SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-86711)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 53 [X]
and
REGISTRATION STATEMENT (No. 811-3855)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 53 [X]
Fidelity Advisor Series VIII
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
(X) on (February 26, 1999) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Like securities of all mutual funds, these securities
have not been approved or disapproved by the
Securities and Exchange Commission, and the
Securities and Exchange Commission has not
determined if this prospectus is accurate or
complete. Any representation to the contrary is a
criminal offense.
FIDELITY ADVISOR
INTERNATIONAL FUNDS
CLASS A, CLASS T, CLASS B, AND CLASS C
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 EMERGING MARKETS INCOME FUND
PROSPECTUS
FEBRUARY 26, 1999
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 3 INVESTMENT SUMMARY
6 PERFORMANCE
9 FEE TABLE
FUND BASICS 13 INVESTMENT DETAILS
16 VALUING SHARES
SHAREHOLDER INFORMATION 17 BUYING AND SELLING SHARES
20 EXCHANGING SHARES
21 ACCOUNT FEATURES AND POLICIES
23 DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
23 TAX CONSEQUENCES
FUND SERVICES 24 FUND MANAGEMENT
25 FUND DISTRIBUTION
APPENDIX 31 FINANCIAL HIGHLIGHTS
37 PRIOR PERFORMANCE OF SIMILAR
FUNDS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Latin American issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Latin America as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN LATIN AMERICA. The
Latin American economies are generally considered emerging markets and
are significantly affected by currency devaluations. The markets in
Latin America can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Japanese issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in Europe.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union (EMU).
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities, including securities of issuers located in emerging
markets.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR OVERSEAS FUND seeks growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using computer-aided, quantitative analysis of
historical earnings, dividend yield, earnings per share and other
factors supported by fundamental analysis to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently than the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing in securities issued anywhere in the
world.
(small solid bullet) Investing at least 65% of total assets in common
stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the world market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income. As a secondary objective, the fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in debt
securities of issuers in emerging markets (countries that have an
emerging stock market as defined by the International Finance
Corporation, countries with low- to middle-income economies according
to the World Bank, and countries that are listed in World Bank
publications as "developing").
(small solid bullet) Potentially investing in other types of
securities, including equity securities of emerging market issuers,
debt securities of non-emerging market foreign issuers, and
lower-quality debt securities of U.S. issuers.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in countries considered emerging markets as a
whole.
(small solid bullet) Analyzing a security's structural features,
current pricing and trading opportunities, and the credit, currency
and economic risks of the security and its issuer to select
investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole. Lower-quality debt securities
(those of less than investment-grade quality) can be more volatile due
to increased sensitivity to adverse issuer, political, regulatory,
market or economic developments.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates Advisor International Capital
Appreciation's performance , as represented by Class T, over the
past year and the changes in Advisor Overseas's and Advisor Emerging
Markets Income's performance, as represented by Class T, from
year to year and compares the funds' performance to the performance of
a market index and an average of the performance of similar funds over
various periods of time. Prior to December 1, 1992, Advisor Overseas
operated under a different investment objective. Accordingly, the
fund's historical performance may not represent its current investment
policies. Returns are based on past results and are not an indication
of future performance.
Because Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International and Advisor Global
Equity were new when this prospectus was printed, their performance
history is not included. Performance history will be available for
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International and Advisor Global
Equity after each fund has been in operation for one calendar year.
YEAR-BY-YEAR RETURNS
The returns in the charts do not include the effect of Class T's
front-end sales charge. If the effect of the sales charge was
reflected, returns would be lower than those shown.
<TABLE>
<CAPTION>
<S> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION - CLASS T
Calendar Years 1998
9.56%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: 9.560000000000001
DURING THE PERIOD SHOWN IN THE CHART FOR CLASS T OF ADVISOR
INTERNATIONAL CAPITAL APPRECIATION, THE HIGHEST RETURN FOR A QUARTER
WAS 16.85 % (QUARTER ENDING DECEMBER 31 , 1998) AND THE
LOWEST RETURN FOR A QUARTER WAS - 19.31 % (QUARTER ENDING
SEPTEMBER 30 , 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADVISOR OVERSEAS - CLASS T
Calendar Years 1991 1992 1993 1994 1995 1996 1997 1998
6.78% -4.83% 41.84% 1.98% 8.64% 12.41% 11.28% 11.31%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: 6.78
Row: 4, Col: 1, Value: -4.83
Row: 5, Col: 1, Value: 41.84
Row: 6, Col: 1, Value: 1.98
Row: 7, Col: 1, Value: 8.640000000000001
Row: 8, Col: 1, Value: 12.41
Row: 9, Col: 1, Value: 11.28
Row: 10, Col: 1, Value: 11.31
DURING THE PERIODS SHOWN IN THE CHART FOR CLASS T OF ADVISOR OVERSEAS,
THE HIGHEST RETURN FOR A QUARTER WAS 17.33 % (QUARTER ENDIN G
DECEMBER 31 , 199 8 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-17.79 % (QUARTER ENDING SEPTEMBER 30 , 199 8 ).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - CLASS T
Calendar Years 1995 1996 1997 1998
6.99% 40.41% 16.47% -22.07%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: 6.99
Row: 8, Col: 1, Value: 40.41
Row: 9, Col: 1, Value: 16.47
Row: 10, Col: 1, Value: -21.97
DURING THE PERIODS SHOWN IN THE CHART FOR CLASS T OF ADVISOR EMERGING
MARKETS INCOME, THE HIGHEST RETURN FOR A QUARTER WAS 15.71 %
(QUARTER ENDING JUNE 30 , 1995) AND THE LOWEST RETURN FOR A
QUARTER WAS -28.60 % (QUARTER ENDING SEPTEMBER 30 ,
199 8 ).
AVERAGE ANNUAL RETURNS
The returns in the following table include the effect of Class A's and
Class T's maximum applicable front-end sales charge and Class B's and
Class C's maximum applicable contingent deferred sales charge (CDSC).
For the periods ended Past 1 year Past 5 years Life of class*
December 31, 1998
ADVISOR INTERNATIONAL CAPITAL 3.54% n/a 3.54%A
APPRECIATION - CLASS A
ADVISOR INTERNATIONAL CAPITAL 5.72% n/a 5.72%A
APPRECIATION - CLASS T
ADVISOR INTERNATIONAL CAPITAL 3.96% n/a 3.96%A
APPRECIATION - CLASS B
ADVISOR INTERNATIONAL CAPITAL 7.96% n/a 7.96%A
APPRECIATION - CLASS C
Morgan Stanley Capital 14.46% n/a 14.46%A
International AC World Index
Free ex USA
Lipper International Funds 13.02% n/a 13.02%A
Average
ADVISOR OVERSEAS - CLASS A 5.10% n/a 8.08%B
ADVISOR OVERSEAS - CLASS T 7.41% 8.28% 10.01%C
ADVISOR OVERSEAS - CLASS B 5.70% n/a 10.09%D
ADVISOR OVERSEAS - CLASS C 9.70% n/a 9.70%A
Morgan Stanley Capital 20.27% 9.29% 9.29%C
International Europe,
Australasia, Far East Index
Lipper International Funds 13.02% 7.69% 10.24%C
Average
ADVISOR EMERGING MARKETS -25.65% n/a -6.92%B
INCOME - CLASS A
ADVISOR EMERGING MARKETS -24.79% n/a 7.10%E
INCOME - CLASS T
ADVISOR EMERGING MARKETS -26.15% n/a 6.87%E
INCOME - CLASS B
ADVISOR EMERGING MARKETS -23.17% n/a -23.17%A
INCOME - CLASS C
J.P. Morgan Emerging Markets -14.35% n/a 14.35%E
Bond Index Plus
Lipper Emerging Markets Debt -20.80% n/a -7.13%E
Funds Average
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE
CLASS'S COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1998.
B FROM JANUARY 1, 1997.
C FROM JANUARY 1, 1991.
D FROM JANUARY 1, 1996.
E FROM JANUARY 1, 1995.
If FMR had not reimbursed certain class expenses during these
periods, returns would have been lower for Class A, Class T,
Class B and Class C of Advisor International Capital Appreciation;
Class A, Class B and Class C of Advisor Overseas; and Class A, Class
T, Class B and Class C of Advisor Emerging Markets Income.
Morgan Stanley Capital International AC World Index Free ex USA is a
market capitalization-weighted index that is designed to represent the
performance of developed stock markets, excluding the United States,
throughout the world.
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE(registered trademark)) Index is a market capitalization-weighted
index that is designed to represent the performance of developed stock
markets outside the United States and Canada. As of December 31, 1998,
the index included over 1,000 equity securities of companies
domiciled in 20 countries.
J.P. Morgan Emerging Markets Bond Index Plus is a market
value -weighted index of U.S. dollar- and other external
currency-denominated Brady bonds, loans, Eurobonds, and local market
debt instruments traded in emerging markets.
Each Lipper Funds Average reflects the performance (excluding
sales charges) of mutual funds with similar objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold or sell Class A, Class T, Class B and Class C
shares of a fund. The annual class operating expenses provided
beginning on page 14 for each class of Advisor International
Capital Appreciation, Advisor Overseas and Advisor Emerging Markets
Income are based on historical expenses, adjusted to reflect
current fees, and do not reflect the effect of any expense
reimbursements o r reduction of certain expenses during the
period. The annual class operating expenses provided beginning on page
14 for each class of Advisor Latin America, Advisor
Japan, Advisor Europe Capital Appreciation, Advisor Diversified
International and Advisor Global Equity are based on estimated
expenses.
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Class A Class T Class B Class C
Maximum sales charge (load) 5.75%A 3.50%B None None
(as a % of offering price)
on purchases of: Advisor
Latin America, Advisor
Japan, Advisor Europe
Capital Appreciation,
Advisor International
Capital Appreciation,
Advisor Overseas, Advisor
Diversified International
and Advisor Global Equity
(the Equity Funds)
Maximum sales charge (load) 4.75%A 3.50%B None None
(as a % of offering price)
on purchases of: Advisor
Emerging Markets Income (the
Bond Fund)
Maximum CDSC for all Equity NoneC NoneC 5.00%D 1.00%E
and Bond Funds (as a % of
the lesser of original
purchase price or redemption
proceeds)
Sales charge (load) on None None None None
reinvested distributions
A LOWER FRONT-END SALES CHARGES FOR CLASS A MAY BE AVAILABLE WITH
PURCHASE OF $50,000 OR MORE.
B LOWER FRONT-END SALES CHARGES FOR CLASS T MAY BE AVAILABLE WITH
PURCHASE OF $50,000 OR MORE.
C A CDSC OF 0.25% IS ASSESSED ON CERTAIN REDEMPTIONS OF CLASS A AND
CLASS T SHARES ON WHICH A FINDER'S FEE WAS PAID.
D DECLINES OVER 6 YEARS FROM 5.00% TO 0%.
E ON CLASS C SHARES REDEEMED WITHIN ONE YEAR OF PURCHASE.
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Class T Class B Class C
ADVISOR LATIN AMERICA Management fee 0.74% 0.74% 0.74% 0.74%
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 17.04% 16.94% 16.95% 16.99%
Total annual class operating 18.03% 18.18% 18.69% 18.73%
expensesA
ADVISOR JAPAN Management fee 0.74% 0.74% 0.74% 0.74%
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 16.64% 16.54% 16.55% 16.59%
Total annual class operating 17.63% 17.78% 18.29% 18.33%
expensesA
ADVISOR EUROPE CAPITAL Management fee 0.74% 0.74% 0.74% 0.74%
APPRECIATION
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 2.00% 1.90% 1.90% 1.95%
Total annual class operating 2.99% 3.14% 3.64% 3.69%
expensesA
ADVISOR INTERNATIONAL CAPITAL Management fee 0.73% 0.73% 0.73% 0.73%
APPRECIATION
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 3.11% 2.87% 2.86% 2.97%
Total annual class operating 4.09% 4.10% 4.59% 4.70%
expensesA
ADVISOR OVERSEAS Management fee 0.89% 0.89% 0.89% 0.89%
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 0.45% 0.36% 0.43% 0.37%
Total annual class operating 1.59% 1.75% 2.32% 2.26%
expensesA
</TABLE>
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE CLASS A, CLASS T, CLASS B
AND CLASS C OF CERTAIN FUNDS TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, SECURITIES LENDING FEES,
BROKERAGE COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
THEIR RESPECTIVE AVERAGE NET ASSETS, EXCEED THE FOLLOWING RATES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Class A Effective Date Class T Effective Date Class B Effective Date
Advisor Latin America 2.00% 12/22/98 2.25% 12/22/98 2.75% 12/22/98
Advisor Japan 2.00% 12/18/98 2.25% 12/18/98 2.75% 12/18/98
Advisor Europe Capital 2.00% 12/18/98 2.25% 12/18/98 2.75% 12/18/98
Appreciation
Advisor International Capital 1.70% 12/1/98 1.95% 12/1/98 2.45% 12/1/98
Appreciation
Advisor Overseas 1.55% 1/1/99 1.80% 1/1/99 2.30% 1/1/99
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Class C Effective Date
Advisor Latin America 2.75% 12/22/98
Advisor Japan 2.75% 12/18/98
Advisor Europe Capital 2.75% 12/18/98
Appreciation
Advisor International Capital 2.45% 12/1/98
Appreciation
Advisor Overseas 2.30% 1/1/99
</TABLE>
THESE ARRANGEMENTS CAN BE TERMINATED BY FMR AT ANY TIME.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total class operating expenses would have been:
Class A Class T Class B Class C
Advisor Overseas 1.54%(dagger) 1.73% 2.29%(dagger) (dagger)(dagger)
(dagger) AFTER REIMBURSEMENT.
(dagger)(dagger) NOT APPLICABLE.
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS) - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class A Class T Class B Class C
ADVISOR DIVERSIFIED Management fee 0.74% 0.74% 0.74% 0.74%
INTERNATIONAL
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 1.05% 0.94% 1.04% 0.98%
Total annual class operating 2.04% 2.18% 2.78% 2.72%
expensesA
ADVISOR GLOBAL EQUITY Management fee 0.74% 0.74% 0.74% 0.74%
Distribution and Service 0.25% 0.50% 1.00% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 0.91% 0.80% 0.91% 0.84%
Total annual class operating 1.90% 2.04% 2.65% 2.58%
expensesA
ADVISOR EMERGING MARKETS INCOME Management fee 0.69% 0.69% 0.69% 0.69%
Distribution and Service 0.15% 0.25% 0.90% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 0.69% 0.59% 0.62% 0.68%
Total annual class operating 1.53% 1.53% 2.21% 2.37%
expensesA
</TABLE>
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE CLASS A, CLASS T, CLASS B
AND CLASS C OF CERTAIN FUNDS TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, SECURITIES LENDING FEES,
BROKERAGE COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE
OF THEIR RESPECTIVE AVERAGE NET ASSETS, EXCEED THE FOLLOWING RATES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Class A Effective Date Class T Effective Date Class B Effective Date
Advisor Diversified 2.00% 12/18/98 2.25% 12/18/98 2.75% 12/18/98
International
Advisor Global Equity 2.00% 12/18/98 2.25% 12/18/98 2.75% 12/18/98
Advisor Emerging Markets Income 1.40% 8/30/96 1.50% 3/10/94 2.15% 1/1/96
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Class C Effective Date
Advisor Diversified 2.75% 12/18/98
International
Advisor Global Equity 2.75% 12/18/98
Advisor Emerging Markets Income 2.25% 11/1/97
</TABLE>
THESE ARRANGEMENTS CAN BE TERMINATED BY FMR AT ANY TIME.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total class operating expenses would have been:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Class A Class T Class B Class C
Advisor Emerging Markets Income 1.39%(dagger) 1.48%(dagger) 2.13%(dagger) 2.23%(dagger)
</TABLE>
(dagger) AFTER REIMBURSEMENT.
Long-term shareholders may pay more than the economic equivalent of
the maximum sales charges permitted by the National Association of
Securities Dealers, Inc., due to 12b-1 fees.
This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.
Let's say, hypothetically, that each class's annual return is 5% and
that your shareholder fees and each class's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account after the number of years indicated
and if you leave your account open:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class A Class T
Account open Account closed Account open Account closed
ADVISOR LATIN AMERICA 1 year $ 2,164 $ 2,164 $ 1,989 $ 1,989
3 years $ 4,747 $ 4,747 $ 4,647 $ 4,647
ADVISOR JAPAN 1 year $ 2,132 $ 2,132 $ 1,956 $ 1,956
3 years $ 4,680 $ 4,680 $ 4,579 $ 4,579
ADVISOR EUROPE CAPITAL 1 year $ 860 $ 860 $ 656 $ 656
APPRECIATION
3 years $ 1,446 $ 1,446 $ 1,285 $ 1,285
ADVISOR INTERNATIONAL CAPITAL 1 year $ 962 $ 962 $ 747 $ 747
APPRECIATION
3 years $ 1,747 $ 1,747 $ 1,553 $ 1,553
5 years $ 2,547 $ 2,547 $ 2,373 $ 2,373
10 years $ 4,610 $ 4,610 $ 4,489 $ 4,489
ADVISOR OVERSEAS 1 year $ 727 $ 727 $ 522 $ 522
3 years $ 1,048 $ 1,048 $ 882 $ 882
5 years $ 1,391 $ 1,391 $ 1,266 $ 1,266
10 years $ 2,356 $ 2,356 $ 2,340 $ 2,340
ADVISOR DIVERSIFIED 1 year $ 770 $ 770 $ 563 $ 563
INTERNATIONAL
3 years $ 1,178 $ 1,178 $ 1,008 $ 1,008
ADVISOR GLOBAL EQUITY 1 year $ 757 $ 757 $ 550 $ 550
3 years $ 1,138 $ 1,138 $ 967 $ 967
ADVISOR EMERGING MARKETS INCOME 1 year $ 623 $ 623 $ 500 $ 500
3 years $ 935 $ 935 $ 816 $ 816
5 years $ 1,270 $ 1,270 $ 1,155 $ 1,155
10 years $ 2,212 $ 2,212 $ 2,110 $ 2,110
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Class B Class C
Account open Account closed Account open Account closed
ADVISOR LATIN AMERICA $ 1,741 $ 2,241 $ 1,744 $ 1,844
$ 4,541 $ 4,841 $ 4,548 $ 4,548
ADVISOR JAPAN $ 1,707 $ 2,207 $ 1,711 $ 1,811
$ 4,472 $ 4,772 $ 4,479 $ 4,479
ADVISOR EUROPE CAPITAL $ 366 $ 866 $ 371 $ 471
APPRECIATION
$ 1,114 $ 1,414 $ 1,129 $ 1,129
ADVISOR INTERNATIONAL CAPITAL $ 460 $ 960 $ 471 $ 571
APPRECIATION
$ 1,385 $ 1,685 $ 1,416 $ 1,416
$ 2,319 $ 2,519 $ 2,368 $ 2,368
$ 4,539A $ 4,539A $ 4,771 $ 4,771
ADVISOR OVERSEAS $ 235 $ 735 $ 229 $ 329
$ 724 $ 1,024 $ 706 $ 706
$ 1,240 $ 1,440 $ 1,210 $ 1,210
$ 2,388A $ 2,388A $ 2,595 $ 2,595
ADVISOR DIVERSIFIED $ 281 $ 781 $ 275 $ 375
INTERNATIONAL
$ 862 $ 1,162 $ 844 $ 844
ADVISOR GLOBAL EQUITY $ 268 $ 768 $ 261 $ 361
$ 823 $ 1,123 $ 802 $ 802
ADVISOR EMERGING MARKETS INCOME $ 224 $ 724 $ 240 $ 340
$ 691 $ 991 $ 739 $ 739
$ 1,185 $ 1,385 $ 1,265 $ 1,265
$ 2,292A $ 2,292A $ 2,706 $ 2,706
</TABLE>
A REFLECTS CONVERSION TO CLASS A SHARES AFTER SEVEN YEARS.
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
ADVISOR LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Latin American issuers. Latin America includes
Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Panama and
Venezuela. FMR normally invests the fund's assets primarily in common
stocks.
FMR normally diversifies the fund's investments across different Latin
American countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Latin America as a whole.
Although FMR may invest up to 35% of the fund's total assets in any
industry that accounts for more than 20% of the Latin American market
as a whole, it does not currently intend to invest more than 25% of
the fund's total assets in any one industry.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities, including securities of issuers located in
emerging markets. FMR normally invests the fund's assets primarily in
common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR OVERSEAS FUND seeks growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund , FMR uses a
disciplined approach that involves computer-aided, quantitative
analysis supported by fundamental analysis. FMR's computer model
systematically reviews thousands of stocks, using data such as
historical earnings, dividend yield, earnings per share, and other
quantitative factors. Then, the issuers of potential investments are
analyzed further using fundamental factors such as growth potential,
earnings estimates and financial condition.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR invests the fund's assets in securities issued anywhere in the
world, including the United States. FMR normally invests at least 65%
of the fund's total assets in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the world market as a
whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve it's
objective.
INVESTMENT OBJECTIVE
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income. As a secondary objective, the fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in debt
securities of issuers in emerging markets. Countries with emerging
markets include those that have an emerging stock market as defined by
the International Finance Corporation, those with low- to
middle-income economies according to the World Bank, and those that
are listed in World Bank publications as "developing." FMR expects to
emphasize countries with relatively low gross national product per
capita compared to the world's major economies and countries with the
potential for rapid economic growth.
FMR may also invest in equity securities of emerging market issuers,
debt securities of non-emerging market foreign issuers, and
lower-quality debt securities of U.S. issuers. Although FMR may invest
up to 35% of the fund's total assets in these securities, FMR does not
currently anticipate that these investments will exceed approximately
20% of the fund's total assets.
FMR normally diversifies the fund's investments across different
emerging market countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in countries considered emerging
markets as a whole.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR generally
analyzes a security's structural features, current price compared to
its long-term value, and any short-term trading opportunities
resulting from market inefficiencies. FMR's analysis also considers
the credit, currency and economic risks associated with the security
and the country of its issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities and
warrants.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Debt securities include
corporate bonds, government securities, mortgage and other
asset-backed securities, and loans and loan participations.
PRINCIPAL INVESTMENT RISKS
Many factors affect each fund's performance. Each fund's share price
and the yield for Advisor Emerging Markets Income Fund change daily
based on changes in market conditions and interest rates and in
response to other economic, political or financial developments. A
fund's reaction to these developments will be affected by the types
of the securities in which the fund invests, the financial
condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that
issuer. Because FMR concentrates the investments of Advisor Latin
America Fund, Advisor Japan Fund and Advisor Europe Capital
Appreciation Fund in a particular country or group of countries, each
fund's performance is expected to be closely tied to economic and
political conditions within that country or group of countries and to
be more volatile than the performance of more geographically
diversified funds. When you sell your shares of a fund, they could be
worth more or less than what you paid for them.
The following factors may significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently than
small cap stocks, and "growth" stocks can react differently than
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities and mortgage
securities can be more sensitive to interest rate changes. In other
words, the longer the maturity of a security, the greater the impact a
change in interest rates could have on the security's price. In
addition, short-term and long-term interest rates do not necessarily
move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term
securities tend to react to changes in long-term interest rates.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently than the U.S. market.
Investing in emerging markets involves risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of foreign development;
political stability; market depth, infrastructure and capitalization
and regulatory oversight is generally less than in more developed
markets. Emerging market economies can be subject to greater social,
economic, regulatory and political uncertainties. All of these factors
can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.
LATIN AMERICA. The economies of countries in Latin America are all
considered emerging market economies. High interest, inflation and
unemployment rates generally characterize each economy. Currency
devaluations in any country can have a significant affect on the
entire region. Recently, the markets in many Latin American countries
have experienced significant downturns as well as significant
volatility. A small number of companies and industries, including the
telecommunications sector, represent a large portion of the market in
many Latin American countries.
JAPAN. The Japanese economy is currently in a recession. The economy
is characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The Japanese market has decreased
significantly recently.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union and many are also members of the EMU, which requires compliance
with restrictions on inflation rates, deficits and debt levels. Many
Eastern European countries continue to move toward market economies.
However, their markets remain relatively undeveloped and are
particularly sensitive to political and economic developments. The
tight fiscal and monetary controls necessary to join the EMU will
significantly affect every country in Europe.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in
general economic or political conditions can affect the credit quality
or value of an issuer's securities. The value of securities of
smaller, less well-known issuers can be more volatile than that of
larger issuers. Lower-quality debt securities (those of less than
investment-grade quality) tend to be more sensitive to these changes
than higher-quality debt securities.
Lower-quality debt securities involve greater risk of default or price
changes due to changes in the credit quality of the issuer. The value
of lower-quality debt securities often fluctuates in response to
company, political or economic developments and can decline
significantly over short periods of time or during periods of general
or regional economic difficulty. Lower-quality debt securities can be
thinly traded or have restrictions on resale, making them difficult to
sell at an acceptable price. The default rate for lower-quality debt
securities is likely to be higher during economic recessions or
periods of high interest rates.
Q UANTITATIVE INVESTING . The value of securities selected
using quantitative analysis can react differently to issuer,
political, market and economic developments than the market as a whole
or securities selected using only fundamental analysis. The factors
used in quantitative analysis and the weight placed on those factors
may not be predictive of a security's value. In addition, factors that
affect a security's value can change over time and these changes may
not be reflected in the quantitative model.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance and the fund may not achieve its investment
objective .
FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
ADVISOR LATIN AMERICA FUND seeks high total investment return.
ADVISOR JAPAN FUND seeks long-term growth of capital.
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
ADVISOR OVERSEAS FUND seeks growth of capital primarily through
investments in foreign securities.
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth by
investing primarily in equity securities of companies located anywhere
outside the U.S.
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income by investing primarily in debt securities and other instruments
of issuers in emerging markets. As a secondary objective, the fund
seeks capital appreciation.
VALUING SHARES
Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.
A class's net asset value per share (NAV) is the value of a single
share. Fidelity(registered trademark) normally calculates each class's
NAV as of the close of business of the NYSE, normally 4:00 p.m.
Eastern time. However, NAV may be calculated earlier if trading on the
NYSE is restricted or as permitted by the Securities and Exchange
Commission (SEC). Each fund's assets are valued as of this time for
the purpose of computing each class's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations or on the basis of information furnished by a pricing
service. Certain short-term securities are valued on the basis of
amortized cost. If market quotations or information furnished by a
pricing service is not readily available for a security or if a
security's value has been materially affected by events occurring
after the close of the exchange or market on which the security is
principally traded (for example, a foreign exchange or market), that
security may be valued by another method that the Board of Trustees
believes accurately reflects fair value. A security's valuation
may differ depending on the method used for determining value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
For account, product and service information, please use the following
phone numbers:
(small solid bullet) If you are investing through a broker-dealer or
insurance representative, 1-800-522-7297 (8:30 a.m.-7:00 p.m. Eastern
time, Monday through Friday).
(small solid bullet) If you are investing through a bank
representative, 1-800-843-3001 (8:30 a.m.-7:00 p.m. Eastern time,
Monday through Friday).
Please use the following addresses:
BUYING OR SELLING SHARES
Fidelity Investments(registered trademark)
P.O. Box 770002
Cincinnati, OH 45277-0081
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH2A
Hebron, KY 41048
You may buy or sell Class A, Class T, Class B, and Class C shares of
the funds through a retirement account or an investment professional.
When you invest through a retirement account or an investment
professional, the procedures for buying, selling and exchanging shares
of each class of a fund and the account features and policies may
differ. Additional fees may also apply to your investment in Class A,
Class T, Class B, and Class C shares of a fund, including a
transaction fee if you buy or sell shares of the fund through a broker
or other investment professional.
Certain methods of contacting Fidelity, such as by telephone, may be
unavailable or delayed (for example, during periods of unusual market
activity).
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROTH CONVERSION IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED
PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of Class A or Class T is the class's
offering price or the class's NAV, depending on whether you pay a
front-end sales charge.
For Class B and Class C, the price to buy one share is the class's
NAV. Class B and Class C shares are sold without a front-end sales
charge, but may be subject to a CDSC upon redemption.
If you pay a front-end sales charge, your price will be Class A's or
Class T's offering price. When you buy Class A or Class T shares at
the offering price, Fidelity deducts the appropriate sales charge and
invests the rest in Class A or Class T shares of the fund. If you
qualify for a front-end sales charge waiver, your price will be Class
A's or Class T's NAV.
The offering price of Class A or Class T is its NAV divided by the
difference between one and the applicable front-end sales charge
percentage. Class A has a maximum front-end sales charge of 5.75% of
the offering price for the Equity Funds and 4.75% of the offering
price for the Bond Fund. Class T has a maximum front-end sales charge
of 3.50% of the offering price for the Equity Funds and the Bond Fund.
Your shares will be bought at the next offering price or NAV, as
applicable, calculated after your order is received in proper form.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) Fidelity must receive payment within three
business days after an order for shares is placed; otherwise your
purchase order may be canceled and you could be liable for any losses
or fees a fund or Fidelity has incurred.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Shares can be bought or sold through investment professionals using an
automated order placement and settlement system that guarantees
payment for orders on a specified date.
Certain financial institutions that meet creditworthiness criteria
established by Fidelity Distributors Corporation (FDC) may enter
confirmed purchase orders on behalf of customers by phone, with
payment to follow no later than close of business on the next business
day. If payment is not received by that time, the order will be
canceled and the financial institution will be liable for any losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accountsA $500
Through regular investment plansB $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accountsA None
A FIDELITY ADVISOR TRADITIONAL IRA, ROTH IRA, ROTH CONVERSION IRA,
ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
B AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED.
There is no minimum account balance or initial or subsequent purchase
minimum for certain Fidelity retirement accounts funded through salary
deduction, or accounts opened with the proceeds of distributions from
such retirement accounts. In addition, each fund may waive or lower
purchase minimums in other circumstances.
Purchase and account minimums are waived for purchases of Class T
shares with distributions from a Fidelity Defined Trust account.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS
B SHARES.
PURCHASE AMOUNTS OF MORE THAN $1 MILLION WILL NOT BE ACCEPTED FOR
CLASS C SHARES. THIS LIMIT DOES NOT APPLY TO PURCHASES OF CLASS C
SHARES MADE BY AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT), 403(B) PROGRAM OR PLAN COVERING A
SOLE-PROPRIETOR (FORMERLY KEOGH/H.R. 10 PLAN).
KEY INFORMATION
PHONE TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from certain other
Fidelity funds. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from certain other
Fidelity funds. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770002 CINCINNATI, (small solid bullet) Complete
OH 45277-0081 and sign the application.
Make your check payable to
the complete name of the
fund and note the applicable
class. Mail to your
investment professional or
to the address at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund
and note the applicable
class. Indicate your fund
account number on your check
and mail to your investment
professional or to the
address at left.
(small solid bullet) Exchange
from the same class of other
Fidelity Advisor funds or
from certain other Fidelity
funds. Send a letter of
instruction to your
investment professional or
to the address at left,
including your name, the
funds' names, the applicable
class names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to your investment
professional.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to your
investment professional.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to set
up your account and to
arrange a wire transaction.
(small solid bullet) Wire to:
Banker's Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Banker's Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Advisor Systematic
Investment Program.
(small solid bullet) Use
Fidelity Advisor Systematic
Exchange Program to exchange
from certain Fidelity money
market funds or a Fidelity
Advisor fund.
SELLING SHARES
The price to sell one share of each class is the class's NAV, minus
any applicable CDSC.
If appropriate to protect shareholders, e ach fund may impose a
redemption fee (trading fee) on redemptions from the
fund.
Any applicable CDSC is calculated based on your original redemption
amount.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus any applicable CDSC.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of business on
the day you place your order.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 30 days;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $1,000 worth of shares in the account to keep
it open, except accounts not subject to account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other assets rather than in cash if the Board of Trustees determines
it is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE (small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Exchange
to the same class of other
Fidelity Advisor funds or to
certain other Fidelity
funds. Call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information."
MAIL: FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 770002 CINCINNATI, SOLE PROPRIETORSHIP, UGMA,
OH 45277-0081 UTMA
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including your name, the
fund's name, the applicable
class name, your fund
account number, and the
dollar amount or number of
shares to be sold. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information" to
request one.
TRUST
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the trust's name,
the fund's name, the
applicable class name, the
trust's fund account number,
and the dollar amount or
number of shares to be sold.
The trustee must sign the
letter of instruction
indicating capacity as
trustee. If the trustee's
name is not in the account
registration, provide a copy
of the trust document
certified within the last 60
days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the firm's name,
the fund's name, the
applicable class name, the
firm's fund account number,
and the dollar amount or
number of shares to be sold.
At least one person
authorized by corporate
resolution to act on the
account must sign the letter
of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The letter of
instruction must be signed
by all persons required to
sign for transactions,
exactly as their names
appear on the account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit
your investment professional
to request one.
TRUST
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The trustee
must sign the letter of
instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to
your investment
professional. At least one
person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit
your investment professional
for instructions.
AUTOMATICALLY (small solid bullet) Use
Fidelity Advisor Systematic
Exchange Program to exchange
to the same class of another
Fidelity Advisor fund or to
certain Fidelity funds.
(small solid bullet) Use
Fidelity Advisor Systematic
Withdrawal Program to set up
periodic redemptions from
your Class A, Class T, Class
B and Class C account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a Class A shareholder, you have the privilege of exchanging Class A
shares of a fund for the same class of shares of other Fidelity
Advisor funds at NAV or for Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund.
As a Class T shareholder, you have the privilege of exchanging Class T
shares of a fund for the same class of shares of other Fidelity
Advisor funds at NAV or for Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund. If you purchased your Class T shares
through certain investment professionals that have signed an agreement
with FDC, you also have the privilege of exchanging your Class T
shares for shares of Fidelity Capital Appreciation Fund.
As a Class B shareholder, you have the privilege of exchanging Class B
shares of a fund for the same class of shares of other Fidelity
Advisor funds or for Advisor B Class shares of Treasury Fund.
As a Class C shareholder, you have the privilege of exchanging Class C
shares of a fund for the same class of shares of other Fidelity
Advisor funds or for Advisor C Class shares of Treasury Fund.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Any exchanges of Class A, Class T, Class B and
Class C shares are not subject to a CDSC.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 1.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY ADVISOR SYSTEMATIC
INVESTMENT PROGRAM TO MOVE
MONEY FROM YOUR BANK ACCOUNT
TO A FIDELITY ADVISOR FUND.
MINIMUM MINIMUM FREQUENCY PROCEDURES
INITIAL ADDITIONAL
$100 $100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or semi-annually up for a new account,
complete the appropriate
section on the application.
(small solid bullet) To set
up for existing accounts,
call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for an
application.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
investment date.
TO DIRECT DISTRIBUTIONS FROM
A FIDELITY DEFINED TRUST TO
CLASS T OF A FIDELITY
ADVISOR FUND.
MINIMUM MINIMUM PROCEDURES
INITIAL ADDITIONAL
Not Applicable Not Applicable (small solid bullet) To set
up for a new or existing
account, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information" for
the appropriate enrollment
form.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
FIDELITY ADVISOR SYSTEMATIC
EXCHANGE PROGRAM TO MOVE
MONEY FROM CERTAIN FIDELITY
MONEY MARKET FUNDS TO CLASS
A, CLASS T, CLASS B OR CLASS
C OF A FIDELITY ADVISOR FUND
OR FROM CLASS A, CLASS T,
CLASS B OR CLASS C OF A
FIDELITY ADVISOR FUND TO THE
SAME CLASS OF ANOTHER
FIDELITY ADVISOR FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, quarterly, (small solid bullet) To set
semi-annually, or annually up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" after both
accounts are opened.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 2 business days
prior to your next scheduled
exchange date.
(small solid bullet) The
account from which the
exchanges are to be
processed must have a
minimum balance of $10,000.
The account into which the
exchange is being processed
must have a minimum balance
of $1,000.
</TABLE>
FIDELITY ADVISOR SYSTEMATIC
WITHDRAWAL PROGRAM TO SET UP
PERIODIC REDEMPTIONS FROM
YOUR CLASS A, CLASS T, CLASS
B OR CLASS C ACCOUNT TO YOU
OR TO YOUR BANK CHECKING
ACCOUNT.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MINIMUM MAXIMUM FREQUENCY PROCEDURES
$100 $50,000 Class A and Class T: Monthly, (small solid bullet) Accounts
quarterly, or semi-annually with a value of $10,000 or
Class B and Class C: Monthly more in Class A, Class T,
or quarterly Class B or Class C shares
are eligible for this program.
(small solid bullet) To set
up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for instructions.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
withdrawal date.
(small solid bullet)
Aggregate redemptions per
12-month period from your
Class B or Class C account
may not exceed 10% of the
account value and are not
subject to a CDSC; and you
may set your withdrawal
amount as a percentage of
the value of your account or
a fixed dollar amount.
(small solid bullet) Because
of Class A's and Class T's
front-end sales charge, you
may not want to set up a
systematic withdrawal plan
during a period when you are
buying Class A or Class T
shares on a regular basis.
</TABLE>
OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account.
(small solid bullet) Call your investment professional or call
Fidelity at the appropriate number found in "General Information"
before your first use to verify that this feature is set up on your
account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
(small solid bullet) To add the wire feature or to change the bank
account designated to receive redemption proceeds at any time prior to
making a redemption request, you should send a letter of instruction,
including a signature guarantee, to your investment professional or to
Fidelity at the address found in "General Information."
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity at 1-888-622-3175 if you need additional
copies of financial reports or p rospectuses.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
If your ACCOUNT BALANCE falls below $1,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV, minus any applicable CDSC, on the day
your account is closed.
Fidelity may charge a FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Each fund earns dividends, interest and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gains distributions.
Each Equity Fund normally pays dividends and capital gains
distributions in December.
The Bond Fund normally declares dividends daily and pays them monthly.
The fund normally pays capital gains distributions in December and
February.
EARNING DIVIDENDS
Shares of the Bond Fund purchased by an automated purchase order begin
to earn dividends on the day your payment is received.
Shares of the Bond Fund purchased by all other purchase orders begin
to earn dividends on the first business day following the day your
payment is received.
Shares of the Bond Fund earn dividends until, but not including, the
next business day following the day of redemption.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each class's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gains distributions
will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gains distributions will be
automatically reinvested in additional shares of the same class of the
fund. Your dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gains distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in the same class of shares of another
identically registered Fidelity Advisor fund or shares of certain
identically registered Fidelity funds. Your capital gains
distributions will be automatically i nvested in the same class
of shares of another identically registered Fidelity Advisor fund or
shares of certain identically registered Fidelity funds, automatically
reinvested in additional shares of the same class of the fund, or paid
in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, contact your investment
professional directly or call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income. Each
fund's distributions of long-term capital gains are taxable to you
generally as capital gains.
If a fund's distributions exceed its income and capital gains realized
in any year, which is sometimes the result of currency-related losses,
all or a portion of those distributions may be treated as a return of
capital to shareholders for tax purposes. A return of capital will
generally not be taxable to you, but will reduce the cost basis of
your shares and result in a higher reported capital gain or a lower
reported capital loss when you sell your shares.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in the same class of shares of another
Fidelity Advisor fund or shares of certain Fidelity funds, you will
receive certain December distributions in January, but those
distributions will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund is the difference between
the cost of your shares and the price you receive when you sell them.
FUND SERVICES
FUND MANAGEMENT
Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is each fund's manager.
As of April 30, 1998, FMR had approximately $ 529 billion
in discretionary assets under management.
As the manager, FMR is responsible for choosing the funds' investments
and handling their business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for each fund. FMR
Far East was organized in 1986 to provide investment research and
advice to FMR. Currently, FMR Far East provides investment research
and advice on issuers based outside the United States and may also
provide investment advisory services for each fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for each fund.
A s of September 28, 199 8 , FIIA had approximately
$ 1 billion in discretionary assets under management. Currently,
FIIA provides investment research and advice on issuers based outside
the United States and may also provide investment advisory services
for each fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
each fun d. A s of September 28, 1998 , FIIA(U.K.)L had
approximately $ 2.3 billion in discretionary assets under
management. Currently, FIIA(U.K.)L provides investment research and
advice on issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan, serves as a sub-adviser for Advisor Japan, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, and Advisor Emerging
Markets Income. As of September 28, 1998 , FIJ had approximately
$ 3.96 billion in discretionary assets under management.
Currently, FIJ is primarily responsible for choosing investments for
Advisor Japan. Currently, FIJ provides investment research and advice
on issuers based outside the United States and may also provide
investment advisory services for Advisor International Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, and Advisor Emerging Markets Income.
A fund could be adversely affected if the computer systems used by FMR
and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.
John Carlson is Vice President and manager of Advisor Emerging Markets
Income , which he has managed since June 1995. He also manages
other Fidelity funds. Prior to joining Fidelity in 1995, Mr. Carlson
was executive director of emerging markets at Lehman Brothers
International from 1992 through 1995.
Greg Fraser is Vice President and manager of Advisor Diversified
International, which he has managed since December 1998. He also
manages other Fidelity funds. Since joining Fidelity in 1986, Mr.
Fraser has worked as an analyst and manager.
Dick Habermann is Vice President and lead manager of Advisor
Global Equity, which he has managed since December 1998. Other
Fidelity investment professionals assist Mr. Habermann in selecting
investments for the fund. He also manages other Fidelity funds.
Mr. Habermann is a senior vice president of FMR Co. Previously, he was
Division Head for International Equities and Director of International
Research from 1993 to 1996, and Joint Chief Strategist for Portfolio
Advisory Services SM from 1996 to 1997. Mr. Habermann joined Fidelity
in 1968.
Richard Mace, Jr. is Vice President and manager of Advisor Overseas,
which he has managed since March 1996. He also manages o ther
Fidelity funds. Since joining Fidelity in 1987, Mr. Mace has worked as
a n analyst and manager.
Kevin McCarey is Vice President and manager of Advisor International
Capital Appreciation and Advisor Europe Capital Appreciation, which he
has managed since November 1997 and December 1998, respectively. He
also manages other Fidelity funds. Since joining Fidelity in
1986, Mr. McCarey has worked as an analyst and manager.
Brenda Reed is Vice President and manager of Advisor Japan ,
which she has managed since December 1998. She also manages other
Fidelity funds. Since joining Fidelity in 1992, Ms. Reed has worked as
an analyst and manager.
Margaret Reynolds is associate manager of Advisor Latin America, which
she has managed since December 1998. Since joining Fidelity in 1995,
Ms. Reynolds has worked as an analyst and associate manager. Prior to
joining Fidelity , Ms. Reynolds was an international equity and
fixed-income analyst with Putnam Investments covering Latin America
and other emerging markets from 1986 to 1995.
Patricia Satterthwaite is Vice President and lead manager of Advisor
Latin America, which she has managed since December 1998. She also
manages other Fidelity funds. Since joining Fidelity in 1986, Ms.
Satterthwaite has worked as an analyst and manager.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Each fund pays a management fee to FMR.
The management fee is calculated and paid to FMR every month.
For Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Diversified International, Advisor Global Equity, and Advisor Emerging
Markets Income, the fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month.
For Advisor Overseas, the fee is determined by calculating a basic fee
and then applying a performance adjustment. The performance adjustment
either increases or decreases the management fee, depending on how
well Advisor Overseas has performed relative to the EAFE Index.
Management fee = Basic fee +/- Performance adjustment
The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52% for the
Equity Funds or 0.37% for the Bond Fund, and it drops as total assets
under management increase.
For October 1998, the group fee rate was 0.2910 % for the Equity
Funds and for December 1998, the group fee rate was 0.1324 % for
the Bond Fund. The individual fund fee rate is 0.45 % for the
Equity Funds and 0.55 % for the Bond Fund.
The basic fee for Advisor Overseas for the fiscal year ended
October 31, 1998 was 0.74 % of the fund's average net
assets.
The performance adjustment rate is calculated monthly by comparing
over the performance period Advisor Overseas's performance to
that of the EAFE Index.
For Advisor Overseas, the performance period is the most recent
36-month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
the fund's average net assets over the performance period.
For the purposes of calculating the performance adjustment for Advisor
Overseas, the fund's investment performance will be based on the
average performance of all classes of the fund weighted according to
their average assets for each month in the performance period.
The total management fee for the fiscal year ended October 31, 1998
was 0.73% of the fund's average net assets for Advisor International
Capital Appreciation and 0.89% of the fund's average net assets for
Advisor Overseas.
The total management fee for the fiscal year ended December 31, 1998
was 0.69% o f the fund's average net assets for Advisor Emerging
Markets Income.
FMR pays FMR U.K., FMR Far East, FIJ and FIIA for providing assistance
with investment advisory services, and FIIA in turn pays FIIA(U.K.)L.
FMR may, from time to time, agree to reimburse each class for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a class if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated by FMR at any time, can decrease
a class's expenses and boost its performance.
As of December 31, 1998, approximately 100 % of Advisor Latin
America's, Advisor Japan's, Advisor Europe Capital Appreciation's,
Advisor Diversified International's and Advisor Global Equity's
total outstanding shares were held by FMR .
FUND DISTRIBUTION
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
FDC distributes each class's shares.
You may pay a sales charge when you buy or sell your shares.
FDC collects the sales charge.
The front-end sales charge will be reduced for purchases of Class A
and Class T shares according to the sales charge schedules below.
SALES CHARGES AND CONCESSIONS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EQUITY FUNDS: Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 5.75% 6.10% 5.00%
$50,000 to $99,999 4.50% 4.71% 3.75%
$100,000 to $249,999 3.50% 3.63% 2.75%
$250,000 to $499,999 2.50% 2.56% 2.00%
$500,000 to $999,999 2.00% 2.04% 1.75%
$1,000,000 to $24,999,999 1.00% 1.01% 0.75%
$25,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 51 .
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BOND FUND: Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 4.75% 4.99% 4.25%
$50,000 to $99,999 4.50% 4.71% 4.00%
$100,000 to $249,999 3.50% 3.63% 3.00%
$250,000 to $499,999 2.50% 2.56% 2.25%
$500,000 to $999,999 2.00% 2.04% 1.75%
$1,000,000 to $24,999,999 0.50% 0.50% 0.50%
$25,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 51.
SALES CHARGES AND CONCESSIONS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EQUITY FUNDS: Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to $99,999 3.00% 3.09% 2.50%
$100,000 to $249,999 2.50% 2.56% 2.00%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 51.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BOND FUND: Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to $99,999 3.00% 3.09% 2.50%
$100,000 to $249,999 2.50% 2.56% 2.00%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 51.
Class A or Class T shares purchased by an individual or company
through the Combined Purchase, Rights of Accumulation or Letter of
Intent program may receive a reduced front-end sales charge according
to the sales charge schedules above. To qualify for a Class A or Class
T front-end sales charge reduction under one of these programs, you
must notify Fidelity in advance of your purchase. More detailed
information about these programs is contained in the Statement of
Additional Information (SAI).
COMBINED PURCHASE. To receive a Class A or Class T front-end sales
charge reduction, if you are a new shareholder, you may combine your
purchase of Class A or Class T shares with purchases of: (i) Class A,
Class T, Class B and Class C shares of any Fidelity Advisor fund and
(ii) Advisor B Class shares and Advisor C Class shares of Treasury
Fund.
RIGHTS OF ACCUMULATION. To receive a Class A or Class T front-end
sales charge reduction, if you are an existing shareholder, you may
add to your purchase of Class A or Class T shares the current value of
your holdings in: (i) Class A, Class T, Class B and Class C shares of
any Fidelity Advisor fund, (ii) Advisor B Class shares and Advisor C
Class shares of Treasury Fund and (iii) Daily Money Class shares of
Treasury Fund, Prime Fund or Tax-Exempt Fund acquired by exchange from
any Fidelity Advisor fund.
LETTER OF INTENT. You may receive a Class A or Class T front-end sales
charge reduction on your purchases of Class A and Class T shares made
during a 13-month period by signing a Letter of Intent (Letter). Each
Class A or Class T purchase you make after you sign the Letter will be
entitled to the reduced front-end sales charge applicable to the total
investment indicated in the Letter. Purchases of the following may be
aggregated for the purpose of completing your Letter: (i) Class A and
Class T shares of any Fidelity Advisor fund (except those acquired by
exchange from Daily Money Class shares of Treasury Fund, Prime Fund or
Tax-Exempt Fund that had been previously exchanged from a Fidelity
Advisor fund), (ii) Class B and Class C shares of any Fidelity Advisor
fund and (iii) Advisor B Class shares and Advisor C Class shares of
Treasury Fund. Reinvested income and capital gain distributions will
not be considered purchases for the purpose of completing your Letter.
Class B shares may, upon redemption, be assessed a CDSC based on the
following schedule:
EQUITY FUNDS - CLASS B:
From Date of Purchase Contingent Deferred Sales
Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years A 0%
BOND FUND - CLASS B:
From Date of Purchase Contingent Deferred Sales
Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years A 0%
A AFTER SEVEN YEARS, CLASS B SHARES WILL CONVERT AUTOMATICALLY TO
CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND.
When exchanging Class B shares of one fund for Class B shares of
another Fidelity Advisor fund or Advisor B Class shares of Treasury
Fund, your Class B shares retain the CDSC schedule in effect when they
were originally bought.
Except as provided below, investment professionals receive as
compensation from FDC, at the time of sale, a concession equal to
4.00% of your purchase of Class B shares. For purchases of Class B
shares through reinvested dividends or capital gains distributions,
investment professionals do not receive a concession at the time of
sale.
Class C shares may, upon redemption within one year of purchase, be
assessed a CDSC of 1.00%.
Except as provided below, investment professionals will receive as
compensation from FDC, at the time of the sale, a concession equal to
1.00% of your purchase of Class C shares. For purchases of Class C
shares made for an employee benefit plan , 403(b) program or plan
covering a sole-proprietor (formerly Keogh/H.R. 10 plan) or
through reinvested dividends or capital gains distributions,
investment professionals do not receive a concession at the time of
sale.
The CDSC for Class B and Class C shares will be calculated based on
the lesser of the cost of the Class B or Class C shares, as
applicable, at the initial date of purchase or the value of those
Class B or Class C shares, as applicable, at redemption, not including
any reinvested dividends or capital gains. Class B and Class C shares
acquired through reinvestment of dividends or capital gains
distributions will not be subject to a CDSC. In determining the
applicability and rate of any CDSC at redemption, Class B or Class C
shares representing reinvested dividends and capital gains will be
redeemed first, followed by those Class B or Class C shares that have
been held for the longest period of time.
A front-end sales charge will not apply to the following Class A
shares:
1. Purchased for an employee benefit plan (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
with at least $25 million or more in plan assets;
2. Purchased for an employee benefit plan (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through an insurance company separate account used to
fund annuity contracts;
3. Purchased for an employee benefit plan (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through a trust institution, bank trust department or
insurance company, or any such institution's broker-dealer affiliate
that is not part of an organization primarily engaged in the brokerage
business. Employee benefit plans (except SIMPLE IRA, SEP, and
SARSEP plans and plans covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs that
participate in the Advisor Retirement Connection do not qualify for
this waiver;
4. Purchased for an employee benefit plan (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through an investment professional sponsored program
that requires the participating employee benefit plan to invest
initially in Class C or Class B shares and, upon meeting certain
criteria, subsequently requires the plan to invest in Class A shares;
5. Purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Employee benefit
plans (except SIMPLE IRA, SEP, and SARSEP plans and plans covering
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans)), 403(b) programs and accounts managed by third parties do
not qualify for this waiver;
6. Purchased by a broker-dealer for a managed account that is charged
an asset-based fee. Employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs
do not qualify for this waiver;
7. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an
account that is managed on a discretionary basis and is charged an
asset-based fee. Employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs
do not qualify for this waiver; or
8. Purchased by a bank trust officer, registered representative, or
other employee (or a member of one of their immediate families) of
investment professionals having agreements with FDC.
A front-end sales charge will not apply to the following Class T
shares:
1. Purchased for an insurance company separate account used to fund
annuity contracts for employee benefit plans (except SIMPLE IRA,
SEP, and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or 403(b)
programs ;
2. Purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Accounts managed
by third parties do not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged
an asset-based fee;
4. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an
account that is managed on a discretionary basis and is charged an
asset-based fee;
5. Purchased for an employee benefit plan (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program ;
6. Purchased for a Fidelity or Fidelity Advisor account with the
proceeds of a distribution from (i) an insurance company separate
account used to fund annuity contracts for employee benefit plans ,
403(b) programs or plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans) that are invested in Fidelity Advisor or
Fidelity funds, or (ii) an employee benefit plan , 403(b) program or
plan covering a sole-proprietor (formerly Keogh/H.R. 10 plan) that
is invested in Fidelity Advisor or Fidelity funds. (Distributions
other than those transferred to an IRA account must be transferred
directly into a Fidelity account.);
7. Purchased for any state, county, or city, or any governmental
instrumentality, department, authority or agency;
8. Purchased with redemption proceeds from other mutual fund complexes
on which you have previously paid a front-end sales charge or CDSC;
9. Purchased by a current or former trustee or officer of a Fidelity
fund or a current or retired officer, director or regular employee of
FMR Corp. or Fidelity International Limited or their direct or
indirect subsidiaries (a Fidelity trustee or employee), the spouse of
a Fidelity trustee or employee, a Fidelity trustee or employee acting
as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee;
10. Purchased by a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more;
11. Purchased by a bank trust officer, registered representative, or
other employee (or a member of one of their immediate families) of
investment professionals having agreements with FDC;
12. Purchased for a charitable remainder trust or life income pool
established for the benefit of a charitable organization (as defined
for purposes of Section 501(c)(3) of the Internal Revenue Code); or
13. Purchased with distributions of income, principal, and capital
gains from Fidelity Defined Trusts.
The Class B or Class C CDSC will not apply to the redemption of
shares:
1. For disability or death, provided that the shares are sold
within one year following the death or the initial determination of
disability;
2. That are permitted without penalty at age 701/2 pursuant to the
Internal Revenue Code from retirement plans or accounts (other than of
shares purchased on or after February 11, 1999 for Traditional IRAs,
Roth IRAs and Rollover IRAs);
3. For disability, payment of death benefits, or minimum required
distributions starting at age 701/2 from Traditional IRAs, Roth IRAs
and Rollover IRAs purchased on or after February 11, 1999;
4. Through the Fidelity Advisor Systematic Withdrawal Program;
or
5. (Applicable to Class C only) From an employee benefit plan,
403(b) program or plan covering a sole-proprietor (formerly Keogh/H.R.
10 plan).
To qualify for a Class A or Class T front-end sales charge reduction
or waiver , you must notify Fidelity in advance of your
purchase.
To qualify for a Class B or Class C CDSC waiver, you must notify
Fidelity in advance of your redemption.
FINDER'S FEE. On eligible purchases of (i) Class A shares in amounts
of $1 million or more that qualify for a Class A load waiver, (ii)
Class A shares in amounts of $25 million or more, and (iii) Class T
shares in amounts of $1 million or more, investment professionals will
be compensated with a fee at the rate of 0.25% of the purchase amount.
Shares held by an insurance company separate account will be
aggregated at the client (e.g., the contract holder or plan sponsor)
level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0.25% fee with respect to shares held by
an insurance company separate account must provide Fidelity access to
records detailing purchases at the client level.
Except as provided below, any assets on which a finder's fee has been
paid will bear a contingent deferred sales charge (Class A or Class T
CDSC) if they do not remain in Class A or Class T shares of the
Fidelity Advisor funds, or Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund, for a period of at least one
uninterrupted year. The Class A or Class T CDSC will be 0.25% of the
lesser of the cost of the Class A or Class T shares, as applicable, at
the initial date of purchase or the value of those Class A or Class T
shares, as applicable, at redemption, not including any reinvested
dividends or capital gains. Class A and Class T shares acquired
through reinvestment of dividends or capital gains distributions will
not be subject to a Class A or Class T CDSC. In determining the
applicability and rate of any Class A or Class T CDSC at redemption,
Class A or Class T shares representing reinvested dividends and
capital gains will be redeemed first, followed by those Class A or
Class T CDSC shares that have been held for the longest period of
time.
The Class A or Class T CDSC will not apply to the redemption of
shares:
1. Held by insurance company separate accounts;
2. For plan loans or distributions or exchanges to non-Advisor fund
investment options from employee benefit plans (except shares of
SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)
purchased on or after February 11, 1999) and 403(b) programs; or
3. For disability, payment of death benefits, or minimum required
distributions starting at age 701/2 from Traditional IRAs, Roth IRAs,
SIMPLE IRAs, SEPs, SARSEPs and plans covering a sole-proprietor or
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans).
To qualify for a Class A or Class T finder's fee or CDSC waiver,
you must notify Fidelity in advance of your purchase or redemption,
respectively.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class A,
Class T, Class B or Class C shares of a fund, you may reinvest an
amount equal to all or a portion of the redemption proceeds in the
same class of the fund or another Fidelity Advisor fund, at the NAV
next determined after receipt in proper form of your investment order,
provided that such reinvestment is made within 90 days of redemption.
Under these circumstances, the dollar amount of the CDSC you paid, if
any, on shares will be reimbursed to you by reinvesting that amount in
Class A, Class T, Class B or Class C shares, as applicable. You must
reinstate your Class A, Class T, Class B or Class C shares into an
account with the same registration. This privilege may be exercised
only once by a shareholder with respect to a fund and certain
restrictions may apply. For purposes of the CDSC schedule, the holding
period will continue as if the Class A, Class T, Class B or Class C
shares had not been redeemed.
CONVERSION FEATURE. After seven years from the initial date of
purchase, Class B shares and any capital appreciation associated with
those shares, convert automatically to Class A shares of the same
Fidelity Advisor fund. Conversion to Class A shares will be made at
NAV. At the time of conversion, a portion of the Class B shares bought
through the reinvestment of dividends or capital gains (Dividend
Shares) will also convert to Class A shares. The portion of Dividend
Shares that will convert is determined by the ratio of your converting
Class B non-Dividend Shares to your total Class B non-Dividend Shares.
Class A of each fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class A of each fund is authorized to pay FDC a monthly
12b-1 fee as compensation for providing services intended to result in
the sale of Class A shares and/or shareholder support services. Class
A of the Equity Funds may pay FDC a 12b-1 fee at an annual rate of
0.75% of its average net assets, or such lesser amount as the Trustees
may determine from time to time. Class A of the Bond Fund may pay FDC
a 12b-1 fee at an annual rate of 0.40% of its average net assets, or
such lesser amount as the Trustees may determine from time to time.
Class A of the Equity Funds currently pays FDC a monthly 12b-1
fee at an annual rate of 0.25% of its average net assets throughout
the month. Class A of the Bond Fund currently pays FDC a monthly 12b-1
fee at an annual rate of 0.15% of its average net assets throughout
the month. Class A's 12b-1 fee rate may be increased only when the
Trustees believe that it is in the best interests of Class A
shareholders to do so.
Class T of each fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class T of each fund is authorized to pay FDC a monthly
12b-1 fee as compensation for providing services intended to result in
the sale of Class T shares and/or shareholder support services. Class
T of Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Diversified International, and Advisor Global Equity may pay FDC a
12b-1 fee at an annual rate of 0.75% of its average net assets, or
such lesser amount as the Trustees may determine from time to time.
Class T of Advisor Overseas may pay FDC a 12b-1 fee at an annual rate
of 0.65% of its average net assets, or such lesser amount as the
Trustees may determine from time to time. Class T of Advisor Emerging
Markets Income may pay FDC a 12b-1 fee at an annual rate of 0.40% of
its average net assets, or such lesser amount as the Trustees may
determine from time to time. Class T of the Equity Funds currently
pays FDC a monthly 12b-1 fee at an annual rate of 0.50% of its average
net assets throughout the month. Class T of the Bond Fund currently
pays FDC a monthly 12b-1 fee at an annual rate of 0.25% of its average
net assets throughout the month. Class T's 12b-1 fee rate may be
increased only when the Trustees believe that it is in the best
interests of Class T shareholders to do so.
FDC may reallow to intermediaries (such as banks, broker-dealers and
other service-providers), including its affiliates, up to the full
amount of the Class A and Class T 12b-1 fee, for providing services
intended to result in the sale of Class A or Class T shares and/or
shareholder support services.
Class B of each fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class B of each fund is authorized to pay FDC a monthly
12b-1 (distribution) fee as compensation for providing services
intended to result in the sale of Class B shares. Class B of each fund
may pay FDC a 12b-1 (distribution) fee at an annual rate of 0.75% of
its average net assets, or such lesser amount as the Trustees may
determine from time to time. Class B of the Equity Funds currently
pays FDC a monthly 12b-1 (distribution) fee at an annual rate of 0.75%
of its average net assets throughout the month. Class B of the Bond
Fund currently pays FDC a monthly 12b-1 (distribution) fee at an
annual rate of 0.65% of its average net assets throughout the month.
Class B's 12b-1 (distribution) fee rate for the Bond Fund may be
increased only when the Trustees believe that it is in the best
interests of Class B shareholders to do so.
In addition, pursuant to each Class B plan, Class B of each fund pays
FDC a monthly 12b-1 (service) fee at an annual rate of 0.25% of Class
B's average net assets throughout the month for providing shareholder
support services.
FDC may reallow up to the full amount of the Class B 12b-1 (service)
fee to intermediaries (such as banks, broker-dealers and other
service-providers) for providing shareholder support services.
Class C of each fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class C of each fund is authorized to pay FDC a monthly
12b-1 (distribution) fee as compensation for providing services
intended to result in the sale of Class C shares. Class C of each fund
currently pays FDC a monthly 12b-1 (distribution) fee at an annual
rate of 0.75% of its average net assets throughout the month.
In addition, pursuant to each Class C plan, Class C of each fund pays
FDC a monthly 12b-1 (service) fee at an annual rate of 0.25% of Class
C's average net assets throughout the month for providing shareholder
support services.
Normally, after the first year of investment, FDC may reallow up to
the full amount of the Class C 12b-1 (distribution) fees to
intermediaries (such as banks, broker-dealers and other
service-providers) for providing services intended to result in the
sale of Class C shares and may reallow up to the full amount of the
Class C 12b-1 (service) fee to intermediaries for providing
shareholder support services.
For purchases of Class C shares made for an employee benefit plan ,
403(b) program or plan covering a sole-proprietor (formerly Keogh/H.R.
10 plan) or through reinvestment of dividends or capital gains
distributions, during the first year of investment and thereafter, FDC
may reallow up to the full amount of the Class C 12b-1 (distribution)
fee paid by such shares to intermediaries, including its affiliates,
for providing services intended to result in the sale of Class C
shares and may reallow up to the full amount of the Class C 12b-1
(service) fee paid by such shares to intermediaries, including its
affiliates, for providing shareholder support services.
Because 12b-1 fees are paid out of each class's assets on an ongoing
basis, they will increase the cost of your investment and may cost you
more than paying other types of sales charges.
In addition, each plan specifically recognizes that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with providing
services intended to result in the sale of the applicable class's
shares and/or shareholder support services, including payments made to
intermediaries that provide those services. Currently, the Board of
Trustees of each fund has authorized such payments.
To receive sales concessions, finder's fees and payments made pursuant
to a Distribution and Service Plan, intermediaries must sign the
appropriate agreement with FDC in advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Fidelity Advisor funds, provided
that a fund receives brokerage services and commission rates
comparable to those of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
class's financial history for the past 5 years or, if
shorter, the period of the class's operations. Certain information
reflects financial results for a single class share. Total returns for
each period include the reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP , independent accountants, whose
report, along with each fund's financial highlights and financial
statements, are included in each fund's Annual Report. A free copy of
each Annual Report is available upon request. Advisor Latin America
commenced operations on December 21, 1998. Advisor Japan, Advisor
Europe Capital Appreciation, Advisor Diversified International, and
Advisor Global Equity commenced operations on December 17,
1998.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION - CLASS A
Selected Per-Share Data and
Ratios
Year ended October 31 1998E
Net asset value, beginning $ 10.00
of period
Income from Investment
Operations
Net investment incomeD .00
Net realized and .07
unrealized gain (loss)
Total from investment .07
operations
Net asset value, end of $ 10.07
period
Total returnB,C .70%
Net assets, end of period $ 860
(000 omitted)
Ratio of expenses to 2.06%A,F
average net assets
Ratio of net investment .03%A
income to average net assets
Portfolio turnover 199%A
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD 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.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION - CLASS T
Selected Per-Share Data
and Ratios
Year ended October 31 1998E
Net asset value, beginning $ 10.00
of period
Income from Investment
Operations
Net investment income (.03)
(loss)D
Net realized and .07
unrealized gain (loss)
Total from investment .04
operations
Net asset value, end of $ 10.04
period
Total returnB,C .40%
Net assets, end of period $ 12,117
(000 omitted)
Ratio of expenses to 2.31%A,F
average net assets
Ratio of net investment (.24)%A
income (loss) to average net
assets
Portfolio turnover 199%A
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD 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.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION - CLASS B
Selected Per-Share Data
and Ratios
Year ended October 31 1998E
Net asset value, beginning $ 10.00
of period
Income from Investment
Operations
Net investment income (.07)
(loss)D
Net realized and .06
unrealized gain (loss)
Total from investment (.01)
operations
Net asset value, end of $ 9.99
period
Total returnB,C (.10)%
Net assets, end of period $ 4,047
(000 omitted)
Ratio of expenses to 2.81%A,F
average net assets
Ratio of net investment (.70)%A
income (loss) to average net
assets
Portfolio turnover 199%A
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD 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.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION - CLASS C
Selected Per-Share Data
and Ratios
Year ended October 31 1998E
Net asset value, beginning $ 10.00
of period
Income from Investment
Operations
Net investment income (.08)
(loss)D
Net realized and .06
unrealized gain (loss)
Total from investment (.02)
operations
Net asset value, end of $ 9.98
period
Total returnB,C (.20)%
Net assets, end of period $ 2,217
(000 omitted)
Ratio of expenses to 2.81%A,F
average net assets
Ratio of net investment (.75)%A
income (loss) to average net
assets
Portfolio turnover 199%A
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD 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.
ADVISOR OVERSEAS - CLASS A
Selected Per-Share Data
and Ratios
Years ended October 31 1998 1997 1996E
Net asset value, beginning $ 16.89 $ 15.29 $ 14.98
of period
Income from Investment
Operations
Net investment incomeD .09 .09 .04
Net realized and .51 2.39 .27
unrealized gain (loss)
Total from investment .60 2.48 .31
operations
Less Distributions
From net investment income (.21) (.25) --
From net realized gain (.96) (.63) --
Total distributions (1.17) (.88) --
Net asset value, end of $ 16.32 $ 16.89 $ 15.29
period
Total returnB,C 3.73% 16.95% 2.07%
Net assets, end of period $ 12,460 $ 5,001 $ 637
(000 omitted)
Ratio of expenses to 1.55%F 1.90%F 1.16%A,F
average net assets
Ratio of expenses to 1.54%G 1.89%G 1.16%A
average net assets after
expense reductions
Ratio of net investment .51% .53% 1.74%A
income to average net assets
Portfolio turnover 74% 70% 82%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
ADVISOR OVERSEAS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended October 31 1998 1997 1996 1995 1994
Net asset value, beginning $ 17.02 $ 15.30 $ 13.92 $ 14.06 $ 12.93
of period
Income from Investment
Operations
Net investment income .06C .13C .19C,E .07 .01
Net realized and .52 2.38 1.29 (.11) 1.14
unrealized gain (loss)
Total from investment .58 2.51 1.48 (.04) 1.15
operations
Less Distributions
From net investment income (.16) (.16) (.09) -- --
From net realized gain (.96) (.63) (.01) (.02) (.02)
In excess of net realized -- -- -- (.08) --
gain
Total distributions (1.12) (.79) (.10) (.10) (.02)
Net asset value, end of $ 16.48 $ 17.02 $ 15.30 $ 13.92 $ 14.06
period
Total returnA,B 3.57% 17.07% 10.69% (.25)% 8.91%
Net assets, end of period $ 1,085,736 $ 1,110,936 $ 995,004 $ 741,928 $ 653,774
(000 omitted)
Ratio of expenses to 1.74% 1.66% 1.61% 1.90% 2.12%
average net assets
Ratio of expenses to 1.72%D 1.65%D 1.60%D 1.90% 2.12%
average net assets after
expense reductions
Ratio of net investment .35% .80% 1.30% 1.01% .05%
income to average net assets
Portfolio turnover 74% 70% 82% 47% 34%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.04 PER SHARE.
ADVISOR OVERSEAS - CLASS B
Selected Per-Share Data
and Ratios
Years Ended October 31 1998 1997 1996 1995E
Net asset value, beginning $ 16.69 $ 15.06 $ 13.92 $ 13.89
of period
Income from Investment
Operations
Net investment income (.03)D .02D .08D,H .01
(loss)
Net realized and .51 2.36 1.26 .02
unrealized gain (loss)
Total from investment .48 2.38 1.34 .03
operations
Less Distributions
From net investment income (.13) (.12) (.19) --
From net realized gain (.96) (.63) (.01) --
Total distributions (1.09) (.75) (.20) --
Net asset value, end of $ 16.08 $ 16.69 $ 15.06 $ 13.92
period
Total returnB,C 3.00% 16.41% 9.73% .22%
Net assets, end of period $ 58,401 $ 39,841 $ 18,668 $ 2,999
(000 omitted)
Ratio of expenses to 2.30%F 2.30% 2.37% 1.97%A,F
average net assets
Ratio of expenses to 2.29%G 2.29%G 2.37% 1.97%A
average net assets after
expense reductions
Ratio of net investment (.19)% .15% .53% .94%A
income (loss) to average net
assets
Portfolio turnover 74% 70% 82% 47%
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 JULY 3, 1995 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
H INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.04 PER SHARE.
ADVISOR OVERSEAS - CLASS C
Selected Per-Share Data
and Ratios
Year ended October 31 1998E
Net asset value, $ 17.23
beginning of period
Income from Investment
Operations
Net investment income (.03)
(loss)D
Net realized and .29
unrealized gain (loss)
Total from investment .26
operations
Less Distributions
From net investment (.16)
income
From net realized gain (.96)
Total Distributions (1.12)
Net asset value, end of $ 16.37
period
Total returnB,C 2.84%
Net assets, end of period $ 14,655
(000 omitted)
Ratio of expenses to 2.30%A,F
average net assets
Ratio of net investment (.20)%A
income (loss) to average net
assets
Portfolio turnover 74%
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD 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.
ADVISOR EMERGING MARKETS INCOME - CLASS A
Selected Per-Share Data
and Ratios
Years ended December 31 1998 1997 1996E
Net asset value, $ 11.120 $ 11.720 $ 10.520
beginning of period
Income from Investment
Operations
Net investment incomeD .943 .953 .274
Net realized and (3.275) .891 1.574
unrealized gain (loss)
Total from investment (2.332) 1.844 1.848
operations
Less Distributions
From net investment (.834) (.984) (.238)
income
From net realized gain -- (1.460) (.410)
Return of capital (.174) -- --
Total distributions (1.008) (2.444) (.648)
Net asset value, end of $ 7.780 $ 11.120 $ 11.720
period
Total returnB,C (21.94)% 16.52% 17.71%
Net assets, end of period $ 2,829 $ 2,313 $ 478
(000 omitted)
Ratio of expenses to 1.40%F 1.40%F 1.40%A,F
average net assets
Ratio of expenses to 1.39%G 1.38%G 1.40%A
average net assets after
expense reductions
Ratio of net investment 10.05% 7.74% 7.31%A
income to average net assets
Portfolio turnover 514% 660% 410%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO DECEMBER 31, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S 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.
ADVISOR EMERGING MARKETS INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended December 31 1998 1997 1996 1995 1994E
Net asset value, $ 11.110 $ 11.710 $ 9.280 $ 9.520 $ 10.000
beginning of period
Income from Investment
Operations
Net investment income .975D .877D .758D .860 .356
Net realized and (3.319) .961 2.832 (.323) (.073)
unrealized gain (loss)
Total from investment (2.344) 1.838 3.590 .537 .283
operations
Less Distributions
From net investment (.824) (.978) (.750) (.777) (.503)
income
From net realized gain -- (1.460) (.410) -- (.260)
Return of capital (.172) -- -- -- --
Total distributions (.996) (2.438) (1.160) (.777) (.763)
Net asset value, end of $ 7.770 $ 11.110 $ 11.710 $ 9.280 $ 9.520
period
Total returnB,C (22.07)% 16.47% 40.41% 6.99% 2.47%
Net assets, end of period $ 53,643 $ 93,228 $ 78,861 $ 36,205 $ 30,029
(000 omitted)
Ratio of expenses to 1.50% 1.47% 1.49% 1.50%F 1.50%A,F
average net assets
Ratio of expenses to 1.48%G 1.45%G 1.48%G 1.50% 1.50%A
average net assets after
expense reductions
Ratio of net investment 9.96% 7.08% 7.23% 9.32% 6.60%A
income to average net assets
Portfolio turnover 514% 660% 410% 305% 354%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 PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 10, 1994 (COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1994.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S 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.
ADVISOR EMERGING MARKETS INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended December 31 1998 1997 1996 1995 1994E
Net asset value, $ 11.160 $ 11.750 $ 9.300 $ 9.520 $ 9.700
beginning of period
Income from Investment
Operations
Net investment income .907D .806D .686D .835 .167
Net realized and (3.334) .956 2.853 (.342) .227
unrealized gain (loss)
Total from investment (2.427) 1.762 3.539 .493 .394
operations
Less Distributions
From net investment (.772) (.892) (.679) (.713) (.314)
income
From net realized gain -- (1.460) (.410) -- (.260)
Return of capital (.161) -- -- -- --
Total distributions (.933) (2.352) (1.089) (.713) (.574)
Net asset value, end of $ 7.800 $ 11.160 $ 11.750 $ 9.300 $ 9.520
period
Total returnB,C (22.66)% 15.70% 39.61% 6.38% 3.67%
Net assets, end of period $ 16,703 $ 23,576 $ 17,746 $ 9,486 $ 5,034
(000 omitted)
Ratio of expenses to 2.15%F 2.15% 2.15%F 2.25%F 2.25%A,F
average net assets
Ratio of expenses to 2.13%G 2.13%G 2.15% 2.25% 2.25%A
average net assets after
expense reductions
Ratio of net investment 9.36% 6.48% 6.56% 8.48% 5.86%A
income to average net assets
Portfolio turnover 514% 660% 410% 305% 354%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 PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO DECEMBER 31, 1994.
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.
ADVISOR EMERGING MARKETS INCOME - CLASS C
Selected Per-Share Data
and Ratios
Years ended December 31 1998 1997E
Net asset value, $ 11.110 $ 12.190
beginning of period
Income from Investment
Operations
Net investment incomeD .792 .154
Net realized and (3.191) .322
unrealized gain (loss)
Total from investment (2.399) .476
operations
Less Distributions
From net investment (.762) (.286)
income
From net realized gain -- (1.270)
Return of capital (.159) --
Total distributions (.921) (1.556)
Net asset value, end of $ 7.790 $ 11.110
period
Total returnB,C (22.47)% 4.16%
Net assets, end of period $ 964 $ 66
(000 omitted)
Ratio of expenses to 2.25%F 2.25%A,F
average net assets
Ratio of expenses to 2.23%G 2.25%
average net assets after
expense reductions
Ratio of net investment 9.30% 9.04%A
income to average net assets
Portfolio turnover 514% 660%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO DECEMBER 31, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because Advisor Latin America, Advisor Japan, Advisor Europe
Capital Appreciation, Advisor Diversified International, and Advisor
Global Equity (Corresponding Funds) were new when this prospectus
was printed, their performance history is not included. However,
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, and Advisor Diversified International are modeled
after the following existing funds, respectively: Fidelity Latin
America Fund, Fidelity Japan Fund, Fidelity Europe Capital
Appreciation Fund, and Fidelity Diversified International Fund
(Related Funds). Advisor Latin America, Advisor Japan, Advisor
Europe Capital Appreciation, and Advisor Diversified International
have investment objectives and policies that are substantially
identical in all material respects to those of their respective
Related Funds, which are managed by FMR. Advisor Global Equity has
an investment objective and policies that are
substantially similar in all material respects to those of
other accounts managed by FMR or an affiliate (Related Accounts). The
Related Funds and Related Accounts, however, have different
expenses and are sold through different distribution channels. FMR
also may manage other substantially similar funds and accounts that
may have better or worse performance than the Related Funds and
Related Accounts. Performance of other funds and accounts is not
included due to factors such as differences in their policies and/or
portfolio management strategies and/or because these accounts are not
mutual funds.
Below you will find information about the prior performance of the
Related Funds and Related Accounts, not the performance of the
Corresponding Funds offered through this prospectus. The performance
data of the Related Funds and Related Accounts is net of
management fees and other expenses and is based on past
results . In the case of Advisor Global Equity, the prior
performance shown is for a composite of non-mutual fund accounts with
investment objectives and policies that are substantially similar in
all material respects to those of Advisor Global Equity (Composite).
The methodology for calculating the performance of the non-mutual fund
accounts differs from that required to be employed by mutual funds
that are offered in the United States.
Although the Corresponding Funds have investment objectives and
policies that are substantially identical (or, in the case of Advisor
Global Equity, substantially similar) in all material respects to
those of the Related Funds and Related Accounts, you should
not assume that the Corresponding Funds will have the same performance
as the Related Funds and Related Accounts. For example, a
Corresponding Fund's future performance may be better or worse than
the performance of its Related Fund or Related Account due to,
among other things, differences in sales charges, expenses, asset
sizes and cash flows between the Corresponding Fund and its Related
Fund or Related Account. Class A, Class T, Class B, and Class C
shares of the Corresponding Funds may have higher sales charges and
may have higher total expenses than the Related Funds and Related
Accounts, which would have resulted in lower performance if each
Corresponding Fund's current sales charges and expenses had been
applied to the performance of the Related Funds and Related
Accounts. Certain investors may be eligible for sales charge
waivers.
The Related Accounts include funds organized in foreign
jurisdictions that are not offered to U.S. investors. These funds have
different expense structures and are subject to different regulatory
requirements than U.S. mutual funds, which may affect their
performance.
Advisor Global Equity is subject to restrictions imposed by the 1940
Act and the Internal Revenue Code of 1986 (E.G., limits on the
percentage of assets invested in securities of issuers in a single
industry and requirements on distributing income to shareholders) that
do not apply to its Related Accounts. These differences may affect the
performance of Advisor Global Equity and cause it to differ from that
of its Related Accounts. Notwithstanding these differences, Advisor
Global Equity has an investment objective and policies that are
substantially similar in all material respects to those of its Related
Accounts.
The first table below shows the date FMR began managing each
Related Fund and the date of the commencement of the Composite and the
asset size of each Related Fund or the Composite as of December 31,
1998.
The next group of tables beginning on page 74 shows changes in
the performance of each Related Fund or the Composite, as applicable,
from year to year.
The last group of tables on page 77 compares the performance of
each Related Fund or the Composite, as applicable, to the performance
of a market index and an average of the performance of similar
funds over various periods of time.
The performance of each Related Fund or the Composite, as applicable,
does not represent the past performance of the Corresponding Funds and
should not be interpreted as indicative of the future performance of
the Corresponding Funds or the Related Funds and Related
Accounts.
CORRESPONDING FUND OFFERED Related Fund or Composite
THROUGH THIS PROSPECTUS (Inception Date) and Asset
Size
Fidelity Advisor Latin Fidelity Latin America Fund
America Fund (April 19, 1993) $307,000,000
Fidelity Advisor Japan Fund Fidelity Japan Fund
(September 15, 1992)
$312,500,000
Fidelity Advisor Europe Fidelity Europe Capital
Capital Appreciation Fund Appreciation Fund (December
21, 1993) $689,900,000
Fidelity Advisor Diversified Fidelity Diversified
International Fund International Fund (December
27, 1991) $2,156,900,000
Fidelity Advisor Global Composite of non-mutual fund
Equity Fund accounts managed by FMR or
an affiliate (March 31,
1993) $3,758,210,000
YEAR-BY-YEAR RETURNS FOR THE RELATED FUNDS AND THE COMPOSITE
The returns in the following tables do not include the effect of
Fidelity Latin America 's, Fidelity Japan 's, or Fidelity
Europe Capital Appreciation 's applicable front-end sales
charge. If the effect of the sales charge was reflected, returns
would be lower than those shown.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY LATIN AMERICA
Calendar Years 1994 1995 1996 1997 1998
-23.17% -16.46% 30.72% 32.89% -38.34%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: -23.17
Row: 7, Col: 1, Value: -16.46
Row: 8, Col: 1, Value: 30.72
Row: 9, Col: 1, Value: 32.89
Row: 10, Col: 1, Value: -38.34
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY LATIN
AMERICA , THE HIGHEST RETURN FOR A QUARTER WAS 29.79%
(QUARTER ENDING SEPTEMBER 30, 1994) AND THE LOWEST RETURN FOR A
QUARTER WAS -30.76% (QUARTER ENDING SEPTEMBER 30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FIDELITY JAPAN
Calendar Years 1993 1994 1995 1996 1997 1998
20.45% 16.46% -2.13% -11.19% -10.73% 13.09%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: 20.45
Row: 6, Col: 1, Value: 16.46
Row: 7, Col: 1, Value: -2.13
Row: 8, Col: 1, Value: -11.19
Row: 9, Col: 1, Value: -10.73
Row: 10, Col: 1, Value: 13.09
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY JAPA N, THE
HIGHEST RETURN FOR A QUARTER WAS 23.45% (QUARTER ENDING JUNE
30, 1997) AND THE LOWEST RETURN FOR A QUARTER WAS -15.47%
(QUARTER ENDING DECEMBER 31, 1997).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY EUROPE CAPITAL
APPRECIATION
Calendar Years 1994 1995 1996 1997 1998
6.88% 14.69% 25.89% 24.96% 21.66%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: 6.88
Row: 7, Col: 1, Value: 14.69
Row: 8, Col: 1, Value: 25.89
Row: 9, Col: 1, Value: 24.96
Row: 10, Col: 1, Value: 21.66
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY EUROPE CAPITAL
APPRECIATION , THE HIGHEST RETURN FOR A QUARTER WAS
22.68% (QUARTER ENDING MARCH 31, 1998) AND THE LOWEST
RETURN FOR A QUARTER WAS -19.88% (QUARTER ENDING SEPTEMBER
30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY DIVERSIFIED
INTERNATIONAL
Calendar Years 1992 1993 1994 1995 1996 1997 1998
-13.81% 36.67% 1.09% 17.97% 20.02% 13.72% 14.39%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: -13.81
Row: 5, Col: 1, Value: 36.67
Row: 6, Col: 1, Value: 1.09
Row: 7, Col: 1, Value: 17.97
Row: 8, Col: 1, Value: 20.02
Row: 9, Col: 1, Value: 13.72
Row: 10, Col: 1, Value: 14.39
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY DIVERSIFIED
INTERNATIONAL , THE HIGHEST RETURN FOR A QUARTER WAS 15.25%
(QUARTER ENDING DECEMBER 31, 1998) AND THE LOWEST RETURN
FOR A QUARTER WAS -14.48% (QUARTER ENDING SEPTEMBER 30,
1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPOSITEA
Calendar Years 1994 1995 1996 1997 1998
0.79% 17.78% 15.93% 18.14% 20.25%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: 0.79
Row: 7, Col: 1, Value: 17.78
Row: 8, Col: 1, Value: 15.93
Row: 9, Col: 1, Value: 18.14
Row: 10, Col: 1, Value: 20.25
A THE METHODOLOGY FOR CALCULATING THE PERFORMANCE OF THE
NON-MUTUAL FUND ACCOUNTS IN THE COMPOSITE DIFFERS FROM THAT REQUIRED
TO BE EMPLOYED BY MUTUAL FUNDS THAT ARE OFFERED IN THE UNITED STATES.
DURING THE PERIODS SHOWN IN THE CHART FOR THE COMPOSITE, THE HIGHEST
RETURN FOR A QUARTER WAS 22.00 % (QUARTER ENDING DECEMBER 31,
1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS -13.85 %
(QUARTER ENDING SEPTEMBER 30, 1998 ).
AVERAGE ANNUAL RETURNS FOR THE RELATED FUNDS AND THE COMPOSITE
The returns in the following table include the effect of Fidelity
Latin America ' s, Fidelity Japan 's, and Fidelity Europe
Capital Appreciation ' s maximum applicable front-end sales
charge.
RELATED FUNDSD
For the periods ended Past 1 year Past 5 years Life of fund*
December 31, 1998
FIDELITY LATIN AMERICAE -40.19% -7.79% -7.79%A
Morgan Stanley Capital -35.11% -1.74% -1.74%A
International Emerging
Markets Free-Latin America
Index
Lipper Latin America Region -38.21% -6.81% -6.81%A
Funds Average
FIDELITY JAPANE 9.69% -0.18% 3.00%B
Tokyo Stock Exchange Index 7.76% -4.87% -0.55%B
Lipper Japanese Funds Average 8.17% -3.66% 0.19%B
FIDELITY EUROPE CAPITAL 18.01% 17.88% 17.88%A
APPRECIATIONE
Morgan Stanley Capital 28.87% 19.24% 19.24%A
International Europe Index
Lipper European Region Funds 22.55% 16.05% 16.05%A
Average
FIDELITY DIVERSIFIED 14.39% 13.24% 11.87%C
INTERNATIONALE
Morgan Stanley Capital 27.02% 11.69% 11.16%C
International GDP-Weighted
EAFE Index
Morgan Stanley Capital 20.27% 9.29% 8.89%C
International EAFE Index
Lipper International Funds 13.02% 7.69% 9.90%C
Average
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE
FUND'S COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1994.
B FROM JANUARY 1, 1993.
C FROM JANUARY 1, 1992 .
D THE FUNDS OFFERED THROUGH THIS PROSPECTUS CHARGE A 12B-1 FEE,
WHILE THE RELATED FUNDS DO NOT. THE FUNDS OFFERED THROUGH THIS
PROSPECTUS MAY SELL THEIR SHARES WITH A FRONT-END SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE. CERTAIN INVESTORS MAY BE ELIGIBLE
FOR SALES CHARGE WAIVERS. FIDELITY LATIN AMERICA , FIDELITY
JAPAN , AND FIDELITY EUROPE CAPITAL APPRECIATION SELL
THEIR SHARES WITH A MAXIMUM FRONT-END SALES CHARGE OF 3.0 0 %,
WHILE FIDELITY DIVERSIFIED INTERNATIONAL DOES NOT CHARGE A
SALES CHARGE. INCLUDING ANY APPLICABLE SALES CHARGE AND/OR 12B-1 FEE
IN A PERFORMANCE CALCULATION PRODUCES A LOWER RETURN.
E FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998, THE TOTAL
OPERATING EXPENSES WERE 1.33 % FOR FIDELITY LATIN AMERICA,
1.48 % FOR FIDELITY JAPAN, 1.08 % FOR FIDELITY EUROPE
CAPITAL APPRECIATION, AND 1.19 % FOR FIDELITY DIVERSIFIED
INTERNATIONA L (INCLUDING ANY APPLICABLE EXPENSE REDUCTIONS). IF
FMR HAD NOT REIMBURSED CERTAIN EXPENSES DURING THESE PERIODS, FIDELITY
JAPAN ' S AND FIDELITY DIVERSIFIED INTERNATIONA L' S TOTAL
RETURNS WOULD HAVE BEEN LOWER.
COMPOSITEA
For the periods ended Past 1 year Past 5 years Life of Composite*
December 31, 1998
COMPOSITE 20.25% 14.35% 14.35%
Morgan Stanley Capital 24.34% 15.68% 15.68%
International World Index
Lipper Global Funds Average 14.34% 11.98% 11.98%
A THE COMPOSITE IS THE ASSET-WEIGHTED COMPOSITE PERFORMANCE OF
THREE RELATED ACCOUNTS, WHICH ARE ALL THE NON-MUTUAL FUND ACCOUNTS
THAT HAVE INVESTMENT OBJECTIVES AND POLICIES THAT ARE SUBSTANTIALLY
SIMILAR IN ALL MATERIAL RESPECTS TO THOSE OF ADVISOR GLOBAL
EQUITY. THE COMPOSITE REFLECTS THE DEDUCTION OF FEES AND EXPENSES OF
2.75%, WHICH MAY BE HIGHER OR LOWER THAN ANY PARTICULAR RELATED
ACCOUNT. COMPOSITE PERFORMANCE RESULTS ARE VALUED MONTHLY AND ARE
ASSET-WEIGHTED BY USING BEGINNING OF MONTH MARKET VALUES.
* LIFE OF COMPOSITE FIGURES ARE FROM JANUARY 1, 1994.
Morgan Stanley Capital International Emerging Markets Free - Latin
America Index is a market capitalization-weighted index of
approximately 190 stocks traded in seven Latin American markets.
Tokyo Stock Exchange Index (TOPIX) is a market
capitalization-weighted index of over 1,100 stocks traded in the
Japanese market.
Morgan Stanley Capital International Europe Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. As of December 31,
1998, the index included over 500 equity securities of companies
domiciled in 15 European countries.
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE) Index is an index that is designed to represent the performance
of developed stock markets outside the United States and Canada. The
index may be compiled in two ways: a market capitalization-weighted
(cap-weighted) and a gross domestic product-weighted (GDP-weighted)
version. As of December 31, 1998, the cap-weighted index included over
1,000 equity securities of companies domiciled in 20 countries, and
the GDP-weighted index included over 1,000 equity securities of
companies domiciled in 20 countries.
Morgan Stanley Capital International World Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets throughout the world. As of
December 31, 1998, the index included over 1,400 equity securities of
companies domiciled in 22 countries.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For Advisor Latin America, Advisor
Japan, Advisor Europe Capital Appreciation, Advisor Diversified
International, and Advisor Global Equity, financial reports will be
available once the funds have completed their first annual or
semi-annual period. Each fund's annual and semi-annual reports include
a discussion of the fund's holdings and recent market conditions
and the fund's investment strategies that affected performance.
For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-8 88-622-3175 .
The SAI, the funds' annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-3855
Fidelity Investments & (Pyramid) Design, Fidelity, Fidelity
Investments, and Directed Dividends are registered trademarks of FMR
Corp.
Portfolio Advisor Services is a service mark of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
1.702979.101 AINT-pro-0299
Like securities of all mutual funds, these securities
have not been approved or disapproved by the
Securities and Exchange Commission, and the
Securities and Exchange Commission has not
determined if this prospectus is accurate or
complete. Any representation to the contrary is a
criminal offense.
FIDELITY ADVISOR
INTERNATIONAL FUNDS
INSTITUTIONAL CLASS
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 EMERGING MARKETS
INCOME FUND
PROSPECTUS
FEBRUARY 26, 1999
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
CONTENTS
FUND SUMMARY 3 INVESTMENT SUMMARY
6 PERFORMANCE
8 FEE TABLE
FUND BASICS 12 INVESTMENT DETAILS
15 VALUING SHARES
SHAREHOLDER INFORMATION 16 BUYING AND SELLING SHARES
19 EXCHANGING SHARES
20 ACCOUNT FEATURES AND POLICIES
21 DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
21 TAX CONSEQUENCES
FUND SERVICES 23 FUND MANAGEMENT
24 FUND DISTRIBUTION
APPENDIX 26 FINANCIAL HIGHLIGHTS
29 PRIOR PERFORMANCE OF SIMILAR
FUNDS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Latin American issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Latin America as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN LATIN AMERICA. The
Latin American economies are generally considered emerging markets and
are significantly affected by currency devaluations. The markets in
Latin America can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Japanese issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in Europe.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union (EMU).
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities, including securities of issuers located in emerging
markets.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR OVERSEAS FUND seeks growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using computer-aided, quantitative analysis of
historical earnings, dividend yield, earnings per share and other
factors supported by fundamental analysis to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently than the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing in securities issued anywhere in the
world.
(small solid bullet) Investing at least 65% of total assets in common
stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the world market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income. As a secondary objective, the fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in debt
securities of issuers in emerging markets (countries that have an
emerging stock market as defined by the International Finance
Corporation, countries with low- to middle-income economies according
to the World Bank, and countries that are listed in World Bank
publications as "developing").
(small solid bullet) Potentially investing in other types of
securities, including equity securities of emerging market issuers,
debt securities of non-emerging market foreign issuers, and
lower-quality debt securities of U.S. issuers.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in countries considered emerging markets as a
whole.
(small solid bullet) Analyzing a security's structural features,
current pricing and trading opportunities, and the credit, currency
and economic risks of the security and its issuer to select
investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole. Lower-quality debt securities
(those of less than investment-grade quality) can be more volatile due
to increased sensitivity to adverse issuer, political, regulatory,
market or economic developments.
In addition, the fund is considered non-diversified and can invest
a greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates Advisor International Capital
Appreciation's performance over the past year and the changes in
Advisor Overseas's and Advisor Emerging Markets Income's performance
from year to year and compares the funds' performance to the
performance of a market index and an average of the performance of
similar funds over various periods of time. Returns are based on past
results and are not an indication of future performance.
Because Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International and Advisor Global
Equity were new when this prospectus was printed, their performance
history is not included. Performance history will be available for
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International and Advisor Global
Equity after each fund has been in operation for one calendar year.
YEAR-BY-YEAR RETURNS
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION
Calendar Years 1998
10.15%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: 10.15
DURING THE PERIOD SHOWN IN THE CHART FOR INSTITUTIONAL CLASS OF
ADVISOR INTERNATIONAL CAPITAL APPRECIATION, THE HIGHEST RETURN FOR A
QUARTER WAS 1 7.09% (QUARTER ENDING DECEMBER 31, 1998)
AND THE LOWEST RETURN FOR A QUARTER WAS -19. 24 % (QUARTER ENDING
SEPTEMBER 30, 1998).
ADVISOR OVERSEAS
Calendar Years 1996 1997 1998
12.34% 11.78% 11.79%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: 12.34
Row: 9, Col: 1, Value: 11.78
Row: 10, Col: 1, Value: 11.79
DURING THE PERIODS SHOWN IN THE CHART FOR INSTITUTIONAL CLASS OF
ADVISOR OVERSEAS , THE HIGHEST RETURN FOR A QUARTER WAS
17. 52 % (QUARTER ENDING DECEMBER 31, 1998) AND THE LOWEST
RETURN FOR A QUARTER WAS -17.7 4 % (QUARTER ENDING SEPTEMBER
30, 1998).
ADVISOR EMERGING MARKETS INCOME
Calendar Years 1996 1997 1998
40.21% 16.84% -21.75%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: 40.21
Row: 9, Col: 1, Value: 16.84
Row: 10, Col: 1, Value: -21.75
DURING THE PERIODS SHOWN IN THE CHART FOR INSTITUTIONAL CLASS OF
ADVISOR EMERGING MARKETS INCOME, THE HIGHEST RETURN FOR A QUARTER WAS
1 3.44 % (QUARTER ENDING SEPTEMBER 30, 199 6 ) AND
THE LOWEST RETURN FOR A QUARTER WAS -28. 48 %% (QUARTER ENDING
SEPTEMBER 30, 1998).
AVERAGE ANNUAL RETURNS
For the periods ended Past 1year Life of class*
December 31, 1998
ADVISOR INTERNATIONAL CAPITAL 10.15% 10.15%A
APPRECIATION
Morgan Stanley Capital 14.46% 14.46%A
International AC World Index
Free ex USA
Lipper International Funds 13.02% 13.02%A
Average
ADVISOR OVERSEAS 11.79% 11.97%B
Morgan Stanley Capital 20.27% 9.17%B
International Europe,
Australasia, Far East Index
Lipper International Funds 13.02% 9.89%B
Average
ADVISOR EMERGING MARKETS INCOME -21.75% 8.63%B
J.P. Morgan Emerging Markets -14.35% 10.48%B
Bond Index Plus
Lipper Emerging Markets Debt -20.80% -8.28%B
Funds Average
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1998.
B FROM JANUARY 1, 1996.
If FMR had not reimbursed certain class expenses during these periods,
Institutional Class's returns would have been lower for Advisor
International Capital Appreciation, Advisor Overseas, and Advisor
Emerging Markets Income .
Morgan Stanley Capital International AC World Index Free ex USA is a
market capitalization-weighted index that is designed to represent the
performance of developed stock markets, excluding the United States,
throughout the world.
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE(registered trademark)) Index is a market capitalization-weighted
index that is designed to represent the performance of developed stock
markets outside the United States and Canada. As of December 31, 1998,
the index included over 1,000 equity securities of companies domiciled
in 20 countries.
J.P. Morgan Emerging Markets Bond Index Plus is a market
value-weighted index of U.S. dollar- and other external
currency-denominated Brady bonds, loans, Eurobonds, and local market
debt instruments traded in emerging markets.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
FEE TABLE
The following table describes the fees and expenses that are
incurred when you buy, hold or sell Institutional Class shares of a
fund. The annual class operating expenses provided beginning on page
12 for Institutional Class of Advisor International Capital
Appreciation, Advisor Overseas, and Advisor Emerging Markets Income
are based on historical expenses, adjusted to reflect current fees,
and do not reflect the effect of any expense reimbursements or
reduction of certain expenses during the period. The annual class
operating expenses provided beginning on page 12 for Institutional
Class of Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International, and Advisor Global
Equity are based on estimated expenses.
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Institutional Class
Sales charge (load) on None
purchases and reinvested
distributions
Deferred sales charge (load) None
on redemptions
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS)
<TABLE>
<CAPTION>
<S> <C> <C>
Institutional Class
ADVISOR LATIN AMERICA Management fee 0.74%
Distribution and Service None
(12b-1) fee
Other expenses 16.81%
Total annual class operating 17.55%
expensesA
ADVISOR JAPAN Management fee 0.74%
Distribution and Service None
(12b-1) fee
Other expenses 16.41%
Total annual class operating 17.15%
expensesA
ADVISOR EUROPE CAPITAL Management fee 0.74%
APPRECIATION
Distribution and Service None
(12b-1) fee
Other expenses 1.77%
Total annual class operating 2.51%
expensesA
ADVISOR INTERNATIONAL CAPITAL Management fee 0.73%
APPRECIATION
Distribution and Service None
(12b-1) fee
Other expenses 3.17%
Total annual class operating 3.90%
expensesA
ADVISOR OVERSEAS Management fee 0.89%
Distribution and Service None
(12b-1) fee
Other expenses 0.30%
Total annual class operating 1.19%
expensesA
</TABLE>
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE INSTITUTIONAL CLASS OF
CERTAIN FUNDS TO THE EXTENT THAT TOTAL OPERATING EXPENSES (EXCLUDING
INTEREST, TAXES, SECURITIES LENDING FEES, BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF THEIR RESPECTIVE AVERAGE
NET ASSETS, EXCEED THE FOLLOWING RATES:
Institutional Class Effective Date
Advisor Latin America 1.75% 1 2/22/98
Advisor Japan 1.75% 12/18/98
Advisor Europe Capital 1.75% 12/18/98
Appreciation
Advisor International Capital 1.45% 12/1/98
Appreciation
Advisor Overseas 1.30% 1/1/99
THESE ARRANGEMENTS CAN BE TERMINATED BY FMR AT ANY TIME.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total Institutional Class operating expenses would have been:
Institutional Class
Advisor Overseas 1.17%
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS) -
CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
Institutional Class
ADVISOR DIVERSIFIED Management fee 0.74%
INTERNATIONAL
Distribution and Service None
(12b-1) fee
Other expenses 0.87%
Total annual class operating 1.61%
expensesA
ADVISOR GLOBAL EQUITY Management fee 0.74%
Distribution and Service None
(12b-1) fee
Other expenses 0.73%
Total annual class operating 1.47%
expensesA
ADVISOR EMERGING MARKETS INCOME Management fee 0.69%
Distribution and Service None
(12b-1) fee
Other expenses 0.67%
Total annual class operating 1.36%
expensesA
</TABLE>
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE INSTITUTIONAL CLASS OF
CERTAIN FUNDS TO THE EXTENT THAT TOTAL OPERATING EXPENSES (EXCLUDING
INTEREST, TAXES, SECURITIES LENDING FEES, BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF THEIR RESPECTIVE AVERAGE
NET ASSETS, EXCEED THE FOLLOWING RATES:
Institutional Class Effective Date
Advisor Diversified 1.75% 12/18/98
International
Advisor Global Equity 1.75% 12/18/98
Advisor Emerging Markets Income 1.25% 7/1/95
THESE ARRANGEMENTS CAN BE TERMINATED BY FMR AT ANY TIME.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total Institutional Class operating expenses would have been:
Institutional Class
Advisor Emerging Markets Income 1.24%(dagger)
(dagger) AFTER REIMBURSEMENT.
This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.
Let's say, hypothetically, that Institutional Class's annual return is
5% and that your shareholder fees and Institutional Class's annual
operating expenses are exactly as described in the fee table. This
example illustrates the effect of fees and expenses, but is not meant
to suggest actual or expected fees and expenses or returns, all of
which may vary. For every $10,000 you invested, here's how much you
would pay in total expenses if you close your account after the number
of years indicated:
Institutional Class
ADVISOR LATIN AMERICA 1 year $ 1,645
3 years $ 4,341
ADVISOR JAPAN 1 year $ 1,611
3 years $ 4,269
ADVISOR EUROPE CAPITAL 1 year $ 254
APPRECIATION
3 years $ 782
ADVISOR INTERNATIONAL CAPITAL 1 year $ 392
APPRECIATION
3 years $ 1,189
5 years $ 2,004
10 years $ 4,121
ADVISOR OVERSEAS 1 year $ 121
3 years $ 378
5 years $ 654
10 years $ 1,443
ADVISOR DIVERSIFIED 1 year $ 164
INTERNATIONAL
3 years $ 508
ADVISOR GLOBAL EQUITY 1 year $ 150
3 years $ 465
ADVISOR EMERGING MARKETS INCOME 1 year $ 138
3 years $ 431
5 years $ 745
10 years $ 1,635
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
ADVISOR LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Latin American issuers. Latin America includes
Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Panama and
Venezuela. FMR normally invests the fund's assets primarily in common
stocks.
FMR normally diversifies the fund's investments across different Latin
American countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Latin America as a whole.
Although FMR may invest up to 35% of the fund's total assets in any
industry that accounts for more than 20% of the Latin American markets
as a whole, it does not currently intend to invest more than 25% of
the fund's total assets in any one industry.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities, including securities of issuers located in
emerging markets. FMR normally invests the fund's assets primarily in
common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR OVERSEAS FUND seeks growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund , FMR uses a
disciplined approach that involves computer-aided, quantitative
analysis supported by fundamental analysis. FMR's computer model
systematically reviews thousands of stocks, using data such as
historical earnings, dividend yield, earnings per share, and other
quantitative factors. Then, the issuers of potential investments are
analyzed further using fundamental factors such as growth potential,
earnings estimates and financial condition.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR invests the fund's assets in securities issued anywhere in the
world, including the United States. FMR normally invests at least 65%
of the fund's total assets in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the world market as a
whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve it's
objective.
INVESTMENT OBJECTIVE
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income. As a secondary objective, the fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in debt
securities of issuers in emerging markets. Countries with emerging
markets include those that have an emerging stock market as defined by
the International Finance Corporation, those with low- to
middle-income economies according to the World Bank, and those that
are listed in World Bank publications as "developing." FMR expects to
emphasize countries with relatively low gross national product per
capita compared to the world's major economies and countries with the
potential for rapid economic growth.
FMR may also invest in equity securities of emerging market issuers,
debt securities of non-emerging market foreign issuers, and
lower-quality debt securities of U.S. issuers. Although FMR may invest
up to 35% of the fund's total assets in these securities, FMR does not
currently anticipate that these investments will exceed approximately
20% of the fund's total assets.
FMR normally diversifies the fund's investments across different
emerging market countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in countries considered emerging
markets as a whole.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR generally
analyzes a security's structural features, current price compared to
its long-term value, and any short-term trading opportunities
resulting from market inefficiencies. FMR's analysis also considers
the credit, currency and economic risks associated with the security
and the country of its issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities and
warrants.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Debt securities include
corporate bonds, government securities, mortgage and other
asset-backed securities, and loans and loan participations.
PRINCIPAL INVESTMENT RISKS
Many factors affect each fund's performance. Each fund's share price
and the yield for Advisor Emerging Markets Income Fund change daily
based on changes in market conditions and interest rates and in
response to other economic, political or financial developments. A
fund's reaction to these developments will be affected by the types
of the securities in which the fund invests, the financial
condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that
issuer. Because FMR concentrates the investments of Advisor Latin
America Fund, Advisor Japan Fund and Advisor Europe Capital
Appreciation Fund in a particular country or group of countries, each
fund's performance is expected to be closely tied to economic and
political conditions within that country or group of countries and to
be more volatile than the performance of more geographically
diversified funds. When you sell your shares of a fund, they could be
worth more or less than what you paid for them.
The following factors may significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently than
small cap stocks, and "growth" stocks can react differently than
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities and mortgage
securities can be more sensitive to interest rate changes. In other
words, the longer the maturity of a security, the greater the impact a
change in interest rates could have on the security's price. In
addition, short-term and long-term interest rates do not necessarily
move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term
securities tend to react to changes in long-term interest rates.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently than the U.S. market.
Investing in emerging markets involves risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of foreign development;
political stability; market depth, infrastructure and capitalization
and regulatory oversight is generally less than in more developed
markets. Emerging market economies can be subject to greater social,
economic, regulatory and political uncertainties. All of these factors
can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.
LATIN AMERICA. The economies of countries in Latin America are all
considered emerging market economies. High interest, inflation and
unemployment rates generally characterize each economy. Currency
devaluations in any country can have a significant affect on the
entire region. Recently, the markets in many Latin American countries
have experienced significant downturns as well as significant
volatility. A small number of companies and industries, including the
telecommunications sector, represent a large portion of the market in
many Latin American countries.
JAPAN. The Japanese economy is currently in a recession. The economy
is characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The Japanese market has decreased
significantly recently.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union and many are also members of the EMU, which requires compliance
with restrictions on inflation rates, deficits and debt levels. Many
Eastern European countries continue to move toward market economies.
However, their markets remain relatively undeveloped and are
particularly sensitive to political and economic developments. The
tight fiscal and monetary controls necessary to join the EMU will
significantly affect every country in Europe.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in
general economic or political conditions can affect the credit quality
or value of an issuer's securities. The value of securities of
smaller, less well-known issuers can be more volatile than that of
larger issuers. Lower-quality debt securities (those of less than
investment-grade quality) tend to be more sensitive to these changes
than higher-quality debt securities.
Lower-quality debt securities involve greater risk of default or price
changes due to changes in the credit quality of the issuer. The value
of lower-quality debt securities often fluctuates in response to
company, political or economic developments and can decline
significantly over short periods of time or during periods of general
or regional economic difficulty. Lower-quality debt securities can be
thinly traded or have restrictions on resale, making them difficult to
sell at an acceptable price. The default rate for lower-quality debt
securities is likely to be higher during economic recessions or
periods of high interest rates.
QUANTITATIVE INVESTING. The value of securities selected using
quantitative analysis can react differently to issuer, political,
market and economic developments than the market as a whole or
securities selected using only fundamental analysis. The factors used
in quantitative analysis and the weight placed on those factors may
not be predictive of a security's value. In addition, factors that
affect a security's value can change over time and these changes may
not be reflected in the quantitative model.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance and the fund may not achieve its investment
objective .
FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
ADVISOR LATIN AMERICA FUND seeks high total investment return.
ADVISOR JAPAN FUND seeks long-term growth of capital.
ADVISOR EUROPE CAPITAL APPRECIATION FUND seeks long-term capital
appreciation.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND seeks capital
appreciation.
ADVISOR OVERSEAS FUND seeks growth of capital primarily through
investments in foreign securities.
ADVISOR DIVERSIFIED INTERNATIONAL FUND seeks capital growth by
investing primarily in equity securities of companies located anywhere
outside the U.S.
ADVISOR GLOBAL EQUITY FUND seeks long-term growth of capital.
ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income by investing primarily in debt securities and other instruments
of issuers in emerging markets. As a secondary objective, the fund
seeks capital appreciation.
VALUING SHARES
Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.
A class's net asset value per share (NAV) is the value of a single
share. Fidelity(registered trademark) normally calculates
Institutional Class's NAV as of the close of business of the NYSE,
normally 4:00 p.m. Eastern time. However, NAV may be calculated
earlier if trading on the NYSE is restricted or as permitted by the
Securities and Exchange Commission (SEC). Each fund's assets are
valued as of this time for the purpose of computing Institutional
Class's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations or on the basis of information furnished by a pricing
service. Certain short-term securities are valued on the basis of
amortized cost. If market quotations or information furnished by a
pricing service is not readily available for a security or if a
security's value has been materially affected by events occurring
after the close of the exchange or market on which the security is
principally traded (for example, a foreign exchange or market), that
security may be valued by another method that the Board of Trustees
believes accurately reflects fair value. A security's valuation
may differ depending on the method used for determining value .
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
For account, product and service information, please use the following
phone numbers:
(small solid bullet) If you are investing through a broker-dealer or
insurance representative, 1-800-522-7297 (8:30 a.m.-7:00 p.m. Eastern
time, Monday through Friday).
(small solid bullet) If you are investing through a bank
representative, 1-800-843-3001 (8:30 a.m.-7:00 p.m. Eastern time,
Monday through Friday).
Please use the following addresses:
BUYING OR SELLING SHARES
Fidelity Investments(registered trademark)
P.O. Box 770002
Cincinnati, OH 45277-0081
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH2A
Hebron, KY 41048
You may buy or sell Institutional Class shares of the funds through a
retirement account or an investment professional. When you invest
through a retirement account or an investment professional, the
procedures for buying, selling and exchanging Institutional Class
shares of a fund and the account features and policies may differ.
Additional fees may also apply to your investment in Institutional
Class shares of a fund, including a transaction fee if you buy or sell
Institutional Class shares of the fund through a broker or other
investment professional.
Certain methods of contacting Fidelity, such as by telephone, may be
unavailable or delayed (for example, during periods of unusual market
activity).
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(small solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(small solid bullet) ROTH IRAS
(small solid bullet) ROTH CONVERSION IRAS
(small solid bullet) ROLLOVER IRAS
(small solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED
PLANS
(small solid bullet) KEOGH PLANS
(small solid bullet) SIMPLE IRAS
(small solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(small solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. In addition, employee
benefit plans (as defined in the Employee Retirement Income Security
Act), 403(b) programs and plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans) must have at least $50 million in plan
assets;
2. Registered investment advisor managed account programs, provided
the registered investment advisor is not part of an organization
primarily engaged in the brokerage business, and the program (i)
charges an asset-based fee and (ii) will have at least $1 million
invested in the Institutional Class of the Advisor funds. In addition,
accounts other than an employee benefit plan, 403(b) program or
plan covering a sole-proprietor (formerly a Keogh/H.R. 10 plan) in
the program must be managed on a discretionary basis;
3. Trust institution and bank trust department managed account
programs that (i) charge an asset-based fee and (ii) will have at
least $1 million invested in the Institutional Class of the Advisor
funds. Accounts managed by third parties are not eligible to purchase
Institutional Class shares;
4. Insurance company separate accounts that will have at least $1
million invested in the Institutional Class of the Advisor funds;
5. Fidelity Trustees and employees ; and
6. Insurance company programs for employee benefit plans, 403(b)
programs or plans covering sole-proprietors (formerly Keogh/H.R. 10
plans) that (i) charge an asset-based fee and (ii) will have at least
$1 million invested in the Institutional Class of the Advisor funds.
Insurance company programs for employee benefit plans, 403(b) programs
and plans covering sole-proprietors (formerly Keogh/H.R. 10 plans)
include such programs offered by a broker-dealer affiliate of an
insurance company, provided that the affiliate is not part of an
organization primarily engaged in the brokerage business.
For purchases made by managed account programs, insurance company
separate accounts or insurance company programs for employee
benefit plans, 403(b) programs or plans covering sole-proprietors
(formerly Keogh/H.R. 10 plans) , Fidelity may waive the
requirement that $1 million be invested in the Institutional Class of
the Advisor funds.
The price to buy one share of Institutional Class is the class's NAV.
Institutional Class shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your order
is received in proper form.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) Fidelity must receive payment within three
business days after an order for shares is placed; otherwise your
purchase order may be canceled and you could be liable for any losses
or fees a fund or Fidelity has incurred.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Institutional Class shares can be bought or sold through investment
professionals using an automated order placement and settlement system
that guarantees payment for orders on a specified date.
Certain financial institutions that meet creditworthiness criteria
established by Fidelity Distributors Corporation (FDC) may enter
confirmed purchase orders on behalf of customers by phone, with
payment to follow no later than close of business on the next business
day. If payment is not received by that time, the order will be
canceled and the financial institution will be liable for any losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accountsA $500
Through regular investment plansB $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accountsA None
A FIDELITY ADVISOR TRADITIONAL IRA, ROTH IRA, ROTH CONVERSION IRA,
ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
B AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED.
There is no minimum account balance or initial or subsequent purchase
minimum for certain Fidelity retirement accounts funded through salary
deduction, or accounts opened with the proceeds of distributions from
such retirement accounts. In addition, each fund may waive or lower
purchase minimums in other circumstances.
KEY INFORMATION
PHONE TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from another
Fidelity fund. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from another
Fidelity fund. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770002 CINCINNATI, (small solid bullet) Complete
OH 45277-0081 and sign the application.
Make your check payable to
the complete name of the
fund and note the applicable
class. Mail to your
investment professional or
to the address at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund
and note the applicable
class. Indicate your fund
account number on your check
and mail to your investment
professional or to the
address at left.
(small solid bullet) Exchange
from the same class of other
Fidelity Advisor funds or
from another Fidelity fund.
Send a letter of instruction
to your investment
professional or to the
address at left, including
your name, the funds' names,
the applicable class names,
the fund account numbers,
and the dollar amount or
number of shares to be
exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to your investment
professional.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to your
investment professional.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to set
up your account and to
arrange a wire transaction.
(small solid bullet) Wire to:
Banker's Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Banker's Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Advisor Systematic
Investment Program.
SELLING SHARES
The price to sell one share of Institutional Class is the class's NAV.
If appropriate to protect shareholders, e ach fund may impose a
redemption fee ( trading fee ) on redemptions from the
fund.
Your shares will be sold at the next NAV calculated after your order
is received in proper form.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of business on
the day you place your order.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 30 days;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $1,000 worth of shares in the account to keep
it open, except accounts not subject to account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other assets rather than in cash if the Board of Trustees determines
it is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE (small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Exchange
to the same class of other
Fidelity Advisor funds or to
another Fidelity fund. Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 770002 CINCINNATI, SOLE PROPRIETORSHIP, UGMA,
OH 45277-0081 UTMA
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including your name, the
fund's name, the applicable
class name, your fund
account number, and the
dollar amount or number of
shares to be sold. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information" to
request one.
TRUST
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the trust's name,
the fund's name, the
applicable class name, the
trust's fund account number,
and the dollar amount or
number of shares to be sold.
The trustee must sign the
letter of instruction
indicating capacity as
trustee. If the trustee's
name is not in the account
registration, provide a copy
of the trust document
certified within the last 60
days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the firm's name,
the fund's name, the
applicable class name, the
firm's fund account number,
and the dollar amount or
number of shares to be sold.
At least one person
authorized by corporate
resolution to act on the
account must sign the letter
of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The letter of
instruction must be signed
by all persons required to
sign for transactions,
exactly as their names
appear on the account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit
your investment professional
to request one.
TRUST
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The trustee
must sign the letter of
instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to
your investment
professional. At least one
person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit
your investment professional
for instructions.
AUTOMATICALLY (small solid bullet) Use
Fidelity Advisor Systematic
Withdrawal Program to set up
periodic redemptions from
your Institutional Class
account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As an Institutional Class shareholder, you have the privilege of
exchanging your Institutional Class shares for Institutional Class
shares of other Fidelity Advisor funds or for shares of Fidelity
funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY ADVISOR SYSTEMATIC
INVESTMENT PROGRAM TO MOVE
MONEY FROM YOUR BANK ACCOUNT
TO A FIDELITY ADVISOR FUND.
MINIMUM INITIAL MINIMUM ADDITIONAL FREQUENCY PROCEDURES
$100 $100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or semi-annually up for a new account,
complete the appropriate
section on the application.
(small solid bullet) To set
up for existing accounts,
call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for an
application.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
investment date.
FIDELITY ADVISOR SYSTEMATIC
WITHDRAWAL PROGRAM TO SET UP
PERIODIC REDEMPTIONS FROM
YOUR INSTITUTIONAL CLASS
ACCOUNT TO YOU OR TO YOUR
BANK CHECKING ACCOUNT.
MINIMUM MAXIMUM FREQUENCY PROCEDURES
$100 $50,000 Monthly, quarterly, or (small solid bullet) Accounts
semi-annually with a value of $10,000 or
more in Institutional Class
shares are eligible for this
program.
(small solid bullet) To set
up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for instructions.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
withdrawal date.
</TABLE>
OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account.
(small solid bullet) Call your investment professional or call
Fidelity at the appropriate number found in "General Information"
before your first use to verify that this feature is set up on your
account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
(small solid bullet) To add the wire feature or to change the bank
account designated to receive redemption proceeds at any time prior to
making a redemption request, you should send a letter of instruction,
including a signature guarantee, to your investment professional or to
Fidelity at the address found in "General Information."
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity at 1-888-622-3175 if you need additional
copies of financial reports or prospectuses.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
If your ACCOUNT BALANCE falls below $1,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV on the day your account is closed.
Fidelity may charge a FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Each fund earns dividends, interest and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gains distributions.
Each of Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, and Advisor Global Equity
normally pays dividends and capital gains distributions in December.
Advisor Emerging Markets Income normally declares dividends daily and
pays them monthly. The fund normally pays capital gains distributions
in December and February.
EARNING DIVIDENDS
Shares of Advisor Emerging Markets Income purchased by an automated
purchase order begin to earn dividends on the day your payment is
received.
Shares of Advisor Emerging Markets Income purchased by all other
purchase orders begin to earn dividends on the first business day
following the day your payment is received.
Shares of Advisor Emerging Markets Income earn dividends until, but
not including, the next business day following the day of redemption.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
Institutional Class's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gains distributions
will be automatically reinvested in additional Institutional Class
shares of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gains distributions will be
automatically reinvested in additional Institutional Class shares of
the fund. Your dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gains distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in Institutional Class shares of
another identically registered Fidelity Advisor fund or shares of
identically registered Fidelity funds. Your capital gains
distributions will be automatically invested in Institutional Class
shares of another identically registered Fidelity Advisor fund or
shares of identically registered Fidelity funds, automatically
reinvested in additional Institutional Class shares of the fund, or
paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, contact your investment
professional directly or call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income. Each
fund's distributions of long-term capital gains are taxable to you
generally as capital gains.
If a fund's distributions exceed its income and capital gains realized
in any year, which is sometimes the result of currency-related losses,
all or a portion of those distributions may be treated as a return of
capital to shareholders for tax purposes. A return of capital will
generally not be taxable to you, but will reduce the cost basis of
your shares and result in a higher reported capital gain or a lower
reported capital loss when you sell your shares.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in Institutional Class shares of another
Fidelity Advisor fund or shares of Fidelity funds, you will receive
certain December distributions in January, but those distributions
will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund is the difference between
the cost of your shares and the price you receive when you sell them.
FUND SERVICES
FUND MANAGEMENT
Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is each fund's manager.
As of April 30, 1998 , FMR had approximately $ 529 billion
in discretionary assets under management.
As the manager, FMR is responsible for choosing the funds' investments
and handling their business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for each fund. FMR
Far East was organized in 1986 to provide investment research and
advice to FMR. Currently, FMR Far East provides investment research
and advice on issuers based outside the United States and may also
provide investment advisory services for each fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for each fund.
As of September 28, 1998 , FIIA had approximately $ 1
billion in discretionary assets under management. Currently, FIIA
provides investment research and advice on issuers based outside the
United States and may also provide investment advisory services for
each fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
each fund. As of September 28, 1998 , FIIA(U.K.)L had
approximately $ 2.3 billion in discretionary assets under
management. Currently, FIIA(U.K.)L provides investment research and
advice on issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan, serves as a sub-adviser for Advisor Japan, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, and Advisor Emerging
Markets Income. As of September 28, 1998 , FIJ had approximately
$ 3.96 billion in discretionary assets under management.
Currently, FIJ is primarily responsible for choosing investments for
Advisor Japan. Currently, FIJ provides investment research and advice
on issuers based outside the United States and may also provide
investment advisory services for Advisor International Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, and Advisor Emerging Markets Income.
A fund could be adversely affected if the computer systems used by FMR
and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.
John Carlson is Vice President and manager of Advisor Emerging Markets
Income, which he has managed since June 1995. He also manages other
Fidelity funds. Prior to joining Fidelity in 1995, Mr. Carlson was
executive director of emerging markets at Lehman Brothers
International from 1992 through 1995.
Greg Fraser is Vice President and manager of Advisor Diversified
International, which he has managed since December 1998. He also
manages other Fidelity funds. Since joining Fidelity in 1986, Mr.
Fraser has worked as an analyst and manager.
Dick Habermann is Vice President and lead manager of Advisor Global
Equity, which he has managed since December 1998. Other Fidelity
investment professionals assist Mr. Habermann in selecting investments
for the fund. He also manages other Fidelity funds. Mr. Habermann is a
senior vice president of FMR Co. Previously, he was Division Head for
International Equities and Director of International Research from
1993 to 1996, and Joint Chief Strategist for Portfolio Advisory
Services SM from 1996 to 1997. Mr. Habermann joined Fidelity in 1968.
Richard Mace, Jr. is Vice President and manager of Advisor Overseas,
which he has managed since March 1996. He also manages other
Fidelity funds. Since joining Fidelity in 1987, Mr. Mace has worked as
an analyst and manager .
Kevin McCarey is Vice President and manager of Advisor International
Capital Appreciation and Advisor Europe Capital Appreciation, which he
has managed since November 1997 and December 1998, respectively. He
also manages other Fidelity funds. Since joining Fidelity in 1986, Mr.
McCarey has worked as an analyst and manager.
Brenda Reed is Vice President and manager of Advisor Japan, which she
has managed since December 1998. She also manages other Fidelity
funds. Since joining Fidelity in 1992, Ms. Reed has worked as an
analyst and manager.
Margaret Reynolds is associate manager of Advisor Latin America, which
she has managed since December 1998. Since joining Fidelity in 1995,
Ms. Reynolds has worked as an analyst and associate manager. Prior to
joining Fidelity, Ms. Reynolds was an international equity and
fixed-income analyst with Putnam Investments covering Latin America
and other emerging markets from 1986 to 1995.
Patricia Satterthwaite is Vice President and lead manager of Advisor
Latin America, which she has managed since December 1998. She also
manages other Fidelity funds. Since joining Fidelity in 1986, Ms.
Satterthwaite has worked as an analyst and manager.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Each fund pays a management fee to FMR.
The management fee is calculated and paid to FMR every month.
For Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Diversified International, Advisor Global Equity, and Advisor Emerging
Markets Income, the fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month.
For Advisor Overseas, the fee is determined by calculating a basic fee
and then applying a performance adjustment. The performance adjustment
either increases or decreases the management fee, depending on how
well Advisor Overseas has performed relative to the EAFE Index.
Management fee = Basic fee +/- Performance adjustment
The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52% for
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, and Advisor Global Equity
or 0.37% for Advisor Emerging Markets Income, and it drops as total
assets under management increase.
For October 1998, the group fee rate was 0.2910 % for Advisor
Latin America, Advisor Japan, Advisor Europe Capital Appreciation,
Advisor International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, and Advisor Global Equity and for December
1998, the group fee rate was 0.1324 % for Advisor Emerging
Markets Income. The individual fund fee rate is 0.45% for Advisor
Latin America, Advisor Japan, Advisor Europe Capital Appreciation,
Advisor International Capital Appreciation, Advisor Overseas Fund,
Advisor Diversified International, and Advisor Global Equity and 0.55%
for Advisor Emerging Markets Income.
The basic fee for Advisor Overseas for the fiscal year ended October
31, 1998 was 0.74 % of the fund's average net assets.
The performance adjustment rate is calculated monthly by comparing
over the performance period Advisor Overseas's performance to
that of the EAFE Index.
For Advisor Overseas, the performance period is the most recent
36-month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
the fund's average net assets over the performance period.
For the purposes of calculating the performance adjustment for Advisor
Overseas, the fund's investment performance will be based on the
average performance of all classes of the fund weighted according to
their average assets for each month in the performance period.
The total management fee for the fiscal year ended October 31, 1998
was 0.73 % of the fund's average net assets for Advisor
International Capital Appreciation and 0.89 % of the fund's
average net assets for Advisor Overseas.
The total management fee for the fiscal year ended December 31, 1998
was 0.69 % of the fund's average net assets for Advisor Emerging
Markets Income.
FMR pays FMR U.K., FMR Far East, FIJ and FIIA for providing assistance
with investment advisory services, and FIIA in turn pays FIIA(U.K.)L.
FMR may, from time to time, agree to reimburse each class for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a class if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated by FMR at any time, can decrease
a class's expenses and boost its performance.
As of December 31, 1998, approximately 100 % of Advisor Latin
America's, Advisor Japan's, Advisor Europe Capital Appreciation's,
Advisor Diversified International 's and Advisor Global Equity's
total outstanding shares were held by FMR .
FUND DISTRIBUTION
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
FDC distributes Institutional Class's shares.
Institutional Class has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 that
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with providing services intended
to result in the sale of Institutional Class shares and/or shareholder
support services. FMR, directly or through FDC, may pay
intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees of each fund has authorized such payments for
Institutional Class.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Fidelity Advisor funds, provided
that a fund receives brokerage services and commission rates
comparable to those of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related
Statement of Additional Information ( SAI ) , in connection
with the offer contained in this Prospectus. If given or made, such
other information or representations must not be relied upon as having
been authorized by the funds or FDC. This Prospectus and the related
SAI do not constitute an offer by the funds or by FDC to sell or to
buy shares of the funds to any person to whom it is unlawful to make
such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
class's financial history for the past 5 years or, if shorter, the
period of the class's operations. Certain information reflects
financial results for a single class share. Total returns for each
period include the reinvestment of all dividends and distributions.
This information has been audited by PricewaterhouseCoopers
LLP, independent accountants , whose report, along with each
fund's financial highlights and financial statements, are included in
each fund's Annual Report. A free copy of each Annual Report is
available upon request. Advisor Latin America commenced operations
on December 21, 1998 . Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International, and Advisor Global
Equity commenced operations on December 17 , 1998.
ADVISOR INTERNATIONAL CAPITAL APPRECIATION
Selected Per-Share Data and
Ratios
Year ended October 31 1998E
Net asset value, beginning $ 10.00
of period
Income from Investment
Operations
Net investment incomeD .04
Net realized and .05
unrealized gain (loss)
Total from investment .09
operations
Net asset value, end of $ 10.09
period
Total returnB,C .90%
Net assets, end of period $ 4,682
(000 omitted)
Ratio of expenses to 1.81%A,F
average net assets
Ratio of net investment .34%A
income to average net assets
Portfolio turnover 199%A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF
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.
ADVISOR OVERSEAS
Selected Per-Share Data
and Ratios
Year ended October 31 1998 1997 1996 1995E
Net asset value, beginning $ 16.92 $ 15.20 $ 13.97 $ 13.89
of period
Income from Investment
Operations
Net investment income .13D .22D .21D,H .05
Net realized and .53 2.36 1.24 .03
unrealized gain (loss)
Total from investment .66 2.58 1.45 .08
operations
Less Distributions
From net investment income (.26) (.23) (.21) --
From net realized gain (.96) (.63) (.01) --
Total distributions (1.22) (.86) (.22) --
Net asset value, end of $ 16.36 $ 16.92 $ 15.20 $ 13.97
period
Total returnB,C 4.11% 17.73% 10.51% .58%
Net assets, end of period $ 76,625 $ 38,247 $ 16,247 $ 1,482
(000 omitted)
Ratio of expenses to 1.26% 1.17% 1.44% .97%A,F
average net assets
Ratio of expenses to 1.24%G 1.16%G 1.43%G .97%A
average net assets after
expense reductions
Ratio of net investment .76% 1.31% 1.46% 1.94%A
income to average net assets
Portfolio turnover 74% 70% 82% 47%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
H INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.04 PER SHARE.
ADVISOR EMERGING MARKETS INCOME
Selected Per-Share Data
and Ratios
Years ended December 31 1998 1997 1996 1995E
Net asset value, beginning $ 11.060 $ 11.650 $ 9.280 $ 8.400
of period
Income from Investment
Operations
Net investment income .931D .860D .786D .393
Net realized and (3.229) 1.008 2.779 .876
unrealized gain (loss)
Total from investment (2.298) 1.868 3.565 1.269
operations
Less Distributions
From net investment income (.846) (.998) (.785) (.389)
From net realized gain -- (1.460) (.410) --
Return of capital (.176) -- -- --
Total distributions (1.022) (2.458) (1.195) (.389)
Net asset value, end of $ 7.740 $ 11.060 $ 11.650 $ 9.280
period
Total returnB,C (21.75)% 16.84% 40.21% 15.52%
Net assets, end of period $ 1,434 $ 1,320 $ 2,639 $ 201
(000 omitted)
Ratio of expenses to 1.25%F 1.25%F 1.25%F 1.25%A,F
average net assets
Ratio of expenses to 1.24%G 1.23%G 1.25% 1.25%A
average net assets after
expense reductions
Ratio of net investment 10.02% 6.85% 7.46% 9.09%A
income to average net assets
Portfolio turnover 514% 660% 410% 305%A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO DECEMBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor Diversified International, and Advisor Global
Equity (Corresponding Funds) were new when this prospectus was
printed, their performance history is not included. However, Advisor
Latin America, Advisor Japan, Advisor Europe Capital Appreciation, and
Advisor Diversified International are modeled after the following
existing funds, respectively: Fidelity Latin America Fund, Fidelity
Japan Fund, Fidelity Europe Capital Appreciation Fund, and Fidelity
Diversified International Fund (Related Funds). Advisor Latin
America, Advisor Japan, Advisor Europe Capital Appreciation, and
Advisor Diversified International have investment objectives and
policies that are substantially identical in all material respects to
those of their respective Related Funds, which are managed by FMR.
Advisor Global Equity has an investment objective and policies
that are substantially similar in all material respects to
those of other accounts managed by FMR or an affiliate (Related
Accounts). The Related Funds and Related Accounts, however, have
different expenses and are sold through different distribution
channels. FMR also may manage other substantially similar funds and
accounts that may have better or worse performance than the Related
Funds and Related Accounts. Performance of other funds and accounts is
not included due to factors such as differences in their policies
and/or portfolio management strategies and/or because these accounts
are not mutual funds.
Below you will find information about the prior performance of the
Related Funds and Related Accounts, not the performance of the
Corresponding Funds offered through this prospectus. The performance
data of the Related Funds and Related Accounts is net of
management fees and other expenses and is based on past
results. In the case of Advisor Global Equity, the prior
performance shown is for a composite of non-mutual fund accounts with
investment objectives and policies that are substantially similar in
all material respects to those of Advisor Global Equity (Composite).
The methodology for calculating the performance of the non-mutual fund
accounts differs from that required to be employed by mutual funds
that are offered in the United States.
Although the Corresponding Funds have investment objectives and
policies that are substantially identical (or, in the case of Advisor
Global Equity, substantially similar) in all material respects to
those of the Related Funds and Related Accounts, you should
not assume that the Corresponding Funds will have the same performance
as the Related Funds and Related Accounts. For example, a
Corresponding Fund's future performance may be better or worse than
the performance of its Related Fund or Related Account due to,
among other things, differences in sales charges, expenses, asset
sizes and cash flows between the Corresponding Fund and its Related
Fund or Related Account.
The Related Accounts include funds organized in foreign jurisdictions
that are not offered to U.S. investors. These funds have different
expense structures and are subject to different regulatory
requirements than U.S. mutual funds, which may affect their
performance.
Advisor Global Equity is subject to restrictions imposed by the 1940
Act and the Internal Revenue Code of 1986 (E.G., limits on the
percentage of assets invested in securities of issuers in a single
industry and requirements on distributing income to shareholders) that
do not apply to its Related Accounts. These differences may affect the
performance of Advisor Global Equity and cause it to differ from that
of its Related Accounts. Notwithstanding these differences, Advisor
Global Equity has an investment objective and policies that are
substantially similar in all material respects to those of its Related
Accounts.
The first table below shows the date FMR began managing each
Related Fund and the date of the commencement of the Composite and the
asset size of each Related Fund or the Composite as of December 31,
1998.
The next group of tables beginning on page 47 shows changes in
the performance of each Related Fund or the Composite, as applicable,
from year to year.
The last group of tables beginning on page 49 compares the
performance of each Related Fund or the Composite, as applicable, to
the performance of a market index and an average of the performance
of similar funds over various periods of time.
The performance of each Related Fund or the Composite, as applicable,
does not represent the past performance of the Corresponding Funds and
should not be interpreted as indicative of the future performance of
the Corresponding Funds or the Related Funds and Related
Accounts.
CORRESPONDING FUND OFFERED RELATED FUND OR COMPOSITE
THROUGH THIS PROSPECTUS (INCEPTION DATE) AND ASSET
SIZE
Fidelity Advisor Latin Fidelity Latin America Fund
America Fund (April 19, 1993) $307,000,000
Fidelity Advisor Japan Fund Fidelity Japan Fund
(September 15, 1992)
$312,500,000
Fidelity Advisor Europe Fidelity Europe Capital
Capital Appreciation Fund Appreciation Fund (December
21, 1993) $689,900,000
Fidelity Advisor Diversified Fidelity Diversified
International Fund International Fund (December
27, 1991) $2,156,900,000
Fidelity Advisor Global Composite of non-mutual fund
Equity Fund accounts managed by FMR or
an affiliate
(March 31, 1993) $3,758,210,000
YEAR-BY-YEAR RETURNS FOR THE RELATED FUNDS AND THE COMPOSITE
The returns in the following tables do not include the effect of
Fidelity Latin America's, Fidelity Japan's, or Fidelity Europe Capital
Appreciation's applicable front-end sales charge. If the effect of the
sales charge was reflected, returns would be lower than those shown.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY LATIN AMERICA
Calendar Years 1994 1995 1996 1997 1998
-23.17% -16.46% 30.72% 32.89% -38.34%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: -23.17
Row: 7, Col: 1, Value: -16.46
Row: 8, Col: 1, Value: 30.72
Row: 9, Col: 1, Value: 32.89
Row: 10, Col: 1, Value: -38.34
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY LATIN AMERICA, THE
HIGHEST RETURN FOR A QUARTER WAS 29. 7 9% (QUARTER ENDING
SEPTEMBER 30, 1994) AND THE LOWEST RETURN FOR A QUARTER WAS
- -30.76% (QUARTER ENDING SEPTEMBER 30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FIDELITY JAPAN
Calendar Years 1993 1994 1995 1996 1997 1998
20.45% 16.46% -2.13% -11.19% -10.73% 13.09%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: 20.45
Row: 6, Col: 1, Value: 16.46
Row: 7, Col: 1, Value: -2.13
Row: 8, Col: 1, Value: -11.19
Row: 9, Col: 1, Value: -10.73
Row: 10, Col: 1, Value: 13.09
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY JAPAN, THE HIGHEST
RETURN FOR A QUARTER WAS 23.45% (QUARTER ENDING JUNE 30 ,
199 7 ) AND THE LOWEST RETURN FOR A QUARTER WAS -15.47% (QUARTER
ENDING DECEMBER 31, 1997).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIDELITY EUROPE CAPITAL
APPRECIATION
Calendar Years 1994 1995 1996 1997 1998
6.88% 14.69% 25.89% 24.96% 21.66%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: 6.88
Row: 7, Col: 1, Value: 14.69
Row: 8, Col: 1, Value: 25.89
Row: 9, Col: 1, Value: 24.96
Row: 10, Col: 1, Value: 21.66
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY EUROPE CAPITAL
APPRECIATION, THE HIGHEST RETURN FOR A QUARTER WAS 22.68% (QUARTER
ENDING MARCH 31, 1998) AND THE LOWEST RETURN FOR A QUARTER WAS
- -19.88% (QUARTER ENDING SEPTEMBER 30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY DIVERSIFIED
INTERNATIONAL
Calendar Years 1992 1993 1994 1995 1996 1997 1998
-13.81% 36.67% 1.09% 17.97% 20.02% 13.72% 14.39%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: -13.81
Row: 5, Col: 1, Value: 36.67
Row: 6, Col: 1, Value: 1.09
Row: 7, Col: 1, Value: 17.97
Row: 8, Col: 1, Value: 20.02
Row: 9, Col: 1, Value: 13.72
Row: 10, Col: 1, Value: 14.39
DURING THE PERIODS SHOWN IN THE CHART FOR FIDELITY DIVERSIFIED
INTERNATIONAL, THE HIGHEST RETURN FOR A QUARTER WAS 15.25% (QUARTER
ENDING DECEMBER 31, 1998) AND THE LOWEST RETURN FOR A QUARTER
WAS -14.48% (QUARTER ENDING SEPTEMBER 30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPOSITEA
Calendar Years 1994 1995 1996 1997 1998
1.80% 18.94% 17.08% 19.31% 21.44%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: 1.8
Row: 7, Col: 1, Value: 18.94
Row: 8, Col: 1, Value: 17.08
Row: 9, Col: 1, Value: 19.31
Row: 10, Col: 1, Value: 21.44
A THE METHODOLOGY FOR CALCULATING THE PERFORMANCE OF THE NON-MUTUAL
FUND ACCOUNTS IN THE COMPOSITE DIFFERS FROM THAT REQUIRED TO BE
EMPLOYED BY MUTUAL FUNDS THAT ARE OFFERED IN THE UNITED STATES.
DURING THE PERIODS SHOWN IN THE CHART FOR THE COMPOSITE, THE HIGHEST
RETURN FOR A QUARTER WAS 22.29 % (QUARTER ENDING DECEMBER
31 , 199 8 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-13.62 % (QUARTER ENDING SEPTEMBER 30 , 199 8 ).
AVERAGE ANNUAL RETURNS FOR THE RELATED FUNDS AND THE COMPOSITE
The returns in the following table include the effect of Fidelity
Latin America's, Fidelity Japan's, and Fidelity Europe Capital
Appreciation's maximum applicable front-end sales charge.
RELATED FUNDS
For the periods ended Past 1 year Past 5 years Life of fund*
December 31, 1998
FIDELITY LATIN AMERICAD -40.19% -7.79% -7.79%A
Morgan Stanley Capital -35.11% -1.74% -1.74%A
International Emerging
Markets Free - Latin America
Index
Lipper Latin America Region -38.21% -6.81% -6.81%A
Funds Average
FIDELITY JAPAND 9.69% -0.18% 3.00%B
Tokyo Stock Exchange Index 7.76% -4.87% -0.55%B
Lipper Japanese Funds Average 8.17% -3.66% 0.19%B
FIDELITY EUROPE CAPITAL 18.01% 17.88% 17.88%A
APPRECIATIOND
Morgan Stanley Capital 28.87% 19.24% 19.24%A
International Europe Index
Lipper European Region Funds 22.55% 16.05% 16.05%A
Average
For the periods ended Past 1 year Past 5 years Life of fund*
December 31, 1998
FIDELITY DIVERSIFIED 14.39% 13.24% 11.87%C
INTERNATIONALD
Morgan Stanley Capital 27.02% 11.69% 11.16%C
International GDP-Weighted
EAFE Index
Morgan Stanley Capital 20.27% 9.29% 8.89%C
International EAFE Index
Lipper International Funds 13.02% 7.69% 9.90%C
Average
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE
FUND'S COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1994 .
B FROM JANUARY 1, 1993.
C FROM JANUARY 1, 1992.
D FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998, THE TOTAL
OPERATING EXPENSES WERE 1.33 % FOR FIDELITY LATIN AMERICA,
1.48 % FOR FIDELITY JAPAN, 1.08 % FOR FIDELITY EUROPE
CAPITAL APPRECIATIO N , AND 1.19 % FOR FIDELITY DIVERSIFIED
INTERNATIONAL (INCLUDING ANY APPLICABLE EXPENSE REDUCTIONS). IF FMR
HAD NOT REIMBURSED CERTAIN EXPENSES DURING THESE PERIODS, FIDELITY
JAPAN'S AND FIDELITY DIVERSIFIED INTERNATIONAL'S RETURNS WOULD HAVE
BEEN LOWER.
COMPOSITEA
For the periods ended Past 1 year Past 5 years Life of Composite*
December 31, 1998
COMPOSITE 21.44% 15.49% 15.49%
Morgan Stanley Capital 24.34% 15.68% 15.68%
International World Index
Lipper Global Funds Average 14.34% 11.98% 11.98%
A THE COMPOSITE IS THE ASSET-WEIGHTED COMPOSITE PERFORMANCE OF THREE
RELATED ACCOUNTS, WHICH ARE ALL THE NON-MUTUAL FUND ACCOUNTS THAT HAVE
INVESTMENT OBJECTIVES AND POLICIES THAT ARE SUBSTANTIALLY SIMILAR
IN ALL MATERIAL RESPECTS TO THOSE OF ADVISOR GLOBAL EQUITY. THE
COMPOSITE REFLECTS THE DEDUCTION OF FEES AND EXPENSES OF 1.75%, WHICH
MAY BE HIGHER OR LOWER THAN ANY PARTICULAR RELATED ACCOUNT. COMPOSITE
PERFORMANCE RESULTS ARE VALUED MONTHLY AND ARE ASSET-WEIGHTED BY USING
BEGINNING OF MONTH MARKET VALUES.
* LIFE OF COMPOSITE FIGURES ARE FROM JANUARY 1, 1994.
Morgan Stanley Capital International Emerging Markets Free - Latin
America Index is a market capitalization-weighted index of
approximately 190 stocks traded in seven Latin American markets.
Tokyo Stock Exchange Index (TOPIX) is a market
capitalization-weighted index of over 1,100 stocks traded in the
Japanese market.
Morgan Stanley Capital International Europe Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. As of December 31,
1998, the index included over 500 equity securities of companies
domiciled in 15 European countries.
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE) Index is an index that is designed to represent the performance
of developed stock markets outside the United States and Canada. The
index may be compiled in two ways: a market capitalization-weighted
(cap-weighted) and a gross domestic product-weighted (GDP-weighted)
version. As of December 31, 1998, the cap-weighted index included over
1,000 equity securities of companies domiciled in 20 countries, and
the GDP-weighted index included over 1,000 equity securities of
companies domiciled in 20 countries.
Morgan Stanley Capital International World Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets throughout the world. As of
December 31, 1998, the index included over 1,400 equity securities of
companies domiciled in 22 countries.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For Advisor Latin America, Advisor
Japan, Advisor Europe Capital Appreciation, Advisor Diversified
International, and Advisor Global Equity, financial reports will be
available once the funds have completed their first annual or
semi-annual period. Each fund's annual and semi-annual reports include
a discussion of the fund's holdings and recent market
conditions and the fund's investment strategies that affected
performance .
For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-888-622-3175 .
The SAI, the funds' annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-3855
Fidelity Investments & (Pyramid) Design, Fidelity, Fidelity
Investments, and Directed Dividends are registered trademarks of FMR
Corp.
Portfolio Advisory Services is a service mark of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
1.540185.101 AINTI-pro-0299
FIDELITY ADVISOR FUNDSSM
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 26, 1999
This Statement of Additional Information (SAI) is not a prospectus.
Portions of the funds' Annual Reports are incorporated herein. The
Annual Reports are supplied with this SAI.
For the Initial Class of Fidelity Advisor Strategic Opportunities Fund
and Fidelity Advisor Mortgage Securities Fund, to obtain a free
additional copy of a Prospectus, dated February 26, 1999, or Annual
Report, please call Fidelity(registered trademark) at 1-800-544-8544.
For Class A, Class T, Class B, Class C and Institutional Class of all
funds, to obtain a free additional copy of a Prospectus, dated
February 26, 1999, or Annual Report, please call Fidelity at
1-888-622-3175.
TABLE OF CONTENTS PAGE
Investment Policies and 3
Limitations
Special Considerations 31
Regarding Africa
Special Considerations 31
Regarding Canada
Special Considerations 31
Regarding Europe
Special Considerations 34
Regarding Asia
Special Considerations 40
Regarding Latin America
Special Considerations 42
Regarding the Russian
Federation
Portfolio Transactions 43
Valuation 55
Performance 56
Prior Performance of Similar 232
Funds
Additional Purchase, Exchange 244
and Redemption Information
Distributions and Taxes 246
Trustees and Officers 247
Control of Investment Advisers 259
Management Contracts 259
Distribution Services 273
Transfer and Service Agent 310
Agreements
Description of the Trusts 313
Financial Statements 314
Appendix 314
For more information on any Fidelity fund, including charges and
expenses, call Fidelity at the number indicated above for a free
prospectus. Read it carefully before you invest or send money.
ACOM-ptb-0299
1.469556.101
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
INTERNATIONAL 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
GROWTH FUNDS
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
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 Government Investment Fund
Fidelity Advisor Mortgage Securities 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
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF ADVISOR LATIN AMERICA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund may purchase the securities of any issuer if, as a result, no
more than 35% of the fund's total assets would be invested in any
industry that accounts for more than 20% of the Latin American market
as a whole, as measured by an index determined by FMR to be an
appropriate measure of the Latin American market;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
(vii) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a
result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in
the same industry.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 27.
INVESTMENT LIMITATIONS OF ADVISOR JAPAN FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 29.
INVESTMENT LIMITATIONS OF ADVISOR EUROPE CAPITAL APPRECIATION FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 30.
INVESTMENT LIMITATIONS OF ADVISOR INTERNATIONAL CAPITAL APPRECIATION
FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 31.
INVESTMENT LIMITATIONS OF ADVISOR OVERSEAS FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government, or any of its agencies or instrumentalities,
or securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 32.
INVESTMENT LIMITATIONS OF ADVISOR DIVERSIFIED INTERNATIONAL FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 33.
INVESTMENT LIMITATIONS OF ADVISOR GLOBAL EQUITY FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 34.
INVESTMENT LIMITATIONS OF ADVISOR TECHNOQUANTSM GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 35.
INVESTMENT LIMITATIONS OF ADVISOR SMALL CAP FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 36.
INVESTMENT LIMITATIONS OF ADVISOR STRATEGIC OPPORTUNITIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 38.
INVESTMENT LIMITATIONS OF ADVISOR MID CAP FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 39.
INVESTMENT LIMITATIONS OF ADVISOR RETIREMENT GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 40.
INVESTMENT LIMITATIONS OF ADVISOR EQUITY GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite any issue of securities (to the extent that the fund
may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations
issued or guaranteed by the Government of the United States, its
agencies or instrumentalities) if, as a result, more than 25% of the
fund's total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in
the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 41.
INVESTMENT LIMITATIONS OF ADVISOR LARGE CAP FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 42.
INVESTMENT LIMITATIONS OF ADVISOR DIVIDEND GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 43.
INVESTMENT LIMITATIONS OF ADVISOR GROWTH OPPORTUNITIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933, in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 44.
INVESTMENT LIMITATIONS OF ADVISOR GROWTH & INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 45.
INVESTMENT LIMITATIONS OF ADVISOR EQUITY INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except (a) by lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser, or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 46.
INVESTMENT LIMITATIONS OF ADVISOR ASSET ALLOCATION FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing and selling precious metals, or from
purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser, or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest more than 5% of its
total assets in precious metals.
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 47.
INVESTMENT LIMITATIONS OF ADVISOR BALANCED FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933, in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser, or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 49.
INVESTMENT LIMITATIONS OF ADVISOR EMERGING MARKETS INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except (a) by lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser,
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more that 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 50.
INVESTMENT LIMITATIONS OF ADVISOR HIGH YIELD FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933, in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 51.
INVESTMENT LIMITATIONS OF ADVISOR STRATEGIC INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933, in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more that 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 52.
INVESTMENT LIMITATIONS OF ADVISOR GOVERNMENT INVESTMENT FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other investments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies in the real estate
business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 53.
The fund has been advised that the Staff of the Securities and
Exchange Commission (SEC) does not consider proprietary strips of
securities issued by the U.S. Government or its agencies or
instrumentalities, and privately sponsored collateralized mortgage
obligations (CMOs) backed by the U.S. Government or its agencies or
instrumentalities to be U.S. Government securities for purposes of
investment limitation (5). Accordingly, the fund may establish the
following four industry groups: (1) custodian banks for proprietary
strips of obligations of the U.S. Government and its agencies and
instrumentalities that are backed by the full faith and credit of the
U.S. Government; (2) custodian banks for proprietary strips of
obligations of the U.S. Government and its agencies and
instrumentalities that are not backed by the full faith and credit of
the U.S. Government; (3) custodian banks for CMOs that are backed by
the full faith and credit of the U.S. Government; (4) custodian banks
for CMOs that are backed by U.S. Government agencies and
instrumentalities but not by the full faith and credit of the U.S.
Government. If the fund concludes that, under applicable legal
principles, any of these securities is a Government security, it will
exclude the security from investment limitation (5).
INVESTMENT LIMITATIONS OF ADVISOR MORTGAGE SECURITIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
( 3 ) borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in
an amount not exceeding 33 1/3% of its total assets (including the
amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within
three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
( 4 ) underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities;
( 5 ) purchase any security if, as a result thereof, more than
25% of the value of its total assets would be invested in the
securities of companies having their principal business activities in
the same industry (this limitation does not apply to securities issued
or guaranteed by the United States government, its agencies or
instrumentalities);
( 6 ) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
( 7 ) purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
( 8 ) lend any security or make any other loan if, as a result,
more than 33 1/3% of its total assets would be lent to other parties,
but this limitation does not apply to purchases of debt securities or
to repurchase agreements.
( 9 ) The fund may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 54.
The fund has been advised that the Staff of the Securities and
Exchange Commission (SEC) does not consider proprietary strips of
securities issued by the U.S. Government or its agencies or
instrumentalities, and privately sponsored collateralized mortgage
obligations (CMOs) backed by the U.S. Government or its agencies or
instrumentalities to be U.S. Government securities for purposes of
investment limitation (5). Accordingly, the fund may establish the
following four industry groups: (1) custodian banks for proprietary
strips of obligations of the U.S. Government and its agencies and
instrumentalities that are backed by the full faith and credit of the
U.S. Government; (2) custodian banks for proprietary strips of
obligations of the U.S. Government and its agencies and
instrumentalities that are not backed by the full faith and credit of
the U.S. Government; (3) custodian banks for CMOs that are backed by
the full faith and credit of the U.S. Government; (4) custodian banks
for CMOs that are backed by U.S. Government agencies and
instrumentalities but not by the full faith and credit of the U.S.
Government. If the fund concludes that, under applicable legal
principles, any of these securities is a Government security, it will
exclude the security from investment limitation (5).
INVESTMENT LIMITATIONS OF ADVISOR INTERMEDIATE BOND FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment), in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of the fund's total assets would be lent to other parties
(but this limitation does not apply to purchases of debt securities or
to repurchase agreements).
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 56.
INVESTMENT LIMITATIONS OF ADVISOR SHORT FIXED-INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 57.
INVESTMENT LIMITATIONS OF ADVISOR MUNICIPAL INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of investment limitations (1) and (5), FMR identifies the
issuer of a security depending on its terms and conditions. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an
issuing political subdivision are separated from those of other
political entities; and whether a governmental body is guaranteeing
the security.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 58.
INVESTMENT LIMITATIONS OF ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities);
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of investment limitations (1) and (5), FMR identifies the
issuer of a security depending on its terms and conditions. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an
issuing political subdivision are separated from those of other
political entities; and whether a governmental body is guaranteeing
the security.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 59.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET ALLOCATION. The stock class includes domestic and
foreign equity securities of all types (other than adjustable rate
preferred stocks which are included in the bond class). FMR seeks to
maximize total return within this asset class by actively allocating
assets to industry sectors expected to benefit from major trends, and
to individual stocks that FMR believes to have superior investment
potential. When FMR selects equity securities, it considers both
growth and anticipated dividend income. Securities in the stock class
may include common stocks, fixed-rate preferred stocks (including
convertible preferred stocks), warrants, rights, depositary receipts,
securities of closed-end investment companies, and other equity
securities issued by companies of any size, located anywhere in the
world.
The bond class includes all varieties of domestic and foreign
fixed-income securities maturing in more than one year. FMR will seek
to maximize total return within the bond class by adjusting the fund's
investments in securities with different credit qualities, maturities,
and coupon or dividend rates, and by seeking to take advantage of
yield differentials between securities. Securities in this class may
include bonds, notes, adjustable-rate preferred stocks, convertible
bonds, mortgage-related and asset-backed securities, domestic and
foreign government and government agency securities, zero coupon
bonds, and other intermediate and long-term securities. These
securities may be denominated in U.S.. dollars or foreign
currency.
The short-term/money market class includes all types of domestic
and foreign short-term and money market instruments. FMR will seek to
maximize total return with respect to Advisor Asset Allocation within
this asset class by taking advantage of yield differentials between
different instruments, issuers, and currencies. Short-term and money
market instruments may include corporate debt securities, such as
commercial paper and notes; government securities issued by U.S. or
foreign governments or their agencies or instrumentalities; bank
deposits and other financial institution obligations; repurchase
agreements involving any type of security; and other similar
short-term instruments. these instruments may be denominated in U.S..
dollars or foreign currency.
FMR may use its judgment to place a security in the most
appropriate class based on its investment characteristics.
Fixed-income securities may be classified in the bond or
short-term/money market class according to interest rate sensitivity
as well as maturity. The fund may also make other investments that do
not fall within these classes. In making asset allocation decisions,
FMR will evaluate projections of risk, market conditions, economic
conditions, volatility, yields, and returns. FMR's management will use
database systems to help analyze past situations and trends, research
specialists in each of the asset classes to help in securities
selection, portfolio management professionals to determine asset
allocation and to select individual securities, and its own credit
analysis as well as credit analyses provided by rating services.
ASSET-BACKED SECURITIES represent interests in pools of purchase
contracts, financing leases, or sales agreements entered into by
municipalities, mortgages, loans, receivables or other assets. Payment
of interest and repayment of principal may be largely dependent upon
the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. Asset-backed security values may also be affected
by other factors including changes in interest rates, the availability
of information concerning the pool and its structure, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities providing the credit
enhancement. In addition, these securities may be subject to
prepayment risk.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
COUNTRIES NOT CONSIDERED TO HAVE EMERGING MARKETS. As of December
31, 1998 , the following countries are not considered to have
emerging markets: Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United
Kingdom, and the United States.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. When a municipal bond issuer has committed to call
an issue of bonds, and has established an independent escrow account
that is sufficient to, and is pledged to, refund that issue, the
number of days to maturity for the pre-refunded bond is considered to
be the number of days to the announced call date of the bonds. The
maturities of mortgage securities, including collateralized mortgage
obligations, and some asset-backed securities are determined on a
weighted average life basis, which is the average time for principal
to be repaid. For a mortgage security, this average time is calculated
by estimating the timing of principal payments, including unscheduled
prepayments, during the life of the mortgage. The weighted average
life of these securities is likely to be substantially shorter than
their stated final maturity.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements involve
an agreement to purchase a foreign security and to sell that security
back to original seller at an agreed-upon price in either U.S. dollars
or foreign currency. Unlike typical U.S. repurchase agreements,
foreign repurchase agreements may not be fully collateralized at all
times. The value of a security purchased by a fund may be more or less
than the price at which the counterparty has agreed to repurchase the
security. In the event of default by the counterparty, the fund may
suffer a loss if the value of the security purchased is less than the
agreed-upon repurchase price, or if the fund is unable to successfully
assert a claim to the collateral under foreign laws. As a result,
foreign repurchase agreements may involve higher credit risks than
repurchase agreements in U.S. markets, as well as risks associated
with currency fluctuations. In addition, as with other emerging market
investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers
or counterparties with lower credit ratings than typical U.S.
repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Standard & Poor's 500 Index (S&P 500) or the Bond Buyer
Municipal Bond Index. Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is
available.
Futures may be based on foreign indexes such as the CAC 40 (France),
DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each equity fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets under normal conditions;
or (c) purchase call options if, as a result, the current value of
option premiums for call options purchased by the fund would exceed 5%
of the fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
In addition, each bond fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
Each bond fund further limits its options and futures investments to
options and futures contracts relating to U.S. Government securities.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Indexed securities may have principal payments as well as coupon
payments that depend on the performance of one or more interest rates.
Their coupon rates or principal payments may change by several
percentage points for every 1% interest rate change.
Mortgage-indexed securities, for example, could be structured to
replicate the performance of mortgage securities and the
characteristics of direct ownership.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. Advisor Municipal
Income and Advisor Intermediate Municipal Income currently intend to
participate in this program as borrowers. A fund will borrow through
the program only when the costs are equal to or lower than the costs
of bank loans, and will lend through the program only when the returns
are higher than those available from an investment in repurchase
agreements. Interfund loans and borrowings normally extend overnight,
but can have a maximum duration of seven days. Loans may be called on
one day's notice. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay
in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
INVERSE FLOATERS have variable interest rates that typically move in
the opposite direction from movements in prevailing short-term
interest rate levels - rising when prevailing short-term interest
rates fall, and vice versa. The prices of inverse floaters can be
considerably more volatile than the prices of bonds with comparable
maturities.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
ISSUER LOCATION. FMR determines where an issuer is located by
looking at such factors as the issuer's country of organization, the
primary trading market for the issuer's securities, and the location
of the issuer's assets, personnel, sales, and earnings. The issuer of
a security is considered to be located in a particular country if (1)
the security is issued or guaranteed by the government of the country
or any of its agencies, political subdivisions, or instrumentalities;
(2) the security has its primary trading market in that country; or
(3) the issuer is organized under the laws of that country, derives at
least 50% of its revenues or profits from goods sold, investments
made, or services performed in the country, or has at least 50% of its
assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MORTGAGE SECURITIES are issued by government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage security is an obligation of the issuer backed by a mortgage
or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage securities, such as collateralized mortgage
obligations (or "CMOs"), make payments of both principal and interest
at a range of specified intervals; others make semiannual interest
payments at a predetermined rate and repay principal at maturity (like
a typical bond). Mortgage securities are based on different types of
mortgages, including those on commercial real estate or residential
properties. Stripped mortgage securities are created when the interest
and principal components of a mortgage security are separated and sold
as individual securities. In the case of a stripped mortgage security,
the holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage, while the holder
of the "interest-only" security (IO) receives interest payments from
the same underlying mortgage.
Fannie Maes and Freddie Macs are pass-through securities issued by
Fannie Mae and Freddie Mac, respectively. Fannie Mae and Freddie Mac,
which guarantee payment of interest and repayment of principal on
Fannie Maes and Freddie Macs, respectively, are federally chartered
corporations supervised by the U.S. Government that act as
governmental instrumentalities under authority granted by Congress.
Fannie Mae is authorized to borrow from the U.S. Treasury to meet its
obligations. Fannie Maes and Freddie Macs are not backed by the full
faith and credit of the U.S. Government.
The value of mortgage securities may change due to shifts in the
market's perception of issuers and changes in interest rates. In
addition, regulatory or tax changes may adversely affect the mortgage
securities market as a whole. Non-government mortgage securities may
offer higher yields than those issued by government entities, but also
may be subject to greater price changes than government issues.
Mortgage securities are subject to prepayment risk, which is the risk
that early principal payments made on the underlying mortgages,
usually in response to a reduction in interest rates, will result in
the return of principal to the investor, causing it to be invested
subsequently at a lower current interest rate. Alternatively, in a
rising interest rate environment, mortgage security values may be
adversely affected when prepayments on underlying mortgages do not
occur as anticipated, resulting in the extension of the security's
effective maturity and the related increase in interest rate
sensitivity of a longer-term instrument. The prices of stripped
mortgage securities tend to be more volatile in response to changes in
interest rates than those of non-stripped mortgage securities.
In order to earn additional income for a fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases costs and may increase taxable gains.
MUNICIPAL INSURANCE. A municipal bond may be covered by insurance that
guarantees the bond's scheduled payment of interest and repayment of
principal. This type of insurance may be obtained by either (i) the
issuer at the time the bond is issued (primary market insurance), or
(ii) another party after the bond has been issued (secondary market
insurance).
Both primary and secondary market insurance guarantee timely and
scheduled repayment of all principal and payment of all interest on a
municipal bond in the event of default by the issuer, and cover a
municipal bond to its maturity, enhancing its credit quality and
value.
Municipal bond insurance does not insure against market fluctuations
or fluctuations in a fund's share price. In addition, a municipal bond
insurance policy will not cover: (i) repayment of a municipal bond
before maturity (redemption), (ii) prepayment or payment of an
acceleration premium (except for a mandatory sinking fund redemption)
or any other provision of a bond indenture that advances the maturity
of the bond, or (iii) nonpayment of principal or interest caused by
negligence or bankruptcy of the paying agent. A mandatory sinking fund
redemption may be a provision of a municipal bond issue whereby part
of the municipal bond issue may be retired before maturity.
Because a significant portion of the municipal securities issued and
outstanding is insured by a small number of insurance companies, an
event involving one or more of these insurance companies could have a
significant adverse effect on the value of the securities insured by
that insurance company and on the municipal markets as a whole.
FMR may decide to retain an insured municipal bond that is in default,
or, in FMR's view, in significant risk of default. While a fund holds
a defaulted, insured municipal bond, the fund collects interest
payments from the insurer and retains the right to collect principal
from the insurer when the municipal bond matures, or in connection
with a mandatory sinking fund redemption.
PRINCIPAL MUNICIPAL BOND INSURERS. The various insurance companies
providing primary and secondary market insurance policies for
municipal bonds are described below. Ratings reflect each respective
rating agency's assessment of the creditworthiness of an insurer and
the insurer's ability to pay claims on its insurance policies at the
time of the assessment.
Ambac Assurance Corp., a wholly-owned subsidiary of Ambac Financial
Group Inc., is authorized to provide bond insurance in the 50 U.S.
states, the District of Columbia, and the Commonwealth of Puerto Rico.
Bonds insured by Ambac Assurance Corp. are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.
Connie Lee Insurance Co. is a wholly-owned subsidiary of Connie Lee
Holdings Inc., which is a wholly-owned subsidiary of Ambac Assurance
Corp. All losses incurred by Connie Lee Insurance Co. that would cause
its statutory capital to drop below $75 million would be covered by
Ambac Assurance Corp. Connie Lee Insurance Co. is authorized to
provide bond insurance in 49 U.S. states, the District of Columbia,
and the Commonwealth of Puerto Rico. Bonds insured by Connie Lee
Insurance Co. are rated "AAA" by Standard & Poor's.
Financial Guaranty Insurance Co. (FGIC), a wholly-owned subsidiary of
GE Capital Services, is authorized to provide bond insurance in the 50
U.S. states and the District of Columbia. Bonds insured by FGIC are
rated "Aaa" by Moody's Investor Service and "AAA" by Standard &
Poor's.
Financial Security Assurance Inc. (FSA), a wholly-owned subsidiary of
Financial Security Assurance Holdings Ltd., is authorized to provide
bond insurance in 49 U.S. states, the District of Columbia, and three
U.S. territories. Bonds insured by FSA are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.
Municipal Bond Investors Assurance Corp. (MBIA Insurance Corp.), a
wholly-owned subsidiary of MBIA Inc., a publicly-owned company, is
authorized to provide bond insurance in the 50 U.S. states, the
District of Columbia, and the Commonwealth of Puerto Rico. Bonds
insured by MBIA Insurance Corp. are rated "Aaa" by Moody's Investor
Service and "AAA" by Standard & Poor's.
MUNICIPAL LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities. Generally,
a fund will not hold these obligations directly as a lessor of the
property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest
gives the purchaser a specified, undivided interest in the obligation
in proportion to its purchased interest in the total amount of the
issue.
Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations. If a municipality stops making payments or transfers its
obligations to a private entity, the obligation could lose value or
become taxable.
MUNICIPAL MARKET DISRUPTION RISK. The value of municipal securities
may be affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the event
of a bankruptcy. Proposals to restrict or eliminate the federal income
tax exemption for interest on municipal securities are introduced
before Congress from time to time. Proposals also may be introduced
before state legislatures that would affect the state tax treatment of
a municipal fund's distributions. If such proposals were enacted, the
availability of municipal securities and the value of a municipal
fund's holdings would be affected and the Trustees would reevaluate
the fund's investment objectives and policies. Municipal bankruptcies
are relatively rare, and certain provisions of the U.S. Bankruptcy
Code governing such bankruptcies are unclear and remain untested.
Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of
the market, or the relative credit quality of particular securities.
Any of these effects could have a significant impact on the prices of
some or all of the municipal securities held by a fund.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student
loans. Bonds issued to supply educational institutions with funds are
subject to the risk of unanticipated revenue decline, primarily the
result of decreasing student enrollment or decreasing state and
federal funding. Among the factors that may lead to declining or
insufficient revenues are restrictions on students' ability to pay
tuition, availability of state and federal funding, and general
economic conditions. Student loan revenue bonds are generally offered
by state (or substate) authorities or commissions and are backed by
pools of student loans. Underlying student loans may be guaranteed by
state guarantee agencies and may be subject to reimbursement by the
United States Department of Education through its guaranteed student
loan program. Others may be private, uninsured loans made to parents
or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student
loan revenue bonds are impacted by numerous factors, including the
rate of student loan defaults, seasoning of the loan portfolio, and
student repayment deferral periods of forbearance. Other risks
associated with student loan revenue bonds include potential changes
in federal legislation regarding student loan revenue bonds, state
guarantee agency reimbursement and continued federal interest and
other program subsidies currently in effect.
ELECTRIC UTILITIES. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy demand,
(d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.
HEALTH CARE. The health care industry is subject to regulatory action
by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for
the health care industry is payments from the Medicare and Medicaid
programs. As a result, the industry is sensitive to legislative
changes and reductions in governmental spending for such programs.
Numerous other factors may affect the industry, such as general and
local economic conditions; demand for services; expenses (including
malpractice insurance premiums); and competition among health care
providers. In the future, the following elements may adversely affect
health care facility operations: adoption of legislation proposing a
national health insurance program; other state or local health care
reform measures; medical and technological advances which dramatically
alter the need for health services or the way in which such services
are delivered; changes in medical coverage which alter the traditional
fee-for-service revenue stream; and efforts by employers, insurers,
and governmental agencies to reduce the costs of health insurance and
health care services.
HOUSING. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages purchased
with the proceeds of the bond issue. It is extremely difficult to
predict the supply of available mortgages to be purchased with the
proceeds of an issue or the future cash flow from the underlying
mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner
repayments will create an irregular cash flow. Many factors may affect
the financing of multi-family housing projects, including acceptable
completion of construction, proper management, occupancy and rent
levels, economic conditions, and changes to current laws and
regulations.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of
the airline industry and on the stability of a specific carrier who
uses the airport as a hub. Air traffic generally follows broader
economic trends and is also affected by the price and availability of
fuel. Toll road bonds are also affected by the cost and availability
of fuel as well as toll levels, the presence of competing roads and
the general economic health of an area. Fuel costs and availability
also affect other transportation-related securities, as do the
presence of alternate forms of transportation, such as public
transportation.
WATER AND SEWER. Water and sewer revenue bonds are often considered to
have relatively secure credit as a result of their issuer's
importance, monopoly status, and generally unimpeded ability to raise
rates. Despite this, lack of water supply due to insufficient rain,
run-off, or snow pack is a concern that has led to past defaults.
Further, public resistance to rate increases, costly environmental
litigation, and Federal environmental mandates are challenges faced by
issuers of water and sewer bonds.
PREFERRED STOCK is a class of equity or ownership in an issuer that
pays dividends at a specified rate and that has precedence over common
stock in the payment of dividends. In the event an issuer is
liquidated or declares bankruptcy, the claims of owners of bonds take
precedence over the claims of those who own preferred and common
stock.
PUT FEATURES entitle the holder to sell a security back to the issuer
at any time or at specified intervals. In exchange for this benefit, a
fund may accept a lower interest rate. Securities with put features
are subject to the risk that the put provider is unable to honor the
put feature (purchase the security). Demand features and standby
commitments are types of put features.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REFUNDING CONTRACTS. Securities may be purchased on a when-issued
basis in connection with the refinancing of an issuer's outstanding
indebtedness. Refunding contracts require the issuer to sell and a
purchaser to buy refunded municipal obligations at a stated price and
yield on a settlement date that may be several months or several years
in the future. A purchaser generally will not be obligated to pay the
full purchase price if the issuer fails to perform under a refunding
contract. Instead, refunding contracts generally provide for payment
of liquidated damages to the issuer. A purchaser may secure its
obligations under a refunding contract by depositing collateral or a
letter of credit equal to the liquidated damages provisions of the
refunding contract.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and a fund's
yield and may be viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Because there
may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR to be of good
standing. Furthermore, they will only be made if, in FMR's judgment,
the consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a
fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of
cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, the
fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any dividends, interest, or
other distributions on the securities loaned and to any increase in
market value; (5) the fund may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able
to vote proxies on the securities loaned, either by terminating the
loan or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.
SHORT SALES. Stocks underlying a fund's convertible security holdings
can be sold short. For example, if FMR anticipates a decline in the
price of the stock underlying a convertible security held by a fund,
it may sell the stock short. If the stock price subsequently declines,
the proceeds of the short sale could be expected to offset all or a
portion of the effect of the stock's decline on the value of the
convertible security. Each fund currently intends to hedge no more
than 15% of its total assets with short sales on equity securities
underlying its convertible security holdings under normal
circumstances.
A fund will be required to set aside securities equivalent in kind and
amount to those sold short (or securities convertible or exchangeable
into such securities) and will be required to hold them aside while
the short sale is outstanding. A fund will incur transaction costs,
including interest expenses, in connection with opening, maintaining,
and closing short sales.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit or
liquidity enhancement provider in determining whether to purchase a
security supported by such enhancement. In evaluating the credit of a
foreign bank or other foreign entities, FMR will consider whether
adequate public information about the entity is available and whether
the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
STANDBY COMMITMENTS are puts that entitle holders to same-day
settlement at an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of
exercise. A fund may acquire standby commitments to enhance the
liquidity of portfolio securities.
Ordinarily a fund will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a
third party at any time. A fund may purchase standby commitments
separate from or in conjunction with the purchase of securities
subject to such commitments. In the latter case, the fund would pay a
higher price for the securities acquired, thus reducing their yield to
maturity.
Issuers or financial intermediaries may obtain letters of credit or
other guarantees to support their ability to buy securities on demand.
FMR may rely upon its evaluation of a bank's credit in determining
whether to purchase an instrument supported by a letter of credit. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank
may be subject to unfavorable political or economic developments,
currency controls, or other governmental restrictions that might
affect the bank's ability to honor its credit commitment.
Standby commitments are subject to certain risks, including the
ability of issuers of standby commitments to pay for securities at the
time the commitments are exercised; the fact that standby commitments
are not generally marketable; and the possibility that the maturities
of the underlying securities may be different from those of the
commitments.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other debt securities, although stripped
securities may be more volatile, and the value of certain types of
stripped securities may move in the same direction as interest rates.
U.S. Treasury securities that have been stripped by a Federal Reserve
Bank are obligations issued by the U.S. Treasury.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and the principal payment, which the
dealer then sells.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price and yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES
Each of Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, Advisor Global Equity,
Advisor TechnoQuant Growth, Advisor Small Cap, Advisor Strategic
Opportunities, Advisor Mid Cap, Advisor Retirement Growth, Advisor
Equity Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor
Growth Opportunities, Advisor Growth & Income, Advisor Equity Income,
Advisor Asset Allocation, and Advisor Balanced reserves the right to
invest without limitation in preferred stocks and investment-grade
debt instruments for temporary, defensive purposes.
Each of Advisor Government Investment, Advisor Mortgage Securities,
Advisor Intermediate Bond, and Advisor Short Fixed-Income reserves the
right to invest without limitation in investment-grade money market or
short-term debt instruments for temporary, defensive purposes.
Each of Advisor Municipal Income and Advisor Intermediate Municipal
Income reserves the right to invest without limitation in short-term
instruments, to hold a substantial amount of uninvested cash, or to
invest more than normally permitted in federally taxable obligations
for temporary, defensive purposes.
Advisor Emerging Markets Income reserves the right to invest without
limitation in U.S. securities for temporary, defensive purposes.
Each of Advisor High Yield and Advisor Strategic Income reserves the
right to invest without limitation in investment-grade securities for
temporary, defensive purposes.
TENDER OPTION BONDS are created by coupling an intermediate- or
long-term, fixed-rate, municipal bond (generally held pursuant to a
custodial arrangement) with a tender agreement that gives the holder
the option to tender the bond at its face value. As consideration for
providing the tender option, the sponsor (usually a bank,
broker-dealer, or other financial institution) receives periodic fees
equal to the difference between the bond's fixed coupon rate and the
rate (determined by a remarketing or similar agent) that would cause
the bond, coupled with the tender option, to trade at par on the date
of such determination. After payment of the tender option fee, a fund
effectively holds a demand obligation that bears interest at the
prevailing short-term tax-exempt rate. In selecting tender option
bonds, FMR will consider the creditworthiness of the issuer of the
underlying bond, the custodian, and the third party provider of the
tender option. In certain instances, a sponsor may terminate a tender
option if, for example, the issuer of the underlying bond defaults on
interest payments.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
In many instances bonds and participation interests have tender
options or demand features that permit the holder to tender (or put)
the bonds to an institution at periodic intervals and to receive the
principal amount thereof. Variable rate instruments structured in this
fashion are considered to be essentially equivalent to other variable
rate securities. The IRS has not ruled whether the interest on these
instruments is tax-exempt. Fixed-rate bonds that are subject to third
party puts and participation interests in such bonds held by a bank in
trust or otherwise may have similar features.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS involve a
commitment to purchase or sell specific securities at a predetermined
price or yield in which payment and delivery take place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities pursuant to one of these transactions, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the security
will not be issued as anticipated. Because payment for the securities
is not required until the delivery date, these risks are in addition
to the risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when a purchase is outstanding,
the purchases may result in a form of leverage. When a fund has sold a
security pursuant to one of these transactions, the fund does not
participate in further gains or losses with respect to the security.
If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a fund could miss a favorable price or
yield opportunity or suffer a loss.
A fund may renegotiate a when-issued or forward transaction and may
sell the underlying securities before delivery, which may result in
capital gains or losses for the fund.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of over
50 countries and 720 million people. Civil wars, coups and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, it is home to an abundance of natural resources,
including natural gas, aluminum, crude oil, copper, iron, bauxite,
cotton, diamonds and timber. Wealthier countries generally have strong
connections to European partners, and evidence of these relationships
is seen in the growing market capitalization and foreign investment of
these countries. Economic performance is closely tied to world
commodity markets, particularly oil, and also to weather conditions,
such as drought.
Five African countries are among the 20 fastest growing in the world
(Uganda, Ivory Coast, Botswana, Angola and Zimbabwe), with GDP growth
rates ranging from 5.5% to 6.0%. Two countries, Yemen and Bahrain, are
experiencing growth at or below 2.0%, and one country, Libya, is
experiencing (- 4.0%) negative growth.
African economic growth is projected to remain higher than in any
recent year other than 1996. The relatively small effects of the Asian
crisis are attributable to the comparatively low levels of private
capital flows to most countries in the regions. Africa can be
negatively impacted from the slowdown in global growth, and its
effects on commodity prices.
Several African countries in the north have substantial oil reserves
and accordingly their economies react strongly to world oil prices.
They share a regional and sometimes religious identification with the
oil producing nations of the Middle East and can be strongly affected
by political and economic developments in those countries. As in the
south, weather conditions also have a strong impact on many of their
natural resources, and, as was the case in 1995, severe drought can
adversely effect economic growth.
Twelve African countries have active equity markets (Bahrain,
Botswana, Egypt, Ghana, Kenya, Morocco, Nigeria, Oman, South Africa,
Tunisia, Zambia, and Zimbabwe). The oldest market, in Egypt, was
established in 1883, while the youngest, in Zambia, was established in
1994. Four additional markets have been established since 1989, and
the mean age for all equity markets is 40 years old. A total of 1,830
firms are listed on the respective exchanges. Total market
capitalization for these countries in 1996 was $290 billion, an
average increase of 54% over 1995 levels.
The South African market is the largest in Africa and has a
capitalization of more than ten times that of all the other African
markets combined. In 1997, the country's Johannesburg Stock Exchange
fell by 6.8%, due largely to weakening commodity prices and a slowdown
in the South African economy. The market decline extended into 1998 as
the South African rand declined versus the world's major currencies.
SPECIAL CONSIDERATIONS REGARDING CANADA
Canada is a confederation of ten provinces with a parliamentary system
of government. Canada is the world's second largest nation by landmass
and is inhabited by 30.2 million people, most of whom are descendants
of France, the United Kingdom and indigenous peoples. The country has
a workforce of over 15 million people in various industries such as
trade, manufacturing, mining, finance, construction and government.
While the country has many institutions which closely parallel the
United States, such as a transparent stock market and similar
accounting practices, it differs from the United States in that it has
an extensive social welfare system, much more akin to European welfare
states.
The confederated structures combined with recent financial pressure on
the federal government have pushed provinces, Quebec in particular, to
call for a revaluation of the legal and financial relationships
between the federal government in Ottawa and the provinces. Recent
referendums on Quebec sovereignty have been narrowly defeated and the
issue appears far from resolved. However, in August of 1998, the
country's Supreme Court decided that Quebec does not have the right to
secede unilaterally, removing any immediate threat that Canada will
break up. Nevertheless, the Canadian markets could continue to react
to any periodic escalations of separatist calls.
Canada is one of the richest nations in the world in terms of natural
resources. The country is a major producer of such commodities as
forest products, mining, metals, and agricultural products.
Additionally, energy related products such as oil, gas, and
hydroelectricity are important components of their economy.
Accordingly, the Canadian stock market is strongly represented by
basic material stocks, and movements in the supply and demand of
industrial materials, agriculture, and energy, both domestically and
internationally, can have a strong effect on market performance.
The United States is Canada's largest trading partner and
approximately 80% of Canadian merchandise traded in 1997 was with the
United States. Automobiles and auto parts accounted for the largest
export items followed by energy, mining and forest products. Canada is
the largest energy supplier to the United States, while the United
States is Canada's largest foreign investor. United States investment
has been largely focused on financial, energy, metals and mining
businesses. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities markets increasingly sensitive to U.S. economic and market
events.
For United States investors in Canadian markets, currency has become
an important determinant of investment return. Since Canada let its
dollar float in 1970, its value has been in a steady decline against
its United States counterpart. While the decline has enabled Canada to
stay competitive with its more efficient southern neighbor, which buys
four-fifths of its exports, United States investors have seen their
investment returns eroded by the impact of currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
Europe can be divided into two distinct categories of market
development: the developed economies of Western Europe and the
transition economies of Eastern Europe.
Any discussion of European national economies and securities markets
must be made with an eye to the impact that the European Union (EU)
and European Economic and Monetary Union (EMU) will have upon
the future of these countries as well as the rest of the world. The
scope and magnitude of these economic and political initiatives dwarfs
anything attempted to date. If successful, the EU will change or erase
many political, economic, cultural and market distinctions that define
and differentiate each of the Continent's countries today. The
third and final stage of the EMU was implemented on January 1,
1999.
The EU consists of 15 countries of western Europe: Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United
Kingdom. The six founding countries first formed an economic community
in the 1950s to bring down trade barriers such as taxes and quotas, to
eliminate technical restrictions such as special standards and
regulations for foreigners, and to coordinate various industrial
policies, such as those pertaining to agriculture. Since that time the
group has admitted new members and, in time, may expand its membership
to other nations such as those of Eastern Europe. The EU has as its
goal, the creation of a single, unified market that would be, at over
370 million people, the largest in the developed world and through
which goods, people and capital could move freely.
A second component of the EU is the establishment of a single currency
- - the Euro, to replace each member country's domestic currencies. In
preparation for the creation of the Euro, the Exchange Rate Mechanism
(ERM) was established to keep the various national currencies at a
pre-specified value relative to each other. The year 1997 is
significant for membership in the EU as it is the initial reference
year for evaluating debt levels and deficits within the criteria set
forth by the Maastricht treaty. Specifically, the Maastricht criteria
include, among other indicators, an inflation rate below 3.3%, a
public debt below 60% of GDP, and a deficit of 3% or less of GDP.
Failure to meet the Maastricht levels would disqualify any country
from membership.
On May 3, 1998 the European Council of Ministers formally announced
the "first wave" of EMU participants. They are: Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands,
Portugal and Spain. On January 1, 1999, the Euro bec a me a
currency, while the bank notes used by EMU's eleven members remain
legal tender. After a three year transition period, the Euro will
begin circulating on January 1, 2002. Six months later, today's
currencies will cease to exist.
Many foreign and domestic businesses are establishing or increasing
their presence in Europe in anticipation of the new unified single
market. Clear, confident visions of a diverse, multi-industrial,
unified market under a single currency have been the impetus for much
of the recent corporate restructuring initiatives as well as for the
increased mergers and acquisitions activity in the region. A
successful EMU could prove to be an engine for sustained growth
throughout Europe.
While the securities markets view the introduction of the euro as
inevitable, the success of the union is not wholly assured. Europe
must grapple with a number of challenges, any one of which could
threaten the survival of this monumental undertaking. For example,
eleven disparate economies must adjust to a unified monetary system,
the absence of exchange rate flexibility and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized and its cultures differ widely. Unemployment is
historically high and could pose a political risk that one or more
countries might exit the union placing the currency and banking system
in jeopardy.
For those countries in Western and Eastern Europe that were not
included in the first round of the EU implementation, the prospects
for eventual membership serves as a strong political impetus for many
governments to employ tight fiscal and monetary policies. Particularly
for the Eastern European countries, aspirations to join the EU are
likely to push governments to act decisively. At the same time, there
could become an increasingly widening gap between rich and poor both
within the aspiring countries and also those countries who are close
to meeting membership criteria and those who are not. Realigning
traditional alliances could result in altering trading relationships
and potentially provoking divisive socio-economic splits.
The economies of Eastern Europe are embarking on the transition from
communism at different paces with appropriately different
characteristics. The transition countries also display sharp contrasts
in performance. Those that are most advanced in the transformation
process are now reaping the rewards of comprehensive reform and
stabilization policies pursued with determination over recent years.
These include Poland, the Baltic countries, Croatia, the Czech
Republic, Hungary, the Slovak Republic and Slovenia. Conversely, those
that are less advanced in the transition are struggling with a number
of policy challenges to strengthen their economies. Several countries
have made good progress, and in Armenia, Azerbaijan, Georgia,
Kazakhstan, and the Kyrgyz Republic, inflation has fallen considerably
in recent years. Nevertheless, the East European markets are
particularly vulnerable to weakness in the world's other emerging
countries and are particularly sensitive to events in Russia. For
example, in mid-1998 when economic and political turmoil forced the
Russian government to devalue its currency and restructure its debt
payments, the other markets in Eastern Europe suffered significant
destabilization of which the extent and duration is still unknown.
FRANCE. France is a republic of over 58 million people in the historic
if not the geographic center of Western Europe. The Fifth French
Republic, established in the early postwar period under Charles de
Gaulle, provides for a strong Presidency which can appoint its own
cabinet but must win approval of a parliamentary majority. The
government was founded upon the French cultural values of liberty,
brotherhood and egalitarianism. In France, this latter value often
translates into a government burden of providing job security. The
result is a large, vast bureaucracy in the public sector and strict
employment and labor laws in the private sector. In addition, a
significant portion of government economic policy revolves around
regulating and protecting domestic industries, particularly farming
and manufacturing. Finally, the French government frequently owns high
majority or minority interests in large companies, particularly
utility, transport and communications concerns. While privatization
has been a popular movement in many other European countries, it has
encountered a stalled stop-and-go cycle in France.
The French economy is the world's fourth-largest Western
industrialized economy, with a GDP of $1538 billion in 1996. The
nation has substantial agricultural resources, a diversified modern
industrial system, and a highly skilled labor force. France's economy
boasts a sophisticated industrial manufacturing base, which includes
not only high technology (information technology and
telecommunications, vehicles, aircraft, computer equipment, etc.) but
also a number of very large companies producing consumer goods. The
country's industrial structure is unusual for an industrialized
economy because the state still controls a large proportion of the
heavy strategic goods industries as well as institutions such as banks
and communications companies. The agricultural sector continues to be
important; however, most farms are small by European standards and
require massive government support. Exports are an economic strong
point and the nation has enjoyed trade surpluses in recent years.
Leading exports include chemicals, electronics and automotive and
aircraft machinery, while imports are dominated by petroleum,
industrial machinery and electronics. Their main trading partners are
the United States, Japan, and other EU countries.
The country is one of the largest consumers of nuclear energy,
obtaining nearly 75% of its total electricity needs from reactors.
While it has some small deposits of oil and gas, it remains heavily
dependent on imports for most of its needs.
In recent years, the country's economic growth has been hindered by a
series of general strikes. The government's efforts to reduce spending
to meet the Maastricht criteria have prompted strikes and unrest from
France's powerful trade unions. In addition, striking workers have
pushed their demands for a lower retirement age and a reduction in the
work week. With an unemployment rate above 12%, the country's
labor markets are not functioning efficiently. France's pay-as-you-go
pension program is an additional deterrent to economic growth as
spending on pensions account for a tenth of GDP. While all parties
agree that the system must be replaced, no agreement has been reached
on an alternative.
France went to the polls in May 1997 after a surprise decision to hold
early elections by conservative President Jacques Chirac. Chirac's
calculation was to capitalize on popular support before he was forced
to undertake austere fiscal measures to meet the Maastricht criteria.
Voters responded that they were more concerned about the country's
high level of unemployment and Chirac's party lost enough seats in the
parliament that the president must now share power for the remaining
five years in office with a socialist-led government. This change
could set back the previous government's pledges to continue its
privatization initiatives, restrain spending, support the franc, and
endure fiscal austerity. It also calls into question whether the
French people have the will to adhere to the EMU convergence criteria
over the next few years.
The stock market in France has undergone both gradual and dramatic
changes in recent years, keeping pace with global trends toward
deregulation, privatization, and cross border activities, allowing
Paris to maintain its position as the world's fourth-largest financial
center. Until 1996, the Paris Bourse was the country's sole stock
exchange, providing access to all listed French securities. Since
then, foreign interest has been stimulated by the creation of new
markets, such as the Nouveau Marche, for riskier, growth oriented,
small corporations. While the listings of these combined markets are
fairly diverse , financial companies account for approximately
one-third of the total. The system underwent many regulatory changes
in the late 1980s, taking steps toward combating insider trading and
ensuring market transparency.
GERMANY. Germany is the largest economy in all of Europe and is the
third largest economy in the world behind the United States and Japan.
The country occupies a central position in Western Europe with strong
cultural and economic ties with the countries of Eastern Europe and
borders on no less than six other Western European countries. The
country's size, location and proven industrial ability have
historically thrust it to the center of European economic life, a
position it was able to re-attain in the wake of the post-war period.
More recently, Germany has used this position as a platform to
champion the cause of the EU, and also to absorb and transform the
devastated economy of its former communist eastern half.
The German economy is heavily industrialized, with a strong emphasis
on manufacturing. The manufacturing sector is driven by small and
medium-sized companies, most of which are very efficient and dynamic.
Germany, nevertheless, has many large industries and manufacturing is
dominated by the production of motor vehicles, precision engineering,
brewing, chemicals, pharmaceuticals and heavy metal products.
The economy has benefited from a strong export performance throughout
the decade. Exports, weighted heavily in the industrial machinery,
autos and chemicals sectors, have provided the economy with positive
trade balances. Exports are the main engine of GDP growth,
highlighting Germany's dependence on the prosperity of its trading
partners. Five out of its top six trading partners are fellow EU
members (the sixth is the United States), while very low levels of
trade are conducted with Asian and Latin American countries. Germany
stands very well poised to supply the emerging markets of central
Europe. It is already the largest European foreign investor in the
Czech Republic and the largest trading partner for Poland and Hungary.
Accordingly, any weakness in the emerging market economies might
likely dampen demand for German goods, to the detriment of the German
economy. As most of these emerging markets aspire to join the EU, it
is possible that a larger EU could alter Germany's trading
relationships due to new quotas, tax rates, exchange rates and other
factors which will come with EU membership.
The recent performance of the German economy must be evaluated within
the context of the 1990 reunification of the eastern and western
states. GDP growth dropped markedly during the early years of
reunification. Industry in Eastern Germany is still catching up.
Workers in Eastern Germany earn two-thirds of western wages but
produce only half as much. In addition, one of the byproducts of
assimilating East Germany into the state has been the need to
restructure many of the government services to accommodate the new and
substantially less affluent citizens. Significant tax and welfare
reforms have yet to be undertaken, and pressure is mounting on the
government to address these issues. Unemployment rates have begun to
cause some discontent among German citizens whose culture generally
places strong emphasis on a social compact.
Germany is faced with other significant economic challenges.
Unemployment is currently above 12% as the country experiences its
longest period of slow growth since the Second World War. The
government's ability to deal with the problem is limited by its
efforts to meet the stringent Maastricht criteria for convergence.
There are also growing concerns about the exodus of German companies
relocating abroad in order to avoid the country's high labor costs. In
the longer run, Germany's government must alter the peculiar mix of
capitalism, welfarism and consensus that sets the country apart. Those
decisions will be politically sensitive - especially if they
antagonize the powerful trade unions or the country's many family-run
firms.
Germany's stock market has enjoyed dramatic growth in volume as the
main DAX index has soared over the past two years. Much of the
market's strength has been attributed to the dollar's recovery and
rising corporate earnings. In addition, a number of changes have
occurred recently to support the share-buying explosion and to
establish a German equity culture. A number of initial public
offerings were launched as the government sought to divest itself of
ownership in such businesses as the nation's telephone utility and
post office businesses to ease budgetary pressures. The government
also created a supervisory authority which has outlawed insider
trading and established stiffer company reporting standards intended
to further increase the appeal of Germany's stock market.
Nevertheless, while there has been progress in broadening the investor
base, shares remain overwhelmingly in the hands of institutions and
companies.
The German central bank is one of the world's strongest and most
independent. Their high interest rates have contributed to a
controlled growth of the stock market and a steadily decreasing
inflation rate. Keeping the Deutsche Mark strong in leading up to EMU
was a priority for the bank. Nevertheless, exports have thrived
despite the currency's strong position.
A founding member of the EU and the most ardent proponent of EMU,
Germany is seen as the primary player in Union economics and politics.
Seeking to consolidate this position, recent government policy has put
a strong emphasis on the maintenance of a strong currency and the
achievement of the Maastricht criteria.
NORDIC COUNTRIES. Increasing economic globalization and the
expansion of the EU have forced the Nordic Countries to scale back
their historically liberal welfare spending policies. While public
spending has dropped from average levels, the cutbacks in social
programs have sparked drops in domestic demand and increases in
unemployment. Nevertheless, the Nordic economies are experiencing
positive growth fueled largely by strong exports and low interest
rates. The EMU put pressure on each nation to maintain their economies
in line with requirements of the Maastricht treaty criteria and the
fiscal and political issues remain central in political debates.
Of the Nordic countries, Finland, Denmark and Sweden are all members
of the EU. Only Norway has elected not to join. However, the decision
likely will not isolate the Norwegian economy from those of its Nordic
neighbors. The country maintains a "shadow membership" in the EU, by
which it seeks to stay as closely informed as possible and to make its
voice heard on the issues. This may ensure that it will become more
closely aligned with the rest of Europe as time passes. One
significant aspect of opting out of the EU is that the central bank is
free to pursue its own agenda, such as setting inflation targets as
opposed to exchange rate targets. Inflation patterns and currency
stability could prove to be issues that may separate the policy
decisions of Norway from the other Nordic countries.
Politically, the countries of this region are historically known for
their approach to policy making that emphasizes consensus. The most
common type of government among the Nordic countries is dominated by
long-standing, left-of-center parties which often align themselves
with smaller centrist parties for majority support. The landscape,
however, is so fractured that governing from a minority position is
common. The absence of a clear majority party slows and sometimes
arrests policy making. The strongest opposition comes from traditional
European conservative parties, which have gained support in recent
years with the decline of the welfare state and the need for the
libertarian policies necessary to compete and integrate with free
markets. None of the Nordic countries face any serious risk of any
anti-democratic political change. However, in Sweden, the prospects of
the present government will depend on its ability to create more jobs
and maintain the economy for EMU. A large minority of voters
are also disappointed about the benefits which membership in the EU
was expected to bring and have been increasingly voicing anti-EU
sentiments. However, in May 1998, Finland was formally admitted
in the "first wave" of the EMU.
Industry in the region is heavily resource-oriented. Denmark's
agricultural sector remains the backbone of the economy although other
industries have been developing rapidly in recent years, with
engineering, food processing, pharmaceuticals, brewing and
shipbuilding gaining in importance. Finland's major industry is
forestry which supplies a large paper and timber products sector. It
also produces household goods and telecommunications equipment and has
an extremely important heavy goods sector producing ships, cement,
steel and machine tools. In Sweden, the manufacturing sector dominates
the economy and includes major industries which range from motor
vehicles to aerospace, chemicals, pharmaceuticals, timber, pulp and
paper. Several of the country's export-oriented industries (in
particular forestry, mining and steel) are suffering as the country's
high wages squeeze them out of foreign markets. Norway's oil-driven
economy has provided its citizens with one of the highest standards of
living in the world. However, they must prepare for the time, due to
arrive early in the next century, when their vast reserves run out.
Reliance on exports concentrated in a few sectors tie these countries
closely to one another.
Economically, the Nordic countries are strong export economies that
take advantage of their abundant natural resources. They are also very
closely tied both to each other and to the rest of Europe. Most
countries have witnessed low levels of positive growth in the last six
years. Finland is the exception. As a significant portion of its trade
is with Russia, Finland suffered in the early years of the collapse of
the Soviet Union. However, in the past two years its economy has
recorded some of the highest growth rates in Western Europe while
having the lowest rate of inflation. Similarly, after five years of
recession, the overall outlook for the Swedish economy is also vastly
improved. A stringent package of spending cuts and tax increases has
brought down the budget deficit to a level that is well within the EMU
target. Exports are recovering as other parts of Europe are coming out
of recession and its inflation is among the lowest in Western Europe.
However, the one weak spot in both countries' economies is a
persistently high unemployment rate. Finland's unemployment, at 17%,
is the second highest in Europe after Spain, and Finland's rate
represents only a marginal improvement over the previous year.
Norway's oil driven economy is the envy of many and unemployment is
just a little over five percent.
A portion of the region's unemployment woes can be attributed to the
cultural ethic which was advanced during the years of the welfare
state. Subsequent cuts in public spending, particularly in those
sectors that traditionally rely on large government spending,
exacerbated the problem. Labor market reform will be a critical issue
in these countries as public spending is cut back. Pensions and
structural issues such as union regulations all need to be reformed, a
task which brings both challenges and unpopularity to the government
that accepts it. Not only will labor market reforms give governments a
daunting challenge; they could also cause the public to regret their
participation in the EMU. One positive point is that the countries
boast very high standards of living, which create healthy and highly
educated workforces.
The stock markets in Scandinavia are of medium size, and frequently
are strongly influenced by a small number of large multinational
firms. For example, in Sweden thirty firms constituted 75% of the
market's total capitalization and market turnover in 1997. Weighing
heavily in the equity markets are the electronics, forest products,
mining and manufacturing sectors. Market capitalization is highest in
Sweden at $273 billion, while the others are between $74 and $94
billion. Sweden also leads in numbers of firms (261) listed. Other
countries' listings range from 126 (Finland) to 249 (Denmark).
Performance of Nordic country indexes tend to be skewed owing to the
dominant weightings that a few large companies have in the index. For
example, the market capitalization of Finnish telecommunications
equipment manufacturer Nokia comprises about one-third of the total
market capitalization of the Finnish exchange and has a substantial
impact upon the performance of the companies in the HEX Index.
UNITED KINGDOM. The United Kingdom is the world's sixth largest
economy and is home to one of the oldest, most established, and most
active stock markets. An island nation, it built an empire of
strategically located trading posts such as Hong Kong and India. While
today the empire is largely dissolved, trade remains a very key
component of the U.K. economy. Strong domestic sectors are services,
natural energy resources, and heavy industry, including steel, autos,
and machinery. Imports generally emphasize food and manufacturing
components. The United Kingdom's trading partners are predominately
established market economies, such as the United States, Japan, and
other member countries of the European Union. The United Kingdom, via
the North Sea, also has substantial petroleum resources.
The London Stock Exchange is comprised of six offices scattered
throughout Great Britain and Northern Ireland. It lists over 2900
firms, and trades both foreign and domestic securities as well as
securities issued by the British Government. A vast majority of the
firms listed (80%) are from the United Kingdom. Total market
capitalization in 1997 was over $5,440 billion. Such size prevents the
stock market from being overly sensitive to the performance of
individual firms.
In 1997 the U.K. posted its sixth year of recovery with GDP growth of
3.5%, the third highest in the EU. The labor market also appears to
have improved as pay settlements and wages remain under control
despite the un employment rate falling from 6.5% to 5% over the
year. The strengthening economy prompted a sharp acceleration in
consumer spending and, in response, the nation's Monetary Policy
Committee was forced to raise base rates. The interest rate rise added
fuel to an already robust sterling which rose 8.6% in 1997 after
appreciating by 15.6% in 1996. This proved particularly damaging to
the manufacturing sector and, although exports held up well during the
year, there were early indications that a decline was underway.
Inflation is low, making the country attractive for foreign
investment. Investment is especially attractive to the United States,
with which the United Kingdom shares many market similarities. Each
country is the other's largest foreign investment partner.
Under Conservative Party leadership in the early 1980s, the United
Kingdom privatized many state-run utilities, such as British Gas and
British Telecom. The success of these efforts is evidence both of the
strong entrepreneurial spirit of British society and also a
fundamental rejection of the welfare state policies that dominated the
scene in the early post-war period. Even today, the Labour Party has
shed much of its socialist economic platform, reflecting a strong
break away from policies that continue to be popular in other European
countries. Eager to attract foreign investment the new administration
is not expected to undo any of the major reforms put in place by the
Conservatives during their last 18 years in power. Some changes could
include an increase in spending on social programs, a slowing of
privatization, and an increase in corporate taxes. Tight monetary
policy and interest rate hikes could be used to keep inflation below
the government's self-imposed 2.5% ceiling. In addition, the
government will probably wish to rebuild ties with the rest of the EU
and has already taken steps to get the pound back into the European
system by increasing the independence of the country's central bank.
Nevertheless, there appears to be some nervousness among many
investors who see the U.K. market lagging behind the continental
European stock markets where they see more compelling prospects for
economic growth. In addition, the manufacturing industry is suffering
from the pound's lofty valuation and many fear that an economic
slowdown could spread to the services sector.
The political scene in London is largely shaped by positions regarding
EMU. Pro Europe MPs in the Tory opposition leadership were
marginalized after the 1997 election, further polarizing the positions
of the two parties. Despite this expression of support, the United
Kingdom continues to be overtly less enthusiastic about EMU than other
countries in Europe and has not committed itself to immediately
joining the new currency once it is established. While the new
government has stated that it hopes to meet the Maastricht criteria,
it is less a self-imposed pressure on the U.K. government than it is
for other countries in the Union. Signing on to the EU Social Charter
would neutralize the policies which have set the United Kingdom above
other countries in attracting investment, such as wages and employment
conditions.
SPECIAL CONSIDERATIONS REGARDING ASIA
Asia has undergone an impressive economic transformation in the past
decade. Many developing economies, utilizing substantial foreign
investments, established themselves as inexpensive producers of
manufactured and re-manufactured consumer goods for export. As
household incomes rose, middle classes increased, stimulating domestic
consumption. In recent years, large projects in infrastructure and
energy resource development have been undertaken, and have benefited
from cheap labor, foreign investment, and a business friendly
regulatory environment. During the course of development, democratic
governments fought to maintain the stability and control necessary to
attract investment and provide labor. Subsequently, Asian countries
today are coming under increasing, if inconsistent, pressure from
western governments regarding human rights practices.
Manufacturing exports declined significantly in 1997, due to drops in
demand, increased competition, and strong performance of the U.S.
dollar. This significant decline is particularly true of electronics,
a critical industry for several Asian economies. Declines in exports
reveal how much of the recent growth in these countries is dependent
on their trading partners. Many Asian exports are priced in U.S.
dollars, while the majority of its imports are paid for in local
currencies. A stable exchange rate between the U.S. dollar and Asian
currencies is important to Asian trade balances.
Despite the impressive economic growth experienced by Asia's emerging
economies, currency and economic concerns have recently roiled these
markets. Over the summer of 1997, a plunge in Thailand's currency set
off a wave of currency depreciations throughout South and Southeast
Asia. The Thai crisis was brought on by the country's failure to take
steps to curb its current-account deficit, reduce short-term foreign
borrowing and strengthen its troubled banking industry, which was
burdened by speculative property loans. Most of Southeast Asia's stock
markets tumbled in reaction to these events. Investors were heavy
sellers as they became increasingly concerned that other countries in
the region, faced with similar problems, would have to allow their
currencies to weaken further or take steps that would choke off
economic growth and erode company profits. For U.S. investors, the
impact of the market declines were further exacerbated by the effect
of the decline in the value of local currencies versus the U.S.
dollar.
The same kind of concerns that effected Thailand and other Southeast
Asian countries subsequently spread to North Asia. To widely varying
degrees, Taiwan, South Korea and Hong Kong all faced related currency
and/or equity market declines. Due to continued weakness in the
Japanese economy combined with the reliance of Asian economies on
intra-Asian trade and capital flows, most of the region was mired in
their worst recessions since World War II.
Investors continue to face considerable risk in Asian markets as
political, economic and currency turmoil has continued to undermine
market valuations throughout the first half of 1998. Rising
unemployment, food shortages and declining purchasing power could lead
to social unrest and threaten the orderly functioning of government.
Currency devaluations also increase pressure on both the consumers who
must pay more for imported goods and on many businesses that must deal
with the rising costs of raw materials. For U.S. investors, weakening
local currencies erode their returns in these markets upon currency
translation. Certainly, the resolve of the region's governments to
adhere to International Monetary Fund-mandated benchmarks will be
sorely tested, as their implementation could further exacerbate these
pressures on the nation's populace and businesses. In addition,
Japan's paralysis is fast becoming a problem for Asia. Worsening
Japanese banking problems could lead to a contraction of credit for
all of Asia and slow rehabilitation in the region. Similarly, a
significant portion of both domestic and foreign investors have fled
these markets in favor of safer havens outside of the region and will
not likely return until they see more evidence that these problems are
being effectively addressed. The scope and magnitude of the tasks that
these countries face in resolving their problems could mean that
investors will see a continuation of high market volatility over an
extended period.
JAPAN. A country of 126 million with a labor force of 64 million
people, Japan is renowned as the preeminent economic miracle of the
post-war era. Fueled by public investment, protectionist trade
policies, and innovative management styles, the Japanese economy has
transformed itself since World War II into the world's second largest
economy. An island nation with limited natural resources, Japan has
developed a strong heavy industrial sector and is highly dependent on
international trade. Strong domestic industries are automotive,
electronics, and metals. Needed imports revolve around raw materials
such as oil, forest products, and iron ore. Subsequently, Japan is
sensitive to fluctuations in commodity prices. With only 19% of its
land suitable for cultivation, the agricultural industry is small and
largely protected. While the United States is Japan's largest single
trading partner, close to half of Japan's trade is conducted with
developing nations, almost all of which are in southeast Asia.
Investment patterns generally mirror these trade relationships. Japan
has over $100 billion of direct investment in the United States.
The Tokyo Stock Exchange (TSE) is the largest of eight exchanges in
Japan. The exchanges divide the market for domestic stocks into two
sections, with larger companies assigned to the first section and
newly listed or smaller companies assigned to the second. In 1997,
1,805 firms were listed on the TSE, 96% of which were domestic. Some
believe that the TSE has a tendency to be strongly influenced by the
performance of a small circle of large cap firms that dominate the
market. The two key indexes are the Tokyo Stock Price Index (TOPIX)
and the Nikkei. In 1997, TSE performance was disappointing, with the
TOPIX down 28% for the year.
Since Japan's bubble economy collapsed seven years ago, the nation has
drifted between modest growth and recession. By mid-year 1998 the
world's second largest economic power had slipped into its deepest
recession since World War II. Much of the blame can be placed on
government inaction in implementing long-neglected structural reforms
despite strong and persistent proddings from the International
Monetary Fund and the G-7 nations. Steps have been taken to institute
deregulation and liberalization of protected areas of the economy, but
the pace of change has been disappointedly slow.
Unemployment levels, already at record rates when measured by the
broader criteria used in many other countries, have been an area of
increasing concern and a major cause of recent voter dissatisfaction
with recent governments. However, the most pressing need for action is
the daunting task of overhauling the nation's financial institutions
and securing public support for taxpayer-funded bailouts. Banks, in
particular, must dispose of their huge overhang of bad loans and trim
their balance sheets in preparation for greater competition from
foreign financial institutions as more areas of the financial sector
are opened. Successful financial sector reform would allow Japan's
financial institutions to act as a catalyst for economic recovery at
home and across the troubled Asian region. Further steps toward
complete financial liberalization are in the initial stages of
implementation. Proposals under consideration could lower many
barriers allowing foreign firms greater and cheaper access to funds,
and the recent relaxation of restrictions on the insurance market also
promise greater access to foreign companies. A large factor in
determining the pace and scope of recovery is the government's
handling of deregulation programs, a delicate task given the recent
changes in Japanese politics.
Recent political initiatives in Japan have fundamentally transformed
Japanese political life, ushering in a new attitude which is strongly
reverberating in the economy. The Japanese Parliament (the Diet) had
been consistently dominated by the Liberal Democratic Party (LDP)
since 1955. The LDP dynasty, recently fraught with scandal,
corruption, accusations of maintaining a virtual monopoly, effectively
ended in 1994 as a result of electoral reform measures that brought
Diet seats to previously underrepresented areas. The first election
under this new system was held in October 1996. While the LDP remained
as the ruling party, it did so from a minority position. A key result
of the electoral reforms has been a strengthening of ideas of
opposition parties. Indeed, many of the LDP's recent reforms
originated with the leaders of the opposition New Frontier Party. The
LDP's ability to consistently produce bold innovations in a
politically competitive environment is untested. The opposition
parties suffer from structural and organizational weaknesses.
Infighting and defections are common. This inexperience with a true
multi-party system has caused the rise and fall of four coalition
governments in recent years. Between the adjusting of the monolithic
LDP to a more demanding and competitive system and the settling of the
opposition parties, Japan's political environment remains unstable.
The desire for electoral reform arose out of what many see as a basic
change in Japanese public opinion in recent years. Faced with
recurring scandal and corruption, Japanese society has come to demand
more accountability from their leaders, more transparency in their
institutions, and less interference from their intensely bureaucratic
government. This attitude was reflected in the results of the recent
election where candidates of the LDP party were heavily defeated in an
election for the upper house of parliament and prime minister
Hashimoto was forced to resign. The election results were considered
to be a repudiation of the government's failure to come to grips with
the country's economic decline, widening corruption scandals
and a lack of any discernable progress in addressing the nation's
banking problems.
Nevertheless, sustaining reforms and recovery are not guaranteed.
Drops in consumption, increased budget deficits, or halting
deregulation could exacerbate the nation's economic woes. Furthermore,
as a trade-dependent nation long used to high levels of government
protection, it is unclear how the Japanese economy will react to the
potential adoption of the trade liberalization measures which are
constantly promoted by their trading partners. In addition, as the
largest economy in a rapidly changing and often volatile region of the
world, external events such as the Korean conflict could effect Japan.
As many of the governments of Southeast Asia frequently face domestic
discontent, and as many of these countries are Japanese trading
partners and investment recipients, their internal stability and its
impact on regional security are of tremendous importance to Japan.
Also of concern are Japan's trade and current-account surpluses. If
they continue to grow, they could lead to an increase in trade
friction between Japan and the United States. Additionally, with
inflationary pressures largely absent and wholesale prices falling,
Japan may be entering a period of deflation. A deflationary
environment would both hit corporate profits and increase the debt
burden of Japan's most highly leveraged companies.
CHINA AND HONG KONG. China is one of the world's last remaining
communist systems, and the only one that appears poised to endure due
to its measured embrace of capitalist institutions. It is the world's
most populous nation, with 1.22 billion people creating a workforce of
699 million people. Today's Chinese economy, roughly separated between
the largely agricultural interior provinces and the more
industrialized coastal and southern provinces, has its roots in the
reforms of the recently deceased communist leader Deng Xiaoping.
Originally an orthodox communist system, China undertook economic
reforms in 1978 by providing broad autonomy to certain industries and
establishing special economic zones (SEZs) to attract foreign
investment (FDI). Attracted to low labor costs and favorable
government policies, investment flowed from many sources, with Hong
Kong, Taiwan, and the United States leading the way. Most of this
investment has been concentrated in the southern provinces,
establishing manufacturing facilities to process goods for re-export.
The result has been a steadily high level of real GDP growth,
averaging 11.35% per year so far this decade. With this growth has
come a doubling of total consumption, a tripling of real incomes for
many workers, and a reduction in the number of people living in
absolute poverty from 270 to 100 million people. Today there is a
market of more than 80 million people who are now able to afford
middle class western goods.
Such success has not come without negatives. As a communist system in
transition, there still exist high levels of subsidies to state-owned
enterprises (SOE) which are not productive. At the end of 1997, it was
reported that close to half of the SOEs ran losses. In addition, the
inefficiencies endemic to communist systems, with their parallel (thus
redundant) political, economic and governmental policy bodies,
contribute to high levels of inflation. Fighting inflation and
attempting to cool runaway growth has forced the government to
repeatedly implement periods of fiscal and monetary austerity.
Periodic intervention seems to be their chosen method of guarding
against overheating.
Performance in 1997 reflects this dynamic between growth, inflation,
and the government's attempts to control them. Growth slowed to 9.1%,
largely as a result of a tightening of credits to SOEs. Policy was a
mix between a loose monetary stance and some relatively austere fiscal
positions. While growth was a priority, it came at the cost of
double-digit inflation.
China has two stock exchanges that are set up to accommodate foreign
investment, in Shenzhen and in Shanghai. In both cases, foreign
trading is limited to a special class of shares (Class B) which was
created for that purpose. Only foreign investors may own Class B
shares, but the government must approve sales of Class B shares among
foreign investors. As of December 1997, there were 51 companies with
Class B shares on the two exchanges, for a total Class B market
capitalization of $2.1 billion U.S. dollars. In 1997, all of China's
stock market indices finished the year below the level at which they
began it. These markets were buoyed by strong speculative buying in
the year's second quarter. Market valuations peaked in September and
were subsequently hit by a heavy sell off from October onwards.
In Shanghai, all "B" shares are denominated in Chinese renminbi but
all transactions in "B" shares must be settled in U.S. dollars. All
distributions made on "B" shares are also payable in U.S. dollars, the
exchange rate being the weighted average exchange rate for the U.S.
dollar as published by the Shanghai Foreign Exchange Adjustment
Center. In Shenzhen, the purchase and sale prices for "B" shares are
quoted in Hong Kong dollars. Dividends and other lawful revenue
derived from "B" shares are calculated in renminbi but payable in Hong
Kong dollars, the rate of exchange being the average rate published by
the Shenzhen Foreign Exchange Adjustment Center. There are no foreign
exchange restrictions on the repatriation of gains made on or income
derived from "B" shares, subject to the repayment of taxes imposed by
China thereon.
China's proven ability to nurture domestic consumption and expand
export markets leads many to believe that the bulk of its growth has
yet to be seen. Most sources, notably the World Bank, predict future
growth levels through the year 2000 of over 7%. This auspicious
indicator notwithstanding, there are a few special considerations
regarding China's future. While this list is not all-inclusive, it
does highlight some internal and external forces that have a strong
influence on the country's future.
To begin with the internal issues, one matter is that infrastructure
bottlenecks could prove to be a problem, as most FDI has been
concentrated in manufacturing and industry at the expense of badly
needed transportation and power improvements. Secondly, as with all
transition economies, the ability to develop and sustain a credible
legal, regulatory, and tax system could influence the course of
investments. Third, environmentalists warn of the current and looming
problems regarding pollution and resource destruction, a common result
of such industrial growth in developing economies which can't afford
effective environmental protection. This is a particularly noteworthy
issue, given the size of the country's agricultural sector. Lastly,
given China's unique method of transition there exists the possibility
that further economic liberalization could give rise to new social
issues which have heretofore been effectively mitigated. One such
issue is the possible dismantling of inefficient state-owned
enterprises, something which is potentially socially explosive given
the communist policy of providing social welfare through the firm.
Exposing what many economists feel is a high level of open
unemployment and widening the gap between the newly empowered business
class and the disenfranchised could pressure the government to retreat
on the road to reform and continue with massive state spending.
Regarding external issues, China's position in the world economy and
its relationship with the United States also have a strong influence
on it's economic performance. The country has recently enjoyed an
almost uninterrupted positive trade balance. As the largest country
amidst the fastest growing region in the world, China and its
multi-million person ethnic diaspora have a significant role to play
in Asian growth. Should China ascend to become a member of the World
Trade Organization (WTO), as it desires, such movements of capital and
goods will become easier.
Export growth in China has recently been subject to fluctuations
caused by external political events, such as the U.S. elections and
debates over human rights issues. U.S. policy (specifically most
favored nation status) is frequently reconsidered by various elements
of the U.S. government in reaction to a variety of issues, from
nuclear proliferation to Tibetan rights. Significant changes in U.S.
policy could impact China's growth, as close to 9% of their GDP is
trade with the U.S. and the U.S. represents the third biggest investor
in China.
Perhaps the strongest influence on the Chinese economy is the policy
that is set by the political leaders in Beijing and this is somewhat
of an open question as the death of Deng has created a slight vacuum
in Chinese political society. A large part of Deng's strength derived
from a newly empowered business class endeared to him and it is
unclear if any of his successors can harness this loyalty as
effectively as he did. Sustained growth is one possible way to win
over this constituency, leading many to believe that the future
Chinese leadership will respect market forces at least as much as Deng
did. Choosing between double digit growth and reduced inflation could
continue to be a central economic question, with 1997 (Deng
influenced) decisions pointing to an acceptance of lower, albeit still
high, GDP growth.
Another key political player is the Chinese army. With provocative
situations occurring in Taiwan and the Korean peninsula, and with ever
present pressure from internal democrats, the military is in a
position of leverage regarding the shaping of the future political
scene. Finally, there is the communist party, long seen as a loser
amongst the beneficiaries of Deng's reforms. Many view the battle
between the party and the middle class as a zero sum game and as the
leadership settles, respective alliances and constituencies could
determine how much the government pursues its growth strategy.
As with almost all foreign investments, U.S. investors face the
significant risk of currency devaluation by the Chinese government.
Despite assurances from officials reemphasizing China's policy
commitment to maintain the current exchange rate of the renminbi
against the U.S. dollar, many observers believe that this policy will
be soon tested as China monitors the effect of regional devaluations
on exports. Government authorities feel that China has boosted its
international reputation by refraining from devaluing the renminbi at
a time when such a move could further destabilize the currencies of
its neighbors. Nevertheless, Chinese authorities have recently hinted
that a continued slide in the Japanese yen would make it very
difficult for them to maintain their promise not to devalue. If
efforts to prevent the slide in the yen fail, then China may be pushed
into devaluing their currency. For U.S. investors, a devaluation would
erode the investment returns on their investments.
The last significant force in the Chinese economy is the acquisition
on July 1, 1997 of Hong Kong as a Special Autonomous Region (SAR). For
the past 99 years as a British Colony, Hong Kong has established
itself as the world's freest market and more recently as an economic
gateway between China and the west.
A tiny, 814 square mile area adjacent to the coast of southern China
with a population of 6.3 million, Hong Kong has a long established
history as a global trading center. Originally a manufacturing-based
economy, most of these businesses have migrated to southern China. In
their place has emerged a developed, mature service economy which
currently accounts for approximately 80% of ITS GROSS DOMESTIC
PRODUCT. Hong Kong trades over $400 billion in goods and services each
year with countries throughout the world, notably China, Japan, and
the U.S. Its leading exports are textiles and electronics while
imports tend to revolve around foodstuffs and raw materials. Hong
Kong's currency, the HK dollar, was pegged to the US dollar at
HK7.7=$1 in 1983 and investors consider it to be a stable mechanism in
enduring confidence lapses and speculator attacks. The operation of a
currency board and accumulation of U.S. dollars in its monetary fund
is partly responsible for this stability.
The stock market (SEHK) listed 658 publicly traded companies by the
end of 1997, with total capitalization at $413 billion U.S. dollars. A
significant portion of SEHK firms are in real estate, and are
sensitive to fluctuations in the property markets. 1997 was a
tumultuous year for the Hong Kong stock market as a speculative attack
on the Hong Kong dollar in October provoked a global sell-off in
equities. Investors were shocked as the Hong Kong market, long
regarded as a safe-haven, plunged 40% in October. The stock market's
decline and the attack on the local currency sent interest rates
soaring, precipitating an erosion in local property values. This in
turn put additional pressure on the banking sector which is heavily
geared to real estate. The Hong Kong market's dramatic downturn
illustrates how vulnerable it is to the Asian region's economic
problems. The structural problems besetting Hong Kong's neighbors in
Southeast and Northeast Asia may not be quickly resolved. Exports to
the Asian region may remain depressed as the process of economic
reform in countries such as Thailand, Malaysia, Indonesia, Japan and
South Korea will likely hold back economic growth in the area.
Accordingly, Hong Kong and China will likely be more dependent upon
demand from the U.S. and Europe for some time to come.
As a trade center, Hong Kong's economy is very closely tied to that of
its trading partners, particularly China and the United States. In the
wake of Deng's reforms, Hong Kong and China have become increasingly
interdependent economically. Currently, China is Hong Kong's largest
trading partner. After Taiwan, Hong Kong is the largest foreign
investor in China, accounting for about 60 percent of overall foreign
direct investment. Hong Kong plays a particularly significant role as
an intermediary in U.S.-China trade. In 1996, it handled 56% of
China's exports to the U.S. and 49% of Chinese imports from the U.S.
The critical question regarding the future of Hong Kong is how the
Chinese leadership will exert its influence now that it has become a
Special Autonomous Region (SAR). This new status is in accordance with
pledges made at the Joint Declaration on the Question of Hong Kong
made by the Chinese and British governments in 1984. Leading up to the
hand over of the colony, the Chinese government has pledged to uphold
the Basic Law of 1990 which states that Hong Kong's status as an
unfettered financial center will remain intact for at least 50 years
after 1997. Part of this status includes retaining the legal,
financial and monetary systems (specifically the HK$/US$ peg) which
guarantee economic freedom and foster market expansion.
Many investors and citizens are closely monitoring Chinese actions in
order to assess their actual commitment to these principles. Already
there is evidence of a clear, if slow, current of political change
coming from Beijing. Certain actions, such as the curbing of media
freedoms, indicate that there is the possibility of significant
interference from communist authorities. More significant was the
clash between the U.K. and Chinese governments over China's abolition
of the elected legislature and subsequent installation of governmental
leaders in both the executive and the legislature who are directly
appointed by Beijing. Mr. Tung Chee-hwa, appointed as the first Chief
Executive of the SAR, has surrounded himself with like-minded
Machiavellian figures who have strong ties to both market successes
and Beijing leaders. They are portrayed as believing in the powers of
capitalism and central authority, if not democracy, leading some to
speculate that the SAR could develop into a South Korean style of
corporatism which preserves the economic status quo without
incorporating further political freedoms.
In assessing the prospects for Hong Kong's future, it must be noted
that China has a very strong interest in a prosperous SAR.
Particularly if Beijing pursues a growth strategy as it has in the
past, Hong Kong can be a key agent in China's economic policy. Desire
for investment and new technologies necessary for modernization is a
strong incentive to send positive signals through the treatment of
Hong Kong. This is reinforced by the respect Hong Kong is due given
its role in China's recent dynamic performance.
To be sure, there are more adamant concerns over the effect of the
acquisition. Many are skeptical of Beijing's ability to leave the
currency alone. Some note the continuous drop in GDP as evidence that
Hong Kong has yet to mature as a service economy and that the
workforce hasn't fully adjusted to the switch out of manufacturing.
Additionally, by tying Hong Kong so closely with China, it now must
weather the ups and downs of Beijing's relationship with the U.S. Most
Favored Nation Status now means just as much, if not more, to the SAR
as it does to Beijing, with some asserting that revoking MFN
could result in substantial losses in trade, income, and jobs.
Hong Kong's competitive advantage has traditionally been a mix of
geography, market freedoms and entrepreneurial spirit. The
preservation of these advantages is now a function of the island's
independence from Beijing. Today's investors will be vigilant in
measuring how much of that independence is retained after July 1,
1997.
AUSTRALIA. Australia is a 3 million square mile continent (about the
size of the 48 continental United States) with a predominantly
European ethnic population of 18.2 million people. A member of the
British Commonwealth, its government is a democratic, federal-state
system.
The country has a western style capitalist economy with a workforce of
9.2 million people that is concentrated in services, mining, and
agriculture. Australia's large agricultural sector specializes in
wheat and sheep rearing and together, these two activities account for
more than half of the country's export revenues. Australia also
possesses abundant natural resources such as bauxite, coal, iron ore,
copper, tin, silver, uranium, nickel, tungsten, mineral sands, lead,
zinc, diamonds, natural gas, and oil. The health of the country's
domestic economy is particularly sensitive to movements in the world
prices of these commodities. Primary trading partners are the United
States, Japan, South Korea, New Zealand, the United Kingdom and
Germany. Imports revolve around machinery and high technology
equipment.
Historically, Australia's strong points were its agricultural and
mining sectors. While this is still true to a large extent, the
government managed to boost its manufacturing sector by undertaking
protective measures in the 1970's and early 1980's. These have
subsequently been liberalized in an effort to spur growth in the
industrial sector. Today's economy is more diverse, as
manufacture r s' share of total exports is increasing. Part of
the government's effort to make manufacturing more competitive was a
floating of the Australian dollar in 1984, precipitating an initial
depreciation, and a campaign to reduce taxes. Such reforms have
attracted foreign investment, particularly in the transport and
manufacturing sectors. Restrictions do exist on investment in certain
areas as media, mining and some real estate.
With inflation well under control but unemployment stubbornly high and
signs of cyclical slack in the economy, Australia's monetary policy is
focused on preserving the low inflation environment while keeping
monetary conditions conducive to stronger economic growth. The
government has set a goal of achieving a government budget surplus in
fiscal year 1998/1999.
Australia is fully integrated into the world economy, participating in
GATT and also more regional trade associations such as the Asia and
the Pacific Economic Cooperation (APEC) forum. Future growth could
result from their movement towards regional economic liberalization,
but a countervailing force is the reality that some export markets in
Europe could be lost to continued European economic integration.
After suffering a significant recession in 1990-91, the Australian
economy has enjoyed six years of expansion. The medium-term outlook
appears favorable, with domestic spending supported by low interest
rates, improving consumer confidence and a strengthening labor market.
GDP growth has increased steadily throughout 1997. However, weakness
in commodity prices, particularly metal prices, coupled with an
increase in the nation's current account deficit have placed
significant pressure on the Australian dollar.
Investors should be aware that, while Australia's prospects for strong
economic growth appear favorable over the long-term, many sectors
currently face significant risks arising from the recent turbulence in
Asian countries, which account altogether for almost 60 percent of
Australia's exports. While projections already embody a more subdued
outlook for growth in these countries, there is a risk of this outlook
deteriorating further, especially in Japan and Korea.
Due to the large position that the agriculture and natural resource
sectors have in the nation's export driven economy, any weakness in
commodity prices may negatively impact both the economy and stock
prices. In addition, United States investors face the risk that their
investment returns from investments in Australia could be eroded if
the Australian currency declines relative to the United States dollar.
INDONESIA. Indonesia is a country that encompasses over 17,000 islands
on which live 195 million people. It is a mixed economy that balances
free enterprise with significant government intervention. Deregulation
policies, diversification of strong domestic sectors, and investment
in infrastructure projects have all contributed to high levels of
growth since the late 1980's. Indonesia's economy grew at 7.1% in
1996, the exact average of its performance for the current decade.
Growth in the 1990's had been fairly steady, hovering between 6.5-7.5%
for the most part, peaking at 8.1% in 1995. Moderate growth in
investment, including public investment, and also in import growth,
helped to slowdown GDP growth. Growth has been accompanied by
moderately high levels of inflation.
In recent years, Indonesia had been undergoing a diversification of
the core of its economy. No longer strictly revolving around oil and
textiles, it is now gaining strength in high technology manufactures,
such as electronics. Indonesia consistently runs a positive trade
balance. Strong export performers are oil, gas, and textiles and
apparel. Oil, once responsible for 80% of export revenues, now
accounts for only 25%, an indication of how far other (mostly
manufacturing and apparel) sectors have developed. Main imports are
raw materials and capital goods.
However, as with many of its Asian neighbors, Indonesia's bright
prospects came to a sudden halt in August of 1997 when the plunging
Thai baht began to destabilize the rupiah. By mid-year 1998 the local
currency had fallen more than 80% against the dollar, and hugely
increased the cost of servicing foreign debts; a collapse of the real
economy, and a growing number of bad loans. Various central bank
initiatives, including a doubling of interest rates, failed to halt
the currency's depreciation. The nation's banks, unable to service
their extensive short - term borrowings, were suddenly in danger
of collapse. Of more than 200 local banks, a mere handful were
estimated to be solvent at mid-year 1998.
The social effects of this decline have been devastating. By the end
of 1998 the government expects 47% of the population to be living
below the poverty line and unemployment is expected to surpass 20% of
the workforce. This has led to an increase in social tensions and food
riots and large-scale strikes have broken out sporadically. Rioting
and attacks upon the countr y' s business oriented ethnic Chinese
population have prompted as many as 80,000 to flee the country. Rising
popular opposition forced President Suharto to resign less than three
months after being appointed to his seventh consecutive five-year term
and was replaced by his vice-president, B. J. Habibie. The political
upheaval and resulting uncertainty has resulted in the further erosion
in public confidence at home and abroad.
The breakdown in public confidence in the Indonesian economy will
likely be difficult to reverse, and will prolong the period of
recovery. Resumption of lending by multilateral institutions under a
rescue package drawn up by the International Monetary Fund (IMF) may
speed up the process of restoring the faith in the government's
efforts to shore up the banking system. Nevertheless, even if the two
critical outstanding issues of restructuring the corporate sector's
external debt and shoring up the banking sector can be resolved this
year, the economy will remain weak in 1999 and recover only slowly in
the following years.
The Indonesian stock market plunged to record lows in 1997 under the
combined impact of the country's economic implosion, political
uncertainty and social unrest. The market's retreat continued into
mid-1998 as domestic and foreign investors fled the market for safer
havens overseas. While many investors believe that the market's steep
decline has brought valuations of a number of Indonesian companies to
very attractive levels, there remains considerable risk particularly
for foreign investors. As with most foreign investments, United States
investors could see their investment returns eroded if the Indonesian
currency declines in value relative to the U.S. dollar. Secondly, any
escalation of rioting and other forms of social unrest could be a
major obstacle in the path of economic recovery. Thirdly, many
question the will of the Indonesian government and its people to
accept the conditions of economic reform as mandated by the IMF.
Fourth, the Indonesian economy, currency and securities markets are
extremely sensitive to events that take place within the Asian region
and their fortunes are somewhat dependent upon how well other Asian
nations resolve their own economic and currency problems.
MALAYSIA. 1997 saw Malaysia's GDP growth slow to 7.4%, down from over
8.2% in 1996 and 9.5% in 1995. Inflation has been kept relatively low
at 3.8%. Performance in 1996 avoided the economy's potential
overheating as export growth, investment, and consumption all slowed.
A large part of Malaysia's recent growth is due to its manufacturing
industries, particularly electronics and semiconductors. This has led
to an increased reliance on imports; thus the economy is sensitive to
shifts in foreign production and demand. This is particularly true
regarding its main trading partners: the United States, Japan, and
Singapore. Such shifts were partly responsible for the slowdown in
1997. In addition, monetary policies to stem the threat of overheating
were evident, but the country still needs massive public and private
investment to finance several large infrastructure projects.
Government industrial policy seeks investment to create more value
added high technology manufacturing and service sectors in order to
decrease the emphasis on low skilled manufacturing. Already U.S.
investors have invested over $9 billion, and most of this is in
electronics and energy projects.
However, like its Asian neighbors, Malaysia has stumbled in its dash
to become a developed nation by 2020. The grandiose ambitions of
Malaysian Prime Minister Mahathir Mohamad have been set back by its
worst-ever currency crisis, which also brought a sharp fall in the
country's stock market. An overheated property market, a growing
current-account deficit and a highly leveraged economy, precipitated
much of the country's problems. Following the sharp decline of
Thailand's currency, the Malaysian ringgit came under severe pressure.
The Malaysian central bank attempted to defend the currency and the
resulting spikes in interbank rates marked the start of a period of
escalating interest rates. Once the central bank ceased using foreign
exchange reserves to slow the ringgit's depreciation in the
region-wide currency slide, the Malaysian currency quickly weakened
versus the United States dollar and by year end had declined by 35%.
By mid-year 1998, the outlook for the Malaysian economy remained bleak
as economists predicted that the economy would shrink by at least 5
percent this year, the first contraction in 13 years. The likelihood
that Malaysia will be forced to seek IMF assistance is increasing.
Although Malaysia does not have the high level of foreign debt that
has overwhelmed its Asian neighbors, domestic lending, at 170 percent
of GDP, was the highest in Southeast Asia when the currency crisis
struck. The nation's banks are now faced with a growing number of
unpaid loans as more businesses are struggling to stay afloat in the
sagging economic environment.
Adding to the bleak outlook is the government's seemingly confused and
erratic response to the nation's serious economic and currency crisis.
The Prime Minister is increasingly at odds with the finance minister
on what policies the country has to institute to remedy the country's
serious problems. Prime Minister Mahathir has abandoned the tight
money, financially conservative recovery policy endorsed by the IMF
and has placed the blame for the nation's troubles on foreign currency
and stock market speculators. The move risks triggering another round
of currency devaluations, inflation and, in the long run, economic
collapse.
Investors should be aware that investing in Malaysia currently entails
a number of potential risks, not the least of which is the
increasingly erratic economic policies of the Malaysian government
that are counter to the advice of the IMF and many of the developed
nations. In addition, the government appears to be escalating its
hostile attitude toward foreign investors. In September of 1998
Malaysian authorities imposed new restrictions on the foreign exchange
and securities markets. Included were limitations in repatriating the
investment proceeds of foreign investors.
While the Malaysian population has been relatively passive during the
first year of the economic meltdown, there could be mounting social
unrest if the crisis is prolonged. Should the country finally adopt
IMF remedies the Malaysian people may be reluctant to accept the
additional sacrifices that they will be called upon to endure. This
could seriously undermine the recovery of Malaysia's economy as well
as its currency and stock market. An increasingly hostile government
towards foreign investors could also lead to additional curbs on the
free access to their funds. As with other Asian markets, currency risk
remains substantial.
SINGAPORE. Since achieving independence from the British in 1965,
Singapore has repeatedly elected the People's Action Party (PAP) as
their government. It is a party that is so consistent it has only
offered up two prime ministers in this 32-year period. Elections in
January 1997 returned the PAP to power, signaling satisfaction with
their policy of close coordination with the private sector to
stimulate investment. Typical policies include selective tax
incentives, subsidies for R&D, and joint ventures with private firms.
While the combination of consistent leadership and interventionist
policies is sometimes seen as impeding civil liberties and
laissez-faire economics, it has produced an attractive investment
environment.
The Singapore economy is almost devoid of agriculture and natural
resources, not surprising given the island nation's geographic size.
Its strongest sector is manufacturing, particularly of electronics,
machinery and petroleum and chemical products. They produce 45% of the
world's computer disk drives. Major trading partners are Japan,
Malaysia and the United States.
The economic situation in Singapore registered a passable year in 1996
but weakened in early 1997, dragged down by the downturn in the global
electronics industry. However, it ended the year on a firmer footing
as real GDP growth rose from 4.1% in the first quarter to 7% by the
fourth quarter. Inflation remained low and the current account balance
maintained its large surplus. Property values have declined recently,
impacted by continuing oversupply.
Although Singapore boasts one of the strongest economies in Asia,
investors in that market face a number of possible risks. Chief among
these is that the country is not immune to the region's economic
troubles, as Singapore's neighbors account for nearly one-quarter of
its trade. Any prolonged regional economic downturn could slow its
growth. In addition, analysts believe that there is
considerable downside risk in the current Singapore dollar exchange
rate and any decline in the Singapore currency versus the U.S. dollar
could erode the investment return of United States investors in that
market.
SOUTH KOREA. South Korea has been one of the more spectacular economic
stories of the post-war period. Coming out of a civil war in the
mid-1950's, the country found itself with a destroyed economy and
boundaries that excluded most of the peninsula's mineral and
industrial resources. It proceeded over the next 40 years to create a
society that includes a highly skilled and educated labor force and an
economy that exploited the large amounts of foreign aid given to it by
the United States and other countries. Exports of labor intensive
products such as textiles initially drove the economy and were
eventually replaced by heavy industries such as automobiles.
Hostile relations with North Korea dictate large expenditures on the
military and political uncertainty and potential famine in the north
has put the south on high alert. Any kind of significant military
effort could have multiple effects, both positive and negative, on the
economy. South Korea's lack of natural resources put a premium on
imported energy products, making the economy very sensitive to oil
prices.
Since 1991, GDP growth has fluctuated widely between 5% and 9%,
settling down at 5.6% last year. Currently the labor market is in need
of restructuring, and its rigidity has hurt performance. Relations
between labor and the large conglomerates, or Chaebols, could prove to
be a significant influence on future growth. Inflation in the same
period has been consistently dropping, save a brief rise in 1994 and
finished the year at 4.5%. The country consistently runs trade
deficits, and the current account deficit widened sharply in 1996,
more than doubling to $19.3 billion. South Korea's strong domestic
sectors are electronics, textiles and industrial machinery. Exports
revolve around electronics, textiles, automobiles, steel and footwear,
while imports focus on oil, food, chemicals and metals.
The stock market (Korea Stock Exchange) is currently undergoing
liberalization to include more foreign participation, which was only
first allowed in 1992, but the bond market remains off limits until
1999. Foreign ownership has since been increased to 55% for all listed
stocks except three. The foreign ownership liberalization is in
response to the KSE 1996 performance, which was down 18%. The number
of listed companies totaled 726 in 1997, a decline of 34 from the
previous year, while the market's capitalization plummeted 70 percent
from its 1996 level.
Over the calendar year 1997, the Korean stock market extended its
two-year decline plunging by 42% to its lowest year-end level since
1986. The collapse came as a direct result of the Asian region's
currency crisis and the failure of several Korean conglomerates. In
the summer of 1997 , the South Korean won hit record lows
against the U.S. dollar as a series of nationwide labor strikes
aggravated the already escalating trade deficit. Despite aggressive
official intervention to support the local currency, the won had
fallen from 860 to 914 to the U.S. dollar by year-end.
The Korean market poses risks for current and prospective investors.
The Korean government will need to maintain public support to
implement the radical and difficult restructuring of the economy
demanded by the IMF under a $58 million loan package. This opposition
could come from the country's major conglomerates that have yet to
institute necessary restructuring initiatives, and from workers
protesting against rising unemployment.
In addition, relations with its long-standing enemy, North Korea have
been worsening as widespread famine could prompt another attack on its
southern neighbor to divert the attention of its people from their
suffering. More importantly, South Korea's heavy reliance on exporting
to the Asian region holds its economy hostage to the economic fortunes
of its neighbors.
THAILAND. The Thai economy has witnessed a fundamental transition in
recent years. Traditionally it was a strong producer of textiles,
minerals and agricultural products, but more recently it has tried to
build high technology export industries. This proved particularly
fortuitous in the mid 1990s when flooding wiped out much of their
traditional exports, but the newer industries remained strong, keeping
the growth rate above 8%. (This level had been achieved through the
1990s, giving the economy a name as one of the fastest growing in the
region.) Successive governments have also taken steps toward reducing
the influence of central planning, opening its market to foreigners
and abandoning five-year plans. This restructuring is still underway,
and the change can cause difficulty at times.
The political situation in Thailand is tenuous. Democracy has a short
history in the country, and power is alternatively obtained by the
military, a non-elected bureaucratic elite, and democratically elected
officials. The frequent transfers of power have generally gone without
divisive, bloody conflicts, but there are bitter differences between
the military and the political parties. Free elections in 1992 and
again in 1995 have produced non-military democratic leaders from
different parties, a healthy sign of party competition. More recently,
the dramatic downturn in the economy generated demands from all
sectors of society for the resignation of Prime Minister Chavalit. The
worsening economic situation threatened social stability of the nation
and the Prime Minister resigned after barely one year in power.
In 1997 GDP contracted by approximately 0.3%, compared with 7.2%
growth in 1996 and 8.6% in 1995. The 1997 current account deficit was
1.9% of GDP as against 7.9% in 1996. Inflation was 5.6%, however, the
government has projected a 16.2% rate for 1998. One cause for
Thailand's economic downturn was a decline in export growth as its
manufacturing industry faces stiff competition from low priced
competitors and its agriculture has suffered a severe drop in
production. In 1996, Thailand's currency, the baht, was linked to a
U.S. dollar dominated basket, and monetary policy had remained tight
to keep that link strong and avoid inflationary pressures.
The situation changed in early 1997, however, with the revelation of
many bad bank loans and a bubbling of property prices due to
over-investment. Many companies, faced with slowing exports, stopped
servicing their debts. Many other firms have stayed alive only with
infusions of public cash, and the government has been slow to let many
property laden financial firms fail. The stock market has reacted
strongly, dropping to new lows for the decade. Reluctant to float the
baht, indeed promising that it wouldn't, the government relented in
early July hoping to revive export and stock market growth. The
subsequent devaluation (approximately 20% against the dollar in the
first month) led to the need for a $16 billion loan coordinated by the
IMF to shore up foreign reserves. Most of the loan came from
neighboring countries led by Japan, indicating their desire to both
protect their own investments in Thailand, and also mitigate the
effect of the devaluation on their home currencies.
The total impact of the entire situation is negative, particularly on
inflation, unemployment and foreign debt. Significant turnover and a
major gamble on the currency has put the government in a precarious
position, especially given the fact that it is a six party coalition.
Dissatisfaction amongst the military, always a political factor, is
high.
The new Thai government has produced mixed results in their efforts to
remedy the country's serious economic woes. Crucial to Thailand's
recovery are both the outcome of newly instituted economic and banking
reforms and the outlook for both China's and Malaysia's economies.
Looking forward, currency risk remains high and the baht will likely
be highly vulnerable to regional contagion.
INDIA. India is the second most populous and seventh largest country
in the world. Although the country occupies only 2.4% of the world's
land area, it supports over 15% of the world's population. Only China
has a larger population. The Indian government is classified as a
federation, or union, and is, under its constitution a "sovereign,
socialist, secular, democratic republic" composed of 25 states and 7
union territories. Like the united States, it has a federal form of
government. However, the central government in India has greater power
in relation to its states, and is patterned after the British
parliamentary system.
India's population was estimated at 952 million in 1997 and has been
projected to double by the year 2028. Religion, caste, and language
are major determinants of social and political organization. Although
83% of the people are Hindu, India also is the home of more than 120
million Muslims - one of the world's largest Muslim populations.
Despite economic modernization and laws countering discrimination
against the lower end of the class structure, the caste system remains
an important factor in Indian society.
India has the world's fifth largest economy in terms of purchasing
power parity. About 62% of the population depends directly on
agriculture. Industry and services sectors are are growing in
importance and account for 29% and 42% of GDP, respectively, while
agriculture contributes about 29%. More than 35% of the population
lives below the poverty line, but a large and growing middle class of
150 - 200 million has disposable income for consumer goods. In the
industrial sector, India now manufactures a variety of finished
products for domestic use and export.
India gained independence in 1947 after two centuries of British
colonial rule. Economic policies in the first four decades of
independence were driven by its leaders' deep distrust of foreign
economic interests and admiration for the the Soviet model of
centrally planned industrialization. Accordingly, the country has
followed a policy regime that has been characterized by extreme
protectionism and public sector dominance in strategic sectors.
Nevertheless, India has developed a large and diversified private
sector, and agriculture has remained almost entirely in private hands.
India's treatment of foreign investment has been alternatively
encouraging, ambivalent or difficult, depending on the industry sector
involved. Most industries are open to limited investment by
multinational companies while others are closed to foreign investors.
Sectors closed to foreign investment currently number five: mineral
oils; railway transport; warships and the military-related areas of
aircraft; atomic energy; and associated minerals. Although recent
measure have liberalized the investment limits on a number of major
industries, several political parties, deeply hostile to foreign
investment, have made these issues the subject of pre-election
rhetoric.
India has a large and active stock market which ranks twentieth
globally in market value. There are 23 recognized stock exchanges in
India. The BSE is the premier exchange; accounting for more than
one-third of trading volume, over 70% of listed capital and over 90%
of market capitalization. As of the end of 1997 there were 5,842
listed companies on the BSE with a total market value of US$128.27
billion.
Relations between India and its neighbors have been fraught with
difficulties. India disputes Pakistan's claims to part of Kashmir, and
repeated attempts at mediation have not resolved this conflict. The
dispute has triggered wars between the two countries in 1947, 1965 and
1971. More recently, India's nuclear tests prompted Pakistan to reply
in kind, despite Western efforts to dissuade it. Economic sanctions
imposed by the U.S. and other industrialized countries following the
nuclear tests in May of 1998 have not been without consequences. While
their short-term direct effect on the economy has been relatively
modest, the indirect and medium-term consequences of sanctions could
become more serious. Relations with Nepal, whit Bhutan and with China
are marred by China's two territorial claims in the nation's east and
north. Historical suspicions remain following the 1962 border war
between India and China and the two countries have continued to work
towards expanding their political and economic influence in the South
Asian region.
While India presents many attractions for U.S. investors, there are a
number of factors that could pose considerable risk to those investing
in this market: Contemporary politics have become increasingly
unpredictable since the resounding defeat of Congress in 1996 after
decades at the help. Th e alignment of political forces has
become increasingly erratic among factions, parties and interest
groups. Some factions within the current administration have been
hostile to foreign investment and could impose measures that would be
detrimental to the interests and rights of these investors.
India's foreign relations in the region remain fragile and the
possibility of increased tensions or open warfare is an ever-present
danger to th stability of the market. In addition, the monetary cost
of economic sanctions resulting from recent nuclear tests could
substantially impact economic growth and corporate profits. Sanctions
affect India in several ways. Crucially, there will be a deferment or
loss of direct aid and concessional loans, from multilateral agencies
(notably the World Bank) and bilateral donors (th e U.S., Japan
and Canada, among others). The loss of export credit and guarantees,
notable from the US Export-Import Bank could delay and increase the
cost of large infrastructure and foreign investment projects. This, in
turn, could have a negative impact upon creditor and investor
confidence in the Indian market.
Relative to the more mature markets of the world, the level of
corporate disclosure in India is very low and companies are generally
less disposed to act in the best interests of their shareholders.
Accordingly, investors face a much more difficult task in ascertaining
the true investment worth of a particular stock.
As with most other emerging markets, the Indian market has been
negatively impacted by recent economic and currency turmoil in the
world's less developed regions and its likely to be similarly impacted
in any future weakness. Currency fluctuation is an additional risk to
U.S. investors as any weakening in the value of the Indian rupee
versus the U.S. dollar could erode the value of their investments upon
currency translation.
TAIWAN. Taiwan is one of the most densely populated countries in the
world, with a population of over 20 million, or 1,504 persons per
square mile. Most Taiwanese are descendants of immigrants who came
from China's Fukien and Kwantung provinces over 100 years ago.
Mandarin is the official language while English is taught to all
students as their first foreign language, beginning in the seventh
grade.
Although settled by Chinese in the seventeenth century, Taiwan (also
called Formosa) was ruled by Japan from 1895-1945 and subsequently
reverted to Chinese administration at the end of World War II. In
1949, nationalist leader Chiang Kai-shek took control of the island
after fleeing mainland China with two million supporters, following
his defeat at the hands of the communists. Since that time, Taiwan has
been governed by the right-wing Kuomintang (KMT) which was founded by
Chiang Kai-shek. In 1996 the island held its first popular
presidential elections in which the KMT retained its control.
Both the Taipei and Beijing governments consider Taiwan an integral
part of China. The KMT has vowed to reconquer the mainland while the
People's Republic of China has urged Taiwan to accept a peaceful
reunification with the mainland. China has proposed that they regain
sovereignty over Taiwan on the basis of a "one country-two systems"
arrangement similar to that of the recent reunification of Hong Kong.
Nevertheless, China has periodically threatened to annex Taiwan
through military action.
Under the KMT government, Taiwan achieved a remarkable record of
economic growth with the assistance of massive U.S. aid in the early
years of the post war period. Today, Taiwan has one of the world's
strongest economies and is among the ten leading capital exporters.
Between 1980 and 1990 real GDP expanded at an average annual rate of
7.9%. During 1990-95 an annual GDP growth rate of 6.6% was recorded.
In 1996, compared with the previous year, GDP increased by 5.7% in
real terms, while it was anticipated that growth would exceed 6.0% in
1997 and 1998. Between 1960 and 1973 the island's exports rose 20 fold
and real GDP increased 3.3 times. Even more remarkable, as the shift
of millions of people from villages to cities took place, was the high
level of employment. Between 1964 and 1995 the unemployment rate
rarely exceeded 2% of the work force in any year.
Prior to 1967 foreign sources played a large role in financing capital
formation expansion, but thereafter domestic savings financed the
entire growth of net capital formation. By 1986 the ratio of national
gross savings to GDP had reached 38.5%. Thereafter the ratio declined,
standing at 26.0% in 1996. The expansion of foreign trade was the
major reason for Taiwan's rapid capital growth. Much of the growth in
exports could be attributed to the competitiveness of its exports in
price and quality in world markets.
Since the mid-1990s the island's traditional reliance upon light
industry has gradually given way to high technology activities, as
emphasis shifted from labor-intensive to capital-intensive production.
The electrical and electronic machinery sector continued to show
particularly strong growth in the 1990s as did the chemical sector.
Taiwan also has eleven vehicle manufacturers, all of which have
contracted joint ventures with foreign companies. By the mid-1990s
Taiwan had become one of the world's largest producers of personal
computers and semiconductors.
Taiwan has a large and active stock market ranking twelfth by market
value among the world's markets. The TSE in Taipei is the only
official stock exchange in Taiwan, although there is also a small OTC
market. At the end of 1997 there were 404 companies listed on the TSE
with a market capitalization of US$288.1 billion. The market is
dominated by individual investors, who account for 90.7% of total
turnover in listed shares. Many local institutions, such as banks,
insurance companies or pension funds, are prohibited or restricted
from investing in listed shares. Foreign individuals and institutional
investors meeting certain criteria have been able to invest in the
market directly since 1990 but are subject to certain limits. Foreign
involvement in the market through qualified foreign institutional
investors and mutual funds is small but growing.
Investing in Taiwan entails special risks as well as those risks that
are common to other emerging markets. Taiwan's relations with The
People's Republic of China remain fragile. The conflict between the
entrenched nationalization of China and the nascent nationalism of
Taiwan persists and armed conflict between the two nations remains a
possibility. Beijing continues its policy of attempting to isolate
Taiwan and could use its growing economic power and political
influence to interfere with the nation's trade with the rest of the
world's economies.
In addition, the Taiwan market has been one of the most volatile in
Asia over the past decade. The country did not escape the effects of
the Asian economic and currency crises in 1997 and 1998 and could
continue to be negatively impacted by an extension of the current
regional turmoil. The nation's heavy dependence upon trade and
manufacturing partnerships with foreign companies also leaves it
particularly vulnerable to downturns in the global economies. Currency
fluctuation is an additional risk to U.S. investors as any weakening
in the value of the local currency versus the U.S. dollar could erode
the value of their investments upon currency conversion.
THE PHILIPPINES. The Philippines is a developing democratic republic.
After 300 years of Spanish rule, the United States acquired the
Philippines from Spain in 1898 and ruled for 48 years. The country
subsequently gained its independence from the United States in 1946.
The nation, as provided by the 1987 Constitution, is a democratic
republican state with a presidential form of government. However,
since its independence, the government has been periodically joined by
military coups, martial law and political assassinations.
The Filipino population consists of approximately 70 million people,
primarily of Indo-Malay, Chinese and Spanish descent. Thirteen percent
of the population lives within the Metro Manila area. Most Filipinos
are bilingual, with English as the basic language in business,
government, schools, and everyday communications. While there are 87
languages spoken throughout the Philippines, the official language is
F ilipino, which is spoken mainly in the Metro Manila area and
widely used in the mass media.
The Philippine economy is basically agricultural if food-processing
manufacture is included. Agriculture (including forestry and fishing)
contributed 21.5% of GDP in 1996, and engaged 39.8% of the employed
labor force, while industry (including mining, manufacturing,
construction and power) contributed 31.9% of GDP and engaged 16.5% of
the employed labor force.
Manufacturing accounted for 22.6% of GDP in 1996 and engaged 9.8% of
the labor force. The principal branches of manufacturing are food
products, petroleum refineries, electrical machinery, chemical
products, beverages, metals and textiles.
The services sector contributed 46.6% of GDP in 1996, and engaged
43.7% of the employed labor force. Remittances from Filipino workers
abroad constituted the Government's principal source of foreign
exchange, while tourism remains a significant sector of the economy.
In 1995 the Philippines recorded a trade deficit and a deficit on the
current account of the balance of payments. The principal source of
imports was Japan, which accounted for 22.1% of the total. Other
significant suppliers were the United States, Saudi Arabia, Singapore,
the Republic of Korea and Taiwan. The United States was the principal
market for exports (35.8%), while other purchasers were Japan,
Singapore and the United Kingdom.
Under the regime of General Fidel Ramos, installed in 1992, the
economic performance of the Philippines improved dramatically, owing
to extensive structural reforms, including the dismantling of
protectionist legislation and the liberalization of trade, foreign
investment an foreign exchange controls. However, economic growth was
adversely affected by the regional financial crisis in 1997. The
effective devaluation of the peso in July caused a collapse of the
stock market and led to rising inflation and the depletion of foreign
exchange reserves. The absence of large foreign investment inflows,
which had previously contributed to an overall surplus on the balance
of payments despite a recurrent account deficit, resulted in an
overall deficit in 1997.
The Philippine stock exchange (PSE) is the country's only exchange and
ranks thirty-sixth in total market capitalization among the world's
markets. The total number of companies listed on the exchange was 221
in 1997. Individual domestic investors are the majority participants
while foreign investment is dominated by the Taiwanese, who are
closely followed by the Japanese and Hong Kong Chinese. Foreign
investors are generally allowed to acquire 100% of the equity of a
Philippine listed company, although there are businesses where foreign
ownership is restricted by law.
Foreign investors face special risks when investing in the
Philippines. The country's economy and stock markets have historically
been highly sensitive to changes in the Asian region's economies and
this has been amply demonstrated in recent years. After posting
dramatic gains in the four years preceding Asia's financial crisis in
mid-1997, the Philippine stock market plummeted in response to the
spreading economic, political turmoil in Southeast Asia and Japan. The
market's weakness was further exacerbated as foreign investors pulled
out of the market in large numbers.
Weakening conditions in neighboring countries has also negatively
impacted the Philippine peso. Plummeting currencies in Thailand,
Indonesia, Singapore and Malaysia sent the Philippine peso into a
steady decline. Over the 1997 calendar year, the value of the peso
fell by 52 percent versus the U.S. dollar.
For U.S. investors, currency fluctuation presents an additional risk
to investing in the Philippines as a weakening peso can erode the
investment returns on their investments in that country.
Because the Philippines is highly dependent upon the United States,
Japan and the Southeast Asian countries as the primary purchasers of
its exports, its economy is particularly sensitive to
changes in the economic fortunes of these nations.
Although the Philippine political climate appears to have improved
over the past few years, investors should be aware that the country
has periodically been subjected to military coups, martial law, and
widespread political corruption since it gained independence. Several
past administrations have instituted policies that have also been
detrimental to the domestic economy and the rights of its citizens.
Cronyism and corruption have also been rampant in both government and
the business community to the detriment of the interests of corporate
shareholders.
PAKISTAN. The Islamic Republic of Pakistan was founded in 1947, when
the British partitioned the South Asian subcontinent into two states:
India and Pakistan. (East Pakistan broke away to become Bangladesh in
1971). The Pakistan constitution of 1973, amended substantially in
1985, provides for a President (Chief of State) who is elected by an
electoral college consisting of both houses of the federal parliament
and members of the four provincial legislatures. The National Assembly
in a special session elects a Prime Minister. Following the election,
the President invites the Prime Minister to create a government. The
constitution permits a vote of "no confidence" against the Prime
Minister by a majority of the National Assembly. In practice, the army
has a strong voice in the decision-making process and few Presidents
have been able to oppose its interests for long.
Relations between Pakistan and India have been fraught with
difficulties. India disputes Pakistan's claims to part of Kashmir, and
repeated attempts at mediation have not resolved this conflict. The
dispute has triggered wars between the two countries in 1947, 1965 and
1971. India has accused Pakistan of fomenting religious and political
unrest and in 1994 there were frequent disturbances in the region. The
two sides frequently exchange gun fire. More recently, India's
nuclear tests prompted Pakistan to reply in kind, despite Western
efforts to dissuade it. Economic sanctions imposed by the U.S. and
other industrialized countries following the nuclear tests have not
been without consequences. While their short-term, direct effect on
the economy has been relatively modest, the indirect and medium-term
consequences of sanctions could become more serious as the resumption
of IMF funding is currently in jeopardy.
With a per capita GDP of about $470, Pakistan is considered a
low-income country by the World Bank. No more than 39% of adults are
literate and life expectancy at birth is about 62 years. Relatively
few resources have been devoted to socio-economic development or
infrastructure projects. Inadequate provision of social services and
high population growth have contributed to a persistence of poverty
and unequal income distribution.
The country's principal natural resource is arable land (25% of the
total land area is under cultivation). Agriculture accounts for 24% of
GDP and employs about 50% of the labor force. Wheat, cotton, and rice
together account for almost 70% of the value of total crop output and
are among the countr y' s major exports. Pakistan's manufacturing
sector accounts for about 20% of GDP. Cotton textile production and
apparel manufacturing are Pakistan's largest industries, accounting
for about 50% of total exports. Other major industries include cement,
fertilizer, sugar, steel, tobacco, chemicals, machinery and food
processing.
Weak world demand for its exports and domestic political uncertainty
have contributed to the nation's widening trade deficit. The nation
continues to rely heavily on imports of such materials as petroleum
products, capital goods, industrial raw materials and consumer
products and the resulting external imbalance has left Pakistan with a
growing foreign debt burden. Annual debt service now exceeds 27% of
export earnings.
Pakistan has three stock exchanges located in Karachi, Lahore and
Islamabad. The Karachi Stock Exchange (KSE) is dominant, accounting
for approximately 80% of equity transactions in Pakistan. The KSE
ranks forty-eighth among the world's markets and had a market
capitalization of $11billion in 1997. At the end of that year there
were 781 companies listed on the KSE. The combined market
capitalization of the 20 largest companies represented 71.7% of the
market total.
U.S. investors should be aware that there are a number of factors that
could pose special risks to investing in Pakistan securities. Among
these is the country's long history of government instability marked
by military coups, political assassinations and frequent outbreaks of
violent rioting, strikes and ethnic unrest. While recent governments
have made some progress on addressing some of the country's social and
economic ills, the current administration is faced with a number of
serious crises. The country appears to be close to defaulting on its
international commitments. With no debt repayments made since August
of 1998, Pakistan faces the possibility of outright default unless it
can secure a bailout package and debt rescheduling. Recent talks with
the IMF on a debt rescue package broke down and a default could
precipitate declines in the nation's trade and currency. By November
of 1998, foreign investment ha d slowed dramatically in response
to a rise in investment risk and new restrictions imposed by the
central bank designed to limit the outflow of foreign exchange.
Corruption within the government and business community remains a
problem and corporate managers are generally not focused on
improving shareholder interests.
The threat of war with India over the disputed province of Kashmir
remains a threat to peace in the region and any outbreak of
hostilities would likely plunge the nation's economy into deep
depression and further erode the relative value of its currency versus
the world's major currencies.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
Latin America represents one of the world's more advanced emerging
markets. With a total population of 427 million people and its
abundant natural resources, the area is a prime trading partner for
the United States and Canada. Latin American exports represent, on
average, 16.6% of GDP. Strong export sectors are petroleum,
manufactured goods, agricultural commodities such as coffee and beef,
and metals and mining products. GDP growth in Latin America as a
region was 3.4% in 1996, up from 0.1% in 1995. Recognizing the
important role of international trade as a component of GDP, the
countries of Latin America have formed strong regional trade
organizations, notably Mercado Comun del Sur (MERCOSUR). Talk of
extending the North American Free Trade Agreement (NAFTA) down through
Latin America indicates some desire to tie the economies even closer
to those of the north.
Politically, Latin American countries generally have strong
presidential systems closely modeled after the United States. The
transition to democracy is largely complete in most countries. All
countries enjoy good relations with the United States, with whom they
cooperate on a range of non-economic matters, such as preservation of
the environment and drug control. Monetarist minded governments were
responsible for the successful staving off of contagion from the
1995 currency crisis in Mexico, increasing their stature in the
eyes of most capital market participants.
ARGENTINA. Prior to 1989, Argentine politics were characterized by
populist leaders, sometimes democratically elected and sometimes not,
who ruled with the overt support of the military. Coups and outright
military rule were not uncommon. Economic polic i es were highly
protectionist, with significant barriers and restrictions on foreign
trade and investment. Markets were highly regulated and the state was
heavily involved in many industries. Inflation was routinely high and
growth stagnant.
President Carlos Menem was first elected to office in 1989 and
undertook a program of deregulation, liberalization and macroeconomic
reform. The results have been positive. GDP growth in 1997 was 8.0%,
up from 4.4% in 1996 and -4.4% in 1995. Argentina's growth, averaging
over 6% from 1991 to 1997, had been driven primarily by domestic
consumption. Immediately after the Mexican crisis, bank liquidity was
restrained. However, deposits have since returned to the system
surpassing the levels that existed prior to the crisis and liquidity
is very much improved. Lending also increased and consumer spending
rebounded although it has slowed somewhat due to the most recent
Brazilian crisis. The positive effect is that inflation, well over
150% at the beginning of the decade, was 0.4% in 1996. Still
troublesome for Argentina is unemployment, quite high at 15%. Menem's
economic liberalization policies have succeeded in attracting foreign
investment. From the U.S. alone, approximately $10 billion was
invested by 1996. Investors have been most attracted to the
telecommunications, finance, and energy sectors.
Argentina enjoys a positive trade balance. The export economy is
heavily weighted toward agriculture, which represents 60% of the total
value of all Argentine exports. Primary products are livestock,
oilseeds, and grain. Argentina's single biggest trading partner is
Brazil, and the United States is the second. Primary imports are
machinery, vehicles and chemicals.
The resignation of Economy Minister Domingo Cavallo in July 1996 was
initially greeted with skepticism from the markets. Cavallo was widely
recognized as the man responsible for ensuring the convertibility of
the peso by pegging it to the dollar, a move which saved Argentina
from the hyperinflation and continuous drops in output which could
have followed from the Mexican crisis in 1994. Confidence was quickly
restored, however, with the appointment of Roque Fernandez, who
promptly reaffirmed commitment to Cavallo's plan and introduced
further measures for fiscal stability.
The next presidential election is due in 1999. In accordance with the
constitution, Menem, a member of the Peronist party, can not seek a
third consecutive term. The next election is likely to present a third
candidate to the voters beyond the traditional contestants from the
Peronist and Radical parties. Frepaso, a center-left alliance, first
emerged in the 1995 elections and by 1999 could build itself up enough
to promote a viable alternative to the older parties. It is uncertain
how policies would be effected by the systemic change from a
predominantly two party system to a three party one.
The Argentine stock market reached an all-time high in October of 1997
in response to rising corporate earnings and strong economic growth.
However, the market underwent a significant correction due largely to
the "contagion effect" of the Asian economic and currency crisis and
the Mervel index ended the year only 5.9% ahead. While there was
little direct impact from the Asian crisis on Argentina's economy,
foreign investors fled the market, as they feared that Asia's currency
problems would spread to Latin America.
The Argentine market may pose special risks for investors. As an
emerging nation, Argentina's stock market may be particularly
vulnerable to widespread economic, currency and market turmoil such as
we have seen recently in Asia. These crises may prompt investors to
become increasingly averse to emerging market exposure on concern that
the impact of these events will spread to other countries. In
addition, mutual funds that invest in emerging markets may be forced
to sell holdings in countries that have little similarity with the
markets in trouble, merely to raise cash to meet redemptions.
Similarly, the Asian crisis has accelerated a growing imbalance
between supply and demand for basic commodities such as oil, metals,
pulp, grains and others. This could impact the Argentinean stock
market where energy stocks (oil, gas and electricity) comprise
approximately 40% of the market's total value. A currency devaluation
by one or more of its Latin American neighbors could precipitate a
recession and political pressure for competitive devaluation to
protect the country's trade competitiveness.
While Argentina's political situation is relatively stable ,
there is a high degree of dissatisfaction with the government's
inability to lower the country's high unemployment rate. This could
eventually lead to social unrest and a turnover of the government to
the control of parties less favorable to investors.
BRAZIL. Brazil is the largest country in South America and is home to
vast amounts of natural resources. Its 155 million people are
descendants from indigenous tribes and European immigrants. They live
in diverse socio-economic conditions, from the urban cities of Sao
Paolo to the undeveloped trading posts of the distant regions.
Industrial development has been concentrated in specific areas. The
disenfranchised population is quite large and is a source of many of
Brazil's social problems.
The Brazilian economy is currently undergoing extensive reforms,
stemming from a 1994 effort to stabilize the currency called the Real
Plan. With the aim of curbing inflation, a new currency, the Real, was
introduced and supported via a floating exchange band. The plan has
stabilized the exchange rate and controlled inflation which was at
2,700% in 1994. Inflation in 1995 dropped to 81%, and fell even
further in 1996, settling at 18.7%. Perhaps the most remarkable
achievement for the Brazilian economy in 1997 was the lowest rate of
inflation in the past 40 years, as the National Consumer Price Index
increased just 7.48%. At the same time, however, the Real Plan has
sent the trade and current account balances into a deficit. The
current account deficit is expected to reach $30 billion in 1998,
equivalent to 3.6% of GDP.
Other objectives of the administration of the current President,
Fernando Henrique Cardoso, are trade liberalization and privatization,
but these efforts are sporadic and often stalled by special interests
in the legislature. Some privatization efforts are performing well,
particularly in the utilities sector. Utilities and telecommunications
have been key draws for foreign investment, and foreign direct
investment (FDI) is coming in at record levels. In 1998 the country
received over $20 billion from privatizations. Still, there are
restrictions against investments in certain industries, such as metals
and mining.
Traditionally a primarily agricultural economy, a strong industrial
sector has developed which produces metals, chemical s , and
manufactured consumer goods. Agriculture still plays a significant
role, however, representing 11% of the GDP, 40% of exports and
employing over 35% of the workforce. Primary agricultural products are
grains, coffee, and cattle. Regarding energy and utilities, the
country is a leading producer of hydroelectric power, but is
dependent on imports for oil.
Presidential elections were held in October of 1998 and President
Cardoso won with 53% of the vote. This should insure continuity in
policy, which will be much needed given the difficulties caused by the
recent instability in the global markets and its impact on Brazil.
In 1997 the Brazilian stock market rose to an all-time high in the
first quarter. Over the summer, the speculative attack on the Thai
currency triggered a sharp reversal in the Brazilian market, as
investors feared a raid on the Brazilian real. However, the market
ended the year with a gain of 4.34%. By mid-year 1998 the Brazilian
market plummeted amid growing concern that Brazil, Latin America's
largest economy, might suffer the confidence crisis that had caused
large currency devaluations in Russia and Asia.
Investing in Brazil could entail special risks: High unemployment is
the chief challenge facing Brazil's president Cardoso following his
reelection in October of 1998. Joblessness is at a record high and
social unrest could hinder his progress in subduing inflation and
denationalizing government ownership of many of its businesses. Brazil
could be a likely target for a renewed attack on its currency. The
economy is in a more precarious state: interest rates remain high and,
despite austerity measures, little progress has been made in reducing
the current account deficit. This poses particular risk for U. S.
investors who would see their investment returns eroded if the
Brazilian real were to be devalued.
Overall, Brazil remains vulnerable to both external shocks and
changing sentiment due to worsening domestic indicators or political
risk.
CHILE. Chile is a transition economy which has recently made great
strides toward putting its authoritarian, statist, past behind itself.
In all of Latin America, it is the country with the highest rates of
growth. Averaging 7.3% so far this decade, GDP grew at 6.0% in 1996,
down from 6.6% the previous year. Inflation has been steadily
declining and is down over 15% in the last five years. Inflation in
1997 was 6.0%, a 0.6% drop over 1996. Unemployment in 1996 was 6.2%,
particularly low for the Latin American region. Chile is still
considered to have one of the best performing stock markets in the
region.
Performance of the Chilean stock market was lackluster in 1997 as weak
copper prices and rising interest rates led to a contraction in the
domestic economy. Also contributing to the market's weakness was the
contagion effect of the Asian economic and currency crises, a decline
in pulp and steel prices; and uncertainty about the growth prospects
of its Latin American neighbors. These factors combined to produce a
15% decline in the stock market for the 1997 calendar year. The market
weakness carried through into the first half of the next year.
Eduardo Frei is President and is due for reelection in 1999. President
Frei has been trying to decentralize the government but encounters
stiff opposition from the powerful trade unions ; a lso high on
Frei's agenda is tax reform.
There is a considerable military component to political life in Chile.
Constitutional reforms, currently in progress, are attempting to
further dimish the role and influence of the military. A
successful outcome requires that the military acquiesce as it is
stripped of its political powers.
Investors in the Chilean market face special risks . The Chilean
market is particularly sensitive to the fluctuation in the
international price of copper and pulp on the international markets
and they have a significant impact on the nation's economy and stock
market.
As is typical of most emerging markets, much of the Chilean market
equity is firmly held by controlling families and their associates.
Accordingly, these owners may not always act in the interests of
outside shareholders. In addition, any weakness in the Chilean
currency versus the dollar could erode the investment returns to
U . S . investors upon currency conversion.
MEXICO. The Mexican economy has recovered fairly well since the
currency crisis of December 1994 thanks in large part to growth in
exports, peso stabilization, and massive financial assistance from the
United States. GDP growth rose to 7.3%, with consumer spending and
investment leading the way. A major positive factor supporting growth
during 1997 was the strength of the peso, which closed the year little
changed from its 1996 year-end level. In addition, the nation's
inflation rate declined to 15.7% from the 27.7% rate of 1996. This
marked the second straight year of improvement. Inflation is the chief
concern of the central bank, which takes active measures such as the
setting of wage ceilings and the adjustment of interest rates to
control it. Domestic consumption, while improved, has yet to return to
pre-1994 levels, and has also contributed to the containment of
inflation.
The Mexican economy is very strong in manufacturing and natural
resources, specifically oil. Manufacturing alone counts for 22% of the
Mexican GDP and 21% of all urban employment. The economy is also very
closely tied to the United States, which is responsible for 60% of all
foreign investment and with whom it conducts over 75% of all trade.
Trade pacts such as the NAFTA further integrate the economies, giving
the United States strong incentives to provide assistance in times of
crisis. NAFTA also enabled the recent recovery, given the ease with
which it allows increases in exports and investment. The Mexican stock
market listed 194 companies with total capitalization of $156 billion
in 1997.
Internally, the various people of the Mexican states have recently
experienced a great deal of dissatisfaction with their relationship to
the federal government. Most notably, in Chiapas there have been armed
uprisings by indigenous groups demanding further autonomy. While the
rebellions have not strongly shaken financial markets, they serve as a
reminder of the diversity of Mexico, of the vast socio-economic gaps
between various peoples, and of the potential for such groups to
demand the attention of both their government and the world.
Politically, the landscape changed fundamentally in July 1997. The
defeat of candidates from the Institutional Revolutionary Party (PRI)
in legislative elections signaled the end of decades of one party
rule. Citizens now have the confidence that their votes count and that
the PRI is no longer invincible. Winning every presidential election
since its founding in 1929, the PRI was the country's monolithic
political machine, maintaining power through rigged elections and
ruling in an environment rife with intrigue and corruption. Internal
pressures including armed rebellion from domestic interest groups,
extensive crises and scandals caused by intra-party rivalries and
corruption, and deteriorating relationships with foreign countries
over financial mismanagement and mutual social problems all
contributed to the establishment of fully free and unfettered
elections. Numerous electoral reforms implemented since 1989 have
aided in the further opening of the Mexican political system and
opposition parties have made historic gains in elections at all
levels. Much of the impetus for establishing a real two party system
in Mexico can be credited to President Zedillo and the PRI majority in
C o ngress. During 1995-96 the political parties negotiated
constitutional amendments to address electoral campaign fairness
issues, which passed unanimously. The response from the Mexican people
was clear as a record number of registered voters cast ballots. Though
they took the most votes (39%) for the 500-member Lower House of
Congress, the PRI has lost their majority. Mid-term elections held in
July of 1997, also saw large gains for opposition parties and marked a
significant step in Mexico's political transformation. Market reaction
to the new Mexican political world was positive. The IPC index,
consisting of 35 of the most representative stocks on the Mexican
Stock Exchange, rose 3.25% the day after the election. Further
financial implications of the new landscape are as yet uncertain.
Relevant considerations are the effect of the new configurations on
government consensus and policy making, the demands of newly empowered
groups on economic and other resources, the balance of power between
the executive and the legislature, and the ability of the government
to maintain law and order.
Mexico's stock market fell sharply in late 1997 and continued its
descent through mid-1998 as the worsening Asian economic and currency
crises threatened to cause problems for Mexico's trade balance and
raised questions concerning the sustainability of its economic growth.
Foreign investors fled the Mexican market, as they feared that Asia's
currency problems would spread to Latin America.
Investors in Mexico face a number of potential risks. As an emerging
nation, Mexico's stock market may be particularly vulnerable to
widespread economic, currency and stock market turmoil such as that
recently experienced in Asia and Russia. These crises may prompt
investors to become increasingly averse to emerging market exposure on
concern that the impact of these events will spread to other
countries. In addition, mutual funds that invest in emerging markets
may be forced to sell holdings in countries that have little
similarity with the troubled markets, merely to raise cash to meet
redemptions. Similarly, because the United States is Mexico's largest
trading partner, any economic downturn in the U.S. economy can have a
strongly adverse impact upon Mexico's economy and stock market.
While Mexico's political situation is relatively stable, there is a
high degree of dissatisfaction with the government's inability to
effectively address the nation's growing social problems, particularly
in the country's less developed regions. Occasional flair-ups of
strikes and armed rebellion could pose a threat to Mexico's political
and economic stability.
SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION
The Russian Federation is the largest republic of the Commonwealth of
Independent States with a 1995 population of 147,500,000. It is about
one and four fifths of the land area of the United States and occupies
most of Eastern Europe and north Asia.
Russia has had a long history of political and economic turbulence.
The USSR lasted 69 years and for more than half that time it ranked as
a nuclear superpower. In the 1930's tens of millions of its citizens
were collectivized under state agricultural and industrial enterprises
and millions died in political purges and the vast penal and labor
system or in state-created famines. During World War II, as many as 20
million Soviet citizens died. After decades of communist rule, the
Soviet Union was dissolved on December 8, 1991 following a failed coup
attempt against the government of Mikhail Gorbachev. On the day that
the leaders declared that the Soviet Union ceased to exist, the Soviet
republics were invited to join with Russia in the Commonwealth of
Independent S tates (CIS). At one time or another those that
have agreed to join have included the Ukraine, Belarus, Moldova,
Georgia, Armenia, Azerbaijan, Uzbekistan, Turkmenistan, Tajikistan,
Kazakhstan and Kyrgyzstan, but a number have dropped out since or have
only observer status. Each of the republics is a sovereign state that
controls its own economy and natural resources and collects its own
taxes, providing only minimal support to the CIS.
Boris Yeltsin, President of Russia, inherited the mantle of economic
and political chaos. With the freeing of most prices he staked his
political life on the rapid creation of a free market economy. Since
1991 Yeltsin and his Russian reformers have been faced with the
daunting task of stabilizing the Russian economy while transforming it
into a modern and efficient structure able to compete in international
markets and respond to the needs of the Russian people. To date, their
efforts have yielded widely mixed results. On the one hand, they have
made some impressive progress. Since 1992, they have abolished central
planning, decontrolled prices, unified the foreign exchange market,
made the ruble convertible, and privatized two thirds of the economy.
They have accomplished this in spite of the crushing burdens inherited
from the communist system: huge industrial enterprises that are
unprofitable , an obsolete capital stock , a crumbling
energy sector, huge external debt , and armies that had to be
repatriated and resettled at home.
Russia remains a paradox among the major economies of the world in
that it is a country marked by stagnation in production levels, but
has few constraints on growth. Labor supply is adequate and savings
are high. In addition, there is almost unlimited scope for increasing
productivity through the introduction of improved technologies,
production process and market-oriented managerial development. There
are 147 million consumers who are slowly increasing their buying power
and education standards are high. Russia is also rich in natural
resources. It has 40% of the world's natural gas reserves, 6% of its
oil, 25% of coal, diamonds, gold and nickel, and 30% of timber and
bauxite. Approximately ten million people are engaged in agriculture
and they produce half of the region's grain, meat, milk, and other
dairy products.
The main reason for the continued poor performance of the Russian
economy is the country's failure to mobilize the resources that are
available. While the official unemployment rate was at 10.6% in 1996,
up to half of the working population is, in effect, unemployed or, to
a significant degree, underemployed in inefficient and unproductive
industries. Much of the country's savings have been siphoned off
through capital flight. Russia's technological potential for
assimilating both domestic and foreign technologies is not being
exploited. Industry privatization and restructuring initiatives have
generally failed to mobilize the available factors of production as
the country's privatization program virtually ensures the predominance
of the old management teams that are largely non market-oriented in
their management approach. Approximately 80% of Russian privatized
companies continue to be majority-owned by insiders and only 10% are
owned by investors with large enough stakes to influence the running
of the company.
In July 1996, Boris Yeltsin was re-elected for a second term and it
was hoped that the election would mark the start of a more stable
period of economic growth. However, macroeconomic indicators in 1996
proved contradictory. On the one hand, the Russian government
continued its strict credit policies, and the annual inflation rate
for 1997 dropped to 11%, down from 22% in 1996. Inflation has since
remained below 3% a month through the first half of 1997. In addition,
expenditure cuts trimmed the budget deficit to 7% of GDP for the first
nine months of 1996.
By the end of 1997, GDP was up 0.4% following 1996's 6% fall, and
industrial production was up by 1.9%. Non-payment continues to
represent a serious problem for the economy, particularly in the
energy sector.
While Russia is widely believed to be one of the most risky markets in
Eastern Europe, it is also recognized for its potential for positive
returns. However, the market has been essentially liquidity driven and
concentrated in very few of the country's largest companies. At just
$129 billion, the total capitalization of the stock market accounts
for just 28.7 percent of GDP. The majority of investors in Russian
equities are small and medium-sized United States hedge funds. In
addition, several country specific funds have been established to make
direct and portfolio investments in Russian companies. To facilitate
foreign investment, a number of the larger Russian companies have
issued equity in the form of American depository receipts while six
big firms have issued securities in the form of Russian depository
certificates. These certificates are issued and marketed by the Bank
of New York. Any investment in Russia is risky and deciding which
companies will perform well at this stage of the country's
transformation is far from easy. A combination of poor accounting
standards, inept management, limited shareholder rights and the
criminalization of large sectors of the economy pose a significant
risk, particularly to foreign investors.
In 1996 the Russian market delivered the world's best stock market
performance and was among the top performing markets in the first half
of 1997. However, the market ' s strength masked a rapidly
deteriorating political and economic picture. Many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other assistance have been squandered or stolen. Taxes were not being
collected and Russian banks, suffering from a collapsed ruble, could
not meet the demands of either domestic depositors or foreign
creditors. In August of 1998 the Yeltsin government effectively
devalued the Russian ruble by approximately 34% to strengthen the
ailing banking system and stimulate demand for Russian exports. In
addition the government announced a restructuring of its local
debt that would allow a 90-day moratorium on banks' foreign loans and
a rescheduling of $40 billion in domestic debt. These actions were
viewed by investors as being tantamount to default and they fled the
Russian stock and bond market s . President Yeltsin's
relations with the communist dominated Duma worsened and there was
talk among the body of beginning impeachment proceedings against the
president. By August of 1998 the ruble had fallen by 70 percent and
food prices soared, heightening fears of social unrest. By early
September the Russian economy appeared to be slipping out of control
and the government in a state of paralysis as the President and the
Duma feuded over remedial initiatives. Many observers fear that
country's communist party could regain control of the government and
end free market reforms, which could further negatively impact stock
prices.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended 1997 and 1998, the portfolio turnover
rates for each fund are presented in the table below. Variations in
turnover rate may be due to fluctuating volume of shareholder purchase
and redemption orders, market conditions, or changes in FMR's
investment outlook.
Fiscal Period Ended Portfolio Turnover Rate
Advisor Latin America
1998+ October 31 <200%*
Advisor Japan
1998++ October 31 <200%*
Advisor Europe Capital
Appreciation
1998++ October 31 <200%*
Advisor International Capital
Appreciation
1998++++ October 31 199%**
Advisor Overseas
1998 October 31 74%
1997 October 31 70%
Advisor Diversified
International
1998++ October 31 <200%*
Advisor Global Equity
1998++ October 31 <200%*
Advisor TechnoQuant Growth
1998 November 30 358%
1997+++++ November 30 213%**
Advisor Small Cap
1998++++++ November 30 204%**
Advisor Strategic Opportunities
1998 November 30 64%
1/1/97-11/30/97 November 30 61%**
1996 December 31 151%
Advisor Mid Cap
1998 November 30 139%
1997 November 30 208%
Advisor Retirement Growth
1998+++ November 30 <200%*
Advisor Equity Growth
1998 November 30 122%
1997 November 30 108%
Advisor Large Cap
1998 November 30 141%
1997 November 30 93%
Advisor Dividend Growth
1998+++ November 30 <200%*
Advisor Growth Opportunities
1998 November 30 25%
11/1/97-11/30/97 November 30 33%**
1997 October 31 35%
Advisor Growth & Income
1998 November 30 54%
1997+++++ November 30 82%**
Advisor Equity Income
1998 November 30 59%
1997 November 30 55%
Advisor Asset Allocation
1998+++ November 30 <200%*
Advisor Balanced
11/1/98-11/30/98 November 30 73%**
1998 October 31 85%
1997 October 31 70%
Advisor Emerging Markets Income
1998 December 31 514%
1997 December 31 660%
Advisor High Yield
1998 October 31 75%
1997 October 31 105%
Advisor Strategic Income
1998 December 31 150%
1997 December 31 140%
Advisor Government Investment
1998 October 31 243%
1997 October 31 136%
Advisor Mortgage Securities
1998 October 31 262%
8/1/97-10/31/97 October 31 125%**
1997 July 31 149%
Advisor Intermediate Bond
12/1/97-10/31/98 October 31 176%**
1997 November 30 138%
1996 November 30 200%
Advisor Short Fixed-Income
1998 October 31 124%
1997 October 31 105%
Advisor Municipal Income
1998 October 31 36%
1997 October 31 36%
Advisor Intermediate
Municipal Income
12/1/97-10/31/98 October 31 26%**
1997 November 30 18%
1996 November 30 35%
* Estimated 1999 turnover rate
** Annualized
+ Advisor Latin America commenced operations on December 21,
1998.
++ Advisor Japan, Advisor Europe Capital Appreciation, Advisor
Diversified International, and Advisor Global Equity commenced
operations on December 17, 1998.
+++ Advisor Retirement Growth, Advisor Dividend Growth, and Advisor
Asset Allocation commenced operations on December 28, 1998.
++++ Advisor International Capital Appreciation commenced
operations on November 3, 1997.
+++++ Advisor TechnoQuant Growth and Advisor Growth & Income
commenced operations on December 31, 1996.
++++++ Advisor Small Cap commenced operations on September 9,
1998.
The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended Total Amount Paid
ADVISOR INTERNATIONAL CAPITAL October 31
APPRECIATION
1998+ $ 176,523
ADVISOR OVERSEAS October 31
1998 3,132,182
1997 2,761,658
1996 2,828,416
ADVISOR TECHNOQUANT GROWTH November 30
1998 182,370
1997++ 91,653
ADVISOR SMALL CAP November 30
1998+++ 138,697
ADVISOR STRATEGIC OPPORTUNITIES
1998 November 30 1,034,523
1/1/97-11/30/97 November 30 698,872
1996 December 31 1,107,012
1995 December 31 1,138,485
ADVISOR MID CAP November 30
1998 991,840
1997 1,076,816
1996++++ 280,816
ADVISOR EQUITY GROWTH November 30
1998 8,620,703
1997 6,180,477
1996 3,252,297
ADVISOR LARGE CAP November 30
1998 168,767
1997 93,523
1996++++ 31,692
ADVISOR GROWTH OPPORTUNITIES
1998 November 30 9,916,182
11/1/97-11/30/97 November 30 746,177
1997 October 31 9,799,619
1996 October 31 6,894,871
ADVISOR GROWTH & INCOME November 30
1998 514,761
1997++ 214,663
ADVISOR EQUITY INCOME November 30
1998 4,136,880
1997 2,827,048
1996 2,634,183
ADVISOR BALANCED
11/1/98-11/30/98 November 30 $ 74,797
1998 October 31 2,240,258
1997 October 31 1,691,341
1996 October 31 7,090,976
ADVISOR EMERGING MARKETS INCOME December 31
1998 12,785
1997 0
1996 0
ADVISOR HIGH YIELD October 31
1998 238,891
1997 269,517
1996 139,187
+ Advisor International Capital Appreciation commenced operations
on November 3, 1997.
++ Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
++ + Advisor Small Cap commenced operations on September 9,
1998 .
+ +++ Advisor Mid Cap and Advisor Large Cap commenced
operations on February 20, 1996 .
Of the following tables, the first shows the total amount of brokerage
commissions paid by each fund to NFSC and, in the case of certain
taxable funds, FBS, for the past three fiscal years. The second
table shows the approximate percentage of aggregate brokerage
commissions paid by a fund to NFSC and FBS for transactions
involving the approximate percentage of the aggregate dollar amount of
transactions for which the fund paid brokerage commissions for the
fiscal year ended 1998. NFSC and FBS are paid on a commission
basis.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Amount Paid
Fiscal Year Ended To NFSC To FBS
ADVISOR INTERNATIONAL CAPITAL October 31
APPRECIATION
1998+ $ 0 $ 105
ADVISOR OVERSEAS October 31
1998 8,154 29,509
1997 5,510 198,192
1996 15,499 169,534
ADVISOR TECHNOQUANT GROWTH November 30
1998 22,210 0
1997++ 14,045 0
ADVISOR SMALL CAP November 30
1998+++ 41,249 0
ADVISOR STRATEGIC OPPORTUNITIES
1998 November 30 189,248 0
1/1/97-11/30/97 November 30 170,790 0
1996 December 31 257,886 0
1995 December 31 217,580 0
ADVISOR MID CAP November 30
1998 121,140 0
1997 184,530 0
1996++++ 72,019 0
ADVISOR EQUITY GROWTH November 30
1998 1,418,505 0
1997 1,553,180 17,274
1996 820,661 9,780
ADVISOR LARGE CAP November 30
1998 $ 26,726 $ 0
1997 10,202 0
1996++++ 8,248 0
ADVISOR GROWTH OPPORTUNITIES
1998 November 30 1,566,109 6,677
11/1/97-11/30/97 November 30 126,243 45,100
1997 October 31 1,199,152 192,356
1996 October 31 1,513,633 74,768
ADVISOR GROWTH & INCOME November 30
1998 73,735 0
1997++ 26,529 69
ADVISOR EQUITY INCOME November 30
1998 657,073 0
1997 473,418 0
1996 685,839 0
ADVISOR BALANCED
11/1/98-11/30/98 November 30 6,833 0
1998 October 31 333,642 0
1997 October 31 251,104 7,686
1996 October 31 1,476,330 61,240
ADVISOR HIGH YIELD October 31
1998 15,062 0
1997 12,656 0
1996 1,507 0
</TABLE>
+ Advisor International Capital Appreciation commenced operations
on November 3, 1997.
++ Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
++ + Advisor Small Cap commenced operations on September 9,
1998 .
+ +++ Advisor Mid Cap and Advisor Large Cap commenced
operations on February 20, 1996 .
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 1998 % of Aggregate Commissions % of Aggregate Dollar Amount
Paid to NFSC of Transactions Effected
through NFSC
ADVISOR INTERNATIONAL CAPITAL October 31 0.00% 0.00%
APPRECIATION+
ADVISOR OVERSEAS October 31 0.26% 0.52%
ADVISOR TECHNOQUANT November 30 12.18% 16.88%
GROWTH(dagger)
ADVISOR SMALL CAP++ November 30 29.74% 26.60%
STRATEGIC OPPORTUNITIES(dagger) November 30 18.29% 27.41%
ADVISOR MID CAP(dagger) November 30 12.21% 18.84%
ADVISOR EQUITY GROWTH(dagger) November 30 16.45% 25.41%
ADVISOR LARGE CAP(dagger) November 30 15.84% 23.28%
ADVISOR GROWTH November 30 15.79% 22.67%
OPPORTUNITIES(dagger)
ADVISOR GROWTH & INCOME(dagger) November 30 14.33% 21.87%
ADVISOR EQUITY INCOME(dagger) November 30 15.88% 23.82%
ADVISOR BALANCED(dagger) November 30* 9.14% 11.94%
October 31** 14.90% 23.19%
ADVISOR HIGH YIELD(dagger) October 31 6.31% 11.26%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
% of Aggregate Commissions % of Aggregate Dollar Amount
Paid to FBS of Transactions Effected
through FBS
ADVISOR INTERNATIONAL CAPITAL 0.06% 0.08%
APPRECIATION+
ADVISOR OVERSEAS 0.94% 0.86%
ADVISOR TECHNOQUANT 0.00% 0.00%
GROWTH(dagger)
ADVISOR SMALL CAP++ 0.00% 0.00%
STRATEGIC OPPORTUNITIES(dagger) 0.00% 0.00%
ADVISOR MID CAP(dagger) 0.00% 0.00%
ADVISOR EQUITY GROWTH(dagger) 0.00% 0.00%
ADVISOR LARGE CAP(dagger) 0.00% 0.00%
ADVISOR GROWTH 0.07% 0.03%
OPPORTUNITIES(dagger)
ADVISOR GROWTH & INCOME(dagger) 0.00% 0.00%
ADVISOR EQUITY INCOME(dagger) 0.00% 0.00%
ADVISOR BALANCED(dagger) 0.00% 0.00%
0.00% 0.00%
ADVISOR HIGH YIELD(dagger) 0.00% 0.00%
</TABLE>
* For the fiscal p eriod November 1, 1998 through November 30,
1998.
** For the fiscal p eriod November 1, 1997 through October 31,
1998.
+ Advisor International Capital Appreciation commenced operations
on November 3, 1997.
++ Advisor Small Cap commenced operations on September 9, 1998.
(dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar amount of transactions effected through, NFSC is a result of
the low commission rates charged by NFSC.
N FSC has used a portion of the commissions paid by Advisor Small
Cap to reduce that fund's custodian or transfer agent fees.
The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
1998. The other funds paid no brokerage commissions to firms that
provided research services for the fiscal year ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 1998 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved+
Research Services+
ADVISOR INTERNATIONAL CAPITAL October 31 $ 128,611 $ 58,839,397
APPRECIATION*
ADVISOR OVERSEAS October 31 2,831,904 1,403,038,874
ADVISOR TECHNOQUANT GROWTH November 30 157,761 127,580,073
ADVISOR SMALL CAP** November 30 124,888 43,820,137
ADVISOR STRATEGIC OPPORTUNITIES November 30 957,531 473,832,613
ADVISOR MID CAP November 30 916,493 746,914,408
ADVISOR EQUITY GROWTH November 30 8,096,963 8,944,198,373
ADVISOR LARGE CAP November 30 154,338 173,485,396
ADVISOR GROWTH OPPORTUNITIES November 30 9,216,407 8,774,253,437
ADVISOR GROWTH & INCOME November 30 473,842 562,668,584
ADVISOR EQUITY INCOME November 30 3,808,356 3,609,471,439
ADVISOR BALANCED November 30*** 63,240 91,119,736
October 31**** 2,068,082 2,480,927,762
ADVISOR EMERGING MARKETS INCOME December 31 12,785 11,877,302
ADVISOR HIGH YIELD October 31 227,082 120,270,357
</TABLE>
+ The provision of research services was not necessarily a factor in
the placement of all this business with such firms.
* Advisor International Capital Appreciation commenced operations
on November 3, 1997.
** Advisor Small Cap commenced operations on September 9, 1998.
* ** For the fiscal p eriod November 1, 1998 through November 30,
1998.
** ** For the fiscal p eriod November 1, 1997 through October 31,
1998.
The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds managed by FMR or investment accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each class's net asset value per share (NAV) is the value of a single
share. The NAV of each class is computed by adding the class's pro
rata share of the value of the applicable fund's investments, cash,
and other assets, subtracting the class's pro rata share of the
applicable fund's liabilities, subtracting the liabilities allocated
to the class, and dividing the result by the number of shares of that
class that are outstanding.
GROWTH AND GROWTH & INCOME FUNDS. Portfolio securities are valued by
various methods depending on the primary market or exchange on which
they trade. Most equity securities for which the primary market is the
United States are valued at last sale price or, if no sale has
occurred, at the closing bid price. Most equity securities for which
the primary market is outside the United States are valued using the
official closing price or the last sale price in the principal market
in which they are traded. If the last sale price (on the local
exchange) is unavailable, the last evaluated quote or closing bid
price normally is used. Securities of other open-end investment
companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the
value of the securities owned by a fund if, in the opinion of a
committee appointed by the Board of Trustees, some other method would
more accurately reflect the fair value of such securities. For
example, securities and other assets for which there is no readily
available market value may be valued in good faith by a committee
appointed by the Board of Trustees. In making a good faith
determination of the value of a security, the committee may review
price movements in futures contracts and ADRs, market and trading
trends, the bid/ask quotes of brokers and off-exchange institutional
trading.
TAXABLE BOND FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets.
Or, fixed-income securities and convertible securities may be valued
on the basis of information furnished by a pricing service that uses a
valuation matrix which incorporates both dealer-supplied valuations
and electronic data processing techniques. Use of pricing services has
been approved by the Board of Trustees. A number of pricing services
are available, and the funds may use various pricing services or
discontinue the use of any pricing service.
Most equity securities for which the primary market is the United
States are valued at last sale price or, if no sale has occurred, at
the closing bid price. Most equity securities for which the primary
market is outside the United States are valued using the official
closing price or the last sale price in the principal market in which
they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or closing bid price normally is
used.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
TAX-FREE BOND FUNDS. Portfolio securities are valued by various
methods. If quotations are not available, fixed-income securities are
usually valued on the basis of information furnished by a pricing
service that uses a valuation matrix which incorporates both
dealer-supplied valuations and electronic data processing techniques.
Use of pricing services has been approved by the Board of Trustees. A
number of pricing services are available, and the funds may use
various pricing services or discontinue the use of any pricing
service.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
PERFORMANCE
A class may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to i ndicate future returns. Each class's share
price, yield, if available, and return fluctuate in response to market
conditions and other factors, and the value of fund shares when
redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for a class are computed by dividing a
class's pro rata share of the fund's interest and dividend income for
a given 30-day or one-month period, net of expenses, by the average
number of shares of that class entitled to receive distributions
during the period, dividing this figure by the class's NAV or offering
price, as applicable, at the end of the period, and annualizing the
result (assuming compounding of income) in order to arrive at an
annual percentage rate. Income is calculated for purposes of yield
quotations in accordance with standardized methods applicable to all
stock and bond funds. Dividends from equity investments are treated as
if they were accrued on a daily basis, solely for the purposes of
yield calculations. In general, interest income is reduced with
respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and
is increased with respect to bonds trading at a discount by adding a
portion of the discount to daily income. For a fund's investments
denominated in foreign currencies, income and expenses are calculated
first in their respective currencies, and then are converted to U.S.
dollars, either when they are actually converted or at the end of the
30-day or one month period, whichever is earlier. Income is adjusted
to reflect gains and losses from principal repayments received by a
fund with respect to mortgage-related securities and other
asset-backed securities. Other capital gains and losses generally are
excluded from the calculation as are gains and losses from currency
exchange rate fluctuations.
Income calculated for the purposes of calculating a class's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, a class's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statements.
In calculating a class's yield, a fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in
order to reflect the risk premium on that security. This practice will
have the effect of reducing a class's yield.
Yield information may be useful in reviewing a class's performance and
in providing a basis for comparison with other investment
alternatives. However, a class's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a class's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a class's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a class's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
The tax-equivalent yield of a class of a municipal fund is the rate an
investor would have to earn from a fully taxable investment before
taxes to equal a class's tax-free yield. Tax-equivalent yields are
calculated by dividing a class's yield by the result of one minus a
specified federal income tax rate. If only a portion of a class's
yield is tax-exempt, only that portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1999. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of
hypothetical federally tax-exempt obligations yielding from
2.00 % to 9.00 %. Of course, no assurance can be given
that a class of a municipal fund will achieve any specific tax-exempt
yield. While a municipal fund invests principally in obligations whose
interest is exempt from federal income tax, other income received by
the fund may be taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 TAX RATES AND TAX-EQUIVALENT YIELDS
Federal If individual tax-exempt
yield is:
Taxable Income* Marginal 2% 3% 4% 5% 6% 7% 8% 9%
Single Return Joint Return Rate** Then taxable-equivalent yield
is:
$ 0 - 25,750 $ 0 - 43,050 15.0% 2.35% 3.53% 4.71% 5.88% 7.06% 8.24% 9.41% 10.59%
$ 25,751 - 62,450 $ 43,051 - 104,050 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11% 12.50%
$ 62,451 - 130,250 $ 104,051 - 158,550 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59% 13.04%
$ 130,251 - 283,150 $ 158,551 - 283,150 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50% 14.06%
$ 283,151 - and over $ 283,151 - and over 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25% 14.09%
</TABLE>
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions,
limitations on itemized deductions, and other credits, exclusions, and
adjustments which may increase a taxpayer's marginal tax rate. An
increase in a shareholder's marginal tax rate would increase that
shareholder's tax-equivalent yield.
A municipal fund may invest a portion of its assets in obligations
that are subject to federal income tax. When a municipal fund invests
in these obligations, its tax-equivalent yields will be lower. In the
table above, tax-equivalent yields are calculated assuming investments
are 100% federally tax-free.
RETU RN CALCU LATIONS. Returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in a class's
NAV over a stated period. A class's return may be calculated by using
the performance data of a previously existing class prior to the date
that the new class commenced operations, adjusted to reflect
differences in sales charges but not 12b-1 fees. A cumulative return
reflects actual performance over a stated period of time. Average
annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in a class over a stated
period, and then calculating the annually compounded percentage rate
that would have produced the same result if the rate of growth or
decline in value had been constant over the period. For example, a
cumulative return of 100% over ten years would produce an average
annual return of 7.18%, which is the steady annual rate of return that
would equal 100% growth on a compounded basis in ten years. Average
annual returns covering periods of less than one year are calculated
by determining a class's return for the period, extending that return
for a full year (assuming that return remains constant over the year),
and quoting the result as an annual return. While average annual
returns are a convenient means of comparing investment alternatives,
investors should realize that a class's performance is not constant
over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual
year-to-year performance of a class.
In addition to average annual returns, a class may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a class's maximum sales charge.
Excluding a class's sales charge from a return calculation produces a
higher return figure. Returns, yields, if applicable, and other
performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a class's NAVs, adjusted
NAVs, and benchmark indexes may be used to exhibit performance. An
adjusted NAV includes any distributions paid by a fund and reflects
all elements of a class's return. Unless otherwise indicated, a
class's adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. An equity, growth & income, or bond fund may
illustrate performance using moving averages. A long-term moving
average is the average of each week's adjusted closing NAV for a
specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average
Activity Indicators combine adjusted closing NAVs from the last
business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above,
or stayed below its moving average.
The 13-week and 39-week long-term moving averages are shown below:
AS OF 13-WEEK 39-WEEK
Advisor Latin America - Class A 10/30/98 N/A N/A
Advisor Latin America - Class T 10/30/98 N/A N/A
Advisor Latin America - Class B 10/30/98 N/A N/A
Advisor Latin America - Class C 10/30/98 N/A N/A
Advisor Latin America - 10/30/98 N/A N/A
Institutional Class
Advisor Japan - Class A 10/30/98 N/A N/A
Advisor Japan - Class T 10/30/98 N/A N/A
Advisor Japan - Class B 10/30/98 N/A N/A
Advisor Japan - Class C 10/30/98 N/A N/A
Advisor Japan - Institutional 10/30/98 N/A N/A
Advisor Europe Capital 10/30/98 N/A N/A
Appreciation - Class A
Advisor Europe Capital 10/30/98 N/A N/A
Appreciation - Class T
Advisor Europe Capital 10/30/98 N/A N/A
Appreciation - Class B
Advisor Europe Capital 10/30/98 N/A N/A
Appreciation - Class C
Advisor Europe Capital 10/30/98 N/A N/A
Appreciation - Institutional
Class
Advisor International Capital 10/30/98 9.89 10.99
Appreciation - Class A
Advisor International Capital 10/30/98 9.87 10.97
Appreciation - Class T
Advisor International Capital 10/30/98 9.82 10.93
Appreciation - Class B
Advisor International Capital 10/30/98 9.82 10.93
Appreciation - Class C
International Capital 10/30/98 9.91 11.00
Appreciation - Institutional
Class
Advisor Overseas - Class A 10/30/98 15.81 17.36
Advisor Overseas - Class T 10/30/98 15.96 17.53
Advisor Overseas - Class B 10/30/98 15.58 17.13
Advisor Overseas - Class C 10/30/98 15.88 17.47
Advisor Overseas - 10/30/98 15.83 17.36
Institutional
Advisor Diversified 10/30/98 N/A N/A
International - Class A
Advisor Diversified 10/30/98 N/A N/A
International - Class T
Advisor Diversified 10/30/98 N/A N/A
International - Class B
Advisor Diversified 10/30/98 N/A N/A
International - Class C
Advisor Diversified 10/30/98 N/A N/A
International -
Institutional Class
Advisor Global Equity - Class A 10/30/98 N/A N/A
Advisor Global Equity - Class T 10/30/98 N/A N/A
Advisor Global Equity - Class B 10/30/98 N/A N/A
Advisor Global Equity - Class C 10/30/98 N/A N/A
Advisor Global Equity - 10/30/98 N/A N/A
Institutional Class
Advisor TechnoQuant Growth - 11/27/98 10.97 11.42
Class A
Advisor TechnoQuant Growth - 11/27/98 10.94 11.39
Class T
Advisor TechnoQuant Growth - 11/27/98 10.87 11.34
Class B
Advisor TechnoQuant Growth - 11/27/98 10.87 11.35
Class C
Advisor TechnoQuant Growth - 11/27/98 10.97 11.43
Institutional Class
Advisor Small Cap - Class A 11/27/98 N/A N/A
Advisor Small Cap - Class T 11/27/98 N/A N/A
Advisor Small Cap - Class B 11/27/98 N/A N/A
Advisor Small Cap - Class C 11/27/98 N/A N/A
Advisor Small Cap - 11/27/98 N/A N/A
Institutional Class
Advisor Strategic 11/27/98 21.55 24.53
Opportunities - Class A
Advisor Strategic 11/27/98 21.86 24.89
Opportunities - Class T
Advisor Strategic 11/27/98 21.39 24.40
Opportunities - Class B
Advisor Strategic 11/27/98 21.80 24.79
Opportunities -
Institutional Class
Advisor Strategic 11/27/98 22.20 25.24
Opportunities - Initial Class
Advisor Mid Cap - Class A 11/27/98 12.55 13.68
Advisor Mid Cap - Class T 11/27/98 12.59 13.73
Advisor Mid Cap - Class B 11/27/98 12.45 13.59
Advisor Mid Cap - Class C 11/27/98 12.50 13.65
Advisor Mid Cap - Institutional 11/27/98 12.65 13.77
Advisor Retirement Growth - 11/27/98 N/A N/A
Class A
Advisor Retirement Growth - 11/27/98 N/A N/A
Class T
Advisor Retirement Growth - 11/27/98 N/A N/A
Class B
Advisor Retirement Growth - 11/27/98 N/A N/A
Class C
Advisor Retirement Growth - 11/27/98 N/A N/A
Institutional Class
Advisor Equity Growth - Class A 11/27/98 52.71 52.64
Advisor Equity Growth - Class T 11/27/98 53.13 53.08
Advisor Equity Growth - Class B 11/27/98 52.17 52.19
Advisor Equity Growth - Class C 11/27/98 52.86 52.88
Advisor Equity Growth - 11/27/98 54.11 53.98
Institutional Class
Advisor Large Cap - Class A 11/27/98 15.19 15.32
Advisor Large Cap - Class T 11/27/98 15.24 15.38
Advisor Large Cap - Class B 11/27/98 15.09 15.25
Advisor Large Cap - Class C 11/27/98 15.13 15.30
Advisor Large Cap - 11/27/98 15.32 15.44
Institutional Class
Advisor Dividend Growth - 11/27/98 N/A N/A
Class A
Advisor Dividend Growth - 11/27/98 N/A N/A
Class T
Advisor Dividend Growth - 11/27/98 N/A N/A
Class B
Advisor Dividend Growth - 11/27/98 N/A N/A
Class C
Advisor Dividend Growth - 11/27/98 N/A N/A
Institutional Class
Advisor Growth Opportunities 11/27/98 45.12 45.82
- - Class A
Advisor Growth Opportunities 11/27/98 45.40 46.13
- - Class T
Advisor Growth Opportunities 11/27/98 44.97 45.75
- - Class B
Advisor Growth Opportunities 11/27/98 45.16 45.95
- - Class C
Advisor Growth Opportunities 11/27/98 45.50 46.17
- - Institutional Class
Advisor Growth & Income - 11/27/98 13.88 14.24
Class A
Advisor Growth & Income - 11/27/98 13.86 14.23
Class T
Advisor Growth & Income - 11/27/98 13.79 14.17
Class B
Advisor Growth & Income - 11/27/98 13.78 14.17
Class C
Advisor Growth & Income - 11/27/98 13.88 14.23
Institutional Class
Advisor Equity Income - Class A 11/27/98 26.16 27.39
Advisor Equity Income - Class T 11/27/98 26.35 27.61
Advisor Equity Income - Class B 11/27/98 26.22 27.51
Advisor Equity Income - Class C 11/27/98 26.25 27.55
Advisor Equity Income - 11/27/98 26.56 27.79
Institutional Class
Advisor Asset Allocation - 11/27/98 N/A N/A
Class A
Advisor Asset Allocation - 11/27/98 N/A N/A
Class T
Advisor Asset Allocation - 11/27/98 N/A N/A
Class B
Advisor Asset Allocation - 11/27/98 N/A N/A
Class C
Advisor Asset Allocation - 11/27/98 N/A N/A
Institutional Class
Advisor Balanced - Class A 11/27/98 18.95 19.30
Advisor Balanced - Class T 11/27/98 18.99 19.35
Advisor Balanced - Class B 11/27/98 18.91 19.30
Advisor Balanced - Class C 11/27/98 18.93 19.32
Advisor Balanced - 11/27/98 19.04 19.38
Institutional Class
Advisor Emerging Markets 12/24/98 7.64 8.64
Income - Class A
Advisor Emerging Markets 12/24/98 7.64 8.64
Income - Class T
Advisor Emerging Markets 12/24/98 7.68 8.70
Income - Class B
Advisor Emerging Markets 12/24/98 7.66 8.67
Income - Class C
Advisor Emerging Markets 12/24/98 7.60 8.59
Income - Institutional Class
Advisor High Yield - Class A 10/30/98 11.35 12.11
Advisor High Yield - Class T 10/30/98 11.36 12.13
Advisor High Yield - Class B 10/30/98 11.34 12.12
Advisor High Yield - Class C 10/30/98 11.36 12.15
Advisor High Yield - 10/30/98 11.14 11.89
Institutional Class
Advisor Strategic Income - 12/24/98 10.34 10.43
Class A
Advisor Strategic Income - 12/24/98 10.33 10.43
Class T
Advisor Strategic Income - 12/24/98 10.36 10.47
Class B
Advisor Strategic Income - 12/24/98 10.34 10.47
Class C
Advisor Strategic Income - 12/24/98 10.39 10.48
Institutional Class
CALCULATING HISTORICAL BOND FUND RESULTS. The following tables show
performance for each class of each fund. Class A and Class T of
Advisor Emerging Markets Income, Advisor High Yield, Advisor
Strategic Income, Advisor Mortgage Securities, Advisor Government
Investment, and Advisor Municipal Incom e have a maximum
front-end sales charge of 4.75% and 3.50%, respectively, which is
included in the yield, tax equivalent yield, and average annual and
cumulative returns. Class A and Class T of Advisor Intermediate Bond
and Advisor Intermediate Municipal Income have a maximum front-end
sales charge of 3.75% and 2.75%, respectively, which is included in
the yield, tax equivalent yield, and average annual and cumulative
returns. Class A and Class T of Advisor Short Fixed-Income has a
maximum front-end sales charge of 1.50% which is included in the yield
and average annual and cumulative returns. Class B and Class C have a
maximum CDSC of 5.00% and 1.00%, respectively, which is included in
the average annual and cumulative returns. Class A, Class T, Class B
and Class C of Advisor Emerging Markets Income, Advisor High Yield,
Advisor Strategic Income, Advisor Government Investment, Advisor
Intermediate Bond, Advisor Municipal Income, and Advisor Intermediate
Municipal Income have a 12b-1 fee of 0.15%, 0.25%, 0.90% and 1.00%,
respectively, which is included in the yield, tax-equivalent yield,
and average annual and cumulative returns. Class A, Class T and Class
B of Advisor Mortgage Securities have a 12b-1 fee of 0.15%, 0.25% and
0.90%, respectively, which is included in the yield and average annual
and cumulative returns. Class A, Class T and Class C of Advisor Short
Fixed-Income have a 12b-1 fee of 0.15%, 0.15% and 1.00%, respectively,
which is included in the yield and average annual and cumulative
returns.
HISTORICAL BOND FUND RESULTS. The following tables show each class's
yield, tax-equivalent yield, and return for the fiscal periods ended
October 31, November 30, and December 31 , as applicable .
The tax-equivalent yields for Advisor Municipal Income and Advisor
Intermediate Municipal Income are based on a 36 % federal income
tax rate. Note that each municipal fund may invest in
securities whose income is subject to the federal alternative
minimum tax.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Average Annual Returns1
Fiscal Period Ended Thirty-Day Yield Tax Equivalent Yield One Year Five Years
Advisor Emerging Markets 12/31 N/A N/A -25.65% N/A
Income - Class A
Advisor Emerging Markets 10.21% N/A -24.79% N/A
Income - Class T
Advisor Emerging Markets 9.91% N/A -26.15% N/A
Income - Class B
Advisor Emerging Markets N/A N/A -23.17% N/A
Income - Class C
Advisor Emerging Markets 10.95% N/A -21.75% N/A
Income - Institutional
Advisor High Yield - Class A 10/31 10.25% N/A -9.08% 6.88%
Advisor High Yield - Class T 10.29% N/A -7.88% 7.19%
Advisor High Yield - Class B 10.02% N/A -9.40% 6.95%
Advisor High Yield - Class C 9.93% N/A -6.18% 7.18%
Advisor High Yield - 11.14% N/A -4.21% 7.95%
Institutional
Advisor Strategic Income - 12/31 N/A N/A -2.48% N/A
Class A
Advisor Strategic Income - 6.88% N/A -1.31% N/A
Class T
Advisor Strategic Income - 6.48% N/A -3.07% N/A
Class B
Advisor Strategic Income - N/A N/A 0.46% N/A
Class C
Advisor Strategic Income - 7.32% N/A 2.49% N/A
Institutional
Advisor Government Investment 10/31 N/A N/A 4.53% 5.13%
- - Class A
Advisor Government Investment 4.34% N/A 5.73% 5.34%
- - Class T
Advisor Government 3.85% N/A 3.87% 5.12%
Investment - Class B
Advisor Government N/A N/A 7.73% 5.42%
Investment - Class C
Advisor Government Investment 4.76% N/A 9.86% 6.25%
- - Institutional
Advisor Mortgage Securities - 10/31 N/A N/A 0.63% 6.55%
Class A
Advisor Mortgage Securities - 5.72% N/A 1.90% 6.80%
Class T
Advisor Mortgage Securities - N/A N/A -0.15% 7.01%
Class B
Advisor Mortgage Securities - 6.19% N/A 5.86% 7.64%
Institutional
Advisor Mortgage Securities - 6.25% N/A 5.99% 7.69%
Initial
Advisor Intermediate Bond - 10/31 4.71% N/A 3.39% 4.37%
Class A
Advisor Intermediate Bond - 4.67% N/A 4.29% 4.56%
Class T
Advisor Intermediate Bond - 4.15% N/A 3.63% 4.48%
Class B
Advisor Intermediate Bond - N/A N/A 5.31% 4.41%
Class C
Advisor Intermediate Bond - 5.10% N/A 7.66% 5.48%
Institutional
Advisor Short Fixed-Income - 10/31 4.69% N/A 4.98% 4.33%
Class A
Advisor Short Fixed-Income - 4.75% N/A 4.72% 4.37%
Class T
Advisor Short Fixed-Income - N/A N/A 4.41% 4.51%
Class C
Advisor Short Fixed-Income - 4.89% N/A 6.47% 4.78%
Institutional
Advisor Municipal Income - 10/31 3.55% 5.55% 2.94% 4.39%
Class A
Advisor Municipal Income - 3.62% 5.66% 4.37% 4.69%
Class T
Advisor Municipal Income - 3.09% 4.83% 2.47% 4.42%
Class B
Advisor Municipal Income - N/A N/A 6.18% 4.69%
Class C
Advisor Municipal Income - 3.83% 5.98% 8.28% 5.54%
Institutional
Advisor Intermediate 10/31 3.26% 5.09% 2.47% 4.20%
Municipal Income - Class A
Advisor Intermediate 3.30% 5.16% 3.57% 4.38%
Municipal Income - Class T
Advisor Intermediate 2.63% 4.11% 2.77% 4.32%
Municipal Income - Class B
Advisor Intermediate N/A N/A 4.65% 4.30%
Municipal Income - Class C
Advisor Intermediate 3.54% 5.53% 6.63% 5.21%
Municipal Income -
Institutional
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Cumulative Returns1
Fiscal Period Ten Years/
Ended Life of Fund* One Year Five Years Ten Years/
Life of Fund*
Advisor Emerging Markets 12/31 6.18% -25.65% N/A 33.45%
Income - Class A
Advisor Emerging Markets 6.41% -24.79% N/A 34.84%
Income - Class T
Advisor Emerging Markets 6.26% -26.15% N/A 33.95%
Income - Class B
Advisor Emerging Markets 6.55% -23.17% N/A 35.74%
Income - Class C
Advisor Emerging Markets 7.35% -21.75% N/A 40.70%
Income - Institutional
Advisor High Yield - Class A 10/31 11.84% -9.08% 39.45% 206.30%
Advisor High Yield - Class T 12.01% -7.88% 41.52% 210.84%
Advisor High Yield - Class B 12.03% -9.40% 39.94% 211.42%
Advisor High Yield - Class C 12.00% -6.18% 41.47% 210.72%
Advisor High Yield - 12.40% -4.21% 46.59% 221.96%
Institutional
Advisor Strategic Income - 12/31 9.68% -2.48% N/A 46.98%
Class A
Advisor Strategic Income - 10.02% -1.31% N/A 48.88%
Class T
Advisor Strategic Income - 9.90% -3.07% N/A 48.19%
Class B
Advisor Strategic Income - 10.17% 0.46% N/A 49.70%
Class C
Advisor Strategic Income - 11.15% 2.49% N/A 55.35%
Institutional
Advisor Government Investment 10/31 7.47% 4.53% 28.40% 105.62%
- - Class A
Advisor Government Investment 7.58% 5.73% 29.71% 107.73%
- - Class T
Advisor Government 7.64% 3.87% 28.38% 108.76%
Investment - Class B
Advisor Government 7.62% 7.73% 30.18% 108.48%
Investment - Class C
Advisor Government Investment 8.05% 9.86% 35.42% 116.87%
- - Institutional
Advisor Mortgage Securities - 10/31 7.92% 0.63% 37.33% 114.28%
Class A
Advisor Mortgage Securities - 8.05% 1.90% 38.98% 116.86%
Class T
Advisor Mortgage Securities - 8.31% -0.15% 40.33% 122.09%
Class B
Advisor Mortgage Securities - 8.47% 5.86% 44.49% 125.47%
Institutional
Advisor Mortgage Securities - 8.49% 5.99% 44.81% 125.96%
Initial
Advisor Intermediate Bond - 10/31 7.46% 3.39% 23.82% 105.25%
Class A
Advisor Intermediate Bond - 7.55% 4.29% 24.96% 107.13%
Class T
Advisor Intermediate Bond - 7.51% 3.63% 24.49% 106.35%
Class B
Advisor Intermediate Bond - 7.48% 5.31% 24.11% 105.72%
Class C
Advisor Intermediate Bond - 8.09% 7.66% 30.54% 117.74%
Institutional
Advisor Short Fixed-Income - 10/31 6.65% 4.98% 23.61% 90.45%
Class A
Advisor Short Fixed-Income - 6.67% 4.72% 23.83% 90.79%
Class T
Advisor Short Fixed-Income - 6.74% 4.41% 24.65% 92.04%
Class C
Advisor Short Fixed-Income - 6.88% 6.47% 26.27% 94.54%
Institutional
Advisor Municipal Income - 10/31 8.16% 2.94% 23.96% 119.16%
Class A
Advisor Municipal Income - 8.32% 4.37% 25.77% 122.36%
Class T
Advisor Municipal Income - 8.35% 2.47% 24.14% 122.96%
Class B
Advisor Municipal Income - 8.32% 6.18% 25.77% 122.36%
Class C
Advisor Municipal Income - 8.75% 8.28% 30.92% 131.45%
Institutional
Advisor Intermediate 10/31 6.07% 2.47% 22.85% 80.27%
Municipal Income - Class A
Advisor Intermediate 6.16% 3.57% 23.91% 81.83%
Municipal Income - Class T
Advisor Intermediate 6.13% 2.77% 23.55% 81.30%
Municipal Income - Class B
Advisor Intermediate 6.12% 4.65% 23.41% 81.10%
Municipal Income - Class C
Advisor Intermediate 6.61% 6.63% 28.88% 89.66%
Municipal Income -
Institutional
</TABLE>
* Life of fund figures are from commencement of operations (March 10,
1994 for Advisor Emerging Markets Income and October 31, 1994 for
Advisor Strategic Income) through each fund's fiscal periods ended
1998.
1 Initial offering of Class A for each fund (except Advisor
Mortgage Securities) took place on September 3, 1996. Class A returns
prior to September 3, 1996 (except for Advisor Intermediate Bond and
Advisor Intermediate Municipal Income) are those of Class T which
reflect a 12b-1 fee of 0.25% for Advisor Emerging Markets Income,
Advisor High Yield, Advisor Strategic Income, Advisor Government
Investment, and Advisor Municipal Income and 0.15% for Advisor
Short Fixed-Income . If Class A's 12b-1 fee had been reflected,
returns prior to September 3, 1996 for Advisor Emerging Markets
Income, Advisor High Yield, Advisor Strategic Income, Advisor
Government Investment, and Advisor Municipal Income would have
been higher. For Advisor Intermediate Bond and Advisor Intermediate
Municipal Income returns from September 3, 1996 through September 10,
1992 are those of Class T which reflect a 12b-1 fee of 0.25%. Class A
returns prior to September 10, 1992 are those of Institutional Class,
which has no 12b-1 fee. If Class A's 12b-1 fee had been reflected,
returns prior to September 3, 1996 through September 10, 1992 would
have been higher and returns prior to September 10, 1992 would have
been lower.
Initial offering of Class A, Class T, and Class B of Advisor Mortgage
Securities took place on March 3, 1997. Class A, Class T, and Class B
returns prior to March 3, 1997 are those of Initial Class which has no
12b-1 fee. If Class A's, Class T's, and Class B's respective 12b-1
fees had been reflected, returns prior to March 3, 1997 would have
been lower.
Initial offering of Class T of Advisor Intermediate Bond and Advisor
Intermediate Municipal Income took place on September 10, 1992. Class
T returns prior to September 10, 1992 are those of Institutional Class
which has no 12b-1 fee. If Class T's 12b-1 fee had been reflected,
returns prior to September 10, 1992 would have been lower.
Initial offering of Class B of Advisor Intermediate Bond and Advisor
Intermediate Municipal Income took place on June 30, 1994. Class B
returns prior to June 30, 1994 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.25%. Class B returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class B's 12b-1 fee had been reflected, returns prior to June
30, 1994 would have been lower.
Initial offering of Class B of Advisor High Yield, Advisor Government
Investment, Advisor Municipal Income, and Advisor Emerging Markets
Income took place on June 30, 1994. Class B returns prior to June 30,
1994 are those of Class T which reflect a 12b-1 fee of 0.25%. If Class
B's 12b-1 fee had been reflected, returns prior to June 30, 1994 would
have been lower.
Class C of each fund (except Advisor Mortgage Securities) commenced
operations on November 3, 1997.
Class C returns for Advisor Strategic Income prior to November 3,
1997 are those of Class B which reflect a 12b-1 fee of 0.90% (1.00%
prior to January 1, 1996). If Class C's 12b-1 fee had been reflected,
returns prior to November 3, 1997 through January 1, 1996 would have
been lower.
Class C returns for Advisor High Yield, Advisor Government
Investment, and Advisor Municipal Income prior to November 3, 1997
through June 30, 1994 are those of Class B which reflect a 12b-1 fee
of 0.90% (1.00% prior to January 1, 1996). Class C returns prior to
June 30, 1994 are those of Class T which reflect a 12b-1 fee of 0.25%.
If Class C's 12b-1 fee had been reflected, returns prior to November
3, 1997 through January 1, 1996 and prior to June 30, 1994 would have
been lower.
Class C returns for Advisor Emerging Markets Income prior to November
3, 1997 through June 30, 1994 are those of Class B which reflect a
12b-1 fee of 0.90% (1.00% prior to January 1, 1996). Class C returns
prior to June 30, 1994 are those of Class T which reflect a 12b-1 fee
of 0.25%. If Class C's 12b-1 fee had been reflected, returns prior to
November 3, 1997 through December 31, 1995 and prior to June 30, 1994
would have been lower.
Class C returns for Advisor Short Fixed-Income prior to November 3,
1997 are those of Class T which reflect a 12b-1 fee of 0.15%. If Class
C's 12b-1 fee had been reflected, returns would have been lower.
Class C returns for Advisor Intermediate Bond and Advisor
Intermediate Municipal Income prior to November 3, 1997 through June
30, 1994 are those of Class B which reflect a 12b-1 fee of 0.90%
(1.00% prior to January 1, 1996). Class C returns prior to June 30,
1994 through September 10, 1992 are those of Class T which reflect a
12b-1 fee of 0.25%. Returns prior to September 10, 1992 are those of
Institutional Class which has no 12b-1 fee. If Class C's 12b-1 fee had
been reflected, returns prior to November 3, 1997 through January 1,
1996 and prior to June 30, 1994 would have been lower.
Initial offering of Institutional Class of Advisor High Yield,
Advisor Strategic Income, Advisor Government Investment, Advisor Short
Fixed-Income, Advisor Municipal Income, and Advisor Emerging Markets
Income took place on July 3, 1995. Institutional Class returns prior
to July 3, 1995 are those of Class T which reflect a 12b-1 fee of
0.25% for Advisor High Yield, Advisor Strategic Income, Advisor
Government Investment, Advisor Emerging Markets Income, and Advisor
Municipal Income; and 0.15% for Advisor Short Fixed-Income. If Class
T's 12b-1 fee had not been reflected, returns prior to July 3, 1995
for Institutional Class would have been higher.
Initial offering of Institutional Class of Advisor Mortgage
Securities took place on March 3, 1997. Institutional Class returns
prior to March 3, 1997 are those of Initial Class which has no 12b-1
fee.
Note: If FMR had not reimbursed certain class expenses during
these periods, returns would have been lower , except for Initial
Class of Advisor Mortgage Securities .
Note: If FMR had not reimbursed certain class expenses during these
periods, the yield and tax-equivalent yield for Class T of Advisor
Intermediate Municipal Income would have been 3.25 % and
5.08 %, respectively , and the yield for Class T of Advisor
Mortgage Securities would have been 5.67%.
CALCULATING HISTORICAL EQUITY FUND RESULTS. The following tables show
performance for each class of each fund. Class A and Class T have a
maximum front-end sales charge of 5.75% and 3.50%, respectively, which
is included in the yield, if applicable, and average annual and
cumulative returns. Class B and Class C have a maximum CDSC of 5.00%
and 1.00%, respectively, which is included in the average annual and
cumulative returns. Class A, Class T, Class B and Class C have a 12b-1
fee of 0.25%, 0.50%, 1.00%, and 1.00%, respectively, which is included
in the yield, if applicable, and average annual and cumulative
returns.
HISTORICAL EQUITY FUND RESULTS. The following table shows each class's
return for the fiscal periods ended October 31, November 30 and
December 31, as applicable.
<TABLE>
<CAPTION>
Average Annual Returns1
Fiscal Year Ended One Year Five Years Ten Years/ Life of Fund*
<S> <C> <C> <C> <C>
Advisor International Capital 10/31 N/A N/A N/A
Appreciation - Class A
Advisor International Capital N/A N/A N/A
Appreciation - Class T
Advisor International Capital N/A N/A N/A
Appreciation - Class B
Advisor International Capital N/A N/A N/A
Appreciation - Class C
Advisor International Capital N/A N/A N/A
Appreciation - Institutional
Class
Advisor Overseas - Class A 10/31 -2.24% 6.56% 7.40%
Advisor Overseas - Class T -0.06% 7.07% 7.70%
Advisor Overseas - Class B -1.81% 7.11% 7.90%
Advisor Overseas - Class C 1.86% 7.37% 7.88%
Advisor Overseas - 4.11% 8.11% 8.31%
Institutional Class
Advisor TechnoQuant Growth - 11/30 0.40% N/A 7.20%
Class A
Advisor TechnoQuant Growth - 2.63% N/A 8.34%
Class T
Advisor TechnoQuant Growth - 0.80% N/A 7.89%
Class B
Advisor TechnoQuant Growth - 4.62% N/A 9.73%
Class C
Advisor TechnoQuant Growth - 6.63% N/A 10.72%
Institutional Class
Advisor Small Cap - Class A 11/30 N/A N/A N/A
Advisor Small Cap - Class T N/A N/A N/A
Advisor Small Cap - Class B N/A N/A N/A
Advisor Small Cap - Class C N/A N/A N/A
Advisor Small Cap - N/A N/A N/A
Institutional Class
Advisor Strategic 11/30 -9.95% 8.95% 11.87%
Opportunities - Class A
Advisor Strategic -7.75% 9.51% 12.15%
Opportunities - Class T
Advisor Strategic -9.29% 9.53% 12.31%
Opportunities - Class B
Advisor Strategic -4.12% 10.76% 13.10%
Opportunities -
Institutional Class
Advisor Strategic -3.98% 10.90% 13.17%
Opportunities -
Initial Class
Advisor Mid Cap - Class A 11/30 2.80% N/A 14.88%
Advisor Mid Cap - Class T 5.06% N/A 15.82%
Advisor Mid Cap - Class B 3.51% N/A 15.74%
Advisor Mid Cap - Class C 7.12% N/A 16.46%
Advisor Mid Cap - 9.60% N/A 17.84%
Institutional Class
Advisor Equity Growth - Class A 11/30 20.84% 19.80% 23.22%
Advisor Equity Growth - Class T 23.52% 20.35% 23.50%
Advisor Equity Growth - Class B 22.27% 20.73% 23.80%
Advisor Equity Growth - Class C 26.30% 20.93% 23.80%
Advisor Equity Growth - 28.67% 21.99% 24.45%
Institutional Class
Advisor Large Cap - Class A 11/30 19.41% N/A 20.49%
Advisor Large Cap - Class T 22.34% N/A 21.54%
Advisor Large Cap - Class B 21.15% N/A 21.68%
Advisor Large Cap - Class C 24.79% N/A 22.31%
Advisor Large Cap - 27.35% N/A 23.64%
Institutional Class
Advisor Growth Opportunities 11/30 13.87% 18.84% 19.31%
- - Class A
Advisor Growth Opportunities 16.41% 19.34% 19.56%
- - Class T
Advisor Growth Opportunities 14.95% 19.76% 19.87%
- - Class B
Advisor Growth Opportunities 18.91% 19.96% 19.87%
- - Class C
Advisor Growth Opportunities 21.29% 20.65% 20.22%
- - Institutional Class
Advisor Growth & Income - 11/30 16.16% N/A 21.50%
Class A
Advisor Growth & Income - 18.70% N/A 22.77%
Class T
Advisor Growth & Income - 17.39% N/A 22.71%
Class B
Advisor Growth & Income - 21.20% N/A 24.32%
Class C
Advisor Growth & Income - 23.69% N/A 25.67%
Institutional Class
Advisor Equity Income - Class A 11/30 7.27% 16.99% 14.41%
Advisor Equity Income - Class T 9.65% 17.54% 14.67%
Advisor Equity Income - Class B 8.06% 17.69% 14.85%
Advisor Equity Income - Class C 11.90% 17.87% 14.84%
Advisor Equity Income - 14.23% 19.17% 15.57%
Institutional Class
Advisor Balanced - Class A 11/30 7.61% 9.15% 12.50%
Advisor Balanced - Class T 10.10% 9.71% 12.79%
Advisor Balanced - Class B 8.44% 9.94% 13.05%
Advisor Balanced - Class C 12.41% 10.22% 13.05%
Advisor Balanced - 14.70% 10.94% 13.42%
Institutional Class
</TABLE>
<TABLE>
<CAPTION>
Cumulative Returns1
Fiscal
Year
Ended One Year Five Years Ten Years/ Life of Fund*
<S> <C> <C> <C>
Advisor International Capital 10/31 N/A N/A -5.09%
Appreciation - Class A
Advisor International Capital N/A N/A -3.11%
Appreciation - Class T
Advisor International Capital N/A N/A -5.09%
Appreciation - Class B
Advisor International Capital N/A N/A -1.20%
Appreciation - Class C
Advisor International Capital N/A N/A 0.90%
Appreciation - Institutional
Class
Advisor Overseas - Class A 10/31 -2.24% 37.41% 83.79%
Advisor Overseas - Class T -0.06% 40.70% 88.19%
Advisor Overseas - Class B -1.81% 40.95% 91.20%
Advisor Overseas - Class C 1.86% 42.73% 90.90%
Advisor Overseas - 4.11% 47.68% 97.53%
Institutional Class
Advisor TechnoQuant Growth - 11/30 0.40% N/A 14.26%
Class A
Advisor TechnoQuant Growth - 2.63% N/A 16.59%
Class T
Advisor TechnoQuant Growth - 0.80% N/A 15.66%
Class B
Advisor TechnoQuant Growth - 4.62% N/A 19.48%
Class C
Advisor TechnoQuant Growth - 6.63% N/A 21.56%
Institutional Class
Advisor Small Cap - Class A 11/30 N/A N/A 16.40%
Advisor Small Cap - Class T N/A N/A 19.08%
Advisor Small Cap - Class B N/A N/A 18.10%
Advisor Small Cap - Class C N/A N/A 22.40%
Advisor Small Cap - N/A N/A 23.50%
Institutional Class
Advisor Strategic 11/30 -9.95% 53.52% 206.94%
Opportunities - Class A
Advisor Strategic -7.75% 57.49% 214.88%
Opportunities - Class T
Advisor Strategic -9.29% 57.65% 219.20%
Opportunities - Class B
Advisor Strategic -4.12% 66.67% 242.55%
Opportunities -
Institutional Class
Advisor Strategic -3.98% 67.71% 244.69%
Opportunities -
Initial Class
Advisor Mid Cap - Class A 11/30 2.80% N/A 47.03%
Advisor Mid Cap - Class T 5.06% N/A 50.39%
Advisor Mid Cap - Class B 3.51% N/A 50.10%
Advisor Mid Cap - Class C 7.12% N/A 52.69%
Advisor Mid Cap - 9.60% N/A 57.77%
Institutional Class
Advisor Equity Growth - Class A 11/30 20.84% 146.73% 707.00%
Advisor Equity Growth - Class T 23.52% 152.44% 725.69%
Advisor Equity Growth - Class B 22.27% 156.53% 745.60%
Advisor Equity Growth - Class C 26.30% 158.58% 745.79%
Advisor Equity Growth - 28.67% 170.15% 791.46%
Institutional Class
Advisor Large Cap - Class A 11/30 19.41% N/A 67.85%
Advisor Large Cap - Class T 22.34% N/A 71.92%
Advisor Large Cap - Class B 21.15% N/A 72.48%
Advisor Large Cap - Class C 24.79% N/A 74.98%
Advisor Large Cap - 27.35% N/A 80.33%
Institutional Class
Advisor Growth Opportunities 11/30 13.87% 137.00% 484.53%
- - Class A
Advisor Growth Opportunities 16.41% 142.05% 496.99%
- - Class T
Advisor Growth Opportunities 14.95% 146.39% 512.63%
- - Class B
Advisor Growth Opportunities 18.91% 148.41% 512.67%
- - Class C
Advisor Growth Opportunities 21.29% 155.60% 530.41%
- - Institutional Class
Advisor Growth & Income - 11/30 16.16% N/A 45.24%
Class A
Advisor Growth & Income - 18.70% N/A 48.17%
Class T
Advisor Growth & Income - 17.39% N/A 48.04%
Class B
Advisor Growth & Income - 21.20% N/A 51.78%
Class C
Advisor Growth & Income - 23.69% N/A 54.94%
Institutional Class
Advisor Equity Income - Class A 11/30 7.27% 119.15% 284.21%
Advisor Equity Income - Class T 9.65% 124.32% 293.26%
Advisor Equity Income - Class B 8.06% 125.80% 299.37%
Advisor Equity Income - Class C 11.90% 127.55% 298.92%
Advisor Equity Income - 14.23% 140.32% 325.10%
Institutional Class
Advisor Balanced - Class A 11/30 7.61% 54.90% 224.78%
Advisor Balanced - Class T 10.10% 58.97% 233.30%
Advisor Balanced - Class B 8.44% 60.61% 240.94%
Advisor Balanced - Class C 12.41% 62.64% 241.01%
Advisor Balanced - 14.70% 68.08% 252.41%
Institutional Class
</TABLE>
* Life of fund figures are from commencement of operations (November
3, 1997 for Advisor International Capital Appreciation; April 23, 1990
for Advisor Overseas; December 31, 1996 for Advisor TechnoQuant
Growth; September 9, 1998 for Advisor Small Cap; February 20, 1996 for
Advisor Mid Cap and Advisor Large Cap; and December 31, 1996 for
Advisor Growth & Income) through the fiscal periods ended 1998.
1 Initial offering of Class A for each fund (except Advisor
International Capital Appreciation, Advisor TechnoQuant Growth,
Advisor Small Cap and Advisor Growth & Income) took place on September
3, 1996. Class A returns prior to September 3, 1996 (except for
Advisor Equity Growth and Advisor Equity Income) are those of Class T
which reflect a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996).
If Class A's 12b-1 fee had been reflected, returns prior to September
3, 1996 would have been higher. For Advisor Equity Growth and Advisor
Equity Income, Class A returns from September 3, 1996 through
September 10, 1992 are those of Class T which reflect a 12b-1 fee of
0.50% (0.65% prior to January 1, 1996). Class A returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class A's 12b-1 fee had been reflected, returns prior to
September 3, 1996 through September 10, 1992 would have been higher
and returns prior to September 10, 1992 would have been lower.
Initial offering of Class T of Advisor Equity Growth and Advisor
Equity Income took place on September 10, 1992. Class T returns prior
to September 10, 1992 are those of Institutional Class which has no
12b-1 fee. If Class T's 12b-1 fee had been reflected, returns prior to
September 10, 1992 would have been lower.
Initial offering of Class B of Advisor Equity Growth took place on
December 31, 1996. Class B returns prior to December 31, 1996 through
September 10, 1992 are those of Class T which reflect a 12b-1 of fee
of 0.50% (0.65% prior to January 1, 1996). Class B returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class B's 12b-1 fee had been reflected, returns prior to
December 31, 1996 would have been lower.
Initial offering of Class B of Advisor Balanced took place on
December 31, 1996. Class B returns prior to December 31, 1996 are
those of Class T which reflect a 12b-1 fee of 0.50% (0.65% prior to
January 1, 1996). If Class B's 12b-1 fee had been reflected, returns
prior to December 31, 1996 would have been lower.
Initial offering of Class B of Advisor Growth Opportunities took
place on March 3, 1997. Class B returns prior to March 3, 1997 are
those of Class T which reflect a 12b-1 fee of 0.50% (0.65% prior to
January 1, 1996). If Class B's 12b-1 fee had been reflected, returns
prior to March 3, 1997 would have been lower.
Initial offering of Class B of Advisor Equity Income took place on
June 30, 1994. Class B returns prior to June 30, 1994 through
September 10, 1992 are those of Class T which reflect a 12b-1 fee of
0.65%. Class B returns prior to September 10, 1992 are those of
Institutional Class which has no 12b-1 fee. If Class B's 12b-1 fee had
been reflected, returns prior to June 30, 1994 would have been lower.
Initial offering of Class B of Advisor Strategic Opportunities took
place on June 30, 1994. Class B returns prior to June 30, 1994 are
those of Class T which reflect a 12b-1 fee of 0.65%. If Class B's
12b-1 fee had been reflected, returns prior to June 30, 1994 would
have been lower.
Initial offering of Class B of Advisor Overseas took place on July 3,
1995. Class B returns prior to July 3, 1995, are those of Class T
which reflect a 12b-1 fee of 0.65%. If Class B's 12b-1 fee had been
reflected, returns prior to July 3, 1995 would have been lower. Prior
to December 1, 1992, Advisor Overseas operated under a different
investment objective. Accordingly, the fund's historical performance
may not represent its current investment policies.
Initial Offering of Class C of Advisor TechnoQuant Growth, Advisor
Mid Cap, Advisor Large Cap, and Advisor Growth & Income took place on
November 3, 1997. Class C returns prior to November 3, 1997 are those
of Class B which reflect a 12b-1 fee of 1.00%.
Initial offering of Class C of Advisor Equity Growth took place on
November 3, 1997. Class C returns prior to November 3, 1997 through
December 31, 1996 are those of Class B which reflect a 12b-1 fee of
1.00%. Class C returns prior to December 31, 1996 through September
10, 1992 are those of Class T which reflect a 12b-1 fee of 0.50%
(0.65% prior to January 1, 1996). Class C returns prior to September
10, 1992 are those of Institutional Class which has no 12b-1 fee. If
Class C's 12b-1 fee had been reflected, returns prior to December 31,
1996 would have been lower.
Initial Offering of Class C of Advisor Growth Opportunities took
place on November 3, 1997. Class C returns prior to November 3, 1997
through March 3, 1997 are those of Class B which reflect a 12b-1 fee
of 1.00%. Class C returns prior to March 3, 1997 are those of Class T
which reflect a 12b-1 fee of 0.50 % (0.65% prior to January 1,
1996). If Class C's 12b-1 fee had been reflected, returns prior to
March 3, 1997 would have been lower.
Initial Offering of Class C of Advisor Balanced took place on
November 3, 1997. Class C returns prior to November 3, 1997 through
December 31, 1996 are those of Class B which reflect a 12b-1 fee of
1.00%. Class C returns prior to December 31, 1996 are those of Class T
which reflect a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996).
If Class C's 12b-1 fee had been reflected, returns prior to December
31, 1996 would have been lower.
Initial Offering of Class C of Advisor Equity Income took place on
November 3, 1997. Class C returns prior to November 3, 1997 through
June 30, 1994 are those of Class B which reflect a 12b-1 fee of 1.00%.
Class C returns prior to June 30, 1994 through September 10, 1992 are
those of Class T which reflect a 12b-1 fee of 0.65%. Class C returns
prior to September 10, 1992 are those of Institutional Class which has
no 12b-1 fee. If Class C's 12b-1 fee had been reflected, returns prior
to June 30, 1994 would have been lower.
Initial Offering of Class C of Advisor Overseas took place on
November 3, 1997. Class C returns prior to November 3, 1997 through
July 3, 1995 are those of Class B which reflect a 12b-1 fee of 1.00%.
Class C returns prior to July 3, 1995 are those of Class T which
reflect a 12b-1 fee of 0.65%. If Class C's 12b-1 fee had been
reflected, returns prior to July 3, 1995 would have been lower.
Prior to December 1, 1992, Advisor Overseas operated under a
different investment objective. Accordingly, the fund's historical
performance may not represent its current investment policies.
Initial offering of Institutional Class of Advisor Growth
Opportunities, Advisor Balanced, and Advisor Overseas took place on
July 3, 1995. Institutional Class returns prior to July 3, 1995 are
those of Class T which reflect a 12b-1 fee of 0.65%. Returns for
Institutional Class prior to July 3, 1995 would have been higher if
Class T's 12b-1 fee had not been reflected.
Initial offering of Institutional Class of Advisor Strategic
Opportunities took place on July 3, 1995. Institutional Class returns
prior to July 3, 1995 are those of Initial Class which has no
12b1-fee.
Note: If FMR had not reimbursed certain class expenses during these
periods, Class A's returns would have been lower ; Class T's
returns would have been lower, except for Advisor Overseas, Advisor
Mid Cap, Advisor Growth Opportunities, Advisor Growth & Income, and
Advisor Balanced; Class B's returns would have been lower, except for
Advisor Mid Cap and Advisor Balanced; Class C's returns would have
been lower ; Institutional Class' returns would have been lower,
except for Advisor Equity Growth, Advisor Growth Opportunities, and
Advisor Growth and Income; and, Initial Class' returns would have been
lower.
The following tables show the income and capital elements of each
class's cumulative return. The tables compare each class's return to
the record of the S&P 500, the Dow Jones Industrial Average (DJIA),
and the cost of living, as measured by the Consumer Price Index (CPI),
over the same period. The CPI information is as of the month-end
closest to the initial investment date for each class. The S&P 500 and
DJIA comparisons are provided to show how each class's return compared
to the record of a broad unmanaged index of common stocks and a
narrower set of stocks of major industrial companies, respectively,
over the same period. Because each of Advisor Emerging Markets Income,
Advisor High Yield, Advisor Strategic Income, Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, Advisor Municipal Income, and Advisor
Intermediate Municipal Income invests in fixed-income securities,
common stocks represent a different type of investment from the funds.
Common stocks generally offer greater growth potential than the funds,
but generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than fixed-income investments such as the funds. Each of
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, Advisor Global Equity,
Advisor TechnoQuant Growth, Advisor Small Cap, Advisor Strategic
Opportunities, Advisor Mid Cap, Advisor Retirement Growth, Advisor
Equity Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor
Growth Opportunities, Advisor Growth & Income, Advisor Equity Income,
Advisor Asset Allocation, and Advisor Balanced has the ability to
invest in securities not included in either index, and its investment
portfolio may or may not be similar in composition to the indexes. The
S&P 500 and DJIA returns are based on the prices of unmanaged groups
of stocks and, unlike each class's returns, do not include the effect
of brokerage commissions or other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each class of each fund during the past 10
fiscal years ended 1998 or life of each fund, as applicable, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments (with the exception of foreign tax withholdings)
have not been factored into the figures below.
During the period from November 3, 1997 (commencement of operations)
to October 31, 1998, a hypothetical $10,000 investment in Class A of
Advisor International Capital Appreciation would have amounted
to $ 9,491 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION - CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 9,491 $ 0 $ 0 $ 9,491
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL INDEXES
APPRECIATION - CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998* $ 11,880 $ 11,385 $ 10,149
</TABLE>
* From November 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor International Capital Appreciation on November 3, 1997,
assuming the maximum sales charge had been in effect, the net amount
invested in Class A shares was $ 9,425 . The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 10,000 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 0 for capital gain distributions.
During the period from November 3, 1997 (commencement of operations)
to October 31, 1998, a hypothetical $10,000 investment in Class T of
Advisor International Capital Appreciation would have amounted
to $ 9,689 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION - CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 9,689 $ 0 $ 0 $ 9,689
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL INDEXES
APPRECIATION - CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998* $ 11,880 $ 11,385 $ 10,149
</TABLE>
* From November 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor International Capital Appreciation on November 3, 1997,
assuming the maximum sales charge had been in effect, the net amount
invested in Class T shares was $ 9,650 . The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 10,000 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 0 for capital gain distributions.
During the period from November 3, 1997 (commencement of operations)
to October 31, 1998, a hypothetical $10,000 investment in Class B of
Advisor International Capital Appreciation would have amounted
to $ 9,491, including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION - CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 9,491 $ 0 $ 0 $ 9,491
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL INDEXES
APPRECIATION - CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998* $ 11,880 $ 11,385 $ 10,149
</TABLE>
* From November 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor International Capital Appreciation on November 3, 1997, the
net amount invested in Class B shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $10,000. If distributions had not been reinvested, the amount of
distributions earned from the class over time would have been smaller,
and cash payments for the period would have amounted to $ 0 for
dividends and $ 0 for capital gain distributions.
During the period from November 3, 1997 (commencement of operations)
to October 31, 1998, a hypothetical $10,000 investment in Class C of
Advisor International Capital Appreciation would have amounted
to $ 9,880 , including the effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION - CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 9,880 $ 0 $ 0 $ 9,880
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL INDEXES
APPRECIATION - CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998* $ 11,880 $ 11,385 $ 10,149
</TABLE>
* From November 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor International Capital Appreciation on November 3, 1997, the
net amount invested in Class C shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 10,000 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 0 for capital gain distributions.
During the period from November 3, 1997 (commencement of operations)
to October 31, 1998, a hypothetical $10,000 investment in
Institutional Class of Advisor International Capital Appreciation
would have grown to $ 10,090 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 10,090 $ 0 $ 0 $ 10,090
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERNATIONAL CAPITAL INDEXES
APPRECIATION -
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998* $ 11,880 $ 11,385 $ 10,149
</TABLE>
* From November 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor International Capital Appreciation on
November 3, 1997, the net amount invested in Institutional Class
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,000 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 0 for capital gain distributions.
During the period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1998, a hypothetical $10,000 investment in
Class A of Advisor Overseas would have grown to $ 18,379 ,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR OVERSEAS - CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,382 $ 1,153 $ 1,844 $ 18,379
1997 $ 15,919 $ 959 $ 840 $ 17,718
1996 $ 14,411 $ 616 $ 123 $ 15,150
1995 $ 13,120 $ 472 $ 103 $ 13,695
1994 $ 13,252 $ 478 $ 0 $ 13,730
1993 $ 12,187 $ 419 $ 0 $ 12,606
1992 $ 8,548 $ 199 $ 0 $ 8,747
1991 $ 9,218 $ 76 $ 0 $ 9,294
1990* $ 9,001 $ 0 $ 0 $ 9,001
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR OVERSEAS - CLASS A INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998 $ 41,487 $ 40,245 $ 12,723
1997 $ 34,008 $ 34,273 $ 12,537
1996 $ 25,742 $ 27,259 $ 12,281
1995 $ 20,744 $ 21,042 $ 11,924
1994 $ 16,406 $ 16,865 $ 11,598
1993 $ 15,795 $ 15,458 $ 11,303
1992 $ 13,741 $ 13,162 $ 11,001
1991 $ 12,495 $ 12,158 $ 10,659
1990* $ 9,359 $ 9,347 $ 10,357
</TABLE>
* From April 23, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Overseas on April 23, 1990, assuming the maximum sales charge
had been in effect, the net amount invested in Class A shares was
$ 9,425 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 12,620 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 839 for dividends and $ 1,602 for
capital gain distributions. Initial offering of Class A of Overseas
took place on September 3, 1996. Class A returns prior to September 3,
1996 are those of Class T, which reflect a 12b-1 fee of 0.50% (0.65%
prior to January 1, 1996). If Class A's 12b-1 fee had been reflected,
returns prior to September 3, 1996 would have been higher. Prior to
December 1, 1992, Advisor Overseas operated under a different
investment objective. Accordingly, the fund's historical performance
may not represent its current investment policies.
During the period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1998, a hypothetical $10,000 investment in
Class T of Advisor Overseas would have grown to $ 18,819 ,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR OVERSEAS - CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,903 $ 1,032 $ 1,884 $ 18,819
1997 $ 16,424 $ 885 $ 862 $ 18,171
1996 $ 14,765 $ 631 $ 126 $ 15,522
1995 $ 13,433 $ 484 $ 105 $ 14,022
1994 $ 13,568 $ 489 $ 0 $ 14,057
1993 $ 12,477 $ 430 $ 0 $ 12,907
1992 $ 8,753 $ 202 $ 0 $ 8,955
1991 $ 9,438 $ 77 $ 0 $ 9,515
1990* $ 9,216 $ 0 $ 0 $ 9,216
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR OVERSEAS - CLASS T INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998 $ 41,487 $ 40,245 $ 12,723
1997 $ 34,008 $ 34,273 $ 12,537
1996 $ 25,742 $ 27,259 $ 12,281
1995 $ 20,744 $ 21,042 $ 11,924
1994 $ 16,406 $ 16,865 $ 11,598
1993 $ 15,795 $ 15,458 $ 11,303
1992 $ 13,741 $ 13,162 $ 11,001
1991 $ 12,495 $ 12,158 $ 10,659
1990* $ 9,359 $ 9,347 $ 10,357
</TABLE>
* From April 23, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Overseas on April 23, 1990, assuming the maximum sales charge
had been in effect, the net amount invested in Class T shares was
$ 9,650 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 12,530 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 724 for dividends and $ 1,641 for
capital gain distributions. Prior to December 1, 1992, Advisor
Overseas operated under a different investment objective. Accordingly,
the fund's historical performance may not represent its current
investment policies.
During the period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1998, a hypothetical $10,000 investment in
Class B of Advisor Overseas would have grown to $ 19,120.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR OVERSEAS - CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,080 $ 1,092 $ 1,948 $ 19,120
1997 $ 16,690 $ 981 $ 891 $ 18,562
1996 $ 15,060 $ 756 $ 129 $ 15,945
1995 $ 13,920 $ 502 $ 109 $ 14,531
1994 $ 14,060 $ 507 $ 0 $ 14,567
1993 $ 12,930 $ 445 $ 0 $ 13,375
1992 $ 9,070 $ 210 $ 0 $ 9,280
1991 $ 9,780 $ 80 $ 0 $ 9,860
1990* $ 9,550 $ 0 $ 0 $ 9,550
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR OVERSEAS - CLASS B INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998 $ 41,487 $ 40,245 $ 12,723
1997 $ 34,008 $ 34,273 $ 12,537
1996 $ 25,742 $ 27,259 $ 12,281
1995 $ 20,744 $ 21,042 $ 11,924
1994 $ 16,406 $ 16,865 $ 11,598
1993 $ 15,795 $ 15,458 $ 11,303
1992 $ 13,741 $ 13,162 $ 11,001
1991 $ 12,495 $ 12,158 $ 10,659
1990* $ 9,359 $ 9,347 $ 10,357
</TABLE>
* From April 23, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Overseas on April 23, 1990, the net amount invested in Class B
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 12,663 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 780 for
dividends and $ 1,700 for capital gain distributions. Initial
offering of Advisor Class B of Advisor Overseas took place on July 3,
1995. Class B returns prior to July 3, 1995 are those of Class T which
reflect a 12b-1 fee of 0.65%. If Class B's 12b-1 fee had been
reflected, returns prior to July 3, 1995 would have been lower. Prior
to December 1, 1992, Advisor Overseas operated under a different
investment objective. Accordingly, the fund's historical performance
may not represent its current investment policies.
During the period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1998 a hypothetical $10,000 investment in
Class C of Advisor Overseas would have grown to $ 19,090.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR OVERSEAS - CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,047 $ 1,120 $ 1,923 $ 19,090
1997 $ 16,690 $ 981 $ 891 $ 18,562
1996 $ 15,060 $ 756 $ 129 $ 15,945
1995 $ 13,920 $ 502 $ 109 $ 14,531
1994 $ 14,060 $ 507 $ 0 $ 14,567
1993 $ 12,930 $ 445 $ 0 $ 13,375
1992 $ 9,070 $ 210 $ 0 $ 9,280
1991 $ 9,780 $ 80 $ 0 $ 9,860
1990* $ 9,550 $ 0 $ 0 $ 9,550
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR OVERSEAS - CLASS C INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998 $ 41,487 $ 40,245 $ 12,723
1997 $ 34,008 $ 34,273 $ 12,537
1996 $ 25,742 $ 27,259 $ 12,281
1995 $ 20,744 $ 21,042 $ 11,924
1994 $ 16,406 $ 16,865 $ 11,598
1993 $ 15,795 $ 15,458 $ 11,303
1992 $ 13,741 $ 13,162 $ 11,001
1991 $ 12,495 $ 12,158 $ 10,659
1990* $ 9,359 $ 9,347 $ 10,357
</TABLE>
* From April 23, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Overseas on April 23, 1990, the net amount invested in Class C
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 12,672 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 807 for
dividends and $ 1,681 for capital gain distributions. Initial
offering of Class C of Advisor Overseas took place on November 3,
1997. Class C returns prior to November 3, 1997 through July 3, 1995
are those of Class B which reflect a 12b-1 fee of 1.00%. Class C
returns prior to July 3, 1995 are those of Class T which reflect a
12b-1 fee of 0.65%. If Class C's 12b-1 fee had been reflected, returns
prior to July 3, 1995 would have been lower. Prior to December 1,
1992, Advisor Overseas operated under a different investment
objective. Accordingly, the fund's historical performance may not
represent its current investment policies.
During the period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1998, a hypothetical $10,000 investment in
Institutional Class of Advisor Overseas would have grown to
$ 19,753 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR OVERSEAS -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,360 $ 1,412 $ 1,981 $ 19,753
1997 $ 16,920 $ 1,151 $ 902 $ 18,973
1996 $ 15,200 $ 785 $ 130 $ 16,115
1995 $ 13,970 $ 504 $ 109 $ 14,583
1994 $ 14,060 $ 507 $ 0 $ 14,567
1993 $ 12,930 $ 445 $ 0 $ 13,375
1992 $ 9,070 $ 210 $ 0 $ 9,280
1991 $ 9,780 $ 80 $ 0 $ 9,860
1990* $ 9,550 $ 0 $ 0 $ 9,550
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR OVERSEAS - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1998 $ 41,487 $ 40,245 $ 12,723
1997 $ 34,008 $ 34,273 $ 12,537
1996 $ 25,742 $ 27,259 $ 12,281
1995 $ 20,744 $ 21,042 $ 11,924
1994 $ 16,406 $ 16,865 $ 11,598
1993 $ 15,795 $ 15,458 $ 11,303
1992 $ 13,741 $ 13,162 $ 11,001
1991 $ 12,495 $ 12,158 $ 10,659
1990* $ 9,359 $ 9,347 $ 10,357
</TABLE>
* From April 23, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Overseas on April 23, 1990, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 12,957 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 1,040 for dividends and $ 1,700 for capital gain
distributions. Initial offering of Institutional Class of Advisor
Overseas took place on July 3, 1995. Institutional Class returns prior
to July 3, 1995 are those of Class T which reflect a 12b-1 fee of
0.65%. Returns for Institutional Class prior to July 3, 1995 would
have been higher if Class T's 12b-1 fee had not been reflected. Prior
to December 1, 1992, Advisor Overseas operated under a different
investment objective. Accordingly, the fund's historical performance
may not represent its current investment policies.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class A of Advisor TechnoQuant Growth would have grown to
$ 11,426 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH -
CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,037 $ 0 $ 389 $ 11,426
1997* $ 10,726 $ 0 $ 0 $ 10,726
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
CLASS A
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor TechnoQuant Growth on December 31, 1996, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,349 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 349 for capital gain distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class T of Advisor TechnoQuant Growth would have grown to
$ 11,659 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH -
CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,271 $ 0 $ 388 $ 11,659
1997* $ 10,962 $ 0 $ 0 $ 10,962
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
CLASS T
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor TechnoQuant Growth on December 31, 1996, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,348 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 347 for capital gain distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class B of Advisor TechnoQuant Growth would have grown to
$ 11,566 , including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH -
CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,200 $ 0 $ 366 $ 11,566
1997* $ 11,310 $ 0 $ 0 $ 11,310
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
CLASS B
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor TechnoQuant Growth on December 31, 1996, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 10,330 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 330 for capital gain
distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class C of Advisor TechnoQuant Growth would have grown to
$ 11,948.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH -
CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,551 $ 0 $ 397 $ 11,948
1997* $ 11,312 $ 0 $ 0 $ 11,312
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
CLASS C
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor TechnoQuant Growth on December 31, 1996, the net amount
invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 10,359 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 358 for capital gain
distributions. Initial offering of Class C of Advisor TechnoQuant
Growth took place on November 3, 1997. Class C returns prior to
November 3, 1997 are those of Class B which reflect a 12b-1 fee of
1.00%
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Institutional Class of Advisor TechnoQuant Growth would have grown
to $ 12,156 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,720 $ 0 $ 436 $ 12,156
1997* $ 11,400 $ 0 $ 0 $ 11,400
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR TECHNOQUANT GROWTH - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor TechnoQuant Growth on December 31,
1996, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 10,390 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 0 for dividends and $ 390 for
capital gain distributions.
During the period from September 9, 1998 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class A of Advisor Small Cap would have grown to $ 11,640 ,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SMALL CAP - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 11,640 $ 0 $ 0 $ 11,640
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SMALL CAP - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998* $ 11,605 $ 11,636 $ 10,037
</TABLE>
* From September 9, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Small Cap on September 9, 1998, assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,000 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 0 for capital gain distributions.
During the period from September 9, 1998 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class T of Advisor Small Cap would have grown to $ 11,908,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SMALL CAP - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 11,908 $ 0 $ 0 $ 11,908
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SMALL CAP - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998* $ 11,605 $ 11,636 $ 10,037
</TABLE>
* From September 9, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Small Cap on September 9, 1998, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,000 . If
distributions had not been reinvested, the amount of distributions
earned from the class overtime would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 0 for capital gain distributions.
During the period from September 9, 1998 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class B of Advisor Small Cap would have grown to $ 11,810 ,
including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SMALL CAP - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 11,810 $ 0 $ 0 $ 11,810
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SMALL CAP - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998* $ 11,605 $ 11,636 $ 10,037
</TABLE>
* From September 9, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Small Cap on September 9, 1998, the net amount invested in
Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 10,000 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 0 for capital gain distributions.
During the period from September 9, 1998 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class C of Advisor Small Cap would have grown to $ 12,240 ,
including the effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SMALL CAP - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 12,240 $ 0 $ 0 $ 12,240
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SMALL CAP - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998* $ 11,605 $ 11,636 $ 10,037
</TABLE>
* From September 9, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Small Cap on September 9, 1998, the net amount invested in
Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 10,000 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 0 for capital gain distributions.
During the period from September 9, 1998 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Institutional Class of Advisor Small Cap would have grown to
$ 12,350 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SMALL CAP -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998* $ 12,350 $ 0 $ 0 $ 12,350
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SMALL CAP - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998* $ 11,605 $ 11,636 $ 10,037
</TABLE>
* From September 9, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Small Cap on September 9, 1998, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 10,000 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 0 for capital gain distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class A of Advisor Strategic Opportunities would
have grown to $ 30,694 , including the effect of Class A's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC
OPPORTUNITIES - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,161 $ 4,298 $ 12,235 $ 30,694
1997 $ 16,307 $ 4,949 $ 10,869 $ 32,125
1996 $ 14,736 $ 4,052 $ 6,533 $ 25,321
1995 $ 14,873 $ 3,703 $ 5,625 $ 24,201
1994 $ 11,346 $ 2,491 $ 4,043 $ 17,880
1993 $ 13,189 $ 2,506 $ 3,149 $ 18,844
1992 $ 12,170 $ 1,827 $ 1,874 $ 15,871
1991 $ 12,116 $ 1,341 $ 0 $ 13,457
1990 $ 10,646 $ 696 $ 0 $ 11,342
1989 $ 11,707 $ 424 $ 0 $ 12,131
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INDEXES
OPPORTUNITIES - CLASS A
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Strategic Opportunities on December 1, 1988, assuming the
maximum sales charge had been in effect, the net amount invested in
Class A shares was $ 9,425 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 24,359 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 2,721 for
dividends and $ 6,971 for capital gain distributions. Initial
offering of Class A of Advisor Strategic Opportunities took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.50% (0.65% prior to
January 1, 1996). If Class A's 12b-1 fee had been reflected, returns
prior to September 3, 1996 would have been higher.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class T of Advisor Strategic Opportunities would
have grown to $ 31,488 , including the effect of Class T's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC
OPPORTUNITIES - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,706 $ 4,257 $ 12,525 $ 31,488
1997 $ 16,860 $ 4,881 $ 11,197 $ 32,938
1996 $ 15,094 $ 4,151 $ 6,691 $ 25,936
1995 $ 15,228 $ 3,792 $ 5,759 $ 24,779
1994 $ 11,616 $ 2,551 $ 4,140 $ 18,307
1993 $ 13,504 $ 2,566 $ 3,224 $ 19,294
1992 $ 12,460 $ 1,871 $ 1,919 $ 16,250
1991 $ 12,405 $ 1,373 $ 0 $ 13,778
1990 $ 10,900 $ 713 $ 0 $ 11,613
1989 $ 11,987 $ 434 $ 0 $ 12,421
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INDEXES
OPPORTUNITIES - CLASS T
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Strategic Opportunities on December 1, 1988, assuming the
maximum sales charge had been in effect, the net amount invested in
Class T shares was $ 9,650 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 24,398 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 2,677 for
dividends and $ 7,095 for capital gain distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class B of Advisor Strategic Opportunities would
have grown to $ 31,920.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC
OPPORTUNITIES - CLASS B
Fiscal Year
Ended November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,899 $ 4,331 $ 12,690 $ 31,920
1997 $ 17,126 $ 4,977 $ 11,477 $ 33,580
1996 $ 15,365 $ 4,382 $ 6,834 $ 26,581
1995 $ 15,585 $ 4,044 $ 5,897 $ 25,526
1994 $ 12,025 $ 2,641 $ 4,285 $ 18,951
1993 $ 13,994 $ 2,658 $ 3,341 $ 19,993
1992 $ 12,912 $ 1,938 $ 1,989 $ 16,839
1991 $ 12,855 $ 1,423 $ 0 $ 14,278
1990 $ 11,296 $ 738 $ 0 $ 12,034
1989 $ 12,421 $ 451 $ 0 $ 12,872
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INDEXES
OPPORTUNITIES - CLASS B
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Strategic Opportunities on December 1, 1988, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 24,789 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 2,767 for dividends and $ 7,277 for capital gain
distributions. Initial offering of Class B of Advisor Strategic
Opportunities took place on June 30, 1994. Class B returns prior to
June 30, 1994 are those of Class T which reflect a 12b-1 fee of 0.65%.
If Class B's 12b-1 fee had been reflected, returns prior to June 30,
1994 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Strategic
Opportunities would have grown to $ 34,255 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC
OPPORTUNITIES -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,236 $ 5,601 $ 13,418 $ 34,255
1997 $ 17,417 $ 6,402 $ 11,906 $ 35,725
1996 $ 15,690 $ 5,340 $ 7,084 $ 28,114
1995 $ 15,860 $ 4,796 $ 6,085 $ 26,741
1994 $ 12,122 $ 3,145 $ 4,381 $ 19,648
1993 $ 14,026 $ 3,138 $ 3,389 $ 20,553
1992 $ 12,940 $ 2,251 $ 2,013 $ 17,204
1991 $ 12,878 $ 1,643 $ 0 $ 14,521
1990 $ 11,323 $ 862 $ 0 $ 12,185
1989 $ 12,478 $ 481 $ 0 $ 12,959
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INDEXES
OPPORTUNITIES -
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Strategic Opportunities on December 1,
1988, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 26,287 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 3,426 for dividends and $ 7,328
for capital gain distributions. Initial offering of Institutional
Class of Advisor Strategic Opportunities took place on July 3, 1995.
Institutional Class returns prior to July 3, 1995 are those of Initial
Class which has no 12b-1 fee.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Initial Class of Advisor Strategic Opportunities
would have grown to $ 34,469 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC
OPPORTUNITIES - INITIAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,362 $ 5,595 $ 13,512 $ 34,469
1997 $ 17,597 $ 6,364 $ 11,938 $ 35,899
1996 $ 15,737 $ 5,295 $ 7,091 $ 28,123
1995 $ 15,861 $ 4,796 $ 6,086 $ 26,743
1994 $ 12,122 $ 3,145 $ 4,381 $ 19,648
1993 $ 14,026 $ 3,138 $ 3,389 $ 20,553
1992 $ 12,940 $ 2,251 $ 2,013 $ 17,204
1991 $ 12,878 $ 1,643 $ 0 $ 14,521
1990 $ 11,323 $ 862 $ 0 $ 12,185
1989 $ 12,478 $ 481 $ 0 $ 12,959
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INDEXES
OPPORTUNITIES - INITIAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Initial
Class of Advisor Strategic Opportunities on December 1, 1988, the net
amount invested in Initial Class shares was $ 10,000 .The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 26,269 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 3,396 for dividends and $ 7,353 for capital gain
distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class A of Advisor Mid Cap would have grown to $ 14,703 ,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MID CAP - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 12,922 $ 11 $ 1,770 $ 14,703
1997 $ 13,233 $ 12 $ 235 $ 13,480
1996* $ 11,027 $ 0 $ 0 $ 11,027
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MID CAP - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Mid Cap on February 20, 1996, assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,591 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 9 for dividends
and $ 1,555 for capital gain distributions. Initial offering of
Class A for Advisor Mid Cap took place on September 3, 1996. Class A
returns prior to September 3, 1996 are those of Class T which reflect
a 12b-1 fee of 0.50%. If Class A's 12b-1 fee had been reflected,
returns prior to September 3, 1996 would have been higher.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class T of Advisor Mid Cap would have grown to $ 15,039 ,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MID CAP - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 13,269 $ 0 $ 1,770 $ 15,039
1997 $ 13,597 $ 0 $ 217 $ 13,814
1996* $ 11,291 $ 0 $ 0 $ 11,291
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MID CAP - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Mid Cap on February 20, 1996, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,587 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 1,563 for capital gain distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class B of Advisor Mid Cap would have grown to $ 15,010 ,
including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MID CAP - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 13,280 $ 0 $ 1,730 $ 15,010
1997 $ 13,940 $ 0 $ 186 $ 14,126
1996* $ 11,610 $ 0 $ 0 $ 11,610
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MID CAP - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
.
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Mid Cap on February 20, 1996, the net amount invested in Class
B shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,560 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 1,540 for capital gain distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class C of Advisor Mid Cap would have grown to $ 15,269.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MID CAP - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 13,505 $ 0 $ 1,764 $ 15,269
1997 $ 13,941 $ 0 $ 186 $ 14,127
1996* $ 11,610 $ 0 $ 0 $ 11,610
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MID CAP - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Mid Cap on February 20, 1996, the net amount invested in Class
C shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,596 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 1,576 for capital gain distributions. Initial offering of
Class C of Advisor Mid Cap took place on November 3, 1997. Class C
returns prior to November 3, 1997 are those of Class B which reflect a
12b-1 fee of 1.00%.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Institutional Class of Advisor Mid Cap would have grown to
$ 15,777 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MID CAP -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 13,820 $ 24 $ 1,933 $ 15,777
1997 $ 14,120 $ 25 $ 251 $ 14,396
1996* $ 11,700 $ 0 $ 0 $ 11,700
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MID CAP - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Mid Cap on February 20, 1996, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 11,740 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 20 for dividends and $ 1,690 for capital gain
distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class A of Advisor Equity Growth would have
grown to $ 80,700 , including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 45,588 $ 2,527 $ 32,585 $ 80,700
1997 $ 40,531 $ 2,090 $ 20,323 $ 62,944
1996 $ 35,128 $ 1,363 $ 16,081 $ 52,572
1995 $ 31,231 $ 1,142 $ 11,817 $ 44,190
1994 $ 22,363 $ 727 $ 8,226 $ 31,316
1993 $ 23,131 $ 753 $ 6,944 $ 30,828
1992 $ 20,646 $ 589 $ 5,684 $ 26,919
1991 $ 19,038 $ 515 $ 2,702 $ 22,255
1990 $ 12,193 $ 329 $ 1,731 $ 14,253
1989 $ 13,581 $ 291 $ 0 $ 13,872
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Equity Growth on December 1, 1988 assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 28,619 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 831 for
dividends and $ 12,687 for capital gain distributions. Initial
offering of Class A of Advisor Equity Growth took place on September
3, 1996. Class A returns prior to September 3, 1996 through September
10, 1992 are those of Class T which reflect a 12b-1 fee of 0.50%
(0.65% prior to January 1, 1996). Class A returns prior to September
10, 1992 are those of Institutional Class which has no 12b-1 fee. If
Class A's 12b-1 fee had been reflected, returns prior to September 3,
1996 through September 10, 1992 would have been higher and returns
prior to September 10, 1992 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class T of Advisor Equity Growth would have
grown to $ 82,569 , including the effect of the Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 47,038 $ 2,108 $ 33,423 $ 82,569
1997 $ 41,723 $ 1,870 $ 20,912 $ 64,505
1996 $ 35,975 $ 1,396 $ 16,468 $ 53,839
1995 $ 31,977 $ 1,169 $ 12,099 $ 45,245
1994 $ 22,897 $ 745 $ 8,422 $ 32,064
1993 $ 23,683 $ 771 $ 7,110 $ 31,564
1992 $ 21,138 $ 604 $ 5,820 $ 27,562
1991 $ 19,493 $ 526 $ 2,767 $ 22,786
1990 $ 12,484 $ 337 $ 1,772 $ 14,593
1989 $ 13,905 $ 298 $ 0 $ 14,203
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Equity Growth on December 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 28,625 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 610 for
dividends and $ 12,966 for capital gain distributions. Initial
offering of Class T of Advisor Equity Growth took place on September
10, 1992. Class T returns prior to September 10, 1992 are those of
Institutional Class which has no 12b-1 fee. If Class T's 12b-1 fee had
been reflected, returns prior to September 10, 1992 would have been
lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class B of Advisor Equity Growth would have
grown to $ 84,560 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 48,066 $ 2,154 $ 34,340 $ 84,560
1997 $ 42,975 $ 1,926 $ 21,539 $ 66,440
1996 $ 37,280 $ 1,447 $ 17,065 $ 55,792
1995 $ 33,136 $ 1,212 $ 12,538 $ 46,886
1994 $ 23,727 $ 772 $ 8,728 $ 33,227
1993 $ 24,542 $ 798 $ 7,368 $ 32,708
1992 $ 21,905 $ 626 $ 6,031 $ 28,562
1991 $ 20,200 $ 546 $ 2,867 $ 23,613
1990 $ 12,937 $ 350 $ 1,836 $ 15,123
1989 $ 14,409 $ 309 $ 0 $ 14,718
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Equity Growth on December 1, 1988, the net amount invested in
Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 29,378 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 632 for
dividends and $ 13,485 for capital gain distributions. Initial
offering of Class B of Advisor Equity Growth took place on December
31, 1996. Class B returns prior to December 31, 1996 through September
10, 1992 are those of Class T which reflect a 12b-1 of fee of 0.50%
(0.65% prior to January 1, 1996). Class B returns prior to September
10, 1992 are those of Institutional Class which has no 12b-1 fee. If
Class B's 12b-1 fee had been reflected, returns prior to December 31,
1996 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class C of Advisor Equity Growth would have
grown to $ 84,579 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 48,177 $ 2,160 $ 34,242 $ 84,579
1997 $ 42,974 $ 1,926 $ 21,539 $ 66,439
1996 $ 37,280 $ 1,447 $ 17,065 $ 55,792
1995 $ 33,136 $ 1,212 $ 12,538 $ 46,886
1994 $ 23,727 $ 772 $ 8,728 $ 33,227
1993 $ 24,542 $ 798 $ 7,368 $ 32,708
1992 $ 21,905 $ 626 $ 6,031 $ 28,562
1991 $ 20,200 $ 546 $ 2,867 $ 23,613
1990 $ 12,937 $ 350 $ 1,836 $ 15,123
1989 $ 14,409 $ 309 $ 0 $ 14,718
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY GROWTH - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Equity Growth on December 1, 1988, the net amount invested in
Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 29,256 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 632 for
dividends and $ 13,408 for capital gain distributions. Initial
offering of Class C of Advisor Equity Growth took place on November 3,
1997. Class C returns prior to November 3, 1997 through December 31,
1996 are those of Class B which reflect a 12b-1 fee of 1.00%. Class C
returns prior to December 31, 1996 through September 10, 1992 are
those of Class T which reflect a 12b-1 fee of 0.50% (0.65% prior to
January 1, 1996). Class C returns prior to September 10, 1992 are
those of Institutional Class which has no 12b-1 fee. If Class C's
12b-1 fee had been reflected, returns prior to December 31, 1996 would
have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Equity Growth
would have grown to $ 89,146 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY GROWTH - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 49,676 $ 4,071 $ 35,399 $ 89,146
1997 $ 43,977 $ 3,269 $ 22,036 $ 69,282
1996 $ 37,870 $ 2,320 $ 17,326 $ 57,516
1995 $ 33,602 $ 1,752 $ 12,704 $ 48,058
1994 $ 24,043 $ 929 $ 8,837 $ 33,809
1993 $ 24,742 $ 829 $ 7,427 $ 32,998
1992 $ 21,938 $ 627 $ 6,040 $ 28,605
1991 $ 20,200 $ 546 $ 2,867 $ 23,613
1990 $ 12,937 $ 350 $ 1,836 $ 15,123
1989 $ 14,409 $ 309 $ 0 $ 14,718
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY GROWTH - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Equity Growth on December 1, 1988, the
net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 30,669 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 1,398 for dividends and $ 13,461 for capital gain
distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class A of Advisor Large Cap would have grown to $ 16,785 ,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LARGE CAP - CLASS A INDEXES
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,664 $ 0 $ 1,121 $ 16,785
1997 $ 13,157 $ 0 $ 90 $ 13,249
1996* $ 11,150 $ 0 $ 0 $ 11,150
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LARGE CAP - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Large Cap on February 20, 1996, assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,864 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 858 for capital gain distributions. Initial offering of
Class A of Advisor Large Cap took place on September 3, 1996. Class A
returns prior to September 3, 1996 are those of Class T which reflect
a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996). If Class A's
12b-1 fee had been reflected, returns prior to September 3, 1996 would
have been higher.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class T of Advisor Large Cap would have grown to $ 17,192 ,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LARGE CAP - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Reinvested Capital Gain Total Value
Investment Distributions Distributions
1998 $ 16,087 $ 0 $ 1,105 $ 17,192
1997 $ 13,491 $ 0 $ 70 $ 13,561
1996* $ 11,406 $ 0 $ 0 $ 11,406
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LARGE CAP - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Large Cap on February 20, 1996, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,855 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 849 for capital gain distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class B of Advisor Large Cap would have grown to $ 17,248 ,
including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LARGE CAP - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,200 $ 0 $ 1,048 $ 17,248
1997 $ 13,850 $ 0 $ 60 $ 13,910
1996* $ 11,770 $ 0 $ 0 $ 11,770
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LARGE CAP - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Large Cap on February 20, 1996, the net amount invested in
Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 10,814 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 810 for capital gain distributions.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class C of Advisor Large Cap would have grown to $ 17,498.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LARGE CAP - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,386 $ 0 $ 1,112 $ 17,498
1997 $ 13,850 $ 0 $ 60 $ 13,910
1996* $ 11,770 $ 0 $ 0 $ 11,770
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LARGE CAP - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Large Cap on February 20, 1996, assuming the maximum
applicable CDSC had been in effect, the net amount invested in Class C
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,867 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 0 for dividends
and $ 862 for capital gain distributions. Initial offering of
Class C of Advisor Large Cap took place on November 3, 1997. Class C
returns prior to November 3, 1997 are those of Class B which reflect a
12b-1 fee of 1.00%.
During the period from February 20, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Institutional Class of Advisor Large Cap would have grown to
$ 18,033 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LARGE CAP -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,770 $ 39 $ 1,224 $ 18,033
1997 $ 14,050 $ 0 $ 110 $ 14,160
1996* $ 11,860 $ 0 $ 0 $ 11,860
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LARGE CAP - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 19,110 $ 17,584 $ 10,587
1997 $ 15,453 $ 14,837 $ 10,426
1996* $ 12,025 $ 12,146 $ 10,239
</TABLE>
* From February 20, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Large Cap on February 20, 1996, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 10,968 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 30 for dividends and $ 930 for capital gain
distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class A of Advisor Growth Opportunities would
have grown to $ 58,453 , including the effect of Class A's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES
- - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 33,667 $ 4,231 $ 20,555 $ 58,453
1997 $ 30,043 $ 3,069 $ 15,269 $ 48,381
1996 $ 26,050 $ 1,862 $ 11,642 $ 39,554
1995 $ 21,594 $ 1,123 $ 9,241 $ 31,958
1994 $ 17,587 $ 642 $ 6,352 $ 24,581
1993 $ 17,246 $ 564 $ 5,436 $ 23,246
1992 $ 15,124 $ 374 $ 3,613 $ 19,111
1991 $ 13,213 $ 250 $ 1,838 $ 15,301
1990 $ 9,807 $ 57 $ 1,364 $ 11,228
1989 $ 11,356 $ 26 $ 646 $ 12,028
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Growth Opportunities on December 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 22,824 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 1,733 for
dividends and $ 7,616 for capital gain distributions. Initial
offering of Class A of Advisor Growth Opportunities took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.50% (0.65% prior to
January 1, 1996). If Class A's 12b-1 fee had been reflected, returns
prior to September 3, 1996 would have been higher.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class T of Advisor Growth Opportunities would
have grown to $ 59,699 , including the effect of Class T's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
- - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 34,680 $ 3,904 $ 21,115 $ 59,699
1997 $ 30,886 $ 2,914 $ 15,687 $ 49,487
1996 $ 26,686 $ 1,908 $ 11,926 $ 40,520
1995 $ 22,109 $ 1,151 $ 9,461 $ 32,721
1994 $ 18,007 $ 658 $ 6,503 $ 25,168
1993 $ 17,658 $ 577 $ 5,566 $ 23,801
1992 $ 15,485 $ 384 $ 3,699 $ 19,568
1991 $ 13,528 $ 256 $ 1,882 $ 15,666
1990 $ 10,041 $ 58 $ 1,397 $ 11,496
1989 $ 11,628 $ 26 $ 661 $ 12,315
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
- - CLASS T
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Growth Opportunities on December 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 22,774 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 1,558 for
dividends and $ 7,798 for capital gain distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class B of Advisor Growth Opportunities would
have grown to $ 61,263 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES
- - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 35,568 $ 4,121 $ 21,674 $ 61,263
1997 $ 31,875 $ 3,009 $ 16,190 $ 51,074
1996 $ 27,654 $ 1,977 $ 12,359 $ 41,990
1995 $ 22,911 $ 1,192 $ 9,805 $ 33,908
1994 $ 18,660 $ 681 $ 6,739 $ 26,080
1993 $ 18,298 $ 598 $ 5,768 $ 24,664
1992 $ 16,046 $ 398 $ 3,833 $ 20,277
1991 $ 14,019 $ 265 $ 1,950 $ 16,234
1990 $ 10,406 $ 59 $ 1,448 $ 11,913
1989 $ 12,049 $ 28 $ 685 $ 12,762
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
- - CLASS B
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Growth Opportunities on December 1, 1988, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 23,250 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 1,622 for dividends and $ 8,081 for capital gain
distributions. Initial offering of Class B of Advisor Growth
Opportunities took place on March 3, 1997. Class B returns prior to
March 3, 1997 are those of Class T which reflect a 12b-1 fee of 0.50%
(0.65% prior to January 1, 1996). If Class B's 12b-1 fee had been
reflected, returns prior to March 3, 1997 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class C of Advisor Growth Opportunities would
have grown to $ 61,267 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES
- - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 35,589 $ 4,007 $ 21,671 $ 61,267
1997 $ 31,888 $ 3,009 $ 16,197 $ 51,094
1996 $ 27,654 $ 1,977 $ 12,359 $ 41,990
1995 $ 22,911 $ 1,192 $ 9,805 $ 33,908
1994 $ 18,660 $ 681 $ 6,739 $ 26,080
1993 $ 18,298 $ 598 $ 5,768 $ 24,664
1992 $ 16,046 $ 398 $ 3,833 $ 20,277
1991 $ 14,019 $ 265 $ 1,950 $ 16,234
1990 $ 10,406 $ 59 $ 1,448 $ 11,913
1989 $ 12,049 $ 28 $ 685 $ 12,762
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
- - CLASS C
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Growth Opportunities on December 1, 1988, the net amount
invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 23,225 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 1,614 for dividends and $ 8,074 for capital gain
distributions. Initial offering of Class C of Advisor Growth
Opportunities took place on November 3, 1997. Class C returns prior to
November 3, 1997 through March 3, 1997 are those of Class B which
reflect a 12b-1 fee of 1.00%. Class C returns prior to March 3, 1997
are those of Class T which reflect a 12b-1 fee of 0.50 (0.65% prior to
January 1, 1996). If Class C's 12b-1 fee had been reflected, returns
prior to March 3, 1997 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Growth
Opportunities would have grown to $ 63,041 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES
- - INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 36,046 $ 4,977 $ 22,018 $ 63,041
1997 $ 32,085 $ 3,574 $ 16,316 $ 51,975
1996 $ 27,712 $ 2,246 $ 12,386 $ 42,344
1995 $ 22,991 $ 1,196 $ 9,839 $ 34,026
1994 $ 18,660 $ 681 $ 6,739 $ 26,080
1993 $ 18,298 $ 598 $ 5,768 $ 24,664
1992 $ 16,046 $ 398 $ 3,833 $ 20,277
1991 $ 14,019 $ 265 $ 1,950 $ 16,234
1990 $ 10,406 $ 59 $ 1,448 $ 11,913
1989 $ 12,049 $ 28 $ 685 $ 12,762
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH OPPORTUNITIES INDEXES
- - INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Growth Opportunities on December 1,
1988, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 23,941 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 2,035 for dividends and $ 8,081
for capital gain distributions. Initial offering of Institutional
Class of Advisor Growth Opportunities took place on July 3, 1995.
Institutional Class returns prior to July 3, 1995 are those of Class T
which reflect a 12b-1 fee of 0.65%. Returns for Institutional Class
prior to July 3, 1995 would have been higher if Class T's 12b-1 fee
had not been reflected.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class A of Advisor Growth & Income would have grown to
$ 14,524 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH & INCOME -
CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,222 $ 92 $ 210 $ 14,524
1997* $ 11,753 $ 32 $ 0 $ 11,785
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH & INCOME - INDEXES
CLASS A
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Growth & Income on December 31, 1996, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,246 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 75 for
dividends and $ 170 for capital gain distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class T of Advisor Growth & Income would have grown to
$ 14,817 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH & INCOME -
CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,543 $ 59 $ 215 $ 14,817
1997* $ 12,024 $ 22 $ 0 $ 12,046
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH & INCOME - INDEXES
CLASS T
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Growth & Income on December 31, 1996, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 10,223 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 48 for
dividends and $ 174 for capital gain distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class B of Advisor Growth & Income would have grown to
$ 14,804 , including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH & INCOME -
CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,580 $ 15 $ 209 $ 14,804
1997* $ 12,410 $ 12 $ 0 $ 12,422
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH & INCOME - INDEXES
CLASS B
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Growth & Income on December 31, 1996, the net amount invested
in Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 10,180 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 10 for
dividends and $ 170 for capital gain distributions.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Class C of Advisor Growth & Income would have grown to
$ 15,178 , including the effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH & INCOME -
CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 14,931 $ 26 $ 221 $ 15,178
1997* $ 12,409 $ 12 $ 0 $ 12,421
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH & INCOME - INDEXES
CLASS C
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Growth & Income on December 31, 1996, the net amount invested
in Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 10,200 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 20 for
dividends and $ 179 for capital gain distributions. Initial
offering of Class C of Advisor Growth & Income took place on November
3, 1997. Class C returns prior to November 3, 1997 are those of Class
B which reflect a 12b-1 fee of 1.00%.
During the period from December 31, 1996 (commencement of operations
of the fund) to November 30, 1998, a hypothetical $10,000 investment
in Institutional Class of Advisor Growth & Income would have grown to
$ 15,494 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GROWTH & INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 15,100 $ 171 $ 223 $ 15,494
1997* $ 12,470 $ 56 $ 0 $ 12,526
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GROWTH & INCOME - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living**
1998 $ 16,213 $ 14,618 $ 10,340
1997* $ 13,111 $ 12,334 $ 10,183
</TABLE>
* From December 31, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Growth & Income on December 31, 1996,
the net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 10,323 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 140 for dividends and $ 180 for capital gain
distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class A of Advisor Equity Income would have
grown to $ 38,421 , including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 23,902 $ 9,150 $ 5,369 $ 38,421
1997 $ 22,662 $ 8,339 $ 2,756 $ 33,757
1996 $ 19,342 $ 6,710 $ 1,607 $ 27,659
1995 $ 16,940 $ 5,479 $ 863 $ 23,282
1994 $ 13,552 $ 4,064 $ 368 $ 17,984
1993 $ 12,618 $ 3,562 $ 343 $ 16,523
1992 $ 10,919 $ 2,784 $ 297 $ 14,000
1991 $ 9,408 $ 1,933 $ 256 $ 11,597
1990 $ 8,083 $ 1,127 $ 220 $ 9,430
1989 $ 10,418 $ 664 $ 0 $ 11,082
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Equity Income on December 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 18,557 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,634 for
dividends and $ 2,844 for capital gain distributions. Initial
offering of Class A of Advisor Equity Income took place on September
3, 1996. Class A returns from September 3, 1996 through September 10,
1992 are those of Class T which reflect a 12b-1 fee of 0.50% (0.65%
for prior to January 1, 1996). Class A returns prior to September 10,
1992 are those of Institutional Class which has no 12b-1 fee. If Class
A's 12b-1 fee had been reflected, returns prior to September 3, 1996
through September 10, 1992 would have been higher and returns prior to
September 10, 1992 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class T of Advisor Equity Income would have
grown to $ 39,326 , including the effect of Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 24,647 $ 9,177 $ 5,502 $ 39,326
1997 $ 23,343 $ 8,431 $ 2,834 $ 34,608
1996 $ 19,848 $ 6,844 $ 1,649 $ 28,341
1995 $ 17,344 $ 5,611 $ 883 $ 23,838
1994 $ 13,875 $ 4,161 $ 377 $ 18,413
1993 $ 12,919 $ 3,648 $ 351 $ 16,918
1992 $ 11,180 $ 2,850 $ 304 $ 14,334
1991 $ 9,633 $ 1,979 $ 262 $ 11,874
1990 $ 8,276 $ 1,155 $ 225 $ 9,656
1989 $ 10,667 $ 680 $ 0 $ 11,347
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Equity Income on December 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 18,538 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,582 for
dividends and $ 2,912 for capital gain distributions. Initial
offering of Class T of Advisor Equity Income took place on September
10, 1992. Class T returns prior to September 10, 1992 are those of
Institutional Class which has no 12b-1 fee. If Class T's 12b-1 fee had
been reflected, returns prior to September 10, 1992 would have been
lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class B of Advisor Equity Income would have
grown to $ 39,937 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 25,405 $ 8,880 $ 5,652 $ 39,937
1997 $ 24,081 $ 8,319 $ 2,922 $ 35,322
1996 $ 20,477 $ 6,887 $ 1,702 $ 29,066
1995 $ 17,928 $ 5,746 $ 914 $ 24,588
1994 $ 14,360 $ 4,318 $ 390 $ 19,068
1993 $ 13,387 $ 3,780 $ 364 $ 17,531
1992 $ 11,586 $ 2,953 $ 315 $ 14,854
1991 $ 9,982 $ 2,051 $ 271 $ 12,304
1990 $ 8,577 $ 1,196 $ 233 $ 10,006
1989 $ 11,054 $ 704 $ 0 $ 11,758
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Equity Income on December 1, 1988, the net amount invested in
Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 18,336 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,387 for
dividends and $ 3,018 for capital gain distributions. Initial
offering of Class B of Advisor Equity Income took place on June 30,
1994. Class B returns prior to June 30, 1994 through September 10,
1992 are those of Class T which reflect a 12b-1 fee of 0.65%. Class B
returns prior to September 10, 1992 are those of Institutional Class
which has no 12b-1 fee. If Class B's 12b-1 fee had been reflected,
returns prior to June 30, 1994 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class C of Advisor Equity Income would have
grown to $ 39,892 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 25,337 $ 8,926 $ 5,629 $ 39,892
1997 $ 24,089 $ 8,322 $ 2,923 $ 35,334
1996 $ 20,477 $ 6,887 $ 1,702 $ 29,066
1995 $ 17,928 $ 5,746 $ 914 $ 24,588
1994 $ 14,360 $ 4,318 $ 390 $ 19,068
1993 $ 13,387 $ 3,780 $ 364 $ 17,531
1992 $ 11,586 $ 2,953 $ 315 $ 14,854
1991 $ 9,982 $ 2,051 $ 271 $ 12,304
1990 $ 8,577 $ 1,196 $ 233 $ 10,006
1989 $ 11,054 $ 704 $ 0 $ 11,758
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY INCOME - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Equity Income on December 1, 1988, the net amount invested in
Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 18,395 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,432 for
dividends and $ 3,012 for capital gain distributions. Initial
offering of Class C of Advisor Equity Income took place on November 3,
1997. Class C returns prior to November 3, 1997 through June 30, 1994
are those of Class B which reflect a 12b-1 fee of 1.00%. Class C
returns prior to June 30, 1994 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.65%. Class C returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class C's 12b-1 fee had been reflected, returns prior to June
30, 1994 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Equity Income
would have grown to $ 42,510 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EQUITY INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 25,757 $ 10,914 $ 5,839 $ 42,510
1997 $ 24,387 $ 9,837 $ 2,990 $ 37,214
1996 $ 20,721 $ 7,833 $ 1,733 $ 30,287
1995 $ 18,099 $ 6,312 $ 925 $ 25,336
1994 $ 14,477 $ 4,554 $ 394 $ 19,425
1993 $ 13,450 $ 3,873 $ 366 $ 17,689
1992 $ 11,604 $ 2,958 $ 315 $ 14,877
1991 $ 9,982 $ 2,051 $ 271 $ 12,304
1990 $ 8,577 $ 1,196 $ 233 $ 10,006
1989 $ 11,054 $ 704 $ 0 $ 11,758
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EQUITY INCOME - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Equity Income on December 1, 1988, the
net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 19,892 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 4,342 for dividends and $ 3,018 for capital gain
distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class A of Advisor Balanced would have grown to
$ 32,478 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR BALANCED - CLASS A
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 17,189 $ 9,489 $ 5,867 $ 32,478
1997 $ 16,511 $ 8,240 $ 3,694 $ 28,445
1996 $ 14,533 $ 6,570 $ 3,088 $ 24,191
1995 $ 13,527 $ 5,249 $ 2,833 $ 21,609
1994 $ 12,443 $ 4,173 $ 2,606 $ 19,222
1993 $ 13,501 $ 4,058 $ 2,202 $ 19,761
1992 $ 12,469 $ 3,075 $ 1,296 $ 16,840
1991 $ 11,867 $ 2,411 $ 545 $ 14,823
1990 $ 9,356 $ 1,407 $ 429 $ 11,192
1989 $ 11,205 $ 563 $ 0 $ 11,768
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR BALANCED - CLASS A INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Balanced on November 1, 198 8 , assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,425 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 21,335 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 4,910 for
dividends and $ 3,104 for capital gain distributions. Initial
offering of Class A of Advisor Balanced took place on September 3,
1996. Class A returns prior to September 3, 1996 are those of Class T
which reflect a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996).
If Class A's 12b-1 fee had been reflected, returns prior to September
3, 1996 would have been higher.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class T of Advisor Balanced would have grown to
$ 33,330 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR BALANCED - CLASS T
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 17,574 $ 9,735 $ 6,021 $ 33,330
1997 $ 16,932 $ 8,495 $ 3,787 $ 29,214
1996 $ 14,906 $ 6,707 $ 3,167 $ 24,780
1995 $ 13,850 $ 5,374 $ 2,901 $ 22,125
1994 $ 12,740 $ 4,273 $ 2,668 $ 19,681
1993 $ 13,823 $ 4,155 $ 2,255 $ 20,233
1992 $ 12,767 $ 3,148 $ 1,327 $ 17,242
1991 $ 12,151 $ 2,468 $ 558 $ 15,177
1990 $ 9,580 $ 1,439 $ 440 $ 11,459
1989 $ 11,473 $ 576 $ 0 $ 12,049
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR BALANCED - CLASS T INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Balanced on November 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 21,605 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 5,028 for
dividends and $ 3,179 for capital gain distributions.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class B of Advisor Balanced would have grown to
$ 34,094 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR BALANCED - CLASS B
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 18,143 $ 9,737 $ 6,214 $ 34,094
1997 $ 17,485 $ 8,659 $ 3,911 $ 30,055
1996 $ 15,447 $ 6,950 $ 3,282 $ 25,679
1995 $ 14,352 $ 5,569 $ 3,006 $ 22,927
1994 $ 13,203 $ 4,427 $ 2,765 $ 20,395
1993 $ 14,325 $ 4,305 $ 2,337 $ 20,967
1992 $ 13,230 $ 3,262 $ 1,375 $ 17,867
1991 $ 12,591 $ 2,558 $ 578 $ 15,727
1990 $ 9,927 $ 1,492 $ 456 $ 11,875
1989 $ 11,889 $ 597 $ 0 $ 12,486
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR BALANCED - CLASS B INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Balanced on November 1, 1988, the net amount invested in Class
B shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 21,726 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 5,046 for
dividends and $ 3,295 for capital gain distributions. Initial
offering of Class B of Advisor Balanced took place on December 31,
1996. Class B returns prior to December 31, 1996 are those of Class T
which reflect a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996).
If Class B's 12b-1 fee had been reflected, returns prior to December
31, 1996 would have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Class C of Advisor Balanced would have grown to
$ 34,101 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR BALANCED - CLASS C
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 18,094 $ 9,815 $ 6,192 $ 34,101
1997 $ 17,493 $ 8,663 $ 3,913 $ 30,070
1996 $ 15,447 $ 6,950 $ 3,282 $ 25,679
1995 $ 14,352 $ 5,569 $ 3,006 $ 22,927
1994 $ 13,203 $ 4,427 $ 2,765 $ 20,395
1993 $ 14,325 $ 4,305 $ 2,337 $ 20,967
1992 $ 13,230 $ 3,262 $ 1,375 $ 17,867
1991 $ 12,591 $ 2,558 $ 578 $ 15,727
1990 $ 9,927 $ 1,492 $ 456 $ 11,875
1989 $ 11,889 $ 597 $ 0 $ 12,486
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR BALANCED - CLASS C INDEXES
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Balanced on November 1, 1988, the net amount invested in Class
C shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 21,814 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 5,100 for
dividends and $ 3,291 for capital gain distributions. Initial
offering of Class C of Advisor Balanced took place on November 3,
1997. Class C returns prior to November 3, 1997 through December 31,
1996 are those of Class B which reflect a 12b-1 fee of 1.00%. Class C
returns prior to December 31, 1996 are those of Class T which reflect
a 12b-1 fee of 0.50% (0.65% prior to January 1, 1996). If Class C's
12b-1 fee had been reflected, returns prior to December 31, 1996 would
have been lower.
During the 10-year period ended November 30, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Balanced would
have grown to $ 35,241 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR BALANCED -
INSTITUTIONAL CLASS
Fiscal Year Ended
November 30 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 18,276 $ 10,684 $ 6,281 $ 35,241
1997 $ 17,609 $ 9,177 $ 3,940 $ 30,726
1996 $ 15,493 $ 7,149 $ 3,292 $ 25,934
1995 $ 14,434 $ 5,646 $ 3,023 $ 23,103
1994 $ 13,203 $ 4,427 $ 2,765 $ 20,395
1993 $ 14,325 $ 4,305 $ 2,337 $ 20,967
1992 $ 13,230 $ 3,262 $ 1,375 $ 17,867
1991 $ 12,591 $ 2,558 $ 578 $ 15,727
1990 $ 9,927 $ 1,492 $ 456 $ 11,875
1989 $ 11,889 $ 597 $ 0 $ 12,486
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR BALANCED - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended November 30 S&P 500 DJIA Cost of Living
1998 $ 55,774 $ 56,818 $ 13,633
1997 $ 45,103 $ 47,940 $ 13,425
1996 $ 35,095 $ 39,245 $ 13,184
1995 $ 27,448 $ 29,892 $ 12,768
1994 $ 20,038 $ 21,491 $ 12,461
1993 $ 19,831 $ 20,603 $ 12,120
1992 $ 18,012 $ 17,962 $ 11,804
1991 $ 15,200 $ 15,275 $ 11,455
1990 $ 12,629 $ 13,059 $ 11,122
1989 $ 13,085 $ 13,282 $ 10,466
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Balanced on November 1, 1988, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 22,546 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 5,484 for dividends and $ 3,294 for capital gain
distributions. Initial offering of Institutional Class of Advisor
Balanced took place on July 3, 1995. Institutional Class returns prior
to July 3, 1995 are those of Class T which reflect a 12b-1 fee of
0.65%. Returns for Institutional Class prior to July 3, 1995 would
have been higher if Class T's 12b-1 fee had not been reflected.
During the period from March 10, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class A of Advisor Emerging Markets Income would have grown to
$ 13,345 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - CLASS A
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 7,410 $ 4,051 $ 1,884 $ 13,345
1997 $ 10,592 $ 3,810 $ 2,693 $ 17,095
1996 $ 11,163 $ 2,722 $ 787 $ 14,672
1995 $ 8,839 $ 1,374 $ 229 $ 10,442
1994* $ 9,068 $ 457 $ 235 $ 9,760
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING MARKETS INDEXES
INCOME - CLASS A
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,398 $ 26,546 $ 11,172
1997 $ 22,864 $ 22,483 $ 10,995
1996 $ 17,144 $ 18,007 $ 10,811
1995 $ 13,943 $ 13,991 $ 10,464
1994* $ 10,134 $ 10,233 $ 10,204
</TABLE>
* From March 10, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Emerging Markets Income on March 10, 1994, assuming the
maximum sales charge had been in effect, the net amount invested in
Class A shares was $ 9,425 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 17,858 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,829 for
dividends and $ 2,029 for capital gain distributions. Initial
offering of Class A for Advisor Emerging Markets Income took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.25%. If Class A's
12b-1 fee had been reflected, returns prior to September 3, 1996 would
have been higher.
During the period from March 10, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class T of Advisor Emerging Markets Income would have grown to
$ 13,484 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - CLASS T
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 7,491 $ 4,083 $ 1,910 $ 13,484
1997 $ 10,721 $ 3,853 $ 2,728 $ 17,302
1996 $ 11,300 $ 2,757 $ 797 $ 14,854
1995 $ 8,955 $ 1,392 $ 232 $ 10,579
1994* $ 9,187 $ 463 $ 238 $ 9,888
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING MARKETS INDEXES
INCOME - CLASS T
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,398 $ 26,546 $ 11,172
1997 $ 22,864 $ 22,483 $ 10,995
1996 $ 17,144 $ 18,007 $ 10,811
1995 $ 13,943 $ 13,991 $ 10,464
1994* $ 10,134 $ 10,233 $ 10,204
</TABLE>
* From March 10, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Emerging Markets Income on March 10, 1994, assuming the
maximum sales charge had been in effect, the net amount invested in
Class T shares was $ 9,650 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 17,935 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,865 for
dividends and $ 2,055 for capital gain distributions.
During the period from March 10, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class B of Advisor Emerging Markets Income would have grown to
$13,395, including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - CLASS B
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 7,637 $ 3,822 $ 1,936 $ 13,395
1997 $ 11,160 $ 3,594 $ 2,767 $ 17,521
1996 $ 11,750 $ 2,577 $ 816 $ 15,143
1995 $ 9,300 $ 1,306 $ 240 $ 10,846
1994* $ 9,520 $ 430 $ 246 $ 10,196
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING MARKETS INDEXES
INCOME - CLASS B
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,398 $ 26,546 $ 11,172
1997 $ 22,864 $ 22,483 $ 10,995
1996 $ 17,144 $ 18,007 $ 10,811
1995 $ 13,943 $ 13,991 $ 10,464
1994* $ 10,134 $ 10,233 $ 10,204
</TABLE>
* From March 10, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Emerging Markets Income on March 10, 1994, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 17,622 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 3,668 for dividends and $ 2,130 for capital gain
distributions. Initial offering of Class B of Advisor Emerging Markets
Income took place on June 30, 1994. Class B returns prior to June 30,
1994 are those of Class T which reflect a 12b-1 fee of 0.25%. If Class
B's 12b-1 fee had been reflected, returns prior to June 30, 1994 would
have been lower.
During the period from March 10, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class C of Advisor Advisor Emerging Markets Income would have grown to
$ 13,574.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - CLASS C
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 7,816 $ 3,815 $ 1,943 $ 13,574
1997 $ 11,146 $ 3,590 $ 2,771 $ 17,507
1996 $ 11,750 $ 2,577 $ 816 $ 15,143
1995 $ 9,300 $ 1,306 $ 240 $ 10,846
1994* $ 9,520 $ 430 $ 246 $ 10,196
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING MARKETS INDEXES
INCOME - CLASS C
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,398 $ 26,546 $ 11,172
1997 $ 22,864 $ 22,483 $ 10,995
1996 $ 17,144 $ 18,007 $ 10,811
1995 $ 13,943 $ 13,991 $ 10,464
1994* $ 10,134 $ 10,233 $ 10,204
</TABLE>
* From March 10, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Emerging Markets Income on March 10, 1994, the net amount
invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 17,613 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 3,658 for dividends and $ 2,134 for capital gain
distributions. Initial offering of Class C of Advisor Emerging Markets
Income took place on November 3, 1997. Class C returns prior to
November 3, 1997 through June 30, 1994 are those of Class B which
reflect a 12b-1 fee of 0.90% (1.00% prior to January 1, 1996). Class C
returns prior to June 30, 1994 are those of Class T which reflect a
12b-1 fee of 0.25%. If Class C's 12b-1 fee had been reflected, returns
prior to November 3, 1997 through December 31, 1995 and prior to June
30, 1994 would have been lower.
During the period from March 10, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Institutional Class of Advisor Emerging Markets Income would have
grown to $ 14,070 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING MARKETS
INCOME - INSTITUTIONAL CLASS
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 7,740 $ 4,341 $ 1,989 $ 14,070
1997 $ 11,060 $ 4,079 $ 2,842 $ 17,981
1996 $ 11,650 $ 2,912 $ 827 $ 15,389
1995 $ 9,280 $ 1,455 $ 241 $ 10,976
1994* $ 9,520 $ 480 $ 247 $ 10,247
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING MARKETS INDEXES
INCOME - INSTITUTIONAL CLASS
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,398 $ 26,546 $ 11,172
1997 $ 22,864 $ 22,483 $ 10,995
1996 $ 17,144 $ 18,007 $ 10,811
1995 $ 13,943 $ 13,991 $ 10,464
1994* $ 10,134 $ 10,233 $ 10,204
</TABLE>
* From March 10, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Emerging Markets Income on March 10,
1994, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 18,393 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 4,096 for dividends and $ 2,130
for capital gain distributions. Initial offering of Institutional
Class of Advisor Emerging Markets Income took place on July 3, 1995.
Institutional Class returns prior to July 3, 1995 are those of Class T
which reflect a 12b-1 fee of 0.25%. If Class T's 12b-1 fee had not
been reflected, returns prior to July 3, 1995 for Institutional Class
would have been higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor High Yield would have grown
to $ 30,630 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,713 $ 18,343 $ 1,574 $ 30,630
1997 $ 12,491 $ 18,523 $ 1,076 $ 32,090
1996 $ 11,882 $ 15,091 $ 887 $ 27,860
1995 $ 11,505 $ 12,343 $ 859 $ 24,707
1994 $ 10,839 $ 9,826 $ 809 $ 21,474
1993 $ 11,602 $ 8,916 $ 403 $ 20,921
1992 $ 10,694 $ 6,673 $ 0 $ 17,367
1991 $ 9,776 $ 4,463 $ 0 $ 14,239
1990 $ 7,873 $ 2,322 $ 0 $ 10,195
1989 $ 8,665 $ 1,178 $ 0 $ 9,843
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS A INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor High Yield on November 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class A shares
was $ 9,525 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 30,060 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 10,199 for
dividends and $ 821 for capital gain distributions. Initial
offering of Class A of Advisor High Yield took place on September 3,
1996. Class A returns prior to September 3, 1996 are those of Class T
which reflect a 12b-1 fee of 0.25%. If Class A's 12b-1 fee had been
reflected, returns prior to September 3, 1996 would have been higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor High Yield would have grown
to $ 31,084 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,873 $ 18,613 $ 1,598 $ 31,084
1997 $ 12,664 $ 18,808 $ 1,091 $ 32,564
1996 $ 12,048 $ 15,318 $ 899 $ 28,265
1995 $ 11,656 $ 12,505 $ 870 $ 25,031
1994 $ 10,981 $ 9,955 $ 819 $ 21,756
1993 $ 11,754 $ 9,033 $ 408 $ 21,196
1992 $ 10,834 $ 6,760 $ 0 $ 17,594
1991 $ 9,904 $ 4,522 $ 0 $ 14,426
1990 $ 7,976 $ 2,352 $ 0 $ 10,329
1989 $ 8,779 $ 1,193 $ 0 $ 9,972
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS T INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor High Yield on November 1, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in Class T shares
was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 30,323 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 10,333 for
dividends and $ 832 for capital gain distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor High Yield would have grown
to $ 31,142.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,227 $ 18,282 $ 1,633 $ 31,142
1997 $ 13,073 $ 18,620 $ 1,124 $ 32,817
1996 $ 12,454 $ 15,317 $ 929 $ 28,700
1995 $ 12,059 $ 12,643 $ 900 $ 25,602
1994 $ 11,369 $ 10,217 $ 848 $ 22,434
1993 $ 12,181 $ 9,360 $ 423 $ 21,964
1992 $ 11,227 $ 7,006 $ 0 $ 18,233
1991 $ 10,264 $ 4,686 $ 0 $ 14,950
1990 $ 8,266 $ 2,437 $ 0 $ 10,703
1989 $ 9,097 $ 1,237 $ 0 $ 10,334
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS B INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor High Yield on November 1, 1988, the net amount invested in
Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 29,995 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 10,329 for
dividends and $ 862 for capital gain distributions. Initial
offering of Class B of Advisor High Yield took place on June 30, 1994.
Class B returns prior to June 30, 1994 are those of Class T which
reflect a 12b-1 fee of 0.25%. If Class B's 12b-1 fee had been
reflected, returns prior to June 30, 1994 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor High Yield would have grown
to $ 31,072.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,221 $ 18,220 $ 1,631 $ 31,072
1997 $ 13,073 $ 18,620 $ 1,124 $ 32,817
1996 $ 12,454 $ 15,317 $ 929 $ 28,700
1995 $ 12,059 $ 12,643 $ 900 $ 25,602
1994 $ 11,369 $ 10,217 $ 848 $ 22,434
1993 $ 12,181 $ 9,360 $ 423 $ 21,964
1992 $ 11,227 $ 7,006 $ 0 $ 18,233
1991 $ 10,264 $ 4,686 $ 0 $ 14,950
1990 $ 8,266 $ 2,437 $ 0 $ 10,703
1989 $ 9,097 $ 1,237 $ 0 $ 10,334
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS C INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor High Yield on November 1, 1988, the net amount invested in
Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 29,932. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $10,307 for
dividends and $861 for capital gain distributions. Initial offering of
Cla ss C of Advisor High Yield took place on November 3, 1997.
Class C returns prior to November 3, 1997 through June 30, 1994 are
those of Class B which reflect a 12b-1 fee of 0.90% (1.00% prior to
January 1, 1996). Class C returns prior to June 30, 1994 are those of
Class T which reflect a 12b-1 fee of 0.25%. If Class C's 12b-1 fee had
been reflected, returns prior to November 3, 1997 through January 1,
1996 and prior to June 30, 1994 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor High Yield would
have grown to $ 32,196 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,055 $ 19,492 $ 1,649 $ 32,196
1997 $ 12,890 $ 19,606 $ 1,115 $ 33,611
1996 $ 12,292 $ 15,913 $ 917 $ 29,122
1995 $ 11,927 $ 12,997 $ 890 $ 25,814
1994 $ 11,379 $ 10,317 $ 849 $ 22,545
1993 $ 12,181 $ 9,360 $ 423 $ 21,964
1992 $ 11,227 $ 7,006 $ 0 $ 18,233
1991 $ 10,264 $ 4,686 $ 0 $ 14,950
1990 $ 8,266 $ 2,437 $ 0 $ 10,703
1989 $ 9,097 $ 1,237 $ 0 $ 10,334
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR HIGH YIELD - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor High Yield on November 1, 1988, the net
amount invested in Institutional Class shares was $10,000. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 31,571 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 10,878 for dividends and $ 862 for capital gain
distributions. Initial offering of Institutional Class of Advisor High
Yield took place on July 3, 1995. Institutional Class returns prior to
July 3, 1995 are those of Class T which reflect a 12b-1 fee of 0.25%.
If Class T's 12b-1 fee had not been reflected, returns prior to July
3, 1995 for Institutional Class would have been higher.
During the period from October 31, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class A of Advisor Strategic Income would have grown to
$ 14,698 , including the effect of Class A's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC INCOME -
CLASS A
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,058 $ 3,582 $ 1,058 $ 14,698
1997 $ 10,563 $ 2,768 $ 1,025 $ 14,356
1996 $ 10,716 $ 1,846 $ 579 $ 13,141
1995 $ 10,478 $ 928 $ 237 $ 11,643
1994* $ 9,449 $ 93 $ 0 $ 9,542
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INCOME - INDEXES
CLASS A
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 28,366 $ 25,570 $ 10,963
1997 $ 22,061 $ 21,656 $ 10,789
1996 $ 16,542 $ 17,344 $ 10,609
1995 $ 13,453 $ 13,476 $ 10,268
1994* $ 9,779 $ 9,857 $ 10,013
</TABLE>
* From October 31, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Strategic Income on October 31, 1994, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,525 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 14,830 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,072 for
dividends and $ 914 for capital gain distributions. Initial
offering of Class A of Advisor Strategic Income took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.25%. If Class A's
12b-1 fee had been reflected, returns prior to September 3, 1996 would
have been higher.
During the period from October 31, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class T of Advisor Strategic Income would have grown to
$ 14,888 , including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC INCOME -
CLASS T
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,181 $ 3,636 $ 1,071 $ 14,888
1997 $ 10,702 $ 2,817 $ 1,039 $ 14,558
1996 $ 10,856 $ 1,874 $ 586 $ 13,316
1995 $ 10,615 $ 941 $ 240 $ 11,796
1994* $ 9,573 $ 94 $ 0 $ 9,667
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INCOME - INDEXES
CLASS T
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 28,366 $ 25,570 $ 10,963
1997 $ 22,061 $ 21,656 $ 10,789
1996 $ 16,542 $ 17,344 $ 10,609
1995 $ 13,453 $ 13,476 $ 10,268
1994* $ 9,779 $ 9,857 $ 10,013
</TABLE>
* From October 31, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Strategic Income on October 31, 1994, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 14,903 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 3,120 for
dividends and $ 926 for capital gain distributions.
During the period from October 31, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class B of Advisor Strategic Income would have grown to
$ 14,819 , including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC INCOME -
CLASS B
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,370 $ 3,356 $ 1,093 $ 14,819
1997 $ 11,100 $ 2,610 $ 1,060 $ 14,770
1996 $ 11,260 $ 1,739 $ 601 $ 13,600
1995 $ 11,010 $ 871 $ 247 $ 12,128
1994* $ 9,910 $ 84 $ 0 $ 9,994
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INCOME - INDEXES
CLASS B
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 28,366 $ 25,570 $ 10,963
1997 $ 22,061 $ 21,656 $ 10,789
1996 $ 16,542 $ 17,344 $ 10,609
1995 $ 13,453 $ 13,476 $ 10,268
1994* $ 9,779 $ 9,857 $ 10,013
</TABLE>
* From October 31, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Strategic Income on October 31, 1994, the net amount invested
in Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 14,632 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 2,921 for
dividends and $ 960 for capital gain distributions.
During the period from October 31, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Class C of Advisor Strategic Income would have grown to
$ 14,970.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC INCOME -
CLASS C
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,569 $ 3,307 $ 1,094 $ 14,970
1997 $ 11,099 $ 2,603 $ 1,060 $ 14,762
1996 $ 11,260 $ 1,739 $ 601 $ 13,600
1995 $ 11,010 $ 871 $ 247 $ 12,128
1994* $ 9,910 $ 84 $ 0 $ 9,994
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INCOME - INDEXES
CLASS C
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 28,366 $ 25,570 $ 10,963
1997 $ 22,061 $ 21,656 $ 10,789
1996 $ 16,542 $ 17,344 $ 10,609
1995 $ 13,453 $ 13,476 $ 10,268
1994* $ 9,779 $ 9,857 $ 10,013
</TABLE>
* From October 31, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Strategic Income on October 31, 1994, the net amount invested
in Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 14,583 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 2,886 for
dividends and $ 961 for capital gain distributions. Initial
offering of Class C of Advisor Strategic Income took place on November
3, 1997. Class C returns prior to November 3, 1997 are those of Class
B which reflect a 12b-1 fee of 0.90% (1.00% prior to January 1, 1996).
If Class C's 12b-1 fees had been reflected, returns prior to November
3, 1997 through January 1, 1996 would have been lower.
During the period from October 31, 1994 (commencement of operations of
the fund) to December 31, 1998, a hypothetical $10,000 investment in
Institutional Class of Advisor Strategic Income would have grown to
$ 15,535 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR STRATEGIC INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,610 $ 3,812 $ 1,113 $ 15,535
1997 $ 11,140 $ 2,941 $ 1,077 $ 15,158
1996 $ 11,300 $ 1,952 $ 609 $ 13,861
1995 $ 11,030 $ 983 $ 249 $ 12,262
1994* $ 9,920 $ 97 $ 0 $ 10,017
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR STRATEGIC INCOME - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 28,366 $ 25,570 $ 10,963
1997 $ 22,061 $ 21,656 $ 10,789
1996 $ 16,542 $ 17,344 $ 10,609
1995 $ 13,453 $ 13,476 $ 10,268
1994* $ 9,779 $ 9,857 $ 10,013
</TABLE>
* From October 31, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Strategic Income on October 31, 1994,
the net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 15,121 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 3,262 for dividends and $ 960 for capital gain
distributions. Initial offering of Institutional Class of Advisor
Strategic Income took place on July 3, 1995. Institutional Class
returns prior to July 3, 1995 are those of Class T which reflect a
12b-1 fee of 0.25%. If Class T's 12b-1 fee had not been reflected,
returns prior to July 3, 1995 for Institutional Class would have been
higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Mortgage Securities would
have grown to $ 21,428 , including the effect of Class A's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES -
CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,336 $ 10,370 $ 722 $ 21,428
1997 $ 10,393 $ 9,218 $ 671 $ 20,282
1996 $ 10,242 $ 7,894 $ 517 $ 18,653
1995 $ 10,374 $ 6,817 $ 284 $ 17,475
1994 $ 9,732 $ 5,278 $ 163 $ 15,173
1993 $ 10,157 $ 4,638 $ 68 $ 14,863
1992 $ 10,072 $ 3,714 $ 0 $ 13,786
1991 $ 10,157 $ 2,817 $ 0 $ 12,974
1990 $ 9,553 $ 1,714 $ 0 $ 11,267
1989 $ 9,600 $ 840 $ 0 $ 10,440
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Mortgage Securities on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,525 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,780 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,888 for
dividends and $ 415 for capital gain distributions. Initial
offering of Class A of Advisor Mortgage Securities took place on March
3, 1997. Class A returns prior to March 3, 1997 are those of Initial
Class which has no 12b-1 fee. If Class A's 12b-1 fee had been
reflected, returns prior to March 3, 1997 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Mortgage Securities would
have grown to $ 21,686 , including the effect of Class T's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES -
CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,472 $ 10,482 $ 732 $ 21,686
1997 $ 10,529 $ 9,328 $ 680 $ 20,537
1996 $ 10,376 $ 7,999 $ 523 $ 18,898
1995 $ 10,510 $ 6,908 $ 287 $ 17,705
1994 $ 9,860 $ 5,347 $ 165 $ 15,372
1993 $ 10,290 $ 4,699 $ 69 $ 15,058
1992 $ 10,204 $ 3,763 $ 0 $ 13,967
1991 $ 10,290 $ 2,854 $ 0 $ 13,144
1990 $ 9,679 $ 1,736 $ 0 $ 11,415
1989 $ 9,726 $ 851 $ 0 $ 10,577
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Mortgage Securities on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,898 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,967 for
dividends and $ 420 for capital gain distributions. Initial
offering of Class T of Advisor Mortgage Securities took place on March
3, 1997. Class T returns prior to March 3, 1997 are those of Initial
Class which has no 12b-1 fee. If Class T's 12b-1 fee had been
reflected, returns prior to March 3, 1997 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Mortgage Securities would
have grown to $ 22,209.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES -
CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,842 $ 10,610 $ 757 $ 22,209
1997 $ 10,911 $ 9,573 $ 704 $ 21,188
1996 $ 10,752 $ 8,289 $ 542 $ 19,583
1995 $ 10,891 $ 7,158 $ 298 $ 18,347
1994 $ 10,218 $ 5,540 $ 171 $ 15,929
1993 $ 10,663 $ 4,870 $ 71 $ 15,604
1992 $ 10,574 $ 3,900 $ 0 $ 14,474
1991 $ 10,663 $ 2,958 $ 0 $ 13,621
1990 $ 10,030 $ 1,799 $ 0 $ 11,829
1989 $ 10,079 $ 881 $ 0 $ 10,960
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,0000 in Class B
of Advisor Mortgage Securities on November 1, 1988, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 21,048 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 7,100 for dividends and $ 436 for capital gain
distributions. Initial offering of Class B of Advisor Mortgage
Securities took place on March 3, 1997. Class B returns prior to March
3, 1997 are those of Initial Class which has no 12b-1 fee. If Class
B's 12b-1 fees had been reflected, returns prior to March 3, 1997
would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Mortgage
Securities would have grown to $ 22,547 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,842 $ 10,947 $ 758 $ 22,547
1997 $ 10,901 $ 9,692 $ 704 $ 21,297
1996 $ 10,752 $ 8,289 $ 542 $ 19,583
1995 $ 10,891 $ 7,158 $ 298 $ 18,347
1994 $ 10,218 $ 5,540 $ 171 $ 15,929
1993 $ 10,663 $ 4,870 $ 71 $ 15,604
1992 $ 10,574 $ 3,900 $ 0 $ 14,474
1991 $ 10,663 $ 2,958 $ 0 $ 13,621
1990 $ 10,030 $ 1,799 $ 0 $ 11,829
1989 $ 10,079 $ 881 $ 0 $ 10,960
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Mortgage Securities on November 1,
1988, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 21,386 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 7,265 for dividends and $ 436 for
capital gain distributions. Initial offering of Institutional Class of
Advisor Mortgage Securities took place on March 3, 1997. Returns prior
to March 3, 1997 are those of Initial Class which has no 12b-1 fee.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Initial Class of Advisor Mortgage Securities
would have grown to $ 22,596 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES -
INITIAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,861 $ 10,976 $ 759 $ 22,596
1997 $ 10,911 $ 9,704 $ 704 $ 21,319
1996 $ 10,752 $ 8,289 $ 542 $ 19,583
1995 $ 10,891 $ 7,158 $ 298 $ 18,347
1994 $ 10,218 $ 5,540 $ 171 $ 15,929
1993 $ 10,663 $ 4,870 $ 71 $ 15,604
1992 $ 10,574 $ 3,900 $ 0 $ 14,474
1991 $ 10,663 $ 2,958 $ 0 $ 13,621
1990 $ 10,030 $ 1,799 $ 0 $ 11,829
1989 $ 10,079 $ 881 $ 0 $ 10,960
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
INITIAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Initial
Class of Advisor Mortgage Securities on November 1, 1988, the net
amount invested in Initial Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 21,397 . If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 7,270 for dividends and $ 436 for capital gain
distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Government Investment would
have grown to $ 20,562 , including the effect of Class A's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT
- - CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,307 $ 9,731 $ 524 $ 20,562
1997 $ 9,947 $ 8,284 $ 506 $ 18,737
1996 $ 9,762 $ 7,076 $ 497 $ 17,335
1995 $ 9,947 $ 6,152 $ 506 $ 16,605
1994 $ 9,216 $ 4,765 $ 469 $ 14,450
1993 $ 10,430 $ 4,527 $ 297 $ 15,254
1992 $ 10,008 $ 3,547 $ 0 $ 13,555
1991 $ 9,864 $ 2,631 $ 0 $ 12,495
1990 $ 9,412 $ 1,680 $ 0 $ 11,092
1989 $ 9,576 $ 841 $ 0 $ 10,417
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT INDEXES
- - CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Government Investment on November 1, 1988, assuming the
maximum sales charge had been in effect, the net amount invested in
Class A shares was $ 9,525 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 19,703 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,378 for
dividends and $ 360 for capital gain distributions. Initial
offering of Class A for Advisor Government Investment took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.25%. If Class A's
12b-1 fee had been reflected, returns prior to September 3, 1996 would
have been higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Government Investment would
have grown to $ 20,773 , including the effect of Class T's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT
- - CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,442 $ 9,800 $ 531 $ 20,773
1997 $ 10,077 $ 8,370 $ 513 $ 18,960
1996 $ 9,890 $ 7,167 $ 503 $ 17,560
1995 $ 10,077 $ 6,233 $ 513 $ 16,823
1994 $ 9,337 $ 4,828 $ 475 $ 14,640
1993 $ 10,567 $ 4,587 $ 300 $ 15,454
1992 $ 10,140 $ 3,593 $ 0 $ 13,733
1991 $ 9,994 $ 2,665 $ 0 $ 12,659
1990 $ 9,535 $ 1,703 $ 0 $ 11,238
1989 $ 9,702 $ 852 $ 0 $ 10,554
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT INDEXES
- - CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Government Investment on November 1, 1988, assuming the
maximum sales charge had been in effect, the net amount invested in
Class T shares was $ 9,650 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 19,774 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,434 for
dividends and $ 365 for capital gain distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Government Investment would
have grown to $ 20,876.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT
- - CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,810 $ 9,516 $ 550 $ 20,876
1997 $ 10,432 $ 8,212 $ 531 $ 19,175
1996 $ 10,248 $ 7,119 $ 521 $ 17,888
1995 $ 10,443 $ 6,277 $ 531 $ 17,251
1994 $ 9,665 $ 4,951 $ 492 $ 15,108
1993 $ 10,950 $ 4,754 $ 311 $ 16,015
1992 $ 10,508 $ 3,723 $ 0 $ 14,231
1991 $ 10,356 $ 2,762 $ 0 $ 13,118
1990 $ 9,881 $ 1,764 $ 0 $ 11,645
1989 $ 10,054 $ 883 $ 0 $ 10,937
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT INDEXES
- - CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Government Investment on November 1, 1988, the net amount
invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 19,529 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 6,360 for dividends and $ 378 for capital gain
distributions. Initial offering of Class B of Advisor Government
Investment took place on June 30, 1994. Class B returns prior to June
30, 1994 are those of Class T which reflect a 12b-1 fee of 0.25%. If
Class B's 12b-1 fee had been reflected, returns prior to June 30, 1994
would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor Government Investment would
have grown to $ 20,848.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT
- - CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,810 $ 9,488 $ 550 $ 20,848
1997 $ 10,432 $ 8,212 $ 531 $ 19,175
1996 $ 10,248 $ 7,119 $ 521 $ 17,888
1995 $ 10,443 $ 6,277 $ 531 $ 17,251
1994 $ 9,665 $ 4,951 $ 492 $ 15,108
1993 $ 10,950 $ 4,754 $ 311 $ 16,015
1992 $ 10,508 $ 3,723 $ 0 $ 14,231
1991 $ 10,356 $ 2,762 $ 0 $ 13,118
1990 $ 9,881 $ 1,764 $ 0 $ 11,645
1989 $ 10,054 $ 883 $ 0 $ 10,937
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT INDEXES
- - CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Government Investment on November 1, 1988, the net amount
invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 19,502 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 6,346 for dividends and $ 378 for capital gain
distributions. Initial offering of Class C of Advisor Government
Investment took place on November 3, 1997. Class C returns prior to
November 3, 1997 through June 30, 1994 are those of Class B which
reflect a 12b-1 fee of 0.90% (1.00% prior to January 1, 1996). Class C
returns prior to June 30, 1994 are those of Class T which reflect a
12b-1 fee of 0.25%. If Class C's 12b-1 fee had been reflected, returns
prior to November 3, 1997 through January 1, 1996 and prior to June
30, 1994 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Government
Investment would have grown to $ 21,687 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT
- - INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,799 $ 10,339 $ 549 $ 21,687
1997 $ 10,421 $ 8,790 $ 530 $ 19,741
1996 $ 10,238 $ 7,490 $ 521 $ 18,249
1995 $ 10,443 $ 6,477 $ 531 $ 17,451
1994 $ 9,676 $ 5,003 $ 492 $ 15,171
1993 $ 10,950 $ 4,754 $ 311 $ 16,015
1992 $ 10,508 $ 3,723 $ 0 $ 14,231
1991 $ 10,356 $ 2,762 $ 0 $ 13,118
1990 $ 9,881 $ 1,764 $ 0 $ 11,645
1989 $ 10,054 $ 883 $ 0 $ 10,937
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR GOVERNMENT INVESTMENT INDEXES
- - INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Government Investment on November 1,
1988, the net amount invested in Institutional Class shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 20,318 . If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $ 6,762 for dividends and $ 378 for
capital gain distributions. Initial offering of Institutional Class of
Advisor Government Investment took place on July 3, 1995.
Institutional Class returns prior to July 3, 1995 are those of Class T
which reflect a 12b-1 fee of 0.25%. If Class T's 12b-1 fee had not
been reflected, returns prior to July 3, 1995 for Institutional Class
would have been higher .
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Intermediate Bond would have
grown to $ 20,525 , including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE BOND -
CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,045 $ 10,480 $ 0 $ 20,525
1997 $ 9,877 $ 9,231 $ 0 $ 19,108
1996 $ 9,812 $ 8,074 $ 0 $ 17,886
1995 $ 9,970 $ 7,075 $ 0 $ 17,045
1994 $ 9,588 $ 5,844 $ 0 $ 15,432
1993 $ 10,502 $ 5,452 $ 0 $ 15,954
1992 $ 9,961 $ 4,104 $ 0 $ 14,065
1991 $ 9,812 $ 2,996 $ 0 $ 12,808
1990 $ 9,364 $ 1,850 $ 0 $ 11,214
1989 $ 9,700 $ 929 $ 0 $ 10,629
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE BOND - INDEXES
CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Intermediate Bond on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,625 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,229 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 7,008 for
dividends and $ 0 for capital gain distributions. Initial
offering of Class A of Advisor Intermediate Bond took place on
September 3, 1996. Class A returns from September 3, 1996 through
September 10, 1992 are those of Class T which reflect a 12b-1 fee of
0.25%. Class A returns prior to September 10, 1992 are those of
Institutional Class which has no 12b-1 fee. If Class A's 12b-1 fee had
been reflected, returns prior to September 3, 1996 through September
10, 1992 would have been higher and returns prior to September 10,
1992 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Intermediate Bond would have
grown to $ 20,713 , including the effect of Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE BOND -
CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,149 $ 10,564 $ 0 $ 20,713
1997 $ 9,989 $ 9,325 $ 0 $ 19,314
1996 $ 9,923 $ 8,165 $ 0 $ 18,088
1995 $ 10,074 $ 7,148 $ 0 $ 17,222
1994 $ 9,687 $ 5,905 $ 0 $ 15,592
1993 $ 10,611 $ 5,509 $ 0 $ 16,120
1992 $ 10,064 $ 4,147 $ 0 $ 14,211
1991 $ 9,913 $ 3,029 $ 0 $ 12,942
1990 $ 9,461 $ 1,870 $ 0 $ 11,331
1989 $ 9,800 $ 939 $ 0 $ 10,739
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE BOND - INDEXES
CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Intermediate Bond on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,725 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,312 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 7,069 for
dividends and $ 0 for capital gain distributions. Initial
offering of Class T of Advisor Intermediate Bond took place on
September 10, 1992. Class T returns prior to September 10, 1992 are
those of Institutional Class which has no 12b-1 fee. If Class T's
12b-1 fee had been reflected, returns prior to September 10, 1992
would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Intermediate Bond would have
grown to $ 20,635.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE BOND -
CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,426 $ 10,209 $ 0 $ 20,635
1997 $ 10,252 $ 9,100 $ 0 $ 19,352
1996 $ 10,194 $ 8,071 $ 0 $ 18,265
1995 $ 10,349 $ 7,158 $ 0 $ 17,507
1994 $ 9,952 $ 6,014 $ 0 $ 15,966
1993 $ 10,911 $ 5,665 $ 0 $ 16,576
1992 $ 10,349 $ 4,264 $ 0 $ 14,613
1991 $ 10,194 $ 3,113 $ 0 $ 13,307
1990 $ 9,729 $ 1,922 $ 0 $ 11,651
1989 $ 10,078 $ 965 $ 0 $ 11,043
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE BOND - INDEXES
CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Intermediate Bond on November 1, 1988, the net amount invested
in Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 19,968 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,951 for
dividends and $ 0 for capital gain distributions. Initial
offering of Class B of Advisor Intermediate Bond took place on June
30, 1994. Class B returns prior to June 30, 1994 through September 10,
1992 are those of Class T which reflect a 12b-1 fee of 0.25%. Class B
returns prior to September 10, 1992 are those of Institutional Class
which has no 12b-1 fee. If Class B's 12b-1 fee had been reflected,
returns prior to June 30, 1994 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor Intermediate Bond would have
grown to $ 20,572.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE BOND -
CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,407 $ 10,165 $ 0 $ 20,572
1997 $ 10,252 $ 9,100 $ 0 $ 19,352
1996 $ 10,194 $ 8,071 $ 0 $ 18,265
1995 $ 10,349 $ 7,158 $ 0 $ 17,507
1994 $ 9,952 $ 6,014 $ 0 $ 15,966
1993 $ 10,911 $ 5,665 $ 0 $ 16,576
1992 $ 10,349 $ 4,264 $ 0 $ 14,613
1991 $ 10,194 $ 3,113 $ 0 $ 13,307
1990 $ 9,729 $ 1,922 $ 0 $ 11,651
1989 $ 10,078 $ 965 $ 0 $ 11,043
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE BOND - INDEXES
CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Intermediate Bond on November 1, 1988, the net amount invested
in Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 19,944 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,939 for
dividends and $ 0 for capital gain distributions. Initial
offering of Class C of Advisor Intermediate Bond took place on
November 3, 1997. Class C returns prior to November 3, 1997 through
June 30, 1994 are those of Class B which reflect a 12b-1 fee of 0.90%
(1.00% prior to January 1, 1996). Class C returns prior to June 30,
1994 through September 10, 1992 are those of Class T which reflect a
12b-1 fee of 0.25%. Class C returns prior to September 10, 1992 are
those of Institutional Class which has no 12b-1 fee. If Class C's
12b-1 fee had been reflected, returns prior to November 3, 1997
through January 1, 1996 and prior to June 30, 1994 would have been
lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Intermediate Bond
would have grown to $ 21,774 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE BOND -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,446 $ 11,328 $ 0 $ 21,774
1997 $ 10,271 $ 9,955 $ 0 $ 20,226
1996 $ 10,213 $ 8,693 $ 0 $ 18,906
1995 $ 10,368 $ 7,581 $ 0 $ 17,949
1994 $ 9,971 $ 6,236 $ 0 $ 16,207
1993 $ 10,921 $ 5,759 $ 0 $ 16,680
1992 $ 10,349 $ 4,283 $ 0 $ 14,632
1991 $ 10,194 $ 3,113 $ 0 $ 13,307
1990 $ 9,729 $ 1,922 $ 0 $ 11,651
1989 $ 10,078 $ 965 $ 0 $ 11,043
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE BOND - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Intermediate Bond on November 1, 1988,
the net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 21,059 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 7,492 for dividends and $ 0 for capital gain
distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Short Fixed-Income would have
grown to $ 19,045 , including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME -
CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,295 $ 9,750 $ 0 $ 19,045
1997 $ 9,226 $ 8,644 $ 0 $ 17,870
1996 $ 9,285 $ 7,631 $ 0 $ 16,916
1995 $ 9,384 $ 6,674 $ 0 $ 16,058
1994 $ 9,394 $ 5,748 $ 0 $ 15,142
1993 $ 9,999 $ 5,177 $ 0 $ 15,176
1992 $ 9,860 $ 4,046 $ 0 $ 13,906
1991 $ 9,781 $ 2,926 $ 0 $ 12,707
1990 $ 9,533 $ 1,793 $ 0 $ 11,326
1989 $ 9,860 $ 866 $ 0 $ 10,726
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME - INDEXES
CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Short Fixed-Income on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,850 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,017 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,900 for
dividends and $ 0 for capital gain distributions. Initial
offering of Class A of Advisor Short Fixed-Income took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.15%.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Short Fixed-Income would have
grown to $ 19,079 , including the effect of Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME -
CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,295 $ 9,784 $ 0 $ 19,079
1997 $ 9,265 $ 8,680 $ 0 $ 17,945
1996 $ 9,295 $ 7,639 $ 0 $ 16,934
1995 $ 9,384 $ 6,674 $ 0 $ 16,058
1994 $ 9,394 $ 5,748 $ 0 $ 15,142
1993 $ 9,999 $ 5,177 $ 0 $ 15,176
1992 $ 9,860 $ 4,046 $ 0 $ 13,906
1991 $ 9,781 $ 2,926 $ 0 $ 12,707
1990 $ 9,533 $ 1,793 $ 0 $ 11,326
1989 $ 9,860 $ 866 $ 0 $ 10,726
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME - INDEXES
CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Short Fixed-Income on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,850 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 20,057 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,919 for
dividends and $ 0 for capital gain distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor Short Fixed-Income would have
grown to $ 19,204.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME -
CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,437 $ 9,767 $ 0 $ 19,204
1997 $ 9,406 $ 8,812 $ 0 $ 18,218
1996 $ 9,437 $ 7,755 $ 0 $ 17,192
1995 $ 9,527 $ 6,775 $ 0 $ 16,302
1994 $ 9,537 $ 5,836 $ 0 $ 15,373
1993 $ 10,151 $ 5,256 $ 0 $ 15,407
1992 $ 10,010 $ 4,108 $ 0 $ 14,118
1991 $ 9,930 $ 2,970 $ 0 $ 12,900
1990 $ 9,678 $ 1,820 $ 0 $ 11,498
1989 $ 10,010 $ 879 $ 0 $ 10,889
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME - INDEXES
CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Short Fixed-Income on November 1, 1988, the net amount
invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 20,046 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 6,944 for dividends and $ 0 for capital gain
distributions. Initial offering of Class C Advisor Short Fixed-Income
took place on November 3, 1997. Class C returns prior to November 3,
1997 are those of Class T which reflect a 12b-1 fee of 0.15%. If Class
C's 12b-1 fee had been reflected, returns would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Short
Fixed-Income would have grown to $ 19,454 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,437 $ 10,017 $ 0 $ 19,454
1997 $ 9,406 $ 8,866 $ 0 $ 18,272
1996 $ 9,427 $ 7,772 $ 0 $ 17,199
1995 $ 9,527 $ 6,783 $ 0 $ 16,310
1994 $ 9,537 $ 5,836 $ 0 $ 15,373
1993 $ 10,151 $ 5,256 $ 0 $ 15,407
1992 $ 10,010 $ 4,108 $ 0 $ 14,118
1991 $ 9,930 $ 2,970 $ 0 $ 12,900
1990 $ 9,678 $ 1,820 $ 0 $ 11,498
1989 $ 10,010 $ 879 $ 0 $ 10,889
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR SHORT FIXED-INCOME - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Short Fixed-Income on November 1, 1988,
the net amount invested Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 20,294 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 7,066 for dividends and $ 0 for capital gain
distributions. Initial offering of Institutional Class of Advisor
Short Fixed-Income took place on July 3, 1995. Institutional Class
returns prior to July 3, 1995 are those of Class T which reflect a
12b-1 fee of 0.15%. If Class T's 12b-1 fee had not been reflected,
returns prior to July 3, 1995 for Institutional Class would have been
higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Municipal Income would have
grown to $ 21,916 , including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MUNICIPAL INCOME -
CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,419 $ 10,028 $ 469 $ 21,916
1997 $ 11,064 $ 8,760 $ 455 $ 20,279
1996 $ 10,691 $ 7,473 $ 436 $ 18,600
1995 $ 10,818 $ 6,544 $ 441 $ 17,803
1994 $ 10,217 $ 5,191 $ 417 $ 15,825
1993 $ 11,583 $ 4,879 $ 378 $ 16,840
1992 $ 10,609 $ 3,605 $ 309 $ 14,523
1991 $ 10,390 $ 2,618 $ 291 $ 13,299
1990 $ 9,898 $ 1,617 $ 148 $ 11,663
1989 $ 9,853 $ 772 $ 48 $ 10,673
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MUNICIPAL INCOME - INDEXES
CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Municipal Income on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $ 9,525 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 19,701 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,497 for
dividends and $ 348 for capital gain distributions. Initial
offering of Class A of Advisor Municipal Income took place on
September 3, 1996. Class A returns prior to September 3, 1996 are
those of Class T which reflect a 12b-1 fee of 0.25%. If Class A's
12b-1 fee had been reflected, returns prior to September 3, 1996 would
have been higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Municipal Income would have
grown to $ 22,236 , including the effect of Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MUNICIPAL INCOME -
CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,587 $ 10,173 $ 476 $ 22,236
1997 $ 11,218 $ 8,881 $ 461 $ 20,560
1996 $ 10,849 $ 7,590 $ 442 $ 18,881
1995 $ 10,960 $ 6,630 $ 447 $ 18,037
1994 $ 10,351 $ 5,259 $ 422 $ 16,032
1993 $ 11,735 $ 4,943 $ 383 $ 17,061
1992 $ 10,748 $ 3,653 $ 313 $ 14,714
1991 $ 10,526 $ 2,652 $ 295 $ 13,473
1990 $ 10,028 $ 1,638 $ 150 $ 11,816
1989 $ 9,982 $ 783 $ 48 $ 10,813
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MUNICIPAL INCOME - INDEXES
CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Municipal Income on November 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $ 9,650 . The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 19,826 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,581 for
dividends and $ 352 for capital gain distributions.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Municipal Income would have
grown to $ 22,296.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MUNICIPAL INCOME -
CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,979 $ 9,825 $ 492 $ 22,296
1997 $ 11,597 $ 8,673 $ 476 $ 20,746
1996 $ 11,224 $ 7,500 $ 458 $ 19,182
1995 $ 11,338 $ 6,648 $ 462 $ 18,448
1994 $ 10,717 $ 5,381 $ 437 $ 16,535
1993 $ 12,161 $ 5,122 $ 397 $ 17,680
1992 $ 11,138 $ 3,786 $ 324 $ 15,248
1991 $ 10,908 $ 2,749 $ 305 $ 13,962
1990 $ 10,392 $ 1,698 $ 155 $ 12,245
1989 $ 10,344 $ 811 $ 50 $ 11,205
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MUNICIPAL INCOME - INDEXES
CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</R.
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Municipal Income on November 1, 1988, the net amount invested
in Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $
19,521 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,469 for
dividends and $ 365 for capital gain distributions. Initial
offering of Class B of Advisor Municipal Income took place on June 30,
1994. Class B returns prior to June 30, 1994 are those of Class T
which reflect a 12b-1 fee of 0.25%. If Class B's 12b-1 fee had been
reflected, returns prior to June 30, 1994 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor Municipal Income would have
grown to $ 22,236.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MUNICIPAL INCOME -
CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,978 $ 9,766 $ 492 $ 22,236
1997 $ 11,597 $ 8,673 $ 476 $ 20,746
1996 $ 11,224 $ 7,500 $ 458 $ 19,182
1995 $ 11,338 $ 6,648 $ 462 $ 18,448
1994 $ 10,717 $ 5,381 $ 437 $ 16,535
1993 $ 12,161 $ 5,122 $ 397 $ 17,680
1992 $ 11,138 $ 3,786 $ 324 $ 15,248
1991 $ 10,908 $ 2,749 $ 305 $ 13,962
1990 $ 10,392 $ 1,698 $ 155 $ 12,245
1989 $ 10,344 $ 811 $ 50 $ 11,205
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MUNICIPAL INCOME - INDEXES
CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Municipal Income on November 1, 1988, the net amount invested
in Class C shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 19,463 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 6,438 for
dividends and $ 365 for capital gain distributions. Initial
offering of Class C of Advisor Municipal Income took place on November
3, 1997. Class C returns prior to November 3, 1997 through June 30,
1994 are those of Class B which reflect a 12b-1 fee of 0.90% (1.00%
prior to January 1, 1996). Class C returns prior to June 30, 1994 are
those of Class T which reflect a 12b-1 fee of 0.25%. If Class C's
12b-1 fee had been reflected, returns prior to November 3, 1997
through January 1, 1996 and prior to June 30, 1994 would have been
lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Municipal Income
would have grown to $ 23,145 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 11,960 $ 10,694 $ 491 $ 23,145
1997 $ 11,587 $ 9,312 $ 476 $ 21,375
1996 $ 11,205 $ 7,868 $ 457 $ 19,530
1995 $ 11,358 $ 6,884 $ 463 $ 18,705
1994 $ 10,727 $ 5,450 $ 437 $ 16,614
1993 $ 12,161 $ 5,122 $ 397 $ 17,680
1992 $ 11,138 $ 3,786 $ 324 $ 15,248
1991 $ 10,908 $ 2,749 $ 305 $ 13,962
1990 $ 10,392 $ 1,698 $ 155 $ 12,245
1989 $ 10,344 $ 811 $ 50 $ 11,205
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR MUNICIPAL INCOME - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Municipal Income on November 1, 1988,
the net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 20,364 . If distributions had not been reinvested,
the amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$ 6,914 for dividends and $ 365 for capital gain
distributions. Initial offering of Institutional Class of Advisor
Municipal Income took place on July 3, 1995. Institutional Class
returns prior to July 3, 1995 are those of Class T which reflect a
12b-1 fee of 0.25%. If Class T's 12b-1 fee had not been reflected,
returns prior to July 3, 1995 for Institutional Class would have been
higher.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class A of Advisor Intermediate Municipal Income
would have grown to $ 18,027 , including the effect of Class A's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME - CLASS A
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,770 $ 7,082 $ 1,175 $ 18,027
1997 $ 9,598 $ 6,229 $ 1,107 $ 16,934
1996 $ 9,317 $ 5,335 $ 1,073 $ 15,725
1995 $ 9,344 $ 4,656 $ 1,076 $ 15,076
1994 $ 8,754 $ 3,737 $ 1,008 $ 13,499
1993 $ 9,598 $ 3,448 $ 1,078 $ 14,124
1992 $ 9,915 $ 2,861 $ 0 $ 12,776
1991 $ 9,825 $ 2,084 $ 0 $ 11,909
1990 $ 9,552 $ 1,314 $ 0 $ 10,866
1989 $ 9,571 $ 631 $ 0 $ 10,202
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Intermediate Municipal Income on November 1, 1988, assuming
the maximum sales charge had been in effect, the net amount invested
in Class A shares was $ 9,625 . The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 17,988 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 4,999 for dividends and $ 845 for capital gain
distributions. Initial offering of Class A of Advisor Intermediate
Municipal Income took place on September 3, 1996. Class A returns from
September 3, 1996 through September 10, 1992 are those of Class T
which reflect a 12b-1 fee of 0.25%. Class A returns prior to September
10, 1992 are those of Institutional Class which has no 12b-1 fee. If
Class A's 12b-1 fee had been reflected, returns prior to September 3,
1996 through September 10, 1992 would have been higher and returns
prior to September 10, 1992 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class T of Advisor Intermediate Municipal Income
would have grown to $ 18,183 , including the effect of Class T's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME - CLASS T
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 9,872 $ 7,124 $ 1,187 $ 18,183
1997 $ 9,688 $ 6,268 $ 1,117 $ 17,073
1996 $ 9,423 $ 5,394 $ 1,085 $ 15,902
1995 $ 9,441 $ 4,704 $ 1,087 $ 15,232
1994 $ 8,845 $ 3,777 $ 1,018 $ 13,640
1993 $ 9,698 $ 3,484 $ 1,089 $ 14,271
1992 $ 10,018 $ 2,891 $ 0 $ 12,909
1991 $ 9,927 $ 2,106 $ 0 $ 12,033
1990 $ 9,652 $ 1,327 $ 0 $ 10,979
1989 $ 9,670 $ 638 $ 0 $ 10,308
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Intermediate Municipal Income on November 1, 1988, assuming
the maximum sales charge had been in effect, the net amount invested
in Class T shares was $ 9,725 . The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 18,041 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 5,035 for dividends and $ 853 for capital gain
distributions. Initial offering of Class T of Advisor Intermediate
Municipal Income took place on September 10, 1992. Class T returns
prior to September 10, 1992 are those of Institutional Class which has
no 12b-1 fee. If Class T's 12b-1 fee had been reflected, returns prior
to September 10, 1992 would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Intermediate Municipal Income
would have grown to $ 18,130.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME - CLASS B
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,151 $ 6,759 $ 1,220 $ 18,130
1997 $ 9,962 $ 6,030 $ 1,149 $ 17,141
1996 $ 9,680 $ 5,257 $ 1,114 $ 16,051
1995 $ 9,708 $ 4,666 $ 1,118 $ 15,492
1994 $ 9,095 $ 3,838 $ 1,047 $ 13,980
1993 $ 9,972 $ 3,582 $ 1,120 $ 14,674
1992 $ 10,302 $ 2,972 $ 0 $ 13,274
1991 $ 10,207 $ 2,166 $ 0 $ 12,373
1990 $ 9,925 $ 1,364 $ 0 $ 11,289
1989 $ 9,943 $ 656 $ 0 $ 10,599
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Intermediate Municipal Income on November 1, 1988, the net
amount invested in Class B shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 17,725 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 4,878 for dividends and $ 877 for capital gain
distributions. Initial offering of Class B of Advisor Intermediate
Municipal Income took place on June 30, 1994. Class B returns prior to
June 30, 1994 through September 10, 1992 are those of Class T which
reflect a 12b-1 fee of 0.25%. Class B returns prior to September 10,
1992 are those of Institutional Class which has no 12b-1 fee. If Class
B's 12b-1 fee had been reflected, returns prior to June 30, 1994 would
have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class C of Advisor Intermediate Municipal Income
would have grown to $ 18,110.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME - CLASS C
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,151 $ 6,739 $ 1,220 $ 18,110
1997 $ 9,962 $ 6,030 $ 1,149 $ 17,141
1996 $ 9,680 $ 5,257 $ 1,114 $ 16,051
1995 $ 9,708 $ 4,666 $ 1,118 $ 15,492
1994 $ 9,095 $ 3,838 $ 1,047 $ 13,980
1993 $ 9,972 $ 3,582 $ 1,120 $ 14,674
1992 $ 10,302 $ 2,972 $ 0 $ 13,274
1991 $ 10,207 $ 2,166 $ 0 $ 12,373
1990 $ 9,925 $ 1,364 $ 0 $ 11,289
1989 $ 9,943 $ 656 $ 0 $ 10,599
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Intermediate Municipal Income on November 1, 1988, the net
amount invested in Class C shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to
$ 17,705 . If distributions had not been reinvested, the amount
of distributions earned from the class over time would have been
smaller, and cash payments for the period would have amounted to
$ 4,866 for dividends and $ 877 for capital gain
distributions. Initial offering of Class C of Advisor Intermediate
Municipal Income took place on November 3, 1997. Class C returns prior
to November 3, 1997 through June 30, 1994 are those of Class B which
reflect a 12b-1 fee of 0.90% (1.00% prior to January 1, 1996). Class C
returns prior to June 30, 1994 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.25%. Class C returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class C's 12b-1 fee had been reflected, returns prior to
November 3, 1997 through January 1, 1996 and prior to June 30, 1994
would have been lower.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Intermediate
Municipal Income would have grown to $ 18,966 .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,141 $ 7,604 $ 1,221 $ 18,966
1997 $ 9,962 $ 6,677 $ 1,149 $ 17,788
1996 $ 9,689 $ 5,720 $ 1,116 $ 16,525
1995 $ 9,708 $ 4,963 $ 1,118 $ 15,789
1994 $ 9,095 $ 3,959 $ 1,048 $ 14,102
1993 $ 9,972 $ 3,624 $ 1,120 $ 14,716
1992 $ 10,302 $ 2,974 $ 0 $ 13,276
1991 $ 10,207 $ 2,166 $ 0 $ 12,373
1990 $ 9,925 $ 1,364 $ 0 $ 11,289
1989 $ 9,943 $ 656 $ 0 $ 10,599
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
1997 $ 42,491 $ 44,953 $ 13,444
1996 $ 32,162 $ 35,753 $ 13,170
1995 $ 25,918 $ 27,599 $ 12,787
1994 $ 20,498 $ 22,121 $ 12,438
1993 $ 19,735 $ 20,275 $ 12,121
1992 $ 17,169 $ 17,263 $ 11,797
1991 $ 15,611 $ 15,947 $ 11,431
1990 $ 11,693 $ 12,260 $ 11,106
1989 $ 12,640 $ 12,774 $ 10,449
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Intermediate Municipal Income on
November 1, 1988, the net amount invested in Institutional Class
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 18,542 . If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $ 5,325 for
dividends and $ 877 for capital gain distributions.
INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the International Finance Corporation Emerging
Markets database, and the performance of national stock markets as
measured in U.S. dollars by the Morgan Stanley Capital International
stock market indexes for the twelve months ended December 31, 1998. Of
course, these results are not indicative of future stock market
performance or the funds' performance. Market conditions during the
periods measured fluctuated widely. Brokerage commissions and other
fees are not factored into the values of the indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew from $ 6,206.9 billion
in 1997 to $ 8,045.9 billion in 1998.
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of the markets are measured
in billions of U.S. dollars as of December 31, 1998.
TOTAL MARKET CAPITALIZATION
Australia $ 191.10 Japan $ 1,566.90
Austria 24.60 Netherlands 484.80
Belgium 143.90 Norway 28.50
Canada 286.00 Singapore/Malaysia 51.40
Denmark 66.20 Spain 250.10
France 701.80 Sweden 196.50
Germany 795.10 Switzerland 600.30
Hong Kong 154.10 United Kingdom 1,585.90
Italy 389.20 United States 8,045.90
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of the markets is measured in
billions of U.S. dollars as of December 31 , 1998.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 24.89
Brazil 65.87
Chile 31.84
Colombia 6.33
Mexico 67.17
Venezuela 4.69
Total Latin America $ 200.79
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended December 31, 1998. The second table shows the
same performance as measured in local currency. Each table measures
return based on the period's change in price, dividends paid on stocks
in the index, and the effect of reinvesting dividends net of any
applicable foreign taxes. These are unmanaged indexes composed of a
sampling of selected companies representing an approximation of the
market structure of the designated country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia 6.1% Japan 5.1%
Austria 0.4% Netherlands 23.21%
Belgium 67.7% Norway -30.1%
Canada -6.1% Singapore/Malaysia -12.9%
Denmark 9.0% Spain 49.9%
France 41.5% Sweden 14.0%
Germany 29.4% Switzerland 23.5%
Hong Kong -2.9% United Kingdom 17.8%
Italy 52.5% United States 30.1%
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 12.7% Japan -8.9%
Austria -7.0% Netherlands 14.1%
Belgium 55.5% Norway -27.7%
Canada 0.7% Singapore/Malaysia -14.7%
Denmark 1.3% Spain 39.4%
France 31.4% Sweden 16.4%
Germany 19.9% Switzerland 16.3%
Hong Kong -2.9% United Kingdom 16.5%
Italy 42.2% United States 30.1%
The following table shows the average annualized stock market returns
measured in U.S. dollars as of December 31, 1998.
STOCK MARKET PERFORMANCE
Five Years Ended December 31, Ten Years Ended December 31,
1998 1998
Germany 17.91% 15.12%
Hong Kong -2.89% 15.92%
Japan -3.69% -5.33%
Spain 27.60% 14.77%
United Kingdom 17.03% 15.17%
United states 24.30% 18.89%
PERFORMANCE COMPARISONS. A class's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on return, assume reinvestment of distributions, do not take
sales charges or trading fees into consideration, and are prepared
without regard to tax consequences. Lipper may also rank based on
yield. In addition to the mutual fund rankings, a class's performance
may be compared to stock, bond, and money market mutual fund
performance indexes prepared by Lipper or other organizations. When
comparing these indexes, it is important to remember the risk and
return characteristics of each type of investment. For example, while
stock mutual funds may offer higher potential returns, they also carry
the highest degree of share price volatility. Likewise, money market
funds may offer greater stability of principal, but generally do not
offer the higher potential returns available from stock mutual funds.
From time to time, a class's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a class may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising. A bond fund may advertise risk
ratings, including symbols or numbers, prepared by independent rating
agencies.
A class's performance may also be compared to that of each index
representing the universe of securities in which the fund may invest.
The return of each index reflects reinvestment of all dividends and
capital gains paid by securities included in each index. Unlike a
class's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
Advisor Strategic Income may compare its performance to that of the
Fidelity Strategic Income Composite Index which is a hypothetical
representation of the performance of the fund's general investment
categories according to their respective weightings in the fund's
neutral mix. The Fidelity Strategic Income Composite Index represents
Advisor Strategic Income's four general investment categories
according to their respective weighting in the fund's neutral mix (40%
high yield, 30% U.S. Government and investment-grade, 15% foreign
developed markets and 15% emerging markets). The following indexes are
used to calculate the Fidelity Strategic Income Composite Index:
Merrill Lynch High Yield Master Index for the high yield category,
Lehman Brothers Government Bond Index for the U.S. Government and
investment grade category, Salomon Brothers Non-U.S. Dollar World
Government Bond Index for the foreign developed markets
category, and J.P. Morgan Emerging Markets Bond Index Plus for the
emerging markets category. The index weightings of the Fidelity
Strategic Income Composite Index are rebalanced monthly.
MERRILL LYNCH HIGH YIELD MASTER INDEX. A market
capitalization-weighted index of all domestic and yankee high-yield
bonds with an outstanding par value of at least $50 million and
maturities of at least one year. Issues included in the index have a
credit rating lower than BBB-Baa3 but are not in default (DDD1 or
lower). Split-rated issues (i.e., rated investment-grade by one rating
agency and high-yield by another) are included in the index based on
the issue's corresponding composite rating. Structured-note issues,
deferred interest bonds, and pay-in-kind bonds are excluded.
LEHMAN BROTHERS GOVERNMENT BOND INDEX is a market
value -weighted index of U.S. Government and government agency
securities (other than mortgage securities) with maturities of one
year or more. Issues include all public obligations of the U.S.
Treasury (excluding flower bonds and foreign-targeted issues) and U.S.
Government agencies and quasi-federal corporations, and corporate debt
guaranteed by the U.S. Government.
SALOMON BROTHERS NON-U.S. DOLLAR WORLD GOVERNMENT BOND INDEX is a
market value-weighted index that is designed to reflect the
performance of 16 world government bond markets, excluding the United
States. Issues included in the index have fixed-rate coupons and
maturities of one year or more.
J.P. MORGAN EMERGING MARKETS BOND INDEX PLUS is a market
value -weighted index of U.S. dollar- and other external
currency-denominated Brady bonds, loans, Eurobonds, and local market
debt instruments traded in emerging markets.
Advisor Balanced may compare its performance to that of the Fidelity
Balanced Composite Index which is a hypothetical representation of the
performance of the fund's general investment categories using a
weighting of 60% equity and 40% bond. The following indexes are used
to calculate the Fidelity Balanced Composite Index: Standard & Poor's
500 Index (S&P 500) for the equity category and the Lehman Brothers
Aggregate Bond Index for the bond category. The index weightings of
the Fidelity Balanced Composite Index are rebalanced monthly.
S&P 500 is a market capitalization-weighted index of common stocks.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value -weighted
index for investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities.
Issues included in the index have an outstanding par value of at least
$100 million and maturities of at least one year. Government and
corporate issues include all public obligations of the U.S. Treasury
(excluding flower bonds and foreign-targeted issues) and U.S.
Government agencies, as well as nonconvertible investment-grade,
SEC-registered corporate debt. Mortgage-backed securities include 15-
and 30-year fixed-rate securities backed by mortgage pools of the
Government National Mortgage Association (GNMA), Federal Home Loan
Mortgage Corporation (FHLMC), and Fannie Mae. Asset-backed securities
include credit card, auto, and home equity loans.
Advisor Asset Allocation may compare its performance to that of the
Aggressive Asset Allocation Composite Index which is a hypothetical
representation of the performance of the fund's three asset classes
according to their respective weighting in the fund's neutral mix (5%
short-term/money market; 25% bonds; and 70% stocks). The following
indexes are used to calculate the Aggressive Allocation Composite
Index: S&P 500 for the stock class, Lehman Brothers Aggregate Bond
Index for the bond class and the Lehman Brothers 3-Month Treasury Bill
Index for the short term/money market class. The index weightings of
the Aggressive Asset Allocation Composite Index are rebalanced
monthly.
S&P 500 is a market capitalization-weighted index of common
stocks.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value-weighted
index for investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities.
Issues included in the index have an outstanding par value of at least
$100 million and maturities of at least one year. Government and
corporate issues include all public obligations of the U.S. Treasury
(excluding flower bonds and foreign-targeted issues) and U.S.
Government agencies, as well as nonconvertible investment-grade,
SEC-registered corporate debt. Mortgage-backed securities include 15-
and 30-year fixed-rate securities backed by mortgage pools of the
Government National Mortgage Association (GNMA), Federal Home Loan
Mortgage Corporation (FHLMC), and Fannie Mae. Asset-backed securities
include credit card, auto, and home equity loans.
LEHMAN BROTHERS 3-MONTH TREASURY BILL INDEX which represents the
average of the Treasury Bill rates for each of the prior three months,
adjusted to a bond equivalent yield basis (short-term and money market
instruments).
Advisor Asset Allocation has the ability to invest in securities
that are not included in any of the indexes, and the fund's actual
investment portfolio may not reflect the composition or the weighting
of the indexes used. The Lehman Brothers 3-Month Treasury Bill Index,
the Lehman Brothers Aggregate Bond Index, the S&P 500, and the
Aggressive Asset Allocation Composite Index include reinvestment of
income or dividends, as appropriate, and are based on the prices of
unmanaged groups of U.S. Treasury obligations, other fixed-income
obligations or stocks, as appropriate. Unlike the fund's returns, the
indexes do not include the effect of paying brokerage commissions,
spreads, or other costs of investing. Historical results are used for
illustrative purposes only and do not reflect the past or future
performance of the fund.
Advisor Equity Growth may compare its performance to that of the
Russell 3000 Growth Index, a market capitalization-weighted index of
U.S. domiciled growth oriented stocks. Advisor Equity Growth may also
compare its performance to that of the S&P 500, a market
capitalization-weighted index of common stocks.
Advisor Equity Income may compare its performance to that of the
Russell 3000 Value Index, a market capitalization-weighted index of
U.S. domiciled value oriented stocks. Advisor Equity Income may also
compare its performance to that of the S&P 500, a market
capitalization-weighted index of common stocks.
Advisor Small Cap may compare its performance to that of the Russell
2000 Index, a market capitalization-weighted index of 2,000 small
company stocks.
Advisor Mid Cap may compare its performance to that of the Standard &
Poor's MidCap 400(registered trademark)Index, a market
capitalization-weighted index of 400 medium-capitalization stocks.
Each of Advisor Overseas and Advisor Diversified International may
compare its performance to that of the Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index, a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets outside of the United States
and Canada. The index returns for periods after January 1, 1997 are
adjusted for tax withholding rates applicable to U.S.-based mutual
funds organized as Massachusetts business trusts. Effective October 1,
1998, the country of Malaysia was removed from this index. The index
returns reflect the inclusion of Malaysia prior to October 1, 1998.
Advisor International Capital Appreciation may compare its performance
to that of the Morgan Stanley Capital International AC World Index
Free ex USA , a market capitalization - weighted equity
index comprising 47 countries, 21 developed markets and
26 emerging markets.
Advisor Europe Capital Appreciation may compare its performance to
that of the Morgan Stanley Capital International Europe Index, a
market capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. The index returns
for periods after January 1, 1997 are adjusted for tax withholding
rates applicable to U.S.-based mutual funds organized as Massachusetts
business trusts.
Advisor Japan may compare its performance to that of the Tokyo Stock
Exchange Index (TOPIX), a market capitalization-weighted index
of over 1100 stocks traded in the Japanese market.
Advisor Latin America may compare its performance to that of the
Morgan Stanley Capital International Emerging Markets Free - Latin
America Index, a market capitalization-weighted index of approximately
170 stocks traded in seven Latin American markets.
Advisor Global Equity may compare its performance to that of the
Morgan Stanley Capital International World Index, a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets throughout the world. Effective
October 1, 1998, the country of Malaysia was removed from this index.
The index returns reflect the inclusion of Malaysia prior to October
1, 1998.
Stocks are selected for the Morgan Stanley Capital International
(MSCI) indexes on the basis of industry representation, liquidity,
sufficient float, and avoidance of cross-ownership. The MSCI Free
index excludes those stocks that cannot be purchased by foreign
investors in otherwise free markets.
Advisor Balanced may also compare its performance to the Lehman
Brothers Aggregate Bond Index, a market value-weighted index
for investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities. Issues
included in the index have an outstanding par value of at least $100
million and maturities of at least one year. Government and corporate
issues include all public obligations of the U.S. Treasury (excluding
flower bonds and foreign-targeted issues) and U.S. Government
agencies, as well as nonconvertible investment-grade, SEC-registered
corporate debt. Mortgage-backed securities include 15- and 30-year
fixed-rate securities backed by mortgage pools of the Government
National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC), and Fannie Mae. Asset-backed securities include
credit card, auto, and home equity loans.
Each of Advisor High Yield and Advisor Strategic Income may compare
its performance to that of the Merrill Lynch High Yield Master Index,
a market value-weighted index of all domestic and yankee
high-yield bonds with an outstanding par value of at least $50 million
and maturities of at least one year. Issues included in the index have
a credit rating lower than BBB-Baa3 but are not in default (DDD1 or
lower). Split-rated issues (i.e., rated investment-grade by one rating
agency and high-yield by another) are included in the index based on
the issue's corresponding composite rating. Structured-note issues,
deferred interest bonds, and pay-in-kind bonds are excluded.
Advisor Mortgage Securities may compare its performance to that of
the Lehman Brothers Mortgage-Backed Securities Index, a market
value-weighted index of fixed-rate securities that represent interests
in pools of mortgage loans with original terms of 15 and 30 years that
are issued by the Government National Mortgage Association (GNMA), the
Federal National Mortgage Association (FNMA), and the Federal Home
Loan Mortgage Corporation (FHLMC), and balloon mortgages with
fixed-rate coupons. Buydowns, manufactured homes, and graduated equity
mortgages are not included in the index.
Advisor Government Investment may compare its performance to that of
the Lehman Brothers Government Bond Index, a market value-weighted
index of U.S. Government and government agency securities (other
than mortgage securities) with maturities of one year or more. Issues
include all public obligations of the U.S. Treasury (excluding flower
bonds and foreign-targeted issues) and U.S. Government agencies and
quasi-federal corporations, and corporate debt guaranteed by the U.S.
Government.
Advisor Intermediate Bond may compare its performance to that of the
Lehman Brothers Intermediate Government/Corporate Bond Index, a market
value-weighted index for government and corporate fixed-rate
debt issues. Issues included in the index have an outstanding par
value of at least $100 million and maturities between one and 10
years. Government and corporate issues include all public obligations
of the U.S. Treasury (excluding flower bonds and foreign-targeted
issues) and U.S. Government agencies, as well as nonconvertible
investment-grade, SEC-registered corporate debt.
Advisor Short Fixed-Income may compare its performance to that of the
Lehman Brothers 1-3 Year Government/Corporate Bond Index, a market
value-weighted index for government and corporate fixed-rate debt
issues. Issues included in the index have an outstanding par value of
at least $100 million and maturities between one and three years.
Government and corporate issues include all public obligations of the
U.S. Treasury (excluding flower bonds and foreign-targeted issues) and
U.S. Government agencies, as well as nonconvertible investment-grade,
SEC-registered corporate debt.
Advisor Emerging Markets Income may compare its performance to that of
the J.P. Morgan Emerging Markets Bond Index Plus, a market
value-weighted index of U.S. dollar- and other external
currency-denominated Brady bonds, loans, Eurobonds, and local market
debt instruments traded in emerging markets.
Each municipal bond fund may compare its performance to the Lehman
Brothers Municipal Bond Index, a market value-weighted index
for investment-grade municipal bonds with maturities of one year or
more. In addition, Advisor Intermediate Municipal Income may compare
its performance to that of the Lehman Brothers 1-17 Year Municipal
Bond Index, a market value-weighted index for investment-grade
municipal bonds with maturities between one and 17 years. Issues
included in each index have been issued after December 31, 1990 and
have an outstanding par value of at least $50 million. Subsequent to
December 31, 1995, zero coupon bonds and issues subject to the
alternative minimum tax are included in each index.
A class may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, a fund may offer greater liquidity or higher
potential returns than CDs, a fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
A municipal bond fund may compare and contrast in advertising the
relative advantages of investing in a mutual fund versus an individual
municipal bond. Unlike municipal bond mutual funds, individual
municipal bonds offer a stated rate of interest and, if held to
maturity, repayment of principal. Although some individual municipal
bonds might offer a higher return, they do not offer the reduced risk
of a mutual fund that invests in many different securities. The sales
charges of many municipal bond mutual funds are lower than the
purchase cost of individual municipal bonds, which are generally
subject to direct brokerage costs.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; model portfolios or allocations; and saving for
college or other goals. In addition, Fidelity may quote or reprint
financial or business publications and periodicals, as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products.
Each fund may be advertised as part of certain asset allocation
programs involving other Fidelity or non-Fidelity mutual funds. These
asset allocation programs may advertise a model portfolio and its
performance results.
Each fund may be advertised as part of a no transaction fee (NTF)
program in which Fidelity and non-Fidelity mutual funds are offered.
An NTF program may advertise performance results.
A class may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote the fund's current portfolio
manager.
VOLATILITY. A class may quote various measures of volatility and
benchmark correlation in advertising. In addition, the class may
compare these measures to those of other funds. Measures of volatility
seek to compare a class's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, a fund may also discuss or illustrate examples
of interest rate sensitivity.
MOMENTUM INDICATORS indicate a class's price movements over specific
periods of time. Each point on the momentum indicator represents a
class's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of December 31 , 1998, FMR advised over $ 34
billion in municipal fund assets, $ 118 billion in taxable
fixed-income fund assets, $ 123 billion in money market fund
assets, $ 497 billion in equity fund assets, $ 13 billion
in international fund assets, and $ 29 billion in Spartan fund
assets. The funds may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.
In addition to performance rankings, each class of a bond fund may
compare its total expense ratio to the average total expense ratio of
similar funds tracked by Lipper. A class's total expense ratio is a
significant factor in comparing bond and money market investments
because of its effect on yield.
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because Advisor Dividend Growth, Advisor Retirement
Growth, Advisor Asset Allocation, Advisor Diversified
International, Advisor Europe Capital Appreciation, Advisor
Japan, Advisor Latin America, and Advisor Global
Equity (Corresponding Funds) were new when this SAI was printed, their
performance history is not included. However, Advisor Dividend
Growth, Advisor Retirement Growth, Advisor Asset
Allocation, Advisor Diversified International, Advisor
Europe Capital Appreciation, Advisor Japan, and Advisor
Latin America are modeled after the following existing registered
funds, respectively: Fidelity Dividend Growth, Fidelity Retirement
Growth, Fidelity Asset Manager: Growth, Fidelity Diversified
International, Fidelity Europe Capital Appreciation, Fidelity Japan,
and Fidelity Latin America (Related Funds).
The Related Funds are managed by FMR and have investment objectives
and policies that are substantially identical in all
material respects to those of the Corresponding Funds described in
this SAI. The Related Funds, however, have different expenses and are
sold through different distribution channels.
Below you will find information about the prior performance of the
Related Funds, not the performance of the Corresponding Funds
described in this SAI. The performance data of the Related Funds is
net of management fees and other expenses and is based on
past results .
Although the Corresponding Funds described in this SAI have
investment objectives and policies that are substantially identical
in all material respects to those of the Related Funds, you should
not assume that the Corresponding Funds will have the same performance
as the Related Funds. For example, a Corresponding Fund's future
performance may be better or worse than the performance of its Related
Fund due to, among other things, differences in sales charges,
expenses, asset sizes and cash flows between the Corresponding Fund
and its Related Fund.
MOVING AVERAGES. Like the Corresponding F unds, a Related Fund
may illustrate performance using moving averages. For December 31,
1998, the 13-week and 39-week long-term moving averages for each
Related Fund are shown below.
13-WEEK 39-WEEK
Fidelity Dividend Growth 26.56 25.45
Fidelity Retirement Growth 18.60 18.10
Fidelity Asset Manager: Growth 17.35 17.09
Fidelity Diversified 16.76 17.25
International
Fidelity Europe Capital 16.63 17.57
Appreciation
Fidelity Japan 10.54 10.10
Fidelity Latin America 10.55 12.39
CALCULATING HISTORICAL FUND RESULTS. The following tables show
performance for each Related Fund calculated including certain Related
Fund expenses for the period ended December 31, 1998. Fidelity Europe
Capital Appreciation, Fidelity Japan, and Fidelity Latin America have
a maximum front-end sales charge of 3%, which is included in the
average annual and cumulative returns. Return figures do not include
the effect of paying Fidelity Europe Capital Appreciation's, Fidelity
Japan's, or Fidelity Latin America's $25 exchange fee, which was in
effect from December 1, 1987 through October 23, 1989, or other
charges for special transactions or services, such as Fidelity Europe
Capital Appreciation's 1.00% short-term trading fee for shares held
less than 90 days, or Fidelity Japan's or Fidelity Latin America's
1.5% short-term trading fee for shares held less than 90 days.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
One Year Five Years Ten Years/ Life of Fund* One Year Five Years Ten Years/
Life of Fund*
Fidelity Dividend
Growth 35.85% 26.53% 27.33% 35.85% 224.27% 294.69%
Fidelity Retirement
Growth 35.89% 16.76% 17.46% 35.89% 117.02% 400.01%
Fidelity Asset Manager:
Growth 18.08% 14.30% 16.43% 18.08% 95.06% 195.74%
Fidelity Diversified 14.39% 13.24% 11.94% 14.39% 86.20% 120.66%
International
Fidelity Europe Capital 18.01% 17.88% 17.83% 18.01% 127.57% 128.25%
Appreciation
Fidelity Japan 9.69% -0.18% 2.79% 9.69% -0.88% 18.91%
Fidelity Latin America -40.19% 7.79% 1.37% -40.19% -33.32% 8.08%
</TABLE>
* Life of fund figures are from commencement of operations (April
27, 1993 for Fidelity Dividend Growth, December 30, 1991 for Fidelity
Asset Manager: Growth, December 27, 1991 for Fidelity Diversified
International, December 21, 1993 for Fidelity Europe Capital
Appreciation, September 15, 1992 for Fidelity Japan, and April 19,
1993 for Fidelity Latin America) through December 31, 1998.
Note: If FMR had not reimbursed certain fund expenses during these
periods, Fidelity Asset Manager: Growth's, Fidelity Diversified
International's, and Fidelity Japan's returns would have been lower.
The following tables show the income and capital elements of each
Related Fund's cumulative return. The tables compare each Related
Fund's return to the record of the S&P 500, the DJIA, and the cost of
living, as measured by the CPI, over the same period. The CPI
information is as of the month-end closest to the initial investment
date for each Related Fund. The S&P 500 and DJIA comparisons are
provided to show how each Related Fund's return compared to the record
of a broad unmanaged index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Each Related Fund has the ability to invest in securities not
included in either index, and its investment portfolio may or may not
be similar in composition to the indexes. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
Related Fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each Related Fund during the past 10 years ended
on the most recent calendar quarter of each Related Fund or life of
each fund, as applicable, assuming all distributions were reinvested.
Returns are based on past results and are not an indication of future
performance. Tax consequences of different investments (with the
exception of foreign tax withholdings) have not been factored into the
figures below.
FIDELITY DIVIDEND GROWTH: During the period from April 27, 1993
(commencement of operations) to December 31, 1998, a hypothetical
$10,000 investment in Fidelity Dividend Growth would have grown to
$ 39,469 , assuming all distributions were reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY DIVIDEND GROWTH
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 28,730 $ 786 $ 9,953 $ 39,469
1997 $ 23,270 $ 477 $ 5,306 $ 29,053
1996 $ 20,090 $ 260 $ 2,365 $ 22,715
1995 $ 15,840 $ 120 $ 1,495 $ 17,455
1994 $ 12,370 $ 21 $ 300 $ 12,691
1993* $ 12,110 $ 11 $ 51 $ 12,172
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY DIVIDEND GROWTH INDEXES
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 31,929 $ 30,493 $ 11,382
1997 $ 24,832 $ 25,826 $ 11,201
1996 $ 18,620 $ 20,684 $ 10,014
1995 $ 15,143 $ 16,071 $ 10,660
1994 $ 11,007 $ 11,755 $ 10,396
1993* $ 10,864 $ 11,198 $ 10,125
</TABLE>
* From April 27, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Dividend Growth on April 27, 1993, the net amount invested in fund
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 17,669 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 480 for
dividends and $ 6,110 for capital gain distributions.
FIDELITY RETIREMENT GROWTH: During the ten-year period ended December
31, 1998, a hypothetical $10,000 investment in Fidelity Retirement
Growth would have grown to $ 50,001 , assuming all distributions
were reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY RETIREMENT GROWTH
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 16,661 $ 3,186 $ 30,154 $ 50,001
1997 $ 13,688 $ 2,353 $ 20,754 $ 36,795
1996 $ 14,045 $ 2,169 $ 14,826 $ 31,040
1995 $ 14,777 $ 1,848 $ 12,027 $ 28,652
1994 $ 13,193 $ 1,196 $ 8,665 $ 23,054
1993 $ 14,736 $ 1,020 $ 7,284 $ 23,040
1992 $ 13,355 $ 775 $ 4,735 $ 18,865
1991 $ 14,809 $ 692 $ 1,557 $ 17,058
1990 $ 10,926 $ 371 $ 420 $ 11,717
1989 $ 12,721 $ 320 $ 0 $ 13,041
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY RETIREMENT GROWTH INDEXES
Period Ended December 31 S&P 500 DJIA Cost of Living
1998 $ 57,973 $ 55,702 $ 13,602
1997 $ 45,088 $ 47,176 $ 13,386
1996 $ 33,809 $ 37,784 $ 13,162
1995 $ 27,496 $ 29,357 $ 12,739
1994 $ 19,985 $ 21,472 $ 12,423
1993 $ 19,726 $ 20,455 $ 12,100
1992 $ 17,920 $ 17,484 $ 11,776
1991 $ 16,647 $ 16,295 $ 11,444
1990 $ 12,758 $ 13,105 $ 11,104
1989 $ 13,168 $ 13,176 $ 10,465
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Retirement Growth on January 1, 1989, the net amount invested in fund
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 37,904 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 1,698 for
dividends and $ 14,492 for capital gain distributions.
FIDELITY ASSET MANAGER: GROWTH: During the period from December 30,
1991 (commencement of operations) to December 31, 1998, a hypothetical
$10,000 investment in Fidelity Asset Manager: Growth would have grown
to $ 29,574 , assuming all distributions were reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY ASSET MANAGER: GROWTH
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 18,680 $ 2,502 $ 8,392 $ 29,574
1997 $ 18,480 $ 1,989 $ 4,577 $ 25,046
1996 $ 16,350 $ 1,322 $ 2,134 $ 19,806
1995 $ 15,170 $ 787 $ 886 $ 16,843
1994 $ 12,840 $ 452 $ 750 $ 14,042
1993 $ 14,250 $ 279 $ 633 $ 15,162
1992 $ 11,770 $ 152 $ 81 $ 12,003
1991* $ 10,080 $ 0 $ 0 $ 10,080
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY ASSET MANAGER: GROWTH INDEXES
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 34,991 $ 34,240 $ 11,885
1997 $ 27,214 $ 28,999 $ 11,697
1996 $ 20,406 $ 23,225 $ 11,501
1995 $ 16,596 $ 18,046 $ 11,131
1994 $ 12,063 $ 13,199 $ 10,856
1993 $ 11,906 $ 12,574 $ 10,573
1992 $ 10,816 $ 10,747 $ 10,290
1991* $ 10,048 $ 10,016 $ 10,000
</TABLE>
* From December 30, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Asset Manager: Growth on December 30, 1991, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 19,853 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 1,840 for
dividends and $ 6,260 for capital gain distributions.
FIDELITY DIVERSIFIED INTERNATIONAL: During the period from December
27, 1991 (commencement of operations) to December 31, 1998, a
hypothetical $10,000 investment in Fidelity Diversified International
would have grown to $ 22,066 , assuming all distributions were
reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY DIVERSIFIED
INTERNATIONAL
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 17,720 $ 1,338 $ 3,008 $ 22,066
1997 $ 16,130 $ 956 $ 2,203 $ 19,289
1996 $ 14,710 $ 673 $ 1,579 $ 16,962
1995 $ 12,690 $ 434 $ 1,009 $ 14,133
1994 $ 11,300 $ 175 $ 505 $ 11,980
1993 $ 11,600 $ 148 $ 103 $ 11,851
1992 $ 8,570 $ 101 $ 0 $ 8,671
1991* $ 10,060 $ 0 $ 0 $ 10,060
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY DIVERSIFIED INDEXES
INTERNATIONAL
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 35,747 $ 34,937 $ 11,885
1997 $ 27,802 $ 29,589 $ 11,697
1996 $ 20,847 $ 23,698 $ 11,501
1995 $ 16,954 $ 18,413 $ 11,131
1994 $ 12,323 $ 13,467 $ 10,856
1993 $ 12,163 $ 12,829 $ 10,573
1992 $ 11,049 $ 10,966 $ 10,290
1991* $ 10,265 $ 10,220 $ 10,000
</TABLE>
* From December 27, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Diversified International on December 27, 1991, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cas h value at the time they were reinvested) amounted to
$ 13,405 . If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 930 for dividends and $ 2,140 for capital gain
distributions.
FIDELITY EUROPE CAPITAL APPRECIATION: During the period from December
21, 1993 (commencement of operations) to December 31, 1998, a
hypothetical $10,000 investment in Fidelity Europe Capital
Appreciation would have grown to $ 22,825 , including the effect
of the fund's 3% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY EUROPE CAPITAL
APPRECIATION
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 17,324 $ 871 $ 4,630 $ 22,825
1997 $ 14,240 $ 715 $ 3,806 $ 18,761
1996 $ 13,182 $ 495 $ 1,337 $ 15,014
1995 $ 11,698 $ 228 $ 0 $ 11,926
1994 $ 10,398 $ 0 $ 0 $ 10,398
1993* $ 9,729 $ 0 $ 0 $ 9,729
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY EUROPE CAPITAL INDEXES
APPRECIATION
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 29,481 $ 27,316 $ 11,241
1997 $ 22,929 $ 23,135 $ 11,063
1996 $ 17,193 $ 18,529 $ 10,878
1995 $ 13,982 $ 14,397 $ 10,528
1994 $ 10,163 $ 10,530 $ 10,267
1993* $ 10,031 $ 10,031 $ 10,000
</TABLE>
* From December 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Europe Capital Appreciation on December 21, 1993, assuming the 3%
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 14,212 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 601 for
dividends and $ 3,279 for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.0%
short-term trading fee applicable to shares held less than 90 days.
FIDELITY JAPAN: During the period from September 15, 1992
(commencement of operations) to December 31, 1998, a hypothetical
$10,000 investment in Fidelity Japan would have grown to
$ 11,891 , including the effect of the fund's 3% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY JAPAN
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,961 $ 245 $ 685 $ 11,891
1997 $ 9,719 $ 189 $ 607 $ 10,515
1996 $ 11,077 $ 11 $ 692 $ 11,780
1995 $ 12,484 $ 0 $ 780 $ 13,264
1994 $ 12,756 $ 0 $ 797 $ 13,553
1993 $ 11,262 $ 0 $ 375 $ 11,637
1992* $ 9,661 $ 0 $ 0 $ 9,661
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY JAPAN INDEXES
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 33,871 $ 31,889 $ 11,599
1997 $ 26,343 $ 27,008 $ 11,415
1996 $ 19,753 $ 21,631 $ 11,224
1995 $ 16,064 $ 16,807 $ 10,863
1994 $ 11,677 $ 12,293 $ 10,594
1993 $ 11,525 $ 11,710 $ 10,318
1992* $ 10,469 $ 10,010 $ 10,042
</TABLE>
* From September 15, 1992 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Japan on September 15, 1992, assuming the 3% sales charge had been in
effect, the net amount investment in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 10,967 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 213 for dividends and $ 728 for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days.
FIDELITY LATIN AMERICA: During the period from April 19, 1993
(commencement of operations) to December 31, 1998, a hypothetical
$10,000 investment in Fidelity Latin America would have grown to
$ 10,808 , including the effect of the fund's 3% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY LATIN AMERICA
Period Ended December 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,059 $ 715 $ 34 $ 10,808
1997 $ 16,703 $ 770 $ 56 $ 17,529
1996 $ 12,717 $ 431 $ 43 $ 13,191
1995 $ 9,904 $ 154 $ 33 $ 10,091
1994 $ 11,999 $ 41 $ 40 $ 12,080
1993* $ 15,617 $ 52 $ 53 $ 15,722
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY LATIN AMERICA INDEXES
Period Ended December 31 S&P 500 DJIA Cost of Living**
1998 $ 31,265 $ 30,064 $ 11,382
1997 $ 24,317 $ 25,462 $ 11,201
1996 $ 18,233 $ 20,393 $ 11,014
1995 $ 14,829 $ 15,845 $ 10,660
1994 $ 10,778 $ 11,589 $ 10,396
1993* $ 10,638 $ 11,040 $ 10,125
</TABLE>
* From April 19, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Latin America on April 19, 1993, assuming the 3% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested)
amounted to $ 10,898 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 825 for dividends and $ 49 for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive Class A and Class T's front-end sales charge on shares acquired
through reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive Class A and
Class T's front-end sales charge in certain instances due to sales
efficiencies and competitive considerations. The sales charge will not
apply:
CLASS A SHARES ONLY
1. to shares purchased for an employee benefit plan (as defined in
the Employee Retirement Income Security Act) (except a SIMPLE IRA,
SEP, or SARSEP plan or a plan covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program with at least $25 million or more in plan assets;
2. to shares purchased for an employee benefit plan (except a
SIMPLE IRA, SEP, or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or a
403(b) program investing through an insurance company separate account
used to fund annuity contracts;
3. to shares purchased for an employee benefit plan (except a
SIMPLE IRA, SEP, or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or a
403(b) program investing through a trust institution, bank trust
department or insurance company, or any such institution's
broker-dealer affiliate that is not part of an organization primarily
engaged in the brokerage business. Employee benefit plans (except
SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) and
403(b) programs that participate in the Advisor Retirement Connection
do no qualify for this waiver;
4. to shares purchased for an employee benefit plan (except a
SIMPLE IRA, SEP, or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or a
403(b) program investing through an investment professional sponsored
program that requires the participating employee benefit plan to
initially invest in Class C or Class B shares and, upon meeting
certain criteria, subsequently requires the plan to invest in Class A
shares;
5. to shares purchased by a trust institution or bank trust
department for a managed account that is charged an asset-based fee.
Employee benefit plans (except SIMPLE IRA, SEP, and SARSEP plans and
plans covering self-employed individuals and their employees (formerly
Keogh/H.R. 10 plans)), 403(b) programs and accounts managed by third
parties do not qualify for this waiver;
6. to shares purchased by a broker-dealer for a managed account
that is charged an asset-based fee. Employee benefit plans (except
SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) and
403(b) programs do not qualify for this waiver;
7. to shares purchased by a registered investment adviser that is
not part of an organization primarily engaged in the brokerage
business for an account that is managed on a discretionary basis and
is charged an asset-based fee. Employee benefit plans (except SIMPLE
IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) and
403(b) programs do not qualify for this waiver; or
8. to shares purchased by a bank trust officer, registered
representative, or other employee (or a member of one of their
immediate families) or investment professionals having agreements with
FDC.
A sales load waiver form must accompany these transactions.
CLASS T SHARES ONLY
1. to shares purchased for an insurance company separate account used
to fund annuity contracts for employee benefit plans (except SIMPLE
IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or
403(b) programs ;
2. to shares purchased by a trust institution or bank trust department
for a managed account that is charged an asset-based fee. Accounts
managed by third parties do not qualify for this waiver;
3. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee;
4. to shares purchased by a registered investment adviser that is not
part of an organization primarily engaged in the brokerage business
for an account that is managed on a discretionary basis and is charged
an asset-based fee;
5. to shares purchased for an employee benefit plan (except a
SIMPLE IRA, SEP, or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or a
403(b) program) ;
6. to shares purchased for a Fidelity or Fidelity Advisor account
(including purchases by exchange) with the proceeds of a distribution
from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans , 403(b) programs or plans
covering sole-proprietors (formerly Keogh/H.R. 10 plans) that are
invested in Fidelity Advisor or Fidelity funds or (ii) an employee
benefit plan , 403(b) program or plan covering a sole-proprietor
(formerly Keogh/H.R. 10 plan) that is invested in Fidelity Advisor
or Fidelity funds. (Distributions other than those transferred to an
IRA account must be transferred directly into a Fidelity account.);
7. to shares purchased for any state, county, or city, or any
governmental instrumentality, department, authority or agency;
8. to shares purchased with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end or contingent
deferred sales charge;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or FIL or their direct or indirect subsidiaries
(a Fidelity Trustee or employee), the spouse of a Fidelity Trustee or
employee, a Fidelity Trustee or employee acting as custodian for a
minor child, or a person acting as trustee of a trust for the sole
benefit of the minor child of a Fidelity Trustee or employee;
10. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
11. to shares purchased by a bank trust officer, registered
representative, or other employee (or a member of one of their
immediate families) of investment professionals having agreements with
FDC;
12. to shares purchased for a charitable remainder trust or life
income pool established for the benefit of a charitable organization
(as defined for purposes of Section 501(c)(3) of the Internal Revenue
Code); or
13. to shares purchased with distributions of income, principal, and
capital gains from Fidelity Defined Trusts.
A sales load waiver form must accompany these transactions.
CLASS B AND CLASS C SHARES ONLY
T he Class B or Class C CDSC will not apply to the redemption of
shares:
1. For disability or death, provided that the shares are sold
within one year following the death or the initial determination of
disability;
2. That are permitted without penalty at age 70 1/2 pursuant to the
Internal Revenue Code from retirement plans or accounts (other than of
shares purchased on or after February 11, 1999 for Traditional IRAs,
Roth IRAs and Rollover IRAs);
3. For disability, payment of death benefits, or minimum required
distributions starting at age 70 1/2 from Traditional IRAs, Roth IRAs
and Rollover IRAs purchased on or after February 11, 1999;
4. Through the Fidelity Advisor Systemic Withdrawal Program; or
5. (Applicable to Class C only) From an employee benefit plan,
403(b) program or plan covering a sole-proprietor (formerly Keogh/H.R.
plan).
A waiver form must accompany these transactions.
INSTITUTIONAL CLASS SHARES ONLY
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. In addition, employee
benefit plans , 403(b) programs and plans covering sole-proprietors
(formerly Keogh/H.R. 10 plans) must have at least $50 million in
plan assets;
2. Registered investment advisor managed account programs, provided
the registered investment advisor is not part of an organization
primarily engaged in the brokerage business and the program (i)
charges an asset-based fee and (ii) will have at least $1 million
invested in the Institutional Class of the Advisor funds. In addition,
accounts other than an employee benefit plan, 403(b) program or
plan covering a sole-proprietor (formerly Keogh/H.R. 10 plan) in
the program must be managed on a discretionary basis;
3. Trust institution and bank trust department managed account
programs that (i) charge an asset-based fee and (ii) will have at
least $1 million invested in the Institutional Class of the Advisor
funds. Accounts managed by third parties are not eligible to purchase
Institutional Class shares;
4. Insurance company separate accounts that will have at least $1
million invested in the Institutional Class of the Advisor funds;
5. Current or former Trustees or officers of a Fidelity fund or
current or retired officers, directors, or regular employees of FMR
Corp. or Fidelity International Limited or their direct or indirect
subsidiaries (Fidelity Trustee or employee), spouses of Fidelity
Trustees or employees, Fidelity Trustees or employees acting as a
custodian for a minor child, or persons acting as trustee of a trust
for the sole benefit of the minor child of a Fidelity Trustee or
employee ; and
6. Insurance company programs for employee benefit plans,
403(b) programs or plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans) that (i) charge an asset-based fee and (ii)
will have at least $1 million invested in the Institutional Class of
the Advisor funds. Insurance company programs for employee
benefit plans, 403(b) programs and plans covering sole-proprietors
(formerly Keogh/H.R. 10 plans) include such programs offered by a
broker-dealer affiliate of an insurance company, provided that the
affiliate is not part of an organization primarily engaged in the
brokerage business.
For purchases made by managed account programs, insurance company
separate accounts or insurance company programs for employee
benefit plans, 403(b) programs or plans covering sole-proprietors
(formerly Keogh/H.R. 10 plans) , FDC reserves the right to waive
the requirement that $1 million be invested in the Institutional Class
of the Advisor funds.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. For all funds except Advisor Short Fixed-Income, on
eligible purchases of (i) Class A shares in amounts of $1 million or
more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, or (iii) Class T shares in amounts of
$1 million or more, investment professionals will be compensated with
a fee at the rate of 0.25% of the purchase amount. Except as provided
below, Class A eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $25 million
or more; an individual trade of $1 million or more that is load
waived; a trade which brings the value of the accumulated account(s)
of an investor (including an employee benefit plan (except a SEP or
SARSEP plan or a plan covering self-employed individuals and their
employees (formerly a Keogh/H.R. 10 plan)) or 403(b) program) past
$25 million; a load waived trade that brings the value of the
accumulated account(s) of an investor (including an employee
benefit plan (except a SEP or SARSEP plan or a plan covering
self-employed individuals and their employees (formerly a Keogh/H.R.
10 plan)) or 403(b) program) past $1 million; a trade for an
investor with an accumulated account value of $25 million or more; a
load waived trade for an investor with an accumulated account value of
$1 million or more; an incremental trade toward an investor's $25
million "Letter of Intent"; and an incremental load waived trade
toward an investor's $1 million "Letter of Intent . " Except as
provided below, Class T eligible purchases are the following purchases
made through broker-dealers and banks: an individual trade of $1
million or more; a trade which brings the value of the accumulated
account(s) of an investor (including an employee benefit plan
(except a SEP or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly a Keogh/H.R. 10 plan)) or
403(b) program) past $1 million; a trade for an investor with an
accumulated account value of $1 million or more; and an incremental
trade toward an investor's $1 million "Letter of Intent."
For Short Fixed-Income, on eligible purchases of (i) Class A shares in
amounts of $1 million or more, or (ii) Class T shares in amounts of $1
million or more, investment professionals will be compensated with a
fee at the rate of 0.25% of the purchase amount. Except as provided
below , Class A eligible purchases are the following purchases
made through broker-dealers and banks: an individual trade of $1
million or more; a trade which brings the value of the accumulated
account(s) of an investor (including an employee benefit plan
(except a SEP or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly a Keogh/H.R. 10 plan)) or
403(b) program) past $1 million; a trade for an investor with an
accumulated account value of $1 million or more; and an incremental
trade toward an investor's $1 million "Letter of Intent." Except as
provided below, Class T eligible purchases are the following purchases
made through broker-dealers and banks: an individual trade of $1
million or more; a trade which brings the value of the accumulated
account(s) of an investor (including an employee benefit plan
(except a SEP or SARSEP plan or a plan covering self-employed
individuals and their employees (formerly a Keogh/H.R. 10 plan)) or
403(b) program) past $1 million; a trade for an investor with an
accumulated account value of $1 million or more; and an incremental
trade toward an investor's $1 million "Letter of Intent."
Shares held by an insurance company separate account will be
aggregated at the client (e.g., the contract holder or plan sponsor)
level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0 .25% fee with respect to shares
held by an insurance company separate account must provide FDC access
to records detailing purchases at the client level.
For the purpose of determining the availability of Class A or Class T
finder's fees, purchases of Class A or Class T shares made with the
proceeds from the redemption of shares of any Fidelity fund will not
be considered "eligible purchases."
Except as provided below, any assets on which a finder's fee has been
paid will bear a contingent deferred sales charge (Class A or Class T
CDSC) if they do not remain in Class A or Class T shares of the
Fidelity Advisor Funds, or Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund, for a period of at least one
uninterrupted year. The Class A or Class T CDSC will be 0.25% of the
lesser of the cost of the Class A or Class T shares, as applicable, at
the initial date of purchase or the value of those Class A or Class T
shares, as applicable, at redemption, not including any reinvested
dividends or capital gains. Class A and Class T shares acquired
through distributions (dividends or capital gains) will not be subject
to a Class A or Class T CDSC. In determining the applicability and
rate of any Class A or Class T CDSC at redemption, Class A or Class T
shares representing reinvested dividends and capital gains will be
redeemed first, followed by those Class A or Class T shares that have
been held for the longest period of time.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
The Class A or Class T CDSC will not apply to the redemption of
shares:
1. Held by insurance company separate accounts;
2. For plan loans or distributions or exchanges to non-Advisor fund
investment options from employee benefit plans (except shares of
SIMPLE IRA, SEP and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)
purchased on or after February 11, 1999) and 403(b) programs; or
3. For disability, payment of death benefits, or minimum required
distributions starting at age 70 1/2 from Traditional IRAs, Roth IRAs,
SIMPLE IRAs, SEPs, SARSEPs and plans covering a sole-proprietor or
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans).
A waiver form must accompany these transactions.
CLASS A AND CLASS T SHARES ONLY
COMBINED PURCHASE, RIGHTS OF ACCUMULATION AND LETTER OF INTENT
PROGRAMS. The following qualify as an "individual" or "company" for
the purposes of determining eligibility for the Combined Purchase,
Rights of Accumulation or Letter of Intent program: an individual,
spouse and their children under age 21 purchasing for his/her or their
own account; a trustee, administrator or other fiduciary purchasing
for a single trust estate or a single fiduciary account or for a
single or a parent-subsidiary group of employee benefit plans
(except SEP and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans) and
403(b) programs ; and tax-exempt organizations (as defined in
Section 501(c)(3) of the Internal Revenue Code).
COMBINED PURCHASE. For your purchases to be aggregated for the purpose
of qualifying for the Combined Purchase program, they must be made on
the same day through one investment professional.
RIGHTS OF ACCUMULATION. The current value of your holdings is
determined at the NAV at the close of business on the day you purchase
the Class A or Class T shares to which the current value of your
holdings will be added. For your purchases and holdings to be
aggregated for the purpose of qualifying for the Rights of
Accumulation program, they must have been made through one investment
professional.
LETTER OF INTENT. You must file your Letter of Intent (Letter)
with Fidelity within 90 days of the start of your purchases toward
completing your Letter. For your purchases to be aggregated for the
purpose of completing your Letter, they must be made through one
investment professional. Your initial purchase toward completing your
Letter must be at least 5% of the total investment specified in your
Letter. Fidelity will register Class A or Class T shares equal to 5%
of the total investment specified in your Letter in your name and will
hold those shares in escrow. You will earn income , dividends
and capital gain distributions on escrowed Class A and Class T shares.
The escrow will be released when you complete your Letter. You are not
obligated to complete your Letter. If you do not complete your Letter,
Fidelity will provide you with 30-days' written notice to pay the
increased front-end sales charges due. If you do not pay the increased
front-end sales charges within 30 days, Fidelity will redeem
sufficient escrowed Class A or Class T shares to pay any applicable
front-end sales charges. If you purchase more than the amount
specified in your Letter and qualify for additional Class A or Class T
front-end sales charge reductions, the front-end sales charge will be
adjusted to reflect your total purchase at the end of 13 months and
the surplus amount will be applied to your purchase of additional
Class A or Class T shares at the then-current offering price
applicable to the total investment.
ALL CLASSES
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing each fund's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. A portion of each fund's income may qualify for the
dividends-received deduction available to corporate shareholders to
the extent that the fund's income is derived from qualifying
dividends. Because each fund may earn other types of income, such as
interest, income from securities loans, non-qualifying dividends, and
short-term capital gains, the percentage of dividends from the funds
that qualify for the deduction will generally be less than 100%. For
those funds whose income is primarily derived from interest, dividends
will not qualify for the dividends-received deduction available to
corporate shareholders. To the extent that a municipal fund's income
is designated as federally tax-exempt interest, the daily dividends
declared by the fund are also federally tax-exempt. Short-term capital
gains are taxable as dividends, but do not qualify for the
dividends-received deduction. For any fund that invests significantly
in foreign securities, corporate shareholders should not expect fund
dividends to qualify for the dividends-received deduction.
Each municipal fund purchases municipal securities whose interest FMR
believes is free from federal income tax. Generally, issuers or other
parties have entered into covenants requiring continuing compliance
with federal tax requirements to preserve the tax-free status of
interest payments over the life of the security. If at any time the
covenants are not complied with, or if the IRS otherwise determines
that the issuer did not comply with relevant tax requirements,
interest payments from a security could become federally taxable
retroactive to the date the security was issued. For certain types of
structured securities, the tax status of the pass-through of tax-free
income may also be based on the federal tax treatment of the
structure.
Interest on certain "private activity" securities is subject to the
federal alternative minimum tax (AMT), although the interest continues
to be excludable from gross income for other tax purposes. Interest
from private activity securities is a tax preference item for the
purposes of determining whether a taxpayer is subject to the AMT and
the amount of AMT to be paid, if any.
A portion of the gain on municipal bonds purchased at market discount
after April 30, 1993 is taxable to shareholders as ordinary income,
not as capital gains.
CAPITAL GAINS DISTRIBUTIONS. Each fund's long-term capital gains
distributions are federally taxable to shareholders generally as
capital gains.
As of October 31, 1998, Advisor International Capital Appreciation had
a capital loss carryforward aggregating approximately
$ 2,311,000 . This loss carryforward, all of which will
expire on October 31, 2006, is available to offset future
capital gains.
As of November 30, 1998, Advisor TechnoQuant Growth had a capital loss
carryforward aggregating approximately $ 333,000 . This loss
carryforward, all of which will expire on November 30,
2006, is available to offset future capital gains.
As of November 30, 1998, Advisor Growth & Income had a capital loss
carryforward aggregating approximately $13,634,000. This loss
carryforward, all of which will expire on November 30, 2006, is
available to offset future capital gains.
As of December 31, 1998, Advisor Emerging Markets Income had a
capital loss carryforward aggregating approximately $20,267,000. This
loss carryforward, all of which will expire on December 31, 2006, is
available to offset future capital gains.
As of October 31, 1998, Advisor Intermediate Bond had a capital loss
carryforward aggregating approximately $ 10,771,000 . This loss
carryforward, of which $9,361,000, and $1,410,000 will expire
on October 31, 2004 and 2005 , respectively, is available to
offset future capital gains.
As of October 31, 1998, Advisor Short Fixed-Income had a capital loss
carryforward aggregating approximately $ 43,066,000 . This loss
carryforward, of which $ 130,000, $38,000, $336,000, $17,691,000,
$19,457,000, $2,265,000 , and $ 3,149,000 will expire on
October 31, 1999, 2000, 2001, 2002, 2003, 2004, and 2005 ,
respectively, is available to offset future capital gains.
As of October 31, 1998, Advisor Municipal Income had a capital loss
carryforward aggregating approximately $ 15,845,000 . This loss
carryforward, of which $ 2,066,000 , $ 7,511,000 , and
$ 6,268,000 will expire on October 31, 2002, 2003, and
2004 , respectively, is available to offset future capital
gains.
RETURNS OF CAPITAL. If a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business
trusts, state law provides for a pass-through of the state and local
income tax exemption afforded to direct owners of U.S. Government
securities. Some states limit this pass-through to mutual funds that
invest a certain amount in U.S. Government securities, and some types
of securities, such as repurchase agreements and some agency-backed
securities, may not qualify for this benefit. The tax treatment of
your dividends from a fund will be the same as if you directly owned a
proportionate share of the U.S. Government securities. Because the
income earned on certain U.S. Government securities is exempt from
state and local personal income taxes, the portion of dividends from a
fund attributable to these securities will also be free from state and
local personal income taxes. The exemption from state and local
personal income taxation does not preclude states from assessing other
taxes on the ownership of U.S. Government securities.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may withhold
taxes on dividends and interest earned by a fund with respect to
foreign securities. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. If, at the close
of its fiscal year, more than 50% of a fund's total assets is invested
in securities of foreign issuers, the fund may elect to pass through
eligible foreign taxes paid and thereby allow shareholders to take a
deduction or, if they meet certain holding period requirements with
respect to fund shares, a credit on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trusts are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments(registered trademark), P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons"
by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc. Abigail Johnson, Vice President of certain
Equity Funds, is Mr. Johnson's daughter.
J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (66), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (67), Trustee. Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (55), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of National Arts Stabilization Inc., Chairman of
the Board of Trustees of the Greenwich Hospital Association, Director
of the Yale-New Haven Health Services Corp. (1998), a Member of the
Public Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (65), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (70), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board, of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of
various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A.
Hanna Company (chemicals, 1993), Imation Corp. (imaging and
information storage, 1997).
*ROBERT C. POZEN (52), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (70), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
DWIGHT D. CHURCHILL (45), is Vice President of Bond Funds, Group
Leader of the Bond Group, Senior Vice President of FMR (1997), and
Vice President of FIMM (1998). Mr. Churchill joined Fidelity in 1993
as Vice President and Group Leader of Taxable Fixed-Income
Investments.
ABIGAIL P. JOHNSON (37), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
FRED L. HENNING, JR. (59), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.
BART A. GRENIER, (39), is Vice President of certain High-Income Bond
Funds (1997). Mr. Grenier rejoined Fidelity in August 1997 from DDJ
Capital Management, LLC, where he had served as Managing Director
since April 1997. Mr. Grenier originally joined Fidelity in 1991 as a
senior analyst. Mr. Grenier served as a Director of High-Income Group
Research and as Director of U.S. Equity Research from 1994 to March
1996. He later became Group Leader of the Income-Growth and Asset
Allocation-Income Groups in 1996 and Assistant Equity Division Head in
1997.
ROBERT A. LAWRENCE (46), is Vice President of certain Equity Funds
(1997), Vice President of Fidelity Real Estate High Income Fund (1995)
and Fidelity Real Estate High Income Fund II (1996), and Senior Vice
President of FMR (1993).
RICHARD A. SPILLANE, JR. (47), is Vice President of certain Equity
Funds and Senior Vice President of FMR (1997). Since joining Fidelity,
Mr. Spillane is Chief Investment Officer for Fidelity International,
Limited. Prior to that position, Mr. Spillane served as Director of
Research.
JOHN H. CARLSON (48), is Vice President of Advisor Emerging Markets
Income (1996), Advisor Strategic Income (1996), and other funds
advised by FMR. Prior to joining Fidelity in 1995, Mr. Carlson spent
three years with Lehman Brothers as executive director of emerging
markets and senior vice president and head trader at Lehman's Latin
American emerging markets fixed-income desk.
C. ROBERT CHOW (37), is Vice President of Advisor Equity Income
(1998). Prior to his current responsibilities, Mr. Chow worked as an
analyst and portfolio manager for a variety of Fidelity funds.
KATHERINE COLLINS (30), is Vice President of Advisor Mid Cap (1998),
and another fund advised by FMR. Prior to her current
responsibilities, Ms. Collins has managed a variety of other Fidelity
funds.
ANDREW J. DUDLEY (34), is Vice President of Advisor Short Fixed-Income
(1998), and other funds advised by FMR. Prior to joining Fidelity as a
portfolio manager in 1996, Mr. Dudley worked as a quantitative analyst
and portfolio manager at Putnam Investments for five years.
MARGARET L. EAGLE (49), is Vice President of Advisor High
Yield , Advisor Strategic Income (1997) , and other funds
advised by FMR . Prior to her current responsibilities, Ms. Eagle
managed a variety of Fidelity funds.
GREGORY FRASER (38), is Vice President of Advisor Diversified
International (1998). Prior to his current responsibilities, Mr.
Fraser has managed a variety of Fidelity funds.
KEVIN E. GRANT (38), is Vice President of Advisor Balanced
(1996), Advisor Strategic Income (1998) , Advisor Intermediate
Bond (1995) , and other funds advised by FMR. Since joining
Fidelity in 1993, Mr. Grant has managed a variety of Fidelity funds.
RICHARD C. HABERMANN (58), is Vice President of Advisor Asset
Allocation (1998) and Advisor Global Equity (1998). Prior to his
current responsibilities, Mr. Habermann has managed a variety of
Fidelity funds.
HARRIS LEVITON (37), is Vice President of Advisor Strategic
Opportunities (1996). Prior to his current responsibilities, Mr.
Leviton has managed a variety of Fidelity funds.
HARRY W. LANGE (46), is Vice President of Advisor Small Cap (1998).
Prior to his current responsibilities, Mr. Lange has managed a variety
of Fidelity funds.
NORMAN U. LIND (42), is Vice President of Advisor Intermediate
Municipal Income (1998) and other funds advised by FMR. Prior to his
current responsibilities, Mr. Lind has managed a variety of Fidelity
funds.
KEVIN R. McCAREY (38), is Vice President of Advisor International
Capital Appreciation (1997), Advisor Europe Capital Appreciation
(1998), and other funds advised by FMR. Prior to his current
responsibilities, Mr. McCarey has managed a variety of Fidelity funds.
RICHARD R. MACE, JR. (37), is Vice President of Advisor Overseas
(1996), and other funds advised by FMR. Prior to his current
responsibilities, Mr. Mace has managed a variety of Fidelity funds.
CHARLES MANGUM (34), is Vice President of Advisor Dividend Growth
(1998). Prior to his current responsibilities, Mr. Mangum has managed
a variety of Fidelity funds.
BRENDA A. REED (37), is Vice President of Advisor Japan (1998). Prior
to her current responsibilities, Ms. Reed has managed a variety of
Fidelity funds.
PATRICIA SATTERTHWAITE (39), is Vice President of Advisor Latin
America (1998). Prior to her current responsibilities, Ms.
Satterthwaite has managed a variety of Fidelity funds.
J. FERGUS SHIEL (41), is Vice President of Advisor Retirement Growth
(1998). Prior to his current responsibilities, Mr. Shiel has managed a
variety of Fidelity funds.
THOMAS J. SILVIA (37), is Vice President of Advisor Mortgage
Securities (1998), Advisor Government Investment (1998), and another
fund advised by FMR. Prior to his current responsibilities, Mr. Silvia
worked as a senior mortgage trader.
BETH TERRANA (41), is Vice President of Advisor Growth & Income
(1996), and other funds advised by FMR. Prior to her current
responsibilities, Ms. Terrana managed a variety of Fidelity funds.
CHRISTINE JONES THOMPSON (40), is Vice President of Advisor Municipal
Income (1998), and other funds advised by FMR. Prior to her current
responsibilities, Ms. Thompson has managed a variety of Fidelity
funds.
JENNIFER S. UHRIG (37), is Vice President of Advisor Equity Growth
(1996), and other funds advised by FMR. Prior to her current
responsibilities, Ms. Uhrig has managed a variety of Fidelity funds.
GEORGE A. VANDERHEIDEN (53), is Vice President of Advisor Growth
Opportunities, and other funds advised by FMR. Prior to his current
responsibilities, Mr. Vanderheiden has managed a variety of Fidelity
funds.
ERIC D. ROITER (50), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
MATTHEW N. KARSTETTER (37), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
STANLEY N. GRIFFITH (52), Assistant Vice President (1998), is
Assistant Vice President of Fidelity's Fixed-Income Funds (1998) and
an employee of FMR Corp.
JOHN H. COSTELLO (52), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THOMAS J. SIMPSON (40), Assistant Treasurer (1996), is Assistant
Treasurer of Fidelity's Fixed-Income Funds (1998) and an employee of
FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and
Fund Controller of Liberty Investment Services (1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended in 1998, or calendar year
ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM J. Gary Burkhead** Ralph F. Cox Phyllis Burke Davis Robert M. Gates Edward C. Johnson 3d**
A FUND
Advisor Latin AmericaB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor Europe Capital $ 0 $ 4 $ 4 $ 4 $ 0
AppreciationB,+
Advisor International
Capital $ 0 $ 5 $ 5 $ 5 $ 0
AppreciationB
Advisor OverseasB $ 0 $ 464 $ 461 $ 467 $ 0
Advisor Diversified $ 0 $ 8 $ 8 $ 8 $ 0
InternationalB,+
Advisor Global EquityB,+ $ 0 $ 8 $ 8 $ 8 $ 0
Advisor TechnoQuant
GrowthB $ 0 $ 13 $ 13 $ 13 $ 0
Advisor Small CapB,+ $ 0 $ 13 $ 13 $ 13 $ 0
Advisor Strategic $ 0 $ 230 $ 228 $ 231 $ 0
OpportunitiesB
Advisor MidCapB $ 0 $ 170 $ 169 $ 171 $ 0
Advisor Retirement
GrowthB,+ $ 0 $ 16 $ 16 $ 16 $ 0
Advisor Equity
GrowthB,C,H $ 0 $ 2,058 $ 2,044 $ 2,072 $ 0
Advisor Large CapB $ 0 $ 34 $ 34 $ 34 $ 0
Advisor Dividend
GrowthB,+ $ 0 $ 44 $ 44 $ 44 $ 0
Advisor Growth
Opportunities $ 0 $ 8,661 $ 8,603 $ 8,721 $ 0
B,D,H
Advisor Growth & IncomeB $ 0 $ 151 $ 149 $ 152 $ 0
Advisor Equity
IncomeB,E,H $ 0 $ 1,358 $ 1,348 $ 1,367 $ 0
Advisor Asset
AllocationB,+ $ 0 $ 8 $ 8 $ 8 $ 0
Advisor BalancedB,F,H $ 0 $ 1,114 $ 1,068 $ 1,083 $ 0
Advisor Emerging Markets $ 0 $ 36 $ 35 $ 36 $ 0
IncomeB
Advisor High YieldB,G,H $ 0 $ 1,280 $ 1,271 $ 1,290 $ 0
Advisor Strategic
IncomeB $ 0 $ 86 $ 85 $ 86 $ 0
Advisor Government
InvestmentB $ 0 $ 77 $ 76 $ 77 $ 0
Advisor Mortgage
SecuritiesB $ 0 $ 187 $ 186 $ 188 $ 0
Advisor Intermediate
BondB $ 0 $ 176 $ 175 $ 178 $ 0
Advisor Short
Fixed-IncomeB $ 0 $ 129 $ 128 $ 130 $ 0
Advisor Municipal
IncomeB $ 0 $ 160 $ 159 $ 161 $ 0
Advisor Intermediate $ 0 $ 25 $ 25 $ 25 $ 0
Municipal IncomeB
TOTAL COMPENSATION
FROM THE $ 0 $ 223,500 $ 220,500 $ 223,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION FROM E. Bradley Jones Donald J. Kirk Peter S. Lynch ** William O. McCoy Gerald C. McDonough
A FUND
Advisor Latin AmericaB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor Europe Capital $ 4 $ 4 $ 0 $ 4 $ 5
AppreciationB,+
Advisor International Capital $ 5 $ 5 $ 0 $ 5 $ 6
AppreciationB
Advisor OverseasB $ 464 $ 473 $ 0 $ 467 $ 575
Advisor Diversified $ 8 $ 8 $ 0 $ 8 $ 10
InternationalB,+
Advisor Global EquityB,+ $ 8 $ 8 $ 0 $ 8 $ 10
Advisor TechnoQuant GrowthB $ 13 $ 13 $ 0 $ 13 $ 16
Advisor Small CapB,+ $ 13 $ 13 $ 0 $ 13 $ 16
Advisor Strategic $ 230 $ 234 $ 0 $ 231 $ 285
OpportunitiesB
Advisor MidCapB $ 170 $ 174 $ 0 $ 171 $ 211
Advisor Retirement GrowthB,+ $ 16 $ 16 $ 0 $ 16 $ 20
Advisor Equity GrowthB,C,H $ 2,058 $ 2,101 $ 0 $ 2,072 $ 2,550
Advisor Large CapB $ 34 $ 35 $ 0 $ 34 $ 42
Advisor Dividend GrowthB,+ $ 44 $ 45 $ 0 $ 44 $ 54
Advisor Growth Opportunities $ 8,662 $ 8,840 $ 0 $ 8,721 $ 10,728
B,D,H
Advisor Growth & IncomeB $ 150 $ 154 $ 0 $ 152 $ 186
Advisor Equity IncomeB,E,H $ 1,358 $ 1,386 $ 0 $ 1,367 $ 1,682
Advisor Asset AllocationB,+ $ 8 $ 8 $ 0 $ 8 $ 10
Advisor BalancedB,F,H $ 1,076 $ 1,098 $ 0 $ 1,083 $ 1,331
Advisor Emerging Markets $ 36 $ 36 $ 0 $ 36 $ 44
IncomeB
Advisor High YieldB,G,H $ 1,280 $ 1,307 $ 0 $ 1,290 $ 1,586
Advisor Strategic IncomeB $ 85 $ 87 $ 0 $ 86 $ 105
Advisor Government
InvestmentB $ 77 $ 78 $ 0 $ 77 $ 95
Advisor Mortgage SecuritiesB $ 187 $ 190 $ 0 $ 188 $ 231
Advisor Intermediate BondB $ 176 $ 180 $ 0 $ 178 $ 218
Advisor Short Fixed-IncomeB $ 129 $ 131 $ 0 $ 130 $ 160
Advisor Municipal IncomeB $ 160 $ 163 $ 0 $ 161 $ 198
Advisor Intermediate $ 25 $ 25 $ 0 $ 25 $ 31
Municipal IncomeB
TOTAL COMPENSATION FROM THE $ 222,000 $ 226,500 $ 0 $223,500 $ 273,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AGGREGATE COMPENSATION FROM Marvin L. Mann Robert C. Pozen** Thomas R. Williams
A FUND
Advisor Latin AmericaB,+ $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0
Advisor Europe Capital $ 4 $ 0 $ 4
AppreciationB,+
Advisor International Capital $ 5 $ 0 $ 5
AppreciationB
Advisor OverseasB $ 461 $ 0 $ 467
Advisor Diversified $ 8 $ 0 $ 8
InternationalB,+
Advisor Global EquityB,+ $ 8 $ 0 $ 8
Advisor TechnoQuant GrowthB $ 13 $ 0 $ 13
Advisor Small CapB,+ $ 13 $ 0 $ 13
Advisor Strategic $ 228 $ 0 $ 231
OpportunitiesB
Advisor MidCapB $ 169 $ 0 $ 171
Advisor Retirement GrowthB,+ $ 16 $ 0 $ 16
Advisor Equity GrowthB,C,H $ 2,045 $ 0 $ 2,072
Advisor Large CapB $ 34 $ 0 $ 34
Advisor Dividend GrowthB,+ $ 44 $ 0 $ 44
Advisor Growth Opportunities $ 8,608 $ 0 $ 8,721
B,D,H
Advisor Growth & IncomeB $ 150 $ 0 $ 152
Advisor Equity IncomeB,E,H $ 1,349 $ 0 $ 1,367
Advisor Asset AllocationB,+ $ 8 $ 0 $ 8
Advisor BalancedB,F,H $ 1,105 $ 0 $ 1,121
Advisor Emerging Markets $ 35 $ 0 $ 36
IncomeB
Advisor High YieldB,G,H $ 1,273 $ 0 $ 1,289
Advisor Strategic IncomeB $ 85 $ 0 $ 86
Advisor Government InvestmentB $ 76 $ 0 $ 77
Advisor Mortgage SecuritiesB $ 185 $ 0 $ 188
Advisor Intermediate BondB $ 175 $ 0 $ 177
Advisor Short Fixed-IncomeB $ 128 $ 0 $ 130
Advisor Municipal IncomeB $ 159 $ 0 $ 161
Advisor Intermediate $ 25 $ 0 $ 25
Municipal IncomeB
TOTAL COMPENSATION FROM THE $ 220,500 $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for
23 7 funds in the complex.
** Interested trustees of each fund and Mr. Burkhead are compensated
by FMR.
+ Estimated
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation: Ralph F.
Cox, $55,039; Marvin L. Mann, $55,039; Thomas R. Williams, $63,433;
and William O. McCoy, $55,039.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $933, Phyllis Burke Davis,
$933, Robert M. Gates, $933, E. Bradley Jones, $933, Donald J.
Kirk, $933, William O. McCoy, $933, Gerald C. McDonough, $1,089,
Marvin L. Mann, $933, and Thomas R. Williams, $933.
D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $3,927, Phyllis Burke Davis,
$3,927, Robert M. Gates, $3,927, E. Bradley Jones, $3,927, Donald J.
Kirk, $3,927, William O. McCoy, $3,927, Gerald C. McDonough, $4,581,
Marvin L. Mann, $3,927, and Thomas R. Williams, $3,927.
E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $616, Phyllis Burke Davis, $616,
Robert M. Gates, $616, E. Bradley Jones, $616, Donald J. Kirk, $616,
William O. McCoy, $616, Gerald C. McDonough, $719, Marvin L. Mann,
$616, and Thomas R. Williams, $616.
F The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $512, Phyllis Burke Davis, $512,
Robert M. Gates, $512, E. Bradley Jones, $512, Donald J. Kirk, $512,
William O. McCoy, $512, Gerald C. McDonough, $598, Marvin L. Mann,
$512, and Thomas R. Williams, $512.
G The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $579, Phyllis Burke Davis, $579,
Robert M. Gates, $579, E. Bradley Jones, $579, Donald J. Kirk, $579,
William O. McCoy, $579 , Gerald C. McDonough, $ 676 , Marvin
L. Mann, $ 579 , and Thomas R. Williams, $ 579 .
H Certain of the non-interested trustees' aggregate
compensation from certain funds includes accrued voluntary deferred
compensation as follows: Equity Growth (Ralph F. Cox, $789, William
O. McCoy, $723, Marvin L. Mann, $789, Thomas R. Williams, $789);
Growth Opportunities (Ralph F. Cox, $3,322, William O. McCoy, $3,059,
Marvin L. Mann, $3,322, Thomas R. Williams, $3,322); Equity Income
(Ralph F. Cox, $521, William O. McCoy, $480, Marvin L. Mann, $521,
Thomas R, Williams, $521); Balanced (Ralph F. Cox, $435, William O.
McCoy, $359, Marvin L. Mann, $435, Thomas R. Williams, $435); and High
Yield (Ralph F. Cox, $492, William O. McCoy, $417, Marvin L. Mann,
$492, Thomas R. Williams, $492).
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of December 31, 1998, approximately 100% of Fidelity Advisor
Latin America's, approximately 100% of Fidelity Advisor Japan's,
approximately 100% of Fidelity Advisor Europe Capital Appreciation's,
approximately 100% of Fidelity Advisor Diversified International's,
approximately 100% of Fidelity Advisor Global Equity's, approximately
3.0% of Fidelity Advisor TechnoQuant Growth's, approximately 100% of
Fidelity Advisor Retirement Growth's, approximately 2.3% of Fidelity
Advisor Large Cap's, approximately 100% of Fidelity Advisor Dividend
Growth's, and approximately 100% of Fidelity Advisor Asset
Allocation's total outstanding shares were held by FMR. FMR Corp. is
the ultimate parent company of FMR. By virtue of his ownership
interest in FMR Corp., as described in the "Control of Investment
Advisers" section on page 383, Mr. Edward C. Johnson 3d, President and
Trustee of each fund, may be deemed to be a beneficial owner of these
shares. As of the above date, with the exception of Mr. Johnson 3d's
deemed ownership of Fidelity Advisor Latin America's, Fidelity Advisor
Japan's, Fidelity Advisor Europe Capital Appreciation's, Fidelity
Advisor Diversified International's, Fidelity Advisor Global Equity's,
Fidelity Advisor Technoquant Growth's, Fidelity Advisor Retirement
Growth's, Fidelity Advisor Large Cap's, Fidelity Advisor Dividend
Growth's, and Fidelity Advisor Asset Allocation's shares, the
Trustees, Members of the Advisory Board, and officers of each fund
owned, in the aggregate, less than 1% of each fund's total outstanding
shares.
As of December 31, 1998, the following owned of record or
beneficially 5% or more (up to and including 25%) of each class's
outstanding shares:
Advisor Latin America Class A: FMR Corp., Boston, MA (100%).
Advisor Latin America Class T: FMR Corp., Boston, MA (100%).
Advisor Latin America Class B: FMR Corp., Boston, MA (100%).
Advisor Latin America Class C: FMR Corp., Boston, MA (100%).
Advisor Latin America Institutional Class: FMR Corp., Boston, MA
(100%).
Advisor Japan Fund Class A: FMR Corp., Boston, MA (100%).
Advisor Japan Fund Class T: FMR Corp., Boston, MA (100%).
Advisor Japan Fund Class B: FMR Corp., Boston, MA (100%).
Advisor Japan Fund Class C: FMR Corp., Boston, MA (100%).
Advisor Japan Fund Class Institutional Class: FMR Corp., Boston, MA
(100%).
Advisor Europe Capital Appreciation Class A: FMR Corp., Boston, MA
(100%).
Advisor Europe Capital Appreciation Class T: FMR Corp., Boston, MA
(100%).
Advisor Europe Capital Appreciation Class B: FMR Corp., Boston, MA
(100%).
Advisor Europe Capital Appreciation Class C: FMR Corp., Boston, MA
(100%).
Advisor Europe Capital Appreciation Institutional Class: FMR Corp.,
Boston, MA (100%).
Advisor International Capital Appreciation Class A: FMR Corp.,
Boston, MA, (10.92%); Emmet A. Larkin & Co. Inc., San Francisco, CA
(9.35%); Lasalle Street Securities, Chicago, IL (8.12%); Protected
Investors of America, San Francisco, CA (6.28%); Painewebber Inc.,
Weehawken, NJ (5.33%).
Advisor International Capital Appreciation Class T: Painewebber
Inc., Weehhawken, NJ (10.50%); Nathan & Lewis Securities, Inc., New
York, NY (6.18%); Cambridge Investment Research, Fairfield, IA
(5.41%).
Advisor International Capital Appreciation Class B: Merrill Lynch,
New York, NY (25.69%); Financial Network Investments, Torrance, CA
(6.99%); Royal Alliance Associates Inc., Birmingham, AL (5.06%).
Advisor International Capital Appreciation Class C: Investacorp,
Inc., Miami Lakes, FL (13.51%); Capital Financial Services, Milwaukee,
WI (8.80%); Reliastar & Affiliates, Minneapolis, MN (5.77%); Financial
Securities Corporation, Atlanta, GA 5.65%); Mutual Service Corp., Palm
Beach Garden, FL (5.50%); Midsouth Capital Inc., Columbia, SC
(5.09%).
Advisor International Capital Appreciation Institutional Class: FMR
Corp., Boston, MA (100%).
Advisor Overseas Fund Class T: Great West Life and Annuity
Insurance Co, Englewood, CO (8.43%); Salomon Smith Barney, Inc., New
York, NY (6.60%).
Advisor Overseas Class B: Merrill Lynch, New York, NY (7.19%).
Advisor Overseas Class C: Salomon Smith Barney, Inc., New York, NY
(25.99%); Merrill Lynch, New York, NY (11.94%).
Advisor Overseas Institutional Class: Merrill Lynch, New York, NY
(40.05%); Mercantile, St. Louis, MO (9.76%); Bingham, Dana & Gould
LLP, Boston, MA (5.26%).
Advisor Diversified International Class A: FMR Corp., Boston, MA
(100%).
Advisor Diversified International Class T: FMR Corp., Boston, MA
(100%).
Advisor Diversified International Class B: FMR Corp., Boston, MA
(100%).
Advisor Diversified International Class C: FMR Corp., Boston, MA
(100%).
Advisor Diversified International Institutional Class: FMR Corp.,
Boston, MA (100%).
Advisor Global Equity Fund Class A: FMR Corp., Boston, MA (100%).
Advisor Global Equity Fund Class T: FMR Corp., Boston, MA (100%).
Advisor Global Equity Fund Class B: FMR Corp., Boston, MA (100%).
Advisor Global Equity Fund Class C: FMR Corp., Boston, MA (100%).
Advisor Global Equity Fund Institutional Class: FMR Corp., Boston,
MA (100%).
Advisor TechnoQuant Growth Class A: Merrill Lynch, New York, NY
(30.42%); Piper Jaffrey & Hopwood, Inc., Minneapolis, MN (13.29%);
Middlegate Securities, New York, NY (11.74%); Commonwealth Equity
Services, Waltham, MA (7.52%).
Advisor TechnoQuant Growth Class T: Offerman & Co., Minneapolis, MN
(10.86%); Wall Street Financial Group, Rochester, NY (6.83%); Royal
Alliance Associates, Inc., Birmingham, AL (6.49%); Merrill Lynch, New
York, NY (6.24%); PaineWebber Inc., Weehawken, NJ (5.45%); Piper
Jaffray & Hopwood, Inc., Minneapolis, MN (5.34%);
Advisor TechnoQuant Growth Class B: Merrill Lynch, New York, NY
(35.26%); Piper Jaffray & Hopwood, Inc., Minneapolis, MN (11.58%);
Prudential Securities, New York, NY (6.27%).
Advisor TechnoQuant Growth Institutional Class: FMR Corp., Boston,
MA (85.14%); Merrill Lynch, New York, NY (8.97%).
Advisor Small Cap Class A: Merrill Lynch, New York, NY (7.44%);
Morgan Keegan & Company, Inc., Memphis, TN (5.68%); Prudential
Securities, New York, NY (5.38%).
Advisor Small Cap Class T: Dain Rauscher, Inc., Minneapolis, MN
(8.66%); Commonwealth Equity Services, Waltham, MA (7.39%); Michigan
National Bank, Farmington Hills, MI (6.39%); Securities America, Inc.,
Williamsville, NY (6.20%).
Advisor Small Cap Class B: Merrill Lynch, New York, NY (12.63%);
Alex Brown & Sons, Inc., Baltimore, MD (6.35%); Prudential Securities,
New York, NY (5.58%).
Advisor Small Cap Class C: Merrill Lynch, New York, NY (9.07%);
Jefferson Pilot Securities, Concord, NH (7.08%); Prudential
Securities, New York, NY (7.08%); Dain Rauscher, Inc., Minneapolis, MN
(6.93%); Securities America, Inc., Williamsville, NY (6.39%);
PaineWebber, Inc., New York, NY (6.12%); Cowles, Sabol & Company,
Encino, CA (5.77%).
Advisor Small Cap Institutional Class: Charles Schwab & Co., Inc.,
San Francisco, CA (27.46%); One Valley Bank, N.A., Charleston, WV
(10.81%); Banc One, Chicago, IL (10.73%).
Advisor Strategic Opportunities Class A: Legend Equities Corp.,
Palm Beach Gardens, FL (11.03%); Correll Company, Hickory Hills, IL
(8.88%).
Advisor Strategic Opportunities Class T: Merrill Lynch, New York,
NY (11.17%); CIGNA Corp. & Affiliates, Harford, CT (7.66%); A.G.
Edwards & Sons Inc., St. Louis, MO (6.18%); Prudential Securities, New
York, NY (5.02%).
Advisor Strategic Opportunities Class B: Salomon Smith Barney,
Inc., New York, NY (5.64%); Merrill Lynch, New York, NY (5.44%).
Advisor Strategic Opportunities Institutional Class : National Bank
of Alaska, Anchorage, AK (31.99%); Whitney National Bank, New Orleans,
LA (21.00%); Thumb National Bank and Trust, Pigeon, MI (10.08%); First
Trust, Denver, CO (8.76%); Equitable Trust Company, Nashville, TN
(8.55%); First Tennessee Bank, Memphis, TN (7.16%).
Advisor Mid Cap Class A: Royal Alliance Associates Inc.,
Birmingham, AL (7.90%); Correll Company, Hickory Hills, IL (6.14%);
Protected Investors of America, San Francisco, CA (5.04%).
Advisor Mid Cap Class T: Dain Rauscher Inc., Minneapolis, MN
(9.27%); Saloman Smith Barney, Inc., New York, NY (8.04%).
Advisor Mid Cap Class B: Merrill Lynch, New York, NY (8.72%); Dain
Rauscher Inc., Minneapolis, MN (8.04%); Saloman Smith Barney, Inc.,
New York, NY (7.48%).
Advisor Mid Cap Class C: Sunamerica Securities, Inc., Phoenix, AZ
(8.27%); Merrill Lynch, New York, NY (6.01%); Capital Financial
Services, Milwaukee, WI (5.57%).
Advisor Mid Cap Institutional Class: Marshall & Isley, Milwaukee,
WI (49.63%); Donaldson Lufkin & Jenrette, New York, NY (7.88%); First
National Bank & Trust Co., Newtown, PA (5.95%).
Advisor Retirement Growth Class A: FMR Corp., Boston, MA
(100%).
Advisor Retirement Growth Class T: FMR Corp., Boston, MA
(100%).
Advisor Retirement Growth Class B: FMR Corp., Boston, MA
(100%).
Advisor Retirement Growth Class C: FMR Corp., Boston, MA
(100%).
Advisor Retirement Growth Institutional Class: FMR Corp., Boston,
MA (100%).
Advisor Equity Growth Class A: Fleet Bank, Providence, RI (10.16%);
Citibank, Houston, TX (5.58%).
Advisor Equity Growth Class T: CIGNA Corp. & Affiliates, Hartford,
CT (8.73%); Saloman Smith Barney, Inc., New York, NY (5.49).
Advisor Equity Growth Class B: First Union Bank, Charlotte, NC
(5.28%); Wells Fargo, Minneapolis, MN (5.20%).
Advisor Equity Growth Class C: Saloman Smith Barney, Inc., New York
(9.29%); Merrill Lynch, New York, NY (8.06%).
Advisor Equity Growth Institutional Class: Wells Fargo,
Minneapolis, MN (6.83%); Firstmerit Securities, Inc., Akron, OH
(6.09%); Charles Schwab & Co., Inc., San Francisco, CA (5.01%).
Advisor Large Cap Growth Class A: BMA Financial Services, Inc.,
Westwood, KS (7.99%); A.G. Edwards & Sons Inc., St. Louis, MO
(6.83%).
Advisor Large Cap Growth Class T: Securities America, Inc.,
Williamsville, NY (8.20%); Dain Rauscher Inc., Minneapolis, MN
(6.79%).
Advisor Large Cap Growth Class B: Dain Rauscher Inc., Minneapolis,
MN (11.89%); Prudential Securities, New York, NY (7.71%).
Advisor Large Cap Growth Class C: Mutual Service Corp., Palm Beach
Garden, FL (19.14%); Milkie Investments, Dallas, TX (8.74%); Merrill
Lynch, New York, NY (6.74%); A.G. Edwards & Sons Inc., St. Louis, MO
(6.08%).
Advisor Large Cap Growth Institutional Class: FMR Corp., Boston, MA
(39.20%); South Holland Bancorp, South Holland, IL (23.70%); The Trust
Company, Knoxville, TN (5.93%); Amivest Corporation, New York, NY
(5.45%).
Advisor Dividend Growth Class A: FMR Corp., Boston, MA (100%).
Advisor Dividend Growth Class T: FMR Corp., Boston, MA (100%).
Advisor Dividend Growth Class B: FMR Corp., Boston, MA (100%).
Advisor Dividend Growth Class C: FMR Corp., Boston, MA (100%).
Advisor Dividend Growth Institutional Class: FMR Corp., Boston, MA
(100%).
Advisor Growth Opportunities Class T: CIGNA Corp. & Affiliates,
Hartford, CT (14.93%); Saloman Smith Barney, New York, NY (6.33%).
Advisor Growth Opportunities Class B: Merrill Lynch, New York, NY
(9.27); A.G. Edwards & Sons Inc., St. Louis, MO (5.57%).
Advisor Growth Opportunities Class C: Merrill Lynch, New York, NY
(17.00%); Saloman Smith Barney, New York, NY (9.30%); A.G. Edwards &
Sons Inc., St. Louis, MO (5.94%).
Advisor Growth Opportunities Institutional Class: Charles Schwab &
Co., Inc., San Francisco, CA (8.60%); Marshall & Isley, Milwaukee, WI
(7.62%); Frost National Bank, San Antonio, TX (5.44%); Wells Fargo,
Minneapolis, MN (5.22%); Donaldson Lufkin & Jenrette, New York, NY
(5.18%).
Advisor Municipal Income Class A: Northeast Securities Inc.,
Westbury, NY (14.90%); Everen Securities Inc., Chicago, IL (7.68%);
Corelink Financial, Inc., Providence, RI (7.07%); Wells Fargo,
Minneapolis, MN (6.94%); Donaldson Lufkin & Jenrette, New York, NY
(5.32%)
Advisor Growth & Income Class A: Merrill Lynch, New York, NY
(7.29%); A.G. Edwards & Sons Inc, St. Louis, MO (5.45%).
Advisor Growth & Income Class T: Dain Raucher Inc, Minneapolis, MN
(9.44%); Securities America, Inc., Williamsville, NY (8.41%);
Commonwealth Equity Services, Waltham, MA (6.66%).
Advisor Growth & Income Class B: Merrill Lynch, New York, NY
(15.53%); Prudential Securities, New York, NY (6.20%).
Advisor Growth & Income Class C: Merrill Lynch, New York, NY
(16.48%); Salomon Smith Barney, Inc., New York, NY (7.05%); Everen
Securities Inc., Chicago, IL (6.59%); Prudential Securities, New York,
NY (6.34%).
Advisor Growth & Income Institutional Class: Marshall & Ilsley,
Milwaukee, WI (62.30%).
Advisor Equity Income Class A: Fleet, Providence, RI (7.48%);
Wachovia Bank & Trust, Winston-Salem, NC (5.13%).
Advisor Equity Income Class B: Merrill Lynch, New York, NY (7.09%);
Salomon Smith Barney, Inc., New York, NY (6.24%).
Advisor Equity Income Institutional Class: BankBoston, Boston, MA
(37.06%); FIRSTMERIT Securities, Inc., Akron, OH (11.98%).
Advisor Asset Allocation Class A: FMR Corp., Boston, MA (100%).
Advisor Asset Allocation Class T: FMR Corp., Boston, MA (100%).
Advisor Asset Allocation Class B: FMR Corp., Boston, MA (100%).
Advisor Asset Allocation Class C: FMR Corp., Boston, MA (100%).
Advisor Asset Allocation Institutional Class: FMR Corp., Boston, MA
(100%).
Advisor Balanced Class A: EQ Financial Consultants, New York, NY
(6.89%).Advisor Balanced Class T: CIGNA Corp & Affiliates, Hartford,
CT (18.45%).
Advisor Balanced Class B: Merill Lynch, New York, NY (4.37%).
Advisor Balanced Class C: Merrill Lynch, New York, NY (19.04%);
Sunpoint Securities, Inc., Longview, TX (12.87%); Royal Alliance
Associates Inc., Birmingham, AL (5.69%).
Advisor Balanced Institutional Class: Whitney National Bank, New
Orleans, LA (15.02%); Salomon Smith Barney, New York, NY (14.68%);
AYCO Corporation, Albany, NY (12.92%); Donaldson, Lufkin & Jenrette,
New York, NY (9.71%); Valley National Bank, Clifton, NJ (8.35%);
Benefit Services Corporation, Atlanta, GA (8.31%); First Tennessee
Bank, Memphis, TN (5.40%).
Advisor Emerging Markets Income Class A: Everen Securities Inc.,
Chicago, IL (33.75%); Linsco/Private Ledger, San Diego, CA (13.50%);
Royal Alliance Associations Inc., Birmingham, AL (7.32%); Reliaster &
Affiliates, Minneapolis, MN (7.31%); Robert W. Baird & Co., Milwaukee,
WI (6.73%); Dain Rauscher Inc., Minneapolis, MN (5.23%).
Advisor Emerging Markets Income Class T: National Investors
Services Corp., New York, NY (5.75%).
Advisor Emerging Markets Income Institutional Class: Donaldson
Lufkin & Jenrette, New York, NY (18.21%); Merrill Lynch, New York, NY
(6.51%).
Advisor High Yield Class A: Fleet, Providence, RI (8.69%); CIGNA
Corp & Affiliates, Hartford, CT (7.83%).
Advisor High Yield Class T: Manulife/NASL, New York, NY (9.17%);
Salomon Smith Barney, Inc, New York, NY (5.37%).
Advisor High Yield Class B: Merrill Lynch, New York, NY (11.76%);
Salomon Smith Barney, Inc, New York, NY (5.56%); Prudential
Securities, New York, NY (5.38%).
Advisor High Yield Class C: Merrill Lynch, New York, NY (27.62%);
Salomon Smith Barney, Inc, New York, NY (7.38%).
Advisor High Yield Institutional Class: Donaldson, Lufkin &
Jenrette, New York, NY (31.52%); Charles Schwab & Co., Inc, San
Francisco, CA (14.48%).
Advisor Strategic Income Class A: Fleet, Providence, RI
(18.04%).
Advisor Strategic Income Class T: Investment Advisors & Consultants
I, Ocean, NJ (21.89%); Royal Alliance Associates Inc., Birmingham, AL
(5.56%).
Advisor Strategic Income Class B: Merrill Lynch, New York, NY
(7.49%); Fleet, Providence, RI (4.60%).
Advisor Strategic Income Class C: Merrill Lynch, New York, NY
(10.02%); Allmerica, Worcester, MA (6.26%).
Advisor Strategic Income Institutional Class: First American Bank &
Trust, Fort Atkinson, WI (33.58%); Donaldson, Lufkin & Jenrette, New
York, NY (10.52%); Bingham, Dana & Gould LLP, Boston, MA (9.05%);
Charles Schwab & Co., Inc., San Francisco, CA (7.14%).
Advisor Government Investment Class A: GW & Wade Asset Management
Co., Wellesley, MA (25.41%); Walnut Street Securities, Clayton, MO
(5.65%).
Advisor Government Investment Class T: Salomon Smith Barney, New
York, NY Inc. (6.44%); Oriental Financial Services Corp., Hato Rey, PR
(5.17%).
Advisor Government Investment Class B: GW & Wade Asset Management
Co., Wellesley, MA (22.89%); Merrill Lynch, New York, NY (12.98%).
Advisor Government Investment Class C: Merrill Lynch, New York, NY
(46.59%).
Advisor Government Investment Institutional Class: Marshall &
Ilsley, Milwaukee, WI (58.22%); Alpha Capital Management, Long Beach,
CA (13.76%), Benefit Services Corporation, Atlanta, GA (7.99%).
Advisor Mortgage Securities Class A: Commonwealth Equity Services,
Waltham, MA (15.94%); Prudential Securities, New York, NY (14.38%);
MetLife, Denver, CO (5.59%); Financial Network Investments, Torrance,
CA (5.41%).
Advisor Mortgage Securities Class T: Commonwealth Equity Services,
Waltham, MA (16.39%); Dai-Ichi Kangyo Bank of California, Los Angelos,
CA (6.75%); First Union Bank, Charlotte, NC (5.25%); The Concord
Equity Group, South Amboy, NJ (5.17%).
Advisor Mortgage Securities Class B: Wells Fargo, Minneapolis, MN
(10.79%); United Financial Markets, Houston, TX (6.18%); Merrill
Lynch, New York, NY (5.59%); Reliaster & Affiliates, Minneapolis, MN
(5.01%).
Advisor Intermediate Bond Fund Class A: Fleet, Providence, RI
(23.51%); Wells Fargo, Minneapolis, MN (13.45%); CORELINK Financial,
Inc., Providence, RI (8.26%).
Advisor Intermediate Bond Fund Class T: Painwebber Inc., Weehawken,
NJ (6.40%); Salomon Smith Barney, Inc., New York, NY (6.33).
Advisor Intermediate Bond Fund Class B: Merrill Lynch, New York, NY
(10.10%); Corelink Financial, Inc., Providence, RI (5.56%).
Advisor Intermediate Bond Fund Class C: Merrill Lynch, New York, NY
(15.57%); Boone County National Bank, Columbia, MO (11.59%).
Advisor Intermediate Bond Fund Institutional Class: Mercantile
(Mo.), St. Louis, MO (23.01%); FIRSTMERIT Securities, Inc., Akron, OH
(6.84%).
Advisor Short Fixed-Income Class A: Investment Advisors &
Consultants I, Ocean, NJ (21.71%); CIGNA Corp & Affiliates, Hartford,
CT (11.15%); W.S. Griffith and Company Inc., San Diego, CA (5.74%);
Terra Securities Corporation, Oak Brook, IL (5.44%); Wachovia Bank and
Trust, Winston-Salem, NC (5.33).
Advisor Short Fixed-Income Class T: PainWebber Inc., Weehawken, NJ
(6.69%); Royal Alliance Associates Inc., Birmingham, AL (6.32%);
Securities America, Inc., Williamsville, NY (5.66%); Salomon Smith
Barney, Inc., New York, NY (5.20%).
Advisor Short Fixed-Income Class C: Merrill Lynch, New York, NY
(15.54%); Cowles, Sabol & Company, Encino, CA (10.00%); NBC
Securities, Inc., Birmingham, AL (6.72%); Securities America, Inc.,
Williamsville, NY (6.68%); Financial Securities Corporation, Atlanta,
GA (6.31%); Royal Alliance Associates Inc., Birmingham, AL (5.23%);
Equitas America LLC, Farmington Hills, MI (5.00%).
Advisor Short Fixed-Income Institutional Class: Marshall & Ilsley,
Milwaukee, WI (49.51%); South Holland Bancorp, South Holland, IL
(21.31%); Mercantile (Mo.), St. Louis, MO (13.33%); Charles Schwab &
Co., San Francisco, CA (5.32%).
Advisor Municipal Income Class T: Salomon Smith Barney, Inc., New
York, NY (8.63%), A.G. Edwards & Sons, Inc., St. Louis, MO
(6.14%).
Advisor Municipal Income Class B: Merrill Lynch, New York, NY
(7.54%); Salomon Smith Barney, Inc., New York, NY (5.44%).
Advisor Municipal Income Class C: Merrill Lynch, New York, NY
(19.56%); Investacorp, Inc., Miami Lakes, FL (11.21%); Reliastar &
Affiliates, Minneapolis, MN (5.90%); Protected Investors of America,
San Francisco, CA(5.09%).
Advisor Municipal Income Institutional Class: Tompkins County Trust
Company, Ithaca, NY (14.48%); Century Trust, Rochester, PA (13.59%);
Arvest Trust Company, Rogers, AR (8.82%); Premier Trust Services,
Freeport IL (8.21%); Peoples Bank and Trust Co., Indianapolis, IN
(7.60%); Vermont National Bank, Brattleboro, VT(5.43%); Donaldson
Lufkin & Jenrette, New York, NY(5.14%).
Advisor Intermediate Municipal Income Class A: FMR Corp., Boston,
MA, (22.90%); Financial Securities Corporation, Atlanta, GA (13.98%);
CIGNA Corp. & Affiliates, Hartford, CT (13.91%); A.G. Edwards & Sons
Inc., St. Louis, MO (7.58%); Legend Equities Corp., Palm Beach
Gardens, FL (5.33%).
Advisor Intermediate Municipal Income Class T: Royal Alliance
Associates Inc., Birmingham, AL (7.58%); Financial Network
Investments, Torrance, CA (5.20%).
Advisor Intermediate Municipal Income Class B: Merrill Lynch, New
York, NY (17.90%); Royal Alliance Associates Inc., Birmingham, AL
(6.67%); A.G. Edwards & Sons Inc., St. Louis, MO (5.34%).
Advisor Intermediate Municipal Income Class C: First Allied
Securities Inc., Cokeville, WY (29.70%); First Union Bank, Charlotte,
NC (24.79%); John Hancock, Boston, MA (14.16%); Merrill Lynch, New
York, NY (12.64%); Sunpoint Securities, Inc., Longview, TX (11.80%);
Royal Alliance Associates Inc., Birmingham, AL (10.18%); CPA Advisors
Network Associates Inc., Bensalem, PA (7.74%); Financial Network
Investments, Torrance, CA (6.50%); Painewebber Inc., Weehawken, NJ
(5.07%).
Advisor Intermediate Municipal Income Institutional Class: Drovers
Bank, York, PA (16.94%); Laird Norton Co., Seattle, WA (10.07%); South
Holland Bancorp, South Holland, IL (9.67%); Citizens National Bank of
Evansville, Evansville, IN (9.11%); Wells Fargo, San Francisco,
CA(8.42%).
A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholder's meeting than votes of other
shareholders.
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
FIMM, FMR U.K., and FMR Far East. The voting common stock of FMR Corp.
is divided into two classes. Class B is held predominantly by members
of the Edward C. Johnson 3d family and is entitled to 49% of the vote
on any matter acted upon by the voting common stock. Class A is held
predominantly by non-Johnson family member employees of FMR Corp. and
its affiliates and is entitled to 51% of the vote on any such matter.
The Johnson family group and all other Class B shareholders have
entered into a shareholders' voting agreement under which all Class B
shares will be voted in accordance with the majority vote of Class B
shares. Under the 1940 Act, control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the 1940 Act, to
form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of FIIA, FIJ, and FIIA(U.K.)L.
Edward C. Johnson 3d, Johnson family members, and various trusts for
the benefit of the Johnson family own, directly or indirectly, more
than 25% of the voting common stock of FIL. FIL provides investment
advisory services to non-U.S. investment companies and institutional
investors investing in securities throughout the world.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.
MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trusts or of FMR, and all personnel of
each fund or FMR performing services relating to research, statistical
and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, as applicable, each fund or each class
thereof, as applicable, pays all of its expenses that are not assumed
by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and
the fees of the custodian, auditor and non-interested Trustees. Each
fund's management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders of the applicable classes. Other expenses paid by each
fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Diversified International, Advisor Global Equity, Advisor TechnoQuant
Growth, Advisor Small Cap, Advisor Mid Cap, Advisor Retirement Growth,
Advisor Equity Growth, Advisor Large Cap, Advisor Dividend Growth,
Advisor Growth & Income, Advisor Equity Income, Advisor Asset
Allocation, Advisor Balanced, Advisor Emerging Markets Income, Advisor
High Yield, Advisor Strategic Income, Advisor Government Investment,
Advisor Mortgage Securities, Advisor Intermediate Bond, Advisor Short
Fixed-Income, Advisor Municipal Income, and Advisor Intermediate
Municipal Income each pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
For the services of FMR under the management contract, Advisor
Overseas, Advisor Strategic Opportunities, and Advisor Growth
Opportunities each pays FMR a monthly management fee which has two
components: a basic fee, which is the sum of a group fee rate and an
individual fund fee rate, and a performance adjustment based on a
comparison of Advisor Strategic Opportu nit ies '
performance and Advisor Growth Opportunities ' performance
to that of the S&P 500 or Advisor Overseas' performance to that
of the Morgan Stanley Capital International Europe, Australasia, Far
East Index (EAFE).
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
The following is the fee schedule for the bond funds.
BOND FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1690
24 - 30 .1800 200 .1652
30 - 36 .1750 225 .1618
36 - 42 .1700 250 .1587
42 - 48 .1650 275 .1560
48 - 66 .1600 300 .1536
66 - 84 .1550 325 .1514
84 - 120 .1500 350 .1494
120 - 156 .1450 375 .1476
156 - 192 .1400 400 .1459
192 - 228 .1350 425 .1443
228 - 264 .1300 450 .1427
264 - 300 .1275 475 .1413
300 - 336 .1250 500 .1399
336 - 372 .1225 525 .1385
372 - 408 .1200 550 .1372
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 669 billion of group net assets - the approximate
level for December 1998 - was 0.1324 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 669 billion.
The following is the fee schedule for the equity funds.
EQUITY FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 699 billion of group net assets - the approximate
level for December 1998 - was 0.2863 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 669 billion.
The individual fund fee rate for each fund (except Advisor Overseas,
Advisor Strategic Opportunities and Advisor Growth Opportunities) is
set forth in the following chart. Based on the average group net
assets of the funds advised by FMR for December 1998 the annual
management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE MANAGEMENT FEE RATE
Advisor Latin America 0.2863% + 0.45% = 0.7363%
Advisor Japan 0.2863% + 0.45% = 0.7363%
Advisor Europe Capital 0.2863% + 0.45% = 0.7363%
Appreciation
Advisor International Capital 0.2863% + 0.45% = 0.7363%
Appreciation
Advisor Diversified 0.2863% + 0.45% = 0.7363%
International
Advisor Global Equity 0.2863% + 0.45% = 0.7363%
Advisor TechnoQuant Growth 0.2863% + 0.30% = 0.5863%
Advisor Small Cap 0.2863% + 0.45% = 0.7363%
Advisor Mid Cap 0.2863% + 0.30% = 0.5863%
Advisor Retirement Growth 0.2863% + 0.30% = 0.5863%
Advisor Equity Growth 0.2863% + 0.30% = 0.5863%
Advisor Large Cap 0.2863% + 0.30% = 0.5863%
Advisor Dividend Growth 0.2863% + 0.30% = 0.5863%
Advisor Growth & Income 0.2863% + 0.20% = 0.4863%
Advisor Equity Income 0.2863% + 0.20% = 0.4863%
Advisor Asset Allocation 0.2863% + 0.30% = 0.5863%
Advisor Balanced 0.2863% + 0.15% = 0.4363%
Advisor Emerging Markets Income 0.1324% + 0.55% = 0.6824%
Advisor High Yield 0.1324% + 0.45% = 0.5824%
Advisor Strategic Income 0.1324% + 0.45% = 0.5824%
Advisor Government Investment 0.1324% + 0.30% = 0.4324%
Advisor Mortgage Securities 0.1324% + 0.30% = 0.4324%
Advisor Intermediate Bond 0.1324% + 0.30% = 0.4324%
Advisor Short Fixed-Income 0.1324% + 0.30% = 0.4324%
Advisor Municipal Income 0.1324% + 0.25% = 0.3824%
Advisor Intermediate 0.1324% + 0.25% = 0.3824%
Municipal Income
</TABLE>
The individual fund fee rate for Advisor Overseas, Advisor Strategic
Opportunities and Advisor Growth Opportunities is set forth in the
following chart. Based on the average group net assets of the funds
advised by FMR for December 1998, each fund's annual basic fee rate
would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE BASIC FEE RATE
Advisor Overseas 0.2863% + 0.45% = 0.7363%
Advisor Strategic Opportunities 0.2863% + 0.30% = 0.5863%
Advisor Growth Opportunities 0.2863% + 0.30% = 0.5863%
</TABLE>
One-twelfth of the basic fee rate or the management fee rate, as
applicable, is applied to each fund's average net assets for the
month, giving a dollar amount which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of
Advisor Overseas, Advisor Strategic Opportunities, and Advisor Growth
Opportunities is subject to upward or downward adjustment, depending
upon whether, and to what extent, the fund's investment performance
for the performance period exceeds, or is exceeded by, the record
over the same period of the S&P 500 for Advisor
Strategic Opportunities and Advisor Growth Opportunities or the
cap-weighted EAFE for Overseas. The performance period consists
of the most recent month plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(for Advisor Overseas, Advisor Strategic Opportunities, and Advisor
Growth Opportunities) (up to a maximum difference of
(plus/minus)10.00) is multiplied by a performance adjustment rate
of 0.02%.
For the purposes of calculating the performance adjustment for each of
Advisor Overseas, Advisor Strategic Opportunities, and Advisor Growth
Opportunities, the fund's investment performance will be based on the
average performance of all classes of the fund weighted according to
their average assets for each month in the performance period.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee.
The maximum annualized adjustment rate is (plus/minus)0.20% (for
Advisor Overseas, Advisor Strategic Opportunities, and Advisor Growth
Opportunities) of a fund's average net assets over the performance
period.
A class's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the class are treated as if
reinvested in that class's shares at the NAV as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on a fund's
performance compared to the investment record of the applicable Index,
the controlling factor is not whether the fund's performance is up or
down per se, but whether it is up or down more or less than the record
of the Index. Moreover, the comparative investment performance of each
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
For Morgan Stanley Capital International Europe, Australasia, Far East
Index, the index returns for periods prior to January 1, 1997 are
adjusted for tax withholding at non-treaty rates. The index returns
for periods after January 1, 1997 are adjusted for tax withholding at
treaty rates applicable to U.S.-based mutual funds organized as
Massachusetts business trusts.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by Advisor Overseas, Advisor Strategic Opportunities, and Advisor
Growth Opportunities.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL YEAR ENDED PERFORMANCE ADJUSTMENT MANAGEMENT FEES PAID TO FMR
ADVISOR INTERNATIONAL CAPITAL
APPRECIATION
1998# 10/31 N/A $ 116,243
ADVISOR OVERSEAS
1998 10/31 $ 1,911,058 (upward) 11,334,456*
1997 10/31 734,731 (upward) 9,515,372*
1996 10/31 687,829 (downward) 6,353,206*
ADVISOR TECHNOQUANT GROWTH
1998 11/30 N/A 208,740
1997** 11/30 N/A 135,400
ADVISOR SMALL CAP
1998*** 11/30 N/A 104,572
ADVISOR STRATEGIC OPPORTUNITIES
1998 11/30 1,343,174 (downward) 2,375,350*
1/1/97 - 11/30/97 11/30 1,112,763 (downward) 2,293,268*
1996 12/31 962,281 (downward) 3,621,407*
1995 12/31 91,269 (upward) 3,510,812*
ADVISOR MID CAP
1998 11/30 N/A 2,834,821
1997 11/30 N/A 2,182,332
1996**** 11/30 N/A 644,430
ADVISOR EQUITY GROWTH
1998 11/30 N/A 34,349,874
1997 11/30 N/A 30,254,233
1996 11/30 N/A 23,048,140
ADVISOR LARGE CAP
1998 11/30 N/A 585,604
1997 11/30 N/A 364,913
1996**** 11/30 N/A 100,564
ADVISOR GROWTH OPPORTUNITIES
1998 11/30 31,888,352 (downward) 113,054,160*
11/1/97 - 11/30/97 11/30 2,127,105 (downward) 8,283,249*
1997 10/31 19,295,278 (downward) 86,854,055*
1996 10/31 1,076,788 (upward) 76,294,260*
ADVISOR GROWTH & INCOME
1998 11/30 N/A 2,243,407
1997** 11/30 N/A 385,672
ADVISOR EQUITY INCOME
1998 11/30 N/A $ 19,202,591(dagger)
1997 11/30 N/A 14,927,663(dagger)
1996 11/30 N/A 10,188,385(dagger)
ADVISOR BALANCED
11/1/98 - 11/30/98 11/30 N/A 1,134,504
1998 10/31 N/A 13,700,950
1997 10/31 N/A 13,236,926
1996 10/31 N/A 16,119,225
ADVISOR EMERGING MARKETS
INCOME
1998 12/31 N/A 665,704
1997 12/31 N/A 822,554
1996 12/31 N/A 488,344
ADVISOR HIGH YIELD
1998 10/31 N/A 20,940,502
1997 10/31 N/A 14,787,091
1996 10/31 N/A 10,195,539
ADVISOR STRATEGIC INCOME
1998 12/31 N/A 1,461,994
1997 12/31 N/A 967,126
1996 12/31 N/A 641,715
ADVISOR GOVERNMENT INVESTMENT
1998 10/31 N/A 964,623
1997 10/31 N/A 930,159
1996 10/31 N/A 1,197,929
ADVISOR MORTGAGE SECURITIES
1998 10/31 N/A 2,226,557
8/1/97 - 10/31/97 10/31 N/A 578,471
1997 7/31 N/A 2,273,788
1996 7/31 N/A 2,104,873
ADVISOR INTERMEDIATE BOND
12/1/97 - 10/31/98 10/31 N/A 1,941,732
1997 11/30 N/A 2,095,786
1996 11/30 N/A 2,174,162
1995 11/30 N/A 1,703,722
ADVISOR SHORT FIXED-INCOME
1998 10/31 N/A 1,531,459
1997 10/31 N/A 1,715,958
1996 10/31 N/A 2,203,578
ADVISOR MUNICIPAL INCOME
1998 10/31 N/A 1,699,469
1997 10/31 N/A 1,826,656
1996 10/31 N/A 2,266,568
ADVISOR INTERMEDIATE
MUNICIPAL INCOME
12/1/97 - 10/31/98 10/31 N/A 242,984
1997 11/30 N/A 255,140
1996 11/30 N/A 310,611
1995 11/30 N/A 292,469
</TABLE>
# Advisor International Capital Appreciation commenced operations on
November 3, 1997.
* Including the amount of the performance adjustment.
** Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
*** Advisor Small Cap commenced operations on September 9, 1998.
**** Advisor Mid Cap and Advisor Large Cap commenced operations on
February 20, 1996.
(dagger) Prior to December 1, 1998, Advisr Equity Income paid FMR a
monthly management fee at an annual rate of 0.50% of the fund's
average net assets throughout the month.
During the reporting period, FMR voluntarily modified the breakpoints
in the group fee rate schedules on January 1, 1996 to provide for
lower management fee rates as FMR's assets under management increase.
FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses), which is subject to revision
or termination. FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
Expense reimbursements by FMR will incre ase a class's returns
and yield, and repayment of the reimbursement by a class will lower
its returns and yield.
SUB-ADVISERS. On behalf of Advisor Government Investment, Advisor
Mortgage Securities, Advisor Intermediate Bond, Advisor Short
Fixed-Income, Advisor Municipal Income, and Advisor Intermediate
Municipal Income, FMR has entered into a sub-advisory agreement with
FIMM pursuant to which FIMM has primary responsibility for choosing
investments for the funds.
On behalf of Advisor Asset Allocation , Advisor Balanced, and
Advisor Strategic Income , FMR has entered into a sub-advisory
agreement with FIMM pursuant to which FIMM chooses certain investments
for the funds.
Under the terms of the sub-advisory agreements for Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, Advisor Municipal Income, and Advisor
Intermediate Municipal Income, FMR pays FIMM fees equal to 50% of the
management fee payable to FMR under its management contract with each
fund. The fees paid to FIMM are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time.
Under the terms of the sub-advisory agreements for Advisor Asset
Allocation , Advisor Balanced , and Advisor Strategic
Income , FMR pays FIMM fees equal to 50% of the management fee
payable to FMR with respect to that portion of the fund's assets that
are managed by FIMM. The fees paid to FIMM are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
On behalf of Advisor TechnoQuant Growth, Advisor Small Cap, Advisor
Strategic Opportunities, Advisor Mid Cap, Advisor Retirement Growth,
Advisor Equity Growth, Advisor Large Cap, Advisor Dividend Growth,
Advisor Growth Opportunities, Advisor Growth & Income, Advisor Equity
Income, Advisor Asset Allocation, Advisor Balanced, Advisor High
Yield, Advisor Mortgage Securities, Advisor Intermediate Bond, and
Advisor Short Fixed-Income, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. On behalf of Advisor Latin
America, Advisor Japan, Advisor Europe Capital Appreciation, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, Advisor Emerging
Markets Income, and Advisor Strategic Income, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers.
On behalf of each fund, FMR may also grant FMR U.K., FMR Far East,
FIJ, FIIA, and FIIA(U.K.)L investment management authority as well as
the authority to buy and sell securities if FMR believes it would be
beneficial to the funds.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a
fee equal to 50% of its monthly management fee (including any
performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For providing investment advice and research services, fees paid to
FMR U.K. and FMR Far East on behalf of Advisor Strategic
Opportunities, Advisor Equity Growth, Advisor Growth Opportunities ,
Advisor Growth & Income, Advisor Equity Income, and Advisor
Balanced , for the past three fiscal years are shown in the
table below.
Fiscal Year Ended FMR U.K. FMR Far East
Advisor Strategic Opportunities
1998 November 30 $ 11,125 $ 10,563
1/1/97 - 11/30/97 November 30 28,790 27,433
1996 December 31 24,977 23,484
1995 December 31 5,261 5,862
FMR U.K. FMR Far East
Advisor Equity Growth
1998 November 30 $ 139,746 $ 123,816
1997 November 30 139,178 133,255
1996 November 30 51,150 49,497
FMR U.K. FMR Far East
Advisor Growth Opportunities
1998 November 30 $ 1,264,405 $ 1,149,662
11/1/97 - 11/30/97 November 30 87,415 77,694
11/1/96 - 10/31/97 October 31 852,607 809,300
1996 October 31 642,845 645,049
FMR U.K. FMR Far East
Advisor Growth & Income
1998 November 30 $ 15,059 $ 13,634
1997* November 30 0 0
FMR U.K. FMR Far East
Advisor Equity Income
1998 November 30 $ 189,295 $ 172,720
1997 November 30 89,084 85,667
1996 November 30 46,448 46,494
FMR U.K. FMR Far East
Advisor Balanced
11/1/98 - 11/30/98 November 30 $ 14,519 $ 11,784
11/1/97 - 10/31/98 October 31 157,996 144,557
1997 October 31 177,487 166,105
1996 October 31 235,847 251,109
* Advisor Growth & Income commenced operations on December 31,
1996
For providing investment advice and research services, fees paid to
FMR U.K., FMR Far East, FIJ, FIIA, and FIIA(U.K.)L on behalf of
Advisor Overseas for the past three fiscal years are shown in the
table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FMR U.K. FMR Far East FIJ FIIA FIIA(U.K.)L
Fiscal Year Ended
Advisor Overseas
1998 October 31 $ 157,996 $ 144,557 $ 0 $ 0 $ 0
1997 October 31 627,390 594,643 0 0 0
1996 October 31 541,988 550,513 0 0 0
</TABLE>
For investment advice and research services, no fees were paid to
FMR U.K. and FMR Far East on behalf of Advisor TechnoQuant Growth,
Advisor Small Cap, Advisor Mid Cap, Advisor Large Cap, Advisor High
Yield, Advisor Mortgage Securities, Advisor Intermediate Bond, and
Advisor Short Fixed-Income.
For investment advice and research services, no fees were paid to
FMR U.K., FMR Far East, FIJ, FIIA or FIIA (U.K.)L on behalf of Advisor
International Capital Appreciation, Advisor Emerging Markets Income,
and Advisor Strategic Income.
Currently, FIJ is primarily responsible for choosing investments
for Advisor Japan Fund.
For discretionary investment management and execution of portfolio
transactions, no fees were paid to FMR U.K., FMR Far East, FIJ, FIIA
or FIIA(U.K.)L on behalf of the funds for the past three fiscal
years.
DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenues collected and retained by FDC for the past
three fiscal years are shown in the table below. Class C of each fund
shown in the table below (except Advisor International Capital
Appreciation and Advisor Small Cap) commenced operations on November
3, 1997.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED PERFORMANCE MANAGEMENT FEES
ADJUSTMENT PAID TO FMR
<S> <C> <C> <C>
ADVISOR
INTERNATIONAL
CAPITAL APPRECIATION
1998# 10/31 N/A $ 116,243
ADVISOR OVERSEAS
1998 10/31 $ 1,911,058 (upward) 11,334,456*
1997 10/31 734,731 (upward) 9,515,372*
1996 10/31 687,829 (downward) 6,353,206*
ADVISOR TECHNOQUANT
GROWTH
1998 11/30 N/A 208,740
1997** 11/30 N/A 135,400
ADVISOR SMALL CAP
1998*** 11/30 N/A 104,572
ADVISOR STRATEGIC
OPPORTUNITIES
1998 11/30 1,343,174 2,375,350*
(downward)
1/1/97 - 11/30/97 11/30 1,112,763 2,293,268*
(downward)
1996 12/31 962,281 (downward) 3,621,407*
1995 12/31 91,269 (upward) 3,510,812*
ADVISOR MID CAP
1998 11/30 N/A 2,834,821
1997 11/30 N/A 2,182,332
1996**** 11/30 N/A 644,430
ADVISOR EQUITY
GROWTH
1998 11/30 N/A 34,349,874
1997 11/30 N/A 30,254,233
1996 11/30 N/A 23,048,140
ADVISOR LARGE CAP
1998 11/30 N/A 585,604
1997 11/30 N/A 364,913
1996**** 11/30 N/A 100,564
ADVISOR GROWTH
OPPORTUNITIES
1998 11/30 31,888,352 113,054,160*
(downward)
11/1/97 - 11/30/97 11/30 2,127,105 8,283,249*
(downward)
1997 10/31 19,295,278 86,854,055*
(downward)
1996 10/31 1,076,788 (upward) 76,294,260*
ADVISOR GROWTH &
INCOME
1998 11/30 N/A 2,243,407
1997** 11/30 N/A 385,672
ADVISOR EQUITY
INCOME
1998 11/30 N/A $ 19,202,591(dagger)
1997 11/30 N/A 14,927,663(dagger)
1996 11/30 N/A 10,188,385(dagger)
ADVISOR BALANCED
11/1/98 - 11/30/98 11/30 N/A 1,134,504
1998 10/31 N/A 13,700,950
1997 10/31 N/A 13,236,926
1996 10/31 N/A 16,119,225
ADVISOR EMERGING
MARKETS INCOME
1998 12/31 N/A 665,704
1997 12/31 N/A 822,554
1996 12/31 N/A 488,344
ADVISOR HIGH YIELD
1998 10/31 N/A 20,940,502
1997 10/31 N/A 14,787,091
1996 10/31 N/A 10,195,539
ADVISOR STRATEGIC
INCOME
1998 12/31 N/A 1,461,994
1997 12/31 N/A 967,126
1996 12/31 N/A 641,715
ADVISOR GOVERNMENT
INVESTMENT
1998 10/31 N/A 964,623
1997 10/31 N/A 930,159
1996 10/31 N/A 1,197,929
ADVISOR MORTGAGE
SECURITIES
1998 10/31 N/A 2,226,557
8/1/97 - 10/31/97 10/31 N/A 578,471
1997 7/31 N/A 2,273,788
1996 7/31 N/A 2,104,873
ADVISOR
INTERMEDIATE BOND
12/1/97 - 10/31/98 10/31 N/A 1,941,732
1997 11/30 N/A 2,095,786
1996 11/30 N/A 2,174,162
1995 11/30 N/A 1,703,722
ADVISOR SHORT
FIXED-INCOME
1998 10/31 N/A 1,531,459
1997 10/31 N/A 1,715,958
1996 10/31 N/A 2,203,578
ADVISOR MUNICIPAL
INCOME
1998 10/31 N/A 1,699,469
1997 10/31 N/A 1,826,656
1996 10/31 N/A 2,266,568
ADVISOR
INTERMEDIATE
MUNICIPAL INCOME
12/1/97 - 10/31/98 10/31 N/A 242,984
1997 11/30 N/A 255,140
1996 11/30 N/A 310,611
1995 11/30 N/A 292,469
</TABLE>
# Advisor International Capital Appreciation commenced operations on
November 3, 1997.
* Including the amount of the performance adjustment.
** Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
*** Advisor Small Cap commenced operations on September 9, 1998.
**** Advisor Mid Cap and Advisor Large Cap commenced operations on
February 20, 1996.
(dagger) Prior to December 1, 1998, Advisr Equity Income paid FMR a
monthly management fee at an annual rate of 0.50% of the fund's
average net assets throughout the month.
During the reporting period, FMR voluntarily modified the breakpoints
in the group fee rate schedules on January 1, 1996 to provide for
lower management fee rates as FMR's assets under management increase.
FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses), which is subject to revision
or termination. FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
Expense reimbursements by FMR will incre ase a class's returns
and yield, and repayment of the reimbursement by a class will lower
its returns and yield.
SUB-ADVISERS. On behalf of Advisor Government Investment, Advisor
Mortgage Securities, Advisor Intermediate Bond, Advisor Short
Fixed-Income, Advisor Municipal Income, and Advisor Intermediate
Municipal Income, FMR has entered into a sub-advisory agreement with
FIMM pursuant to which FIMM has primary responsibility for choosing
investments for the funds.
On behalf of Advisor Asset Allocation , Advisor Balanced, and
Advisor Strategic Income , FMR has entered into a sub-advisory
agreement with FIMM pursuant to which FIMM chooses certain investments
for the funds.
Under the terms of the sub-advisory agreements for Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, Advisor Municipal Income, and Advisor
Intermediate Municipal Income, FMR pays FIMM fees equal to 50% of the
management fee payable to FMR under its management contract with each
fund. The fees paid to FIMM are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time.
Under the terms of the sub-advisory agreements for Advisor Asset
Allocation , Advisor Balanced , and Advisor Strategic
Income , FMR pays FIMM fees equal to 50% of the management fee
payable to FMR with respect to that portion of the fund's assets that
are managed by FIMM. The fees paid to FIMM are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
On behalf of Advisor TechnoQuant Growth, Advisor Small Cap, Advisor
Strategic Opportunities, Advisor Mid Cap, Advisor Retirement Growth,
Advisor Equity Growth, Advisor Large Cap, Advisor Dividend Growth,
Advisor Growth Opportunities, Advisor Growth & Income, Advisor Equity
Income, Advisor Asset Allocation, Advisor Balanced, Advisor High
Yield, Advisor Mortgage Securities, Advisor Intermediate Bond, and
Advisor Short Fixed-Income, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. On behalf of Advisor Latin
America, Advisor Japan, Advisor Europe Capital Appreciation, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, Advisor Emerging
Markets Income, and Advisor Strategic Income, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers.
On behalf of each fund, FMR may also grant FMR U.K., FMR Far East,
FIJ, FIIA, and FIIA(U.K.)L investment management authority as well as
the authority to buy and sell securities if FMR believes it would be
beneficial to the funds.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a
fee equal to 50% of its monthly management fee (including any
performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For providing investment advice and research services, fees paid to
FMR U.K. and FMR Far East on behalf of Advisor Strategic
Opportunities, Advisor Equity Growth, Advisor Growth Opportunities ,
Advisor Growth & Income, Advisor Equity Income, and Advisor
Balanced , for the past three fiscal years are shown in the
table below.
Fiscal Year Ended FMR U.K. FMR Far East
Advisor Strategic
Opportunities
1998 November 30 $ 11,125 $ 10,563
1/1/97 - 11/30/97 November 30 28,790 27,433
1996 December 31 24,977 23,484
1995 December 31 5,261 5,862
FMR U.K. FMR Far East
Advisor Equity Growth
1998 November 30 $ 139,746 $ 123,816
1997 November 30 139,178 133,255
1996 November 30 51,150 49,497
FMR U.K. FMR Far East
Advisor Growth
Opportunities
1998 November 30 $ 1,264,405 $ 1,149,662
11/1/97 - 11/30/97 November 30 87,415 77,694
11/1/96 - 10/31/97 October 31 852,607 809,300
1996 October 31 642,845 645,049
FMR U.K. FMR Far East
Advisor Growth &
Income
1998 November 30 $ 15,059 $ 13,634
1997* November 30 0 0
FMR U.K. FMR Far East
Advisor Equity Income
1998 November 30 $ 189,295 $ 172,720
1997 November 30 89,084 85,667
1996 November 30 46,448 46,494
FMR U.K. FMR Far East
Advisor Balanced
11/1/98 - 11/30/98 November 30 $ 14,519 $ 11,784
11/1/97 - 10/31/98 October 31 157,996 144,557
1997 October 31 177,487 166,105
1996 October 31 235,847 251,109
* Advisor Growth & Income commenced operations on December 31,
1996
For providing investment advice and research services, fees paid to
FMR U.K., FMR Far East, FIJ, FIIA, and FIIA(U.K.)L on behalf of
Advisor Overseas for the past three fiscal years are shown in the
table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FMR U.K. FMR Far East FIJ FIIA FIIA(U.K.)L
Fiscal Year Ended
Advisor Overseas
1998 October 31 $ 157,996 $ 144,557 $ 0 $ 0 $ 0
1997 October 31 627,390 594,643 0 0 0
1996 October 31 541,988 550,513 0 0 0
</TABLE>
For investment advice and research services, no fees were paid to
FMR U.K. and FMR Far East on behalf of Advisor TechnoQuant Growth,
Advisor Small Cap, Advisor Mid Cap, Advisor Large Cap, Advisor High
Yield, Advisor Mortgage Securities, Advisor Intermediate Bond, and
Advisor Short Fixed-Income.
For investment advice and research services, no fees were paid to
FMR U.K., FMR Far East, FIJ, FIIA or FIIA (U.K.)L on behalf of Advisor
International Capital Appreciation, Advisor Emerging Markets Income,
and Advisor Strategic Income.
Currently, FIJ is primarily responsible for choosing investments
for Advisor Japan Fund.
For discretionary investment management and execution of portfolio
transactions, no fees were paid to FMR U.K., FMR Far East, FIJ, FIIA
or FIIA(U.K.)L on behalf of the funds for the past three fiscal
years.
DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenues collected and retained by FDC for the past
three fiscal years are shown in the table below. Class C of each fund
shown in the table below (except Advisor International Capital
Appreciation and Advisor Small Cap) commenced operations on November
3, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Sales Charge Revenue CDSC Revenue
Fiscal Year Ended Amount Paid to FDC Amount Retained by Amount Paid to FDC Amount Retained by
FDC FDC
Advisor Oct. 31, 1998* $ 16,408 $ 5,206 $ 0 $ 0
International
Capital
Appreciation -
Class A
Advisor Oct. 31, 1998* 68,287 18,616 0 0
International
Capital
Appreciation -
Class T
Advisor Oct. 31, 1998* N/A N/A
International 5,042 5,042
Capital
Appreciation -
Class B
Advisor Oct. 31, 1998* N/A N/A
International 1,231 1,231
Capital
Appreciation -
Class C
Advisor Overseas - Oct. 31, 1998 123,000 42,000 0 0
Class A
Oct. 31, 1997 93,000 25,000 0 0
Oct. 31, 1996A 12,000 1,000 0 0
Advisor
Overseas - Oct. 31, 1998 618,000 174,000 0 0
Class T
Oct. 31, 1997 748,000 202,000 0 0
Oct. 31, 1996 2,313,000 375,000 0 0
Advisor
Overseas - Oct. 31, 1998 N/A N/A 124,000 124,000
Class B
Oct. 31, 1997 N/A N/A 86,000 86,000
Oct. 31, 1996 N/A N/A 24,000 24,000
Advisor
Overseas - Oct. 31, 1998 N/A N/A 4,000 4,000
Class C
Advisor
TechnoQuant Nov. 30, 1998 17,545 5,286 0 0
Growth - Class A
Nov. 30, 1997** 54,370 30,175 0 0
Advisor
TechnoQuant Nov. 30, 1998 45,229 11,046 0 0
Growth - Class T
Nov. 30, 1997** 111,714 41,936 0 0
Advisor
TechnoQuant Nov. 30, 1998 N/A N/A 47,726 47,726
Growth - Class B
Nov. 30, 1997** N/A N/A 18,557 18,557
Advisor
TechnoQuant Nov. 30, 1998 N/A N/A 422 422
Growth - Class C
Nov. 30, 1997** N/A N/A 0 0
Advisor
Small Cap - Nov. 30, 1998*** 59,118 42,784 0 0
Class A
Advisor
Small Cap - Nov. 30, 1998*** 153,317 75,134 0 0
Class T
Advisor
Small Cap - Nov. 30, 1998*** N/A N/A 5,341
Class B 5,341
Advisor
Small Cap - Nov. 30, 1998*** N/A N/A 1,436 1,436
Class C
Advisor Strategic Nov. 30, 1998 70,878 17,322 0 0
Opportunities -
Class A
Nov. 30, 1997(dagger) 28,462 9,936 0 0
Dec. 31, 1996B 15,662 2,958 0 0
Advisor Strategic Nov. 30, 1998 $ 243,044 $ 72,427 $ 0 $ 0
Opportunities -
Class T
Nov. 30, 1997(dagger) 187,128 53,056 0 0
Dec. 31, 1996 909,434 145,926 0 0
Dec. 31, 1995 1,883,199 144,719 0 0
Advisor Strategic Nov. 30, 1998 N/A N/A 232,999 232,999
Opportunities -
Class B
Nov. 30, 1997(dagger) N/A N/A 304,658 304,658
Dec. 31, 1996 N/A N/A 243,510 243,510
Dec. 31, 1995 N/A N/A 40,916 40,916
Advisor Strategic Nov. 30, 1998 11 0 N/A N/A
Opportunities -
Initial Class
Nov. 30, 1997(dagger) 0 0 N/A N/A
Dec. 31, 1996 0 0 N/A N/A
Dec. 31, 1995 0 0 N/A N/A
Advisor Mid Cap - Nov. 30, 1998 119,088 33,806 0 0
Class A
Nov. 30, 1997 68,624 17,485 0 0
Nov. 30, 1996**** 25,943 4,434 0 0
Advisor Mid Cap - Nov. 30, 1998 459,186 163,750 0 0
Class T
Nov. 30, 1997 419,798 153,727 0 0
Nov. 30, 1996**** 1,836,711 304,519 0 0
Advisor Mid Cap - Nov. 30, 1998 N/A N/A 138,632 138,632
Class B
Nov. 30, 1997 N/A N/A 160,918 160,918
Nov. 30, 1996**** N/A N/A 20,844 20,844
Advisor Mid Cap - Nov. 30, 1998 N/A N/A 2,300 2,300
Class C
Nov. 30, 1997 N/A N/A 0 0
Advisor Equity Nov. 30, 1998 838,000 356,000 0 0
Growth - Class A
Nov. 30, 1997 516,000 163,000 0 0
Nov. 30, 1996 151,603 16,099 0 0
Advisor Equity Nov. 30, 1998 2,265,000 769,000 0 0
Growth - Class T
Nov. 30, 1997 2,561,000 777,000 0 0
Nov. 30, 1996 11,845,527 1,998,996 0 0
Advisor Equity Nov. 30, 1998 N/A N/A 488,000 488,000
Growth - Class B
Nov. 30, 1997C N/A N/A 53,000 53,000
Advisor Equity Nov. 30, 1998 N/A N/A 25,000 25,000
Growth - Class C
Nov. 30, 1997 N/A N/A 0 0
Advisor
Large Cap - Nov. 30, 1998 48,225 13,628 0 0
Class A
Nov. 30, 1997 39,475 12,656 0 0
Nov. 30, 1996**** 1,495 1,476 0 0
Advisor
Large Cap - Nov. 30, 1998 85,387 27,254 0 0
Class T
Nov. 30, 1997 83,276 28,199 0 0
Nov. 30, 1996**** 208,839 32,342 0 0
Advisor
Large Cap - Nov. 30, 1998 N/A N/A 50,675 50,675
Class B
Nov. 30, 1997 N/A N/A 27,546 27,546
Nov. 30, 1996**** N/A N/A 5,900 5,900
Advisor
Large Cap - Nov. 30, 1998 N/A N/A 4,117 4,117
Class C
Nov. 30, 1997 N/A N/A 0 0
Advisor Growth Nov. 30, 1998 3,082,000 1,252,000 0 0
Opportunities -
Class A
Nov. 30, 1997+ 189,000 73,000 0 0
Oct. 31, 1997 $ 2,096,000 $ 618,000 $ 0 $ 0
Oct. 31, 1996 399,713 45,606 0 0
Advisor Growth Nov. 30, 1998 11,634,000 4,534,000 0 0
Opportunities -
Class T
Nov. 30, 1997+ 821,000 352,000 0 0
Oct. 31, 1997 13,380,000 4,538,000 0 0
Oct. 31, 1996 49,538,901 7,961,248 0 0
Advisor Growth Nov. 30, 1998 N/A N/A 1,990,000 1,990,000
Opportunities -
Class B
Nov. 30, 1997+ N/A N/A 41,000 41,000
Oct. 31, 1997D N/A N/A 154,000 154,000
Advisor Growth Nov. 30, 1998 N/A N/A 98,000 98,000
Opportunities -
Class C
Nov. 30, 1997+ N/A N/A 0 0
Advisor Growth & Nov. 30, 1998 416,022 154,022 0 0
Income - Class A
Nov. 30, 1997** 107,155 38,752 0 0
Advisor Growth & Nov. 30, 1998 931,112 327,957 0 0
Income - Class T
Nov. 30, 1997** 316,414 112,138 0 0
Advisor Growth & Nov. 30, 1998 N/A N/A 146,346 146,346
Income - Class B
Nov. 30, 1997** N/A N/A 35,346 35,346
Advisor Growth & Nov. 30, 1998 N/A N/A 24,046 24,046
Income - Class C
Nov. 30, 1997** N/A N/A 0 0
Advisor Equity Nov. 30, 1998 672,000 278,000 0 0
Income - Class A
Nov. 30, 1997 461,000 124,000 0 0
Nov. 30, 1996 108,178 10,945 0 0
Advisor Equity Nov. 30, 1998 1,700,000 545,000 0 0
Income - Class T
Nov. 30, 1997 1,835,000 533,000 0 0
Nov. 30, 1996 8,110,513 1,572,831 0 0
Advisor Equity Nov. 30, 1998 N/A N/A 1,178,000 1,178,000
Income - Class B
Nov. 30, 1997 N/A N/A 1,017,000 1,017,000
Nov. 30, 1996 N/A N/A 651,390 651,390
Advisor Equity Nov. 30, 1998 N/A N/A 10,000 10,000
Income - Class C
Nov. 30, 1997 N/A N/A 0 0
Advisor
Balanced - Nov. 30, 22,000 9,000 0 0
Class A 1998(dagger)(dagger)
Oct. 31, 1998 173,000 57,000 0 0
Oct. 31, 1997 139,000 37,000 0 0
Oct. 31, 1996 38,444 5,070 0 0
Advisor
Balanced - Nov. 30, 58,000 21,000 0 0
Class T 1998(dagger)(dagger)
Oct. 31, 1998 940,000 263,000 0 0
Oct. 31, 1997 1,052,000 275,000 0 0
Oct. 31, 1996 3,494,533 591,963 0 0
Advisor
Balanced - Nov. 30, N/A N/A 10,000 10,000
Class B 1998(dagger)(dagger)
Oct. 31, 1998 N/A N/A 48,000 48,000
Oct. 31, 1997G N/A N/A 9,000 9,000
Advisor
Balanced - Nov. 30, N/A N/A $ 1,000 $ 1,000
Class C 1998(dagger)(dagger)
Oct. 31, 1998 N/A N/A 6,000 6,000
Advisor Emerging Dec. 31, 1998 $ 26,332 $ 8,219 0 0
Markets Income -
Class A
Dec. 31, 1997 29,709 6,462 0 0
Dec. 31, 1996 9,186 1,098 0 0
Advisor Emerging Dec. 31, 1998 61,537 20,587 0 0
Markets Income -
Class T
Dec. 31, 1997 142,370 30,730 0 0
Dec. 31, 1996 270,379 42,424 0 0
Advisor Emerging Dec. 31, 1998 N/A N/A 71,458 71,458
Markets Income -
Class B
Dec. 31, 1997 N/A N/A 68,657 68,657
Dec. 31, 1996 N/A N/A 46,800 46,800
Advisor Emerging Dec. 31, 1998 N/A N/A 2,699 2,699
Markets Income -
Class C
Dec. 31, 1997 N/A N/A 0 0
Advisor
High Yield Oct. 31, 1998 923,000 346,000 0 0
- - Class A
Oct. 31, 1997 609,000 162,000 0 0
Oct. 31, 1996 116,000 17,000 0 0
Advisor
High Yield Oct. 31, 1998 2,889,000 1,263,000 0 0
- - Class T
Oct. 31, 1997 2,978,000 979,000 0 0
Oct. 31, 1996 8,201,000 1,356,000 0 0
Advisor
High Yield Oct. 31, 1998 N/A N/A 1,774,000 1,774,000
- - Class B
Oct. 31, 1997 N/A N/A 1,076,000 1,076,000
Oct. 31, 1996 N/A N/A 372,000 372,000
Advisor
High Yield Oct. 31, 1998 N/A N/A 54,000 54,000
- - Class C
Advisor Strategic Dec. 31, 1998 97,601 25,922 0 0
Income - Class A
Dec. 31, 1997 56,247 9,922 0 0
Dec. 31, 1996 13,287 1,628 0 0
Advisor Strategic Dec. 31, 1998 269,192 76,233 0 0
Income - Class T
Dec. 31, 1997 275,540 77,574 0 0
Dec. 31, 1996 558,381 94,606 0 0
Advisor Strategic Dec. 31, 1998 N/A N/A 140,845 140,845
Income - Class B
Dec. 31, 1997 N/A N/A 89,199 89,199
Dec. 31, 1996 N/A N/A 56,783 56,783
Advisor Strategic Dec. 31, 1998 N/A N/A 9,131 9,131
Income - Class C
Dec. 31, 1997 N/A N/A 0 0
Advisor Government Oct. 31, 1998 41,422 12,554 0 0
Investment -
Class A
Oct. 31, 1997 31,629 6,913 0 0
Oct. 31, 1996A 5,077 1,157 0 0
Advisor Government Oct. 31, 1998 105,994 31,145 0 0
Investment -
Class T
Oct. 31, 1997 76,261 20,512 0 0
Oct. 31, 1996 618,420 101,833 0 0
Advisor Government Oct. 31, 1998 N/A N/A 76,288 76,288
Investment -
Class B
Oct. 31, 1997 N/A N/A 87,840 87,840
Oct. 31, 1996 N/A N/A 38,738 38,738
Advisor Government Oct. 31, 1998 N/A N/A $ 14,911 $ 14,911
Investment -
Class C
Advisor Mortgage Oct. 31, 1998 $ 15,729 $ 5,230 0 0
Securities -
Class A
Oct. 31, 1997++ 263 180 0 0
July 31, 1997E 7,090 67 0 0
Advisor Mortgage Oct. 31, 1998 32,042 9,363 0 0
Securities -
Class T
Oct. 31, 1997++ 8,746 1,749 0 0
July 31, 1997E 9,662 2,170 0 0
Advisor Mortgage Oct. 31, 1998 N/A N/A 7,660 7,660
Securities -
Class B
Oct. 31, 1997++ N/A N/A 72 72
July 31, 1997E N/A N/A 0 0
Advisor Oct. 31, 1998+++ 49,160 28,254 0 0
Intermediate Bond
- - Class A
Nov. 30, 1997 68,475 24,480 0 0
Nov. 30, 1996F 10,944 1,799 0 0
Advisor Oct. 31, 1998+++ 83,240 32,737 0 0
Intermediate Bond
- - Class T
Nov. 30, 1997 109,296 31,882 0 0
Nov. 30, 1996 604,408 100,654 0 0
Nov. 30, 1995 1,297,536 198,826 0 0
Advisor Oct. 31, 1998+++ N/A N/A 90,580 90,580
Intermediate Bond
- - Class B
Nov. 30, 1997 N/A N/A 68,602 68,602
Nov. 30, 1996 N/A N/A 56,925 56,925
Nov. 30, 1995 N/A N/A 20,310 20,310
Advisor Oct. 31, 1998+++ N/A N/A 3,720 3,720
Intermediate Bond
- - Class C
Nov. 30, 1997 N/A N/A 0 0
Advisor Short Oct. 31, 1998 30,218 7,274 0 0
Fixed-Income -
Class A
Oct. 31, 1997 15,709 3,424 0 0
Oct. 31, 1996A 1,525 231 0 0
Advisor Short Oct. 31, 1998 221,684 43,309 0 0
Fixed-Income -
Class T
Oct. 31, 1997 278,405 63,127 0 0
Oct. 31, 1996 553,986 95,855 0 0
Advisor Short Oct. 31, 1998 N/A N/A 6,373 6,373
Fixed-Income -
Class C
Advisor Municipal Oct. 31, 1998 38,091 15,167 0 0
Income - Class A
Oct. 31, 1997 57,657 14,649 0 0
Oct. 31, 1996A 3,984 599 0 0
Advisor Municipal Oct. 31, 1998 179,663 60,942 0 0
Income - Class T
Oct. 31, 1997 173,689 52,646 0 0
Oct. 31, 1996 918,111 154,356 0 0
Advisor Municipal Oct. 31, 1998 N/A N/A $ 112,936 $ 112,936
Income - Class B
Oct. 31, 1997 N/A N/A 174,350 174,350
Oct. 31, 1996 N/A N/A 130,817 130,817
Advisor Municipal Oct. 31, 1998 N/A N/A 6,848 6,848
Income - Class C
Advisor Oct. 31, 1998+++ $ 11,024 $ 4,498 0 0
Intermediate
Municipal Income -
Class A
Nov. 30, 1997 5,742 1,250 0 0
Nov. 30, 1996F 17 2 0 0
Advisor Oct. 31, 1998+++ 15,232 4,671 0 0
Intermediate
Municipal Income -
Class T
Nov. 30, 1997 21,915 6,612 0 0
Nov. 30, 1996 78,940 12,934 0 0
Nov. 30, 1995 375,591 141,432 0 0
Advisor Oct. 31, 1998+++ N/A N/A 8,419 8,419
Intermediate
Municipal Income -
Class B
Nov. 30, 1997 N/A N/A 19,218 19,218
Nov. 30, 1996 N/A N/A 35,837 35,837
Nov. 30, 1995 N/A N/A 1,449 1,449
Advisor Oct. 31, 1998+++ N/A N/A 534 534
Intermediate
Municipal Income -
Class C
Nov. 30, 1997 N/A N/A 0 0
</TABLE>
* Advisor International Capital Appreciation commenced operations on
November 3, 1997.
** Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
*** Advisor Small Cap commenced operations on September 9, 1998.
**** Advisor Mid Cap and Advisor Large Cap commenced operations on
February 20, 1996.
(dagger) For the fiscal period January 1, 1997 through November 30,
1997.
(dagger)(dagger) For the fiscal period November 1, 1998 through
November 30, 1998.
+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period August 1, 1997 through October 31, 1997.
+++ For the fiscal period December 1, 1997 through October 31,
1998.
A For the fiscal period September 3, 1996 through October 31,
1996.
B For the fiscal period September 3, 1996 through December 31,
1996.
C For the fiscal period December 31, 1996 through November 30,
1997.
D For the fiscal period March 3, 1997 through October 31, 1997.
E For the fiscal period March 3, 1997 through July 31, 1997.
F For the fiscal period September 3, 1996 through November 30,
1996.
G For the fiscal period December 31, 1996 through October 31, 1997.
The Trustees have approved Distribution and Service Plans on behalf of
Class A, Class T, Class B, Class C, Institutional Class and Initial
Class of each fund, except Advisor Strategic Opportunities: Initial
Class, (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow Class A, Class T, Class B,
Class C, Institutional Class, and Initial Class and FMR to incur
certain expenses that might be considered to constitute direct or
indirect payment by the funds of distribution expenses.
Pursuant to the Class A Plan for Advisor Latin America, Advisor Japan,
Advisor Europe Capital Appreciation, Advisor International Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, Advisor TechnoQuant Growth, Advisor Small Cap,
Advisor Strategic Opportunities, Advisor Mid Cap, Advisor Retirement
Growth, Advisor Equity Growth, Advisor Large Cap, Advisor Dividend
Growth, Advisor Growth Opportunities, Advisor Growth & Income, Advisor
Equity Income, Advisor Asset Allocation, and Advisor Balanced (the
Equity Funds), FDC is paid a monthly fee at an annual rate of up to
0.75% of Class A's average net assets determined at the close of each
business day throughout the month. Pursuant to the Class A Plan for
Advisor Emerging Markets Income, Advisor High Yield, Advisor Strategic
Income, Advisor Government Investment, Advisor Mortgage Securities,
and Advisor Municipal Income (the Bond Funds), Advisor Intermediate
Bond and Advisor Intermediate Municipal Income (the Intermediate-Term
Bond Funds), and Advisor Short Fixed-Income (the Short-Term Bond
Fund), FDC is paid a monthly fee at an annual rate of up to 0.40% of
Class A's average net assets determined at the close of each business
day throughout the month. Currently, the Trustees have approved a
monthly 12b-1 fee for Class A of each of the Equity Funds at an annual
rate of 0.25% of its average net assets; and for Class A of each of
the Bond Funds, Intermediate-Term Bond Funds, and Short-Term Bond Fund
at an annual rate of 0.15% of its average net assets. This fee rate
may be increased only when, in the opinion of the Trustees, it is in
the best interests of the shareholders of the applicable class to do
so.
Currently, FDC may reallow to intermediaries (such as banks,
broker-dealers and other service-providers), including its affiliates,
up to the full amount of 12b-1 fees paid by Class A for providing
services intended to result in the sale of Class A shares and/or
shareholder support services.
Pursuant to the Class T Plan for Advisor Latin America, Advisor Japan,
Advisor Europe Capital Appreciation, Advisor International Capital
Appreciation, Advisor Diversified International, Advisor Global
Equity, Advisor TechnoQuant Growth, Advisor Small Cap, Advisor Mid
Cap, Advisor Retirement Growth, Advisor Equity Growth, Advisor Large
Cap, Advisor Dividend Growth, Advisor Growth & Income, Advisor Equity
Income, and Advisor Asset Allocation, FDC is paid a monthly 12b-1 fee
at an annual rate of up to 0.75% of Class T's average net assets
determined at the close of business on each day throughout the month.
Pursuant to the Class T Plan for Advisor Overseas, Advisor Strategic
Opportunities, Advisor Growth Opportunities, and Advisor Balanced, FDC
is paid a monthly 12b-1 fee at an annual rate of up to 0.65% of Class
T's average net assets determined at the close of business on each day
throughout the month. Pursuant to the Class T Plan for the Bond Funds
and Intermediate-Term Bond Funds, FDC is paid a monthly 12b-1 fee at
an annual rate of up to 0.40% of Class T's average net assets
determined at the close of business on each day throughout the month.
Pursuant to the Class T Plan for the Short-Term Bond Fund, FDC is paid
a monthly 12b-1 fee at an annual rate of up to 0.15% of Class T's
average net assets determined at the close of business on each day
throughout the month. Currently, the Trustees have approved a monthly
12b-1 fee for Class T of each of the Equity Funds at an annual rate of
0.50% of its average net assets; for Class T of each of the Bond Funds
and the Intermediate-Term Bond Funds at an annual rate of 0.25% of its
average net assets; and for Class T of the Short-Term Bond Fund at an
annual rate of 0.15% of its average net assets. This fee rate may be
increased only when, in the opinion of the Trustees, it is in the best
interests of the shareholders of the applicable class to do so.
Currently, FDC may reallow to intermediaries ( such as banks,
broker-dealers and other service-providers ) , including its
affiliates, up to the full amount of 12b-1 fees paid by Class T for
providing services intended to result in the sale of Class T shares
and/or shareholder support services.
Pursuant to the Class B Plan for each fund, FDC is paid a monthly
12b-1 (distribution) fee at an annual rate of up to 0.75% of Class B's
average net assets determined at the close of business on each day
throughout the month. Currently, the Trustees have approved a monthly
12b-1 (distribution) fee for Class B of the Equity Funds at an annual
rate of 0.75% of its average net assets; and for Class B of the Bond
Funds and the Intermediate Bond Funds at an annual rate of 0.65% of
its average net assets. This fee rate may be increased only when, in
the opinion of the Trustees, it is in the best interests of the
shareholders of the class to do so.
Pursuant to the Class B Plan for each fund, FDC is also paid a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class B's average
net assets determined at the close of business on each day throughout
the month.
Currently, FDC retains the full amount of 12b-1 (distribution) fees
paid by Class B as compensation for providing services intended to
result in the sale of Class B shares, and FDC may reallow up to the
full amount of 12b-1 (service) fees paid by Class B to intermediaries
( such as banks, broker-dealers and other
service-providers ) for providing shareholder support services.
Pursuant to the Class C Plan for each fund, FDC is paid a monthly
12b-1 (distribution) fee at an annual rate of 0.75% of Class C's
average net assets determined at the close of business on each day
throughout the month.
Pursuant to the Class C Plan for each fund, FDC is also paid a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class C's average
net assets determined at the close of business on each day throughout
the month.
Currently and except as provided below, for the first year of
investment, FDC retains the full amount of 12b-1 (distribution) fees
paid by Class C as compensation for providing services intended to
result in the sale of Class C shares and retains the full amount of
12b-1 (service) fees paid by Class C for providing shareholder
support services. Normally, after the first year of investment, FDC
may reallow up to the full amount of 12b-1 (distribution) fees paid by
Class C to intermediaries ( such as banks, broker-dealers and
other service-providers ) for providing services intended to
result in the sale of Class C shares and may reallow up to the full
amount of 12b-1 (service) fees paid by Class C to intermediaries for
providing shareholder support services. For purchases of Class C
shares made for an employee benefit plan , 403(b) program or
plan covering a sole-proprietor (formerly Keogh/H.R. 10 plan) or
through reinvestment of dividends or capital gains distributions,
during the first year of investment and thereafter, FDC may reallow up
to the full amount of 12b-1 (distribution) fees paid by such Class C
shares to intermediaries, including its affiliates, for providing
services intended to result in the sale of Class C shares and may
reallow up to the full amount of 12b-1 (service) fees paid by such
Class C shares to intermediaries , including its affiliates, for
providing shareholder support services.
The table below shows the distribution fees paid by Class A for the
fiscal years ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS A DISTRIBUTION FEES
Fees Paid to FDC Paid by FDC to Retained by FDC+++++
Intermediaries
Advisor $ 1,366 $ 1,112 $ 254
International
Capital
Appreciation*
Advisor Overseas 21,188 21,188 0
Advisor TechnoQuant 9,638 9,565 73
Growth
Advisor Small Cap+ 2,413 2,413 0
Advisor Strategic 8,709 8,416 293
Opportunities
Advisor Mid Cap 20,451 20,424 27
Advisor Equity Growth 141,701 141,484 217
Advisor Large Cap 7,709 7,256 453
Advisor Growth 636,559 635,048 1,511
Opportunities
Advisor Growth & 44,707 44,259 448
Income
Advisor Equity Income 118,889 118,772 117
Advisor Balanced++ 3,366 3,326 40
Advisor Balanced+++ 29,129 29,054 75
Advisor Emerging 3,810 3,626 184
Markets Income
Advisor High Yield 130,493 130,382 111
Advisor Strategic 10,359 10,277 82
Income
Advisor Government 4,622 4,520 102
Investment
Advisor Mortgage 1,249 1,060 189
Securities
Advisor 8,316 8,316 0
Intermediate
Bond++++
Advisor Short 9,763 9,524 239
Fixed-Income
Advisor Municipal 7,582 7,456 126
Income
Advisor 1,130 916 214
Intermediate
Municipal Income++++
</TABLE>
* Advisor International Capital Appreciation commenced operations on
November 3, 1997.
+ Advisor Small Cap commenced operations on September 9, 1998.
++ For the fiscal period November 1, 1998 through November 30, 1998.
+++ For the fiscal period November 1, 1997 through October 31, 1998.
++++ For the fiscal period December 1, 1997 through October 31, 1998.
+++++ Amounts retained by FDC represent fees paid to FDC but not yet
reallowed to intermediaries as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
The table below shows the distribution fees paid by Class T for the
fiscal years ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS T DISTRIBUTION FEES
Fees Paid to FDC Paid by FDC Paid to Retained by FDC+++++
Intermediaries
Advisor $ 33,900 $ 30,489 $ 3,411
International
Capital
Appreciation*
Advisor Overseas 5,792,812 5,730,481 62,331
Advisor TechnoQuant 91,619 88,998 2,621
Advisor Small Cap+ 34,861 34,803 58
Advisor Strategic 2,460,259 2,423,497 36,762
Opportunities
Advisor Mid Cap 1,786,000 1,691,879 94,121
Advisor Equity Growth 22,837,617 22,615,273 222,344
Advisor Large Cap 297,440 295,053 2,387
Advisor Growth 113,729,158 112,542,332 1,186,826
Opportunities
Advisor Growth & 1,271,397 1,247,399 23,998
Income
Advisor Equity Income 12,461,508 12,276,728 184,780
Advisor Balanced++ 1,231,854 1,210,216 21,638
Advisor Balanced+++ 15,038,514 14,899,220 139,294
Advisor Emerging 182,151 158,311 23,840
Markets Income
Advisor High Yield 6,204,367 6,111,663 92,704
Advisor Strategic 405,368 405,198 170
Income
Advisor Government 402,948 398,927 4,021
Investment
Advisor Mortgage 36,423 22,439 13,984
Securities
Advisor 637,223 607,965 29,258
Intermediate
Bond++++
Advisor Short 505,426 500,937 4,489
Fixed-Income
Advisor Municipal 958,589 947,780 10,809
Income
Advisor 121,547 119,621 1,926
Intermediate
Municipal Income++++
</TABLE>
* Advisor International Capital Appreciation commenced operations on
November 3, 1997.
+ Advisor Small Cap commenced operations on September 9, 1998.
++ For the fiscal period November 1, 1998 through November 30, 1998.
+++ For the fiscal period November 1, 1997 through October 31, 1998.
++++ For the fiscal period December 1, 1997 through October 31, 1998.
+++++ Amounts retained by FDC represent fees paid to FDC but not yet
reallowed to intermediaries as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
The table below shows the distribution and service fees paid by Class
B for the fiscal years ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B DISTRIBUTION AND SERVICE FEES
Distribution Fees Distribution Fees Service Fees Paid Service Fees FDC Service Fees
Paid to FDC Retained by FDC* to FDC Paid to Retained by FDC**
Intermediaries
Advisor $ 16,567 $ 16,567 $ 5,524 $ 5,352 $ 172
International
Capital
Appreciation+
Advisor Overseas 387,860 387,860 129,287 129,174 113
Advisor TechnoQuant 87,152 87,152 29,050 28,883 167
Growth
Advisor Small Cap++ 16,347 16,347 5,449 5,449 0
Advisor Strategic 821,851 821,851 273,950 273,160 790
Opportunities
Advisor Mid Cap 548,693 548,693 182,898 182,571 327
Advisor Equity Growth 1,249,128 1,249,128 416,377 415,933 444
Advisor Large Cap 205,925 205,925 68,643 68,440 203
Advisor Growth 6,927,050 6,927,050 2,309,017 2,306,973 2,044
Opportunities
Advisor Growth & 588,780 588,780 196,259 196,166 93
Income
Advisor Equity Income 5,990,865 5,990,865 1,996,956 1,991,709 5,247
Advisor Balanced+++ 33,711 33,711 11,237 11,193 44
Advisor Balanced++++ 242,180 242,180 80,726 80,662 64
Advisor Emerging 132,602 132,602 51,001 50,750 251
Markets Income
Advisor High Yield 5,350,747 5,350,747 2,057,981 2,054,786 3,195
Advisor Strategic 443,456 443,456 170,560 170,178 382
Income
Advisor Government 188,977 188,977 72,685 72,502 183
Investment
Advisor Mortgage 25,662 25,662 9,869 9,720 149
Securities
Advisor 162,092 162,092 62,326 62,224 102
Intermediate
Bond+++++
Advisor Municipal 306,173 306,173 117,760 117,755 5
Income
Advisor 50,270 50,270 19,333 19,333 0
Intermediate
Municipal
Income+++++
</TABLE>
* These amounts are retained by FDC for use in its capacity as
distributor.
** Amounts retained by FDC represent fees paid to FDC but not yet
reallowed to intermediaries as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
+ Advisor International Capital Appreciation commenced operations on
November 3, 1997.
++ Advisor Small Cap commenced operations on September 9, 1998.
+++ For the fiscal period November 1, 1998 through November 30, 1998.
++++ For the fiscal period November 1, 1997 through October 31, 1998.
+++++ For the fiscal period December 1, 1997 through October 31, 1998.
The table below shows the distribution and service fees paid by Class
C for the fiscal years ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS C DISTRIBUTION AND SERVICE FEES
Distribution Fees Distribution Fees Distribution Fees Service Fees Paid Service Fees Paid
Paid to FDC Paid by FDC to Retained by FDC++ to FDC by FDC to
Intermediaries Intermediaries
Advisor $ 9,251 $ 7 $ 9,244 $ 3,083 $ 2
International
Capital
Appreciation*
Advisor Overseas 44,676 96 44,580 14,893 32
Advisor TechnoQuant 2,081 23 2,058 690 4
Growth
Advisor Small Cap** 16,218 0 16,218 5,406 0
Advisor Mid Cap 48,650 308 48,342 16,216 102
Advisor Equity Growth 194,674 1,097 193,577 64,891 365
Advisor Large Cap 11,363 18 11,345 3,789 7
Advisor Growth 1,091,669 4,137 1,087,532 363,888 1,377
Opportunities
Advisor Growth & 163,415 342 163,073 54,471 113
Income
Advisor Equity Income 135,114 847 134,267 45,039 283
Advisor Balanced*** 13,123 129 12,994 4,374 43
Advisor Balanced**** 70,970 260 70,710 23,655 87
Advisor Emerging 3,290 48 3,242 1,096 16
Markets Income
Advisor High Yield 525,952 2,574 523,378 175,319 858
Advisor Strategic 59,093 715 58,378 10,328 238
Income
Advisor Government 27,497 112 27,385 9,167 37
Investment
Advisor 17,342 74 17,268 5,800 25
Intermediate
Bond*****
Advisor Short 14,717 108 14,609 4,905 36
Fixed-Income
Advisor Municipal 22,088 61 22,027 7,361 20
Income
Advisor 3,472 14 3,458 1,158 5
Intermediate
Municipal
Income*****
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Service Fees
Retained by FDC+
Advisor $ 3,081
International
Capital
Appreciation*
Advisor Overseas 14,861
Advisor TechnoQuant 686
Growth
Advisor Small Cap** 5,406
Advisor Mid Cap 16,114
Advisor Equity Growth 64,526
Advisor Large Cap 3,782
Advisor Growth 362,511
Opportunities
Advisor Growth & 54,358
Income
Advisor Equity Income 44,756
Advisor Balanced*** 4,331
Advisor Balanced**** 23,568
Advisor Emerging 1,080
Markets Income
Advisor High Yield 174,461
Advisor Strategic 10,090
Income
Advisor Government 9,130
Investment
Advisor 5,775
Intermediate
Bond*****
Advisor Short 4,869
Fixed-Income
Advisor Municipal 7,341
Income
Advisor 1,153
Intermediate
Municipal
Income*****
</TABLE>
+ Amounts retained by FDC represent fees paid to FDC but not yet
reallowed to intermediaries as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
++ These amounts are retained by FDC for use in its capacity as
distributor.
* Advisor International Capital Appreciation commenced operations on
November 3, 1997.
** Advisor Small Cap commenced operations on September 9, 1998.
*** For the fiscal period November 1, 1998 through November 30, 1998.
**** For the fiscal period November 1, 1997 through October 31, 1998.
***** For the fiscal period December 1, 1997 through October 31, 1998.
Under each Institutional Class and Initial Class Plan, if the payment
of management fees by the fund to FMR is deemed to be indirect
financing by the fund of the distribution of its shares, such payment
is authorized by the Plan. Each Institutional Class and Initial Class
Plan specifically recognizes that FMR may use its management fee
revenue, as well as its past profits or its other resources, to pay
FDC for expenses incurred in connection with providing services
intended to result in the sale of Institutional Class and Initial
Class shares and/or shareholder support services. In addition, each
Institutional Class and Initial Class Plan provides that FMR, directly
or through FDC, may pay intermediaries, such as banks, broker-dealers
and other service-providers, that provide those services. Currently,
the Board of Trustees has authorized such payments for Institutional
Class and Initial Class shares.
Under each Class A, Class T, Class B and Class C Plan, if the payment
of management fees by the fund to FMR is deemed to be indirect
financing by the fund of the distribution of its shares, such payment
is authorized by the Plan. Each Class A, Class T, Class B and Class C
Plan specifically recognizes that FMR may use its management fee
revenue, as well as its past profits or its other resources, to pay
FDC for expenses incurred in connection with providing services
intended to result in the sale of Class A, Class T, Class B and Class
C shares and/or shareholder support services, including payments made
to intermediaries that provide those services. Currently, the Board of
Trustees has authorized such payments for Class A, Class T, Class B
and Class C shares.
Payments made by FMR either directly or through FDC, to intermediaries
for the fiscal year ended 1998 amounted to $0 for Initial Class of
Advisor Mortgage Securities and, for Class A, Class T, Class B, Class
C, and Institutional Class of each fund, amounted to the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class A Class T Class B Class C Institutional
Advisor $ 57 $ 75 $ 58 $ 3,752 $ 3
International
Capital
Appreciation***
Advisor Overseas 6,791 383,564 32,812 7,097 10,057
Advisor TechnoQuant 3,231 6,191 5,111 1,185 117
Growth
Advisor Small Cap**** 0 0 0 0 0
Advisor Strategic 2,539 124,790 66,981 ** 5,422
Opportunities
Advisor Mid Cap 5,461 101,845 31,287 11,743 5,883
Advisor Equity Growth 24,057 601,156 35,641 17,470 49,382
Advisor Large Cap 2,189 22,166 10,674 1,885 1,579
Advisor Growth 103,054 1,832,318 178,218 124,356 34,589
Opportunities
Advisor Growth & 4,725 28,163 11,271 10,791 2,341
Income
Advisor Equity Income 18,037 394,428 270,671 19,033 28,086
Advisor Balanced+ 265 25,056 411 373 1,005
Advisor Balanced++ 5,409 450,077 8,970 6,180 11,876
Advisor Emerging 2,476 32,484 14,214 308 1,076
Markets Income
Advisor High Yield 22,670 370,310 199,517 48,738 12,639
Advisor Strategic 1,507 46,652 13,435 2,761 674
Income
Advisor Government 882 98,475 8,663 1,726 10,018
Investment
Advisor Mortgage 107 6,184 415 ** 2,793
Securities
Advisor 2,629 124,812 12,549 2,751 15,871
Intermediate Bond+++
Advisor Short 1,475 103,634 * 2,229 1,707
Fixed-Income
Advisor Municipal 747 43,765 11,053 2,835 495
Income
Advisor 182 6,183 1,941 611 674
Intermediate
Municipal Income+++
</TABLE>
* Fund does not offer Class B shares.
** Fund does not offer Class C shares.
*** Advisor International Capital Appreciation commenced operations
on November 3, 1997.
**** Advisor Small Cap commenced operations on September 9,
1998.
+ For the fiscal period November 1, 1998 through November 30, 1998.
++ For the fiscal period November 1, 1997 through October 31, 1998.
+++ For the fiscal period December 1, 1997 through October 31,
1998.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the applicable class of each fund and its shareholders. In
particular, the Trustees noted that each Institutional Class and
Initial Class Plan does not authorize payments by Institutional Class
and Initial Class of the fund other than those made to FMR under its
management contract with the fund. To the extent that each Plan gives
FMR and FDC greater flexibility in connection with the distribution of
Class A, Class T, Class B, Class C, Institutional Class, and Initial
Class shares, additional sales of fund shares or stabilization of cash
flows may result. Furthermore, certain shareholder support services
may be provided more effectively under the Plans by local entities
with whom shareholders have other relationships.
Each Class A, Class T, Class B and Class C Plan does not provide for
specific payments by the applicable class of any of the expenses of
FDC, or obligate FDC or FMR to perform any specific type or level of
distribution activities or incur any specific level of expense in
connection with distribution activities.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
TRANSFER AND SERVICE AGENT AGREEMENTS
Class A, Class T, Class B, Class C, and Institutional Class of Advisor
Latin America, Advisor Japan, Advisor Europe Capital Appreciation,
Advisor International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, Advisor TechnoQuant
Growth, Advisor Small Cap, Advisor Strategic Opportunities, Advisor
Mid Cap, Advisor Retirement Growth, Advisor Equity Growth, Advisor
Large Cap, Advisor Dividend Growth, Advisor Growth Opportunities,
Advisor Growth & Income, Advisor Equity Income, Advisor Asset
Allocation, Advisor Balanced, Advisor Emerging Markets Income, Advisor
High Yield, Advisor Strategic Income, Advisor Government Investment,
Advisor Mortgage Securities, Advisor Intermediate Bond, and Advisor
Short Fixed-Income has entered into a transfer agent agreement with
FIIOC, an affiliate of FMR. Initial Class of Strategic Opportunities
and Mortgage Securities has entered into a transfer agent agreement
with FSC, an affiliate of FMR. Under the terms of the agreements,
FIIOC and FSC perform transfer agency, dividend disbursing, and
shareholder services for Class A, Class T, Class B, Class C,
Institutional Class, and Initial Class of each fund.
Each class of Advisor Municipal Income and Advisor Intermediate
Municipal Income has entered into a transfer agent agreement with UMB,
which is located at 1010 Grand Avenue, Kansas City, Missouri. Under
the terms of the agreements, UMB provides transfer agency, dividend
disbursing, and shareholder services for each class of each fund. UMB
in turn has entered into sub-transfer agent agreements with FIIOC.
Under the terms of the sub-agreements, FIIOC performs all processing
activities associated with providing these services for each class of
each fund and receives all related transfer agency fees paid to UMB.
For providing transfer agency services, FSC and FIIOC receive an
account fee and an asset-based fee each paid monthly with respect to
each account in a fund. For retail accounts and certain institutional
accounts, these fees are based on account size and fund type. For
certain institutional retirement accounts, these fees are based on
fund type. For certain other institutional retirement accounts, these
fees are based on account type and fund type. The account fees are
subject to increase based on postage rate changes.
For the E quity F unds the asset-based fees are subject to
adjustment if the year-to-date total return of the S&P 500 exceeds a
positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
FSC and FIIOC pay out-of-pocket expenses associated with providing
transfer agent services. In addition, FSC and FIIOC bear the expense
of typesetting, printing, and mailing prospectuses, statements of
additional information, and all other reports, notices, and statements
to existing shareholders, with the exception of proxy statements.
Each of Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, Advisor Global Equity,
Advisor TechnoQuant Growth, Advisor Small Cap, Advisor Strategic
Opportunities, Advisor Mid Cap, Advisor Retirement Growth, Advisor
Equity Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor
Growth Opportunities, Advisor Growth & Income, Advisor Equity Income,
Advisor Asset Allocation, Advisor Balanced, Advisor Emerging Markets
Income, Advisor High Yield, Advisor Strategic Income, Advisor
Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, and Advisor Short Fixed-Income (the Taxable Funds)
has also entered into a service agent agreement with FSC. Under
the terms of the agreements, FSC calculates the NAV and dividends for
each class of each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
Each of Advisor Municipal Income and Advisor Intermediate Municipal
Income has also entered into a service agent agreement with UMB. Under
the terms of the agreements, UMB provides pricing and bookkeeping
services for each fund. UMB in turn has entered into sub-service agent
agreements with FSC. Under the terms of the sub-agreements, FSC
performs all processing activities associated with providing these
services, including calculating the NAV and dividends for each class
of each fund and maintaining each fund's portfolio and general
accounting records, and receives all related pricing and bookkeeping
fees paid to UMB.
For providing pricing and bookkeeping services, FSC receives a
monthly fee based on each fund's average daily net assets throughout
the month.
The annual rates for pricing and bookkeeping services for Advisor
TechnoQuant Growth, Advisor Small Cap, Advisor Strategic
Opportunities, Advisor Mid Cap, Advisor Retirement Growth, Advisor
Equity Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor
Growth Opportunities, Advisor Growth & Income, Advisor Equity Income,
Advisor Asset Allocation, and Advisor Balanced are 0.0450% of the
first $500 million of average net assets, 0.0265% of average net
assets between $500 million and $3 billion, and 0.0010% of average net
assets in excess of $3 billion. The fee, not including reimbursement
for out-of-pocket expenses, is limited to a minimum of $60,000 per
year.
The annual rates for pricing and bookkeeping services for Advisor
Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, Advisor Short Fixed-Income, Advisor Municipal Bond,
and Advisor Intermediate Municipal Income are 0.0275% of the first
$500 million of average net assets, 0.0175% of average net assets
between $500 million and $3 billion, and 0.0010% of average net assets
in excess of $3 billion. The fee, not including reimbursement for
out-of-pocket expenses, is limited to a minimum of $60,000 per
year.
The annual rates for pricing and bookkeeping services for Advisor
High Yield are 0.0475% of the first $500 million of average net
assets, 0.0275% of average net assets between $500 million and $3
billion, and 0.0010% of average net assets in excess of $3 billion.
The fee, not including reimbursement for out-of-pocket expenses, is
limited to a minimum of $60,000 per year.
The annual rates for pricing and bookkeeping services for Advisor
Latin America, Advisor Japan, Advisor Europe Capital Appreciation,
Advisor International Capital Appreciation, Advisor Overseas, Advisor
Diversified international, Advisor Global Equity, Advisor Strategic
Income, and Advisor Emerging Markets Income are 0.0550% of the first
$500 million of average net assets, 0.0425% of average net assets
between $500 million and $3 billion, and 0.0010% of average net assets
in excess of $3 billion. The fee, not including reimbursement for
out-of-pocket expenses, is limited to a minimum of $60,000 per
year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year End 1998 1997 1996
Advisor 10/31 $ 60,181# N/A N/A
International
Capital Appreciation
Advisor Overseas 10/31 669,432 $ 629,811 $ 523,913
Advisor TechnoQuant 11/30 60,636 55,019## N/A
Growth
Advisor Small Cap 11/30 13,571* N/A N/A
Advisor Strategic 11/30 341,818 310,776** N/A
Opportunities
12/31 N/A N/A 380,339
Advisor Mid Cap 11/30 288,852 266,208 65,738***
Advisor Equity Growth 11/30 816,007 813,000 804,585
Advisor Large Cap 11/30 65,096 60,755 46,209***
Advisor Growth 11/30 905,589 78,000+ N/A
Opportunities
10/31 N/A 836,000++ 821,769
Advisor Growth & 11/30 264,289 67,333## N/A
Income
Advisor Equity Income 11/30 811,037 808,212 751,619
Advisor Balanced 11/30 67,064(double N/A N/A
dagger)
10/31 810,916(double 806,920 800,592
dagger)(double
dagger)
Advisor Emerging 12/31 75,433 91,562 62,296
Markets Income
Advisor High Yield 10/31 821,873 821,882 734,437
Advisor Strategic 12/31 101,938 66,910 60,655
Income
Advisor Government 10/31 90,466 87,365 109,259
Investment
Advisor Mortgage 10/31 205,166 52,896+++ N/A
Securities
7/31 N/A 208,321++++ 189,021
Advisor 10/31 181,249(double N/A N/A
Intermediate Bond dagger)(double
dagger)(double
dagger)
11/30 N/A 195,556 198,036
Advisor Short 10/31 142,365 159,567 197,893
Fixed-Income
Advisor Municipal 10/31 184,252 191,896 239,476
Income
Advisor 10/31 57,149(double N/A N/A
Intermediate dagger)(double
Municipal Income dagger)(double
dagger)
11/30 N/A 61,883 65,230
</TABLE>
# Advisor International Capital Appreciation commenced operations on
November 3, 1997.
## Advisor TechnoQuant Growth and Advisor Growth & Income commenced
operations on December 31, 1996.
* Advisor Small Cap commenced operations on September 9, 1998.
** For the fiscal period January 1, 1997 through November 30, 1997.
*** Advisor Mid Cap and Advisor Large Cap commenced operations on
February 20, 1996.
+ For th e fiscal period November 1, 1997 through November
30, 1997.
++ For the fiscal period November 1, 1996 through October 31,
1997.
+++ For the fiscal period August 1, 1997 through October 31,
1997.
++++ For the fiscal period August 1, 1996 through July 31,
1997.
(double dagger) For the fiscal period November 1, 1998 through
November 30, 1998.
(double dagger)(double dagger) For the fiscal period November 1,
1997 through October 31, 1998.
(double dagger)(double dagger)(double dagger) For the fiscal period
December 1, 1997 through October 31, 1998.
For the fiscal year ended December 31, 1995, the pricing and
bookkeeping fee for Advisor Strategic Opportunities was $315,623.
For the fiscal year ended November 30, 1995, the pricing and
bookkeeping fee for Advisor Intermediate Bond was $151,940.
For the fiscal year ended November 30, 1995, the pricing and
bookkeeping fee for Advisor Intermediate Municipal Income was
$48,976.
For administering the securities lending program for the
T axable F und s , FSC receives fees based on the number
and duration of individual securities loans.
For the fiscal years ended October 31, November 30, and December 31,
1998, 1997, and 1996, the Taxable Funds paid no securities
lending fees.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Advisor TechnoQuant Growth, Advisor Small Cap,
Advisor Strategic Opportunities, Advisor Mid Cap, Advisor Retirement
Growth, Advisor Equity Growth, Advisor Large Cap, Advisor Dividend
Growth, Advisor Growth Opportunities, Advisor Growth & Income, Advisor
Equity Income, Advisor Asset Allocation, and Advisor Balanced are
funds of Fidelity Advisor Series I, an open-end management investment
company organized as a Massachusetts business trust on June 24, 1983.
On January 1, 1996, Advisor Equity Growth changed its name from
Advisor Equity Portfolio Growth to Advisor Equity Growth Fund. On
February 24, 1995, Advisor Equity Income changed its name from Advisor
Equity Portfolio Income to Advisor Equity Income Fund. On January 2,
1997, Advisor Balanced changed its name from Advisor Income & Growth
Fund to Advisor Balanced Fund. Currently, there are thirteen funds
in Fidelity Advisor Series I: Advisor TechnoQuant Growth, Advisor
Small Cap, Advisor Strategic Opportunities, Advisor Mid Cap, Advisor
Retirement Growth, Advisor Equity Growth, Advisor Large Cap, Advisor
Dividend Growth, Advisor Growth Opportunities, Advisor Growth &
Income, Advisor Equity Income, Advisor Asset Allocation, and Advisor
Balanced. The Trustees are permitted to create additional funds in the
trust and to create additional classes of the funds.
Advisor High Yield, Advisor Strategic Income, Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, Advisor Municipal Income, and Advisor
Intermediate Municipal Income are funds of Fidelity Advisor Series II,
an open-end management investment company organized as a Massachusetts
business trust on April 23, 1986 . On January 1, 1996, Advisor
Intermediate Bond changed its name from Advisor Limited Term Bond Fund
to Advisor Intermediate Bond Fund. O n January 16, 1998, Advisor
Municipal Income changed its name from Advisor High Income
Municipal Fund to Advisor Municipal Income Fund . On
January 1, 1996, Advisor Intermediate Municipal Income changed its
name from Advisor Limited Term Tax-Exempt Bond Fund to Advisor
Intermediate Municipal Income Fund. Currently, there are eight
funds in Fidelity Advisor Series II: Advisor High Yield, Advisor
Strategic Income, Advisor Government Investment, Advisor Mortgage
Securities, Advisor Intermediate Bond, Advisor Short Fixed-Income,
Advisor Municipal Income, and Advisor Intermediate Municipal Income.
The Trustees are permitted to create additional funds in the trust and
to create additional classes of the funds.
Advisor Latin America, Advisor Japan, Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, Advisor Global Equity,
and Advisor Emerging Markets Income are funds of Fidelity Advisor
Series VIII, an open-end management investment company organized as a
Massachusetts business trust on September 23, 1983. Currently, there
are eight funds in Fidelity Advisor Series VIII: Advisor Latin
America, Advisor Japan, Advisor Europe Capital Appreciation, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, and Advisor Emerging
Markets Income. The Trustees are permitted to create additional funds
in the trust and to create additional classes of the funds.
The assets of each trust received for the issue or sale of shares of
each of its funds and all income, earnings, profits, and proceeds
thereof, subject to the rights of creditors, are allocated to such
fund, and constitute the underlying assets of such fund. The
underlying assets of each fund in a trust shall be charged with the
liabilities and expenses attributable to such fund, except that
liabilities and expenses may be allocated to a particular class. Any
general expenses of the respective trusts shall be allocated between
or among any one or more of its funds or classes.
SHAREHOLDER LIABILITY. Each trust is an entity of the type commonly
known as a "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust.
The Declaration of Trust for each of Fidelity Advisor Series I and
Fidelity Advisor Series VIII provides that the trust shall not have
any claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust shall include a provision limiting the
obligations created thereby to the trust and its assets. The
Declaration of Trust for Fidelity Advisor Series II contains an
express disclaimer of shareholder liability for the debts,
liabilities, obligations, and expenses of the trust or fund. The
Declaration of Trust for Fidelity Advisor Series II provides that the
trust shall not have any claim against shareholders except for the
payment of the purchase price of shares and requires that each
agreement, obligation, or instrument entered into or executed by the
trust or the Trustees relating to the trust or to a fund shall include
a provision limiting the obligations created thereby to the trust or
to one or more funds and its or their assets. The Declaration of Trust
for Fidelity Advisor Series II further provides that shareholders of a
fund shall not have a claim on or right to any assets belonging to any
other fund.
Each Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. Each Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote. Claims asserted against one class of shares may subject
holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value you own. The voting rights of shareholders
can be changed only by a shareholder vote. Shares may be voted in the
aggregate, by fund and by class.
The shares have no preemptive or, for Class A, Class T, Class C,
Institutional Class, and Initial Class shares, conversion rights.
Shares are fully paid and nonassessable, except as set forth under the
heading "Shareholder Liability" above.
Each of Fidelity Advisor Series I and Fidelity Advisor Series VIII or
any of its funds may be terminated upon the sale of its assets to
another open-end management investment company, or upon liquidation
and distribution of its assets, if approved by a vote of shareholders
of the trust or the fund. In the event of the dissolution or
liquidation of a trust, shareholders of each of its funds are entitled
to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a
fund, shareholders of that fund are entitled to receive the underlying
assets of the fund available for distribution.
Fidelity Advisor Series II or any of its funds may be terminated upon
the sale of its assets to, or merger with, another open-end management
investment company or series thereof, or upon liquidation and
distribution of its assets. Generally, the merger of a trust or a fund
with another entity or the sale of substantially all of the assets of
a trust or a fund to another entity requires approval by a vote of
shareholders of the trust or the fund. The Trustees may, however,
reorganize or terminate the trust or any of its funds without prior
shareholder approval. In the event of the dissolution or liquidation
of the trust, shareholders of each of its funds are entitled to
receive the underlying assets of such fund available for distribution.
In the event of the dissolution or liquidation of a fund, shareholders
of that fund are entitled to receive the underlying assets of the fund
available for distribution.
CUSTODIANS. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of Advisor International
Capital Appreciation, Advisor Mid Cap, Advisor Growth Opportunities,
Advisor Strategic Opportunities, and Advisor Large Cap. State Street
Bank and Trust Company, 1776 Heritage Drive, Quincy, Massachusetts, is
custodian of the assets of Advisor Latin America, Advisor Japan,
Advisor Europe Capital Appreciation, Advisor Diversified
International, Advisor Global Equity, Advisor Small Cap,
Advisor Retirement Growth, Advisor Dividend Growth, and Advisor Asset
Allocation. The Chase Manhattan Bank, 4 Chase MetroTech Center,
Brooklyn, New York, is custodian of the assets of Advisor TechnoQuant
Growth, Advisor Overseas, Advisor Equity Growth, Advisor Growth &
Income, Advisor Equity Income, Advisor Balanced, and Advisor Emerging
Markets Income. The Bank of New York, 110 Washington Street, New York,
New York, is custodian of the assets of Advisor High Yield, Advisor
Strategic Income, Advisor Government Investment, Advisor Intermediate
Bond, Advisor Mortgage Securities and Advisor Short Fixed-Income. UMB
Bank, n.a., 1010 Grand Avenue, Kansas City, Missouri, is custodian of
the assets of Advisor Municipal Income and Advisor Intermediate
Municipal Income. Each custodian is responsible for the safekeeping of
a fund's assets and the appointment of subcustodian banks and clearing
agencies. The Bank of New York and The Chase Manhattan Bank, each
headquartered in New York, also may serve as special purpose
custodians of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. The Boston branch of the custodian bank of
Advisor International Capital Appreciation, Advisor Mid Cap, Advisor
Growth Opportunities, Advisor Strategic Opportunities, and Advisor
Large Cap leases its office space from an affiliate of FMR at a lease
payment which, when entered into, was consistent with prevailing
market rates. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITOR S . PricewaterhouseCoopers LLP, One Post Office
Square, Boston, Massachusetts serves as independent accountant
for Advisor Latin America, Advisor Japan, Advisor Overseas, Advisor
Diversified International, Advisor Global Equity, Advisor Small Cap,
Advisor Retirement Growth, Advisor Dividend Growth, Advisor Asset
Allocation, Advisor Emerging Markets Income, Advisor Mortgage
Securities, Advisor Intermediate Bond, Advisor Municipal Income, and
Advisor Intermediate Municipal Income. The auditor examines
financial statements for the funds and provides other audit, tax, and
related services.
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts
serves as independent accountant for Advisor Europe Capital
Appreciation. Effective February 18, 1999, Deloitte & Touche LLP, 125
Summer Street, Boston, Massachusetts, serves as independent accountant
for Advisor International Capital Appreciation, Advisor TechnoQuant
Growth, Advisor Strategic Opportunities, Advisor Mid Cap, Advisor
Equity Growth, Advisor Large Cap, Advisor Growth Opportunities,
Advisor Growth & Income, Advisor Equity Income, Advisor Balanced,
Advisor High Yield, Advisor Strategic Income, Advisor Government
Investment, and Advisor Short Fixed-Income. The auditor examines
financial statements for the fund and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
Each fund's (except Advisor Latin America, Advisor Japan, Advisor
Europe Capital Appreciation, Advisor Diversified International,
Advisor Global Equity, Advisor Retirement Growth, Advisor Dividend
Growth, and Advisor Asset Allocation) financial statements and
financial highlights for the fiscal periods ended October 31, 1998,
November 30, 1998, and December 31, 1998, as appropriate, and reports
of the auditor, are included in each fund's Annual Report and are
incorporated herein by reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, Magellan, and Fidelity Focus are registered trademarks of
FMR Corp.
Fidelity Advisor Funds and TechnoQuant are service
mark s of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
Advisor Series VIII
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) 1) Amended and Restated
Declaration of Trust, dated
October 1, 1986, is
incorporated herein by
reference to Exhibit 1(a) of
Post-Effective Amendment No.
37.
(2) Supplement to the Declaration
of Trust, dated November 29,
1990, is incorporated herein
by
reference to Exhibit 1(b) of
Post-Effective Amendment No.
37.
(3) Supplement to the Declaration
of Trust, dated July 15,
1993, is incorporated herein
by reference to
Exhibit 1(c) of
Post-Effective Amendment No.
37.
(4) Supplement to the Declaration
of Trust, dated July 17,
1997, is incorporated herein
by reference to
Exhibit 1(b) of
Post-Effective Amendment No.
45.
(b) Bylaws of the Trust, as
amended and dated May 19,
1994, are incorporated
herein by reference to
Exhibit 2(a) of Fidelity
Union Street Trust's (File
No. 2-50318) Post-Effective
Amendment No.
87.
(c) Not Applicable.
(d) (1) Management Contract between
Fidelity Advisor Diversified
International Fund and
Fidelity
Management & Research
Company, dated November 19,
1998, is incorporated herein
by reference
to Exhibit 5(s) of
Post-Effective Amendment No.
51.
(2) Form of Management Contract
between Fidelity Advisor
Emerging Asia Fund and
Fidelity Man
agement & Research Company is
incorporated herein by
reference to Exhibit 5(uu)
of Post-Effec
tive Amendment No. 50.
(3) Management Contract between
Fidelity Advisor Emerging
Markets Income Fund and
Fidelity
Management & Research Co.,
dated July 1, 1997, is
incorporated herein by
reference to Exhibit
5(b) of Post-Effective
Amendment No. 45.
(4) Management Contract between
Fidelity Advisor Europe
Capital Appreciation Fund
and Fidelity
Management & Research
Company, dated November 19,
1998, is incorporated herein
by reference
to Exhibit 5(ee) of
Post-Effective Amendment No.
51.
(5) Management Contract between
Fidelity Advisor Global
Equity Fund and Fidelity
Management &
Research Company, dated
November 19, 1998, is
incorporated herein by
reference to Exhibit 5(y)
of Post-Effective Amendment
No. 51.
(6) Management Contract between
Fidelity Advisor
International Capital
Appreciation Fund and Fi
delity Management & Research
Company, dated October 16,
1997, is incorporated herein
by refer
ence to Exhibit 5(j) of
Post-Effective Amendment No.
47.
(7) Management Contract between
Fidelity Advisor Japan Fund
and Fidelity Management &
Research
Company, dated November 19,
1998, is incorporated herein
by reference to Exhibit
5(jj) of Post-
Effective Amendment No. 51.
(8) Management Contract between
Fidelity Advisor Latin
America Fund and Fidelity
Management &
Research Company, dated
November 19, 1998, is
incorporated herein by
reference to Exhibit
5(pp) of Post-Effective
Amendment No. 51.
(9) Management Contract between
Fidelity Advisor Overseas
Fund and Fidelity Management
& Re
search Co., dated October 31,
1997, is incorporated herein
by reference to Exhibit 5(p)
of Post-Ef
fective Amendment No. 46.
(10) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Diversified
International Fund, and
Fidelity Management &
Research (U.K.) Inc., dated
November 19, 1998, is
incorporated herein by
reference to Exhibit 5(t) of
Post-Effective Amend
ment No. 51.
(11) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Diversified
International Fund, and
Fidelity Management &
Research (Far East) Inc.,
dated November 19, 1998, is
incorporated herein by
reference to Exhibit 5(u) of
Post-Effective
Amendment No. 51.
(12) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Diversified
International Fund, and
Fidelity International
Investment Advisors, dated No
vember 19, 1998, is
incorporated herein by
reference to Exhibit 5(v) of
Post-Effective Amendment
No. 51.
(13) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Diversified International
Fund, dated November 19,
1998, is filed herein as
Exhibit (d)(13).
(14) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Diversified
International Fund, and
Fidelity Investments Japan
Limited, dated November
19, 1998, is filed herein as
Exhibit (d)(14).
(15) Form of Sub-Advisory
Agreement between Fidelity
Management & Research Co.,
on behalf of
Fidelity Advisor Emerging
Asia Fund, and Fidelity
Management & Research (U.K.)
Inc., is incor
porated herein by reference
to Exhibit 5(vv) of
Post-Effective Amendment No.
50.
(16) Form of Sub-Advisory
Agreement between Fidelity
Management & Research Co.,
on behalf of
Fidelity Advisor Emerging
Asia Fund, and Fidelity
Management & Research (Far
East) Inc., is
incorporated herein by
reference to Exhibit 5(ww)
of Post-Effective Amendment
No. 50.
(17) Form of Sub-Advisory
Agreement between Fidelity
Management & Research Co.,
on behalf of
Fidelity Advisor Emerging
Asia Fund, and Fidelity
International Investment
Advisors, is incorpo
rated herein by reference to
Exhibit 5(xx) of
Post-Effective Amendment No.
50.
(18) Form of Sub-Advisory
Agreement between Fidelity
International Investment
Advisors (U.K.)
Limited and Fidelity
International Investment
Advisors, on behalf of
Fidelity Advisor Emerging
Asia Fund, is incorporated
herein by reference to
Exhibit 5(yy) of
Post-Effective Amendment No.
50.
(19) Form of Sub-Advisory
Agreement between Fidelity
Management & Research Co.,
on behalf of
Fidelity Advisor Emerging
Asia Fund, and Fidelity
Investments Japan Limited,
is incorporated
herein by reference to
Exhibit 5(zz) of
Post-Effective Amendment No.
50.
(20) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Emerging Markets
Income Fund, and Fidelity
Management and Research
(U.K.) Inc.,
dated January 20, 1994, is
incorporated herein by
reference to Exhibit 5(e) of
Post-Effective
Amendment No. 32.
(21) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Emerging Markets
Income Fund, and Fidelity
Management and Research (Far
East) Inc.,
dated January 20, 1994, is
incorporated herein by
reference to Exhibit 5(f) of
Post-Effective
Amendment No. 32.
(22) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Emerging Markets
Income Fund, and Fidelity
International Investment
Advisors, dated
January 20, 1994, is
incorporated herein by
reference to Exhibit 5(h) of
Post-Effective Amend
ment No. 32.
(23) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Emerging Markets In
come Fund, dated January 20,
1994, is incorporated herein
by reference to Exhibit 5(g)
of Post-Ef
fective Amendment No. 32.
(24) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Emerging Markets
Income Fund, and Fidelity
Investments Japan Limited,
dated January
20, 1994, is incorporated
herein by reference to
Exhibit 5(i) of
Post-Effective Amendment No.
32.
(25) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Europe Capital
Appreciation Fund, and
Fidelity Management &
Research (U.K.) Inc.,
dated November 19, 1998, is
incorporated herein by
reference to Exhibit 5(ff)
of Post-Effective
Amendment No. 51.
(26) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Europe Capital
Appreciation Fund, and
Fidelity Management &
Research (Far East) Inc.,
dated November 19, 1998, is
incorporated herein by
reference to Exhibit 5(gg)
of Post-Effective
Amendment No. 51.
(27) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Europe Capital
Appreciation Fund, and
Fidelity International
Investment Advisors, dated
November 19, 1998, is
incorporated herein by
reference to Exhibit 5(hh)
of Post-Effective Amend
ment No. 51.
(28) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Europe Capital Appreci
ation Fund, dated November
19, 1998, is filed herein as
Exhibit (d)(28).
(29) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Global Equity Fund,
and Fidelity Management &
Research (U.K.) Inc., dated
November
19, 1998, is incorporated
herein by reference to
Exhibit 5(z) of
Post-Effective Amendment No.
51.
(30) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fideli
ty Advisor Global Equity
Fund, and Fidelity
Management & Research (Far
East) Inc., dated No
vember 19, 1998, is
incorporated herein by
reference to Exhibit 5(aa)
of Post-Effective Amend
ment No. 51.
(31) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fideli
ty Advisor Global Equity
Fund, and Fidelity
International Investment
Advisors, dated November
19, 1998, is incorporated
herein by reference to
Exhibit 5(bb) of
Post-Effective Amendment No.
51.
(32) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Global Equity Fund,
dated November 19, 1998, is
filed herein as Exhibit
(d)(32).
(33) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Global Equity Fund,
and Fidelity Investments
Japan Limited, dated
November 19, 1998,
is filed herein as Exhibit
(d)(33).
(34) Sub-Advisory Agreement
between Fidelity Management
& Research Company, on
behalf of Fi
delity Advisor International
Capital Appreciation Fund,
and Fidelity Management &
Research
(U.K.) Inc., dated October
16, 1997, is incorporated
herein by reference to
Exhibit 5(k) of Post-Ef
fective Amendment No. 47.
(35) Sub-Advisory Agreement
between Fidelity Management
& Research Company, on
behalf of Fi
delity Advisor International
Capital Appreciation Fund,
and Fidelity Management &
Research (Far
East) Inc., dated October 16,
1997, is incorporated herein
by reference to Exhibit 5(l)
of Post-Ef
fective Amendment No. 47.
(36) Sub-Advisory Agreement
between Fidelity Management
& Research Company, on
behalf of Fi
delity Advisor International
Capital Appreciation Fund,
and Fidelity International
Investment Ad
visors, dated October 16,
1997, is incorporated herein
by reference to Exhibit 5(m)
of Post-Effec
tive Amendment No. 47.
(37) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
International Capital Ap
preciation Fund, dated
October 16, 1997, is
incorporated herein by
reference to Exhibit 5(k) of
Post-Effective Amendment No.
48.
(38) Sub-Advisory Agreement
between Fidelity Management
& Research Company, on
behalf of Fi
delity Advisor International
Capital Appreciation Fund,
and Fidelity Investments
Japan Limited,
dated October 16, 1997, is
incorporated herein by
reference to Exhibit 5(o) of
Post-Effective
Amendment No. 47.
(39) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Japan Fund, and
Fidelity Management &
Research (U.K.) Inc., dated
November 19, 1998,
is incorporated herein by
reference to Exhibit 5(kk)
of Post-Effective Amendment
No. 51.
(40) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Japan Fund, and
Fidelity Management &
Research (Far East) Inc.,
dated November 19,
1998, is incorporated herein
by reference to Exhibit
5(ll) of Post-Effective
Amendment No. 51.
(41) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Japan Fund, and
Fidelity International
Investment Advisors, is
incorporated herein by
reference to Exhibit 5(mm) of
Post-Effective Amendment No.
51.
(42) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Japan Fund, dated No
vember 19, 1998, is filed
herein as Exhibit (d)(42).
(43) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Japan Fund, and
Fidelity Investments Japan
Limited, dated November 19,
1998, is filed
herein as Exhibit (d)(43).
(44) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Latin America Fund,
and Fidelity Management &
Research (U.K.) Inc., dated
November
19, 1998, is incorporated
herein by reference to
Exhibit 5(qq) of
Post-Effective Amendment No.
51.
(45) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Latin America Fund,
and Fidelity Management &
Research (Far East) Inc.,
dated Novem
ber 19, 1998, is incorporated
herein by reference to
Exhibit 5(rr) of
Post-Effective Amendment
No. 51.
(46) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Latin America Fund,
and Fidelity International
Investment Advisors, dated
November 19,
1998, is incorporated herein
by reference to Exhibit
5(ss) of Post-Effective
Amendment No. 51.
(47) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Latin America Fund,
dated November 19, 1998, is
filed herein as Exhibit
(d)(47).
(48) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Overseas Fund, and
Fidelity Management &
Research (U.K.) Inc., dated
October 31,
1997, is incorporated herein
by reference to Exhibit 5(q)
of Post-Effective Amendment
No. 46.
(49) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Overseas Fund, and
Fidelity Management &
Research (Far East) Inc.,
dated October 31,
1997, is incorporated herein
by reference to Exhibit 5(r)
of Post-Effective Amendment
No. 46.
(50) Sub-Advisory Agreement
between Fidelity Management
& Research Co., on behalf of
Fidelity
Advisor Overseas Fund, and
Fidelity International
Investment Advisors, dated
October 31, 1997,
is incorporated herein by
reference to Exhibit 5(t) of
Post-Effective Amendment No.
47.
(51) Sub-Advisory Agreement
between Fidelity
International Investment
Advisors (U.K.) Limited and
Fidelity International
Investment Advisors, on
behalf of Fidelity Advisor
Overseas Fund, dated
October 31, 1997, is
incorporated herein by
reference to Exhibit 5(s) of
Post-Effective Amend
ment No. 47.
(52) Sub-Advisory Agreement
between Fidelity Management
& Research Company, on
behalf of Fi
delity Advisor Overseas Fund,
and Fidelity Investments
Japan Limited, dated October
31, 1997, is
incorporated herein by
reference to Exhibit 5(u) of
Post-Effective Amendment No.
47.
(e) (1) General Distribution
Agreement between Fidelity
Advisor Diversified
International Fund and Fi
delity Distributors
Corporation, dated November
19, 1998, is incorporated
herein by reference to
Exhibit 6(e) of
Post-Effective Amendment No.
51.
(2) Form of General Distribution
Agreement between Fidelity
Advisor Emerging Asia Fund
and Fideli
ty Distributors Corporation
is incorporated herein by
reference to Exhibit 6(j) of
Post-Effective
Amendment No. 50.
(3) General Distribution
Agreement between Fidelity
Advisor Emerging Markets
Income Fund and Fi
delity Distributors
Corporation, dated January
20, 1994, is incorporated
herein by reference to Ex
hibit 6(c) of Post-Effective
Amendment No. 32.
(4) Amendments to the General
Distribution Agreement
between Fidelity Advisor
Series VIII on behalf
of Fidelity Advisor Emerging
Markets Income Fund, and
Fidelity Distributors
Corporation, dated
March 14, 1996 and July 15,
1996, are incorporated
herein by reference to
Exhibit 6(a) of Fidelity
Court Street Trust's (File
No. 2-58774) Post-Effective
Amendment No. 61.
(5) General Distribution
Agreement between Fidelity
Advisor Europe Capital
Appreciation Fund and
Fidelity Distributors
Corporation, dated November
19, 1998, is incorporated
herein by reference to
Exhibit 6(g) of
Post-Effective Amendment No.
51.
(6) General Distribution
Agreement between Fidelity
Advisor Global Equity Fund
and Fidelity Distrib
utors Corporation, dated
November 19, 1998, is
incorporated herein by
reference to Exhibit 6(f) of
Post-Effective Amendment No.
51.
(7) General Distribution
Agreement between Fidelity
Advisor International
Capital Appreciation Fund
and Fidelity Distributors
Corporation, dated October
16, 1997, is incorporated
herein by reference to
Exhibit 6(e) of
Post-Effective Amendment No.
47.
(8) General Distribution
Agreement between Fidelity
Advisor Japan Fund and
Fidelity Distributors Cor
poration, dated November 19,
1998, is incorporated herein
by reference to Exhibit 6(h)
of Post-Ef
fective Amendment No. 51.
(9) General Distribution
Agreement between Fidelity
Advisor Latin America Fund
and Fidelity Distrib
utors Corporation, dated
November 19, 1998, is
incorporated herein by
reference to Exhibit 6(i) of
Post-Effective Amendment No.
51.
(10) General Distribution
Agreement between Fidelity
Advisor Overseas Fund and
Fidelity Distributors
Corporation, dated October
31, 1997, is incorporated
herein by reference to
Exhibit 6(f) of Post-Ef
fective Amendment No. 47.
(11) Form of Bank Agency Agreement
(most recently revised
January, 1997) is
incorporated herein by
reference to Exhibit 6(e) of
Post-Effective Amendment No.
48.
(12) Form of Selling Dealer
Agreement (most recently
revised January, 1997) is
incorporated herein by
reference to Exhibit 6(f) of
Post-Effective Amendment No.
48.
(13) Form of Selling Dealer
Agreement for Bank-Related
Transactions (most recently
revised January,
1997) is incorporated herein
by reference to Exhibit 6(g)
of Post-Effective Amendment
No. 48.
(f) (1) Retirement Plan for
Non-Interested Person
Trustees, Directors or
General Partners, as amended
on
November 16, 1995, is
incorporated herein by
reference to Exhibit 7(a) of
Fidelity Select Portfolios'
(File No. 2-69972)
Post-Effective Amendment No.
54.
(2) The Fee Deferral Plan for
Non-Interested Person
Directors and Trustees of
the Fidelity Funds, ef
fective as of September 14,
1995 and amended through
November 14, 1996, is
incorporated herein
by reference to Exhibit 7(b)
of Fidelity Aberdeen Street
Trust's (File No. 33-43529)
Post-Effective
Amendment No. 19.
(g) (1) Custodian Agreement, and
Appendix C, dated February
1, 1996, between State
Street Bank and
Trust Company and Fidelity
Advisor Series VIII on
behalf of Fidelity Advisor
Diversified Interna
tional Fund, Fidelity Advisor
Europe Capital Appreciation
Fund, Fidelity Advisor
Global Equity
Fund, Fidelity Advisor Japan
Fund, and Fidelity Advisor
Latin America Fund are
incorporated
herein by reference to
Exhibit 8(b) of Fidelity
Institutional Trust's (File
No. 33-15983) Post-Effec
tive Amendment No. 22.
(2) Appendix A, dated November
19, 1998, to the Custodian
Agreement, dated February 1,
1996, bet
ween State Street Bank and
Trust Company and Fidelity
Advisor Series VIII on
behalf of Fidelity
Advisor Diversified
International Fund, Fidelity
Advisor Europe Capital
Appreciation Fund, Fidel
ity Advisor Global Equity
Fund, Fidelity Advisor Japan
Fund, and Fidelity Advisor
Latin America
Fund is filed herein as
Exhibit (g)(2).
(3) Appendix B, dated December
17, 1998, to the Custodian
Agreement, dated February 1,
1996, bet
ween State Street Bank and
Trust Company and Fidelity
Advisor Series VIII on
behalf of Fidelity
Advisor Diversified
International Fund, Fidelity
Advisor Europe Capital
Appreciation Fund, Fidel
ity Advisor Global Equity
Fund, Fidelity Advisor Japan
Fund, and Fidelity Advisor
Latin America
Fund is filed herein as
Exhibit (g)(3).
(4) Custodian Agreement and
Appendix C, dated August 1,
1994, between The Chase
Manhattan
Bank, N.A. and Fidelity
Advisor Series VIII on
behalf of Fidelity Advisor
Emerging Markets In
come Fund and Fidelity
Advisor Overseas Fund are
incorporated herein by
reference to Exhibit
8(a) of Fidelity Investment
Trust's (File No. 2-90649)
Post-Effective Amendment No.
59.
(5) Appendix A, dated November
19, 1998, to the Custodian
Agreement, dated August 1,
1994, be
tween The Chase Manhattan
Bank, N.A. and Fidelity
Advisor Series VIII on
behalf of Fidelity
Advisor Emerging Markets
Income Fund and Fidelity
Advisor Overseas Fund is
incorporated
herein by reference to
Exhibit (g)(2) of Fidelity
Trend Fund's (File No.
2-15063) Post-Effective
Amendment No. 109.
(6) Appendix B, dated December
17, 1998, to the Custodian
Agreement, dated August 1,
1994, be
tween The Chase Manhattan
Bank, N.A. and Fidelity
Advisor Series VIII on
behalf of Fidelity
Advisor Emerging Markets
Income Fund and Fidelity
Advisor Overseas Fund is
incorporated
herein by reference to
Exhibit (g)(3) of Fidelity
Trend Fund's (File No.
2-15063) Post-Effective
Amendment No. 109.
(7) Custodian Agreement and
Appendix C, dated September
1, 1994, between Brown
Brothers Harri
man & Company and Fidelity
Advisor Series VIII on
behalf of Fidelity Advisor
International Cap
ital Appreciation Fund are
incorporated herein by
reference to Exhibit 8(a) of
Fidelity Common
wealth Trust's (File No.
2-52322) Post-Effective
Amendment No. 56.
(8) Appendix A, dated November
19, 1998, to the Custodian
Agreement, dated September
1, 1994,
between Brown Brothers
Harriman & Company and
Fidelity Advisor Series VIII
on behalf of Fi
delity Advisor International
Capital Appreciation Fund is
incorporated herein by
reference to Ex
hibit g(2) of Fidelity Select
Portfolios' (File No.
2-69972) Post-Effective
Amendment No. 65.
(9) Appendix B, dated December
17, 1998, to the Custodian
Agreement, dated September
1, 1994,
between Brown Brothers
Harriman & Company and
Fidelity Advisor Series VIII
on behalf of Fi
delity Advisor International
Capital Appreciation Fund is
incorporated herein by
reference to Ex
hibit g(3) of Fidelity Select
Portfolios' (File No.
2-69972) Post-Effective
Amendment No. 65.
(10) Forms of Custodian Agreement
and Appendix C between Brown
Brothers Harriman & Company
and Fidelity Advisor Series
VIII on behalf of Fidelity
Advisor Emerging Asia Fund
are incorpora
ted herein by reference to
Exhibit g(2) of
Post-Effective Amendment No.
52.
(11) Form of Appendix B to the
Custodian Agreement dated
September 1, 1994, between
Brown
Brothers Harriman & Company
and Fidelity Advisor Series
VIII on behalf of Fidelity
Advisor
Emerging Asia Fund is filed
herein as Exhibit (g)(11).
(12) Fidelity Group Repo Custodian
Agreement among The Bank of
New York, J. P. Morgan Securi
ties, Inc., and Fidelity
Advisor Series VIII on
behalf of Fidelity Advisor
Emerging Markets In
come Fund, dated February 12,
1996, is incorporated herein
by reference to Exhibit 8(d)
of Fideli
ty Institutional Cash
Portfolios' (File No.
2-74808) Post-Effective
Amendment No. 31.
(13) Schedule 1 to the Fidelity
Group Repo Custodian
Agreement between The Bank
of New York and
Fidelity Advisor Series VIII
on behalf of Fidelity
Advisor Emerging Markets
Income Fund, dated
February 12, 1996, is
incorporated herein by
reference to Exhibit 8(e) of
Fidelity Institutional Cash
Portfolios' (File No.
2-74808) Post-Effective
Amendment No. 31.
(14) Fidelity Group Repo Custodian
Agreement among Chemical
Bank, Greenwich Capital
Markets,
Inc., and Fidelity Advisor
Series VIII on behalf of
Fidelity Advisor Emerging
Markets Income
Fund, dated November 13,
1995, is incorporated herein
by reference to Exhibit 8(f)
of Fidelity
Institutional Cash
Portfolios' (File No.
2-74808) Post-Effective
Amendment No. 31.
(15) Schedule 1 to the Fidelity
Group Repo Custodian
Agreement between Chemical
Bank and Fidelity
Advisor Series VIII on behalf
of Fidelity Advisor Emerging
Markets Income Fund, dated
Novem
ber 13, 1995, is incorporated
herein by reference to
Exhibit 8(g) of Fidelity
Institutional Cash Port
folios' (File No. 2-74808)
Post-Effective Amendment No.
31.
(16) Joint Trading Account Custody
Agreement between the The
Bank of New York and
Fidelity Advi
sor Series VIII on behalf of
Fidelity Advisor Emerging
Markets Income Fund, dated
May 11,
1995, is incorporated herein
by reference to Exhibit 8(h)
of Fidelity Institutional
Cash Portfolios'
(File No. 2-74808)
Post-Effective Amendment No.
31.
(17) First Amendment to Joint
Trading Account Custody
Agreement between the The
Bank of New
York and Fidelity Advisor
Series VIII on behalf of
Fidelity Advisor Emerging
Markets Income
Fund, dated July 14, 1995, is
incorporated herein by
reference to Exhibit 8(i) of
Fidelity Institu
tional Cash Portfolios' (File
No. 2-74808) Post-Effective
Amendment No. 31.
(18) Forms of Fidelity Group Repo
Custodian Agreement and
Schedule 1 among The Bank of
New
York, J.P. Morgan Securities,
Inc., and Fidelity Advisor
Series VIII on behalf of
Fidelity Advisor
Diversified International
Fund, Fidelity Advisor
Emerging Asia Fund, Fidelity
Advisor Europe
Capital Appreciation Fund,
Fidelity Advisor Global
Equity Fund, Fidelity
Advisor International
Capital Appreciation Fund,
Fidelity Advisor Japan Fund,
Fidelity Advisor Latin
America Fund,
and Fidelity Advisor Overseas
Fund are incorporated herein
by reference to Exhibit
g(15) of Post-
Effective Amendment No. 52.
(19) Forms of Fidelity Group Repo
Custodian Agreement and
Schedule 1 among Chemical
Bank,
Greenwich Capital Markets,
Inc., and Fidelity Advisor
Series VIII on behalf of
Fidelity Advisor
Diversified International
Fund, Fidelity Advisor
Emerging Asia Fund, Fidelity
Advisor Europe
Capital Appreciation Fund,
Fidelity Advisor Global
Equity Fund, Fidelity
Advisor International
Capital Appreciation Fund,
Fidelity Advisor Japan Fund,
Fidelity Advisor Latin
America Fund,
and Fidelity Advisor Overseas
Fund are incorporated herein
by reference to Exhibit
g(16) of Post-
Effective Amendment No. 52.
(20) Forms of Joint Trading
Account Custody Agreement
and First Amendment to Joint
Trading Ac
count Custody Agreement
between The Bank of New York
and Fidelity Advisor Series
VIII on
behalf of Fidelity Advisor
Diversified International
Fund, Fidelity Advisor
Emerging Asia Fund,
Fidelity Advisor Europe
Capital Appreciation Fund,
Fidelity Advisor Global
Equity Fund, Fidelity
Advisor International Capital
Appreciation Fund, Fidelity
Advisor Japan Fund, Fidelity
Advisor
Latin America Fund, and
Fidelity Advisor Overseas
Fund are incorporated herein
by reference to
Exhibit (g)(17) of
Post-Effective Amendment No.
52.
(h) Not applicable.
(i) Not applicable.
(j) (1) Consent of
PricewaterhouseCoopers LLP,
dated February 23, 1999, is
filed herein as Exhibit
(j)(1).
(2) Consent of
PricewaterhouseCoopers LLP,
dated February 23, 1999, is
filed herein as Exhibit
(j)(2).
(3) Consent of Deloitte & Touche
LLP, dated February 23,
1999, is filed herein as
Exhibit (j)(3).
(k) Not applicable.
(l) Not applicable.
(m) (1) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Diversified
International
Fund: Class A is incorporated
herein by reference to
Exhibit 15(p) of
Post-Effective Amendment
No. 51.
(2) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Diversified
International
Fund: Class T is incorporated
herein by reference to
Exhibit 15(q) of
Post-Effective Amendment
No. 51.
(3) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Diversified
International
Fund: Class B is incorporated
herein by reference to
Exhibit 15(r) of
Post-Effective Amendment No.
51.
(4) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Diversified
International
Fund: Class C is incorporated
herein by reference to
Exhibit 15(s) of
Post-Effective Amendment No.
51.
(5) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Diversified
International
Fund: Institutional Class is
incorporated herein by
reference to Exhibit 15(t)
of Post-Effective
Amendment No. 51.
(6) Form of Distribution and
Service Plan pursuant to
Rule 12b-1 for Fidelity
Advisor Emerging Asia
Fund: Class A is incorporated
herein by reference to
Exhibit 12(oo) of
Post-Effective Amendment
No. 50.
(7) Form of Distribution and
Service Plan pursuant to
Rule 12b-1 for Fidelity
Advisor Emerging Asia
Fund: Class T is incorporated
herein by reference to
Exhibit 12(pp) of
Post-Effective Amendment
No. 50.
(8) Form of Distribution and
Service Plan pursuant to
Rule 12b-1 for Fidelity
Advisor Emerging Asia
Fund: Class B is incorporated
herein by reference to
Exhibit 12(qq) of
Post-Effective Amendment
No. 50.
(9) Form of Distribution and
Service Plan pursuant to
Rule 12b-1 for Fidelity
Advisor Emerging Asia
Fund: Class C is incorporated
herein by reference to
Exhibit 12(rr) of
Post-Effective Amendment
No. 50.
(10) Form of Distribution and
Service Plan pursuant to
Rule 12b-1 for Fidelity
Advisor Emerging Asia
Fund: Institutional Class is
incorporated herein by
reference to Exhibit 12(ss)
of Post-Effective
Amendment No. 50.
(11) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Emerging
Markets In
come Fund: Class A is
incorporated herein by
reference to Exhibit 15(l)
of Post-Effective Amend
ment No. 39.
(12) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Emerging
Markets In
come Fund: Class T is
incorporated herein by
reference to Exhibit 15(g)
of Post-Effective Amend
ment No. 45.
(13) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Emerging
Markets In
come Fund: Class B is
incorporated herein by
reference to Exhibit 15(b)
of Post-Effective Amend
ment No. 45.
(14) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Emerging
Markets In
come Fund: Class C is
incorporated herein by
reference to Exhibit 15(n)
of Post-Effective Amend
ment No. 46.
(15) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Emerging
Markets In
come Fund: Institutional
Class is incorporated herein
by reference to Exhibit
15(i) of Post-Effective
Amendment No. 41.
(16) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Europe
Capital Appreci
ation Fund: Class A is
incorporated herein by
reference to Exhibit 15(z)
of Post-Effective Amend
ment No. 51.
(17) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Europe
Capital Appreci
ation Fund: Class T is
incorporated herein by
reference to Exhibit 15(aa)
of Post-Effective Amend
ment No. 51.
(18) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Europe
Capital Appreci
ation Fund: Class B is
incorporated herein by
reference to Exhibit 15(bb)
of Post-Effective Amend
ment No. 51.
(19) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Europe
Capital Appreci
ation Fund: Class C is
incorporated herein by
reference to Exhibit 15(cc)
of Post-Effective Amend
ment No. 51.
(20) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Europe
Capital Appreci
ation Fund: Institutional
Class is incorporated herein
by reference to Exhibit
15(dd) of Post-Effec
tive Amendment No. 51.
(21) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Global
Equity Fund: Class
A is incorporated herein by
reference to Exhibit 15(u)
of Post-Effective Amendment
No. 51.
(22) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Global
Equity Fund: Class
T is incorporated herein by
reference to Exhibit 15(v)
of Post-Effective Amendment
No. 51.
(23) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Global
Equity Fund: Class
B is incorporated herein by
reference to Exhibit 15(w)
of Post-Effective Amendment
No. 51.
(24) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Global
Equity Fund: Class
C is incorporated herein by
reference to Exhibit 15(x)
of Post-Effective Amendment
No. 51.
(25) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Global
Equity Fund: Insti
tutional Class is
incorporated herein by
reference to Exhibit 15(y)
of Post-Effective Amendment
No.
51.
(26) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor
International Capital Ap
preciation Fund: Class A is
incorporated herein by
reference to Exhibit 15(i)
of Post-Effective
Amendment No. 46.
(27) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor
International Capital Ap
preciation Fund: Class T is
incorporated herein by
reference to Exhibit 15(j)
of Post-Effective
Amendment No. 46.
(28) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor
International Capital Ap
preciation Fund: Class B is
incorporated herein by
reference to Exhibit 15(k)
of Post-Effective
Amendment No. 46.
(29) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor
International Capital Ap
preciation Fund: Class C is
incorporated herein by
reference to Exhibit 15(m)
of Post-Effective
Amendment No. 46.
(30) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor
International Capital Ap
preciation Fund:
Institutional Class is
incorporated herein by
reference to Exhibit 15(l)
of Post-Ef
fective Amendment No. 46.
(31) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Japan Fund:
Class A is
incorporated herein by
reference to Exhibit 15(ee)
of Post-Effective Amendment
No. 51.
(32) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Japan Fund:
Class T is
incorporated herein by
reference to Exhibit 15(ff)
of Post-Effective Amendment
No. 51.
(33) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Japan Fund:
Class B is
incorporated herein by
reference to Exhibit 15(gg)
of Post-Effective Amendment
No. 51.
(34) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Japan Fund:
Class C is
incorporated herein by
reference to Exhibit 15(hh)
of Post-Effective Amendment
No. 51.
(35) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Japan Fund:
Institutional
Class is incorporated herein
by reference to Exhibit
15(ii) of Post-Effective
Amendment No. 51.
(36) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Latin
America Fund:
Class A is incorporated
herein by reference to
Exhibit 15(jj) of
Post-Effective Amendment No.
51.
(37) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Latin
America Fund:
Class T is incorporated
herein by reference to
Exhibit 15(kk) of
Post-Effective Amendment No.
51.
(38) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Latin
America Fund:
Class B is incorporated
herein by reference to
Exhibit 15(ll) of
Post-Effective Amendment No.
51.
(39) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Latin
America Fund:
Class C is incorporated
herein by reference to
Exhibit 15(mm) of
Post-Effective Amendment No.
51.
(40) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Latin
America Fund: In
stitutional Class is
incorporated herein by
reference to Exhibit 15(nn)
of Post-Effective Amendment
No. 51.
(41) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Overseas
Fund: Class A is
incorporated herein by
reference to Exhibit 15(s)
of Post-Effective Amendment
No. 46.
(42) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Overseas
Fund: Class T is
incorporated herein by
reference to Exhibit 15(p)
of Post-Effective Amendment
No. 46.
(43) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Overseas
Fund: Class B is
incorporated herein by
reference to Exhibit 15(q)
of Post-Effective Amendment
No. 46.
(44) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Overseas
Fund: Class C is
incorporated herein by
reference to Exhibit 15(o)
of Post-Effective Amendment
No. 46.
(45) Distribution and Service Plan
pursuant to Rule 12b-1 for
Fidelity Advisor Overseas
Fund: Institu
tional Class is incorporated
herein by reference to
Exhibit 15(r) of
Post-Effective Amendment No.
46.
(n) Financial Data Schedules for
the funds are filed herein
as Exhibit 27.
(o) (1) Multiple Class of Shares Plan
pursuant to Rule 18f-3,
dated March 19, 1998, is
incorporated herein
by reference to Exhibit 18(a)
of Post-Effective Amendment
No. 49.
(2) Schedule I, dated February
26, 1999, to Multiple Class
of Shares Plan pursuant to
Rule 18f-3, dated
March 19, 1998, is filed
herein as Exhibit o(2).
Item 24. Trusts Controlled by or under Common Control with this Trust
The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.
Item 25. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names FIIOC
and/or the Registrant as a party and is not based on and does not
result from FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with
FIIOC's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence
or reckless disregard of duties) which results from the negligence of
the Registrant, or from FIIOC's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of FIIOC's
acting in reliance upon advice reasonably believed by FIIOC to have
been given by counsel for the Registrant, or as a result of FIIOC's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 26. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR; President
and Chief Executive Officer
of FMR Corp.; Chairman of
the Board and Director of
FMR Corp., Fidelity
Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), and Fidelity
Management & Research (Far
East) Inc. (FMR Far East);
Chairman of the Executive
Committee of FMR; Director
of Fidelity Investments
Japan Limited (FIJ);
President and Trustee of
funds advised by FMR.
Robert C. Pozen President and Director of
FMR; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR U.K.,
and FMR Far East;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Peter S. Lynch Vice Chairman of the Board
and Director of FMR.
John H. Carlson Vice President of FMR and of
funds advised by FMR.
Dwight D. Churchill Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR; Vice
President of FIMM.
Brian Clancy Vice President of FMR and
Treasurer of FMR, FIMM, FMR
U.K., and FMR Far East.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Frederic G. Corneel Tax Counsel of FMR.
Stephen G. Manning Assistant Treasurer of FMR,
FIMM, FMR U.K., FMR Far
East; Vice President and
Treasurer of FMR Corp.;
Treasurer of Strategic
Advisers, Inc.
William Danoff Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Scott E. DeSano Vice President of FMR.
Penelope Dobkin Vice President of FMR and of
a fund advised by FMR.
Walter C. Donovan Vice President of FMR.
Bettina Doulton Vice President of FMR and of
funds advised by FMR.
Margaret L. Eagle Vice President of FMR and of
funds advised by FMR.
William R. Ebsworth Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Gregory Fraser Vice President of FMR and of
a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, and Strategic
Advisers, Inc.; Secretary of
FIMM; Associate General
Counsel FMR Corp.
David L. Glancy Vice President of FMR and of
a fund advised by FMR.
Barry A. Greenfield Vice President of FMR and of
a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR;
Vice President of FIMM.
Bart A. Grenier Senior Vice President of FMR;
Vice President of
High-Income Funds advised by
FMR.
Robert J. Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR;
Vice President of funds
advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR
and Vice President of
Fixed-Income Funds advised
by FMR.
Bruce T. Herring Vice President of FMR.
Robert F. Hill Vice President of FMR;
Director of Technical
Research.
Abigail P. Johnson Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.; Associate
Director and Senior Vice
President of Equity Funds
advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Senior Vice President of FMR
and of a fund advised by FMR.
Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
U.K. and FMR Far East.
Harris Leviton Vice President of FMR and of
a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of
funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of
funds advised by FMR.
Charles A. Mangum Vice President of FMR and of
a fund advised by FMR.
Kevin McCarey Vice President of FMR and of
a fund advised by FMR.
Neal P. Miller Vice President of FMR.
Jacques Perold Vice President of FMR.
Alan Radlo Vice President of FMR.
Eric D. Roiter Vice President and General
Counsel and Clerk of FMR and
Secretary of funds advised
by FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of
a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Richard A. Silver Vice President of FMR.
Carol A. Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR and of
funds advised by FMR.
Thomas T. Soviero Vice President of FMR and of
a fund advised by FMR.
Richard Spillane Senior Vice President of FMR;
Associate Director and
Senior Vice President of
Equity Funds advised by FMR;
Previously, Senior Vice
President and Director of
Operations and Compliance of
FMR U.K.
Thomas M. Sprague Vice President of FMR and of
funds advised by FMR.
Robert E. Stansky Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Scott D. Stewart Vice President of FMR.
Thomas Sweeney Vice President of FMR.
Beth F. Terrana Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of
a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of
funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.
Steven S. Wymer Vice President of FMR and of
a fund advised by FMR.
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR U.K., FMR,
FMR Corp., FIMM, and FMR Far
East; President and Chief
Executive Officer of FMR
Corp.; Chairman of the
Executive Committee of FMR;
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen President and Director of FMR
U.K.; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR, and
FMR Far East; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Brian Clancy Treasurer of FMR U.K., FMR
Far East, FMR, and FIMM and
Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR
U.K., FMR, FMR Far East, and
FIMM; Vice President and
Treasurer of FMR Corp.;
Treasurer of Strategic
Advisers, Inc.
Francis V. Knox Compliance Officer of FMR
U.K. and FMR Far East; Vice
President of FMR.
Jay Freedman Clerk of FMR U.K., FMR Far
East, FMR Corp. and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Associate
General Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR U.K.,
FMR Far East and FIMM.
Sarah H. Zenoble Senior Vice President and
Director of Operations and
Compliance.
(3) FIDELITY MANAGEMENT & RESEARCH (Far East) INC. (FMR Far East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR Far East,
FMR, FMR Corp., FIMM, and
FMR U.K.; Chairman of the
Executive Committee of FMR;
President and Chief
Executive Officer of FMR
Corp.; Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen President and Director of FMR
Far East; Senior Vice
President and Trustee of
funds advised by FMR;
President and Director of
FIMM, FMR U.K., and FMR;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Robert H. Auld Senior Vice President of FMR
Far East.
Brian Clancy Treasurer of FMR Far East,
FMR U.K., FMR, and FIMM and
Vice President of FMR.
Francis V. Knox Compliance Officer of FMR Far
East and FMR U.K.; Vice
President of FMR.
Jay Freedman Clerk of FMR Far East, FMR
U.K., FMR Corp. and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Associate
General Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR Far
East, FMR U.K. and FIMM.
Stephen G. Manning Assistant Treasurer of FMR
Far East, FMR, FMR U.K., and
FIMM; Vice President and
Treasurer of FMR Corp.;
Treasurer of Strategic
Advisers, Inc.
Billy Wilder Vice President of FMR Far
East; President and
Representative Director of
Fidelity Investments Japan
Limited.
(4) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (FIIA)
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda
The directors and officers of FIIA have held, during the past two
fiscal years, the following positions of a substantial nature.
Robert H. Auld Director of FIIA and Senior
Vice President of Fidelity
Management & Research (Far
East) Inc. (FMR Far East).
Anthony J. Bolton Director of FIIA, Fidelity
International Investment
Advisors (U.K.) Limited
(FIIA(U.K.)L), Fidelity
Investment Management
Limited (FIML (U.K.)),
Fidelity Investment Services
Limited (FISL (U.K.)), and
Fidelity Investments
International (FII).
Brett P. Goodin Director, Vice President,
Secretary and Chief Legal
Officer of many Fidelity
International Limited (FIL)
companies.
Simon Haslam Director of FIIA, FISL
(U.K.), and FII; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.).
K.C. Lee Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.
Peter Phillips Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.
Frank Mutch Director of FIIA.
Richard A. Wane Secretary of FIIA.
Terrence V. Richards Assistant Secretary of FIIA.
David J. Saul President and Director of
FIIA; Previously, Director
of Fidelity International
Limited; and numerous
companies and funds in the
FIL group.
(5) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
(FIIA(U.K.)L)
26 Lovat Lane, London, EC3R 8LL, England
The directors and officers of FIIA(U.K.)L have held, during the past
two fiscal years, the following positions of a substantial nature.
Anthony J. Bolton Director of FIIA(U.K.)L,
Fidelity International
Investment Advisors (FIIA),
Fidelity Investment
Management Limited (FIML
(U.K.)), Fidelity Investment
Services Limited (FISL
(U.K.)), and Fidelity
Investments International
(FII).
Pamela Edwards Director of FIIA(U.K.)L, FISL
(U.K.), and FII; Previously,
Director of Legal Services
for Europe.
Simon Haslam Director of FIIA, FISL
(U.K.), and FII; Chief
Financial Officer of FIL
(U.K.); Previously, Company
Secretary of Fidelity
Investments Group of
Companies (U.K.).
Sally Walden Director of FIIA(U.K.)L and
FISL (U.K.).
Sally Hinchliffe Assistant Company Secretary
of Fidelity International
Group of Companies (U.K.).
Emma Barratt Assistant Company Secretary
of Fidelity International
Group of Companies (U.K.).
(6) FIDELITY INVESTMENTS JAPAN LIMITED (FIJ)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
The directors and officers of FIJ have held, during the past two
fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Director of FIJ; Chairman of
the Board and Director of
FMR Far East, FMR, FMR
Corp., FMR U.K., and FIMM;
Chairman of the Executive
Committee of FMR; President
and Chief Executive Officer
of FMR Corp.; President and
Trustee of funds advised by
FMR.
Yasuo Kuramoto Vice Chairman, Representative
Director of FIJ.
Billy Wilder President and Representative
Director of FIJ; Vice
President of FMR Far East.
Simon Fraser Director and Chief Investment
Officer of FIJ.
Simon Haslam Director of FIJ; Chief
Financial Officer of
Fidelity International
Limited.
Noboru Kawai Director and General Manager
of Administration of FIJ.
Tetsuzo Nishimura Director and Vice President
of Broker Distribution of FIJ.
Hiroshi Yamashita Managing Director and
Portfolio Manager of FIJ.
Item 27. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Fund
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
James Curvey Director None
Martha B. Willis President None
Eric D. Roiter Vice President Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 28. Location of Accounts and Records.
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Fidelity Service
Company, Inc. or Fidelity Investments Institutional Operations
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodians: Brown Brothers Harriman & Co., 40 Water Street,
Boston, MA, The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, NY, or State Street Bank & Trust Company, 1776 Heritage Drive,
Quincy, MA.
Item 29. Management Services.
Not Applicable.
Item 30. Undertakings
(a) The Registrant undertakes for Fidelity Advisor Diversified
International Fund, Fidelity Advisor Emerging Asia Fund, Fidelity
Advisor Emerging Markets Income Fund, Fidelity Advisor Europe Capital
Appreciation Fund, Fidelity Advisor Global Equity Fund, Fidelity
Advisor International Capital Appreciation Fund, Fidelity Advisor
Japan Fund, Fidelity Advisor Latin America Fund, and Fidelity Advisor
Overseas Fund: (1) to call a meeting of shareholders for the purpose
of voting upon the questions of removal of a trustee or trustees, when
requested to do so by record holders of not less than 10% of its
outstanding shares; and (2) to assist in communications with other
shareholders pursuant to Section 16(c)(1) and (2) of the 1934 Act,
whenever shareholders meeting the qualifications set forth in Section
16(c) seek the opportunity to communicate with other shareholders with
a view toward requesting a meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for the effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Post-Effective Amendment No. 53 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 25th day of February 1999.
Fidelity Advisor Series VIII
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
(Signature) (Title) (Date)
/s/Edward C. Johnson 3d (dagger) President and Trustee February 25, 1999
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer February 25, 1999
Richard A. Silver
/s/Robert C. Pozen Trustee February 25, 1999
Robert C. Pozen
/s/Ralph F. Cox* Trustee February 25, 1999
Ralph F. Cox
/s/Phyllis Burke Davis* Trustee February 25, 1999
Phyllis Burke Davis
/s/Robert M. Gates** Trustee February 25, 1999
Robert M. Gates
/s/E. Bradley Jones* Trustee February 25, 1999
E. Bradley Jones
/s/Donald J. Kirk* Trustee February 25, 1999
Donald J. Kirk
/s/Peter S. Lynch* Trustee February 25, 1999
Peter S. Lynch
/s/Marvin L. Mann* Trustee Februry 25, 1999
Marvin L. Mann
/s/William O. McCoy* Trustee February 25, 1999
William O. McCoy
/s/Gerald C. McDonough* Trustee February 25, 1999
Gerald C. McDonough
/s/Thomas R. Williams* Trustee February 25, 1999
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash
Fidelity Advisor Series III Portfolios
Fidelity Advisor Series IV Fidelity Institutional
Fidelity Advisor Series V Tax-Exempt Cash Portfolios
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts
Fidelity Beacon Street Trust Municipal Trust
Fidelity Boston Street Trust Fidelity Money Market Trust
Fidelity California Municipal Fidelity Mt. Vernon Street
Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust
Fidelity Commonwealth Trust Fidelity New York Municipal
Fidelity Concord Street Trust Trust II
Fidelity Congress Street Fund Fidelity Phillips Street Trust
Fidelity Contrafund Fidelity Puritan Trust
Fidelity Corporate Trust Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Daily Money Fund Fidelity Sterling Performance
Fidelity Destiny Portfolios Portfolio, L.P.
Fidelity Deutsche Mark Fidelity Summer Street Trust
Performance Fidelity Trend Fund
Portfolio, L.P. Fidelity U.S.
Fidelity Devonshire Trust Investments-Bond Fund, L.P.
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Government
Fidelity Fixed-Income Trust Securities
Fidelity Government Fund, L.P.
Securities Fund Fidelity Union Street Trust
Fidelity Hastings Street Trust Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
Fidelity Aberdeen Street Trust Fidelity Government
Fidelity Advisor Annuity Fund Securities Fund
Fidelity Advisor Series I Fidelity Hastings Street Trust
Fidelity Advisor Series II Fidelity Hereford Street Trust
Fidelity Advisor Series III Fidelity Income Fund
Fidelity Advisor Series IV Fidelity Institutional Cash
Fidelity Advisor Series V Portfolios
Fidelity Advisor Series VI Fidelity Institutional
Fidelity Advisor Series VII Tax-Exempt Cash Portfolios
Fidelity Advisor Series VIII Fidelity Institutional Trust
Fidelity Beacon Street Trust Fidelity Investment Trust
Fidelity Boston Street Trust Fidelity Magellan Fund
Fidelity California Municipal Fidelity Massachusetts
Trust Municipal Trust
Fidelity California Municipal Fidelity Money Market Trust
Trust II Fidelity Mt. Vernon Street
Fidelity Capital Trust Trust
Fidelity Charles Street Trust Fidelity Municipal Trust
Fidelity Commonwealth Trust Fidelity Municipal Trust II
Fidelity Congress Street Fund Fidelity New York Municipal
Fidelity Contrafund Trust
Fidelity Corporate Trust Fidelity New York Municipal
Fidelity Court Street Trust Trust II
Fidelity Court Street Trust II Fidelity Phillips Street Trust
Fidelity Covington Trust Fidelity Puritan Trust
Fidelity Daily Money Fund Fidelity Revere Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity School Street Trust
Fidelity Destiny Portfolios Fidelity Securities Fund
Fidelity Deutsche Mark Fidelity Select Portfolios
Performance Fidelity Sterling Performance
Portfolio, L.P. Portfolio, L.P.
Fidelity Devonshire Trust Fidelity Summer Street Trust
Fidelity Exchange Fund Fidelity Trend Fund
Fidelity Financial Trust Fidelity U.S.
Fidelity Fixed-Income Trust Investments-Bond Fund, L.P.
Fidelity U.S.
Investments-Government
Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/William O. McCoy
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox /s/Gerald C. McDonough
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis /s/Marvin L. Mann
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
Fidelity Aberdeen Street Trust Fidelity Government
Fidelity Advisor Annuity Fund Securities Fund
Fidelity Advisor Series I Fidelity Hastings Street Trust
Fidelity Advisor Series II Fidelity Hereford Street Trust
Fidelity Advisor Series III Fidelity Income Fund
Fidelity Advisor Series IV Fidelity Institutional Cash
Fidelity Advisor Series V Portfolios
Fidelity Advisor Series VI Fidelity Institutional
Fidelity Advisor Series VII Tax-Exempt Cash Portfolios
Fidelity Advisor Series VIII Fidelity Institutional Trust
Fidelity Beacon Street Trust Fidelity Investment Trust
Fidelity Boston Street Trust Fidelity Magellan Fund
Fidelity California Municipal Fidelity Massachusetts
Trust Municipal Trust
Fidelity California Municipal Fidelity Money Market Trust
Trust II Fidelity Mt. Vernon Street
Fidelity Capital Trust Trust
Fidelity Charles Street Trust Fidelity Municipal Trust
Fidelity Commonwealth Trust Fidelity Municipal Trust II
Fidelity Congress Street Fund Fidelity New York Municipal
Fidelity Contrafund Trust
Fidelity Corporate Trust Fidelity New York Municipal
Fidelity Court Street Trust Trust II
Fidelity Court Street Trust II Fidelity Phillips Street Trust
Fidelity Covington Trust Fidelity Puritan Trust
Fidelity Daily Money Fund Fidelity Revere Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity School Street Trust
Fidelity Destiny Portfolios Fidelity Securities Fund
Fidelity Deutsche Mark Fidelity Select Portfolios
Performance Fidelity Sterling Performance
Portfolio, L.P. Portfolio, L.P.
Fidelity Devonshire Trust Fidelity Summer Street Trust
Fidelity Exchange Fund Fidelity Trend Fund
Fidelity Financial Trust Fidelity U.S.
Fidelity Fixed-Income Trust Investments-Bond Fund, L.P.
Fidelity U.S.
Investments-Government
Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
Exhibit (d)(13)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity International Investment Advisors (U.K.) Limited, 27-28 Lovat
Lane, London, England (hereinafter called the "U.K. Sub-Advisor") and
Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter
called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity Advisor Diversified International Fund (hereinafter called
the "Portfolio"), pursuant to which the Advisor is to act as
investment advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located outside of North
America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. Sub-Advisor performing services for the
Portfolio relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment
objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations
as the Trust or Advisor may impose with respect to the Portfolio by
notice to the U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the U.K. Sub-Advisor
may select. The U.K. Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign
currency investments, purchasing and selling or writing futures and
options contracts, borrowing money or lending securities on behalf of
the Portfolio. All investment management and any other activities of
the U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. Sub-Advisor may
deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K.
Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the U.K. Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor.
The U.K. Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to
the Portfolio and/or to the other accounts over which the U.K.
Sub-Advisor, the Sub-Advisor or Advisor exercise investment
discretion. The U.K. Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the U.K. Sub-Advisor
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the U.K. Sub-Advisor and the Sub-Advisor have
with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
Sub-Advisor on the following basis for the services to be furnished
hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall
have provided both investment advisory services under subparagraph (a)
and investment management services under subparagraph (b) of paragraph
1 for the same portion of the investments of the Portfolio for the
same period, the fees paid to the U.K. Sub-Advisor with respect to
such investments shall be calculated exclusively under subparagraph
(b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. Sub-Advisor being free to render services to
others and engage in other activities, provided, however, that such
other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, the Advisor, the
Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the U.K. Sub-Advisor, the Sub-Advisor and the Portfolio subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to
the other parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or with
respect to the Portfolio by vote of a majority of its outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the
Portfolio arising in connection with this Agreement shall be limited
in all cases to the Portfolio and its assets, and the U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
Sub-Advisor seek satisfaction of any such obligation from the Trustees
or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY:/s/Pamela Edwards
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY:/s/David J. Saul
Director
Exhibit (d)(14)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR DIVERSIFIED INTERNATIONAL FUND
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Investments Japan
Limited, a Japanese company with principal offices at Shiroyama JT
Mori Building, 19th Floor, 3-1 Toranomon 4-chome, Minato-ku, Tokyo
105, Japan (hereinafter called the "Sub-Advisor"); and Fidelity
Advisor Series VIII, a Massachusetts business trust which may issue
one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Diversified
International Fund (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor has been formed in part for the purpose of
researching and compiling information and recommendations with respect
to the economies of various countries, and securities of issuers
located in such countries, and providing investment advisory services
in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940
(the"1940 Act") and rules thereunder, as amended from time to time,
and such other limitations as the Trust or Advisor may impose with
respect to the Portfolio by notice to the Sub-Advisor. With respect
to the portion of the investments of the Portfolio under its
management, the Sub-Advisor is authorized to make investment decisions
on behalf of the Portfolio with regard to any stock, bond, other
security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as
the Sub-Advisor may select. The Sub-Advisor may also be authorized,
but only to the extent such duties are delegated in writing by the
Advisor, to provide additional investment management services to the
Portfolio, including but not limited to services such as managing
foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities
on behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of
Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on
the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to: (i) 30% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by (ii) the fraction equal to the net assets of
the Portfolio as to which the Sub-Advisor shall have provided
investment advice divided by the net assets of the Portfolio for that
month. The Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Advisor, if any, in effect from
time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefor; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of Section
15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth
in the Declaration of Trust or other organizational document of the
Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, all as of the date written above.
FIDELITY INVESTMENTS JAPAN LIMITED
BY:/s/Billy W. Wilder
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY:/s/Robert C. Pozen
President
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR DIVERSIFIED INTERNATIONAL FUND
BY:/s/Robert C. Pozen
Senior Vice President
Exhibit (d)(28)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity International Investment Advisors (U.K.) Limited, 27-28 Lovat
Lane, London, England (hereinafter called the "U.K. Sub-Advisor") and
Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter
called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity Advisor Europe Capital Appreciation Fund (hereinafter called
the "Portfolio"), pursuant to which the Advisor is to act as
investment advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located outside of North
America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. Sub-Advisor performing services for the
Portfolio relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment
objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations
as the Trust or Advisor may impose with respect to the Portfolio by
notice to the U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the U.K. Sub-Advisor
may select. The U.K. Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign
currency investments, purchasing and selling or writing futures and
options contracts, borrowing money or lending securities on behalf of
the Portfolio. All investment management and any other activities of
the U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. Sub-Advisor may
deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K.
Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the U.K. Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor.
The U.K. Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to
the Portfolio and/or to the other accounts over which the U.K.
Sub-Advisor, the Sub-Advisor or Advisor exercise investment
discretion. The U.K. Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the U.K. Sub-Advisor
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the U.K. Sub-Advisor and the Sub-Advisor have
with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
Sub-Advisor on the following basis for the services to be furnished
hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall
have provided both investment advisory services under subparagraph (a)
and investment management services under subparagraph (b) of paragraph
1 for the same portion of the investments of the Portfolio for the
same period, the fees paid to the U.K. Sub-Advisor with respect to
such investments shall be calculated exclusively under subparagraph
(b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. Sub-Advisor being free to render services to
others and engage in other activities, provided, however, that such
other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, the Advisor, the
Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the U.K. Sub-Advisor, the Sub-Advisor and the Portfolio subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to
the other parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or with
respect to the Portfolio by vote of a majority of its outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the
Portfolio arising in connection with this Agreement shall be limited
in all cases to the Portfolio and its assets, and the U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
Sub-Advisor seek satisfaction of any such obligation from the Trustees
or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY:/s/Pamela Edwards
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY:/s/David J. Saul
Director
Exhibit (d)(32)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity International Investment Advisors (U.K.) Limited, 27-28 Lovat
Lane, London, England (hereinafter called the "U.K. Sub-Advisor") and
Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter
called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity Advisor Global Equity Fund (hereinafter called the
"Portfolio"), pursuant to which the Advisor is to act as investment
advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located outside of North
America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. Sub-Advisor performing services for the
Portfolio relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment
objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations
as the Trust or Advisor may impose with respect to the Portfolio by
notice to the U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the U.K. Sub-Advisor
may select. The U.K. Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign
currency investments, purchasing and selling or writing futures and
options contracts, borrowing money or lending securities on behalf of
the Portfolio. All investment management and any other activities of
the U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. Sub-Advisor may
deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K.
Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the U.K. Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor.
The U.K. Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to
the Portfolio and/or to the other accounts over which the U.K.
Sub-Advisor, the Sub-Advisor or Advisor exercise investment
discretion. The U.K. Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the U.K. Sub-Advisor
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the U.K. Sub-Advisor and the Sub-Advisor have
with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
Sub-Advisor on the following basis for the services to be furnished
hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall
have provided both investment advisory services under subparagraph (a)
and investment management services under subparagraph (b) of paragraph
1 for the same portion of the investments of the Portfolio for the
same period, the fees paid to the U.K. Sub-Advisor with respect to
such investments shall be calculated exclusively under subparagraph
(b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. Sub-Advisor being free to render services to
others and engage in other activities, provided, however, that such
other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, the Advisor, the
Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the U.K. Sub-Advisor, the Sub-Advisor and the Portfolio subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to
the other parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or with
respect to the Portfolio by vote of a majority of its outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the
Portfolio arising in connection with this Agreement shall be limited
in all cases to the Portfolio and its assets, and the U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
Sub-Advisor seek satisfaction of any such obligation from the Trustees
or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY:/s/Pamela Edwards
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY:/s/David J. Saul
Director
Exhibit (d)(33)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR GLOBAL EQUITY FUND
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Investments Japan
Limited, a Japanese company with principal offices at Shiroyama JT
Mori Building, 19th Floor, 3-1 Toranomon 4-chome, Minato-ku, Tokyo
105, Japan (hereinafter called the "Sub-Advisor"); and Fidelity
Advisor Series VIII, a Massachusetts business trust which may issue
one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Global Equity Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor has been formed in part for the purpose of
researching and compiling information and recommendations with respect
to the economies of various countries, and securities of issuers
located in such countries, and providing investment advisory services
in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940
(the"1940 Act") and rules thereunder, as amended from time to time,
and such other limitations as the Trust or Advisor may impose with
respect to the Portfolio by notice to the Sub-Advisor. With respect
to the portion of the investments of the Portfolio under its
management, the Sub-Advisor is authorized to make investment decisions
on behalf of the Portfolio with regard to any stock, bond, other
security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as
the Sub-Advisor may select. The Sub-Advisor may also be authorized,
but only to the extent such duties are delegated in writing by the
Advisor, to provide additional investment management services to the
Portfolio, including but not limited to services such as managing
foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities
on behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of
Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on
the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to: (i) 30% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by (ii) the fraction equal to the net assets of
the Portfolio as to which the Sub-Advisor shall have provided
investment advice divided by the net assets of the Portfolio for that
month. The Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Advisor, if any, in effect from
time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefor; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of Section
15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth
in the Declaration of Trust or other organizational document of the
Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, all as of the date written above.
FIDELITY INVESTMENTS JAPAN LIMITED
BY:/s/Billy W. Wilder
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY:/s/Robert C. Pozen
President
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR GLOBAL EQUITY FUND
BY:/s/Robert C. Pozen
Senior Vice President
Exhibit (d)(42)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity International Investment Advisors (U.K.) Limited, 27-28 Lovat
Lane, London, England (hereinafter called the "U.K. Sub-Advisor") and
Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter
called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity Advisor Japan Fund (hereinafter called the "Portfolio"),
pursuant to which the Advisor is to act as investment advisor to the
Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located outside of North
America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. Sub-Advisor performing services for the
Portfolio relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment
objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations
as the Trust or Advisor may impose with respect to the Portfolio by
notice to the U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the U.K. Sub-Advisor
may select. The U.K. Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign
currency investments, purchasing and selling or writing futures and
options contracts, borrowing money or lending securities on behalf of
the Portfolio. All investment management and any other activities of
the U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. Sub-Advisor may
deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K.
Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the U.K. Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor.
The U.K. Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to
the Portfolio and/or to the other accounts over which the U.K.
Sub-Advisor, the Sub-Advisor or Advisor exercise investment
discretion. The U.K. Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the U.K. Sub-Advisor
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the U.K. Sub-Advisor and the Sub-Advisor have
with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
Sub-Advisor on the following basis for the services to be furnished
hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall
have provided both investment advisory services under subparagraph (a)
and investment management services under subparagraph (b) of paragraph
1 for the same portion of the investments of the Portfolio for the
same period, the fees paid to the U.K. Sub-Advisor with respect to
such investments shall be calculated exclusively under subparagraph
(b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. Sub-Advisor being free to render services to
others and engage in other activities, provided, however, that such
other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, the Advisor, the
Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the U.K. Sub-Advisor, the Sub-Advisor and the Portfolio subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to
the other parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or with
respect to the Portfolio by vote of a majority of its outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the
Portfolio arising in connection with this Agreement shall be limited
in all cases to the Portfolio and its assets, and the U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
Sub-Advisor seek satisfaction of any such obligation from the Trustees
or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY:/s/Pamela Edwards
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY:/s/David J. Saul
Director
Exhibit (d)(43)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR JAPAN FUND
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Investments Japan
Limited, a Japanese company with principal offices at Shiroyama JT
Mori Building, 19th Floor, 3-1 Toranomon 4-chome, Minato-ku, Tokyo
105, Japan (hereinafter called the "Sub-Advisor"); and Fidelity
Advisor Series VIII, a Massachusetts business trust which may issue
one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Japan Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor has been formed in part for the purpose of
researching and compiling information and recommendations with respect
to the economies of various countries, and securities of issuers
located in such countries, and providing investment advisory services
in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940
(the"1940 Act") and rules thereunder, as amended from time to time,
and such other limitations as the Trust or Advisor may impose with
respect to the Portfolio by notice to the Sub-Advisor. With respect
to the portion of the investments of the Portfolio under its
management, the Sub-Advisor is authorized to make investment decisions
on behalf of the Portfolio with regard to any stock, bond, other
security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as
the Sub-Advisor may select. The Sub-Advisor may also be authorized,
but only to the extent such duties are delegated in writing by the
Advisor, to provide additional investment management services to the
Portfolio, including but not limited to services such as managing
foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities
on behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of
Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on
the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to: (i) 30% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by (ii) the fraction equal to the net assets of
the Portfolio as to which the Sub-Advisor shall have provided
investment advice divided by the net assets of the Portfolio for that
month. The Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Advisor, if any, in effect from
time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefor; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31,1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of Section
15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth
in the Declaration of Trust or other organizational document of the
Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, all as of the date written above.
FIDELITY INVESTMENTS JAPAN LIMITED
BY:/s/Billy W. Wilder
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY:/s/Robert C. Pozen
President
FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR JAPAN FUND
BY:/s/Robert C. Pozen
Senior Vice President
Exhibit (d)(47)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 19th day of November, 1998, by and between
Fidelity International Investment Advisors (U.K.) Limited, 27-28 Lovat
Lane, London, England (hereinafter called the "U.K. Sub-Advisor") and
Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter
called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity Advisor Latin America Fund (hereinafter called the
"Portfolio"), pursuant to which the Advisor is to act as investment
advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located outside of North
America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. Sub-Advisor performing services for the
Portfolio relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment
objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations
as the Trust or Advisor may impose with respect to the Portfolio by
notice to the U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the U.K. Sub-Advisor
may select. The U.K. Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign
currency investments, purchasing and selling or writing futures and
options contracts, borrowing money or lending securities on behalf of
the Portfolio. All investment management and any other activities of
the U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. Sub-Advisor may
deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K.
Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the U.K. Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor.
The U.K. Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected
who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to
the Portfolio and/or to the other accounts over which the U.K.
Sub-Advisor, the Sub-Advisor or Advisor exercise investment
discretion. The U.K. Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the U.K. Sub-Advisor
determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall
responsibilities which the U.K. Sub-Advisor and the Sub-Advisor have
with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
Sub-Advisor on the following basis for the services to be furnished
hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall
have provided both investment advisory services under subparagraph (a)
and investment management services under subparagraph (b) of paragraph
1 for the same portion of the investments of the Portfolio for the
same period, the fees paid to the U.K. Sub-Advisor with respect to
such investments shall be calculated exclusively under subparagraph
(b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. Sub-Advisor being free to render services to
others and engage in other activities, provided, however, that such
other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, the Advisor, the
Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1999 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the U.K. Sub-Advisor, the Sub-Advisor and the Portfolio subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to
the other parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or with
respect to the Portfolio by vote of a majority of its outstanding
voting securities. This Agreement shall terminate automatically in
the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the
Portfolio arising in connection with this Agreement shall be limited
in all cases to the Portfolio and its assets, and the U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
Sub-Advisor seek satisfaction of any such obligation from the Trustees
or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY:/s/Pamela Edwards
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY:/s/David J. Saul
Director
Exhibit (g)(2)
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
State Street Bank and Trust Company and Each of the Following
Investment Companies
Dated as of November 19, 1998
The following is a list of the Funds and their respective
Portfolios for which the Custodian shall serve under a Custodian
Agreement dated as of February 1, 1996 (the "Custodian Agreement"):
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Portfolio Effective as of:
Fidelity Advisor Series I Fidelity Advisor Small Cap Fund September 6, 1998
Fidelity Advisor Dividend December 14, 1998
Growth Fund*
Fidelity Advisor Retirement December 14, 1998
Growth Fund*
Fidelity Advisor Asset December 14, 1998
Allocation Fund*
Fidelity Advisor Series VIII Fidelity Advisor Diversified December 14, 1998
International Fund*
Fidelity Advisor Europe December 14, 1998
Capital Appreciation Fund*
Fidelity Advisor Global December 14, 1998
Equity Fund*
Fidelity Advisor Japan Fund* December 14, 1998
Fidelity Advisor Latin December 14, 1998
America Fund*
Fidelity Beacon Street Trust Fidelity Tax Managed Stock Fund October 5, 1998
Fidelity Capital Trust Fidelity Disciplined Equity February 1, 1996
Fund
Fidelity Destiny Portfolios Destiny I February 1, 1996
Destiny II February 1, 1996
Fidelity Magellan Fund Fidelity Magellan Fund February 1, 1996
*Addition of eight new
advisor funds
effective December 14, 1998.
</TABLE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Appendix to be executed in its name and behalf as of the day and year
first set forth opposite each such Portfolio.
Each of the Investment
Companies Listed on State Street Bank and Trust Company
this Appendix A to
the Custodian Agreement,
on Behalf of Each of
Their Respective Portfolios
By: /s/John Costello By: /s/Ronald E. Logue
Name: John Costello Name: Ronald E. Logue
Title: Asst. Treasurer Title: Executive Vice President
Exhibit (g)(3)
APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
State Street Bank and Trust Company and Each of the Investment
Companies Listed on Appendix A
Dated as of December 17, 1998
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of February 1, 1996 (the "Custodian Agreement"):
<TABLE>
<CAPTION>
<S> <C> <C>
A. Additional Custodians:
Custodian Purpose
Bank of New York Ficash
Fiterm
B. Special Subcustodians:
Subcustodian Purpose
Bank of New York Ficash
C. Foreign Subcustodians:
Country Subcustodian Depository
Argentina Citibank, N.A., Buenos Aires Caja de Valores S.A.
Australia Westpac Banking Corporation, Austraclear Limited
Sydney
Reserve Bank Information and
Transfer System (RITS)
Austria GiroCredit Bank Oesterreichische Kontrollbank
AG der Sparkassen, Vienna AG (Wertpapiersammelbank
Division)
Bahrain The British Bank of the None
Middle East, Manama
Bangladesh Standard Chartered Bank, Dhaka None
Belgium Generale Bank, Brussels Caisse Interprofessionnelle de
Depots et de Virements de
Titres
S.A. (CIK)
Belgium Banque Nationale de Belgique
Bermuda The Bank of Bermuda Limited None
Bostwana Barclays Bank of Bostwana None
Limited, Gaborone
Brazil Citibank, N.A., Sao Paulo Bolsa de Valores de Sao Paulo
(Bovespa); Banco Central do
Brasil, Systema
Especial de Liquidacao e
Custodia
(SELIC); Rio de Janeiro Stock
Exchange
(BVRJ); Central de Custodia e
Liquidacao
Financeira de Titulos
(CETIP); Companhia
Brasileria de Liquidacao e
Custodia
Bulgaria ING Bank N.V., Sofia Central Depository AD (CDAD)
The Bulgarian National Bank
Canada Canada Trustco Mortgage Canadian Depository for
Company, Toronto Securities Limited (CDS)
Chile Citibank, N.A., Santiago None
China The Hongkong and Shanghai Shanghai Securities Central
Banking Corporation Limited, Clearing and Registration
Shanghai & Shenzhen branches Corporation (SSCRC);
Shenzhen Securities
Registrars Co.,
Ltd. (SSRC).
Colombia Cititrust Colombia S.A. None
Sociedad Fiduciaria, Bogota
Cyprus Barclays Bank PLC, Nicosia
Czech Republic Ceskoslovenska Obchodni Stredisko Cennych Papiru (SCP);
Banka, A.S., Prague Czech National Bank (CNB)
Denmark Den Danske Bank, Copenhagen Vaerdipapericentralen- The
Danish
Securities Center (VP)
Ecuador Citibank, N.A., Quito None
Egypt National Bank of Egypt, Cairo Misr for Clearing, Settlement
and Depository
Finland Merita Bank Limited, Helsinki The Finnish Central
Securities Depository
Limited (CSD)
France Banque Paribas, Paris Societe Interprofessionnelle
pour la
Compensation des Valeurs
Mobilieres (SICOVAM)
Banque de France
Germany Dresdner Bank AG, Frankfurt Deutsche Borse Clearing (DBC)
Ghana Barclays Bank of Ghana Limited, None
Accra
Greece National Bank of Greece, S.A., Central Securities
Depository, S.A.
Athens (Apothtirion Tilton A.E.)
The Bank of Greece
Hong Kong Standard Chartered Bank, Hong Kong Securities Clearing
Co. Ltd.,
Hong Kong Central Clearing and
Settlement System
(CCASS)
The Central Money Markets
Unit CMU
Hungary Citibank Budapest Rt., Central Depository and
Clearing House
Budapest (Budapest) Ltd. (KELER Ltd.)
India Deutsche Bank AG, Mumbai; National Securities
Depository Limited
Hongkong & Shanghai Banking (NSDL)
Corporation, Ltd., Mumbai
Indonesia Standard Chartered Bank, Bank Indonesia
Jakarta
Ireland Bank of Ireland, Dublin Gilt Settlement Office (GSO)
Israel Bank Hapoalim B.M., Tel Aviv Tel Aviv Stock Exchange (TASE)
Clearinghouse, Ltd.
The Bank of Israel
Italy Banque Paribas, Milan Monte Titoli S.p.A.;
Banca d'Italia
Ivory Coast Societe Generale de Banques None
en Cote d'Ivoire, Abidjan
Japan Sumitomo Trust & Banking Japan Securities Depository
Center
Co., Ltd., Osaka; (JASDEC);
Daiwa Bank, Ltd., Tokyo; Bank of Japan
Fuji Bank, Ltd., Tokyo
Jordan British Bank of the Middle None
East, Amman
Kenya Barclays Bank of Kenya Limited, The Central Bank of Kenya
Nairobi
Lebanon The British Bank of the Middle Midclear
East, Beirut
Central Bank of Lebanon
Malaysia Standard Chartered Bank Malaysia Central Depository
Sdn.
Malaysia Berhad, Kuala Lampur bhd. (MCD)
Bank Negara Malasia
Mauritius Hongkong and Shanghai Central Depository &
Settlement Co., Ltd.
Banking Corporation Limited,
Port Louis
Mexico Citibank Mexico, S.A., S.D. INDEVAL, S.A. de C.V.
Mexico City (Instituci<UNDEF>n para el
Deposito de
Valores)
Morocco Banque Commerciale du Maroc, MAROCLEAR
Casablanca
Netherlands MeesPierson N.V., Amesterdam Nederlands Centraal Instituut
voor
Giraal Effectenverkeer B.V.
(NECIGEF), KAS Associatie,
N.V. (KAS)
De Nederlandshe Bank
New Zealand ANZ Banking Group (New New Zealand Securities
Zealand) Limited, Wellington Depository Limited (NZCDS)
Norway Christiania Bank og Verdipapirsentralen (VPS)
Kreditkasse,
Oslo
Oman British Bank of the Middle Muscat Securities Market
East,
Muscat
Pakistan Deutsche Bank AG, Karachi The Central Depository
Company of Pakistan
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Standard Chartered Bank, The Philippines Central
Depository, Inc.
Manila
The Book-Entry-System of the
Central Bank
The Registry of Scripless
Securities of the
Bureau of the Treasury,
Department of
Finance
Poland Citibank Poland, S.A., Warsaw National Depository of
Securities;
National Bank of Poland
Bank Polska Kasa Opieki S.A.,
Warsaw
Portugal Banco Comercial Portuguese, Central de Valores Mobiliarios
S.A.,
Lisbon (Interbolsa)
Central Treasury Bills
Registrar
Romania ING Bank N.V., Bucharest National Company for
Clearing, Settlement &
Depository for Securities
(SNCDD)
Romania Bucharest Stock Exchange (BSE)
Russia Credit Suisse First Boston, AO None
Moscow
Singapore The Development Bank of Central Depository (Pte) Ltd.
(CDP)
Singapore Ltd., Singapore
The Monetary Authority of
Singapore
Slovak Republic Ceskoslovenska Obchodna Stredisko Cennych Papierov
(SCP)
Banka A.S., Bratislava National Bank of Slovakia (NBS)
Slovenia Banka Creditanstalt d.d., Klirinsko Depotna Druzba
Ljubljana,
a 99.96% owned subsidiary of
Creditanstalt AG
South Africa Standard Bank of South Africa The Central Depository (Pty)
Ltd. (CD)
Limited, Johannesburg
South Korea The Hongkong and Shanghai Korean Securities
Depositories (KSD)
Banking Corporation, Limited
Seoul
Spain Banco Santander, S.A., Servicio de Compensacion y
Madrid Liquidacion de Valores (SCLV);
Banco de Espana
Sri Lanka Hongkong and Shanghai Central Depository System (Pvt)
Banking Corp. Ltd., Colombo Limited (CDS)
Swaziland Standard Bank Swaziland, None
Limited, Mbabane
Sweden Skandinaviska Enskilda Banken, Vardepapperscentralen AB
Stockholm
The Swedish Central
Securities Depository
Switzerland UBS AG, Schweizerische Effekten-Giro AG
Zurich (SEGA)
Taiwan Central Trust of China, Taiwan Securities Central
Taipei Depository Company (TSCD)
Thailand Standard Chartered Bank, Thailand Securities Depository
Bangkok Company Limited (TSD)
Transnational Cedel Bank Societe Anonyme
INTERSETTLE
The Euroclear System
Turkey Citibank, N.A., Istanbul Istanbul Stock Exchange
Settlement
and Custody Co., Inc. (I.M.K.B.
Takas ve Saklama A.S.);
Central Bank of Turkey
United Kingdom State Street Bank and Trust Central Gilts Office (CGO);
Company, London Central Moneymarkets Office
State Street London Limited, (CMO); European Settlement
Office (ESO)
London
Uruguay Citibank, N.A., Montevideo None
Venezuela Citibank, N.A., Caracas The Central Bank of Venezuela
Zambia Barclays Bank of Zambia Lusaka Central Depository (LCD)
Limited, Lusaka (overseen by Lusaka Stock
Exchange)
The Bank of Zambia
Each of the Investment
Companies Listed on
Appendix A to the Custodian
Agreement, on
Behalf of Each of Their
Respective Portfolios
By: /s/John Costello
Name: John Costello
Title: Asst. Treasurer
</TABLE>
Exhibit (g)(11)
Form of
Appendix "B"
To
Custodian Agreement
Between
Brown Brothers Harriman & Co. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of _____________________
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of ____________ (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
Bank of New York FICASH
FITERM
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
C. Foreign Subcustodians:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A.;
(Citibank, N.A., New York Central de Registracion y
Agt. 7/16/81
New York Agreement Amendment Liquidacion de Instrumentos
8/31/90)
de Endeudamiento Publico (CRYL)
BankBoston, N.A., Buenos Aires
(First Nat. Bank of Boston
Agreement 1/15/88
Omnibus Amendment 2/22/94)
Australia National Australia Bank Ltd., Austraclear Limited;
Melbourne
(National Australia Bank Agt. Reserve Bank Information and
5/1/85
Agreement Amendment 2/13/92 Transfer System (RITS)
Omnibus Amendment 11/22/93)
The Clearing House Electronic
Sub-register system
Austria Creditanstalt, AG, Vienna Oesterreichische Kontrollbank
(Creditanstalt Bankverein Aktiengesellschaft (OEKB)
Agreement 12/18/89
Omnibus Amendment 1/17/94)
Bahrain British Bank of the Middle None
East, Manama
Bangladesh Standard Chartered Bank, Dhaka None
(Standard Chartered Bank
Agreement 2/18/92)
Belgium Banque Bruxelles Lambert, Caisse Interprofessionnelle
Brussels de Depot
(Banque Bruxelles Lambert et Virements de Titres (CIK);
Agreement 11/15/90
Omnibus Amendment 3/1/94) Banque Nationale de Belgique
(BNB)
Bermuda Bank of N.T. Butterfield &
Son Ltd., Hamilton
Botswana Stanbic Bank Botswana,
Limited, Gaborone
for The Standard Bank of
South Africa, Limited
(SBSA)
Brazil BankBoston, N.A., Sao Paulo Sao Paulo Stock Exchange
(First National Bank of (BOVESPA);
Boston Agreement 1/5/88
Omnibus Amendment 2/22/94) Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A. (CLC)
Bulgaria ING Bank N.V. (ING) Central Depository AD (and)
Bulgarian National Bank
Canada Canadian Imperial Bank of Canadian Depository for
Commerce, Toronto Securities,
(Canadian Imperial Bank of Ltd., (CDS)
Commerce
Agreement 9/9/88
Omnibus Amendment 12/1/93)
Royal Bank of Canada, Toronto Bank of Canada
Proposed Agreement 2/23/96
Chile Citibank, N.A., Santiago Deposito Central de Valores,
S.A.
(Citibank N.A., New York (DCV)
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
China-Shanghai Standard Chartered Bank, Shanghai Securities Central
Shanghai Clearing
(Standard Chartered Bank
Agreement 2/18/92)
& Registration Corporation (SSCCRC)
China-Shenzhen Standard Chartered Bank, Shenzhen Securities
Shenzhen Registration
(Standard Chartered Bank Corp. Ltd., (SSRC)
Agreement 2/18/92)
Colombia Cititrust Colombia , S.A.,
Sociedad Fiduciaria,
Bogota Deposito Central de Valores
(DCV)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment Deposito Centralizado de
8/31/90 Valores
Citibank N.A. Subsidiary (DECEVAL)
Amendment 10/19/95
Citibank N.A./Cititrust
Colombia Agreement 12/2/91)
Czech Republic Citibank a.s., Praha, an Stredisko Cennych Papiru (SCP)
indirect subsidiary of
Citibank, N.A.
Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen - VP
Center
(Den Danske Bank Agreement
1/1/89
Omnibus Amendment 12/1/93)
Ecuador Citibank, N.A., Quito None
(Citibank, N.A. New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Quito Side Letter
7/3/95)
Egypt Citibank, N.A., Cairo Misr for Clearing, Settlement
(Citibank, N.A. New York and Depository
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Finland Merita Bank Ltd., Helsinki Finnish Central Securities
Depository Ltd.
France Banque Paribas, Paris SICOVAM;
Agreement 4/2/93) Banque de France
Germany Dresdner Bank AG, Frankfurt Deutsche Borse Clearing (DBC)
(Dresdner Bank Agreement
10/6/95)
Ghana Merchant Bank (Ghana) None
Limited, Accra
for The Standard Bank of
South Africa, Limited
(SBSA)
Greece Citibank, N.A., Athens The Central Securities
Depository,
(Citibank N.A., New York Apothetirion Titlon A.E.
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
The Bank of Greece
Hong Kong The Hongkong & Shanghai Banking Central Clearing and
Corp., Ltd., Hong Kong Settlement System (CCASS)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93) The Central Money Markets Unit
Hungary Citibank Budapest, Rt. Central Depository and Clearing
(Citibank N.A., New York House (Budapest) Ltd.,
Agreement 7/16/81
New York Agreement Amendment (KELER Ltd.)
8/31/90
Citibank N.A. Subsidiary
Amendment 10/19/95
Citibank N.A./Citibank
Budapest Agmt. 1/24/92
(amended 6/23/92 and 9/29/92))
India Citibank, N.A., Mumbai National Securities
Depository Limited
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Mumbai Amendment
11/17/93)
Standard Chartered Bank, Mumbai
(Standard Chartered Bank
Agreement 2/18/92
SCB, Mumbai Annexure and Side
Letter 7/18/94)
Indonesia Citibank, N.A., Jakarta None
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Ireland Allied Irish Banks, plc., Gilt Settlement Office (GSO)
Dublin
(Allied Irish Banks Agreement
1/10/89
Omnibus Amendment 4/8/94) CREST
Israel Bank Hapoalim, B.M. Tel-Aviv Stock Exchange
(Bank Hapoalim Agreement (TASE) Clearinghouse Ltd.
8/27/92)
Italy Banca Commerciale Italiana, Monte Titoli S.p.A.
Milan
(Banca Commerciale Italiana
Agreement 5/8/89
Agreement Amendment 10/8/93 Banca D'Italia
Omnibus Amendment 12/14/93)
Japan The Bank of Tokyo-Mitsubishi, Japan Securities Depository
Ltd., Center.,
Tokyo (JASDEC); Bank of Japan
Jordan Arab Bank, plc, Amman None
(Arab Bank Agreement 4/5/95
Kenya Stanbic Bank Kenya, Limited, None
Nairobi
for The Standard Bank of
South Africa, Limited
(SBSA)
Lebanon British Bank of the Middle Midclear
East, Beirut
Luxembourg Kredietbank Luxembourg (KBL)
Malaysia Hongkong Bank Malaysia Berhad, Malaysian Central Depository
Sdn.
Kuala Lumpur Bhd (MCD)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93
Malaysia Subsidiary Bank Negara Malaysia
Supplement 5/23/94)
Mauritius Hongkong & Shanghai Banking Central Depository &
Corp., Ltd., Settlement Co.,
Port Louis Ltd.
Mexico Citibank Mexico, S.A., Mexico Institucion para el Deposito de
City
(Citibank N.A., New York Valores- S.D. INDEVAL, S.A. de
Agreement 7/16/81
New York Agreement Amendment C.V.
8/31/90
Citibank, Mexico, S.A.
Amendment 2/7/95)
Banco de Mexico
Morocco Banque Marocaine du Commerce MAROCLEAR
Exterieur,
Casablanca
(BMCE Agreement 7/6/94)
Namibia Standard Bank Namibia Ltd., None
Windhoek
Netherlands ABN-AMRO, Bank N. V., Amsterdam Nederlands Centraal Instituut
voor
(ABN-AMRO Agreement 12/19/88) (NECIGEF)/KAS Associatie N.V.
(KAS); De Nederlandsche Bank (DNB)
New New Zealand National Australia Bank Ltd., New Zealand Securities
Melbourne
(National Australia Bank Depository Limited (NZCDS)
Agreement 5/1/85
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89)
Norway Den norske Bank ASA, Oslo Verdipapirsentralen (VPS)
(Den norske Bank Agreement
11/16/94)
Oman British Bank of the Middle Muscat Securities Market
East, Muscat
Pakistan Standard Chartered Bank, The Central Depository
Karachi
(Standard Chartered Bank Company of Pakistan (CDC)
Agreement 2/18/92)
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Philippines Citibank, N.A., Manila The Philippines Central
Depository,
(Citibank N.A., New York Inc.; The Registry of Scripless
Agreement 7/16/81
New York Agreement Amendment Securities of the Bureau of the
8/31/90)
Treasury Department of Finance
Poland Citibank Poland, S.A., Warsaw National Depository of
Securities
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment National Bank of Poland
8/31/90
Citibank Subsidiary Amendment
10/19/95
Citibank, N.A./Citibank
Poland S.A. Agt. 11/6/92)
Bank Polska Kasa Opieki S.A.,
Warsaw
Portugal Banco Comercial Portuges, Central de Valores Mobiliaros
Lisboa
(Interbolsa)
Romania National Company for Clearing
Settlement & Depository for
Securities
Bucharest Stock Exchange
National Bank of Romania
Russia Credit Suisse First Boston Rosvneshtorgbank (VTB)
(Moscow), Ltd
Citibank T/O, Moscow Moscow Interbank Currency
Exchange Clearinghouse (MICEX)
National Depository Center
Singapore Hongkong & Shanghai Banking Central Depository Pte Ltd.
(CDP)
Corp., Ltd., Singapore
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Slovak Republic Internationale Nederlanden Stredisko Cennych Papeirov
Bank N.V. (ING Bank (SCP)
N.V.), Amsterdam
National Bank of Slovakia
Slovenia Central Klirnisko Depotna
Drozba d.d.
South Africa First National Bank of The Central Depository (Pty)
Southern Africa Ltd., Ltd.
Johannesburg (CD)
(First National Bank of
Southern Africa Agmt. 8/7/91)
South Korea Citibank, N.A., Seoul Korean Securities Depository
(KSD)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Seoul Agreement
Supplement 10/28/94)
Spain Banco Santander S.A., Madrid Servicio de Compensacion y
(Banco Santander Agreement Liquidacion de Valores (SCLV)
12/14/88)
Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Central Depository System (Pvt)
Corp. Ltd.,
Colombo Limited (CDS)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Swaziland Standard Bank Swaziland, None
Limited, Mbabane
for The Standard Bank of
South Africa, Limited
(SBSA)
Sweden Skandinaviska Enskilda Vardepapperscentralen VPC AB
Banken, Stockholm
(Skandinaviska Enskilda
Banken Agreement 2/20/89
Omnibus Amendment 12/3/93)
Switzerland Swiss Bank Corporation, Basel Schweizerische Effekten -
Giro A.G.
(Swiss Bank Corporation (SEGA)
Agreement 3/1/94)
Taiwan Standard Chartered Bank, Taipei Taiwan Securities Central
Depository
(Standard Chartered Bank Co. Ltd. (TSCD)
Agmt. 2/18/92)
Thailand Hongkong & Shanghai Banking Thailand Securities Depository
Corp. Ltd.,
Bangkok Company (TSD)
(Hongkong & Shanghai Banking
Corp. Agmt. 4/19/91
Omnibus Amendment 12/29/93)
Transnational Cedel Bank Societe
Anonyme, Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Citibank, N.A., Istanbul Takas ve Saklama Bankasi A.S.
(TvS)
(Citibank N.A., New York
Agmt. 7/16/81
New York Agmt. Amendment Central Bank of Turkey (CBT)
8/31/90)
United Kingdom Lloyds Bank PLC, London Central Gilts Office (CGO);
CREST;
Central Money Markets Office
(CMO)
Uruguay BankBoston, N.A. Montevideo None
Venezuela Citibank, N.A., Caracas The Caja Venezolana de
(Citibank N.A., New York Valores (CVV)
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Zambia Stanbic Bank Zambia Ltd., Lusaka Central Depository
Lusaka
The Bank of Zamibia
Zimbabwe Stanbic Bank Zimbabwe Ltd., None
Harare
</TABLE>
Exhibit (j)(1)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the
Prospectuses and Statement of Additional Information in Post-Effective
Amendment No. 53 to the Registration Statement on Form N-1A of
Fidelity Advisor Series VIII: Fidelity Advisor International Capital
Appreciation Fund and Fidelity Advisor Overseas Fund of our reports
dated December 11, 1998 on the financial statements and financial
highlights included in the October 31, 1998 Annual Reports to
Shareholders and Fidelity Advisor Series VIII: Fidelity Advisor
Emerging Markets Income Fund of our report dated February 17, 1999 on
the financial statements and financial highlights included in the
December 31, 1998 Annual Reports.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the
Statement of Additional Information.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 23, 1999
Exhibit (j)(2)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our Firm under the heading
"Auditor" in the Statement of Additional Information of Fidelity
Advisor Series VIII: Fidelity Advisor Diversified International Fund,
Fidelity Advisor Japan Fund, Fidelity Advisor Latin America Fund, and
Fidelity Advisor Global Equity Fund which is included in
Post-Effective Amendment No. 53 to the Registration Statement on Form
N-1A.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 23, 1999
Exhibit (j)(3)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our Firm under the heading
"Auditor" in the Statement of Additional Information of Fidelity
Advisor Series VIII: Fidelity Advisor Europe Capital Appreciation Fund
and Fidelity Advisor International Capital Appreciation Fund which is
included in Post-Effective Amendment No. 53 to the Registration
Statement on Form N-1A.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Boston, Massachusetts
February 23, 1999
Exhibit (o)(2)
SCHEDULE I DATED FEBRUARY 26, 1999 TO MULTIPLE CLASS OF SHARES PLAN
FOR FIDELITY ADVISOR FUNDS DATED MARCH 19, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF AVERAGE
NET ASSETS)
Advisor Series VIII
Emerging Asia Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
Overseas Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Equity Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Natural Resources Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Growth Opportunities Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Equity Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Balanced Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Large Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Mid Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Small Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Strategic Opportunities Fund:
Initial Class front-end none none
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Consumer Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Cyclical Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Financial Services Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Health Care Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Technology Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VII
Utilities Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
TechnoQuant Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Growth & Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
International Capital
Appreciation Fund: front-end 0.25 none
Class A* front-end 0.50 none
Class T* contingent deferred 0.75 0.25
Class B contingent deferred 0.75 0.25
Class C none none none
Institutional Class
Advisor Series I
Dividend Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Retirement Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series I
Asset Allocation Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
Diversified International
Fund: front-end 0.25 none
Class A* front-end 0.50 none
Class T* contingent deferred 0.75 0.25
Class B contingent deferred 0.75 0.25
Class C none none none
Institutional Class
Advisor Series VIII
Europe Capital Appreciation
Fund: front-end 0.25 none
Class A* front-end 0.50 none
Class T* contingent deferred 0.75 0.25
Class B contingent deferred 0.75 0.25
Class C none none none
Institutional Class
Advisor Series VIII
Japan Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
Latin America Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
Global Equity Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
Intermediate Bond Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
Intermediate Municipal Income
Fund: front-end 0.15 none
Class A* front-end 0.25 none
Class T* contingent deferred 0.65 0.25
Class B contingent deferred 0.75 0.25
Class C none none none
Institutional Class
Advisor Series II
Short Fixed-Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.15 none
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series VIII
Emerging Markets Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
High Yield Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
Strategic Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
Government Investment Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
Advisor Series II
Municipal Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
</TABLE>
______________________________________________________________
* A contingent deferred sales charge of 0.25% is accessed on certain
redemptions of Class A and Class T shares on which a finder's fee was
paid.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000729218
<NAME> Fidelity Advisor Series VIII
<SERIES>
<NUMBER> 21
<NAME> Fidelity Advisor Emerging Markets Income Fund CLASS T
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> dec-31-1998
<PERIOD-END> dec-31-1998
<INVESTMENTS-AT-COST> 74,876
<INVESTMENTS-AT-VALUE> 70,764
<RECEIVABLES> 5,894
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 76,658
<PAYABLE-FOR-SECURITIES> 248
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 838
<TOTAL-LIABILITIES> 1,086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 107,559
<SHARES-COMMON-STOCK> 6,905
<SHARES-COMMON-PRIOR> 8,392
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 632
<ACCUMULATED-NET-GAINS> (27,236)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4,119)
<NET-ASSETS> 75,572
<DIVIDEND-INCOME> 4
<INTEREST-INCOME> 11,320
<OTHER-INCOME> (197)
<EXPENSES-NET> 1,571
<NET-INVESTMENT-INCOME> 9,556
<REALIZED-GAINS-CURRENT> (24,724)
<APPREC-INCREASE-CURRENT> (7,289)
<NET-CHANGE-FROM-OPS> (22,457)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,144
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,282
<NUMBER-OF-SHARES-SOLD> 2,934
<NUMBER-OF-SHARES-REDEEMED> 5,119
<SHARES-REINVESTED> 698
<NET-CHANGE-IN-ASSETS> (44,930)
<ACCUMULATED-NII-PRIOR> 424
<ACCUMULATED-GAINS-PRIOR> 272
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 666
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,628
<AVERAGE-NET-ASSETS> 72,774
<PER-SHARE-NAV-BEGIN> 11.110
<PER-SHARE-NII> 975
<PER-SHARE-GAIN-APPREC> (3.319)
<PER-SHARE-DIVIDEND> .824
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .172
<PER-SHARE-NAV-END> 7.770
<EXPENSE-RATIO> 150
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000729218
<NAME> Fidelity Advisor Series VIII
<SERIES>
<NUMBER> 22
<NAME> Fidelity Advisor Emerging Markets Income Fund CLASS B
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> dec-31-1998
<PERIOD-END> dec-31-1998
<INVESTMENTS-AT-COST> 74,876
<INVESTMENTS-AT-VALUE> 70,764
<RECEIVABLES> 5,894
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 76,658
<PAYABLE-FOR-SECURITIES> 248
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 838
<TOTAL-LIABILITIES> 1,086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 107,559
<SHARES-COMMON-STOCK> 2,140
<SHARES-COMMON-PRIOR> 2,113
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 632
<ACCUMULATED-NET-GAINS> (27,236)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4,119)
<NET-ASSETS> 75,572
<DIVIDEND-INCOME> 4
<INTEREST-INCOME> 11,320
<OTHER-INCOME> (197)
<EXPENSES-NET> 1,571
<NET-INVESTMENT-INCOME> 9,556
<REALIZED-GAINS-CURRENT> (24,724)
<APPREC-INCREASE-CURRENT> (7,289)
<NET-CHANGE-FROM-OPS> (22,457)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,621
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 338
<NUMBER-OF-SHARES-SOLD> 816
<NUMBER-OF-SHARES-REDEEMED> 964
<SHARES-REINVESTED> 175
<NET-CHANGE-IN-ASSETS> (44,930)
<ACCUMULATED-NII-PRIOR> 424
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