SUPPLEMENT TO THE
FIDELITY ADVISOR FUNDS(registered trademark)
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
FEBRUARY 26, 1999
REVISED APRIL 9, 1999
STATEMENT OF ADDITIONAL INFORMATION
THIS STATEMENT OF ADDITIONAL INFORMATION IS ONLY VALID FOR
FIDELITY ADVISOR STRATEGIC INCOME FUND AND FIDELITY ADVISOR EMERGING
MARKETS INCOME FUND. TO REQUEST A COPY OF A PROSPECTUS OR A STATEMENT
OF ADDITIONAL INFORMATION FOR OTHER FIDELITY ADVISOR FUNDS, PLEASE
CALL FIDELITY AT 1-888-622-3175.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND HAS BEEN RENAMED
FIDELITY ADVISOR VALUE STRATEGIES FUND. ALL REFERENCES TO ADVISOR
STRATEGIC OPPORTUNITIES THROUGHOUT THIS SAI SHOULD BE REPLACED WITH
ADVISOR VALUE STRATEGIES.
THE FOLLOWING INFORMATION REPLACES NON-FUNDAMENTAL INVESTMENT
LIMITATION (III) BEGINNING ON PAGE 3 FOR EACH FUND EXCEPT ADVISOR
EMERGING MARKETS INCOME FUND AND ADVISOR STRATEGIC INCOME FUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
THE FOLLOWING INFORMATION REPLACES NON-FUNDAMENTAL INVESTMENT
LIMITATION (IV) ON PAGES 24 AND 27, RESPECTIVELY, FOR ADVISOR EMERGING
MARKETS INCOME FUND AND ADVISOR STRATEGIC INCOME FUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
THE FOLLOWING INFORMATION REPLACES NON-FUNDAMENTAL INVESTMENT
LIMITATION (V) BEGINNING ON PAGE 3 FOR EACH FUND EXCEPT ADVISOR
EMERGING MARKETS INCOME FUND, ADVISOR STRATEGIC INCOME FUND, ADVISOR
MUNICIPAL INCOME FUND AND ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION.
(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.)
THE FOLLOWING INFORMATION REPLACES NON-FUNDAMENTAL INVESTMENT
LIMITATION (VI) ON PAGES 25 AND 27, RESPECTIVELY, FOR ADVISOR EMERGING
MARKETS INCOME FUND AND ADVISOR STRATEGIC INCOME FUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION.
(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.)
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR LATIN AMERICA FUND" SECTION BEGINNING ON PAGE 3.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR JAPAN FUND" SECTION BEGINNING ON PAGE 4.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR EUROPE CAPITAL APPRECIATION FUND" SECTION BEGINNING ON PAGE 5.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND" SECTION BEGINNING ON
PAGE 6.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR OVERSEAS FUND" AND "INVESTMENT LIMITATIONS OF ADVISOR
DIVERSIFIED INTERNATIONAL FUND" SECTIONS BEGINNING ON PAGES 7 AND 8,
RESPECTIVELY.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR GLOBAL EQUITY FUND" SECTION BEGINNING ON PAGE 9.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR SMALL CAP FUND" SECTION BEGINNING ON PAGE 11.
For purposes of normally investing at least 65% of the fund's total
assets in securities of companies with small market capitalizations,
FMR interprets "total assets" to exclude collateral received for
securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR MID CAP FUND" SECTION BEGINNING ON PAGE 13.
For purposes of normally investing at least 65% of the fund's total
assets in securities of companies with medium market capitalizations,
FMR interprets "total assets" to exclude collateral received for
securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR EQUITY GROWTH FUND" SECTION BEGINNING ON PAGE 15.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR LARGE CAP FUND" SECTION BEGINNING ON PAGE 16.
For purposes of normally investing at least 65% of the fund's total
assets in securities of companies with large market capitalizations,
FMR interprets "total assets" to exclude collateral received for
securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR DIVIDEND GROWTH FUND" SECTION BEGINNING ON PAGE 17.
For purposes of normally investing at least 65% of the fund's total
assets in securities of companies that FMR believes have the potential
for dividend growth by either increasing their dividends or commencing
dividends, if none are currently paid, FMR interprets "total assets"
to exclude collateral received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR EQUITY INCOME FUND" SECTION BEGINNING ON PAGE 21.
For purposes of normally investing at least 65% of the fund's total
assets in income-producing equity securities, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR BALANCED FUND" SECTION BEGINNING ON PAGE 23.
For purposes of investing at least 25% of the fund's total assets in
fixed-income senior securities (including debt securities and
preferred stock), FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR EMERGING MARKETS INCOME FUND" SECTION BEGINNING ON PAGE 24.
For purposes of normally investing at least 65% of the fund's total
assets in debt securities of issuers in emerging markets, FMR
interprets "total assets" to exclude collateral received for
securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR HIGH YIELD FUND" SECTION BEGINNING ON PAGE 25.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR GOVERNMENT INVESTMENT FUND" SECTION BEGINNING ON PAGE 27.
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 FOLLOWING INFORMATION SUPPLEMENTS THE "INVESTMENT LIMITATIONS OF
ADVISOR MORTGAGE SECURITIES FUND" SECTION BEGINNING ON PAGE 28.
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 FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 45.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 82.
<TABLE>
<CAPTION>
Average Annual Returns1
Fiscal Period Ended Thirty-Day Yield Tax Equivalent Yield One Year Five Years
<S> <C> <C> <C> <C> <C>
Advisor Intermediate 2.63% 4.11% 2.67% 4.30%
Municipal Income - Class B
Advisor Intermediate 3.54% 5.53% 6.73% 5.22%
Municipal Income -
Institutional
</TABLE>
<TABLE>
<CAPTION>
Cumulative Returns1
Ten Years/ Life of Fund* One Year Five Years Ten Years/ Life of Fund*
<S> <C> <C> <C> <C> <C>
Advisor Intermediate 6.12% 2.67% 23.43% 81.13%
Municipal Income - Class B
Advisor Intermediate 6.62% 6.73% 29.00% 89.84%
Municipal Income -
Institutional
</TABLE>
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION BEGINNING ON PAGE 95.
ADVISOR VALUE STRATEGIES -
CLASS A
Explanatory Notes: With an initial investment of $10,000 in Class A of
Advisor Value Strategies on December 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class A
shares was $9,425. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $24,359. If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $2,721 for dividends and $6,971 for capital
gain distributions. Initial offering of Class A of Advisor Value
Strategies 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 July 1, 1999, Advisor Value Strategies operated under
certain different investment policies. Accordingly, the fund's
historical performance may not represent its current investment
policies.
ADVISOR VALUE STRATEGIES -
CLASS T
Explanatory Notes: With an initial investment of $10,000 in Class T of
Advisor Value Strategies on December 1, 1988, assuming the maximum
sales charge had been in effect, the net amount invested in Class T
shares was $9,650. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $24,398. If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $2,677 for dividends and $7,095 for capital
gain distributions. Prior to July 1, 1999, Advisor Value Strategies
operated under certain different investment policies. Accordingly, the
fund's historical performance may not represent its current investment
policies.
ADVISOR VALUE STRATEGIES -
CLASS B
Explanatory Notes: With an initial investment of $10,000 in Class B of
Advisor Value Strategies on December 1, 1988, the net amount invested
in Class B shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $24,789. If distributions
had not been reinvested, the amount of distributions earned from the
class over time would have been smaller, and cash payments for the
period would have amounted to $2,767 for dividends and $7,277 for
capital gain distributions. Initial offering of Class B of Advisor
Value Strategies took place on June 30, 1994. Class B returns prior to
June 30, 1994 are those of Class T which reflect a 12b-1 fee of 0.65%.
If Class B's 12b-1 fee had been reflected, returns prior to June 30,
1994 would have been lower. Prior to July 1, 1999, Advisor Value
Strategies operated under certain different investment policies.
Accordingly, the fund's historical performance may not represent its
current investment policies.
ADVISOR VALUE STRATEGIES -
INSTITUTIONAL CLASS
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of Advisor Value Strategies on December 1, 1988,
the net amount invested in Institutional Class shares was $10,000. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $26,287. If distributions had not been reinvested, the
amount of distributions earned from the class over time would have
been smaller, and cash payments for the period would have amounted to
$3,426 for dividends and $7,328 for capital gain distributions.
Initial offering of Institutional Class of Advisor Value Strategies
took place on July 3, 1995. Institutional Class returns prior to July
3, 1995 are those of Initial Class which has no 12b-1 fee. Prior to
July 1, 1999, Advisor Value Strategies operated under certain
different investment policies. Accordingly, the fund's historical
performance may not represent its current investment policies.
ADVISOR VALUE STRATEGIES -
INITIAL CLASS
Explanatory Notes: With an initial investment of $10,000 in Initial
Class of Advisor Value Strategies on December 1, 1988, the net amount
invested in Initial Class shares was $10,000.The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $26,269. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $3,396 for dividends
and $7,353 for capital gain distributions. Prior to July 1, 1999,
Advisor Value Strategies operated under certain different investment
policies. Accordingly, the fund's historical performance may not
represent its current investment policies.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION BEGINNING ON PAGE 134.
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Class B of Advisor Intermediate Municipal Income
would have grown to $18,113.
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended October
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,142 $ 6,753 $ 1,218 $ 18,113
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
</TABLE>
During the 10-year period ended October 31, 1998, a hypothetical
$10,000 investment in Institutional Class of Advisor Intermediate
Municipal Income would have grown to $18,984.
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended October
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1998 $ 10,151 $ 7,611 $ 1,222 $ 18,984
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended October 31 S&P 500 DJIA Cost of Living
1998 $ 51,835 $ 52,786 $ 13,644
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE FOURTH AND FIFTH PARAGRAPHS
UNDER "PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION ON PAGE
138.
Advisor Strategic Income may compare its performance to that of the
Fidelity Strategic Income Composite Index which is a hypothetical
representation of the performance of the fund's general investment
categories according to their respective weightings in the fund's
neutral mix. The Fidelity Strategic Income Composite Index represents
Advisor Strategic Income's four general investment categories
according to their respective weighting in the fund's neutral mix (40%
high yield, 30% U.S. Government and investment-grade, 15% foreign
developed markets and 15% emerging markets). The following indexes are
used to calculate the Fidelity Strategic Income Composite Index:
Merrill Lynch High Yield Master II Index for the high yield category,
Lehman Brothers Government Bond Index for the U.S. Government and
investment grade category, Salomon Brothers Non-U.S. Dollar World
Government Bond Index for the foreign developed markets category, and
J.P. Morgan Emerging Markets Bond Index Plus for the emerging markets
category. The index weightings of the Fidelity Strategic Income
Composite Index are rebalanced monthly.
MERRILL LYNCH HIGH YIELD MASTER II INDEX is 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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"PERFORMANCE" SECTION BEGINNING ON PAGE 139.
Each of Advisor TechnoQuant Growth, Advisor Value Strategies, Advisor
Retirement Growth, Advisor Equity Growth, Advisor Large Cap, Advisor
Dividend Growth, Advisor Growth Opportunities, Advisor Growth &
Income, Advisor Equity Income, Advisor Asset Allocation, and Advisor
Balanced may compare its performance to that of the Standard & Poor's
500 Index, a market capitalization-weighted index of common stocks.
Advisor Value Strategies may compare its performance to that of the
Russell MidCap Value Index, a market capitalization-weighted index of
medium-capitalization stocks determined by Russell to be value stocks
as measured by their lower price-to-book ratios and lower forecasted
growth values.
Each of Advisor High Yield and Advisor Strategic 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.
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH FOLLOWING THE
HEADING "PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION
BEGINNING ON PAGE 140.
Each municipal bond fund may compare its performance to the Lehman
Brothers Municipal Bond Index, a market value-weighted index for
investment-grade municipal bonds with maturities of one year or more.
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. Advisor Intermediate Municipal
Income may also compare its performance to that of the Lehman Brothers
1-17 Year Municipal Bond Index, a market value-weighted index for
investment-grade municipal bonds with maturities between one and 17
years. Issues included in each index have been issued after December
31, 1990, have an outstanding par value of at least $3 million, and
have been issued as part of an offering of at least $50 million.
Subsequent to December 31, 1995, zero coupon bonds and issues subject
to the alternative minimum tax are included in each index. Beginning
January 1, 2000, issues included in each index will have an
outstanding par value of at least $5 million.
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 147.
CLASS A SHARES ONLY
10. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 148.
CLASS T SHARES ONLY
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;
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 148.
CLASS T SHARES ONLY
14. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 149.
FOR CLASS A AND CLASS T SHARES ONLY
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."
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 151.
NED C. LAUTENBACH (55), 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).
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.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 151.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 151.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
THE FOLLOWING INFORMATION REPLACES THE "COMPENSATION TABLE" FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 155.
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.
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM A Edward C. Johnson 3d** Abigail P. Johnson ** J. Gary Burkhead** Ralph F. Cox
FUND
<S> <C> <C> <C> <C>
Advisor Latin AmericaB,+ $ 0 $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0 $ 0
Advisor Europe Capital $ 0 $ 0 $ 0 $ 4
AppreciationB,+
Advisor International Capital $ 0 $ 0 $ 0 $ 5
AppreciationB
Advisor OverseasB $ 0 $ 0 $ 0 $ 464
Advisor Diversified $ 0 $ 0 $ 0 $ 8
InternationalB,+
Advisor Global EquityB,+ $ 0 $ 0 $ 0 $ 8
Advisor TechnoQuant GrowthB $ 0 $ 0 $ 0 $ 13
Advisor Small CapB,+ $ 0 $ 0 $ 0 $ 13
Advisor Value StrategiesB $ 0 $ 0 $ 0 $ 230
Advisor MidCapB $ 0 $ 0 $ 0 $ 170
Advisor Retirement GrowthB,+ $ 0 $ 0 $ 0 $ 16
Advisor Equity GrowthB,C,H $ 0 $ 0 $ 0 $ 2,058
Advisor Large CapB $ 0 $ 0 $ 0 $ 34
Advisor Dividend GrowthB,+ $ 0 $ 0 $ 0 $ 44
Advisor Growth Opportunities $ 0 $ 0 $ 0 $ 8,661
B,D,H
Advisor Growth & IncomeB $ 0 $ 0 $ 0 $ 151
Advisor Equity IncomeB,E,H $ 0 $ 0 $ 0 $ 1,358
Advisor Asset AllocationB,+ $ 0 $ 0 $ 0 $ 8
Advisor BalancedB,F,H $ 0 $ 0 $ 0 $ 1,114
Advisor Emerging Markets $ 0 $ 0 $ 0 $ 36
IncomeB
Advisor High YieldB,G,H $ 0 $ 0 $ 0 $ 1,280
Advisor Strategic IncomeB $ 0 $ 0 $ 0 $ 86
Advisor Government InvestmentB $ 0 $ 0 $ 0 $ 77
Advisor Mortgage SecuritiesB $ 0 $ 0 $ 0 $ 187
Advisor Intermediate BondB $ 0 $ 0 $ 0 $ 176
Advisor Short Fixed-IncomeB $ 0 $ 0 $ 0 $ 129
Advisor Municipal IncomeB $ 0 $ 0 $ 0 $ 160
Advisor Intermediate $ 0 $ 0 $ 0 $ 25
Municipal IncomeB
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM
A Phyllis Burke Davis Robert M. Gates E. Bradley Jones **** Donald J. Kirk Ned C. Lautenbach***
FUND
<S> <C> <C> <C> <C> <C>
Advisor Latin
AmericaB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor Europe Capital $ 4 $ 4 $ 4 $ 4 $ 0
AppreciationB,+
Advisor International
Capital $ 5 $ 5 $ 5 $ 5 $ 0
AppreciationB
Advisor OverseasB $ 461 $ 467 $ 464 $ 473 $ 0
Advisor Diversified $ 8 $ 8 $ 8 $ 8 $ 0
InternationalB,+
Advisor Global
EquityB,+ $ 8 $ 8 $ 8 $ 8 $ 0
Advisor TechnoQuant
GrowthB $ 13 $ 13 $ 13 $ 13 $ 0
Advisor Small CapB,+ $ 13 $ 13 $ 13 $ 13 $ 0
Advisor Value
StrategiesB $ 228 $ 231 $ 230 $ 234 $ 0
Advisor MidCapB $ 169 $ 171 $ 170 $ 174 $ 0
Advisor Retirement
GrowthB,+ $ 16 $ 16 $ 16 $ 16 $ 0
Advisor Equity
GrowthB,C,H $ 2,044 $ 2,072 $ 2,058 $ 2,101 $ 0
Advisor Large CapB $ 34 $ 34 $ 34 $ 35 $ 0
Advisor Dividend
GrowthB,+ $ 44 $ 44 $ 44 $ 45 $ 0
Advisor Growth
Opportunities $ 8,603 $ 8,721 $ 8,662 $ 8,840 $ 0
B,D,H
Advisor Growth &
IncomeB $ 149 $ 152 $ 150 $ 154 $ 0
Advisor Equity
IncomeB,E,H $ 1,348 $ 1,367 $ 1,358 $ 1,386 $ 0
Advisor Asset
AllocationB,+ $ 8 $ 8 $ 8 $ 8 $ 0
Advisor BalancedB,F,H $ 1,068 $ 1,083 $ 1,076 $ 1,098 $ 0
Advisor Emerging
Markets $ 35 $ 36 $ 36 $ 36 $ 0
IncomeB
Advisor High
YieldB,G,H $ 1,271 $ 1,290 $ 1,280 $ 1,307 $ 0
Advisor Strategic
IncomeB $ 85 $ 86 $ 85 $ 87 $ 0
Advisor Government
InvestmentB $ 76 $ 77 $ 77 $ 78 $ 0
Advisor Mortgage
SecuritiesB $ 186 $ 188 $ 187 $ 190 $ 0
Advisor Intermediate
BondB $ 175 $ 178 $ 176 $ 180 $ 0
Advisor Short
Fixed-IncomeB $ 128 $ 130 $ 129 $ 131 $ 0
Advisor Municipal
IncomeB $ 159 $ 161 $ 160 $ 163 $ 0
Advisor Intermediate $ 25 $ 25 $ 25 $ 25 $ 0
Municipal IncomeB
TOTAL COMPENSATION
FROM THE $ 220,500 $ 223,500 $ 222,000 $ 226,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
FROM A Peter S. Lynch** William O. McCoy Gerald C. Mc-Donough Marvin L. Mann Robert C. Pozen**
FUND
<S> <C> <C> <C> <C> <C>
Advisor Latin AmericaB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor JapanB,+ $ 0 $ 0 $ 0 $ 0 $ 0
Advisor Europe Capital $ 0 $ 4 $ 5 $ 4 $ 0
AppreciationB,+
Advisor International Capital $ 0 $ 5 $ 6 $ 5 $ 0
AppreciationB
Advisor OverseasB $ 0 $ 467 $ 575 $ 461 $ 0
Advisor Diversified $ 0 $ 8 $ 10 $ 8 $ 0
InternationalB,+
Advisor Global EquityB,+ $ 0 $ 8 $ 10 $ 8 $ 0
Advisor TechnoQuant GrowthB $ 0 $ 13 $ 16 $ 13 $ 0
Advisor Small CapB,+ $ 0 $ 13 $ 16 $ 13 $ 0
Advisor Value StrategiesB $ 0 $ 231 $ 285 $ 228 $ 0
Advisor MidCapB $ 0 $ 171 $ 211 $ 169 $ 0
Advisor Retirement GrowthB,+ $ 0 $ 16 $ 20 $ 16 $ 0
Advisor Equity GrowthB,C,H $ 0 $ 2,072 $ 2,550 $ 2,045 $ 0
Advisor Large CapB $ 0 $ 34 $ 42 $ 34 $ 0
Advisor Dividend GrowthB,+ $ 0 $ 44 $ 54 $ 44 $ 0
Advisor Growth Opportunities $ 0 $ 8,721 $ 10,728 $ 8,608 $ 0
B,D,H
Advisor Growth & IncomeB $ 0 $ 152 $ 186 $ 150 $ 0
Advisor Equity IncomeB,E,H $ 0 $ 1,367 $ 1,682 $ 1,349 $ 0
Advisor Asset AllocationB,+ $ 0 $ 8 $ 10 $ 8 $ 0
Advisor BalancedB,F,H $ 0 $ 1,083 $ 1,331 $ 1,105 $ 0
Advisor Emerging Markets $ 0 $ 36 $ 44 $ 35 $ 0
IncomeB
Advisor High YieldB,G,H $ 0 $ 1,290 $ 1,586 $ 1,273 $ 0
Advisor Strategic IncomeB $ 0 $ 86 $ 105 $ 85 $ 0
Advisor Government
InvestmentB $ 0 $ 77 $ 95 $ 76 $ 0
Advisor Mortgage SecuritiesB $ 0 $ 188 $ 231 $ 185 $ 0
Advisor Intermediate BondB $ 0 $ 178 $ 218 $ 175 $ 0
Advisor Short Fixed-IncomeB $ 0 $ 130 $ 160 $ 128 $ 0
Advisor Municipal IncomeB $ 0 $ 161 $ 198 $ 159 $ 0
Advisor Intermediate $ 0 $ 25 $ 31 $ 25 $ 0
Municipal IncomeB
TOTAL COMPENSATION FROM THE $ 0 $223,500 $ 273,500 $ 220,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM A Thomas R. Williams
FUND
<S> <C>
Advisor Latin AmericaB,+ $ 0
Advisor JapanB,+ $ 0
Advisor Europe Capital $ 4
AppreciationB,+
Advisor International Capital $ 5
AppreciationB
Advisor OverseasB $ 467
Advisor Diversified $ 8
InternationalB,+
Advisor Global EquityB,+ $ 8
Advisor TechnoQuant GrowthB $ 13
Advisor Small CapB,+ $ 13
Advisor Value StrategiesB $ 231
Advisor MidCapB $ 171
Advisor Retirement GrowthB,+ $ 16
Advisor Equity GrowthB,C,H $ 2,072
Advisor Large CapB $ 34
Advisor Dividend GrowthB,+ $ 44
Advisor Growth Opportunities $ 8,721
B,D,H
Advisor Growth & IncomeB $ 152
Advisor Equity IncomeB,E,H $ 1,367
Advisor Asset AllocationB,+ $ 8
Advisor BalancedB,F,H $ 1,121
Advisor Emerging Markets $ 36
IncomeB
Advisor High YieldB,G,H $ 1,289
Advisor Strategic IncomeB $ 86
Advisor Government InvestmentB $ 77
Advisor Mortgage SecuritiesB $ 188
Advisor Intermediate BondB $ 177
Advisor Short Fixed-IncomeB $ 130
Advisor Municipal IncomeB $ 161
Advisor Intermediate $ 25
Municipal IncomeB
TOTAL COMPENSATION FROM THE $ 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, Ms. Johnson and Mr. Burkhead 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, $933, Phyllis Burke Davis, $933,
Robert M. Gates, $933, E. Bradley Jones, $933, Donald J. Kirk, $933,
William O. McCoy, $933, Gerald C. McDonough, $1,089, Marvin L. Mann,
$933, and Thomas R. Williams, $933.
D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $3,927, Phyllis Burke Davis,
$3,927, Robert M. Gates, $3,927, E. Bradley Jones, $3,927, Donald J.
Kirk, $3,927, William O. McCoy, $3,927, Gerald C. McDonough, $4,581,
Marvin L. Mann, $3,927, and Thomas R. Williams, $3,927.
E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $616, Phyllis Burke Davis, $616,
Robert M. Gates, $616, E. Bradley Jones, $616, Donald J. Kirk, $616,
William O. McCoy, $616, Gerald C. McDonough, $719, Marvin L. Mann,
$616, and Thomas R. Williams, $616.
F The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $512, Phyllis Burke Davis, $512,
Robert M. Gates, $512, E. Bradley Jones, $512, Donald J. Kirk, $512,
William O. McCoy, $512, Gerald C. McDonough, $598, Marvin L. Mann,
$512, and Thomas R. Williams, $512.
G The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $579, Phyllis Burke Davis, $579,
Robert M. Gates, $579, E. Bradley Jones, $579, Donald J. Kirk, $579,
William O. McCoy, $579, Gerald C. McDonough, $676, Marvin L. Mann,
$579, and Thomas R. Williams, $579.
H Certain of the non-interested trustees' aggregate compensation from
certain funds includes accrued voluntary deferred compensation as
follows: Equity Growth (Ralph F. Cox, $789, William O. McCoy, $723,
Marvin L. Mann, $789, Thomas R. Williams, $789); Growth Opportunities
(Ralph F. Cox, $3,322, William O. McCoy, $3,059, Marvin L. Mann,
$3,322, Thomas R. Williams, $3,322); Equity Income (Ralph F. Cox,
$521, William O. McCoy, $480, Marvin L. Mann, $521, Thomas R,
Williams, $521); Balanced (Ralph F. Cox, $435, William O. McCoy, $359,
Marvin L. Mann, $435, Thomas R. Williams, $435); and High Yield (Ralph
F. Cox, $492, William O. McCoy, $417, Marvin L. Mann, $492, Thomas R.
Williams, $492).
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOR THE BOND FUNDS ON PAGE 163.
BOND FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 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 FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOR THE EQUITY FUNDS ON PAGE 164.
EQUITY FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 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 FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 164.
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $669 billion of group net assets - the approximate level for
December 1998 - was 0.2863%, which is the weighted average of the
respective fee rates for each level of group net assets up to $669
billion.
THE FOLLOWING INFORMATION REPLACES THE FOURTH AND FIFTH PARAGRAPHS
FOUND IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 165.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of
Advisor Overseas and Advisor Growth Opportunities is subject to upward
or downward adjustment, depending upon whether, and to what extent,
the fund's investment performance for the performance period exceeds,
or is exceeded by, the record over the same period of the S&P 500 for
Advisor Growth Opportunities or the cap-weighted EAFE for Overseas.
The performance period consists of the most recent month plus the
previous 35 months.
The basic fee for Advisor Value Strategies is subject to downward
adjustment, depending on whether, and to what extent, the fund's
investment performance for the performance period is exceeded by the
record over the same period of the S&P 500. The performance period
consists of the most recent month plus the previous 35 months. After
December 31, 2000, no performance adjustment will be applied to the
basic fee for Advisor Value Strategies.
Each percentage point of difference, calculated to the nearest 0.01%
(for Advisor Overseas, Advisor Value Strategies, and Advisor Growth
Opportunities) (up to a maximum difference of (plus/minus)10.00 for
Advisor Overseas and Advisor Growth Opportunities and -10.00 for
Advisor Value Strategies) is multiplied by a performance adjustment
rate of 0.02%.
THE FOLLOWING INFORMATION REPLACES THE SEVENTH AND EIGHTH PARAGRAPHS
FOUND IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 165.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee for Advisor Overseas and
Advisor Growth Opportunities or subtracted from the basic fee for
Advisor Value Strategies.
The maximum annualized performance adjustment rate is
(plus/minus)0.20% for Advisor Overseas and Advisor Growth
Opportunities and -0.20% for Advisor Value Strategies of a fund's
average net assets over the performance period.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 166.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED PERFORMANCE ADJUSTMENT MANAGEMENT FEES PAID TO FMR
<S> <C> <C> <C>
ADVISOR VALUE STRATEGIES##
1998 11/30 1,343,174 (downward) 2,375,350*
1/1/97 - 11/30/97 11/30 1,112,763 (downward) 2,293,268*
1996 12/31 962,281 (downward) 3,621,407*
1995 12/31 91,269 (upward) 3,510,812*
</TABLE>
* Including the amount of the performance adjustment.
## Prior to July 1, 1999, Advisor Value Strategies paid FMR a monthly
management fee with two components: a basic fee and a performance
adjustment. The basic fee was subject to upward or downward
adjustment, depending on whether, and to what extent, the fund's
investment performance for the performance period exceeded, or was
exceeded by, the record over the same period of the S&P 500. The
maximum annualized performance adjustment rate was (plus/minus)0.20%
of the fund's average net assets over the performance period.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE
168.
On behalf of Advisor TechnoQuant Growth, Advisor Small Cap, Advisor
Value Strategies, Advisor Mid Cap, Advisor Retirement Growth, Advisor
Equity Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor
Growth Opportunities, Advisor Growth & Income, Advisor Equity Income,
Advisor Asset Allocation, Advisor Balanced, Advisor High Yield,
Advisor Mortgage Securities, Advisor Intermediate Bond, and Advisor
Short Fixed-Income, FMR has entered into sub-advisory agreements with
FMR U.K. and FMR Far East. On behalf of Advisor Latin America and
Advisor Europe Capital Appreciation, 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 Japan, Advisor International Capital Appreciation, Advisor
Overseas, Advisor Diversified International, Advisor Global Equity,
Advisor Emerging Markets Income, and Advisor Strategic Income, FMR has
entered into sub-advisory agreements with FMR U.K., FMR Far East, FIJ,
and FIIA. FIIA, in turn, has entered into a sub-advisory agreement
with FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may
receive 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.
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND UNDER
THE HEADING "SUB-ADVISERS"IN THE "MANAGEMENT CONTRACTS" SECTION ON
PAGE 168.
On behalf of Advisor Latin America, Advisor Japan, Advisor Europe
Capital Appreciation, Advisor International Capital Appreciation,
Advisor Overseas, Advisor Diversified International, Advisor Global
Equity, Advisor TechnoQuant Growth, Advisor Small Cap, Advisor Value
Strategies, Advisor Mid Cap, Advisor Retirement Growth, Advisor Equity
Growth, Advisor Large Cap, Advisor Dividend Growth, Advisor Growth
Opportunities, Advisor Growth & Income, Advisor Equity Income, Advisor
Asset Allocation, Advisor Balanced, Advisor Emerging Markets Income,
Advisor High Yield, Advisor Strategic Income, Advisor Mortgage
Securities, Advisor Intermediate Bond, and Advisor Short Fixed-Income,
FMR Far East has entered 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).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE
168.
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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE
168.
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 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.
THE FOLLOWING INFORMATION REPLACES THE SECOND AND EIGHTH PARAGRAPHS
FOUND IN THE "TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE
182.
Each class of Advisor Municipal Income and Advisor Intermediate
Municipal Income has entered into a transfer agent agreement with
Citibank, N.A., which is located at 111 Wall Street, New York, New
York. Under the terms of the agreements, Citibank, N.A. provides
transfer agency, dividend disbursing, and shareholder services for
each class of each fund. Citibank, N.A. in turn has entered into
sub-transfer agent agreements with FIIOC. Under the terms of the
sub-agreements, FIIOC performs all processing activities associated
with providing these services for each class of each fund and receives
all related transfer agency fees paid to Citibank, N.A.
Each of Advisor Municipal Income and Advisor Intermediate Municipal
Income has also entered into a service agent agreement with Citibank,
N.A. Under the terms of the agreements, Citibank, N.A. provides
pricing and bookkeeping services for each fund. Citibank, N.A. 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, N.A.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUSTS" SECTION ON PAGE 185.
CUSTODIANS. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of Advisor International
Capital Appreciation, Advisor Mid Cap, Advisor Growth Opportunities,
Advisor Value Strategies, and Advisor Large Cap. State Street Bank and
Trust Company, 1776 Heritage Drive, Quincy, Massachusetts, is
custodian of the assets of Advisor Latin America, Advisor Japan,
Advisor Europe Capital Appreciation, Advisor Diversified
International, Advisor Global Equity, Advisor Small Cap, Advisor
Retirement Growth, Advisor Dividend Growth, and Advisor Asset
Allocation. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, New York, is custodian of the assets of Advisor TechnoQuant
Growth, Advisor Overseas, Advisor Equity Growth, Advisor Growth &
Income, Advisor Equity Income, Advisor Balanced, and Advisor Emerging
Markets Income. The Bank of New York, 110 Washington Street, New York,
New York, is custodian of the assets of Advisor High Yield, Advisor
Strategic Income, Advisor Government Investment, Advisor Intermediate
Bond, Advisor Mortgage Securities and Advisor Short Fixed-Income.
Citibank, N.A., 111 Wall Street, New York, New York, is custodian of
the assets of Advisor Municipal Income and Advisor Intermediate
Municipal Income. Each custodian is responsible for the safekeeping of
a fund's assets and the appointment of subcustodian banks and clearing
agencies. The Bank of New York and The Chase Manhattan Bank, each
headquartered in New York, also may serve as special purpose
custodians of certain assets in connection with repurchase agreement
transactions.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "AUDITORS" IN THE "DESCRIPTION OF THE TRUSTS" SECTION ON PAGE
186.
Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts
serves as independent accountant for Advisor Europe Capital
Appreciation. The auditor examines financial statements for the fund
and provides other audit, tax, and related services.
Effective February 18, 1999, Deloitte & Touche LLP, 200 Berkeley
Street, Boston, Massachusetts, serves as independent accountant for
Advisor International Capital Appreciation, Advisor TechnoQuant
Growth, Advisor Value Strategies, Advisor Mid Cap, Advisor Equity
Growth, Advisor Large Cap, Advisor Growth Opportunities, Advisor
Growth & Income, Advisor Equity Income, Advisor Balanced, Advisor High
Yield, Advisor Strategic Income, Advisor Government Investment, and
Advisor Short Fixed-Income for the next fiscal period. The auditor
examines financial statements for the funds and provides other audit,
tax, and related services.
