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(registered trademark) ADVISOR
JAPAN
FUND
INSTITUTIONAL CLASS
(Fund 744, CUSIP 315920462)
PROSPECTUS
DECEMBER 29, 1999
AS REVISED JUNE 16, 2000
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
2 PERFORMANCE
2 FEE TABLE
FUND BASICS 3 INVESTMENT DETAILS
4 VALUING SHARES
SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES
11 EXCHANGING SHARES
12 ACCOUNT FEATURES AND POLICIES
14 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
14 TAX CONSEQUENCES
FUND SERVICES 15 FUND MANAGEMENT
15 FUND DISTRIBUTION
APPENDIX 15 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.
(small solid bullet) Normally 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 from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can 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 from
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.
PERFORMANCE
Performance history for Advisor Japan will be included in this section
of the prospectus after the fund has been in operation for one
calendar year.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell Institutional Class shares of the fund.
The annual class operating expenses provided below for Institutional
Class do not reflect the effect of any expense reimbursements or
reduction of certain expenses during the period.
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)
Institutional Class
Management feeA 0.73%
Distribution and Service None
(12b-1) fee
Other expensesA 1.42%
Total annual class operating 2.15%
expensesB
A ANNUALIZED
B FMR HAS VOLUNTARILY AGREED TO REIMBURSE INSTITUTIONAL CLASS OF THE
FUND TO THE EXTENT THAT TOTAL OPERATING EXPENSES (EXCLUDING INTEREST,
TAXES, SECURITIES LENDING COSTS, BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS AVERAGE NET ASSETS,
EXCEEDS THE FOLLOWING RATE:
Institutional Class Effective Date
Advisor Japan 1.75% 12/18/98
THIS ARRANGEMENT CAN BE DISCONTINUED BY FMR AT ANY TIME.
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, through arrangements with the
fund's custodian and transfer agent, 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, after reimbursement, would have been 1.76%.
This EXAMPLE helps you compare the cost of investing in the fund 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
1 year $ 218
3 years $ 673
5 years $ 1,154
10 years $ 2,483
FUND BASICS
INVESTMENT DETAILS
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.
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.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of 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 fund's
investments in a particular country, the fund's performance is
expected to be closely tied to economic and political conditions
within that country and to be more volatile than the performance of
more geographically diversified funds. When you sell your shares of
the fund, they could be worth more or less than what you paid for
them.
The following factors can significantly affect the 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 from
small cap stocks, and "growth" stocks can react differently from
"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.
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. For example, many foreign countries are less prepared
than the United States to properly process and calculate information
related to dates from and after January 1, 2000, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest, or principal. 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 from the U.S.
market.
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.
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. Although 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.
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 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.
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 the fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
ADVISOR JAPAN FUND seeks long-term growth of capital.
VALUING SHARES
The 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 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). The fund's assets are valued as of this time for the purpose of
computing Institutional Class's NAV.
To the extent that the 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 the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are 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
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 fund 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 the fund and the account features and policies may differ.
Additional fees may also apply to your investment in Institutional
Class shares of the 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
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH 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
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 adviser managed account programs, provided
the registered investment adviser 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's 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 the fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, the 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
the fund. For these purposes, FMR may consider an investor's trading
history in the fund or other Fidelity funds, and accounts under common
ownership or control.
The 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 the 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 the 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, 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, the 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:
Bankers 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:
Bankers 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, the 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 15 or 30 days, depending on the type of account;
(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
the 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 property rather than in cash if FMR determines it is in the best
interests of the 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.
To sell shares issued with certificates, call Fidelity for
instructions. The fund no longer issues share certificates.
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) The 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. Accounts under common
ownership or control will be counted together for purposes of the four
exchange limit.
(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) The 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 fund 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 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
fund.
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 Monthly, bimonthly, (small solid bullet) To set
$100 $100 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
the 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 the 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 CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
The fund normally pays dividends and capital gain distributions in
December.
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 gain 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 gain 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 gain 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 gain 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 the 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 the fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, the fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income, while
the fund's distributions of long-term capital gains are taxable to you
generally as capital gains.
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 the fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
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 the fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Advisor Japan is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is the fund's manager.
As of March 25, 1999, FMR had approximately $521.7 billion in
discretionary assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its 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 the 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 the fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for the 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 the fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 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 the fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
the fund. As of September 28, 1999, FIIA(U.K.)L had approximately $2.6
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 the fund.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ) serves as a
sub-adviser for the fund. As of September 28, 1999, FIJ had
approximately $16.3 billion in discretionary assets under
management.
The 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 the 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 the fund.
William Kennedy is manager of Advisor Japan Fund, which
he has managed since June 2000 . He also manages
another Fidelity fund . Since joining Fidelity in
1994, Mr. Kennedy has worked as an analyst and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
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.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. 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.
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%, and it
drops as total assets under management increase.
For October 1999, the group fee rate was 0.2805%. The individual fund
fee rate is 0.45%.
FMR pays FMR U.K., FMR Far East, and FIIA for providing sub-advisory
services and FIIA in turn pays FIIA(U.K.)L. FMR Far East will pay FIJ
for providing sub-advisory services.
FMR may, from time to time, agree to reimburse a 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 discontinued by FMR at any time, can decrease a class's
expenses and boost its performance.
FUND DISTRIBUTION
The fund is composed of multiple classes of shares. All classes of the
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 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 the 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 fund or FDC. This prospectus and the related SAI do
not constitute an offer by the fund or by FDC to sell shares of the
fund to or to buy shares of the fund from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand
Institutional Class's financial history for the period of the class's
operations. Certain information reflects financial results for a
single class share. The total returns in the table represent the rate
that an investor would have earned (or lost) on an investment in the
class (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the fund's financial
highlights and financial statements, are included in the fund's annual
report. A free copy of the annual report is available upon request.
SELECTED PER-SHARE DATA AND RATIOS
Year ended October 31, 1999 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.10)
D
Net realized and unrealized 9.19
gain (loss)
Total from investment 9.09
operations
Net asset value, end of period $ 19.09
TOTAL RETURN B, C 90.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,986
(000 omitted)
Ratio of expenses to average 1.77% A,F
net assets
Ratio of expenses to average 1.76% A, G
net assets after expense
reductions
Ratio of net investment (.78)% A
income (loss) to average net
assets
Portfolio turnover 152% A
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 17, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
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.
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The 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 the fund, call Fidelity at
1-888-622-3175.
The SAI, the fund's 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 fund, including the fund's 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.
The third party marks appearing above are the marks of their
respective owners.
1.728700.101 AJAFI-pro-0600
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(registered trademark) ADVISOR
JAPAN
FUND
CLASS A
(Fund 741, CUSIP 315920512)
CLASS T
(Fund 745, CUSIP 315920470)
CLASS B
(Fund 742, CUSIP 315920496)
CLASS C
(Fund 743, CUSIP 315920488)
PROSPECTUS
DECEMBER 29, 1999
AS REVISED JUNE 16, 2000
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
2 PERFORMANCE
2 FEE TABLE
FUND BASICS 3 INVESTMENT DETAILS
4 VALUING SHARES
SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES
7 EXCHANGING SHARES
7 ACCOUNT FEATURES AND POLICIES
9 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
9 TAX CONSEQUENCES
FUND SERVICES 10 FUND MANAGEMENT
10 FUND DISTRIBUTION
APPENDIX 11 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.
(small solid bullet) Normally 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 from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can 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 from
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.
PERFORMANCE
Performance history for Advisor Japan will be included in this section
of the prospectus after the fund has been in operation for one
calendar year.
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 the fund. The annual class operating expenses provided below
for each class do not reflect the effect of any expense reimbursements
or reduction of certain expenses during the period.
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
on purchases (as a % of
offering price)
Maximum contingent deferred NoneC NoneC 5.00%D 1.00%E
sales charge (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 contingent deferred sales charge 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)
Class A Class T Class B Class C
Management feeA 0.73% 0.73% 0.73% 0.73%
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 expensesA 1.45% 1.40% 1.45% 1.38%
Total annual class operating 2.43% 2.63% 3.18% 3.11%
expensesB
A ANNUALIZED
B FMR HAS VOLUNTARILY AGREED TO REIMBURSE CLASS A, CLASS T, CLASS B
AND CLASS C OF THE FUND TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, SECURITIES LENDING COSTS, BROKERAGE
COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS
AVERAGE NET ASSETS, EXCEED THE FOLLOWING RATES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Effective Date Class T Effective Date Class B Effective Date Class C Effective Date
Advisor Japan 2.00% 12/18/98 2.25% 12/18/98 2.75% 12/18/98 2.75% 12/18/98
</TABLE>
THESE ARRANGEMENTS CAN BE DISCONTINUED BY FMR AT ANY TIME.
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, through arrangements with the
fund's custodian and transfer agent, credits realized as a result of
uninvested cash balances are used to reduce custodian expenses.
Including these reductions, the total Class A, Class T, Class B, and
Class C operating expenses, after reimbursement, would have been
2.01%, 2.26%, 2.77%, and 2.76%, respectively.
This EXAMPLE helps you compare the cost of investing in the fund 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> <C> <C>
Class A Class T Class B Class C
Account open Account closed Account open Account closed Account open Account closed Account open
1 year $ 807 $ 807 $ 607 $ 607 $ 321 $ 821 $ 314
3 years $ 1,289 $ 1,289 $ 1,139 $ 1,139 $ 980 $ 1,280 $ 960
5 years $ 1,796 $ 1,796 $ 1,696 $ 1,696 $ 1,664 $ 1,864 $ 1,630
10 years $ 3,182 $ 3,182 $ 3,210 $ 3,210 $ 3,232A $ 3,232A $ 3,420
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Class C
Account closed
1 year $ 414
3 years $ 960
5 years $ 1,630
10 years $ 3,420
</TABLE>
A REFLECTS CONVERSION TO CLASS A SHARES AFTER A MAXIMUM OF SEVEN
YEARS.
FUND BASICS
INVESTMENT DETAILS
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.
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.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of 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 fund's
investments in a particular country, the fund's performance is
expected to be closely tied to economic and political conditions
within that country and to be more volatile than the performance of
more geographically diversified funds. When you sell your shares of
the fund, they could be worth more or less than what you paid for
them.
The following factors can significantly affect the 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 from
small cap stocks, and "growth" stocks can react differently from
"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.
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. For example, many foreign countries are less prepared
than the United States to properly process and calculate information
related to dates from and after January 1, 2000, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest, or principal. 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 from the U.S.
market.
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.
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. Although 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.
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 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.
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 the fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
ADVISOR JAPAN FUND seeks long-term growth of capital.
VALUING SHARES
The 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 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). The fund's
assets are valued as of this time for the purpose of computing each
class's NAV.
To the extent that the 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 the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are 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
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 fund 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 Class
A, Class T, Class B, and Class C shares of the 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
the fund, including a transaction fee if you buy or sell Class A,
Class T, Class B, and Class C 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) 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 contingent deferred sales charge
(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. Class T has a maximum front-end sales charge of
3.50% of the offering price.
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 the fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, the 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
the fund. For these purposes, FMR may consider an investor's trading
history in the fund or other Fidelity funds, and accounts under common
ownership or control.
The 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 the 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 the 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, 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, the 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:
Bankers 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:
Bankers 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 Class A, Class T, Class B or Class C is
the class's NAV, minus any applicable CDSC.
If appropriate to protect shareholders, the 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 15 or 30 days, depending on the type of account;
(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
the 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 property rather than in cash if FMR determines it is in the best
interests of the 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.
To sell shares issued with certificates, call Fidelity for
instructions. The fund no longer issues share certificates.
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 the 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 the 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 the 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 the 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) The 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. Accounts under common
ownership or control will be counted together for purposes of the four
exchange limit.
(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) The 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 fund may terminate or modify the exchange privilege 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
fund.
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 Monthly, bimonthly, (small solid bullet) To set
$100 $100 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 (small solid bullet) To set
Not Not Applicable up for a new or existing
Applicable 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>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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.
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 fund.
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
the 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 the 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 CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
The fund normally pays dividends and capital gain distributions in
December.
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:
5. REINVESTMENT OPTION. Your dividends and capital gain 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.
6. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the same class of the
fund. Your dividends will be paid in cash.
7. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
8. 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 gain distributions
will be 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 the 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 the 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, while
each fund's distributions of long-term capital gains are taxable to
you generally as capital gains.
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 the fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
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 the fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Advisor Japan is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is the fund's manager.
As of March 25, 1999, FMR had approximately $521.7 billion in
discretionary assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its 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 the 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 the fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for the 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 the fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 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 the fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
the fund. As of September 28, 1999, FIIA(U.K.)L had approximately $2.6
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 the fund.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ) serves as a
sub-adviser for the fund. As of September 28, 1999, FIJ had
approximately $16.3 billion in discretionary assets under
management.
The 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 the 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 the fund.
William Kennedy is manager of Advisor Japan Fund, which
he has managed since June 2000 . He also manages
another Fidelity fund . Since joining Fidelity in
1994, Mr. Kennedy has worked as an analyst and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
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.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. 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.
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%, and it
drops as total assets under management increase.
For October 1999, the group fee rate was 0.2805%. The individual fund
fee rate is 0.45%.
FMR pays FMR U.K., FMR Far East, and FIIA for providing sub-advisory
services and FIIA in turn pays FIIA(U.K.)L. FMR Far East will pay FIJ
for providing sub-advisory services.
FMR may, from time to time, agree to reimburse a 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 discontinued by FMR at any time, can decrease a class's
expenses and boost its performance.
FUND DISTRIBUTION
The fund is composed of multiple classes of shares. All classes of the
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 Class A, Class T,
Class B or Class C 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SALES CHARGES AND CONCESSIONS - CLASS A
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 52.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SALES CHARGES AND CONCESSIONS - CLASS T
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 52.
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:
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 yearsA 0%
A AFTER A MAXIMUM OF 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 gain 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 gain 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 gain
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 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;
8. Purchased with proceeds from the sale of front-end load shares of a
non-Advisor mutual fund for an account participating in the FundSelect
by Nationwide program;
9. 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 member of the
immediate family of a bank trust officer, a registered representative
or other employee of investment professionals having agreements with
FDC, is a spouse of one of those individuals, an account for which one
of those individuals is acting as custodian for a minor child, and a
trust account that is registered for the sole benefit of a minor child
of one of those individuals; or
10. Purchased by the Fidelity Investments Charitable Gift Fund.
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 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. 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, but excluding the
Fidelity Investments Charitable Gift Fund) 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. A member of the
immediate family of a bank trust officer, a registered representative
or other employee of investment professionals having agreements with
FDC, is a spouse of one of those individuals, an account for which one
of those individuals is acting as custodian for a minor child, and a
trust account that is registered for the sole benefit of a minor child
of one of those individuals;
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);
13. Purchased with distributions of income, principal, and capital
gains from Fidelity Defined Trusts; or
14. Purchased by the Fidelity Investments Charitable Gift Fund.
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 gain 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 the 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 the 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.
To qualify for the reinstatement privilege, you must notify Fidelity
in writing, in advance of your reinvestment.
CONVERSION FEATURE. After a maximum of 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 the 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 the 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 fund 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 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 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 the 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 the 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
the fund 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 the fund 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'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 the 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 the 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 the 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 the Class B plan, Class B 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 the 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 the 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 the 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 the Class C plan, Class C 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 gain
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 the fund has authorized such payments for Class A, Class
T, Class B and Class C.
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 the 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 fund or FDC. This prospectus and
the related SAI do not constitute an offer by the fund or by FDC to
sell shares of the fund to or to buy shares of the fund from any
person to whom it is unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each class's financial history for the period of the class's
operations. Certain information reflects financial results for a
single class share. The total returns in the table represent the rate
that an investor would have earned (or lost) on an investment in the
class (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report along with the fund's financial
highlights and financial statements, are included in the fund's annual
report. A free copy of the annual report is available upon request.
ADVISOR JAPAN FUND - CLASS A
Year ended October 31, 1999E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.13)
Net realized and unrealized 9.17
gain (loss)
Total from investment 9.04
operations
Net asset value, end of period $ 19.04
TOTAL RETURN B, C 90.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 7,130
(000 omitted)
Ratio of expenses to average 2.02% A,F
net assets
Ratio of expenses to average 2.01% A,G
net assets after expense
reductions
Ratio of net investment (1.04)% A
income (loss) to average net
assets
Portfolio turnover 152% 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 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 DECEMBER 17, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
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 JAPAN FUND - CLASS T
Year ended October 31, 1999 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.17)
Net realized and unrealized 9.18
gain (loss)
Total from investment 9.01
operations
Net asset value, end of period $ 19.01
TOTAL RETURN B, C 90.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 25,682
(000 omitted)
Ratio of expenses to average 2.27% A,F
net assets
Ratio of expenses to average 2.26% A, G
net assets after expense
reductions
Ratio of net investment (1.29)% A
income (loss) to average net
assets
Portfolio turnover 152% 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 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 DECEMBER 17, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
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 JAPAN FUND - CLASS B
Year ended October 31, 1999 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.23)
Net realized and unrealized 9.15
gain (loss)
Total from investment 8.92
operations
Net asset value, end of period $ 18.92
TOTAL RETURN B, C 89.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 20,667
(000 omitted)
Ratio of expenses to average 2.78% A, F
net assets
Ratio of expenses to average 2.77% A,G
net assets after expense
reductions
Ratio of net investment (1.79)% A
income (loss) to average net
assets
Portfolio turnover 152% 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 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 DECEMBER 17, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
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 IN VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
ADVISOR JAPAN FUND - CLASS C
Year ended October 31, 1999 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.24)
Net realized and unrealized 9.17
gain (loss)
Total from investment 8.93
operations
Net asset value, end of period $ 18.93
TOTAL RETURN B, C 89.30%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 22,213
(000 omitted)
Ratio of expenses to average 2.78% A,F
net assets
Ratio of expenses to average 2.76% A, G
net assets after expense
reductions
Ratio of net investment (1.79)% A
income (loss) to average net
assets
Portfolio turnover 152% 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 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 DECEMBER 17, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
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.
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The 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 the fund, call Fidelity at
1-888-622-3175.
The SAI, the fund's 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 fund, including the fund's 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.
The third party marks appearing above are the marks of their
respective owners.
1.728699.101 AJAF-pro-0600
FIDELITY ADVISOR LATIN AMERICA FUND, FIDELITY ADVISOR EMERGING ASIA
FUND, FIDELITY ADVISOR JAPAN FUND, FIDELITY ADVISOR INTERNATIONAL
CAPITAL APPRECIATION FUND, FIDELITY ADVISOR EUROPE CAPITAL
APPRECIATION FUND, FIDELITY ADVISOR OVERSEAS FUND, FIDELITY ADVISOR
DIVERSIFIED INTERNATIONAL FUND, FIDELITY ADVISOR GLOBAL EQUITY FUND,
FIDELITY ADVISOR HIGH YIELD FUND, FIDELITY ADVISOR HIGH INCOME FUND,
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND, FIDELITY ADVISOR MORTGAGE
SECURITIES FUND, FIDELITY ADVISOR INTERMEDIATE BOND FUND, FIDELITY
ADVISOR SHORT FIXED-INCOME FUND, AND FIDELITY ADVISOR MUNICIPAL INCOME
FUND
FUNDS OF FIDELITY ADVISOR SERIES II AND FIDELITY ADVISOR SERIES VIII
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 29, 1999
REVISED JUNE 16, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of each fund's annual reports are incorporated herein. The
annual reports are supplied with this SAI.
To obtain a free additional copy of a prospectus, dated December 29,
1999, or an annual report for Class A, Class T, Class B, Class C, and
Institutional Class of each fund, please call Fidelity(registered
trademark) at 1-888-622-3175. To obtain a free additional copy of a
prospectus for the Initial Class of Fidelity Advisor Mortgage
Securities Fund, dated December 29, 1999, or an annual report for the
Initial Class of Fidelity Advisor Mortgage Securities Fund, please
call Fidelity at 1-800-544-8544 or visit Fidelity's Web site at
www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 3
Limitations
Special Considerations 21
Regarding Canada
Special Considerations 21
Regarding Europe
Special Considerations 22
Regarding Japan
Special Considerations 22
Regarding Asia Pacific
Region (ex Japan)
Special Considerations 22
Regarding Latin America
Special Considerations 23
Regarding Russia
Special Considerations 23
Regarding Africa
Portfolio Transactions 23
Valuation 32
Performance 33
Prior Performance of Similar 142
Funds
Additional Purchase, Exchange 149
and Redemption Information
Distributions and Taxes 152
Trustees and Officers 153
Control of Investment Advisers 161
Management Contracts 162
Distribution Services 171
Transfer and Service Agent 190
Agreements
Description of the Trusts 193
Financial Statements 193
Appendix 193
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.
ACOM10-ptb-0600
1.730173.101
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
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)).
(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 15% 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 17.
For purposes of normally investing at least 65% of the fund's total
assets in securities of Latin American issuers, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.
INVESTMENT LIMITATIONS OF ADVISOR EMERGING ASIA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as 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 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 representing interests in 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 or indexed to, or representing interests in, physical commodities
or investing or trading in derivative investments); or
(7) make any 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 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) 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 its 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)).
(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 15% 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
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 (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 18.
For purposes of normally investing at least 65% of the fund's total
assets in securities of Asian emerging market issuers, FMR interprets
"total assets" to exclude collateral received for securities lending
transactions.
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)).
(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 15% 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 19.
For purposes of normally investing at least 65% of the fund's total
assets in securities of Japanese issuers, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.
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)).
(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 15% 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 20.
For purposes of normally investing at least 65% of the fund's total
assets in foreign securities, including securities of issuers located
in emerging markets, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
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)).
(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 15% 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 22.
For purposes of normally investing at least 65% of the fund's total
assets in securities of issuers that have their principal activities
in Europe, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
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)).
(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 15% 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 23.
For purposes of normally investing at least 65% of the fund's total
assets in foreign securities, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
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)).
(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 15% 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 24.
For purposes of normally investing at least 65% of the fund's total
assets in foreign securities, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
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)).
(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 15% 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 25.
For purposes of normally investing at least 65% of the fund's total
assets in common stocks, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
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)).
(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 15% 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 26.
For purposes of normally investing at least 65% of the fund's total
assets in income-producing debt securities, preferred stocks and
convertible securities, with an emphasis on lower-quality debt
securities, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
INVESTMENT LIMITATIONS OF ADVISOR HIGH 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 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)).
(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 15% 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 were 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.
For purposes of investing at least 65% of total assets in
income-producing debt securities, preferred stocks and convertible
securities, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
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)).
(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 15% 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 28.
For purposes of normally investing at least 65% of the fund's total
assets in U.S. Government securities, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
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)).
(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 15% 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 30.
For purposes of normally investing at least 65% of the fund's total
assets in investment-grade mortgage-related securities, FMR interprets
"total assets" to exclude collateral received for securities lending
transactions.
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)).
(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 15% 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 31.
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)).
(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 15% 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 32.
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)).
(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 33.
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-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.
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. For example, many
foreign countries are less prepared than the United States to properly
process and calculate information related to dates from and after
January 1, 2000. As a result, some foreign markets, brokers, banks or
securities depositories could experience at least temporary
disruptions, which could result in difficulty buying and selling
securities in certain foreign markets and pricing foreign investments,
and foreign issuers could fail to pay timely dividends, interest or
principal. 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 the 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 currently intends to participate in this program only 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.
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 represents an equity or ownership interest 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
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market 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 LIQUIDITY OR CREDIT 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 of the
liquidity or credit 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, and Advisor Emerging Asia
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.
Advisor 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.
Each of Advisor High Yield and Advisor High 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 CANADA
POLITICAL. Canada's parliamentary system of government is, in general,
stable. However, from time to time, some provinces, but particularly
Quebec, have called for a revamping of the legal and financial
relationship between the federal government in Ottawa and the
provinces. To date, referendums on Quebec sovereignty have been
defeated, but the issue remains unresolved. The Supreme Court of
Canada decided in August 1998 that if there was a "clear answer" to a
"clear question" in a referendum, then the federal government would be
obliged to negotiate with Quebec.
ECONOMIC. Canada is a major producer of commodities such as forest
products, metals, agricultural products, and energy related products
like oil, gas, and hydroelectricity. Accordingly, changes in the
supply and demand of industrial and basic materials, both domestically
and internationally, can have a significant effect on Canadian market
performance.
In addition, Canada relies considerably on the health of the United
States' economy, its biggest trading partner and largest foreign
investor. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities market increasingly sensitive to U.S. economic and market
events.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. Since Canada let its currency float in 1970, its
value has been in a steady decline against the U.S. dollar. While the
decline has helped Canada stay competitive in export markets, U.S.
investors have seen their investment returns eroded by the impact of
currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
On January 1, 1999, eleven of the fifteen member countries of the
European Union (EU) fixed their currencies irrevocably to the euro,
the new unit of currency of the European Economic and Monetary Union
(EMU). At that time each member's currency was converted at a fixed
rate to the euro. Initially, use of the euro will be confined mainly
to the wholesale financial markets, while its widespread use in the
retail sector will follow the circulation of euro banknotes and coins
on January 1, 2002. At that time, the national banknotes and coins of
participating member countries will cease to be legal tender. In
addition to adopting a single currency, member countries will no
longer control their own monetary policies. Instead, the authority to
direct monetary policy will be exercised by the new European Central
Bank.
While economic and monetary convergence in the European Union may
offer new opportunities for those investing in the region, investors
should be aware that 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. 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 political risk. One or more member
countries might exit the union, placing the currency and banking
system in jeopardy.
POLITICAL. 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 serve 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 within the aspiring countries, those countries
who are close to meeting membership criteria, and those who are not
likely to join the EMU. Realigning traditional alliances could alter
trading relationships and potentially provoke divisive socioeconomic
splits. Despite relative calm in Western Europe in recent years, the
risk of regional conflict or targeted terrorist activity could disrupt
European markets.
In the transition to the single economic system, significant political
decisions will be made which will effect the market regulation,
subsidization, and privatization across all industries, from
agricultural products to telecommunications.
ECONOMIC. As economic conditions across member states vary from robust
to dismal, there is continued concern about national-level support for
the currency and the accompanying coordination of fiscal and wage
policy among the eleven EMU member nations. According to the Maastrich
treaty, member countries must maintain inflation below 3.3%, public
debt below 60% of GDP, and a deficit of 3% or less of GDP to qualify
for participation in the euro. These requirements severely limit
member countries' ability to implement monetary policy to address
regional economic conditions. Countries that did not qualify for the
euro, such as Greece, risk being left farther behind.
FOREIGN TRADE. The EU has recently been involved in a number of trade
disputes with major trading partners, including the United States.
Tariffs and embargoes have been levied upon imports of agricultural
products and meat that have resulted in the affected nation levying
retaliatory tariffs upon imports from Europe. These disputes can
adversely affect the valuations of the European companies that export
the targeted products.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. However, investing in euro-denominated securities
entails risk of being exposed to a new currency that may not fully
reflect the strengths and weaknesses of the disparate economies that
make up the Union. This has been the case in the first six months of
1999, when the initial exchange rates of the euro versus many of the
world's major currencies steadily declined. In this environment, U.S.
and other foreign investors experienced erosion of their investment
returns in the region. In addition, many European countries rely
heavily upon export dependent businesses and any strength in the
exchange rate between the euro and the dollar can have either a
positive or a negative effect upon corporate profits.
GERMANY. The German economy is heavily industrialized, with a strong
emphasis on manufacturing and exports. Therefore, Germany's economic
growth is heavily dependent on the prosperity of its trading partners
and on currency exchange rates. Germany is closely tied to a number of
Eastern European emerging market economies and weakness in these
economies will likely dampen demand for German exports. Germany
continues to struggle with its incorporation of former East Germany
and the country as a whole faces high labor costs and high
unemployment.
FRANCE. In recent years, the country's economic growth has been hit by
a series of general strikes. France's strong labor unions reacted
negatively to government cuts driven by the country's effort to meet
EMU membership criteria. Recently, unions have demanded a lower
retirement age and a shorter work week. Economic growth also is
limited by the country's pay-as-you-go pension system; spending on
pensions accounts for about 10% of GDP.
NORDIC COUNTRIES. Faced with stronger global competition, the Nordic
countries- Norway, Finland, Denmark, and Sweden- have had to scale
down their historically generous welfare programs, resulting in drops
in domestic demand and increased unemployment. Major industries in the
region, such as forestry, agriculture, and oil, are heavily resource
dependent and face pressure as a result of high labor costs. Pension
reform, union regulation, and further cuts in liberal social programs
will likely need to be addressed as the Nordic countries face
increased international competition.
UNITED KINGDOM. The United Kingdom continues to be overtly less
enthusiastic about EMU than other countries in Europe and has not
committed itself to joining the euro. While the UK views independence
from the EMU as a competitive advantage, the country may not benefit
from its independence if economic conditions on the continent improve.
If the continental European stock markets make more compelling
prospects for economic growth, there is concern that the UK market may
lag its European counterparts.
EASTERN EUROPE. Investing in the securities of Eastern European
issuers is highly speculative and involves risks not usually
associated with investing in the more developed markets of Western
Europe.
The economies of the Eastern European nations are embarking on the
transition from communism at different paces with appropriately
different characteristics. Most Eastern European markets suffer from
thin trading activity, dubious investor protections, and often, a
dearth of reliable corporate information. Information and transaction
costs, differential taxes, and sometimes political or transfer risk
give a comparative advantage to the domestic investor rather than the
foreign investor. In addition, these markets are particularly
sensitive to political, economic, and currency events in Russia and
have recently suffered heavy losses as a result of their trading and
investment links to the troubled Russian economy and currency.
SPECIAL CONSIDERATIONS REGARDING JAPAN
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.
Despite its impressive history, investors face special risks when
investing in Japan.
ECONOMIC. Since Japan's bubble economy collapsed eight years ago, the
nation has drifted between modest growth and recession. By mid-year
1998, the world's second largest economy 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 prodding from the International Monetary
Fund and the G7 member nations. Steps have been taken to deregulate
and liberalize protected areas of the economy, but the pace of change
has been disappointedly slow.
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 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.
FOREIGN TRADE. Much of Japan's economy is dependent upon international
trade. The country is a leading exporter of automobiles and industrial
machinery as well as industrial and consumer electronics. 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. For the past two years, Southeast Asia's
economies have been mired in economic stagnation causing a steep
decline in Japan's exports to the area. Much of Japan's hopes for
economic recovery and renewed export growth is largely dependent upon
the pace of economic recovery in Southeast Asia.
NATURAL RESOURCE DEPENDENCY. An island nation with limited natural
resources, Japan is also heavily dependent upon imports of essential
products such as oil, forest products, and industrial metals.
Accordingly, Japan's industrial sector and domestic economy are highly
sensitive to fluctuations in international commodity prices. In
addition, many of these commodities are traded in U.S. dollars and any
strength in the exchange rate between the yen and the dollar can have
either a positive or a negative effect upon corporate profits.
NATURAL DISASTERS. The Japanese islands have been subjected to
periodic natural disasters including earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industries.
SPECIAL CONSIDERATIONS REGARDING ASIA PACIFIC REGION (EX JAPAN)
Many countries in the region have historically faced political
uncertainty, corruption, military intervention, and social unrest.
Examples include the ethnic, sectarian, and separatist violence found
in Indonesia, and the nuclear arms threats between India and Pakistan.
To the extent that such events continue in the future, they can be
expected to have a negative effect on economic and securities market
conditions in the region.
ECONOMIC. The economic health of the region depends, in great part, on
each country's respective ability to carry out fiscal and monetary
reforms and its ability to address the International Monetary Fund's
mandated benchmarks. The majority of the countries in the region can
be characterized as either developing or newly industrialized
economies, which tend to experience more volatile economic cycles than
developed countries. In addition, a number of countries in the region
have historically faced hyperinflation, a deterrent to productivity
and economic growth.
CURRENCY. For U.S. investors, investing in any currency entails an
additional risk that is not faced when investing in the domestic
market. Some countries in the region may impose restrictions on
converting local currency, effectively preventing foreigners from
selling assets and repatriating funds. While flexible exchange rates
through most of the region should allow greater control of domestic
liquidity conditions, the region's currencies generally face
above-average volatility with potentially negative implications for
economic and security market conditions.
NATURAL DISASTERS. The Asia Pacific region has been subjected to
periodic natural disasters such as earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industry.
CHINA AND HONG KONG. As with all transition economies, China's ability
to develop and sustain a credible legal, regulatory, monetary, and
socioeconomic system could influence the course of outside investment.
Hong Kong is closely tied to China, economically and through China's
1997 acquisition of the country as a Special Autonomous Region (SAR).
Hong Kong's success depends, in large part, on its ability to retain
the legal, financial and monetary systems that allow economic freedom
and market expansion.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
As an emerging market, Latin America has long suffered from political,
economic, and social instability. For investors, this has meant
additional risk caused by periods of regional conflict, political
corruption, totalitarianism, protectionist measures, nationalization,
hyperinflation, debt crises, and currency devaluation. However, much
has changed in the past decade. Democracy is beginning to become well
established in some countries. A move to a more mature and accountable
political environment is well under way. Domestic economies have been
deregulated and have enjoyed sound levels of growth. Privatization of
state-owned companies is almost completed. Foreign trade restrictions
have been relaxed. Large fiscal deficits have been reduced and
inflation controlled. Nonetheless, the volatile stock markets of 1998
have clearly demonstrated that investors in the region continue to
face a number of potential risks.
The telephone company industry comprises a major segment of the Latin
American market, as a whole as currently represented by the MSCI
Emerging Markets Free - Latin America Index. The pace of the
privatization of most Latin America's telephone companies has been
accelerating and is generally expected to ameliorate the industry's
worsening infrastructure problems and substantially expand and improve
services to the consumer. Following the privatization and breakup of
many of Latin America's telecommunications monopolies, telephone
companies are now faced with an increasingly competitive operating
environment that could substantially affect their profit margins
adversely. In addition, because these companies are regulated
providers of a highly visible basic service, in a sovereign stress
scenario, a company may not be permitted to pass on increased
operating expenses or devaluation-related price increases directly and
immediately to consumers. Attempts by management to undertake
restructuring initiatives, such as cutting employment overhead, could
also meet with strong government and union opposition. Latin America
countries have periodically experienced sharp economic slowdowns, high
interest rates, and spiraling inflation. In this environment, the
earnings and profits of telephone companies could be particularly
vulnerable. Access to capital could be substantially restricted by the
market's reaction to regional or global economic crisis. Because
telephone companies issue among Latin America's most liquid stocks,
they may be among the first companies whose shares will be sold by
foreign investors seeking to repatriate their overseas investments in
times of regional or global crisis. Accordingly, shares of telephone
companies may be subject to a high degree of price volatility in these
situations.
POLITICAL. While investors recently have benefited from friendlier
forms of government, the Latin American political climate is still
vulnerable to sudden changes. Many countries in the region have been
in recession and have faced high unemployment. Corruption remains part
of the political landscape. This could lead to social unrest and
changes in governments that are less favorable to investors. The
investor friendly trends of social, economic, and market reforms seen
over the past several years could be reversed. Also, as has
historically been the case, the stock markets may be subject to
increased volatility as some countries approach elections: Argentina,
Chile, Mexico, and Peru.
SOCIAL UNREST. Latin America continues to suffer from one of the most
inequitable distributions of wealth in the world, as well as rampant
delinquency and street crime. The recent reforms and the move to
democracy, which were initially welcomed by the population, so far
have failed to significantly improve the living conditions of the
majority of people. This could lead to social unrest, occasional labor
strikes, rebellion, or civil war.
ECONOMIC. Many countries in the region have experienced periods of
hyperinflation which adversely impacted and may continue to impact
their economies and local stock markets. Despite signs that inflation
has been tamed, the risk of hyperinflation persists.
FOREIGN TRADE. One key to the recent economic growth in the region has
been the reduction of trade barriers and a series of free-trade
agreements. These are currently under pressure given the recent
macro-economic imbalances between many trading partners. One example
would be Mercosur, which includes Argentina, Brazil, Uruguay, and
Paraguay. As long as the economies perform well and the regimes
maintain similar economic and currency policies, all will benefit from
this agreement. However, the recent devaluation of Brazil's currency,
combined with recessions in the region, has created tension between
the largest trading partners, Brazil and Argentina. This could
threaten the pace of vital trade integration and regional economic
stability.
CURRENCY. For U.S. investors, investing in any foreign market entails
the risk of currency fluctuations; any weakness in the local currency
could erode the investment returns to U.S. investors upon currency
conversion. As is typical of emerging markets, Latin America has a
long history of currency devaluation, evidenced by the Mexican peso
crisis and the more recent Brazilian devaluation. The region remains
exposed to currency speculators, particularly if the economic or
political conditions worsen. Countries where the currency is
artificially pegged to the dollar are most at risk. For example,
predatory speculation may shift to Argentina if the cost of
maintaining the currency board reaches an unsustainable level given
the negative impact of the Brazilian devaluation, the economic
recession, the deterioration of the foreign trade balances, and the
mounting fiscal deficit.
SOVEREIGN DEBT. Although austerity programs in many countries have
significantly reduced fiscal deficits, the region is still facing
significant debt. Interest on the debt is subject to market conditions
and may reach levels that would impair economic activity and create a
difficult and costly environment for borrowers. In addition,
governments may be forced to reschedule or freeze their debt
repayment, which could negatively impact the stock market.
NATURAL RESOURCES DEPENDENCY. Commodities such as agricultural
products, minerals, and metals account for a significant percentage of
exports of many Latin American countries. As a result, these economies
have been particularly sensitive to the fluctuation of commodity
prices. As an example, Chile has been affected by the change in the
prices of copper and pulp, which has adversely affected its economy
and stock market. Similarly, because the U.S. is Mexico's largest
trading partner - accounting for more than four-fifths of its exports
- any economic downturn in the U.S. economy could adversely impact the
Mexican economy and stock market.
NATURAL DISASTERS. The region has been subjected to periodic natural
disasters, such as earthquakes and floods. These events have often
inflicted substantial damage upon the populations and the economy.
More recently, weather disorders attributed to the "El Nino" effect
have placed a serious drag on the economy of some countries, such as
Peru and Ecuador.
FINANCIAL REPORTING STANDARDS. As is typical of many emerging markets,
many companies in the region are still controlled by families and
their associates. Accordingly, these owners may not always act in the
best interests of public shareholders. In addition, rules for
disclosing financial information are less stringent, which increases
the difficulty of accessing reliable and viable information.
SPECIAL CONSIDERATIONS REGARDING RUSSIA
Investing in Russian securities is highly speculative and involves
greater risks than generally encountered when investing in the
securities markets of the U.S. and most other developed countries.
Over the past century, Russia has experienced political and economic
turbulence and has endured decades of communist rule under which tens
of millions of its citizens were collectivized into state agricultural
and industrial enterprises. For most of the past decade, Russia's
government has been faced with the daunting task of stabilizing its
domestic economy, while transforming it into a modern and efficient
structure able to compete in international markets and respond to the
needs of its citizens. However, to date, many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other economic assistance have been squandered or stolen. In this
environment, there is always the risk that the nation's government
will abandon the current program of economic reform and replace it
with radically different political and economic policies that would be
detrimental to the interests of foreign investors. This could entail a
return to a centrally planned economy and nationalization of private
enterprises similar to what existed under the old Soviet Union. As
recently as 1998, the government imposed a moratorium on the repayment
of its international debt and the restructuring of the repayment
terms.
Foreign investors also face a high degree of currency risk when
investing in Russian securities. In a surprise move in August 1998,
Russia devalued the ruble, defaulted on short-term domestic bonds, and
declared a moratorium on commercial debt payments. In light of these
and other recent government actions, foreign investors face the
possibility of further devaluations. In addition, there is the risk
the government may impose capital controls on foreign portfolio
investments in the event of extreme financial or political crisis.
Such capital controls would prevent the sale of a portfolio of foreign
assets and the repatriation of proceeds.
Many of Russia's businesses have failed to mobilize the available
factors of production because the country's privatization program
virtually ensured the predominance of the old management teams that
are largely non-market-oriented in their management approach. A
combination of poor accounting standards, inept management, endemic
corruption, and limited shareholder rights pose a significant risk,
particularly to foreign investors.
Compared to most national stock markets, the Russian securities market
suffers from a variety of problems not encountered in more developed
markets. Among these are thin trading activity, inadequate regulatory
protection for the rights of investors, and lax custody procedures.
Additionally, there is a dearth of solid corporate information
available to investors.
The Russian economy is heavily dependent upon the export of a range of
commodities including most industrial metals, forestry products, oil,
and gas. Accordingly, it is strongly affected by international
commodity prices and is particularly vulnerable to any weakening in
global demand for these products.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of over
50 countries and 840 million people. Civil wars, coups, and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, the continent is home to an abundance of natural
resources, including natural gas, aluminum, crude oil, copper, iron,
bauxite, cotton, diamonds, and timber. Wealthier African countries
generally have strong connections to European partners; evidence of
these relationships is seen in the growing market capitalization and
foreign investment. Economic performance remains closely tied to world
commodity markets, particularly oil, as well as agricultural
conditions, such as drought.
Several Northern African countries 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 have a strong impact on many of their
natural resources, as was the case in 1995, when severe drought
adversely affected economic growth.
Several African countries have active equity markets, many established
since 1989. The oldest market, in Egypt, was established in 1883,
while the youngest, in Zambia, was established in 1994. The mean age
for all equity markets is 40 years old. A total of 1,830 firms are
listed on the respective exchanges. With the exception of the
relatively large and liquid South African stock market, sub-Saharan
Africa is probably the riskiest of all the world's emerging markets.
During the past two decades, sub-Saharan Africa has lagged behind
other developing regions in economic growth. The area attracts only a
modest share of foreign direct investment and remains highly dependent
on foreign aid. The financial markets are small and underdeveloped and
offer little regulatory protection for investors. Except for South
Africa, the most fundamental problems in all of the countries in the
region are the absence of an effective court system to ensure the
enforceability of contracts. Investors in the area generally face a
high risk of continuing political and economic instability as well as
currency exchange rate volatility.
SOUTH AFRICA. South Africa has a highly developed and industrialized
economy. It is rich in mineral resources and is the world's largest
producer and exporter of gold. The nation's new government has made
remarkable progress in consolidating the nation's peaceful transition
to democracy and in redressing the socioeconomic disparities created
by apartheid. It has a sophisticated financial structure with a large
and active stock exchange that ranks 19th in the world in terms of
market capitalization. Nevertheless, investors in South Africa face a
number of risks common to other developing regions. The nation's heavy
dependence upon the export of natural resources makes its economy and
stock market vulnerable to weak global demand and declines in
commodity prices. The country's currency reserves have been a constant
problem and its currency can be vulnerable to devaluation. There is
also the risk that ethnic and civic conflict could result in the
abandonment of many of the nation's free market reforms to the
detriment of shareholders.
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 October 31, 1999 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
1999+ October 31 50%*
Advisor Emerging Asia
1999 October 31 62%
Advisor Japan
1999++ October 31 152%*
Advisor International Capital
Appreciation
1999 October 31 218%
1998+++ October 31 199%*
Advisor Europe Capital
Appreciation
1999++ October 31 164%*
Advisor Overseas
1999 October 31 85%
1998 October 31 74%
Advisor Diversified
International
1999++ October 31 78%*
Advisor Global Equity
1999++ October 31 69%*
Advisor High Yield
1999 October 31 61%
1998 October 31 75%
Advisor High Income
1999++++ October 31 331%*
Advisor Government Investment
1999 October 31 174%
1998 October 31 243%
Advisor Mortgage Securities
1999 October 31 183%
1998 October 31 262%
Advisor Intermediate Bond
1999 October 31 138%
12/1/97-10/31/98 October 31 176%*
Advisor Short Fixed-Income
1999 October 31 139%
1998 October 31 124%
Advisor Municipal Income
1999 October 31 23%
1998 October 31 36%
* 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 International Capital Appreciation commenced operations on
November 3, 1997.
++++ Advisor High Income commenced operations on September 7, 1999.
Prior to June 16, 1999, Advisor Emerging Asia operated as Fidelity
Advisor Emerging Asia, Inc. (Closed-End Fund), a closed-end fund. On
June 15, 1999, the Closed-End Fund was reorganized as an open-end fund
through a transfer of all its assets and liabilities to Advisor
Emerging Asia. Shareholders of the Closed-End Fund received Class A
shares of Advisor Emerging Asia in exchange for their shares of the
Closed-End Fund.
Significant changes in brokerage commissions paid by the Closed-End
Fund and those paid by Advisor Emerging Asia may result from its
reorganization as an open-end fund, which must continuously meet
redemptions.
The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.
The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended Total Amount Paid
Advisor Latin America October 31
1999+ $ 14,837
Advisor Emerging Asia October 31
1999 486,161
1998 270,016
1997 678,317
Advisor Japan October 31
1999++ 119,713
Advisor International Capital October 31
Appreciation
1999 304,587
1998+++ 176,523
Advisor Europe Capital October 31
Appreciation
1999++ 102,306
Advisor Overseas October 31
1999 3,471,595
1998 3,132,182
1997 2,761,658
Advisor Diversified October 31
International
1999++ 103,668
Advisor Global Equity October 31
1999++ 13,316
Advisor High Yield October 31
1999 163,687
1998 238,891
1997 269,517
Advisor High Income October 31
1999++++ 600
+ 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 commenced operations on
November 3, 1997.
++++ Advisor High Income commenced operations on September 7, 1999.
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 and FBSJ, as applicable, 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 and FBSJ 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 1999. NFSC, FBS, and FBSJ are
paid on a commission basis.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Total Amount Paid
Fiscal Year Ended To NFSC To FBS To FBSJ
Advisor Japan October 31
1999+ $ 0 $ 0 $ 290
Advisor International Capital October 31
Appreciation
1999 0 0 518
1998++ 0 105 0
Advisor Europe Capital October 31
Appreciation
1999+ 8 0 0
Advisor Overseas October 31
1999 1,854 0 132
1998 8,154 29,509 0
1997 5,510 198,192 0
Advisor Diversified October 31
International
1999+ 685 0 0
Advisor Global Equity October 31
1999+ 222 0 0
Advisor High Yield October 31
1999 4,035 0 0
1998 15,062 0 0
1997 12,656 0 0
</TABLE>
+ Advisor Japan, Advisor Europe Capital Appreciation, Advisor
Diversified International, and Advisor Global Equity commenced
operations on December 17, 1998.
++ Advisor International Capital Appreciation commenced operations on
November 3, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 1999 % of Aggregate Commissions % of Aggregate Dollar Amount
Paid to NFSC of Transactions Effected
through NFSC
Advisor Japan+ October 31 0% 0%
Advisor International Capital October 31 0% 0%
Appreciation
Advisor Europe Capital October 31 0.01% 0.12%
Appreciation+,(dagger)
Advisor Overseas(dagger) October 31 0.05% 0.19%
Advisor Diversified October 31 0.66% 0.68%
International+,(dagger)
Advisor Global Equity+,(dagger) October 31 1.67% 6.59%
Advisor High Yield October 31 2.47% 1.77%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
% of Aggregate Commissions % of Aggregate Dollar Amount % of Aggregate Commissions
Paid to FBS of Transactions Effected Paid to FBSJ
through FBS
Advisor Japan+ 0% 0% 0.24%
Advisor International Capital 0% 0% 0.17%
Appreciation
Advisor Europe Capital 0% 0% 0%
Appreciation+,(dagger)
Advisor Overseas(dagger) 0% 0% 0%
Advisor Diversified 0% 0% 0%
International+,(dagger)
Advisor Global Equity+,(dagger) 0% 0% 0%
Advisor High Yield 0% 0% 0%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
% of Aggregate Dollar Amount
of Transactions Effected
through FBSJ
Advisor Japan+ 0.36%
Advisor International Capital 0.43%
Appreciation
Advisor Europe Capital 0%
Appreciation+,(dagger)
Advisor Overseas(dagger) 0.01%
Advisor Diversified 0%
International+,(dagger)
Advisor Global Equity+,(dagger) 0%
Advisor High Yield 0%
</TABLE>
+ Advisor Japan, Advisor Europe Capital Appreciation, Advisor
Diversified International and Advisor Global Equity commenced
operations on December 17, 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.
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
1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 1999 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*
Advisor Latin America+ October 31 $ 9,689 $ 3,556,432
Advisor Emerging Asia October 31 197,329 45,928,456
Advisor Japan++ October 31 99,339 97,553,867
Advisor International Capital October 31 247,828 143,973,563
Appreciation
Advisor Europe Capital October 31 86,029 44,377,089
Appreciation++
Advisor Overseas October 31 2,985,875 1,672,624,495
Advisor Diversified October 31 85,222 50,737,604
International++
Advisor Global Equity++ October 31 8,638 5,107,723
Advisor High Yield October 31 147,615 78,480,045
Advisor High Income+++ October 31 600 144,104
</TABLE>
* The provision of research services was not necessarily a factor in
the placement of all this business with such firms.
+ 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 High Income commenced operations on September 7, 1999.
For the fiscal year ended October 31, 1999 Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, and Advisor Municipal Income paid no
brokerage commissions to firms that provided research services.
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 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 indicate future returns. Each class's share price,
yield, 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 2000. 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% to 9%.
Of course, no assurance can be given that a class of the municipal
fund will achieve any specific tax-exempt yield. While the 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>
2000 TAX RATES AND TAX-EQUIVALENT YIELDS
Federal If individual tax-exempt
yield is:
Taxable Income* Marginal 2% 3% 4% 5%
Single Return Joint Return Rate** Then taxable-equivalent yield
is:
$ 0 - 26,250 $ 0 - 43,850 15.0% 2.35% 3.53% 4.71% 5.88%
$ 26,251 - 63,550 $ 43,851 - 105,950 28.0% 2.78% 4.17% 5.56% 6.94%
$ 63,551 - 132,600 $ 105,951 - 161,450 31.0% 2.90% 4.35% 5.80% 7.25%
$ 132,601 - 288,350 $ 161,451 - 288,350 36.0% 3.13% 4.69% 6.25% 7.81%
$ 288,351 - and over $ 288,351 - and over 39.6% 3.31% 4.97% 6.62% 8.28%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000 TAX RATES AND TAX-EQUIVALENT YIELDS
Federal If individual tax-exempt
yield is:
Taxable Income* Marginal 6% 7% 8% 9%
Single Return Joint Return Rate** Then taxable-equivalent yield
is:
$ 0 - 26,250 $ 0 - 43,850 15.0% 7.06% 8.24% 9.41% 10.59%
$ 26,251 - 63,550 $ 43,851 - 105,950 28.0% 8.33% 9.72% 11.11% 12.50%
$ 63,551 - 132,600 $ 105,951 - 161,450 31.0% 8.70% 10.14% 11.59% 13.04%
$ 132,601 - 288,350 $ 161,451 - 288,350 36.0% 9.38% 10.94% 12.50% 14.06%
$ 288,351 - and over $ 288,351 - and over 39.6% 9.93% 11.59% 13.25% 14.90%
</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.
The municipal fund may invest a portion of its assets in obligations
that are subject to federal income tax. When the 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.
Prior to June 16, 1999, Advisor Emerging Asia operated as the
Closed-End Fund. The closed-end fund had the same investment objective
and substantially similar investment policies as Advisor Emerging
Asia. On June 15, 1999, the Closed-End Fund was reorganized as an
open-end fund through a transfer of all its assets and liabilities to
Advisor Emerging Asia. Shareholders of the Closed-End Fund received
Class A shares of Advisor Emerging Asia in exchange for their shares
of the Closed-End Fund.
Class A, Class T, Class B, Class C, and Institutional Class shares of
Advisor Emerging Asia were not offered prior to June 16, 1999. The
returns presented below for Advisor Emerging Asia for periods prior to
June 16, 1999 do not reflect Class A, Class T, Class B, Class C, or
Institutional Class total expenses. If the effect of Class A, Class T,
Class B, Class C, and Institutional Class total expenses was
reflected, returns may be lower than those shown because Class A,
Class T, Class B, Class C, and Institutional Class shares of Advisor
Emerging Asia may have higher total expenses than the Closed-End Fund.
RETURN CALCULATIONS. 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, 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 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 for each class of each
fund are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund 13-Week Long-Term Moving 39-Week Long-Term Moving
Average* Average*
Advisor Latin America - Class A 11.26 11.46
Advisor Latin America - Class T 11.24 11.45
Advisor Latin America - Class B 11.20 11.43
Advisor Latin America - Class C 11.20 11.43
Advisor Latin America - 11.28 11.48
Institutional Class
Advisor Emerging Asia - Class A 14.93 13.64
Advisor Emerging Asia - Class T 14.92 13.64
Advisor Emerging Asia - Class B 14.90 13.63
Advisor Emerging Asia - Class C 14.90 13.63
Advisor Emerging Asia - 14.93 13.64
Institutional Class
Advisor Japan - Class A 17.04 13.63
Advisor Japan - Class T 17.01 13.61
Advisor Japan - Class B 16.94 13.57
Advisor Japan - Class C 16.95 13.58
Advisor Japan - Institutional 17.08 13.65
Advisor International Capital 14.19 12.95
Appreciation - Class A
Advisor International Capital 14.15 12.91
Appreciation - Class T
Advisor International Capital 13.98 12.78
Appreciation - Class B
Advisor International Capital 13.98 12.77
Appreciation - Class C
Advisor International Capital 14.22 12.98
Appreciation - Institutional
Class
Advisor Europe Capital 10.27 10.15
Appreciation - Class A
Advisor Europe Capital 10.26 10.14
Appreciation - Class T
Advisor Europe Capital 10.21 10.11
Appreciation - Class B
Advisor Europe Capital 10.21 10.11
Appreciation - Class C
Advisor Europe Capital 10.28 10.16
Appreciation - Institutional
Class
Advisor Overseas - Class A 19.71 18.72
Advisor Overseas - Class T 19.95 18.96
Advisor Overseas - Class B 19.40 18.46
Advisor Overseas - Class C 19.71 18.76
Advisor Overseas - 19.73 18.72
Institutional
Advisor Diversified 12.48 11.68
International - Class A
Advisor Diversified 12.46 11.67
International - Class T
Advisor Diversified 12.41 11.64
International - Class B
Advisor Diversified 12.41 11.64
International - Class C
Advisor Diversified 12.50 11.70
International -
Institutional Class
Advisor Global Equity - Class A 11.31 11.00
Advisor Global Equity - Class T 11.29 10.99
Advisor Global Equity - Class B 11.24 10.96
Advisor Global Equity - Class C 11.24 10.96
Advisor Global Equity - 11.32 11.01
Institutional
</TABLE>
* On October 29, 1999.
HISTORICAL EQUITY FUND RESULTS. The following table shows each class's
return for the fiscal periods ended October 31, 1999.
Class A and Class T have a maximum front-end sales charge of 5.75% and
3.50%, respectively, which is included in the 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
average annual and cumulative returns.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Average Annual Returns1 Cumulative Returns1
One Year Five Years Life of Fund* One Year Five Years
Advisor Latin America - Class A N/A N/A N/A N/A N/A
Advisor Latin America - Class T N/A N/A N/A N/A N/A
Advisor Latin America - Class B N/A N/A N/A N/A N/A
Advisor Latin America - Class C N/A N/A N/A N/A N/A
Advisor Latin America - N/A N/A N/A N/A N/A
Institutional Class
Advisor Emerging Asia - Class A 47.21% -0.81% 1.53% 47.21% -3.98%
Advisor Emerging Asia - Class T 50.72% -0.34% 1.96% 50.72% -1.69%
Advisor Emerging Asia - Class B 50.88% -0.04% 2.41% 50.88% -0.20%
Advisor Emerging Asia - Class C 54.78% 0.32% 2.56% 54.78% 1.61%
Advisor Emerging Asia - 56.40% 0.40% 2.63% 56.40% 2.01%
Institutional Class
Advisor Japan - Class A N/A N/A N/A N/A N/A
Advisor Japan - Class T N/A N/A N/A N/A N/A
Advisor Japan - Class B N/A N/A N/A N/A N/A
Advisor Japan - Class C N/A N/A N/A N/A N/A
Advisor Japan - Institutional N/A N/A N/A N/A N/A
Class
Advisor International Capital 40.95% N/A 19.22% 40.95% N/A
Appreciation - Class A
Advisor International Capital 44.37% N/A 20.48% 44.37% N/A
Appreciation - Class T
Advisor International Capital 43.35% N/A 20.17% 43.35% N/A
Appreciation - Class B
Advisor International Capital 47.60% N/A 21.87% 47.60% N/A
Appreciation - Class C
Advisor International Capital 49.55% N/A 22.94% 49.55% N/A
Appreciation - Institutional
Class
Advisor Europe Capital N/A N/A N/A N/A N/A
Appreciation - Class A
Advisor Europe Capital N/A N/A N/A N/A N/A
Appreciation - Class T
Advisor Europe Capital N/A N/A N/A N/A N/A
Appreciation - Class B
Advisor Europe Capital N/A N/A N/A N/A N/A
Appreciation - Class C
Advisor Europe Capital N/A N/A N/A N/A N/A
Appreciation - Institutional
Class
Advisor Overseas - Class A 20.69% 10.07% 9.40% 20.69% 61.55%
Advisor Overseas - Class T 23.27% 10.54% 9.64% 23.27% 65.02%
Advisor Overseas - Class B 22.00% 10.49% 9.76% 22.00% 64.69%
Advisor Overseas - Class C 26.21% 10.76% 9.76% 26.21% 66.71%
Advisor Overseas - 28.30% 11.71% 10.25% 28.30% 73.98%
Institutional Class
Advisor Diversified N/A N/A N/A N/A N/A
International - Class A
Advisor Diversified N/A N/A N/A N/A N/A
International - Class T
Advisor Diversified N/A N/A N/A N/A N/A
International - Class B
Advisor Diversified N/A N/A N/A N/A N/A
International - Class C
Advisor Diversified N/A N/A N/A N/A N/A
International -
Institutional Class
Advisor Global Equity - Class A N/A N/A N/A N/A N/A
Advisor Global Equity - Class T N/A N/A N/A N/A N/A
Advisor Global Equity - Class B N/A N/A N/A N/A N/A
Advisor Global Equity - Class C N/A N/A N/A N/A N/A
Advisor Global Equity - N/A N/A N/A N/A N/A
Institutional Class
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Cumulative Returns1
Life of Fund*
Advisor Latin America - Class A 9.71%
Advisor Latin America - Class T 12.13%
Advisor Latin America - Class B 10.80%
Advisor Latin America - Class C 14.70%
Advisor Latin America - 16.70%
Institutional Class
Advisor Emerging Asia - Class A 8.87%
Advisor Emerging Asia - Class T 11.47%
Advisor Emerging Asia - Class B 14.28%
Advisor Emerging Asia - Class C 15.21%
Advisor Emerging Asia - 15.67%
Institutional Class
Advisor Japan - Class A 79.45%
Advisor Japan - Class T 83.45%
Advisor Japan - Class B 84.20%
Advisor Japan - Class C 88.30%
Advisor Japan - Institutional 90.90%
Class
Advisor International Capital 41.94%
Appreciation - Class A
Advisor International Capital 44.94%
Appreciation - Class T
Advisor International Capital 44.20%
Appreciation - Class B
Advisor International Capital 48.30%
Appreciation - Class C
Advisor International Capital 50.90%
Appreciation - Institutional
Class
Advisor Europe Capital -0.47%
Appreciation - Class A
Advisor Europe Capital 1.71%
Appreciation - Class T
Advisor Europe Capital -0.20%
Appreciation - Class B
Advisor Europe Capital 3.90%
Appreciation - Class C
Advisor Europe Capital 5.80%
Appreciation - Institutional
Class
Advisor Overseas - Class A 135.34%
Advisor Overseas - Class T 140.39%
Advisor Overseas - Class B 142.82%
Advisor Overseas - Class C 142.85%
Advisor Overseas - 153.44%
Institutional Class
Advisor Diversified 23.00%
International - Class A
Advisor Diversified 25.64%
International - Class T
Advisor Diversified 24.60%
International - Class B
Advisor Diversified 28.60%
International - Class C
Advisor Diversified 30.80%
International -
Institutional Class
Advisor Global Equity - Class A 11.12%
Advisor Global Equity - Class T 13.58%
Advisor Global Equity - Class B 12.10%
Advisor Global Equity - Class C 16.10%
Advisor Global Equity - 18.10%
Institutional Class
</TABLE>
* Life of fund figures are from commencement of operations (December
21, 1998 for Advisor Latin America; December 17, 1998 for Advisor
Japan, Advisor Europe Capital Appreciation, Advisor Diversified
International, and Advisor Global Equity; November 3, 1997 for Advisor
International Capital Appreciation; April 23, 1990 for Advisor
Overseas) through the fiscal periods ended October 31, 1999. Life of
fund figures for Advisor Emerging Asia are from March 25, 1994
(commencement of operations of the Closed-End Fund) through the fiscal
period ended 1999.
Initial offering of each class of Advisor Emerging Asia took place on
June 16, 1999. Returns prior to June 16, 1999 are those of the
Closed-End Fund, which has no 12b-1 fee. If Class A's, Class T's,
Class B's and Class C's total expenses, including 12b-1 fees, had been
reflected, returns may have been lower.
1 Initial offering of Class A for Advisor 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.
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 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.
Note: If FMR had not reimbursed certain class expenses during these
periods, Class A's, Class T's, except for Advisor Overseas Class B's,
Class C's, and Institutional Class's returns would have been lower.
HISTORICAL BOND FUND RESULTS. The following table shows each class's
yield, tax-equivalent yield, and returns for the fiscal period ended
October 31, 1999.
Class A and Class T of Advisor High Yield, Advisor High Income,
Advisor Government Investment, Advisor Mortgage Securities, and
Advisor Municipal Income 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 has a maximum front-end sales
charge of 3.75% and 2.75%, respectively, which is included in the
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 High Yield, Advisor
High Income, Advisor Government Investment, Advisor Intermediate Bond,
and Advisor Municipal Income have a 12b-1 fee of 0.15%, 0.25%, 0.90%
and 1.00%, respectively, which is included in the 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.
The tax-equivalent yield for Advisor Municipal Income is based on a
36% federal income tax rate. Note that the municipal fund may invest
in securities whose income is subject to the federal alternative
minimum tax.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Average Annual Returns1
Thirty-Day Yield Tax Equivalent Yield One Year Five Years
Advisor High Yield - Class A 9.70% N/A 6.66% 8.75%
Advisor High Yield - Class T 9.73% N/A 7.91% 9.05%
Advisor High Yield - Class B 9.46% N/A 6.10% 8.77%
Advisor High Yield - Class C 9.35% N/A 10.00% 8.98%
Advisor High Yield - 10.54% N/A 12.05% 9.86%
Institutional Class
Advisor High Income - Class A N/A N/A N/A N/A
Advisor High Income - Class T N/A N/A N/A N/A
Advisor High Income - Class B N/A N/A N/A N/A
Advisor High Income - Class C N/A N/A N/A N/A
Advisor High Income - N/A N/A N/A N/A
Institutional Class
Advisor Government Investment 5.72% N/A -6.21% 5.94%
- Class A
Advisor Government Investment 5.72% N/A -5.15% 6.12%
- Class T
Advisor Government Investment 5.30% N/A -6.88% 5.88%
- Class B
Advisor Government Investment 5.20% N/A -3.36% 6.13%
- Class C
Advisor Government Investment 6.24% N/A -1.55% 7.07%
- Institutional Class
Advisor Mortgage Securities - N/A N/A -1.96% 6.73%
Class A
Advisor Mortgage Securities - 6.01% N/A -0.78% 6.96%
Class T
Advisor Mortgage Securities - 5.66% N/A -2.49% 7.05%
Class B
Advisor Mortgage Securities - 6.53% N/A 3.09% 7.85%
Institutional Class
Advisor Mortgage Securities - 6.57% N/A 3.14% 7.91%
Initial Class
Advisor Intermediate Bond - 5.86% N/A -2.78% 5.27%
Class A
Advisor Intermediate Bond - 5.84% N/A -1.80% 5.46%
Class T
Advisor Intermediate Bond - 5.37% N/A -2.51% 5.34%
Class B
Advisor Intermediate Bond - 5.29% N/A -0.77% 5.24%
Class C
Advisor Intermediate Bond - 6.32% N/A 1.19% 6.33%
Institutional Class
Advisor Short Fixed-Income - 5.93% N/A 1.57% 5.02%
Class A
Advisor Short Fixed-Income - 5.91% N/A 1.57% 5.06%
Class T
Advisor Short Fixed-Income - 5.07% N/A 1.33% 5.03%
Class C
Advisor Short Fixed-Income - 6.20% N/A 3.27% 5.50%
Institutional Class
Advisor Municipal Income - 4.57% 7.14% -6.99% 5.19%
Class A
Advisor Municipal Income - 4.55% 7.11% -5.95% 5.46%
Class T
Advisor Municipal Income - 4.08% 6.38% -7.82% 5.16%
Class B
Advisor Municipal Income - 3.97% 6.20% -4.17% 5.41%
Class C
Advisor Municipal Income - 4.92% 7.69% -2.31% 6.36%
Institutional Class
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Average Annual Returns1 Cumulative Returns1
Ten Years/ Life of Fund One Year Five Years Ten Years/ Life of Fund
Advisor High Yield - Class A 12.75% 6.66% 52.14% 231.92%
Advisor High Yield - Class T 12.90% 7.91% 54.19% 236.38%
Advisor High Yield - Class B 12.84% 6.10% 52.24% 234.80%
Advisor High Yield - Class C 12.81% 10.00% 53.74% 233.76%
Advisor High Yield - 13.32% 12.05% 60.03% 249.13%
Institutional Class
Advisor High Income - Class A N/A N/A N/A -4.51%*
Advisor High Income - Class T N/A N/A N/A -3.27%*
Advisor High Income - Class B N/A N/A N/A -4.77%*
Advisor High Income - Class C N/A N/A N/A -0.91%*
Advisor High Income - N/A N/A N/A 0.28%*
Institutional Class
Advisor Government Investment 6.35% -6.21% 33.46% 85.13%
- Class A
Advisor Government Investment 6.44% -5.15% 34.58% 86.68%
- Class T
Advisor Government Investment 6.44% -6.88% 33.09% 86.61%
- Class B
Advisor Government Investment 6.40% -3.36% 34.64% 85.98%
- Class C
Advisor Government Investment 6.92% -1.55% 40.74% 95.23%
- Institutional Class
Advisor Mortgage Securities - 7.24% -1.96% 38.46% 101.23%
Class A
Advisor Mortgage Securities - 7.36% -0.78% 39.98% 103.44%
Class T
Advisor Mortgage Securities - 7.56% -2.49% 40.61% 107.27%
Class B
Advisor Mortgage Securities - 7.81% 3.09% 45.92% 112.06%
Institutional Class
Advisor Mortgage Securities - 7.84% 3.14% 46.31% 112.63%
Initial Class
Advisor Intermediate Bond - 6.50% -2.78% 29.30% 87.73%
Class A
Advisor Intermediate Bond - 6.60% -1.80% 30.45% 89.40%
Class T
Advisor Intermediate Bond - 6.49% -2.51% 29.71% 87.54%
Class B
Advisor Intermediate Bond - 6.44% -0.77% 29.09% 86.64%
Class C
Advisor Intermediate Bond - 7.15% 1.19% 35.95% 99.52%
Institutional Class
Advisor Short Fixed-Income - 6.07% 1.57% 27.75% 80.35%
Class A
Advisor Short Fixed-Income - 6.09% 1.57% 27.98% 80.67%
Class T
Advisor Short Fixed-Income - 6.08% 1.33% 27.81% 80.43%
Class C
Advisor Short Fixed-Income - 6.32% 3.27% 30.68% 84.49%
Institutional Class
Advisor Municipal Income - 6.68% -6.99% 28.81% 90.98%
Class A
Advisor Municipal Income - 6.82% -5.95% 30.45% 93.42%
Class T
Advisor Municipal Income - 6.78% -7.82% 28.58% 92.69%
Class B
Advisor Municipal Income - 6.74% -4.17% 30.12% 92.01%
Class C
Advisor Municipal Income - 7.27% -2.31% 36.09% 101.78%
Institutional Class
</TABLE>
* For Advisor High Income, life of fund figures are from commencement
of operations (September 7, 1999) through the fund's fiscal period
ended October 31, 1999.
1 Initial offering of Class A for each fund (except Advisor High
Income and Advisor Mortgage Securities) took place on September 3,
1996. Class A returns prior to September 3, 1996 (except for Advisor
Intermediate Bond) are those of Class T which reflect a 12b-1 fee of
0.25% for Advisor High Yield, 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 High Yield, Advisor Government Investment, and
Advisor Municipal Income would have been higher. For Advisor
Intermediate Bond 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 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 High Yield, Advisor Government
Investment, and 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.
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.
Initial offering of Class C for each fund (except Advisor High Income
and Advisor Mortgage Securities) took place on November 3, 1997.
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 Intermediate Bond 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.
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.
Initial offering of Institutional Class of Advisor High Yield,
Advisor Government Investment, Advisor Short Fixed-Income, and 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% for Advisor High Yield, Advisor Government
Investment, 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 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, Class A's, Class T's, Class B's, Class C's, and Institutional
Class's 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 S&P 500 and DJIA comparisons are provided to
show how each class's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Because each of Advisor High Yield, Advisor High Income,
Advisor Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, Advisor Short Fixed-Income, and Advisor 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 and Advisor Emerging
Asia 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 10-year
period ended October 31, 1999 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 December 21, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor Latin America would have grown to $10,971, including the
effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS A
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 10,971 $ 0 $ 0 $ 10,971
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS A INDEXES
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,454 $ 12,097 $ 10,262
</TABLE>
* From December 21, 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 Latin America on December 21, 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 December 21, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class T of
Advisor Latin America would have grown to $11,213, including the
effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS T
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 11,213 $ 0 $ 0 $ 11,213
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS T INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,454 $ 12,097 $ 10,262
</TABLE>
* From December 21, 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 Latin America on December 21, 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
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 December 21, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class B of
Advisor Latin America would have grown to $11,080, including the
effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS B
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 11,080 $ 0 $ 0 $ 11,080
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS B INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,454 $ 12,097 $ 10,262
</TABLE>
* From December 21, 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 Latin America on December 21, 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 December 21, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class C of
Advisor Latin America would have grown to $11,470, including the
effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS C
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 11,470 $ 0 $ 0 $ 11,470
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LATIN AMERICA - CLASS C INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,454 $ 12,097 $ 10,262
</TABLE>
* From December 21, 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 Latin America on December 21, 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 December 21, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Latin America would have grown to
$11,670.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR LATIN AMERICA -
InstitutionaL CLASS
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 11,670 $ 0 $ 0 $ 11,670
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR LATIN AMERICA - INDEXES
InstitutionaL CLASS
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,454 $ 12,097 $ 10,262
</TABLE>
* From December 21, 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 Latin America on December 21, 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 March 25, 1994 (commencement of operations of
the Closed-End Fund) to October 31, 1999, a hypothetical $10,000
investment in Class A of Advisor Emerging Asia would have grown to
$10,887, including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS A
Period Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
October 31 Investment Distributions Gain Distributions
1999 $ 10,033 $ 260 $ 594 $ 10,887
1998 $ 6,424 $ 166 $ 380 $ 6,970
1997 $ 7,747 $ 111 $ 288 $ 8,146
1996 $ 10,655 $ 145 $ 94 $ 10,894
1995 $ 9,318 $ 88 $ 82 $ 9,488
1994* $ 10,702 $ 0 $ -15 $ 10,687
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS A INDEXES
Period Ended S&P 500 DJIA Cost of Living**
October 31
1999 $ 33,137 $ 31,854 $ 11,426
1998 $ 26,368 $ 25,113 $ 11,141
1997 $ 21,615 $ 21,386 $ 10,978
1996 $ 16,361 $ 17,010 $ 10,754
1995 $ 13,184 $ 13,130 $ 10,442
1994* $ 10,427 $ 10,524 $ 10,156
</TABLE>
* From March 25, 1994 (commencement of operations of the Closed-End
Fund).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Emerging Asia on March 25, 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 $10,685. 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 $196 for dividends and $480 for capital gain
distributions. Initial offering of Class A of Advisor Emerging Asia
took place on June 16, 1999. Returns prior to June 16, 1999 are those
of the Closed-End Fund, which had no 12b-1 fee. If Class A's total
expenses, including 12b-1 fee, had been reflected, returns may have
been lower.
During the period from March 25, 1994 (commencement of operations of
the Closed-End Fund) to October 31, 1999, a hypothetical $10,000
investment in Class T of Advisor Emerging Asia would have grown to
$11,147, including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS T
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 10,273 $ 266 $ 608 $ 11,147
1998 $ 6,577 $ 171 $ 389 $ 7,137
1997 $ 7,932 $ 113 $ 295 $ 8,340
1996 $ 10,909 $ 149 $ 96 $ 11,154
1995 $ 9,540 $ 91 $ 84 $ 9,715
1994* $ 10,957 $ 0 $ -15 $ 10,942
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS T INDEXES
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 33,137 $ 31,854 $ 11,426
1998 $ 26,368 $ 25,113 $ 11,141
1997 $ 21,615 $ 21,386 $ 10,978
1996 $ 16,361 $ 17,010 $ 10,754
1995 $ 13,184 $ 13,130 $ 10,442
1994* $ 10,427 $ 10,524 $ 10,156
</TABLE>
* From March 25, 1994 (commencement of operations of the Closed-End
Fund).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Emerging Asia on March 25, 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 $10,702. 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 $198 for dividends and $486 for capital gain
distributions. Initial offering of Class T of Advisor Emerging Asia
took place on June 16, 1999. Returns prior to June 16, 1999 are those
of the Closed-End Fund, which had no 12b-1 fee. If Class T's total
expenses, including 12b-1 fee, had been reflected, returns may have
been lower.
During the period from March 25, 1994 (commencement of operations of
the Closed-End Fund) to October 31, 1999, a hypothetical $10,000
investment in Class B of Advisor Emerging Asia would have grown to
$11,428, including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS B
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 10,524 $ 275 $ 629 $ 11,428
1998 $ 6,816 $ 176 $ 404 $ 7,396
1997 $ 8,220 $ 118 $ 305 $ 8,643
1996 $ 11,305 $ 153 $ 100 $ 11,558
1995 $ 9,887 $ 93 $ 87 $ 10,067
1994* $ 11,355 $ 0 $ -16 $ 11,339
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS B INDEXES
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 33,137 $ 31,854 $ 11,426
1998 $ 26,368 $ 25,113 $ 11,141
1997 $ 21,615 $ 21,386 $ 10,978
1996 $ 16,361 $ 17,010 $ 10,754
1995 $ 13,184 $ 13,130 $ 10,442
1994* $ 10,427 $ 10,524 $ 10,156
</TABLE>
* From March 25, 1994 (commencement of operations of the Closed-End
Fund).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Emerging Asia on March 25, 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 $10,727. 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 $206 for dividends and $504 for capital
gain distributions. Initial offering of Class B of Advisor Emerging
Asia took place on June 16, 1999. Returns prior to June 16, 1999 are
those of the Closed-End Fund, which had no 12b-1 fee. If Class B's
total expenses, including 12b-1 fee, had been reflected, returns may
have been lower.
During the period from March 25, 1994 (commencement of operations of
the Closed-End Fund) to October 31, 1999, a hypothetical $10,000
investment in Class C of Advisor Emerging Asia would have grown to
$11,521.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS C
Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 10,617 $ 275 $ 629 $ 11,521
1998 $ 6,816 $ 176 $ 404 $ 7,396
1997 $ 8,220 $ 118 $ 305 $ 8,643
1996 $ 11,305 $ 153 $ 100 $ 11,558
1995 $ 9,887 $ 93 $ 87 $ 10,067
1994* $ 11,355 $ 0 $ -16 $ 11,339
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING ASIA - CLASS C INDEXES
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 33,137 $ 31,854 $ 11,426
1998 $ 26,368 $ 25,113 $ 11,141
1997 $ 21,615 $ 21,386 $ 10,978
1996 $ 16,361 $ 17,010 $ 10,754
1995 $ 13,184 $ 13,130 $ 10,442
1994* $ 10,427 $ 10,524 $ 10,156
</TABLE>
* From March 25, 1994 (commencement of operations of the Closed-End
Fund).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Emerging Asia on March 25, 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 $10,727. 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 $206 for dividends and $504 for capital
gain distributions. Initial offering of Class C of Advisor Emerging
Asia took place on June 16, 1999. Returns prior to June 16, 1999 are
those of the Closed-End Fund, which had no 12b-1 fee. If Class C's
total expenses, including 12b-1 fee, had been reflected, returns may
have been lower.
During the period from March 25, 1994 (commencement of operations of
the Closed-End Fund) to October 31, 1999, a hypothetical $10,000
investment in Institutional Class of Advisor Emerging Asia would have
grown to $11,567.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EMERGING ASIA -
INSTITUTIONAL CLASS
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 10,660 $ 276 $ 631 $ 11,567
1998 $ 6,816 $ 176 $ 404 $ 7,396
1997 $ 8,220 $ 118 $ 305 $ 8,643
1996 $ 11,305 $ 153 $ 100 $ 11,558
1995 $ 9,887 $ 93 $ 87 $ 10,067
1994* $ 11,355 $ 0 $ -16 $ 11,339
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EMERGING ASIA - INDEXES
INSTITUTIONAL CLASS
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 33,137 $ 31,854 $ 11,426
1998 $ 26,368 $ 25,113 $ 11,141
1997 $ 21,615 $ 21,386 $ 10,978
1996 $ 16,361 $ 17,010 $ 10,754
1995 $ 13,184 $ 13,130 $ 10,442
1994* $ 10,427 $ 10,524 $ 10,156
</TABLE>
* From March 25, 1994 (commencement of operations of the Closed-End
Fund).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Emerging Asia on March 25, 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 $10,727. 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
$206 for dividends and $504 for capital gain distributions. Initial
offering of Institutional Class of Advisor Emerging Asia took place on
June 16, 1999. Returns prior to June 16, 1999 are those of the
Closed-End Fund.
During the period from December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor Japan would have grown to $17,945, including the effect of
Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR JAPAN - CLASS A
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 17,945 $ 0 $ 0 $ 17,945
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR JAPAN - CLASS A INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Japan on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class T of
Advisor Japan would have grown to $18,345, including the effect of
Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR JAPAN - CLASS T
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 18,345 $ 0 $ 0 $ 18,345
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR JAPAN - CLASS T INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Japan on December 17, 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 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class B of
Advisor Japan would have grown to $18,420, including the effect of
Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR JAPAN - CLASS B
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 18,420 $ 0 $ 0 $ 18,420
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR JAPAN - CLASS B INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Japan on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class C of
Advisor Japan would have grown to $18,830, including the effect of
Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR JAPAN - CLASS C
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 18,830 $ 0 $ 0 $ 18,830
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR JAPAN - CLASS C INDEXES
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Japan on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Japan would have grown to $19,090.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR JAPAN - InstitutionaL
CLASS
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 19,090 $ 0 $ 0 $ 19,090
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR JAPAN - InstitutionaL INDEXES
CLASS
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Japan on December 17, 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 November 3, 1997 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor International Capital Appreciation would have amounted to
$14,194, 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
1999 $ 14,194 $ 0 $ 0 $ 14,194
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**
1999 $ 14,930 $ 14,442 $ 10,408
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, 1999, a hypothetical $10,000 investment in Class T of
Advisor International Capital Appreciation would have amounted to
$14,494, 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
1999 $ 14,494 $ 0 $ 0 $ 14,494
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**
1999 $ 14,930 $ 14,442 $ 10,408
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, 1999, a hypothetical $10,000 investment in Class B of
Advisor International Capital Appreciation would have amounted to
$14,420, 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
1999 $ 14,420 $ 0 $ 0 $ 14,420
1998* $ 9,990 $ 0 $ 0 $ 9,990
</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**
1999 $ 14,930 $ 14,442 $ 10,408
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
$14,830.
<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
1999 $ 14,830 $ 0 $ 0 $ 14,830
1998* $ 9,980 $ 0 $ 0 $ 9,980
</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**
1999 $ 14,930 $ 14,442 $ 10,408
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, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor International Capital Appreciation
would have grown to $15,090.
<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
1999 $ 15,090 $ 0 $ 0 $ 15,090
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**
1999 $ 14,930 $ 14,442 $ 10,408
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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor Europe Capital Appreciation would have amounted to $9,953,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EUROPE CAPITAL
APPRECIATION - CLASS A
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 9,953 $ 0 $ 0 $ 9,953
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EUROPE CAPITAL INDEXES
APPRECIATION - CLASS A
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Europe Capital Appreciation on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class T of
Advisor Europe Capital Appreciation would have grown to $10,171,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR EUROPE CAPITAL
APPRECIATION - CLASS T
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 10,171 $ 0 $ 0 $ 10,171
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR EUROPE CAPITAL INDEXES
APPRECIATION - CLASS T
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Europe Capital Appreciation on December 17, 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 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class B of
Advisor Europe Capital Appreciation would have amounted to $9,980,
including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR Europe Capital
Appreciation - CLASS B
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 9,980 $ 0 $ 0 $ 9,980
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR Europe Capital INDEXES
Appreciation - CLASS B
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Europe Capital Appreciation on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class C of
Advisor Europe Capital Appreciation would have grown to $10,390,
including the effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR Europe Capital
Appreciation - CLASS C
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 10,390 $ 0 $ 0 $ 10,390
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR Europe Capital INDEXES
Appreciation - CLASS C
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Europe Capital Appreciation on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Europe Capital Appreciation would have
grown to $10,580.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR Europe Capital
Appreciation - InstitutionaL
CLASS
Fiscal Period Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999* $ 10,580 $ 0 $ 0 $ 10,580
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADVISOR Europe Capital INDEXES
Appreciation - InstitutionaL
CLASS
Fiscal Period Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Europe Capital Appreciation on December
17, 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 period from April 23, 1990 (commencement of operations of
the fund) to October 31, 1999, a hypothetical $10,000 investment in
Class A of Advisor Overseas would have grown to $23,534, 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
1999 $ 19,406 $ 1,607 $ 2,521 $ 23,534
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
1999 $ 52,137 $ 51,048 $ 13,049
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).
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 $12,901. 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 $943 for dividends and $1,734 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, 1999, a hypothetical $10,000 investment in
Class T of Advisor Overseas would have grown to $24,039, 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
1999 $ 20,101 $ 1,360 $ 2,578 $ 24,039
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
1999 $ 52,137 $ 51,048 $ 13,049
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).
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 $12,736. 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 $762 for dividends and $1,776 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, 1999, a hypothetical $10,000 investment in
Class B of Advisor Overseas would have grown to $24,282.
<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
1999 $ 20,250 $ 1,376 $ 2,656 $ 24,282
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
1999 $ 52,137 $ 51,048 $ 13,049
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).
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 $12,829. 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 $1,840 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, 1999 a hypothetical $10,000 investment in
Class C of Advisor Overseas would have grown to $24,285.
<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
1999 $ 20,174 $ 1,494 $ 2,617 $ 24,285
1998 $ 16,047 $ 1,120 $ 1,923 $ 19,090
1997 $ 16,690 $ 980 $ 892 $ 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
1999 $ 52,137 $ 51,048 $ 13,049
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).
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 $12,905. 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 $866 for dividends and $1,818 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, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Overseas would have grown to $25,344.
<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
1999 $ 20,620 $ 2,019 $ 2,705 $ 25,344
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
1999 $ 52,137 $ 51,048 $ 13,049
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).
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 $13,319. 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 $1,200 for
dividends and $1,840 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 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor Diversified International would have amounted to $12,300,
including the effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor DIVERSIFIED
International - 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
1999* $ 12,300 $ 0 $ 0 $ 12,300
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor DIVERSIFIED INDEXES
International - CLASS A
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Diversified International on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class T of
Advisor Diversified International would have amounted to $12,564,
including the effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor DIVERSIFIED
International - 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
1999* $ 12,564 $ 0 $ 0 $ 12,564
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor DIVERSIFIED INDEXES
International - CLASS T
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Diversified International on December 17, 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 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class B of
Advisor Diversified International would have amounted to $12,460,
including the effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor DIVERSIFIED
International - 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
1999* $ 12,460 $ 0 $ 0 $ 12,460
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor DIVERSIFIED INDEXES
International - CLASS B
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Diversified International on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class C of
Advisor Diversified International would have amounted to $12,860,
including the effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor DIVERSIFIED
International - 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
1999* $ 12,860 $ 0 $ 0 $ 12,860
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor DIVERSIFIED INDEXES
International - CLASS C
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Diversified International on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Diversified International would have
grown to $13,080.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor DIVERSIFIED
International -
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
1999* $ 13,080 $ 0 $ 0 $ 13,080
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor DIVERSIFIED INDEXES
International -
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Diversified International on December
17, 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 period from December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class A of
Advisor Global Equity would have amounted to $11,112, including the
effect of Class A's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor GLOBAL EQUITY - 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
1999* $ 11,112 $ 0 $ 0 $ 11,112
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor GLOBAL EQUITY - CLASS A INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Global Equity on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class T of
Advisor Global Equity would have amounted to $11,358, including the
effect of Class T's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor GLOBAL EQUITY - 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
1999* $ 11,358 $ 0 $ 0 $ 11,358
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor GLOBAL EQUITY - CLASS T INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Global Equity on December 17, 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
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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class B of
Advisor Global Equity would have amounted to $11,210, including the
effect of Class B's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor GLOBAL EQUITY - 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
1999* $ 11,210 $ 0 $ 0 $ 11,210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor GLOBAL EQUITY - CLASS B INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Global Equity on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Class C of
Advisor Global Equity would have amounted to $11,610, including the
effect of Class C's maximum CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor GLOBAL EQUITY - 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
1999* $ 11,610 $ 0 $ 0 $ 11,610
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor GLOBAL EQUITY - CLASS C INDEXES
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Global Equity on December 17, 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 December 17, 1998 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in
Institutional Class of Advisor Global Equity would have grown to
$11,810.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Advisor GLOBAL EQUITY -
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
1999* $ 11,810 $ 0 $ 0 $ 11,810
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Advisor GLOBAL EQUITY - INDEXES
INSTITUTIONAL CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living**
1999* $ 11,677 $ 12,253 $ 10,262
</TABLE>
* From December 17, 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 Global Equity on December 17, 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 October 31, 1999, a hypothetical
$10,000 investment in Class A of Advisor High Yield would have grown
to $33,192, 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
1999 $ 11,808 $ 19,521 $ 1,863 $ 33,192
1998 $ 11,776 $ 16,342 $ 1,523 $ 29,641
1997 $ 13,730 $ 16,282 $ 1,041 $ 31,053
1996 $ 13,061 $ 13,041 $ 858 $ 26,960
1995 $ 12,647 $ 10,431 $ 831 $ 23,909
1994 $ 11,914 $ 8,083 $ 783 $ 20,780
1993 $ 12,753 $ 7,102 $ 390 $ 20,245
1992 $ 11,755 $ 5,051 $ 0 $ 16,806
1991 $ 10,746 $ 3,034 $ 0 $ 13,780
1990 $ 8,654 $ 1,212 $ 0 $ 9,866
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor High Yield on November 1, 1989, 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 $31,777. 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 $11,117 for dividends and $1,041 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor High Yield would have grown
to $33,638, 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
1999 $ 11,985 $ 19,763 $ 1,890 $ 33,638
1998 $ 11,952 $ 16,582 $ 1,546 $ 30,080
1997 $ 13,921 $ 16,535 $ 1,056 $ 31,512
1996 $ 13,243 $ 13,239 $ 870 $ 27,352
1995 $ 12,813 $ 10,567 $ 842 $ 24,222
1994 $ 12,071 $ 8,189 $ 793 $ 21,053
1993 $ 12,920 $ 7,196 $ 395 $ 20,511
1992 $ 11,909 $ 5,117 $ 0 $ 17,026
1991 $ 10,887 $ 3,073 $ 0 $ 13,960
1990 $ 8,768 $ 1,227 $ 0 $ 9,995
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor High Yield on November 1, 1989, 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 $32,021. 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 $11,248 for dividends and $1,054 for capital
gain distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class B of Advisor High Yield would have grown
to $33,480.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - CLASS B INDEXES
Fiscal Year Ended
October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 12,363 $ 19,192 $ 1,925 $ 33,480
1998 $ 12,341 $ 16,215 $ 1,580 $ 30,136
1997 $ 14,370 $ 16,299 $ 1,088 $ 31,757
1996 $ 13,690 $ 13,184 $ 899 $ 27,773
1995 $ 13,255 $ 10,649 $ 871 $ 24,775
1994 $ 12,497 $ 8,391 $ 821 $ 21,709
1993 $ 13,389 $ 7,457 $ 409 $ 21,255
1992 $ 12,341 $ 5,303 $ 0 $ 17,644
1991 $ 11,282 $ 3,185 $ 0 $ 14,467
1990 $ 9,086 $ 1,272 $ 0 $ 10,358
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor High Yield on November 1, 1989, 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 $31,467. 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 $11,161 for dividends and $1,093 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, 1999, a hypothetical
$10,000 investment in Class C of Advisor High Yield would have grown
to $33,376.
<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
1999 $ 12,357 $ 19,098 $ 1,921 $ 33,376
1998 $ 12,335 $ 16,155 $ 1,578 $ 30,068
1997 $ 14,370 $ 16,299 $ 1,088 $ 31,757
1996 $ 13,690 $ 13,184 $ 899 $ 27,773
1995 $ 13,255 $ 10,649 $ 871 $ 24,775
1994 $ 12,497 $ 8,391 $ 821 $ 21,709
1993 $ 13,389 $ 7,457 $ 409 $ 21,255
1992 $ 12,341 $ 5,303 $ 0 $ 17,644
1991 $ 11,282 $ 3,185 $ 0 $ 14,467
1990 $ 9,086 $ 1,272 $ 0 $ 10,358
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor High Yield on November 1, 1989, 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 $31,367. 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 $11,125 for dividends and $1,091 for
capital gain distributions. Initial offering of Class 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor High Yield would
have grown to $34,913.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR HIGH YIELD - INDEXES
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
1999 $ 12,152 $ 20,806 $ 1,955 $ 34,913
1998 $ 12,152 $ 17,409 $ 1,596 $ 31,157
1997 $ 14,169 $ 17,277 $ 1,079 $ 32,525
1996 $ 13,512 $ 13,781 $ 888 $ 28,181
1995 $ 13,110 $ 11,009 $ 861 $ 24,980
1994 $ 12,508 $ 8,487 $ 822 $ 21,817
1993 $ 13,389 $ 7,457 $ 409 $ 21,255
1992 $ 12,341 $ 5,303 $ 0 $ 17,644
1991 $ 11,282 $ 3,185 $ 0 $ 14,467
1990 $ 9,086 $ 1,272 $ 0 $ 10,358
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor High Yield on November 1, 1989, 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 $33,476. 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 $11,874 for
dividends and $1,093 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 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class A of Advisor Government Investment would
have grown to $18,513 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
1999 $ 9,525 $ 8,543 $ 445 $ 18,513
1998 $ 10,251 $ 8,071 $ 479 $ 18,801
1997 $ 9,893 $ 6,776 $ 463 $ 17,132
1996 $ 9,709 $ 5,687 $ 454 $ 15,850
1995 $ 9,893 $ 4,827 $ 463 $ 15,183
1994 $ 9,167 $ 3,616 $ 429 $ 13,212
1993 $ 10,374 $ 3,302 $ 271 $ 13,947
1992 $ 9,955 $ 2,439 $ 0 $ 12,394
1991 $ 9,811 $ 1,614 $ 0 $ 11,425
1990 $ 9,361 $ 781 $ 0 $ 10,142
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Government Investment on November 1, 1989, 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 $19,192. 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 $6,125 for dividends and $358 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor Government Investment would
have grown to $18,668, 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
1999 $ 9,640 $ 8,577 $ 451 $ 18,668
1998 $ 10,386 $ 8,122 $ 486 $ 18,994
1997 $ 10,023 $ 6,844 $ 469 $ 17,336
1996 $ 9,837 $ 5,758 $ 460 $ 16,055
1995 $ 10,023 $ 4,890 $ 469 $ 15,382
1994 $ 9,287 $ 3,665 $ 434 $ 13,386
1993 $ 10,510 $ 3,345 $ 275 $ 14,130
1992 $ 10,085 $ 2,472 $ 0 $ 12,557
1991 $ 9,940 $ 1,635 $ 0 $ 11,575
1990 $ 9,484 $ 791 $ 0 $ 10,275
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Government Investment on November 1, 1989, 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 $19,242. 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 $6,169 for dividends and $363 for
capital gain distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class B of Advisor Government Investment would
have grown to $18,661.
<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
1999 $ 9,989 $ 8,205 $ 467 $ 18,661
1998 $ 10,752 $ 7,833 $ 503 $ 19,088
1997 $ 10,376 $ 6,671 $ 485 $ 17,532
1996 $ 10,193 $ 5,685 $ 477 $ 16,355
1995 $ 10,387 $ 4,900 $ 486 $ 15,773
1994 $ 9,613 $ 3,750 $ 450 $ 13,813
1993 $ 10,892 $ 3,466 $ 285 $ 14,643
1992 $ 10,451 $ 2,561 $ 0 $ 13,012
1991 $ 10,301 $ 1,693 $ 0 $ 11,994
1990 $ 9,828 $ 820 $ 0 $ 10,648
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Government Investment on November 1, 1989, 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 $18,875. 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 $6,022 for dividends
and $376 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, 1999, a hypothetical
$10,000 investment in Class C of Advisor Government Investment would
have grown to $18,598.
<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
1999 $ 9,979 $ 8,152 $ 467 $ 18,598
1998 $ 10,751 $ 7,808 $ 503 $ 19,062
1997 $ 10,376 $ 6,671 $ 485 $ 17,532
1996 $ 10,193 $ 5,685 $ 477 $ 16,355
1995 $ 10,387 $ 4,900 $ 486 $ 15,773
1994 $ 9,613 $ 3,750 $ 450 $ 13,813
1993 $ 10,892 $ 3,466 $ 285 $ 14,643
1992 $ 10,451 $ 2,561 $ 0 $ 13,012
1991 $ 10,301 $ 1,693 $ 0 $ 11,994
1990 $ 9,828 $ 820 $ 0 $ 10,648
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Government Investment on November 1, 1989, 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 $18,829. 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 $5,997 for dividends
and $376 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Government
Investment would have grown to $19,523.
<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
1999 $ 9,957 $ 9,100 $ 466 $ 19,523
1998 $ 10,741 $ 8,586 $ 502 $ 19,829
1997 $ 10,365 $ 7,200 $ 485 $ 18,050
1996 $ 10,183 $ 6,027 $ 476 $ 16,686
1995 $ 10,387 $ 5,083 $ 486 $ 15,956
1994 $ 9,624 $ 3,797 $ 450 $ 13,871
1993 $ 10,892 $ 3,466 $ 285 $ 14,643
1992 $ 10,451 $ 2,561 $ 0 $ 13,012
1991 $ 10,301 $ 1,693 $ 0 $ 11,994
1990 $ 9,828 $ 820 $ 0 $ 10,648
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Government Investment on November 1,
1989, 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 $19,817. 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 $6,516 for dividends and $376 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, 1999, a hypothetical
$10,000 investment in Class A of Advisor Mortgage Securities would
have grown to $20,123, 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
1999 $ 9,806 $ 9,427 $ 890 $ 20,123
1998 $ 10,255 $ 8,636 $ 659 $ 19,550
1997 $ 10,311 $ 7,582 $ 612 $ 18,505
1996 $ 10,161 $ 6,386 $ 471 $ 17,018
1995 $ 10,292 $ 5,393 $ 259 $ 15,944
1994 $ 9,656 $ 4,039 $ 148 $ 13,843
1993 $ 10,077 $ 3,421 $ 62 $ 13,560
1992 $ 9,993 $ 2,585 $ 0 $ 12,578
1991 $ 10,077 $ 1,760 $ 0 $ 11,837
1990 $ 9,478 $ 802 $ 0 $ 10,280
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Mortgage Securities on November 1, 1989, 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 $20,542. 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 $6,648 for dividends and $552 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor Mortgage Securities would
have grown to $20,344, including the effect of Class T's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR MORTGAGE SECURITIES - INDEXES
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
1999 $ 9,934 $ 9,509 $ 901 $ 20,344
1998 $ 10,389 $ 8,728 $ 668 $ 19,785
1997 $ 10,446 $ 7,671 $ 620 $ 18,737
1996 $ 10,295 $ 6,469 $ 478 $ 17,242
1995 $ 10,427 $ 5,464 $ 262 $ 16,153
1994 $ 9,783 $ 4,092 $ 150 $ 14,025
1993 $ 10,209 $ 3,466 $ 63 $ 13,738
1992 $ 10,124 $ 2,619 $ 0 $ 12,743
1991 $ 10,209 $ 1,784 $ 0 $ 11,993
1990 $ 9,603 $ 812 $ 0 $ 10,415
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Mortgage Securities on November 1, 1989, 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 $20,637. 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 $6,714 for dividends and $559 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, 1999, a hypothetical
$10,000 investment in Class B of Advisor Mortgage Securities would
have grown to $20,727.
<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
1999 $ 10,295 $ 9,502 $ 930 $ 20,727
1998 $ 10,756 $ 8,815 $ 691 $ 20,262
1997 $ 10,825 $ 7,865 $ 642 $ 19,332
1996 $ 10,668 $ 6,704 $ 495 $ 17,867
1995 $ 10,806 $ 5,661 $ 272 $ 16,739
1994 $ 10,138 $ 4,239 $ 156 $ 14,533
1993 $ 10,580 $ 3,591 $ 65 $ 14,236
1992 $ 10,491 $ 2,714 $ 0 $ 13,205
1991 $ 10,580 $ 1,847 $ 0 $ 12,427
1990 $ 9,951 $ 842 $ 0 $ 10,793
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Mortgage Securities on November 1, 1989, 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 $20,653. 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 $6,775 for dividends
and $580 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Mortgage
Securities would have grown to $21,206.
<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
1999 $ 10,285 $ 9,986 $ 935 $ 21,206
1998 $ 10,756 $ 9,123 $ 692 $ 20,571
1997 $ 10,815 $ 7,974 $ 642 $ 19,431
1996 $ 10,668 $ 6,704 $ 495 $ 17,867
1995 $ 10,806 $ 5,661 $ 272 $ 16,739
1994 $ 10,138 $ 4,239 $ 156 $ 14,533
1993 $ 10,580 $ 3,591 $ 65 $ 14,236
1992 $ 10,491 $ 2,714 $ 0 $ 13,205
1991 $ 10,580 $ 1,847 $ 0 $ 12,427
1990 $ 9,951 $ 842 $ 0 $ 10,793
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Mortgage Securities on November 1,
1989, 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 $21,169. 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 $7,029 for dividends and $580 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, 1999, a hypothetical
$10,000 investment in Initial Class of Advisor Mortgage Securities
would have grown to $21,263.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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
1999 $ 10,305 $ 10,022 $ 936 $ 21,263
1998 $ 10,776 $ 9,147 $ 693 $ 20,616
1997 $ 10,825 $ 7,982 $ 643 $ 19,450
1996 $ 10,668 $ 6,704 $ 495 $ 17,867
1995 $ 10,806 $ 5,661 $ 272 $ 16,739
1994 $ 10,138 $ 4,239 $ 156 $ 14,533
1993 $ 10,580 $ 3,591 $ 65 $ 14,236
1992 $ 10,491 $ 2,714 $ 0 $ 13,205
1991 $ 10,580 $ 1,847 $ 0 $ 12,427
1990 $ 9,951 $ 842 $ 0 $ 10,793
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MORTGAGE SECURITIES - INITIAL INDEXES
CLASS
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Initial
Class of Advisor Mortgage Securities on November 1, 1989, 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 $21,191. 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 $7,040 for
dividends and $580 for capital gain distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class A of Advisor Intermediate Bond would have
grown to $18,773, 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
1999 $ 9,532 $ 9,241 $ 0 $ 18,773
1998 $ 9,967 $ 8,620 $ 0 $ 18,587
1997 $ 9,801 $ 7,503 $ 0 $ 17,304
1996 $ 9,736 $ 6,461 $ 0 $ 16,197
1995 $ 9,893 $ 5,542 $ 0 $ 15,435
1994 $ 9,514 $ 4,461 $ 0 $ 13,975
1993 $ 10,421 $ 4,027 $ 0 $ 14,448
1992 $ 9,884 $ 2,852 $ 0 $ 12,736
1991 $ 9,736 $ 1,863 $ 0 $ 11,599
1990 $ 9,292 $ 863 $ 0 $ 10,155
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Intermediate Bond on November 1, 1989, 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 $19,455. 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 $6,619 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor Intermediate Bond would have
grown to $18,940, 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
1999 $ 9,641 $ 9,299 $ 0 $ 18,940
1998 $ 10,071 $ 8,686 $ 0 $ 18,757
1997 $ 9,912 $ 7,578 $ 0 $ 17,490
1996 $ 9,847 $ 6,533 $ 0 $ 16,380
1995 $ 9,996 $ 5,600 $ 0 $ 15,596
1994 $ 9,613 $ 4,507 $ 0 $ 14,120
1993 $ 10,529 $ 4,069 $ 0 $ 14,598
1992 $ 9,987 $ 2,882 $ 0 $ 12,869
1991 $ 9,837 $ 1,882 $ 0 $ 11,719
1990 $ 9,388 $ 873 $ 0 $ 10,261
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Intermediate Bond on November 1, 1989, 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 $19,508. 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 $6,665 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, 1999, a hypothetical
$10,000 investment in Class B of Advisor Intermediate Bond would have
grown to $18,754.
<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
1999 $ 9,904 $ 8,850 $ 0 $ 18,754
1998 $ 10,346 $ 8,340 $ 0 $ 18,686
1997 $ 10,173 $ 7,351 $ 0 $ 17,524
1996 $ 10,115 $ 6,425 $ 0 $ 16,540
1995 $ 10,269 $ 5,585 $ 0 $ 15,854
1994 $ 9,875 $ 4,584 $ 0 $ 14,459
1993 $ 10,827 $ 4,184 $ 0 $ 15,011
1992 $ 10,269 $ 2,964 $ 0 $ 13,233
1991 $ 10,115 $ 1,936 $ 0 $ 12,051
1990 $ 9,654 $ 897 $ 0 $ 10,551
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Intermediate Bond on November 1, 1989, 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 $19,053. 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 $6,476 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, 1999, a hypothetical
$10,000 investment in Class C of Advisor Intermediate Bond would have
grown to $18,664.
<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
1999 $ 9,876 $ 8,788 $ 0 $ 18,664
1998 $ 10,327 $ 8,302 $ 0 $ 18,629
1997 $ 10,173 $ 7,351 $ 0 $ 17,524
1996 $ 10,115 $ 6,425 $ 0 $ 16,540
1995 $ 10,269 $ 5,585 $ 0 $ 15,854
1994 $ 9,875 $ 4,584 $ 0 $ 14,459
1993 $ 10,827 $ 4,184 $ 0 $ 15,011
1992 $ 10,269 $ 2,964 $ 0 $ 13,233
1991 $ 10,115 $ 1,936 $ 0 $ 12,051
1990 $ 9,654 $ 897 $ 0 $ 10,551
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Intermediate Bond on November 1, 1989, 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 $19,013. 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 $6,454 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Intermediate Bond
would have grown to $19,952.
<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
1999 $ 9,913 $ 10,039 $ 0 $ 19,952
1998 $ 10,365 $ 9,353 $ 0 $ 19,718
1997 $ 10,192 $ 8,123 $ 0 $ 18,315
1996 $ 10,135 $ 6,985 $ 0 $ 17,120
1995 $ 10,288 $ 5,966 $ 0 $ 16,254
1994 $ 9,894 $ 4,782 $ 0 $ 14,676
1993 $ 10,837 $ 4,267 $ 0 $ 15,104
1992 $ 10,269 $ 2,981 $ 0 $ 13,250
1991 $ 10,115 $ 1,936 $ 0 $ 12,051
1990 $ 9,654 $ 897 $ 0 $ 10,551
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Intermediate Bond on November 1, 1989,
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 $20,273. 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
$7,105 for dividends and $0 for capital gain distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class A of Advisor Short Fixed-Income would have
grown to $18,035, 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
1999 $ 9,058 $ 8,977 $ 0 $ 18,035
1998 $ 9,286 $ 8,203 $ 0 $ 17,489
1997 $ 9,216 $ 7,194 $ 0 $ 16,410
1996 $ 9,276 $ 6,258 $ 0 $ 15,534
1995 $ 9,375 $ 5,372 $ 0 $ 14,747
1994 $ 9,385 $ 4,520 $ 0 $ 13,905
1993 $ 9,989 $ 3,947 $ 0 $ 13,936
1992 $ 9,850 $ 2,921 $ 0 $ 12,771
1991 $ 9,771 $ 1,898 $ 0 $ 11,669
1990 $ 9,523 $ 878 $ 0 $ 10,401
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Short Fixed-Income on November 1, 1989, 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 $19,397. 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 $6,579 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor Short Fixed-Income would have
grown to $18,067, 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
1999 $ 9,058 $ 9,009 $ 0 $ 18,067
1998 $ 9,286 $ 8,235 $ 0 $ 17,521
1997 $ 9,256 $ 7,223 $ 0 $ 16,479
1996 $ 9,286 $ 6,265 $ 0 $ 15,551
1995 $ 9,375 $ 5,372 $ 0 $ 14,747
1994 $ 9,385 $ 4,520 $ 0 $ 13,905
1993 $ 9,989 $ 3,947 $ 0 $ 13,936
1992 $ 9,850 $ 2,921 $ 0 $ 12,771
1991 $ 9,771 $ 1,898 $ 0 $ 11,669
1990 $ 9,523 $ 878 $ 0 $ 10,401
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Short Fixed-Income on November 1, 1989, 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 $19,435. 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 $6,598 for dividends and $0 for capital gain
distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class C of Advisor Short Fixed-Income would have
grown to $18,043.
<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
1999 $ 9,206 $ 8,837 $ 0 $ 18,043
1998 $ 9,427 $ 8,209 $ 0 $ 17,636
1997 $ 9,397 $ 7,333 $ 0 $ 16,730
1996 $ 9,427 $ 6,361 $ 0 $ 15,788
1995 $ 9,518 $ 5,453 $ 0 $ 14,971
1994 $ 9,528 $ 4,589 $ 0 $ 14,117
1993 $ 10,141 $ 4,007 $ 0 $ 14,148
1992 $ 10,000 $ 2,965 $ 0 $ 12,965
1991 $ 9,920 $ 1,927 $ 0 $ 11,847
1990 $ 9,668 $ 891 $ 0 $ 10,559
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Short Fixed-Income on November 1, 1989, 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 $19,255. 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 $6,534 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Short
Fixed-Income would have grown to $18,449.
<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
1999 $ 9,196 $ 9,253 $ 0 $ 18,449
1998 $ 9,427 $ 8,438 $ 0 $ 17,865
1997 $ 9,397 $ 7,383 $ 0 $ 16,780
1996 $ 9,417 $ 6,377 $ 0 $ 15,794
1995 $ 9,518 $ 5,460 $ 0 $ 14,978
1994 $ 9,528 $ 4,589 $ 0 $ 14,117
1993 $ 10,141 $ 4,007 $ 0 $ 14,148
1992 $ 10,000 $ 2,965 $ 0 $ 12,965
1991 $ 9,920 $ 1,927 $ 0 $ 11,847
1990 $ 9,668 $ 891 $ 0 $ 10,559
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Short Fixed-Income on November 1, 1989,
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 $19,687. 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
$6,753 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, 1999, a hypothetical
$10,000 investment in Class A of Advisor Municipal Income would have
grown to $19,098, 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
1999 $ 10,291 $ 8,463 $ 344 $ 19,098
1998 $ 11,039 $ 8,151 $ 369 $ 19,559
1997 $ 10,696 $ 7,044 $ 358 $ 18,098
1996 $ 10,335 $ 5,922 $ 343 $ 16,600
1995 $ 10,458 $ 5,083 $ 347 $ 15,888
1994 $ 9,877 $ 3,918 $ 328 $ 14,123
1993 $ 11,198 $ 3,544 $ 287 $ 15,029
1992 $ 10,256 $ 2,476 $ 230 $ 12,962
1991 $ 10,044 $ 1,610 $ 215 $ 11,869
1990 $ 9,569 $ 751 $ 89 $ 10,409
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Municipal Income on November 1, 1989, 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 $18,845. 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 $6,076 for dividends and $292 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, 1999, a hypothetical
$10,000 investment in Class T of Advisor Municipal Income would have
grown to $19,342, 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
1999 $ 10,435 $ 8,558 $ 349 $ 19,342
1998 $ 11,202 $ 8,268 $ 374 $ 19,844
1997 $ 10,845 $ 7,141 $ 363 $ 18,349
1996 $ 10,488 $ 6,014 $ 348 $ 16,850
1995 $ 10,595 $ 5,150 $ 352 $ 16,097
1994 $ 10,007 $ 3,969 $ 332 $ 14,308
1993 $ 11,345 $ 3,591 $ 290 $ 15,226
1992 $ 10,390 $ 2,509 $ 233 $ 13,132
1991 $ 10,176 $ 1,631 $ 217 $ 12,024
1990 $ 9,695 $ 760 $ 90 $ 10,545
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Municipal Income on November 1, 1989, 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 $18,938. 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 $6,144 for dividends and $296 for capital gain
distributions.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class B of Advisor Municipal Income would have
grown to $19,269.
<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
1999 $ 10,786 $ 8,123 $ 360 $ 19,269
1998 $ 11,580 $ 7,931 $ 387 $ 19,898
1997 $ 11,211 $ 6,929 $ 375 $ 18,515
1996 $ 10,850 $ 5,908 $ 361 $ 17,119
1995 $ 10,961 $ 5,139 $ 364 $ 16,464
1994 $ 10,360 $ 4,052 $ 345 $ 14,757
1993 $ 11,756 $ 3,721 $ 301 $ 15,778
1992 $ 10,767 $ 2,600 $ 241 $ 13,608
1991 $ 10,545 $ 1,690 $ 226 $ 12,461
1990 $ 10,046 $ 788 $ 94 $ 10,928
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Municipal Income on November 1, 1989, 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 $18,514. 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 $5,955 for dividends and $307 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, 1999, a hypothetical
$10,000 investment in Class C of Advisor Municipal Income would have
grown to $19,201.
<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
1999 $ 10,787 $ 8,054 $ 360 $ 19,201
1998 $ 11,579 $ 7,878 $ 387 $ 19,844
1997 $ 11,211 $ 6,929 $ 375 $ 18,515
1996 $ 10,850 $ 5,909 $ 360 $ 17,119
1995 $ 10,961 $ 5,139 $ 364 $ 16,464
1994 $ 10,360 $ 4,053 $ 344 $ 14,757
1993 $ 11,756 $ 3,721 $ 301 $ 15,778
1992 $ 10,767 $ 2,600 $ 241 $ 13,608
1991 $ 10,545 $ 1,691 $ 225 $ 12,461
1990 $ 10,046 $ 788 $ 94 $ 10,928
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
Advisor Municipal Income on November 1, 1989, 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 $18,441. 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 $5,913 for dividends and $307 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, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Municipal Income
would have grown to $20,178.
<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
1999 $ 10,767 $ 9,051 $ 360 $ 20,178
1998 $ 11,562 $ 8,707 $ 387 $ 20,656
1997 $ 11,201 $ 7,500 $ 375 $ 19,076
1996 $ 10,832 $ 6,239 $ 359 $ 17,430
1995 $ 10,980 $ 5,350 $ 364 $ 16,694
1994 $ 10,370 $ 4,113 $ 344 $ 14,827
1993 $ 11,756 $ 3,721 $ 301 $ 15,778
1992 $ 10,767 $ 2,600 $ 241 $ 13,608
1991 $ 10,545 $ 1,691 $ 225 $ 12,461
1990 $ 10,046 $ 788 $ 94 $ 10,928
</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
1999 $ 51,536 $ 52,414 $ 13,392
1998 $ 41,009 $ 41,322 $ 13,057
1997 $ 33,617 $ 35,190 $ 12,866
1996 $ 25,445 $ 27,989 $ 12,604
1995 $ 20,505 $ 21,605 $ 12,237
1994 $ 16,217 $ 17,317 $ 11,903
1993 $ 15,613 $ 15,871 $ 11,600
1992 $ 13,583 $ 13,514 $ 11,290
1991 $ 12,351 $ 12,484 $ 10,939
1990 $ 9,251 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Municipal Income on November 1, 1989,
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 $19,481. 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
$6,484 for dividends and $307 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.
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 October 31, 1999. 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 $6,981 billion in
October 1998 to $9,147 billion in October 1999.
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of each market is measured
in billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION
Australia $ 210.6 Japan $ 2,509.3
Austria $ 22.0 Malaysia $ 66.8
Belgium $ 104.2 Netherlands $ 470.7
Canada $ 372.6 Norway $ 34.1
Denmark $ 67.9 Singapore $ 87.8
France $ 838.7 Spain $ 235.4
Germany $ 838.1 Sweden $ 201.8
Hong Kong $ 192.6 Switzerland $ 561.0
Italy $ 334.2 United Kingdom $ 1,783.8
United States $ 9,316.0
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of each market is measured in
billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 22.0
Brazil $ 87.4
Chile $ 32.6
Colombia $ 3.3
Mexico $ 98.7
Venezuela $ 6.8
Peru $ 7.0
Total Latin America $ 257.8
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 October 31, 1999. 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 11.43% Japan 58.40%
Austria -14.33% Malaysia 184.38%
Belgium -5.05% Netherlands 12.31%
Canada 35.31% Norway 3.11%
Denmark 7.20% Singapore 90.23%
France 24.30% Spain 0.85%
Germany 7.48% Sweden 47.73%
Hong Kong 27.24% Switzerland -0.59%
Italy 1.55% United Kingdom 13.25%
United States 26.21%
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 8.80% Japan 41.86%
Austria -3.75% Malaysia 99.02%
Belgium 6.69% Netherlands 26.08%
Canada 28.65% Norway 9.71%
Denmark 20.41% Singapore 94.38%
France 39.60% Spain 13.13%
Germany 20.76% Sweden 55.68%
Hong Kong 27.63% Switzerland 11.85%
Italy 14.20% United Kingdom 15.58%
United States 26.21%
The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31.
STOCK MARKET PERFORMANCE
Five Years Ended 1999 Ten Years Ended 1999
Germany 15.87% 13.41%
Hong Kong 6.06% 18.32%
Japan -0.90% -1.39%
Spain 23.55% 11.99%
United Kingdom 17.59% 15.18%
United States 26.88% 17.59%
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 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.
Each of Advisor Overseas and Advisor Diversified International may
compare its performance to that of the Morgan Stanley Capital
International Europe, Australasia and 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 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.
Advisor Latin America Fund 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
160 stocks traded in seven Latin American markets.
Advisor Emerging Asia may compare its performance to that of the
Morgan Stanley Capital International AC (All Country) Asia Free ex
Japan Index, a market capitalization-weighted index of over 500 stocks
traded in 11 Asian markets, excluding Japan. 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 Japan Fund may compare its performance to that of the Tokyo
Stock Exchange Index, a market capitalization-weighted index of over
1,300 stocks traded in the Japanese market.
Advisor International Capital Appreciation may compare its performance
to that of the Morgan Stanley Capital International AC (All Country)
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 Fund 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. 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 High Yield 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.
Each of Advisor High Yield and Advisor High Income may compare its
performance to that of the Merrill Lynch High Yield Master II Index, a
market value-weighted index of all domestic and yankee high-yield
bonds, including deferred interest bonds and payment-in-kind
securities. Issues included in the index have maturities of one year
or more and have a credit rating lower than BBB-/Baa3, but are not in
default. Issues must have an outstanding par value of at least $50
million to be included in the index.
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.
The 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.
Issues included in the index have been issued after December 31, 1990
and have been issued as part of an offering of at least $50 million.
After December 31, 1995, zero coupon bonds and issues subject to the
alternative minimum tax are included in the index. Issues included in
the index prior to January 1, 2000 have an outstanding par value of at
least $3 million; while issues included in the index after January 1,
2000 have an outstanding par value of at least $5 million.
Advisor Municipal Income may also compare its performance to that of
the Lehman Brothers 3 Plus Year Municipal Bond Index, a market
value-weighted index for investment-grade municipal bonds with
maturities of three years or more. Issues included in the index have
been issued after December 31, 1990 and have been issued as part of an
offering of at least $50 million. After December 31, 1995, zero coupon
bonds and issues subject to the alternative minimum tax are included
in the index. Issues included in the index prior to January 1, 2000
have an outstanding par value of at least $3 million; while issues
included in the index after January 1, 2000 have an outstanding par
value of at least $5 million.
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 October 31, 1999, FMR advised over $33 billion in municipal fund
assets, $136 billion in taxable fixed-income fund assets, $140 billion
in money market fund assets, $567 billion in equity fund assets, $18
billion in international fund assets, and $43 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
Advisor Latin America, Advisor Europe Capital Appreciation, and
Advisor Diversified International (Corresponding Funds) have
investment objectives and policies that are substantially identical in
all material respects to the following funds, which are managed by,
respectively: Fidelity Latin America, Fidelity Europe Capital
Appreciation, and Fidelity Diversified International (Related Funds).
FMR also may manage other substantially similar funds and accounts
that may have better or worse performance than the Related Funds.
Below you will find information about the prior performance of the
Related Funds, not the performance of the Corresponding Funds. The
Related Funds also have different expenses and are sold through
different distribution channels. The performance information for the
Related Funds is based on past results.
You should not assume that each class of the Corresponding Funds will
have the same performance as the Related Funds. The performance of
each class of a Corresponding Fund may be better or worse than the
performance of its Related Fund due to, among other things,
differences in portfolio holdings, sales charges, expenses, asset
sizes, and cash flows between each class of a Corresponding Fund and
its Related Fund.
MOVING AVERAGES. Like the Corresponding Funds, the Related Funds 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 a NAV has crossed, stayed above, or
stayed below its moving average. The 13-week and 39-week long-term
moving averages for each Related Fund are shown in the table below.
13-Week Long-Term Moving 13-Week Long-Term Moving
Average Average
Fidelity Latin America* $ 11.81 $ 12.03
Fidelity Europe Capital $ 18.11 $ 17.84
Appreciation*
Fidelity Diversified $ 20.41 $ 19.28
International*
* On October 31, 1999.
HISTORICAL FUND RESULTS. The following table shows each Related Fund's
returns for the fiscal period ended October 31, 1999. Fidelity Latin
America and Fidelity Europe Capital Appreciation have a maximum
front-end sales charge of 3%, which is included in the average annual
and cumulative returns. Returns do not include the effect of Fidelity
Latin America' s or Fidelity Europe Capital Appreciation'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, applicable to shares held less than 90 days,
or Fidelity Latin America's 1.5% short-term trading fee,
applicable to shares held less than 90 days.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
One Year Five Years Ten Years/ Life of Fund* One Year Five Years
Fidelity Latin America 13.93% -4.70% 3.89% 13.93% -21.38%
Fidelity Europe Capital 11.06% 15.98% 15.96% 11.06% 109.89%
Appreciation
Fidelity Diversified 29.12% 15.86% 13.26% 29.12% 108.76%
International
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Cumulative Returns
Ten Years/ Life of Fund*
Fidelity Latin America 28.29%
Fidelity Europe Capital 138.22%
Appreciation
Fidelity Diversified 165.73%
International
</TABLE>
* From commencement of operations (April 19, 1993 for Fidelity Latin
America, December 21, 1993 for Fidelity Europe Capital Appreciation,
and December 27, 1991 for Fidelity Diversified International).
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 S&P 500 and
DJIA comparisons are provided to show how each Related Fund's return
compared to the record of a market capitalization-weighted 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 10-year period
ended October 31, 1999 or life of each Related 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 LATIN AMERICA: During the period from April 19, 1993
(commencement of operations) to October 31, 1999, a hypothetical
$10,000 investment in Fidelity Latin America would have grown to
$12,829, including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY LATIN AMERICA
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 11,941 $ 848 $ 40 $ 12,829
1998 $ 10,408 $ 480 $ 35 $ 10,923
1997 $ 15,045 $ 510 $ 51 $ 15,606
1996 $ 12,212 $ 190 $ 41 $ 12,443
1995 $ 9,458 $ 31 $ 32 $ 9,521
1994 $ 15,724 $ 53 $ 53 $ 15,830
1993* $ 12,882 $ 0 $ 0 $ 12,882
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY LATIN AMERICA INDEXES
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 35,028 $ 35,588 $ 11,681
1998 $ 27,873 $ 28,057 $ 11,389
1997 $ 22,848 $ 23,893 $ 11,222
1996 $ 17,295 $ 19,004 $ 10,993
1995 $ 13,937 $ 14,670 $ 10,674
1994 $ 11,022 $ 11,758 $ 10,382
1993* $ 10,612 $ 10,776 $ 10,118
</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 maximum sales charge had
been in effect, 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 $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 Related
Fund's 1.5% short-term trading fee applicable to shares held less than
90 days.
FIDELITY EUROPE CAPITAL APPRECIATION: During the period from December
21, 1993 (commencement of operations) to October 31, 1999, a
hypothetical $10,000 investment in Fidelity Europe Capital
Appreciation would have grown to $23,822, including the effect of the
fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY EUROPE CAPITAL
APPRECIATION
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 18,081 $ 908 $ 4,833 $ 23,822
1998 $ 15,792 $ 793 $ 4,221 $ 20,806
1997 $ 16,073 $ 603 $ 1,630 $ 18,306
1996 $ 13,648 $ 266 $ 0 $ 13,914
1995 $ 11,718 $ 0 $ 0 $ 11,718
1994* $ 11,010 $ 0 $ 0 $ 11,010
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY EUROPE CAPITAL INDEXES
APPRECIATION
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 33,029 $ 32,336 $ 11,536
1998 $ 26,282 $ 25,493 $ 11,248
1997 $ 21,544 $ 21,710 $ 11,084
1996 $ 16,308 $ 17,267 $ 10,857
1995 $ 13,141 $ 13,329 $ 10,542
1994* $ 10,393 $ 10,683 $ 10,254
</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 maximum
sales charge had been in effect, 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 $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 Related Fund's 1.0% short-term trading fee applicable to shares
held less than 90 days.
FIDELITY DIVERSIFIED INTERNATIONAL: During the period from December
27, 1991 (commencement of operations) to October 31, 1999, a
hypothetical $10,000 investment in Fidelity Diversified International
would have grown to $26,573.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY DIVERSIFIED
INTERNATIONAL
Period Ended October 31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 21,340 $ 1,611 $ 3,622 $ 26,573
1998 $ 17,210 $ 1,020 $ 2,351 $ 20,581
1997 $ 16,570 $ 757 $ 1,779 $ 19,106
1996 $ 14,380 $ 491 $ 1,144 $ 16,015
1995 $ 12,730 $ 197 $ 569 $ 13,496
1994 $ 12,460 $ 158 $ 111 $ 12,729
1993 $ 11,320 $ 133 $ 0 $ 11,453
1992* $ 8,460 $ 0 $ 0 $ 8,460
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY DIVERSIFIED INDEXES
INTERNATIONAL
Period Ended October 31 S&P 500 DJIA Cost of Living**
1999 $ 40,049 $ 41,357 $ 12,197
1998 $ 31,868 $ 32,604 $ 11,893
1997 $ 26,124 $ 27,766 $ 11,719
1996 $ 19,774 $ 22,084 $ 11,479
1995 $ 15,934 $ 17,047 $ 11,146
1994 $ 12,602 $ 13,663 $ 10,841
1993 $ 12,133 $ 12,523 $ 10,566
1992* $ 10,555 $ 10,663 $ 10,283
</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
cash 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.
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 not 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;
8. to shares purchased with proceeds from the sale of front-end load
shares of a non-Advisor mutual fund for an account participating in
the FundSelect by Nationwide program;
9. 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. A member of the immediate family of a bank trust officer, a
registered representative or other employee of investment
professionals having agreements with FDC, is a spouse of one of those
individuals, an account for which one of those individuals is acting
as custodian for a minor child, and a trust account that is registered
for the sole benefit of a minor child of one of those individuals; or
10. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
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 Fidelity International Limited (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, but
excluding the Fidelity Investments Charitable Gift Fund) 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. A member of the immediate family of a bank trust officer, a
registered representative or other employee of investment
professionals having agreements with FDC, is a spouse of one of those
individuals, an account for which one of those individuals is acting
as custodian for a minor child, and a trust account that is registered
for the sole benefit of a minor child of one of those individuals;
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);
13. to shares purchased with distributions of income, principal, and
capital gains from Fidelity Defined Trusts; or
14. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
A sales load waiver form must accompany these transactions.
CLASS B AND CLASS C SHARES ONLY
The Class B or Class C contingent deferred sales charge (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 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).
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 adviser managed account programs, provided
the registered investment adviser 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. Current or former Trustees or officers of a Fidelity fund or
current or retired officers, directors, or regular employees of FMR
Corp. or FIL 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), Fidelity 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 (i) with
the proceeds from the redemption of shares of any Fidelity fund or
(ii) by the Fidelity Investments Charitable Gift 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 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. Class A and Class T shares acquired through an employee
benefit plan, a Traditional IRA, a Roth IRA, a rollover IRA, a 403(b)
program or a plan covering a sole-proprietor (formerly Keogh/H.R. 10
plan) will be included for purposes of completing your Letter but may
not be used to meet the initial investment minimum of 5% of the total
investment specification 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, you must pay the increased
front-end sales charges due. If you do not pay the increased front-end
sales charges within 20 days after the date your letter expires,
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
A fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing each class's NAV, if FMR determines it is
in the best interest of the fund. Shareholders that receive 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. Because Advisor Latin America, Advisor Emerging Asia,
Advisor Japan, Advisor Europe Capital Appreciation, Advisor
International Capital Appreciation, Advisor Overseas, Advisor
Diversified International, and Advisor Global Equity invest
significantly in foreign securities, corporate shareholders should not
expect fund dividends to qualify for the dividends-received deduction.
For those funds whose income is primarily derived from interest,
dividends from the fund generally 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 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.
The 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 GAIN DISTRIBUTIONS. Each fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
As of October 31, 1999, Advisor Latin America had a capital loss
carryforward aggregating approximately $6,000. This loss carryforward,
all of which will expire on October 31, 2007, is available to offset
future capital gains.
As of October 31, 1999, Advisor Emerging Asia had a capital loss
carryforward aggregating approximately $9,407,000. This loss
carryforward, all of which will expire on October 31, 2006, is
available to offset future capital gains.
As of October 31, 1999, Advisor Europe Capital Appreciation had a
capital loss carryforward aggregating approximately $697,000. This
loss carryforward, all of which will expire on October 31, 2007, is
available to offset future capital gains.
As of October 31, 1999, Advisor High Yield had a capital loss
carryforward aggregating approximately $34,789,000. This loss
carryforward, all of which will expire on October 31, 2007, is
available to offset future capital gains.
As of October 31, 1999, Advisor High Income had a capital loss
carryforward aggregating approximately $7,000. This loss carryforward,
all of which will expire on October 31, 2007, is available to offset
future capital gains.
As of October 31, 1999, Advisor Government Investment had a capital
loss carryforward aggregating approximately $8,649,000. This loss
carryforward, all of which will expire on October 31, 2007, is
available to offset future capital gains.
As of October 31, 1999, Advisor Mortgage Securities had a capital loss
carryforward aggregating approximately $5,050,000. This loss
carryforward, all of which will expire on October 31, 2007, is
available to offset future capital gains.
As of October 31, 1999, Advisor Intermediate Bond had a capital loss
carryforward aggregating approximately $14,756,000. This loss
carryforward, of which $9,361,000, $1,410,000, and $3,985,000, will
expire on October 31, 2004, 2005, and 2007, respectively, is available
to offset future capital gains.
As of October 31, 1999, Advisor Short Fixed-Income had a capital loss
carryforward aggregating approximately $45,403,000. This loss
carryforward, of which $38,000, $336,000, $17,691,000, $19,457,000,
$2,265,000, $3,149,000, and $2,467,000 will expire on October 31,
2000, 2001, 2002, 2003, 2004, 2005, and 2007, respectively, is
available to offset future capital gains.
As of October 31, 1999, Advisor Municipal Income had a capital loss
carryforward aggregating approximately $13,685,000. This loss
carryforward, of which $7,417,000 and $6,268,000 will expire on
October 31, 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, 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 (69), 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.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Advisor Series II and
Fidelity Advisor Series VIII, is Mr. Johnson's daughter.
ABIGAIL P. JOHNSON (38), Member of the Advisory Board of Fidelity
Advisor Series II and Fidelity Advisor Series VIII (1999), 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.
J. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), Columbia/HCA Healthcare Corporation (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, a Director of the National Forum for Health Care Quality,
Measurement and Reporting, past chairman and a member of the Board of
Catalyst (a leading organization for the advancement of women in
business), and is a Director of the STAR Foundation (Society to
Advance the Retarded and Handicapped). He also serves as a member of
the Board and Executive Committee and as Co-Chairman of the Audit and
Finance Committee of the Center for Strategic & International Studies,
a member of the Board of Overseers of the Columbia Business School,
and a Member of the Advisory Board of the Graduate School of Business
of the University of Florida.
RALPH F. COX (67), 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 Waste Management,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petroleum production).
In addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (68), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., and Standard
Brands, Inc. In addition, she is a member of the Board of Directors of
the Southampton Hospital in Southampton, N.Y. (1998).
ROBERT M. GATES (56), 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 Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
Lucas Varity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A&M University (1999-2000). 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.
DONALD J. KIRK ( 67 ), Trustee, is Executive-in-Residence (1995)
at Columbia University Graduate School of Business. 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 previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a Director
of Valuation Research Corp. (appraisals and valuations, 1993-1995). 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), Vice Chairman 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).
NED C. LAUTENBACH (56), Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
*PETER S. LYNCH ( 57 ), 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 (66), Trustee (1997), is the Interim Chancellor for
the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). 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), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH (72), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the Board 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 (67), Trustee (1993), is Chairman Emeritus of the Board
of Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. 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). He is a
Board member of Dynatech Corporation (electronics, 1999).
*ROBERT C. POZEN (53), 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 (71), 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 National Life Insurance Company of Vermont and American Software,
Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
AppleSouth, Inc. (restaurants, 1992).
DWIGHT D. CHURCHILL (46), is Vice President of Fidelity Advisor
High Yield Fund, Fidelity Advisor High Income Fund, Fidelity Advisor
Government Investment Fund, Fidelity Advisor Mortgage Securities Fund,
Fidelity Advisor Intermediate Bond Fund, Fidelity Advisor Short
Fixed-Income Fund, and Fidelity Advisor Municipal Income Fund. He
serves as President of Fidelity's Fixed-Income Division (2000), Vice
President of Fidelity's Money Market Funds (2000), Vice President of
Fidelity's Bond Funds, 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.
BOYCE I. GREER (44), is Vice President of Fidelity Advisor
Municipal Income Fund (2000). He serves as Vice President of
Fidelity's Municipal Bond Funds (2000), Group Leader of Fidelity's
Municipal Bond Group (2000), Vice President of Fidelity's Money Market
Funds (1997), Group Leader of Fidelity's Money Market Group (1997),
Senior Vice President of FMR (1997), and Vice President of FIMM
(1998). Mr. Greer served as the Leader of the Fixed-Income Group for
Fidelity Management Trust Company (1993-1995) and was Vice President
and Group Leader of Municipal Fixed-Income Investments
(1996-1997).
ROBERT A. LAWRENCE (47), is Vice President of Fidelity Advisor High
Yield Fund (2000), Fidelity Advisor High Income Fund (2000), Fidelity
Advisor Diversified International, and Fidelity Advisor Global Equity
Fund. Mr. Lawrence serves as Vice President of certain High Income
Bond Funds (2000), Vice President of Fidelity Real Estate High Income
Fund (1995) and Fidelity Real Estate High Income Fund II (1996), Vice
President of certain Equity Funds (1997), and Senior Vice President of
FMR (1993).
DAVID L. MURPHY (52), is Vice President of Fidelity Advisor
High Yield Fund (2000 ), Fidelity Advisor High Income Fund
(2000 ), Fidelity Advisor Government Investment Fund
(2000 ), Fidelity Advisor Mortgage Securities Fund
(2000 ), Fidelity Advisor Intermediate Bond Fund (2000 ),
Fidelity Advisor Short Fixed-Income Fund (2000). He serves as Vice
President of Fidelity's Taxable Bond Funds (2000), Group Leader of
Fidelity's Taxable Bond Group (2000), and a Vice President and
Director of Taxable Bond Research for FMR (1998). Mr. Murphy joined
Fidelity in 1989 as a manager of fixed-income funds.
RICHARD A. SPILLANE, JR. (49), 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.
ANDREW J. DUDLEY (35) , is Vice President of Fidelity Advisor
Short Fixed-Income Fund (1998), Fidelity Advisor Intermediate Bond
Fund (1999), 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 (50), is Vice President of Fidelity Advisor High
Yield Fund. Ms. Eagle is also a senior vice president of Fidelity
Management Trust Company, the unit of Fidelity which serves
institutional investment businesses worldwide by managing assets for
corporate and public employee retirement funds, endowments,
foundations, and other major institutions. Prior to her current
responsibilities, she managed several Fidelity funds.
GREGORY FRASER (39), is Vice President of Fidelity Advisor Diversified
International Fund (1998) and another fund advised by Fidelity. Prior
to his current responsibilities, Mr. Fraser managed a variety of
Fidelity funds.
DAVID L. GLANCY (39) , is Vice President of Fidelity Advisor
High Income Fund (1999) and another fund advised by FMR. Prior to his
current responsibilities, Mr. Glancy managed a variety of Fidelity
funds.
RICHARD C. HABERMANN (59), is Vice President of Fidelity Advisor
Global Equity (1998) and other funds advised by FMR. He is also Senior
Vice President of FMR (1993). Prior to his current responsibilities,
Mr. Habermann managed a variety of Fidelity funds.
KEVIN R. MCCAREY (40 ), is Vice President of Fidelity Advisor
Europe Capital Appreciation Fund (1998), Fidelity Advisor
International Capital Appreciation Fund (1997), and other funds
advised by FMR. Prior to his current responsibilities, Mr. McCarey
managed a variety of Fidelity funds.
RICHARD R. MACE, JR. (38), is Vice President of Fidelity
Advisor Overseas Fund (1996) and other funds advised by FMR. Prior to
his current responsibilities, Mr. Mace managed a variety of Fidelity
funds.
PATRICIA SATTERTHWAITE (41) , is Vice President of Fidelity
Advisor Latin America Fund (1998) and another fund advised by FMR.
Prior to her current responsibilities, she managed several Fidelity
funds.
THOMAS J. SILVIA (38), is Vice President of Fidelity Advisor Mortgage
Securities (1998), Fidelity Advisor Government Investment Fund (1998),
and other funds advised by FMR. Since joining Fidelity in 1993, Mr.
Silvia was a senior mortgage trader and co-managed another Fidelity
fund.
CHRISTINE JONES THOMPSON (42) , is Vice President of Fidelity
Advisor Municipal Income Fund (1998) and other funds advised by FMR.
Prior to her current responsibilities, Ms. Thompson managed a variety
of Fidelity funds.
ERIC D. ROITER ( 51 ), Secretary (1998), is Vice President (1998)
and General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).
ROBERT A. DWIGHT (42), is Treasurer of Fidelity Advisor Latin
America Fund (2000), Fidelity Advisor Emerging Asia Fund (2000),
Fidelity Advisor Japan Fund (2000), Fidelity Advisor International
Capital Appreciation Fund (2000), Fidelity Advisor Europe Capital
Appreciation Fund (2000), Fidelity Advisor Overseas Fund (2000),
Fidelity Advisor Diversified International Fund (2000), Fidelity
Advisor Global Equity Fund (2000), Fidelity Advisor High Yield Fund
(2000), Fidelity Advisor High Income Fund (2000), Fidelity Advisor
Government Investment Fund (2000), Fidelity Advisor Mortgage
Securities Fund (2000), Fidelity Advisor Intermediate Bond Fund
(2000), Fidelity Advisor Short Fixed-Income Fund (2000), and Fidelity
Advisor Municipal Income Fund (2000). Mr. Dwight also serves as
Treasurer of other Fidelity funds (2000) and is an employee of FMR.
Prior to becoming Treasurer of the Fidelity funds, he served as
President of Fidelity Accounting and Custody Services (FACS). Before
joining Fidelity, Mr. Dwight was Senior Vice President of fund
accounting operations for The Boston Company.
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer of
the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
STANLEY N. GRIFFITH (53), Assistant Vice President (1998), is
Assistant Vice President of Fidelity's Fixed-Income Funds (1998) and
an employee of FMR Corp.
JOHN H. COSTELLO (53), Assistant Treasurer, is an employee of FMR.
THOMAS J. SIMPSON ( 42 ), 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>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM A Edward C. Johnson 3d** Abigail P. Johnson ** Ralph F. Cox Phyllis Burke Davis
FUND
Advisor Latin America B,+ $ 0 $ 0 $ 1 $ 1
Advisor Emerging AsiaB,+ $ 0 $ 0 $ 20 $ 20
Advisor JapanB,+ $ 0 $ 0 $ 5 $ 5
Advisor International Capital $ 0 $ 0 $ 10 $ 10
AppreciationB
Advisor Europe Capital $ 0 $ 0 $ 4 $ 4
AppreciationB,+
Advisor OverseasB $ 0 $ 0 $ 403 $ 387
Advisor Diversified $ 0 $ 0 $ 5 $ 5
InternationalB,+
Advisor Global EquityB,+ $ 0 $ 0 $ 2 $ 2
Advisor High YieldB,C,D $ 0 $ 0 $ 1,218 $ 1,167
Advisor High IncomeB,+ $ 0 $ 0 $ 1 $ 1
Advisor Government InvestmentB $ 0 $ 0 $ 106 $ 102
Advisor Mortgage SecuritiesB $ 0 $ 0 $ 147 $ 141
Advisor Intermediate BondB $ 0 $ 0 $ 161 $ 155
Advisor Short Fixed-IncomeB $ 0 $ 0 $ 101 $ 97
Advisor Municipal IncomeB $ 0 $ 0 $ 134 $ 128
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 223,500 $ 220,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM A Robert M. Gates E. Bradley Jones **** Donald J. Kirk Ned C. Lautenbach*** Peter S. Lynch**
FUND
Advisor Latin America B,+ $ 1 $ 1 $ 1 $ 0 $ 0
Advisor Emerging AsiaB,+ $ 20 $ 20 $ 20 $ 2 $ 0
Advisor JapanB,+ $ 5 $ 5 $ 5 $ 1 $ 0
Advisor International Capital $ 10 $ 10 $ 10 $ 2 $ 0
AppreciationB
Advisor Europe Capital $ 4 $ 4 $ 4 $ 1 $ 0
AppreciationB,+
Advisor OverseasB $ 400 $ 400 $ 397 $ 38 $ 0
Advisor Diversified $ 5 $ 5 $ 5 $ 1 $ 0
InternationalB,+
Advisor Global EquityB,+ $ 2 $ 2 $ 2 $ 0 $ 0
Advisor High YieldB,C,D $ 1,210 $ 1,209 $ 1,201 $ 97 $ 0
Advisor High IncomeB,+ $ 1 $ 1 $ 1 $ 0 $ 0
Advisor Government InvestmentB $ 105 $ 105 $ 105 $ 9 $ 0
Advisor Mortgage SecuritiesB $ 146 $ 146 $ 145 $ 11 $ 0
Advisor Intermediate BondB $ 160 $ 160 $ 159 $ 13 $ 0
Advisor Short Fixed-IncomeB $ 100 $ 100 $ 99 $ 8 $ 0
Advisor Municipal IncomeB $ 133 $ 133 $ 132 $ 10 $ 0
TOTAL COMPENSATION FROM THE $ 223,500 $ 222,000 $ 226,500 $ 0 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM A William O. McCoy Gerald C. Mc-Donough Marvin L. Mann Robert C. Pozen** Thomas R. Williams
FUND
Advisor Latin America B,+ $ 1 $ 1 $ 1 $ 0 $ 1
Advisor Emerging AsiaB,+ $ 20 $ 25 $ 20 $ 0 $ 20
Advisor JapanB,+ $ 5 $ 6 $ 5 $ 0 $ 5
Advisor International Capital $ 10 $ 12 $ 10 $ 0 $ 10
AppreciationB
Advisor Europe Capital $ 4 $ 5 $ 4 $ 0 $ 4
AppreciationB,+
Advisor OverseasB $ 400 $ 495 $ 400 $ 0 $ 392
Advisor Diversified $ 5 $ 6 $ 5 $ 0 $ 5
InternationalB,+
Advisor Global EquityB,+ $ 2 $ 3 $ 2 $ 0 $ 2
Advisor High YieldB,C,D $ 1,210 $ 1,495 $ 1,210 $ 0 $ 1,184
Advisor High IncomeB,+ $ 1 $ 1 $ 1 $ 0 $ 1
Advisor Government InvestmentB $ 105 $ 130 $ 105 $ 0 $ 103
Advisor Mortgage SecuritiesB $ 146 $ 181 $ 146 $ 0 $ 143
Advisor Intermediate BondB $ 160 $ 198 $ 160 $ 0 $ 157
Advisor Short Fixed-IncomeB $ 100 $ 124 $ 100 $ 0 $ 98
Advisor Municipal IncomeB $ 133 $ 164 $ 133 $ 0 $ 130
TOTAL COMPENSATION FROM THE $223,500 $ 273,500 $220,500 $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested trustees of the funds and Ms. Johnson are compensated by
FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
+ 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 as
follows: 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, $564; Phyllis Burke Davis, $564;
Robert M. Gates, $564; E. Bradley Jones, $564; Donald J. Kirk, $564;
William O. McCoy, $564; Gerald C. McDonough, $658; Marvin L. Mann,
$564; and Thomas R. Williams, $564.
D Certain of the non-interested trustees' aggregate compensation from
certain funds includes accrued voluntary deferred compensation as
follows: Ralph F. Cox, $471; Marvin L. Mann, $80; William O. McCoy,
$471, and Thomas R. Williams, $471.
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 October 31, 1999, approximately 59.25% of Advisor Latin
America's, approximately 18.87% of Advisor Emerging Asia's,
approximately 5.35% of Advisor Japan's, approximately 11.12% of
Advisor International Capital Appreciation's, approximately 9.34% of
Advisor Europe Capital Appreciation's, approximately 1.27% of Advisor
Overseas', approximately 14.33% of Advisor Diversified
International's, approximately 52.03% of Advisor Global Equity's,
approximately 1.90% of Advisor High Yield's, approximately 38.79% of
Advisor High Income's, approximately 1.11% of Advisor Government
Investment's, and approximately 1.09% of Advisor Municipal Income's
total outstanding shares were held by FMR affiliates. FMR Corp. is the
ultimate parent company of these FMR affiliates. By virtue of their
ownership interest in FMR Corp., as described in the "Control of
Investment Advisors" section on page 232, Mr. Edward C. Johnson 3d,
President and Trustee of the funds, and Ms. Abigail P. Johnson, Member
of the Advisory Board of the funds, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's and Ms. Johnson's deemed ownership of Advisor Latin
America's, Advisor Emerging Asia's, Advisor Japan's, Advisor
International Capital Appreciation's, Advisor International Capital
Appreciation's, Advisor Europe Capital Appreciation's, Advisor
Overseas', Advisor Diversified International's, Advisor Global
Equity's, Advisor High Yield's, Advisor High Income's, Advisor
Government Investment's, and Advisor Municipal Income's shares, the
Trustees, Members of the Advisory Board, and officers of the funds
owned, in the aggregate, less than 1% of each fund's total outstanding
shares.
As of October 31, 1999, 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: Fidelity Investments, Boston, MA
(61.62%); KeyCorp, Inc., Cleveland, OH (9.42%); First Union Corp.,
Roanoke, VA (8.83%).
Advisor Latin America Class T: Fidelity Investments, Boston, MA
(43.66%); Equity Services, Inc., Montpelier, VT (10.24%); Berkshire
Equity Sales, Inc., Pittsfield, MA (8.38%).
Advisor Latin America Class B: Fidelity Investments Distributors
Corp., Boston, MA (50.28%); The Guardian, Phoenix, AZ (10.68%); FFP
Securities, Inc., Chesterfield, MO (6.18%).
Advisor Latin America Class C: Fidelity Investments Distributors
Corp., Boston, MA (65.36%); PaineWebber, Inc., New York, NY (6.07%);
LPL Financial Services, Inc., San Diego, CA (5.51%).
Advisor Latin America Institutional Class: Fidelity Investments,
Boston, MA (98.96%).
Advisor Emerging Asia Class A: Fidelity Investments, Boston, MA
(9.94%); Northern Trust Company, Chicago, IL (8.71%); Brown Brothers
Harriman, New York, NY (6.52%); Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (6.04%).
Advisor Emerging Asia Class T: Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (21.26%); A.G. Edwards & Sons Inc., Saint
Louis, MO (8.51%); ProEquities Inc., Birmingham, AL (8.15%);
PaineWebber, Inc., New York, NY (7.88%); Citigroup, Inc., New York, NY
(5.98%).
Advisor Emerging Asia Class B: Citigroup, Inc., Long Island City, NY
(15.48%); Fidelity Investments Distributors Corp., Boston, MA
(10.76%); Transamerica Life Insurance & Annuity, Los Angeles, CA
(8.99%); Protected Investors of America, San Francisco, CA (6.73%);
Bank One Corporation, Westerville, OH (5.47%); BISYS Brokerage
Services, Inc., Rhinebeck, NY (5.37%).
Advisor Emerging Asia Class C: Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (24.08%); Fidelity Investments Distributors
Corp., Boston, MA (16.90%); Dain Rauscher Inc., Minneapolis, MN
(10.07%); Lehman Brothers Inc., New York, NY (8.18%); Bear Stearns &
Company, Inc., Brooklyn, NY (5.70%); A.G. Edwards & Sons Inc., Saint
Louis, MO (5.22%).
Advisor Emerging Asia Institutional Class: Citigroup, Inc., New York,
NY (60.75%); Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville,
FL (33.46%).
Advisor Japan Class A: Fidelity Investments, Boston, MA (10.70%); Bear
Stearns, New York, NY, (6.42%); SunAmerica, New York, NY (6.39%);
Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL (6.12%);
Fleet Financial Group Inc., Boston, MA (5.48%); Sentra Securities
Corporation, San Diego, CA (5.44%).
Advisor Japan Class T: Securities America, Omaha, NE (18.21%);
Advanced Financial Planning Securities, Brentwood, TN (8.21%).
Advisor Japan Class B: Merrill Lynch, Pierce, Fenner & Smith Inc.,
Jacksonville, FL (8.52%); Citigroup, Inc., Long Island City, NY
(6.97%); Prudential, New York, NY (6.15%); A.G. Edwards & Sons Inc.,
Saint Louis, MO (5.11%).
Advisor Japan Class C: Merrill Lynch, Pierce, Fenner & Smith Inc.,
Jacksonville, FL (36.00%); Legg Mason Wood Walker, Inc., Baltimore, MD
(8.53%); Lifemark Securities Corp., Pittsfield, NY (8.50%).
Advisor Japan Institutional Class: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (42.37%); Fidelity Investments, Boston,
MA (25.66%); Meeder Advisory Assoc., Inc., Dublin, OH (6.47%).
Advisor International Capital Appreciation Class A: Legend Equities
Corporation, Palm Beach Garden, FL (6.66%); Protected Investors of
America, San Francisco, CA (6.27%).
Advisor International Capital Appreciation Class T: SunAmerica, New
York, NY (6.24%); PaineWebber, Inc., New York, NY (5.89%).
Advisor International Capital Appreciation Class B: Merrill Lynch,
Pierce, Fenner & Smith Inc., Jacksonville, FL (13.05%); Dain Rauscher
Inc., Minneapolis, MN (5.54%).
Advisor International Capital Appreciation Class C: SunAmerica,
Atlanta, GA (6.61%); Merrill Lynch, Pierce, Fenner & Smith Inc.,
Jacksonville, FL (5.84%); Mutual Service Corporation, West Palm Beach,
FL (5.66%); Capital Financial Services, Inc., Madison, WI (5.48%).
Advisor International Capital Appreciation Institutional Class:
Fidelity Investments, Boston, MA (97.79%).
Advisor Europe Capital Appreciation Class A: Fidelity Investments,
Boston, MA (20.51%); Comerica Bank, Detroit, MI (9.68%); First Union
Corp., Roanoke, VA (6.66%).
Advisor Europe Capital Appreciation Class T: PMG Securities
Corporation, New York, NY (37.35%); ING America Life Group, Atlanta,
GA (12.57%); SunAmercia, Atlanta, GA (5.95%).
Advisor Europe Capital Appreciation Class B: Fidelity Investments
Distributors Corp., Boston, MA (11.19%).
Advisor Europe Capital Appreciation Class C: US Bancorp, Minneapolis,
MN (36.12%); Fidelity Investments Distributors Corp., Boston, MA
(10.77%); Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL
(10.55%).
Advisor Europe Capital Appreciation Institutional Class: Fidelity
Investments, Boston, MA (50.36%); Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (36.75%).
Advisor Overseas Class A: Citigroup, Inc., Long Island City, NY
(5.52%).
Advisor Overseas Class T: Manulife Financial Group, Toronto, ON
(13.49%); Great West Life and Annuity Insurance Co., Englewood, CO
(7.39%); Citibank, Inc., New York, NY (5.54%).
Advisor Overseas Class B: Merrill Lynch, Pierce, Fenner & Smith Inc.,
Jacksonville, FL (8.22%).
Advisor Overseas Class C: Citigroup, Inc., New York, NY (30.49%);
Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL (8.90%).
Advisor Overseas Institutional Class: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (43.34%); Mercantile Investment Services,
Jonesboro, AR (7.59%); Bingham, Dana & Gould, Boston, MA (5.44%).
Advisor Diversified International Class A: Fidelity Investments,
Boston, MA (34.03%).
Advisor Diversified International Class T: ING America Life Group,
Atlanta, GA (7.37%); Fidelity Investment Advisor Group (FIAG), Boston,
MA (5.64%); A.G. Edwards & Sons Inc., Saint Louis, MO (5.48%).
Advisor Diversified International Class B: Fidelity Investments
Distributors Corp., Boston, MA (12.08%); Merrill Lynch, Pierce, Fenner
& Smith Inc., Jacksonville, FL (10.83%); Aetna Inc., Torrance, CA
(6.97%).
Advisor Diversified International Class C: Merrill Lynch, Pierce,
Fenner & Smith Inc., Jacksonville, FL (16.61%); Fidelity Investments
Distributors Corp., Boston, MA (16.04%); Allmerica Financial Corp.,
Worcester, MA (5.34%).
Advisor Diversified International Institutional Class: FTC & CO,
Denver, CO (49.09%); Fidelity Investments, Boston, MA (32.01%);
Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL (7.39%).
Advisor Global Equity Class A: Fidelity Investments, Boston, MA
(63.61%); Prudential, New York, NY (8.18%).
Advisor Global Equity Class T: Fidelity Investments, Boston, MA
(36.73%).
Advisor Global Equity Class B: Fidelity Investments Distributors
Corp., Boston, MA (51.70%); Legend Equities Corporation, Palm Beach
Garden, FL (6.64%); Prime Capital Services, Inc., Poughkeepsie, NY
(5.30%).
Advisor Global Equity Class C: Fidelity Investments Distributors
Corp., Boston, MA (44.23%); Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (22.24%); Capital Financial Services, Inc.,
Madison, WI (7.78%); HRC Services, Inc., Glenwood Landing, NY (7.03%).
Advisor Global Equity Institutional Class: Fidelity Investments,
Boston, MA (99.91%).
Advisor High Yield Class A: Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (13.84%); Fleet Financial Group Inc., Boston,
MA (5.72%); Commonwealth Financial Network, Waltham, MA (5.44%).
Advisor High Yield Class T: Manulife Financial Group, Toronto, ON
(6.54%); Citigroup, Inc., New York, NY (5.81%).
Advisor High Yield Class B: Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (12.10%); Citigroup, Inc., New York, NY
(5.40%).
Advisor High Yield Class C: Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (24.25%); Citigroup, Inc., New York, NY
(7.99%).
Advisor High Yield Institutional Class: LPL Financial Services, Inc.,
San Diego, CA (18.24%); Charles Schwab & Co., Inc., San Francisco, CA
(9.17%); Aetna Inc., Torrance, CA (8.75%); Merrill Lynch, Pierce,
Fenner & Smith Inc., Jacksonville, FL (5.35%).
Advisor High Income Class A: Fidelity Investments Distributors Corp.,
Boston, MA (81.93%).
Advisor High Income Class T: Fidelity Investments Distributors Corp.,
Boston, MA (25.07%); SunAmerica, Atlanta, GA (18.43%); Marion Bass
Securities Corp., Charlotte, NC (17.20%); SunAmerica, New York, NY
(7.79%).
Advisor High Income Class B: Fidelity Investments Distributors Corp.,
Boston, MA (28.87%); Merrill Lynch, Pierce, Fenner & Smith Inc.,
Jacksonville, FL (12.47%); Metropolitan Life Insurance Company, New
York, NY (6.23%); Marion Bass Securities Corp., Charlotte, NC (5.25%).
Advisor High Income Class C: Fidelity Investments Distributors Corp.,
Boston, MA (32.98%); Offerman & Company, Inc., Houston, TX (19.11%);
PaineWebber, Inc., New York, NY (11.20%); SunAmerica, New York, NY
(10.90%); Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL
(5.20%).
Advisor High Income Institutional Class: FMR Capital, Boston, MA
(84.34%); Aetna Inc., Torrance, Ca (14.04%).
Advisor Government Investment Class A: G. W. & Wade Asset Management
Co., Wellesley, MA (10.18%); KeyCorp, Inc., Cleveland, OH (7.27%).
Advisor Government Investment Class T: Citigroup, Inc., New York, NY
(5.15%); Fleet Financial Group Inc., Boston, MA (5.05%).
Advisor Government Investment Class B: G. W. & Wade Asset Management
Co., Wellesley, MA (13.87%); Merrill Lynch, Pierce, Fenner & Smith
Inc., Jacksonville, FL (12.38%).
Advisor Government Investment Class C: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (28.36%).
Advisor Government Investment Institutional Class: First Hawaiian
Bank, Honolulu, HI (66.33%); First American Bank & Trust Co., Fort
Atkinson, WI (5.07%).
Advisor Mortgage Securities Class A: Prudential, New York, NY (8.46%);
BankBoston Corporation, Boston, MA (7.43%); Gilford Securities, Inc.,
New York, NY (6.15%); Aetna Inc., Torrance, CA (5.85%).
Advisor Mortgage Securities Class T: Commonwealth Financial Network,
Waltham, MA (11.53%); US Bancorp, Minneapolis, MN (5.79%); ING America
Life Group, Atlanta, GA (5.60%).
Advisor Mortgage Securities Class B: Wells Fargo Bank, San Francisco,
CA (9.79%).
Advisor Mortgage Securities Institutional Class: Union Planters Bank,
Memphis, TN (34.71%); Reliance Financial Services, Defiance, OH
(22.78%).
Advisor Intermediate Bond Class A: Fleet Financial Group Inc., Boston,
MA (14.12%); Scott & Stringfellow, Inc., Richmond, VA (5.21%).
Advisor Intermediate Bond Class T: PaineWebber, Inc., New York, NY
(5.59%); Citigroup, Inc., New York, NY (5.53%).
Advisor Intermediate Bond Class B: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (6.99%); Fleet Financial Group Inc.,
Boston, MA (6.26%).
Advisor Intermediate Bond Class C: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (17.35%); Boone County National Bank,
Columbia, MO (5.34%).
Advisor Intermediate Bond Institutional Class: Mercantile Investment
Services, Jonesboro, AR (31.01%); First Merit Bank, N.A., Akron, OH
(5.45%).
Advisor Short Fixed-Income Class A: Jackson National Life, Menasha, WI
(25.57%); Fleet Financial Group Inc., Boston, MA (15.03%); Brown
Brothers Harriman, New York, NY (8.72%).
Advisor Short Fixed-Income Class T: PaineWebber, Inc., New York, NY
(7.23%); Securities America, Omaha, NE (6.84%); SunAmerica, New York,
NY (6.79%); Citigroup, Inc., New York, NY (5.85%).
Advisor Short Fixed-Income Class C: Securities America, Omaha, NE
(38.47%); Merrill Lynch, Pierce, Fenner & Smith Inc., Jacksonville, FL
(6.01%).
Advisor Short Fixed-Income Institutional Class: First Hawaiian Bank,
Honolulu, HI (42.47%); South Holland Bancorp, South Holland, IL
(17.35%); First National Bank of Springdale, Springdale, AZ (7.93%);
Mercantile Investment Services, Jonesboro, AR (6.44%).
Advisor Municipal Income Class A: Raymond James Financial Services,
Inc., Saint Petersburg, FL (9.74%); Hudson Trader Investment Services,
Middletown, NY (6.04%).
Advisor Municipal Income Class T: Citigroup, Inc., New York, NY
(8.55%); A.G. Edwards & Sons Inc., Saint Louis, MO (6.48%).
Advisor Municipal Income Class B: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (9.45%).
Advisor Municipal Income Class C: Merrill Lynch, Pierce, Fenner &
Smith Inc., Jacksonville, FL (19.16%); Investacorp, Inc., Amherst, NH
(6.68%); Citigroup, Inc., New York, NY (5.04%).
Advisor Municipal Income Institutional Class: Tompkins County Trust
Company, Ithaca, NY (11.88%); Century Bank & Trust, Rochester, PA
(10.81%); Grand Premier Trust Services, Freeport, IL (8.82%); Arvest
Trust Company, Rogers, AR (6.82%).
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 shareholders' 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 the
cost associated with securities lending 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 International
Capital Appreciation, Advisor Europe Capital Appreciation, Advisor
Diversified International, Advisor Global Equity, Advisor Emerging
Asia, Advisor High Yield, Advisor Government Investment, Advisor
Mortgage Securities, Advisor Intermediate Bond, Advisor Short
Fixed-Income, Advisor Municipal Income, and Advisor High 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 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 Overseas' performance to that of 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BOND FUNDS
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</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 $757 billion of group net assets - the approximate level for
October 1999 - was 0.1289%, which is the weighted average of the
respective fee rates for each level of group net assets up to $757
billion.
The following is the fee schedule for the equity funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EQUITY FUNDS
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
Over 1,260 .2167
</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 $757 billion of group net assets - the approximate level for
October 1999 - was 0.2805%, which is the weighted average of the
respective fee rates for each level of group net assets up to $757
billion.
The individual fund fee rate for each fund (except Advisor Overseas)
is set forth in the following chart. Based on the average group net
assets of the funds advised by FMR for October 1999, each fund's
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 0.2805% + 0.45% = 0.7305%
Advisor Emerging Asia 0.2805% + 0.45% = 0.7305%
Advisor Japan 0.2805% + 0.45% = 0.7305%
Advisor International Capital 0.2805% + 0.45% = 0.7305%
Appreciation
Advisor Europe Capital 0.2805% + 0.45% = 0.7305%
Appreciation
Advisor Diversified 0.2805% + 0.45% = 0.7305%
International
Advisor Global Equity 0.2805% + 0.45% = 0.7305%
Advisor High Yield 0.1289% + 0.45% = 0.5789%
Advisor High Income 0.1289% + 0.45% = 0.5789%
Advisor Government Investment 0.1289% + 0.30% = 0.4289%
Advisor Mortgage Securities 0.1289% + 0.30% = 0.4289%
Advisor Intermediate Bond 0.1289% + 0.30% = 0.4289%
Advisor Short Fixed-Income 0.1289% + 0.30% = 0.4289%
Advisor Municipal Income 0.1289% + 0.25% = 0.3789%
</TABLE>
The individual fund fee rate for Advisor Overseas is 0.45%. Based on
the average group net assets of the funds advised by FMR for October
1999, 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 0.2805% + 0.45% = 0.7305%
</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 Advisor
Overseas 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 cap-weighted EAFE. 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) (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 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 performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to the 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 performance adjustment rate is
(plus/minus)0.20% (for Advisor Overseas) of the 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 Advisor
Overseas' performance compared to the investment record of the 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 the
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended October 31 Performance Adjustment Management Fees Paid to FMR
Advisor Latin America 1999+ N/A $ 19,333
Advisor Emerging Asia 1999 N/A 248,875
1998 N/A N/A
1997 N/A N/A
Advisor Japan 1999++ N/A 151,192
Advisor International Capital 1999 N/A 278,914
Appreciation
1998+++ N/A 116,243
Advisor Europe Capital 1999++ N/A 98,482
Appreciation
Advisor Overseas 1999 2,336,270 (upward) 12,651,751*
1998 1,911,058 (upward) 11,334,456*
1997 734,731 (upward) 9,515,372*
Advisor Diversified 1999++ N/A 142,982
International
Advisor Global Equity 1999++ N/A 50,032
Advisor High Yield 1999 N/A 24,193,202
1998 N/A 20,940,502
1997 N/A 14,787,091
Advisor High Income 1999++++ N/A 4,502
Advisor Government Investment 1999 N/A 1,558,916
1998 N/A 964,623
1997 N/A 930,159
Advisor Mortgage Securities 1999 N/A 2,110,419
1998 N/A 2,226,557
8/1/97 - 10/31/97 N/A 578,471
1997 N/A 2,273,788
Advisor Intermediate Bond 1999 N/A 2,359,875
12/1/97 - 10/31/98 N/A 1,941,732
11/30/97 N/A 2,095,786
Advisor Short Fixed-Income 1999 N/A 1,459,500
1998 N/A 1,531,459
1997 N/A 1,715,958
Advisor Municipal Income 1999 N/A 1,695,763
1998 N/A 1,699,469
1997 N/A 1,826,656
</TABLE>
+ 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 commenced operations on
November 3, 1997.
++++ Advisor High Income commenced operations on September 7, 1999.
* Including the amount of the performance adjustment.
FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, securities
lending costs, brokerage commissions, and extraordinary expenses),
which is subject to revision or discontinuance. 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 increase 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, and Advisor Municipal Income, FMR has entered into a
sub-advisory agreement with FIMM pursuant to which FIMM has primary
responsibility for choosing investments for each fund.
Under the terms of the sub-advisory agreements for Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, and Advisor 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.
Fees paid to FIMM by FMR on behalf of Advisor Government Investment,
Advisor Mortgage Securities, Advisor Intermediate Bond, Advisor Short
Fixed-Income, and Advisor Municipal Income for the past fiscal year
are shown in the table below.
Fund Fiscal Year Ended October 31 Fees Paid to FIMM
Advisor Government Investment 1999 $ 779,458
Advisor Mortgage Securities 1999 $ 872,801
Advisor Intermediate Bond 1999 $ 994,805
Advisor Short Fixed-Income 1999 $ 608,924
Advisor Municipal Income 1999 $ 703,641
On behalf of Advisor High Yield, Advisor High Income, 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
International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, and Advisor Emerging Asia, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, and FIIA. FIIA,
in turn, has entered into a sub-advisory agreement with FIIA(U.K.)L.
On behalf of Advisor Emerging Asia, Advisor Japan, Advisor
International Capital Appreciation, Advisor Overseas, and Advisor
Diversified International, FMR has entered into sub-advisory
agreements with FIJ. Pursuant to the sub-advisory agreements, FMR may
receive from the sub-advisers investment research and advice on
issuers outside the United States and FMR may grant the sub-advisers
investment management authority as well as the authority to buy and
sell securities if FMR believes it would be beneficial to the funds.
Effective January 1, 2000, on behalf of each fund except Advisor
Government Investment and Advisor Municipal Income, FMR Far East will
enter into a sub-advisory agreement with FIJ, pursuant to which FMR
Far East may receive from FIJ investment research and advice relating
to Japanese issuers (and such other Asian issuers as FMR Far East may
designate).
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.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East 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) FMR pays FIJ and FIIA a fee equal to 57% 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 UK, and FMR Far East, 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>
Fiscal Year Ended October 31 FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
Advisor Overseas
1999 $ 1,471,773 $ 925,624 $ 0 $ 0 $ 0
1998 $ 157,996 $ 144,557 $ 0 $ 0 $ 0
1997 $ 627,390 $ 594,643 $ 0 $ 0 $ 0
</TABLE>
Currently , FIIA is primarily responsible for choosing
investments for Advisor Emerging Asia.
For discretionary investment management and execution of portfolio
transactions, fees paid to FMR UK, FMR Far East, FIJ FIIA and
FIIA(U.K.)L on behalf of Advisor Global Equity and Advisor Japan for
the past three fiscal years are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended October 31 FMR U.K. FMR Far East FIIA** FIIA(U.K.)L FIJ**
Advisor Global Equity
1999* $ 0 $ 0 $ 6,673 $ 0 $ 0
Fiscal Year Ended October 31 FMR U.K. FMR Far East FIIA* FIIA(U.K.)L FIJ*
Advisor Japan
1999* $ 0 $ 0 $ 82,730 $ 0 $ 0
</TABLE>
* From December 17, 1998 (commencement of operations).
** Prior to August 1, 1999, FMR paid FIIA and FIJ a fee equal to 50%
of its monthly management fee with respect to the fund's average net
assets managed by the sub-adviser on a discretionary basis.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Sales Charge Revenue CDSC Revenue
Fiscal Year Ended Amount Paid to FDC Amount Retained by FDC Amount Paid to FDC
Advisor Latin America - Oct. 31, 1999+ $ 1,172 $ 786 $ 0
Class A
Advisor Latin America - Oct. 31, 1999+ 1,574 236 0
Class T
Advisor Latin America - Oct. 31, 1999+ N/A N/A 765
Class B
Advisor Latin America - Oct. 31, 1999+ N/A N/A 1,120
Class C
Advisor Emerging Asia - Oct. 31, 1999 6,092 1,360 0
Class A
Advisor Emerging Asia - Oct. 31, 1999 3,504 706 0
Class T
Advisor Emerging Asia - Oct. 31, 1999 N/A N/A 0
Class B
Advisor Emerging Asia - Oct. 31, 1999 N/A N/A 0
Class C
Advisor Japan - Class A Oct. 31, 1999++ 37,716 22,618 0
Advisor Japan - Class T Oct. 31, 1999++ 46,244 19,283 0
Advisor Japan - Class B Oct. 31, 1999++ N/A N/A 24,304
Advisor Japan - Class C Oct. 31, 1999++ N/A N/A 5,016
Advisor International Capital Oct. 31, 1999 21,896 8,307 500
Appreciation - Class A
Oct. 31, 1998+++ 16,408 5,206 0
Advisor International Capital Oct. 31, 1999 69,434 20,281 55
Appreciation - Class T
Oct. 31, 1998+++ 68,287 18,616 0
Advisor International Capital Oct. 31, 1999 N/A N/A 13,971
Appreciation - Class B
Oct. 31, 1998+++ N/A N/A 5,042
Advisor International Capital Oct. 31, 1999 N/A N/A 2,028
Appreciation - Class C
Oct. 31, 1998+++ N/A N/A 1,231
Advisor Europe Capital Oct. 31, 1999++ 22,916 10,160 0
Appreciation - Class A
Advisor Europe Capital Oct. 31, 1999++ 48,724 15,624 0
Appreciation - Class T
Advisor Europe Capital Oct. 31, 1999++ N/A N/A 6,305
Appreciation - Class B
Advisor Europe Capital Oct. 31, 1999++ N/A N/A 871
Appreciation - Class C
Advisor Overseas - Class A Oct. 31, 1999 $ 112,000 $ 44,000 $ 0
Oct. 31, 1998 123,000 42,000 0
Oct. 31, 1997 93,000 25,000 0
Advisor Overseas - Class T Oct. 31, 1999 441,000 136,000 5,000
Oct. 31, 1998 618,000 174,000 0
Oct. 31, 1997 748,000 202,000 0
Advisor Overseas - Class B Oct. 31, 1999 N/A N/A 213,000
Oct. 31, 1998 N/A N/A 124,000
Oct. 31, 1997 N/A N/A 86,000
Advisor Overseas - Class C Oct. 31, 1999 N/A N/A 13,000
Oct. 31, 1998*** N/A N/A 4,000
Advisor Diversified Oct. 31, 1999++ 31,240 11,489 0
International - Class A
Advisor Diversified Oct. 31, 1999++ 105,261 32,178 0
International - Class T
Advisor Diversified Oct. 31, 1999++ N/A N/A 6,226
International - Class B
Advisor Diversified Oct. 31, 1999++ N/A N/A 449
International - Class C
Advisor Global Equity - Class A Oct. 31, 1999++ 7,852 4,267 0
Advisor Global Equity - Class T Oct. 31, 1999++ 8,125 2,655 0
Advisor Global Equity - Class B Oct. 31, 1999++ N/A N/A 354
Advisor Global Equity - Class C Oct. 31, 1999++ N/A N/A 27
Advisor High Yield - Class A Oct. 31, 1999 831,000 324,000 0
Oct. 31, 1998 923,000 346,000 0
Oct. 31, 1997 609,000 162,000 0
Advisor High Yield - Class T Oct. 31, 1999 1,840,000 819,000 8,000
Oct. 31, 1998 2,889,000 1,263,000 0
Oct. 31, 1997 2,978,000 979,000 0
Advisor High Yield - Class B Oct. 31, 1999 N/A N/A 3,139,000
Oct. 31, 1998 N/A N/A 1,774,000
Oct. 31, 1997 N/A N/A 1,076,000
Advisor High Yield - Class C Oct. 31, 1999 N/A N/A 180,000
Oct. 31, 1998*** N/A N/A 54,000
Advisor High Income - Class A Oct. 31, 1999++++ 1,541 341 0
Advisor High Income - Class T Oct. 31, 1999++++ 1,877 1,162 0
Advisor High Income - Class B Oct. 31, 1999++++ N/A N/A 0
Advisor High Income - Class C Oct. 31, 1999++++ N/A N/A 0
Advisor Government Investment Oct. 31, 1999 $ 129,786 $ 42,713 $ 0
- Class A
Oct. 31, 1998 41,422 12,554 0
Oct. 31, 1997 31,629 6,913 0
Advisor Government Investment Oct. 31, 1999 283,622 88,854 5,034
- Class T
Oct. 31, 1998 105,994 31,145 0
Oct. 31, 1997 76,261 20,512 0
Advisor Government Investment Oct. 31, 1999 N/A N/A 330,686
- Class B
Oct. 31, 1998 N/A N/A 76,288
Oct. 31, 1997 N/A N/A 87,840
Advisor Government Investment Oct. 31, 1999 N/A N/A 30,008
- Class C
Oct. 31, 1998*** N/A N/A 14,911
Advisor Mortgage Securities - Oct. 31, 1999 29,751 10,398 0
Class A
Oct. 31, 1998 15,729 5,230 0
Oct. 31, 1997* 263 180 0
Advisor Mortgage Securities - Oct. 31, 1999 74,991 27,421 0
Class T
Oct. 31, 1998 32,042 9,363 0
Oct. 31, 1997* 8,746 1,749 0
Advisor Mortgage Securities - Oct. 31, 1999 N/A N/A 68,549
Class B
Oct. 31, 1998 N/A N/A 7,660
Oct. 31, 1997* N/A N/A 72
Advisor Intermediate Bond - Oct. 31, 1999 139,199 63,030 0
Class A
Oct. 31, 1998** 49,160 28,254 0
Nov. 30, 1997 68,475 24,480 0
Advisor Intermediate Bond - Oct. 31, 1999 180,734 60,024 6,817
Class T
Oct. 31, 1998** 83,240 32,737 0
Nov. 30, 1997 109,296 31,882 0
Advisor Intermediate Bond - Oct. 31, 1999 N/A N/A 126,253
Class B
Oct. 31, 1998** N/A N/A 90,580
Nov. 30, 1997 N/A N/A 68,602
Advisor Intermediate Bond - Oct. 31, 1999 N/A N/A 15,221
Class C
Oct. 31, 1998** N/A N/A 3,720
Nov. 30, 1997**** N/A N/A 0
Advisor Short Fixed-Income - Oct. 31, 1999 $ 56,679 $ 14,321 $ 0
Class A
Oct. 31, 1998 30,218 7,274 0
Oct. 31, 1997 15,709 3,424 0
Advisor Short Fixed-Income - Oct. 31, 1999 248,099 79,649 0
Class T
Oct. 31, 1998 221,684 43,309 0
Oct. 31, 1997 278,405 63,127 0
Advisor Short Fixed-Income - Oct. 31, 1999 N/A N/A 26,881
Class C
Oct. 31, 1998*** N/A N/A 6,373
Advisor Municipal Income - Oct. 31, 1999 50,968 28,875 0
Class A
Oct. 31, 1998 38,091 15,167 0
Oct. 31, 1997 57,657 14,649 0
Advisor Municipal Income - Oct. 31, 1999 204,851 72,163 0
Class T
Oct. 31, 1998 179,663 60,942 0
Oct. 31, 1997 173,689 52,646 0
Advisor Municipal Income - Oct. 31, 1999 N/A N/A 209,085
Class B
Oct. 31, 1998 N/A N/A 112,936
Oct. 31, 1997 N/A N/A 174,350
Advisor Municipal Income - Oct. 31, 1999 N/A N/A 16,279
Class C
Oct. 31, 1998*** N/A N/A 6,848
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CDSC Revenue
Amount Retained by FDC
Advisor Latin America - $ 0
Class A
Advisor Latin America - 0
Class T
Advisor Latin America - 765
Class B
Advisor Latin America - 1,120
Class C
Advisor Emerging Asia - 0
Class A
Advisor Emerging Asia - 0
Class T
Advisor Emerging Asia - 0
Class B
Advisor Emerging Asia - 0
Class C
Advisor Japan - Class A 0
Advisor Japan - Class T 0
Advisor Japan - Class B 24,304
Advisor Japan - Class C 5,016
Advisor International Capital 500
Appreciation - Class A
0
Advisor International Capital 55
Appreciation - Class T
0
Advisor International Capital 13,971
Appreciation - Class B
5,042
Advisor International Capital 2,028
Appreciation - Class C
1,231
Advisor Europe Capital 0
Appreciation - Class A
Advisor Europe Capital 0
Appreciation - Class T
Advisor Europe Capital 6,305
Appreciation - Class B
Advisor Europe Capital 871
Appreciation - Class C
Advisor Overseas - Class A $ 0
0
0
Advisor Overseas - Class T 5,000
0
0
Advisor Overseas - Class B 213,000
124,000
86,000
Advisor Overseas - Class C 13,000
4,000
Advisor Diversified 0
International - Class A
Advisor Diversified 0
International - Class T
Advisor Diversified 6,226
International - Class B
Advisor Diversified 449
International - Class C
Advisor Global Equity - Class A 0
Advisor Global Equity - Class T 0
Advisor Global Equity - Class B 354
Advisor Global Equity - Class C 27
Advisor High Yield - Class A 0
0
0
Advisor High Yield - Class T 8,000
0
0
Advisor High Yield - Class B 3,139,000
1,774,000
1,076,000
Advisor High Yield - Class C 180,000
54,000
Advisor High Income - Class A 0
Advisor High Income - Class T 0
Advisor High Income - Class B 0
Advisor High Income - Class C 0
Advisor Government Investment $ 0
- Class A
0
0
Advisor Government Investment 5,034
- Class T
0
0
Advisor Government Investment 330,686
- Class B
76,288
87,840
Advisor Government Investment 30,008
- Class C
14,911
Advisor Mortgage Securities - 0
Class A
0
0
Advisor Mortgage Securities - 0
Class T
0
0
Advisor Mortgage Securities - 68,549
Class B
7,660
72
Advisor Intermediate Bond - 0
Class A
0
0
Advisor Intermediate Bond - 6,817
Class T
0
0
Advisor Intermediate Bond - 126,253
Class B
90,580
68,602
Advisor Intermediate Bond - 15,221
Class C
3,720
0
Advisor Short Fixed-Income - $ 0
Class A
0
0
Advisor Short Fixed-Income - 0
Class T
0
0
Advisor Short Fixed-Income - 26,881
Class C
6,373
Advisor Municipal Income - 0
Class A
0
0
Advisor Municipal Income - 0
Class T
0
0
Advisor Municipal Income - 209,085
Class B
112,936
174,350
Advisor Municipal Income - 16,279
Class C
6,848
</TABLE>
+ 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 commenced operations
on November 3, 1997.
++++ Advisor High Income commenced operations on September 7, 1999.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period December 1, 1997 through October 31, 1998.
*** For the fiscal period November 3, 1997 through October 31, 1998.
**** For the fiscal period November 3, 1997 through November 30, 1997.
The Trustees have approved a Distribution and Service Plans on behalf
of Class A, Class T, Class B, Class C, Institutional Class and Initial
Class of each fund (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
Emerging Asia, Advisor Japan, Advisor International Capital
Appreciation, Advisor Europe Capital Appreciation, Advisor Overseas,
Advisor Diversified International, and Advisor Global Equity, (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 High Yield, Advisor High Income, Advisor Government
Investment, Advisor Mortgage Securities, and Advisor Municipal Income
(the Bond Funds), and Advisor Intermediate Bond (the Intermediate-Term
Bond Fund), 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
Emerging Asia, Advisor Japan, Advisor International Capital
Appreciation, Advisor Europe Capital Appreciation, Advisor Diversified
International, and Advisor Global Equity, 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, 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 gain 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 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS A DISTRIBUTION FEES
Fees Paid to FDC Paid by FDC to Intermediaries Retained by FDC*
Advisor Latin America+ $ 1,221 $ 272 $ 949
Advisor Emerging Asia 83,642 55,938 27,704
Advisor Japan++ 5,006 3,971 1,035
Advisor International Capital 3,945 3,686 259
Appreciation
Advisor Europe Capital 3,256 2,405 851
Appreciation++
Advisor Overseas 41,214 41,084 130
Advisor Diversified 4,141 1,715 2,426
International++
Advisor Global Equity++ 3,050 696 2,354
Advisor High Yield 251,670 251,461 209
Advisor High Income+++ 146 15 131
Advisor Government Investment 18,505 18,484 21
Advisor Mortgage Securities 3,865 3,719 146
Advisor Intermediate Bond 23,701 23,701 0
Advisor Short Fixed-Income 19,542 19,542 0
Advisor Municipal Income 14,240 14,169 71
</TABLE>
+ 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 High Income commenced operations on September 7, 1999.
* 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 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS T DISTRIBUTION FEES
Fees Paid to FDC Paid by FDC to Intermediaries Retained by FDC*
Advisor Latin America+ $ 3,231 $ 1,337 $ 1,894
Advisor Emerging Asia 1,338 1,200 138
Advisor Japan++ 35,922 34,566 1,356
Advisor International Capital 104,765 101,577 3,188
Appreciation
Advisor Europe Capital 35,955 34,699 1,256
Appreciation++
Advisor Overseas 6,059,913 6,014,458 45,455
Advisor Diversified 50,579 46,271 4,308
International++
Advisor Global Equity++ 9,341 4,697 4,644
Advisor High Yield 6,308,338 6,211,894 96,444
Advisor High Income+++ 570 388 182
Advisor Government Investment 532,422 527,821 4,601
Advisor Mortgage Securities 61,872 56,948 4,924
Advisor Intermediate Bond 760,397 737,083 23,314
Advisor Short Fixed-Income 460,956 457,885 3,071
Advisor Municipal Income 900,188 888,638 11,550
</TABLE>
+ 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 High Income commenced operations on September 7, 1999.
* 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 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS B DISTRIBUTION AND SERVICE FEES
Distribution Fees Paid to FDC Distribution Fees Retained by Service Fees Paid to FDC
FDC*
Advisor Latin America+ $ 4,517 $ 4,517 $ 1,504
Advisor Emerging Asia 1,240 1,240 413
Advisor Japan++ 36,806 36,806 12,268
Advisor International Capital 44,758 44,758 14,916
Appreciation
Advisor Europe Capital 16,088 16,088 5,362
Appreciation++
Advisor Overseas 531,123 531,123 177,071
Advisor Diversified 25,980 25,980 8,660
International++
Advisor Global Equity++ 9,773 9,773 3,258
Advisor High Yield 7,347,174 7,347,174 2,825,836
Advisor High Income+++ 1,046 1,046 402
Advisor Government Investment 556,646 556,646 214,093
Advisor Mortgage Securities 89,966 89,966 34,603
Advisor Intermediate Bond 343,651 343,651 132,173
Advisor Municipal Income 398,972 398,972 153,452
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CLASS B DISTRIBUTION AND SERVICE FEES
Service Fees Paid by FDC to Service Fees Retained by FDC**
Intermediaries
Advisor Latin America+ $ 560 $ 944
Advisor Emerging Asia 330 83
Advisor Japan++ 11,460 808
Advisor International Capital 14,897 19
Appreciation
Advisor Europe Capital 4,547 815
Appreciation++
Advisor Overseas 176,899 172
Advisor Diversified 6,314 2,346
International++
Advisor Global Equity++ 923 2,335
Advisor High Yield 2,822,380 3,456
Advisor High Income+++ 205 197
Advisor Government Investment 213,776 317
Advisor Mortgage Securities 34,603 0
Advisor Intermediate Bond 132,075 98
Advisor Municipal Income 153,324 128
</TABLE>
+ 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 High Income commenced operations on September 7, 1999.
* 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.
The table below shows the distribution and service fees paid by Class
C for the fiscal years ended 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS C DISTRIBUTION AND SERVICE FEES
Distribution Fees Paid to FDC Distribution Fees Paid by FDC Distribution Fees Retained by
to Intermediaries FDC*
Advisor Latin America+ $ 3,893 $ 164 $ 3,729
Advisor Emerging Asia 929 259 670
Advisor Japan++ 41,310 10,792 30,518
Advisor International Capital 27,918 8,478 19,440
Appreciation
Advisor Europe Capital 16,743 1,665 15,078
Appreciation++
Advisor Overseas 166,355 59,216 107,139
Advisor Diversified 21,683 1,437 20,246
International++
Advisor Global Equity++ 11,229 2,173 9,056
Advisor High Yield 1,628,309 420,115 1,208,194
Advisor High Income+++ 1,446 0 1,446
Advisor Government Investment 203,219 23,799 179,420
Advisor Intermediate Bond***** 84,788 18,687 66,101
Advisor Short Fixed-Income 89,327 12,961 76,366
Advisor Municipal Income 83,327 17,803 65,524
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS C DISTRIBUTION AND SERVICE FEES
Service Fees Paid to FDC Service Fees Paid by FDC to Service Fees Retained by FDC**
Intermediaries
Advisor Latin America+ $ 1,298 $ 55 $ 1,243
Advisor Emerging Asia 310 86 224
Advisor Japan++ 13,770 3,597 10,173
Advisor International Capital 9,306 2,826 6,480
Appreciation
Advisor Europe Capital 5,581 555 5,026
Appreciation++
Advisor Overseas 55,452 19,739 35,713
Advisor Diversified 7,227 479 6,748
International++
Advisor Global Equity++ 3,743 725 3,018
Advisor High Yield 542,770 140,039 402,731
Advisor High Income+++ 482 0 482
Advisor Government Investment 67,740 7,933 59,807
Advisor Intermediate Bond***** 28,263 6,229 22,034
Advisor Short Fixed-Income 29,776 4,321 25,455
Advisor Municipal Income 27,776 5,935 21,841
</TABLE>
+ 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 High Income commenced operations on September 7, 1999.
* 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.
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 Plan 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 Plan shares.
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 of the 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.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Class A, Class T, Class B, Class C, and Institutional Class of Advisor
Latin America, Advisor Emerging Asia, Advisor Japan, Advisor
International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, Advisor High Yield, Advisor High Income,
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 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 has entered into a transfer
agent agreement with Citibank, N.A. (Citibank), which is located at
111 Wall Street, New York, New York. Under the terms of the
agreements, Citibank provides transfer agency, dividend disbursing,
and shareholder services for each class of each fund. Citibank in turn
has entered into sub-transfer agent agreements with FSC. Under the
terms of the sub-agreements, FSC performs all processing activities
associated with providing these services for each class of each fund
and receives all related transfer agency fees paid to Citibank.
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 Advisor Latin America, Advisor Emerging Asia, Advisor Japan,
Advisor International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Overseas, Advisor Diversified International, and
Advisor Global Equity, 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 Emerging Asia, Advisor Japan,
Advisor International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Overseas, Advisor Diversified International,
Advisor Global Equity, Advisor High Yield, Advisor High Income,
Advisor Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, and Advisor Short Fixed-Income 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.
Advisor Municipal Income has also entered into a service agent
agreement with Citibank. Under the terms of the agreements, Citibank
provides pricing and bookkeeping services for each fund. Citibank 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 Citibank.
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
Latin America, Advisor Emerging Asia, Advisor Japan, Advisor
International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Overseas, Advisor Diversified International, and
Advisor Global Equity 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.
The annual rates for pricing and bookkeeping services for Advisor
Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, Advisor Short Fixed-Income, and Advisor 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 and Advisor High Income 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.
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 1999 1998 1997
Advisor Latin America 10/31 $ 51,600+ N/A N/A
Advisor Emerging Asia 10/31 22,821 N/A N/A
Advisor Japan 10/31 52,086++ N/A N/A
Advisor International Capital 10/31 60,363 $ 60,181+++ N/A
Appreciation
Advisor Europe Capital 10/31 52,090++ N/A N/A
Appreciation
Advisor Overseas 10/31 676,473 669,432 $ 629,811
Advisor Diversified 10/31 52,097++ N/A N/A
International
Advisor Global Equity 10/31 52,067++ N/A N/A
Advisor High Yield 10/31 926,567 821,873 821,882
Advisor High Income 10/31 8,833++++ N/A N/A
Advisor Government Investment 10/31 111,672 90,466 87,365
Advisor Mortgage Securities 10/31 161,159 205,166 52,896*
Advisor Intermediate Bond 10/31 164,670 181,249** N/A
11/30 N/A N/A 195,556
Advisor Short Fixed-Income 10/31 105,213 142,365 159,567
Advisor Municipal Income 10/31 141,615 184,252 191,896
</TABLE>
+ Advisor Latin America commenced operations on December 21, 1998.
++ Advisor Japan, Europe Capital Appreciation, Advisor Diversified
International, and Global Equity commenced operations on December 17,
1998.
+++ Advisor International Capital Appreciation commenced operations on
November 3, 1997.
++++ Advisor High Income commenced operations on September 7, 1999.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period December 1, 1997 through October 31, 1998.
For administering the securities lending program for the Taxable
Funds, FSC is paid based on the number and duration of individual
securities loans.
For the fiscal years ended October 31, 1999, 1998, and 1997, Advisor
Latin America, Advisor Emerging Asia, Advisor Japan, Advisor
International Capital Appreciation, Advisor Europe Capital
Appreciation, Advisor Diversified International, Advisor Global
Equity, Advisor High Yield, Advisor High Income, Advisor Government
Investment, Advisor Mortgage Securities, Advisor Intermediate Bond,
Advisor Short Fixed-Income, and Advisor Municipal Income did not pay
FSC for securities lending.
For the fiscal years ended October 31, 1999, 1998, and 1997, Advisor
Overseas paid FSC $111, $0, and $0, respectively, for securities
lending.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Advisor High Yield, Advisor High Income, Advisor
Government Investment, Advisor Mortgage Securities, Advisor
Intermediate Bond, Advisor Short Fixed-Income, and Advisor 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. On January 16, 1998, Advisor Municipal Income
changed its name from Advisor High Income Municipal Fund to Advisor
Municipal Income Fund. Currently, there are seven 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, and Advisor 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 International Capital
Appreciation, Advisor Europe Capital Appreciation, Advisor Overseas,
Advisor Diversified International, Advisor Global Equity, and Advisor
Emerging Asia 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 Asia. 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. The trust is an entity 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 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. The Declaration of Trust for 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.
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. The 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 that 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.
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 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.
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
the 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 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.
CUSTODIANS. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of Advisor International
Capital Appreciation and Advisor Emerging Asia. 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, and Advisor Global Equity. The Chase Manhattan Bank, 1
Chase Manhattan Plaza, New York, New York is custodian of the assets
of Advisor Overseas. The Bank of New York, 110 Washington Street, New
York, New York, is custodian of the assets of Advisor High Yield,
Advisor High Income, Advisor Government Investment, Advisor
Intermediate Bond, Advisor Mortgage Securities, and Advisor Short
Fixed-Income. Citibank, N.A., 111 Wall Street, New York, New York, is
custodian of the assets of Advisor Municipal Income. Each custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any 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 of the taxable
funds 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 and Advisor Emerging Asia
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. PricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts, serves as independent accountant for Advisor Latin
America, Advisor Emerging Asia, Advisor Japan, Advisor Overseas,
Advisor Diversified International, Advisor Global Equity, Advisor
Mortgage Securities, Advisor Intermediate Bond, and Advisor Municipal
Income. The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts,
serves as independent accountant for Advisor Europe Capital
Appreciation, Advisor International Capital Appreciation, Advisor High
Yield, Advisor High Income, Advisor Government Investment, and Advisor
Short Fixed-Income. The auditor examines financial statements for the
funds and provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended October 31, 1999, and report of the auditor, are
included in the 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.
The third party marks appearing above are the marks of their
respective owners.
