(2_FIDELITY_LOGOS)FIDELITY
INTERNATIONAL EQUITY
FUNDS
BROADLY DIVERSIFIED FUNDS
FIDELITY DIVERSIFIED INTERNATIONAL FUND
FIDELITY INTERNATIONAL GROWTH & INCOME FUND
FIDELITY INTERNATIONAL VALUE FUND
FIDELITY OVERSEAS FUND
FIDELITY WORLDWIDE FUND
REGIONAL/SINGLE COUNTRY FUNDS
FIDELITY CANADA FUND
FIDELITY EUROPE FUND
FIDELITY EUROPE CAPITAL
APPRECIATION FUND
FIDELITY JAPAN FUND
FIDELITY PACIFIC BASIN FUND
EMERGING MARKETS FUNDS
FIDELITY EMERGING MARKETS FUND
FIDELITY LATIN AMERICA FUND
FIDELITY SOUTHEAST ASIA FUND
SEMIANNUAL REPORT
APRIL 30, 1995
CONTENTS
PRESIDENT'S MESSAGE NED JOHNSON ON OVERSEAS INVESTING.
BROADLY DIVERSIFIED FUNDS
DIVERSIFIED INTERNATIONAL FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
INTERNATIONAL GROWTH & INCOME FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
INTERNATIONAL VALUE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT SUMMARY
INVESTMENTS
FINANCIAL STATEMENTS
OVERSEAS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
WORLDWIDE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
REGIONAL/SINGLE COUNTRY FUNDS
CANADA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE CAPITAL APPRECIATION FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
JAPAN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
PACIFIC BASIN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EMERGING MARKETS FUNDS
EMERGING MARKETS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
LATIN AMERICA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
SOUTHEAST ASIA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS
UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND
SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY
INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING
CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
For many years, we've discussed the volatility and risks of international
markets - both in my letters to you and in the reports of our portfolio
managers.
Ten years ago, in a report on Fidelity Overseas Fund, we said international
stocks "may undergo wide price changes. Like all equities, they are subject
to changes stemming from fundamental factors, such as corporate earnings,
interest rate levels, changing economic policies, and overall stock market
conditions." A year ago, in this report, we discussed how several markets,
particularly in the Far East and Latin America, suffered corrections after
posting strong gains in 1993. And six months ago, we noted that emerging
market returns in Latin America had swung widely over the previous year.
Recent events have shown that stability remains hard to find. The same
Latin American markets that were up 46% for the year last October have
fallen 30% since then. Turkey - which plunged 68% in U.S. dollars in the
first four months of 1994 - rose more than 50% in the same period of 1995.
Some of the recent volatility can be attributed to Mexico's sudden,
unexpected devaluation of the peso, which shook markets from Latin America
to the Far East and drove many investors back to the U.S. Investor
confidence was eroded further by a series of events that included an
earthquake in Kobe, Japan, and the sudden collapse of Barings PLC, a major
British financial institution that had been in business for more than a
century.
Whether investors stay at home or again feel the lure of international
markets - many of which have fallen in price - remains to be seen. Those
who decide to make the trip should understand the types of risk they are
taking on, and keep in mind what we said years ago in the Overseas Fund
report.
First, you should take a long-term approach to international investing.
Doing so reduces your vulnerability to any single decline during the ups
and downs of foreign markets that we have been discussing.
Second, keep in mind that foreign stocks and markets can be higher risk
than those in the U.S. You should pay particular attention to country risk
- - the possibility that unexpected political events or wide swings in
currency rates could negatively impact your returns. Currency movements
can, of course, work in your favor as well; in fact, returns in many
foreign markets have been boosted during the past year by a weak U.S.
dollar.
Third, remember that many foreign markets are not as well developed or as
closely regulated as the U.S., and that investors may not have access to as
much information as is available here. These factors make investing
overseas more difficult.
Finally, you may want to diversify your international investments across a
variety of countries and regions.
International markets are at different points in their development and will
evolve in different ways. Although they present a variety of risks, they
also can reward investors who do their homework and apply the principles
I've discussed.
If we can be of any assistance, please contact us at 1-800-544-8888. We
look forward to hearing from you.
Sincerely,
Edward C. Johnson 3d
S&P 500 EAFE
* YEAR TO DATE THROUGH APRIL 30, 1995
Row: 1, Col: 1, Value: 22.38
Row: 1, Col: 2, Value: 23.69
Row: 2, Col: 1, Value: 6.1
Row: 2, Col: 2, Value: 7.38
Row: 3, Col: 1, Value: 31.57
Row: 3, Col: 2, Value: 56.16
Row: 4, Col: 1, Value: 18.56
Row: 4, Col: 2, Value: 69.44000000000001
Row: 5, Col: 1, Value: 5.1
Row: 5, Col: 2, Value: 24.63
Row: 6, Col: 1, Value: 16.61
Row: 6, Col: 2, Value: 28.27
Row: 7, Col: 1, Value: 31.69
Row: 7, Col: 2, Value: 10.53
Row: 8, Col: 1, Value: -3.1
Row: 8, Col: 2, Value: -23.45
Row: 9, Col: 1, Value: 30.47
Row: 9, Col: 2, Value: 12.13
Row: 10, Col: 1, Value: 7.619999999999999
Row: 10, Col: 2, Value: -12.17
Row: 11, Col: 1, Value: 10.08
Row: 11, Col: 2, Value: 32.56
Row: 12, Col: 1, Value: -2.56
Row: 12, Col: 2, Value: 7.89
Row: 13, Col: 1, Value: 12.97
Row: 13, Col: 2, Value: 5.69
%
DIVERSIFIED INTERNATIONAL
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Diversified
International has a 3% sales charge, which has been waived since the fund's
start on December 27, 1991 through June 30, 1995. The sales charge is being
eliminated July 1, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
DIVERSIFIED INTERNATIONAL -1.72% 1.54% 25.10%
Morgan Stanley GDP-
weighted EAFE Index 2.32% 3.37% 42.07%
Average International Fund -4.55% -1.09% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on December 27, 1991. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley GDP-weighted EAFE index - a broad measure of the performance
of stocks in Europe, Australia, and the Far East, weighted by each
country's gross domestic product. To measure how the fund's performance
stacked up against its peers, you can compare it to the average
international fund, which reflects the performance of 225 funds with
similar objectives tracked by Lipper Analytical Services over the past six
months. These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
DIVERSIFIED INTERNATIONAL 1.54% 6.92%
Morgan Stanley GDP-
weighted EAFE Index 3.37% 10.82%
Average International Fund -1.09% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity DiversiMorgan Stanley GDP
12/27/91 10000.00 10000.00
12/31/91 10060.00 10290.08
01/31/92 9860.00 10203.01
02/29/92 9680.00 10064.33
03/31/92 9140.00 9568.44
04/30/92 9240.00 9651.88
05/31/92 9750.00 10220.19
06/30/92 9540.00 9887.63
07/31/92 9190.00 9537.51
08/31/92 9350.00 10012.01
09/30/92 9140.00 9644.68
10/31/92 8460.00 9253.15
11/30/92 8460.00 9298.31
12/31/92 8671.06 9296.74
01/31/93 8873.42 9404.39
02/28/93 9176.95 9733.39
03/31/93 9915.56 10398.05
04/30/93 10522.64 11355.72
05/31/93 10785.70 11533.22
06/30/93 10482.17 11333.59
07/31/93 10805.94 11674.67
08/31/93 11362.42 12530.25
09/30/93 11210.66 12267.38
10/31/93 11453.49 12604.75
11/30/93 11028.53 11600.55
12/31/93 11850.64 12416.51
01/31/94 12739.44 13365.93
02/28/94 12484.04 13292.56
03/31/94 12085.61 13101.70
04/30/94 12320.58 13763.52
05/31/94 12300.15 13447.65
06/30/94 12136.69 13441.70
07/31/94 12555.55 13753.82
08/31/94 12872.25 13986.79
09/30/94 12504.47 13495.11
10/31/94 12729.22 13905.21
11/30/94 12044.75 13285.50
12/31/94 11979.79 13386.26
01/31/95 11428.50 13043.35
02/28/95 11566.32 13028.55
03/31/95 12128.21 13618.58
04/28/95 12509.86 14227.37
Let's say you invested $10,000 in Fidelity Diversified International Fund
on December 27, 1991, when the fund sarted. By April 30, 1995, the value of
your investment would have grown to $12,510 - a 25.10% increase on your
initial investment. That compares to $10,000 invested in the Morgan Stanley
GDP-weighted EAFE index, which would have grown to $14,207 over the same
period - a 42.07% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
DIVERSIFIED INTERNATIONAL
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Greg Fraser,
Portfolio Manager of Fidelity Diversified International Fund
Q. HOW HAS THE FUND PERFORMED, GREG?
A. In a challenging market environment, for the six and 12 months ended
April 30, 1995, the fund had a total return of -1.72% and 1.54%,
respectively. That's better than the average international fund tracked by
Lipper Analytical Services, which was down 4.55% for the six months ended
April 30, 1995. However, the Morgan Stanley GDP-weighted EAFE index, a
broad measure of stock performance in Europe, Australia and the Far East
was up 2.32% for the same time period.
Q. WHAT DO YOU MEAN BY "CHALLENGING MARKET ENVIRONMENT?"
A. There were a lot of unexpected international events during the past six
months. One of these was the tragic earthquake in Japan in January which
probably contributed to the poor performance of the Japanese stock market
during the period. About 23% of the fund's investments are in Japanese
securities. Another was the devaluation of the Mexican peso in December.
This caused poor performance in most of the other emerging markets because
investors became wary about these markets. The fund had moderate exposure
to the emerging markets. Finally, the collapse of Barings, the venerable
British investment bank, through the massive misuse of futures by a single
employee, worsened an already-tense environment.
Q. HOW DID CHANGES IN THE VALUE OF THE DOLLAR AFFECT THE FUND?
A. The weakness of the U.S. dollar against the yen and the deutsche mark
really tempered what would otherwise have been much worse performance
during the period. For example, although the Japanese market did poorly,
the yen rose sharply versus the dollar. Think of it this way: If you owned
a Japanese stock and it fell 20% (in yen terms), but the yen strengthened
by 20% versus the dollar, your Japanese stock stays about the same price in
dollars, at least in the short-run. So because I mostly didn't hedge the
fund's currency exposure, the strength of the yen and deutsche mark largely
canceled out the weakness of the Japanese and German stock markets.
Investors should remember that the dollar was actually strong against some
currencies such as the Mexican peso and the Italian lira.
Q. HAVE YOU MADE ANY ADJUSTMENTS TO THE FUND'S
COUNTRY WEIGHTINGS?
A. Yes. Nordic countries as a group - Norway, Finland and Sweden - have
increased to about 9% of the fund. The exporting companies in those
countries such as Volvo and Modo have been the beneficiaries of weak
currencies because they've become more competitive. For example, Nordic
paper companies arguably weren't very competitive in 1992. However, today
those same companies are very competitive with their currencies at least
10% lower than they were in 1992. So it's interesting to see how a weak
currency can really help some companies be more competitive. I also reduced
the fund's exposure to Italy due to continuing political uncertainty there.
Q. WHY DID YOU INCREASE THE FUND'S U.K. POSITION FROM 5.1% OF THE FUND TO
ABOUT 9.3%?
A. That's the result of the bottom-up stock selection process. As
shareholders know, the fund uses two general sets of computer models. We
have a set of models that helps us to allocate assets among countries,
which we refer to as the "top-down" models. We also have models that try to
predict best-performing individual stocks, which we call the "bottom-up"
models. Hanson, a U.K. conglomerate, is an example of why the fund's U.K.
stake is higher. The stock hadn't done particularly well for the past
couple of years, but earnings estimates began rising, and the valuation
looked quite reasonable. Another stock that looked quantitatively
attractive was Vodafone. Vodafone is a leading cellular provider which has
outstanding growth potential at a more reasonable price than U.S. cellular
providers.
Q. WHAT IMPACT HAS THE RECENT UPHEAVAL IN EMERGING MARKETS HAD ON YOUR
STRATEGY FOR THE FUND?
A. When the stocks in Mexico and Argentina started acting poorly, I began
selling them, even before Mexico's peso devaluation. Then after the stocks
had plummeted after the devaluation, I slowly started buying them back
again, at much lower prices. At the end of the period the fund had about
11% in emerging markets, including debt. I continue to believe that over
the long run, the companies in those countries are likely to experience
greater growth than many stocks in the developed international markets. Of
course, this greater growth is likely to come with much higher volatility.
As I've discussed in past reports, I expect to continue to add to the
fund's emerging market exposure in a prudent and measured way over time.
Q. WHAT CHANGES HAVE YOU MADE TO THE FUND'S STOCK
SELECTION METHOD?
A. The investment process for the fund is constantly evolving. I'm
continually trying to improve my computer models to more accurately
forecast the returns of individual stocks, industries and markets in
general. For example, while we continue to compare stocks with each other
based on their current data, we've also started to compare a stock with
itself at various points of time in the past. The bottom line is that the
fund tries to be invested primarily in cheap stocks with improving business
fundamentals.
Q. WHAT SPECIFIC DISAPPOINTMENT HAS THE FUND EXPERIENCED DURING THE PAST
SIX MONTHS?
A. The fund didn't experience many major disasters in individual stocks
during the period. The major challenge was the international environment -
when the tide is moving out, it's tough to paddle to shore. With so many
markets performing poorly it was difficult to achieve large positive
returns.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. During the past six months most international markets have not performed
very well while the U.S. market has performed quite well. Valuations of
international stocks look quite reasonable when compared to those in the
U.S. If interest rates stop rising around the world, international stocks
could do quite well. So I've become more positive on the outlook for
foreign stocks, especially when compared with U.S. stocks. The U.S. dollar,
however, is a significant wild card. Shareholders should understand that
not being hedged during the most recent period really helped the fund's
relative performance. If the dollar were to strengthen -and some analysts
feel it should be much stronger - it could be painful for shareholders.
FUND FACTS
GOAL: long-term growth of capital by investing
in foreign equity securities that are determined,
through both technical and fundamental
analysis, to be undervalued compared to
others in their industries and countries
START DATE: December 27, 1991
SIZE: as of April 30, 1995, more than $291 million
MANAGER: Gregory Fraser, since 1991;
manager, Fidelity Select Defense and
Aerospace Portfolio, 1989-1990; and
Fidelity Select Environmental Services
Portfolio, 1991; joined Fidelity in 1986
(checkmark)
GREG FRASER ON INVESTING IN BONDS:
"While the fund is primarily an equity fund, we do run
models that compare the attractiveness of bonds,
stocks, and money market instruments in many
different countries. From time to time, the fund finds
opportunities where bonds appear to offer equity-like
returns. That's why the fund took some modest
positions in Argentine and New Zealand debt. The
fund also has owned some bonds indirectly through
closed end funds trading at large discounts. If we
can buy a closed end fund that trades at a 20%
discount to the value of its underlying bond holdings,
that's not too different from buying bonds
themselves at a 20% discount. And that's a great
value. So the fund will occasionally own some bonds
when their returns look especially appealing or when
the models suggest that bonds will be especially
helpful in balancing the risk of its stock holdings."
DIVERSIFIED INTERNATIONAL
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 10.0%
Netherlands 5.9%
Row: 1, Col: 1, Value: 10.0
Row: 1, Col: 2, Value: 9.300000000000001
Row: 1, Col: 3, Value: 3.1
Row: 1, Col: 4, Value: 3.6
Row: 1, Col: 5, Value: 23.3
Row: 1, Col: 6, Value: 3.6
Row: 1, Col: 7, Value: 22.9
Row: 1, Col: 8, Value: 3.4
Row: 1, Col: 9, Value: 8.5
Row: 1, Col: 10, Value: 6.4
Row: 1, Col: 11, Value: 5.9
Row: 1, Col: 12, Value: 0.0
France 6.4%
United
Kingdom 9.3%
Germany 8.5%
Canada 3.1%
Australia 3.6%
Norway 3.4%
Other 23.3%
Japan 22.9%
Sweden 3.6%
AS OF OCTOBER 31, 1994
United States 7.5%
Netherlands 3.8%
United
Kingdom 5.1%
Row: 1, Col: 1, Value: 7.5
Row: 1, Col: 2, Value: 5.1
Row: 1, Col: 3, Value: 5.4
Row: 1, Col: 4, Value: 24.3
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 6, Value: 25.6
Row: 1, Col: 7, Value: 3.7
Row: 1, Col: 8, Value: 4.4
Row: 1, Col: 9, Value: 9.300000000000001
Row: 1, Col: 10, Value: 7.9
Row: 1, Col: 11, Value: 3.8
France 7.9%
Canada 5.4%
Germany 9.3%
Italy 4.4%
Hong Kong 3.7%
Other 24.3%
Spain 3.0%
Japan 25.6%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 89.2 92.5
Bonds 2.7 0.0
Short-term investments 8.1 7.5
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Hitachi Ltd. 2.2 1.8
(Japan, Electronics)
Matsushita Electric Industrial Co. Ltd. 1.7 1.4
(Japan, Consumer Electronics)
Veba AG Ord. 1.6 1.9
(Germany, Electric Utilities)
TDK Corp. 1.5 1.4
(Japan, Electronics)
Bayer AG 1.4 1.4
(Germany, Chemicals & Plastics)
Brierley Investments Ltd. 1.3 1.1
(New Zealand, Holding Companies)
Fuji Photo Film Co. Ltd. 1.2 0.3
(Japan, Photographic Equipment)
Takeda Chemical Industries Ltd. 1.2 1.0
(Japan, Drugs & Pharmaceuticals)
Petroleum Geo-Services AS ADR 1.2 0.0
(Norway, Oil & Gas)
Omron Corp. 1.2 0.5
(Japan, Electrical Equipment)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 13.7 16.7
Technology 10.9 6.5
Utilities 10.1 9.7
Nondurables 9.0 5.1
Basic Industries 8.7 9.6
Energy 7.1 6.6
Industrial Machinery & Equipment 5.4 6.2
Durables 5.3 10.3
Health 4.6 5.8
Construction & Real Estate 3.0 5.0
DIVERSIFIED INTERNATIONAL
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 81.4%
SHARES VALUE (NOTE 1)
ARGENTINA - 1.2%
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing Class B
shares (New) 20,000 $ 322,500
Banco Frances del Rio de la Plata SA
ADR 27,000 496,125
Telecom Argentina sponsored ADR
Class B 31,500 1,378,125
Telefonica de Argentina SA
sponsored ADR 63,000 1,480,500
3,677,250
AUSTRALIA - 3.5%
Advance Bank Australia Ltd. 100,000 718,918
Alcan Australia Ltd. 350,000 710,549
Boral Ltd. Ord. 308,700 783,944
Broken Hill Proprietary Co. Ltd. (The) 100,000 1,458,211
Caltex Australia Ltd. 600,000 1,877,340
CSR Ltd. 300,000 958,314
News Corp. Ltd. ADR 50,000 975,000
Pioneer International Ltd. 500,000 1,215,175
Santos Ltd. 432,507 1,189,619
Siddons Ramset Ltd. 100,000 196,466
Westfield Trust 100,000 176,091
10,259,627
BERMUDA - 0.5%
Mid Ocean Ltd. 20,000 572,500
Partner Re Holdings 40,000 920,000
1,492,500
BRAZIL - 0.6%
Telebras PN (Pfd. Reg.) 30,000,000 1,069,800
Telebras sponsored ADR 20,000 705,000
1,774,800
CANADA - 3.1%
Alcan Aluminium Ltd. 50,000 1,419,669
Barrick Gold Corp. 50,000 1,216,859
BCE Mobile Communications, Inc. 40,000 1,268,483
Dominion Textile, Inc. 250,000 1,544,120
FCA International Ltd. (a) 150,300 332,534
Imasco Ltd. 50,000 1,760,758
Intera Information Technologies Corp.
Class A (a) 49,000 135,514
InterTan, Inc. 50,000 381,250
Placer Dome, Inc. 50,000 1,193,813
9,253,000
FINLAND - 1.8%
Cultor OY Ord., Series 2 30,000 984,991
Instrumentarium OY Class B 40,000 797,373
Kemira OY sponsored ADR (b) 100,000 1,650,000
Nokia Corp. AB, Series K 48,000 1,969,981
5,402,345
FRANCE - 6.4%
CGIP 10,000 2,376,841
Coflexip sponsored ADR 105,000 3,168,047
Credit Commercial de France
(warrants) (a) 277 287
Dietrich & Co. 2,000 1,121,381
Elf Aquitaine sponsored ADR 50,000 1,987,500
Elf Sanofi SA 25,000 1,376,333
Eramet SA 1,200 83,459
Eridania Beghin Say Group Ord. 10,000 1,543,931
Europeene de Propulsion SA 10,000 611,478
SHARES VALUE (NOTE 1)
Finextel 25,000 $ 350,432
Lafarge Coppee SA 15,000 1,167,090
Peugeot SA Ord. (a) 8,000 1,152,260
Societe Generale Class A 15,000 1,645,505
Total SA Class B 40,160 2,506,278
19,090,822
GERMANY - 6.0%
Andrea-Noris Zahn AG 8,000 1,759,383
BASF AG 7,500 1,665,645
Bayer AG 17,000 4,179,976
Deutsche Bank AG 3,500 1,715,615
Hoechst AG Ord. 10,000 2,131,449
Thyssen AG Ord. (a) 8,000 1,483,650
Veba AG Ord. 13,000 4,836,860
17,772,578
HONG KONG - 1.7%
Cheung Kong Holdings Ltd. 200,000 842,160
Hong Kong & China Gas Co. Ltd. 360,000 523,120
Hutchison Whampoa Ltd. Ord. 150,000 650,994
Peregrine Investments Holdings Ltd. 1,500,000 1,579,050
Semi-tech (Global) Ltd. 500,000 771,765
South China Morning Post Holdings 800,000 475,328
Yue Yuen Industrial Holdings Ltd. 1,500,000 346,815
5,189,232
IRELAND - 1.0%
Bank of Ireland U.S. Holdings, Inc. 150,000 812,448
Elan Corp. PLC ADR (a) 12,400 438,650
IAWS Group PLC Class A (Reg.) 200,000 290,160
Independent Newspapers PLC 192,496 868,850
Waterford Foods PLC Class A 500,000 660,920
3,071,028
ISRAEL - 0.3%
Elscint Ltd. 500,000 937,500
ITALY - 1.0%
Stet (Societa Finanziaria Telefonica) Spa
Ord. 500,000 1,421,020
Telecom Italia Ord. 600,000 1,597,728
3,018,748
JAPAN - 22.9%
Canon, Inc. 100,000 1,650,929
DDI Corp. Ord. 300 2,636,736
Dai-Tokyo Fire & Marine Insurance Ord. 400,000 2,921,788
Dowa Fire & Marine Industries Co. Ltd. 100,000 552,289
Fuji Photo Film Co. Ltd. 150,000 3,670,052
Fujitsu Ltd. 200,000 2,040,502
Hitachi Ltd. 650,000 6,600,750
Honda Motor Co. Ltd. 100,000 1,615,298
Izumiya Co. Ltd. 100,000 1,674,684
Kao Corp. 275,000 3,331,551
Kirin Brewery Co. Ltd. 150,000 1,778,016
Konica Corp. 200,000 1,658,056
Matsushita Electric Industrial Co. Ltd. 300,000 5,024,052
Mitsubishi Heavy Industries Ltd. 400,000 2,898,036
Nintendo Co. Ltd. Ord. 20,000 1,280,361
Nitto Denko Corp. 100,000 1,555,912
Nomura Securities Co. Ltd. 100,000 2,019,122
Omron Corp. 175,000 3,429,538
Ricoh Co. Ltd. Ord. 250,000 2,330,898
Royal Co. Ltd. 100,000 1,520,280
Sekisui Chemical Co. Ltd. 200,000 2,494,210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Sekisui House Ltd. 150,000 $ 1,977,552
TDK Corp. 100,000 4,560,841
Takeda Chemical Industries Ltd. 270,000 3,591,662
Takara Co. Ltd. 19,000 218,897
Toshiba Corp. 300,000 1,991,805
Toyota Motor Corp. 150,000 3,046,499
68,070,316
KOREA (SOUTH) - 1.0%
Korea Electric Power Corp. 40,000 1,507,811
Samsung Electronics Co. Ltd. (a)(b):
GDR (non-vtg.) (New) 5,343 257,265
GDS 27,000 1,309,500
3,074,576
MEXICO - 0.3%
Grupo Industrial Maseca ADR 20,000 242,500
Grupo Radio Centro SA de CV
sponsored ADR 40,000 415,000
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 10,000 302,500
960,000
NETHERLANDS - 5.9%
ABN-AMRO Holdings NV 25,500 980,833
Heineken NV 12,500 1,783,874
International Nederlanden Groep NV 25,375 1,337,333
Koninklijke PPT Nederland (a)(b) 42,300 1,474,409
Philips Electronics 75,000 2,860,640
Royal Dutch Petroleum Co. 25,000 3,100,000
Telegraaf 15,000 1,826,558
Unilever NV Ord. 20,000 2,676,374
Twentsche Kabel Holding NV 10,000 1,520,521
17,560,542
NETHERLANDS ANTILLES - 1.1%
Intrum Justitia NV (Reg.) 1,000,000 1,209,000
Schlumberger Ltd. 35,000 2,200,625
3,409,625
NEW ZEALAND - 1.5%
Brierley Investments Ltd. 5,000,000 3,765,150
Fletcher Challenge Ltd. (Reg.) 300,000 806,820
4,571,970
NORWAY - 3.4%
Helikopter Services AS 200,000 2,311,396
Norsk Hydro AS ADR 20,000 802,500
Orkla AS Class B (non-vtg.) 50,000 2,026,485
Petroleum Geo-Services AS ADR 130,000 3,550,625
Saga Petroleum AS Class B 100,000 1,372,392
10,063,398
SINGAPORE - 0.6%
Jardine Matheson Holdings Ltd. Ord. 120,024 954,191
Jardine Strategic Holdings Ltd. Ord. 220,000 748,000
1,702,191
SOUTH AFRICA - 1.3%
Anglo American Corp. of
South Africa (Reg.) 50,000 2,832,274
Rustenberg Platinum Holding Ltd. ADR 35,000 883,750
3,716,024
SHARES VALUE (NOTE 1)
SPAIN - 1.2%
Banco de Santander SA de Credito ADR 10,000 $ 362,500
Hidroelectrisa de Cantabrico SA 50,000 1,510,733
Telefonica de Espana SA sponsored ADR 15,000 551,250
Union Electrica Fenosa SA 300,000 1,253,949
3,678,432
SWEDEN - 3.6%
Astra AB Class A Free shares 75,000 2,190,384
Atlas Copco AB Class A Free shares 100,000 1,377,600
Avesta Sheffield AB Ord. Free shares 150,000 1,611,792
Cardo AB 79,000 870,643
Mo Och Domsjoe (Modo) Class B
Free shares 15,000 836,892
Pharmacia AB Class A Free shares 100,000 1,894,200
Volvo AB Class B 100,000 1,880,424
10,661,935
SWITZERLAND - 2.2%
Bank for International Settlements 200 1,555,944
Bucher Holding AG (Bearer) 1,500 865,385
Nestle SA (Reg.) 3,000 2,934,441
Prodega AG (Bearer) 800 1,049,650
6,405,420
UNITED KINGDOM - 9.3%
ADT Ltd. 150,000 1,781,250
BAT Industries PLC Ord. 91,800 694,034
BET PLC Ord. 500,000 955,110
British Gas PLC Ord. 100,000 485,212
British Petroleum PLC ADR 30,000 2,583,750
British Telecommunications PLC Ord. 125,000 781,820
Cordiant PLC sponsored ADR 250,000 1,093,750
Forte PLC 200,000 735,072
Guinness PLC Ord. 75,000 568,230
Hanson PLC sponsored ADR 100,000 1,900,000
Huntingdon International Holdings PLC
Ord. 129,250 113,551
Invesco Mim PLC 400,000 1,212,224
London International Group PLC 1,200,000 2,127,840
Norweb PLC 100,000 1,052,636
Royal Insurance Holdings PLC 411,914 2,011,928
South Western Electricity PLC 100,000 1,071,980
Tate & Lyle PLC 200,000 1,395,992
Tesco PLC Ord. 300,000 1,351,662
Vodafone Group PLC sponsored ADR 100,000 3,187,500
Waste Management International PLC
sponsored ADR 100,000 862,500
WPP Group PLC ADR 270,000 945,000
Zeneca Group PLC sponsored ADR 15,000 654,375
27,565,416
TOTAL COMMON STOCKS
(Cost $212,822,232) 242,379,275
CLOSED-END INVESTMENT COMPANIES - 5.8%
AUSTRALIA - 0.1%
Kleinwort Benson Australia Income Fund. 45,166 372,620
CHILE - 0.7%
Five Arrows Chile Investment Trust Ltd. 500,000 1,315,000
GT Chile Growth Fund Ltd. 20,000 660,000
1,975,000
CLOSED-END INVESTMENT COMPANIES - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - 0.6%
New Germany Fund, Inc. (The) 152,101 $ 1,844,225
INDIA - 0.3%
India Fund 70,000 743,750
MALAYSIA - 0.6%
Malaysia Equity Fund Ltd. 120,000 1,800,000
PAKISTAN - 0.1%
Pakistan Investment Fund, Inc. 60,000 397,500
PHILIPPINES - 0.3%
First Philippine Fund, Inc. 50,000 781,250
REGIONAL AFRICA - 0.2%
Morgan Stanley Africa Investment Fund,
Inc. 60,000 705,000
REGIONAL ASIA - 0.3%
Morgan Stanley Asia-Pacific Fund, Inc. 75,000 806,250
SPAIN - 0.8%
Growth Fund of Spain, Inc. 260,000 2,502,500
THAILAND - 0.5%
Thai Euro Fund (a):
IDR 52 1,521,000
(warrants) 10,400 10,400
1,531,400
UNITED STATES OF AMERICA - 1.3%
Global Government Plus Fund, Inc. 133,600 801,600
Global Total Return Fund, Inc. 144,000 936,000
Strategic Global Income Fund, Inc. 200,000 2,075,000
3,812,600
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $18,039,952) 17,272,095
NONCONVERTIBLE PREFERRED STOCKS - 2.0%
AUSTRIA - 0.3%
Creditanstalt Bankverein 17,000 972,823
GERMANY - 1.1%
SAP AG 1,950 1,926,308
Suedzucker AG 3,000 1,217,868
3,144,176
UNITED STATES OF AMERICA - 0.6%
Freeport McMoran Copper & Gold,
Inc., Series B 50,000 1,768,750
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $5,585,322) 5,885,749
NONCONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS PRINCIPAL
AMOUNT (C)
MEXICO - 0.3%
Transport Maritima Mexicana
8 1/2%, 10/15/00
(Cost $711,250) Ba2 $ 1,000,000 752,500
GOVERNMENT OBLIGATIONS (E) - 2.4%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (C)
ARGENTINA - 0.2%
Argentina Republic BOCON
6.1875%, 4/1/01 (d) B1 $ 1,068,892 $ 620,230
GERMANY - 0.8%
German Government Bundes
8%, 3/20/97 Aaa DEM 3,400,000 2,563,637
NEW ZEALAND - 1.4%
New Zealand Government:
8%, 11/15/95 Aaa NZD 1,500,000 1,003,281
9%, 11/15/96 Aaa NZD 3,000,000 2,033,792
10%, 7/15/97 Aaa NZD 1,500,000 1,044,529
4,081,602
TOTAL GOVERNMENT OBLIGATIONS
(Cost $6,688,575) 7,265,469
REPURCHASE AGREEMENTS - 8.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.93%
dated 4/28/95 due 5/1/95 $ 24,062,885 24,051,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $267,898,331) $ 297,606,088
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE VALUE GAIN/(LOSS)
CONTRACTS TO SELL
3,541,950 DEM 6/12/95 $ 2,559,111 $ (9,111)
(Receivable amount $2,550,000)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.9%
CURRENCY ABBREVIATIONS
DEM - German deutsche mark
NZD - New Zealand dollar
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,691,174 or 1.6% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $147,570,625 and $194,721,172, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $77,789 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $267,972,777. Net unrealized appreciation aggregated
$29,633,311, of which $34,414,056 related to appreciated investment
securities and $4,780,745 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.2%
Basic Industries 8.7
Conglomerates 0.6
Construction & Real Estate 3.0
Durables 5.3
Energy 7.1
Finance 13.7
Government Obligations 2.4
Health 4.6
Holding Companies 2.1
Industrial Machinery & Equipment 5.4
Media & Leisure 2.7
Nondurables 9.0
Precious Metals 1.8
Repurchase Agreements 8.1
Retail & Wholesale 1.5
Services 1.7
Technology 10.9
Transportation 1.1
Utilities 10.1
100.0%
DIVERSIFIED INTERNATIONAL
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $24,051,000) (cost $267,898,331) - See $ 297,606,088
accompanying schedule
Cash 4,435
Receivable for investments sold 1,257,448
Receivable for fund shares sold 4,039,478
Dividends receivable 1,536,947
Interest receivable 179,808
TOTAL ASSETS 304,624,204
LIABILITIES
Payable for investments purchased $ 7,517,596
Unrealized depreciation on foreign currency contracts 9,111
Payable for fund shares redeemed 5,575,583
Accrued management fee 152,336
Other payables and accrued expenses 138,104
TOTAL LIABILITIES 13,392,730
NET ASSETS $ 291,231,474
Net Assets consist of:
Paid in capital $ 266,329,143
Undistributed net investment income 1,745,221
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (6,560,998
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 29,718,108
NET ASSETS, for 24,670,733 shares outstanding $ 291,231,474
NET ASSET VALUE, offering price and redemption price per share ($291,231,474 (divided by) 24,670,733 shares) $11.80
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,803,392
Dividends
Interest 824,612
3,628,004
Less foreign taxes withheld (255,300
)
TOTAL INCOME 3,372,704
EXPENSES
Management fee $ 1,137,838
Basic fee
Performance adjustment (166,005
)
Transfer agent fees 435,012
Accounting fees and expenses 89,522
Non-interested trustees' compensation 1,363
Custodian fees and expenses 84,841
Registration fees 18,691
Audit 18,256
Legal 2,386
Miscellaneous 2,083
Total expenses before reductions 1,623,987
Expense reductions (21,769 1,602,218
)
NET INVESTMENT INCOME 1,770,486
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (5,780,527
)
Foreign currency transactions (339,387 (6,119,914
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (4,793,803
)
Assets and liabilities in foreign currencies 388,575 (4,405,228
)
NET GAIN (LOSS) (10,525,142
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (8,754,656
)
OTHER INFORMATION $74,575
Accounting fees paid to FSC
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
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Operations $ 1,770,486 $ 3,033,098
Net investment income
Net realized gain (loss) (6,119,914 10,885,262
)
Change in net unrealized appreciation (depreciation) (4,405,228 13,742,044
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,754,656 27,660,404
)
Distributions to shareholders (804,584 (57,277
From net investment income ) )
From net realized gain (10,459,145 (2,281,540
) )
TOTAL DISTRIBUTIONS (11,263,729 (2,338,817
) )
Share transactions 91,498,310 439,644,650
Net proceeds from sales of shares
Reinvestment of distributions 10,913,981 2,282,423
Cost of shares redeemed (142,314,674 (371,125,272
) )
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (39,902,383 70,801,801
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (59,920,768 96,123,388
)
NET ASSETS
Beginning of period 351,152,242 255,028,854
End of period (including undistributed net investment income of $1,745,221 and $819,988,
respectively) $ 291,231,474 $ 351,152,242
OTHER INFORMATION
Shares
Sold 8,097,342 36,516,172
Issued in reinvestment of distributions 980,592 201,263
Redeemed (12,583,103 (31,079,116
) )
Net increase (decrease) (3,505,169 5,638,319
)
</TABLE>
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<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED DECEMBER 27, 1991
APRIL 30, 1995 OCTOBER 31, (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31,
SELECTED PER-SHARE DATA 1994 1993 1992
</TABLE>
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<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.46 $ 11.32 $ 8.46 $ 10.00
Income from Investment Operations
Net investment income .07 .05 .07 .07
Net realized and unrealized gain (loss) (.31) 1.20 2.89 (1.61)
Total from investment operations (.24) 1.25 2.96 (1.54)
Less Distributions (.03) (.01) (.10) -
From net investment income
From net realized gain (.39) (.10) - -
Total distributions (.42) (.11) (.10) -
Net asset value, end of period $ 11.80 $ 12.46 $ 11.32 $ 8.46
TOTAL RETURN B, C (1.72)% 11.14% 35.38% (15.40)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 291,231 $ 351,152 $ 255,029 $ 36,439
Ratio of expenses to average net assets 1.10% A 1.25% 1.47% 2.00% A
Ratio of expenses to average net assets before expense reductions 1.12% A 1.25% 1.47% 2.34% A
Ratio of net investment income to average net assets 1.22% A .96% .84% 1.38% A
Portfolio turnover rate 111% A 89% 56% 56% A
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN.
</TABLE>
INTERNATIONAL GROWTH & INCOME
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). International
Growth & Income had a 2% sales charge, which was waived through May 31,
1994. The sales charge was eliminated effective June 1, 1994.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 MONTH YEAR YEARS FUND
S
INTERNATIONAL GROWTH & INCOME 1.89% 2.59% 46.89% 99.88%
INTERNATIONAL GROWTH & INCOME
(INCL. 2% SALES CHARGE) -0.15% 0.54% 43.95% 95.89%
Morgan Stanley EAFE Index 1.24% 5.59% 43.03% 101.17%
JP Morgan Global Bond Index 10.58% 11.73% 77.64% 118.74%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 31, 1986. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Morgan Stanley EAFE index - a broad measure of the
performance of stocks in Europe, Australia, and the Far East. You can also
compare the fund's performance to the JP Morgan Global Traded Government
Bond index - a broad measure of bond performance in developed countries,
including the United States. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 YEAR YEARS FUND
INTERNATIONAL GROWTH & INCOME 2.59% 7.99% 8.66%
INTERNATIONAL GROWTH & INCOME
(INCL. 2% SALES CHARGE) 0.54% 7.56% 8.40%
Morgan Stanley EAFE Index 5.59% 7.42% 8.75%
JP Morgan Global Bond Index 11.73% 12.18% 9.84%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
International GEurope, AustraliJP Morgan Global
12/31/86 9800.00 10000.00 10000.00
01/31/87 10456.60 11062.61 10257.00
02/28/87 10917.20 11393.69 10377.01
03/31/87 11387.60 12327.33 10565.87
04/30/87 11828.60 13631.69 10575.38
05/31/87 11907.00 13631.64 10475.97
06/30/87 12024.45 13197.34 10430.92
07/31/87 12525.06 13174.29 10305.75
08/31/87 12868.62 14162.12 10418.08
09/30/87 12976.78 13939.16 10164.92
10/31/87 10259.33 11925.20 10730.09
11/30/87 9993.50 12104.07 11008.00
12/31/87 10616.00 12463.49 11382.28
01/31/88 10240.74 12686.01 11440.33
02/29/88 10704.88 13531.62 11545.58
03/31/88 11169.02 14363.62 11636.79
04/30/88 11465.28 14572.35 11582.09
05/31/88 11317.15 14105.22 11457.01
06/30/88 11188.77 13733.43 11355.04
07/31/88 11188.77 14164.30 11266.47
08/31/88 10635.75 13243.36 11186.48
09/30/88 11020.89 13822.02 11465.02
10/31/88 11662.79 15004.67 11916.74
11/30/88 11870.17 15898.44 12021.61
12/31/88 11843.61 15987.08 11949.48
01/31/89 12064.61 16268.36 11831.18
02/28/89 12104.79 16351.98 11812.25
03/31/89 12104.79 16031.06 11711.85
04/30/89 12406.16 16179.74 11905.09
05/31/89 12054.56 15299.51 11776.52
06/30/89 12094.75 15041.96 12043.84
07/31/89 13239.93 16930.83 12523.19
08/31/89 13059.11 16169.38 12152.50
09/30/89 13581.48 16905.93 12344.51
10/31/89 12928.52 16226.69 12503.76
11/30/89 13410.70 17042.40 12615.04
12/31/89 14108.24 17671.22 12762.64
01/31/90 13864.30 17013.70 12572.47
02/28/90 13376.40 15826.23 12436.69
03/31/90 13366.24 14177.52 12360.83
04/30/90 13335.75 14065.01 12312.62
05/31/90 14199.72 15669.84 12706.62
06/30/90 14646.96 15531.83 12936.61
07/31/90 15327.98 15750.60 13316.95
08/31/90 14016.76 14221.09 13213.08
09/30/90 12664.89 12239.17 13337.28
10/31/90 13935.45 14146.27 13864.10
11/30/90 13620.35 13311.80 14108.11
12/31/90 13652.87 13527.45 14264.71
01/31/91 14135.97 13965.00 14588.52
02/28/91 14934.14 15462.03 14603.11
03/31/91 14398.53 14533.81 14147.49
04/30/91 14619.08 14676.53 14318.68
05/31/91 14598.07 14829.67 14331.56
06/30/91 13894.42 13739.97 14139.52
07/31/91 14377.53 14415.04 14437.86
08/31/91 14325.01 14122.30 14738.17
09/30/91 14787.11 14918.22 15276.12
10/31/91 14692.59 15129.70 15427.35
11/30/91 14283.01 14423.38 15678.81
12/31/91 14750.27 15168.25 16470.59
01/31/92 14729.00 14844.25 16147.77
02/29/92 14750.27 14312.95 16100.94
03/31/92 14271.71 13368.06 15952.81
04/30/92 14899.16 13431.61 16085.22
05/31/92 15569.14 14330.66 16542.04
06/30/92 15420.26 13650.92 16993.64
07/31/92 14920.43 13301.55 17367.50
08/31/92 15186.29 14135.84 17829.48
09/30/92 14931.06 13856.69 17811.65
10/31/92 14133.46 13129.85 17366.36
11/30/92 14101.56 13253.40 17058.97
12/31/92 14257.48 13321.95 17221.03
01/31/93 14388.19 13320.31 17513.79
02/28/93 14780.29 13722.68 17795.76
03/31/93 15880.38 14918.82 18069.82
04/30/93 16762.62 16334.66 18398.69
05/31/93 17154.73 16679.64 18516.44
06/30/93 16926.00 16419.41 18531.25
07/31/93 17492.38 16994.17 18538.66
08/31/93 18407.29 17911.56 19087.41
09/30/93 18287.48 17508.39 19289.73
10/31/93 18788.51 18047.95 19280.09
11/30/93 18145.89 16470.37 19139.34
12/31/93 19259.02 17659.65 19334.57
01/31/94 20267.46 19152.69 19516.31
02/28/94 19905.74 19099.65 19301.63
03/31/94 18842.49 18277.00 19212.84
04/30/94 19094.60 19052.47 19197.47
05/31/94 19445.36 18943.09 19038.13
06/30/94 18974.03 19210.79 19264.69
07/31/94 19291.91 19395.54 19445.78
08/31/94 19478.25 19854.73 19395.22
09/30/94 19028.83 19229.40 19490.25
10/31/94 19226.14 19869.74 19782.61
11/30/94 18634.23 18914.79 19533.35
12/31/94 18706.03 19033.23 19578.27
01/31/95 18072.31 18302.06 19973.75
02/28/95 18196.79 18249.54 20489.08
03/31/95 19237.90 19387.78 21531.97
04/28/95 19588.71 20116.93 21874.33
Let's say you invested $10,000 in Fidelity International Growth & Income
Fund on December 31, 1986, when the fund started, and paid the 2% sales
charge. By April 30, 1995, the value of your investment would have grown to
$19,589 - a 95.89% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley EAFE index, which would have grown
to $20,117 over the same period - a 101.17% increase. If you had put
$10,000 in the J.P. Morgan Global Bond index, it would have grown to
$21,874 - a 118.74% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
INTERNATIONAL GROWTH & INCOME
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace, Portfolio Manager of
Fidelity International Growth & Income Fund
Q. HOW DID THE FUND DO, RICK?
A. During the six- and 12-month periods ended April 30, 1995, the fund had
total returns of 1.89% and 2.59%, respectively. Because the fund invests in
both stocks and bonds - keeping at least a 25% weighting in bonds - we can
look at the performance of two separate indexes. The Morgan Stanley EAFE
index - which measures the performance of stocks in Europe, Australia and
the Far East - had total returns of 1.24% and 5.59% for the six- and
12-month periods, respectively. Meanwhile, the JP Morgan Global Government
Bond Index, a benchmark of government bond performance in 13 developed
nations including the United States, had total returns of 10.58% and 11.73%
for the same periods.
Q. WHAT HAS DRIVEN THE FUND'S PERFORMANCE OVER THE PAST
SIX MONTHS?
A. Whereas the fund's bond component was a drag on performance as interest
rates around the world rose during most of 1994, that changed in 1995.
Rates in the U.S. and several other countries stabilized, and in some cases
fell, which helped bond prices. On another positive note, the fund's stake
in Latin American stocks and bonds was quite small at the time of Mexico's
financial crisis and subsequent devaluation of the peso in mid-December.
However, the benefits were relative; the Mexican situation led investors to
withdraw assets from most foreign markets in favor of the relative safety
of U.S. markets. In addition, several key factors such as the strong yen
and the Kobe earthquake dampened returns in Japan, where the fund has its
largest stake in stocks. However, some of the fund's larger stock
investments in Europe held up well in what were generally lackluster
markets. In addition, most of the fund benefited somewhat from the weak
U.S. dollar, which boosted returns on foreign stocks and bonds when
translated from their local currencies back to dollars.
Q. LET'S START WITH BONDS. WHICH WERE THE BEST
PERFORMING MARKETS?
A. At the end of April, the fund had its largest bond weightings in
Germany, the United Kingdom and France. Bonds in each of these markets have
offered excellent real yields - the difference between a bond's yield and
the local inflation rate - and in some cases, price appreciation as well.
As it turned out, avoiding mistakes proved just as important as finding
winners. Because I felt that political and economic conditions in much of
Latin America, and particularly in Argentina, had deteriorated, I gradually
reduced the fund's stake in these countries to less than 5% prior to the
Mexican crisis in December.
Q. WERE U.S. BONDS PART OF THE PICTURE?
A. To a certain extent. U.S. Treasuries performed quite well during the
period as it began to appear that economic growth would slow enough to keep
inflation in check. The fund benefited from a roughly 5% to 6% stake in
Treasuries. The fund is allowed to hold up to 35% of its assets in the U.S.
However, I usually keep the fund's U.S. stake fairly small because I
believe that shareholders invest in the fund to gain exposure to
international markets. One footnote: along with U.S. bond performance,
excellent gains in Japanese bonds helped drive the strong returns of the JP
Morgan Global Bond index. The index has a heavy weighting in the U.S., and
a relatively large stake in Japan as well.
Q. BUT THE FUND WAS HEAVILY INVESTED IN JAPANESE STOCKS,
NOT JAPANESE BONDS . . .
A. That's correct. Six months ago, the prospects for Japanese stocks
appeared much more attractive than those for Japanese bonds. The country
was emerging from a long recession. Many Japanese companies had effectively
cut costs, business conditions were improving, and stock valuations -
prices relative to other measures such as earnings and cash flow - were
cheap. However, the strong yen, the Kobe earthquake, and other events
combined to temporarily derail the Japanese economic recovery and depress
the Japanese stock market. As a result, Japanese investors fled stocks to
the relative security of bonds, which drove up bond prices.
Q. DOES THIS MEAN YOU'VE REDUCED THE FUND'S INVESTMENT IN JAPANESE STOCKS?
A. No, just the opposite. I saw the recent turbulence in the Japanese
market as an opportunity to buy the stocks of well-run companies with
attractive business prospects at even cheaper valuations. In fact, the
fund's overall stake in Japan rose to 37.0% by April 30 from 27.5% six
months ago. Although the economy did suffer a setback, Japanese companies
are telling me that, in many cases, business is better than they expected.
Because selected companies have done such an excellent job cutting costs in
recent years, they are very well positioned to experience solid earnings
growth as the economy improves.
Q. WHAT ARE SOME OF YOUR FAVORITE JAPANESE STOCKS?
A. I've focused mainly on three groups: exporters, domestic industrial
companies and retailers. The exporters include companies such as Hitachi,
Sony, Honda, Canon and Toyota. They were particularly hard hit by the
rising yen; a strong currency not only makes it more expensive to do
business, but also makes exporters' products less competitive in foreign
markets. However, I believe the negative effects of the strong yen are
short-term in nature. In addition, exporters have significantly reduced
costs. The second group - the domestic industrial companies - includes
names such as Omron, which manufactures control components, and Mitsubishi
Electric, which makes electric machinery and consumer electronics. Again,
these are solid, well-run companies that are strongly positioned for what
should be a Japanese economic recovery. Finally, Ito-Yokado - which
operates superstores in Japan - leads the retailers, who also would benefit
from an expanding economy.
Q. IT APPEARS THAT MOST OF THE REST OF THE FUND'S STOCK INVESTMENTS ARE IN
EUROPE AND, TO A LESSER EXTENT, NORTH AMERICA. WHERE HAVE YOU FOUND
OPPORTUNITIES IN THOSE AREAS?
A. Generally, the fund's European and North American investments fared
better than those in Japan. And, as in Japan, strong currencies in Europe
boosted stock returns when translated back into U.S. dollars. Koninklijke
PPT Nederland (KPN) is a good example of what I look for in a stock. The
company operates the Netherlands' post office and telephone service, which
the government privatized last year. KPN's growth prospects appear
excellent and its stock is still cheap. In addition, commodity stocks
generally have helped the fund over the past six months. British Petroleum
and Schlumberger, a worldwide oil service company, have benefited from
effective corporate restructuring and rising oil prices. And the stocks of
Alcan and Aluminum Company of America have risen on the strength of
improving demand for aluminum, which has driven strong earnings gains for
these companies.
Q. RICK, LET'S DISCUSS THE NEXT SIX MONTHS. WHAT'S ON THE HORIZON?
A. There are several factors that could influence the fund's performance
during the rest of 1995. One is the extent to which economies improve in
Europe and Japan. Again, I believe the problems that have plagued the
Japanese recovery are short term in nature. One large variable, however, is
the direction of the U.S. dollar. As I've mentioned, the weak dollar has
strengthened the returns of foreign investments over the past six months.
But currencies move both ways. The risk is that a strengthening dollar
could partially offset improved foreign stock performance going forward.
Good stock picking will be very important.
FUND FACTS
GOAL: growth of capital and current income by
investing mainly in foreign stocks and bonds
START DATE: December 31, 1986
SIZE: as of April 30, 1995, more than
$929 million
MANAGER: Richard Mace, since 1994;
manager, Fidelity International Value Fund,
since 1994; co-manager, Fidelity Global
Balanced Fund, since January 1995, and 1993;
manager,
Fidelity Select Chemicals and Industrial
Materials Portfolios, 1992; Fidelity Select
Transportation Portfolio, 1989-1991; joined
Fidelity in 1987
(checkmark)
RICK MACE ON INVESTING IN EMERGING MARKETS:
"Over the past six months, the fund had very few
investments in emerging market stocks in the Far
East or Latin America. Most of these markets fell
recently due to anxiety caused by Mexico's sudden
devaluation of the peso. While that generally has
resulted in lower, more attractive stock valuations, I
want to be very selective before adding such
investments to the fund. Emerging markets tend to
be characterized by rapidly growing companies. I
would like to own the stocks of these companies, but
only if I can buy them cheap. I have found, though,
that to buy the stock of a company growing its
earnings at 20% annually, you more often than not
have to pay a large premium compared to a
company growing at a 5% or 10% annual rate.
Because my investment style is value-oriented, and
I'm interested in reducing risk and volatility within the
fund, I'm not willing to pay such premiums.
"In addition, the crash of the Mexican stock market
in December illustrated how "event risk" - the risk
that an unforeseen event might rattle a stock market
- - can play out. Sometimes, there's simply too
much political and economic uncertainty inherent in
emerging markets to create a risk/reward profile to
my liking. That means that the fund may miss
investing in some high-flying stocks, but conversely,
and I feel more importantly, it should miss the big
losers. My hope is that the fund's value approach to
investing will provide consistently superior returns
with reduced risk over the long run. The bottom line
is that I'll continue to look for opportunities to invest
in emerging markets, but only on my terms."
INTERNATIONAL GROWTH & INCOME
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Denmark 3.0%
United States 9.7%
Row: 1, Col: 1, Value: 9.699999999999999
Row: 1, Col: 2, Value: 10.6
Row: 1, Col: 3, Value: 5.1
Row: 1, Col: 4, Value: 37.0
Row: 1, Col: 5, Value: 12.1
Row: 1, Col: 6, Value: 8.300000000000001
Row: 1, Col: 7, Value: 11.0
Row: 1, Col: 8, Value: 3.2
Row: 1, Col: 9, Value: 3.0
Canada 3.2%
United Kingdom
11.0%
Other 10.6%
Netherlands
5.1%
France 8.3%
Germany 12.1%
Japan 37.0%
AS OF OCTOBER 31, 1994
Argentina 7.4%
Row: 1, Col: 1, Value: 15.6
Row: 1, Col: 2, Value: 16.3
Row: 1, Col: 3, Value: 7.6
Row: 1, Col: 4, Value: 27.5
Row: 1, Col: 5, Value: 7.3
Row: 1, Col: 6, Value: 6.1
Row: 1, Col: 7, Value: 5.6
Row: 1, Col: 8, Value: 8.6
Row: 1, Col: 9, Value: 7.4
United States 15.8%
Canada 8.6%
United Kingdom
5.6%
Other 14.1%
France 6.1%
Germany 7.3%
Netherlands 7.6%
Japan 27.5%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and equity futures 63.9 56.0
Bonds 33.8 35.0
Short-term investments 2.3 9.0
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Hitachi Ltd. 4.4 1.7
(Japan, Electronics)
Ito-Yokado Co. Ltd. 3.5 0.4
(Japan, General Merchandise Stores)
Omron Corp. 3.4 1.1
(Japan, Electrical Equipment)
Matsushita Electric Industrial Co. Ltd. (Japan, Consumer Electronics) 3.3 0.6
Koninklijke PPT Nederland 3.2 2.3
(Netherlands, Telephone Services)
Sony Corp. 2.7 1.2
(Japan, Consumer Electronics)
Mitsubishi Electric Co. Ord. 2.7 1.0
(Japan, Electrical Equipment)
Nomura Securities Co. Ltd. 2.6 1.0
(Japan, Securities Industry)
Veba AG Ord. 2.2 1.5
(Germany, Electric Utilities)
British Petroleum PLC Ord. 1.8 1.3
(United Kingdom, Oil & Gas)
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Durables 9.6 8.0
Technology 9.3 7.2
Industrial Machinery & Equipment 8.6 5.4
Basic Industries 8.4 10.1
Utilities 7.0 7.1
Energy 5.2 5.5
Retail & Wholesale 4.5 1.6
Finance 4.1 5.4
Health 2.4 1.8
Services 2.2 1.5
INTERNATIONAL GROWTH & INCOME
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 63.3%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.0%
BTR Nylex Ltd. 1,000 $ 1,957
AUSTRIA - 0.3%
Mayr Melnhof Karton AG (a) 42,700 2,469,777
CANADA - 3.2%
Alcan Aluminium Ltd. 491,600 13,958,186
AT Plastics, Inc. 149,900 1,271,285
Barrick Gold Corp. 35,500 863,970
Canada Occidental Petroleum Ltd. 93,700 2,746,838
Canadian Pacific Ltd. Ord. 72,300 1,113,066
Inco Ltd. 1,000 25,904
Intertape Polymer Group, Inc. 47,300 1,007,255
Methanex Corp. (a) 600,000 6,305,544
Midland Walwyn, Inc. 150,000 829,677
Sherritt Gordon Ltd. (a) 147,400 1,521,884
29,643,609
DENMARK - 0.7%
International Service Systems AS,
Series B 72,000 2,103,831
Teledanmark AS Class B 45,000 2,348,617
Unidanmark AS Class A 45,000 2,059,175
6,511,623
FINLAND - 1.4%
Enso-Gutzeit OY Class R Free shares 115,000 1,035,647
Kemira OY 199,800 1,686,867
Kemira OY sponsored ADR (b) 152,525 2,516,663
Kone Corp. Ord. Class B 13,000 1,615,854
Kymmene Corp. 48,600 1,458,912
Repola OY 75,000 1,507,388
Valmet OY Ord. 126,700 2,873,333
12,694,664
FRANCE - 2.3%
Accor SA 35,000 4,010,158
Carnaudmetalbox SA 37,500 1,328,593
Eramet SA (a)(b) 8,000 554,840
Generale des Eaux 50,000 5,261,554
Lagardere Groupe SA (Reg.) 60,000 1,344,439
Michelin SA Cie Generale des
Etablissements Class B (Reg.) 20,900 936,201
Total SA sponsored ADR 200,000 6,275,000
Ugine SA (b) 26,300 1,859,299
21,570,084
GERMANY - 3.0%
Bayer AG 3,300 811,407
BMW AG 3,000 1,535,855
Schering AG 7,000 5,191,261
Veba AG Ord. 55,000 20,463,640
28,002,163
HONG KONG - 0.0%
Sun Hung Kai & Co. Ltd. 1,000 365
IRELAND - 0.1%
Smurfit (Jefferson) Group PLC 177,930 1,058,377
ITALY - 0.7%
Fiat Spa 1,500,000 6,120,930
Telecom Italia Ord. 310,000 825,493
6,946,423
JAPAN - 34.9%
Aida Engineering Ltd. Ord. 308,000 2,432,686
Amada Metrecs Co. Ltd. 34,000 500,742
Canon, Inc. 460,000 7,594,273
SHARES VALUE (NOTE 1)
Daifuku Co. Ltd. 1,000 $ 13,065
Daihatsu Motor Co. Ltd. 265,000 1,350,257
Daiwa Securities Co. Ltd. 360,000 4,532,335
Fuji Electric Co. Ltd. 1,000,000 5,178,450
Fuji Photo Film Co. Ltd. 100,000 2,446,701
Hitachi Koki Co. Ltd. Ord. 415,000 4,145,319
Hitachi Ltd. 4,000,000 40,620,000
Hitachi Maxell Ltd. 1,000 15,559
Hitachi Transport System Co. 267,000 2,806,520
Honda Motor Co. Ltd. 500,000 8,076,490
Ito-Yokado Co. Ltd. 610,000 32,820,239
Kaneka Corp. 377,000 2,767,218
Kenwood Corp. 1,000 7,340
Kokusai Securities Co. Ltd. 1,000 13,659
Kokuyo Co. Ltd. 38,000 974,880
Kyocera Corp. 1,000 77,202
Matsushita Electric Industrial Co. Ltd. 1,800,000 30,144,312
Matsushita Electric Works Co. Ltd. 1,000 11,996
Mazda Motor Corp. (a) 169,000 744,688
Mitsubishi Electric Co. Ord. 3,500,000 24,775,835
Mitsubishi Heavy Industries Ltd. 234,000 1,695,351
Mitsubishi Motors Corp. 1,000 9,276
Murata Manufacturing Co. Ltd. Ord. 10,000 401,449
Nichicon Corp. 400,000 5,701,052
Nifco, Inc. 272,000 4,199,775
Nissan Motor Co. Ltd. Ord. 1,000 7,293
Nisshinbo Industries 463,000 4,608,281
Nitto Denko Corp. 790,000 12,291,705
Nomura Securities Co. Ltd. 1,200,000 24,229,464
Omron Corp. 1,631,000 31,963,294
Pioneer Electronic Corp. 1,000 21,023
Rohm Co. Ltd. 46,000 2,125,304
Sankyo Co. Ltd. 330,000 7,917,334
Secom Co. Ltd. 34,000 2,212,958
Sekisui Chemical Co. Ltd. 320,000 3,990,736
Shinetsu Chemical 150,000 2,903,973
Sony Corp. 500,000 25,179,645
Sumitomo Chemical Co. Ltd. 1,000 5,654
Suzuki Motor Corp. 1,000 10,689
Taiyo Yuden Co. Ltd. 1,000 10,630
Takeda Chemical Industries Ltd. 1,000 13,302
Tayca Corp. 146,000 606,925
Tokai Rika Denki Co. Ltd. 41,000 443,138
Toppan Printing Co. Ltd. 365,000 5,288,912
Toshiba Corp. 1,000 6,639
Toyoda Automatic Loom Works Ltd. 1,000 18,291
Toyota Motor Corp. 130,000 2,640,299
Uny Co. Ltd. 372,000 6,715,839
Wako Electric Co. Ltd. 80,000 1,520,280
Yamanouchi Pharmaceutical Co. Ltd. 201,000 4,512,026
Zexel Corp. 1,000 7,091
323,307,394
MALAYSIA - 0.0%
Tenega Nasional BHD 1,000 4,453
MEXICO - 0.0%
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 1,000 30,250
NETHERLANDS - 5.1%
AKZO Nobel NV Ord. 30,300 3,513,949
DSM NV 40,000 3,363,185
EVC International NV (b) 45,000 1,977,321
Heineken NV 8,750 1,248,711
KBB NV Ord. 40,000 3,077,121
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - CONTINUED
KLM Royal Dutch Airlines Ord. (a) 80,000 $ 2,432,833
Koninklijke PPT Nederland 850,000 29,627,600
Pirelli Tyre Holdings NV Ord. 400,000 2,474,068
47,714,788
NETHERLANDS ANTILLES - 1.5%
Schlumberger Ltd. 227,700 14,316,638
NEW ZEALAND - 0.3%
Brierley Investments Ltd. 3,717,211 2,799,171
NORWAY - 1.4%
Helikopter Services AS 206,600 2,387,672
Kverneland Gruppen AS 177,800 2,639,887
Norsk Hydro AS 150,000 6,115,571
Saga Petroleum AS Class B 138,000 1,893,901
13,037,031
SINAPORE - 0.0%
Kim Engineering Holdings Ltd. 20,000 18,221
SOUTH AFRICA - 0.9%
Anglo American Corp. of
South Africa (Reg.) 30,700 1,739,016
Buffelsfontein Gold Mining Co. Ltd. ADR 76,300 495,950
Driefontein Consolidated Ltd.:
ADR 42,500 610,938
Ord. 75,500 1,105,692
Free State Consolidated Gold Mines Ltd.:
ADR 148,382 1,762,036
Ord. 25,578 312,746
Vaal Reefs Exploration and Mining Co. Ltd.:
ADR 60,000 367,500
(Reg.) 9,400 597,403
Western Deep Levels Ltd.:
ADR 18,300 601,613
Ord. 14,700 495,551
8,088,445
SPAIN - 0.0%
Telefonica de Espana SA Ord. 5,000 60,956
SWEDEN - 1.6%
Avesta Sheffield AB Ord. Free shares 200,000 2,149,056
Celsius Industrier AB Class B 23,200 364,348
Electrolux AB 40,000 2,044,359
Esselte AB Class B Free shares 80,000 1,046,976
Pharmacia AB Class A Free shares 134,400 2,545,805
SKF AB Ord. 60,000 1,210,910
Stora Kopparbergs Bergslags AB
Class A Free shares 35,000 2,343,298
Volvo AB Class B 142,300 2,675,843
14,380,595
SWITZERLAND - 0.2%
Kuoni Reisen Holding AG Class B (Reg.) 915 1,483,676
UNITED KINGDOM - 3.9%
BET PLC Ord. 4,027,200 7,692,838
British Petroleum PLC Ord. 2,340,000 16,880,058
Cookson Group 700,000 2,640,456
Forte PLC 800,000 2,940,288
Tomkins PLC Ord. 200,000 754,416
WPP Group PLC 35,700 63,879
WPP Group PLC (b) 2,660,000 4,781,031
35,752,966
UNITED STATES OF AMERICA - 1.8%
Aluminum Co. of America 200,000 8,975,000
SHARES VALUE (NOTE 1)
American Express Co. 50,000 $ 1,737,500
Reynolds Metals Co. 25,700 1,294,638
Rhone-Poulenc Rorer, Inc. 50,000 2,093,750
RJR Nabisco Holdings Corp. 105,200 2,879,850
16,980,738
TOTAL COMMON STOCKS
(Cost $533,988,568) 586,874,364
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
ITALY - 0.0%
Fiat Spa Ord. (Cost $1,636) 1,000 2,497
CONVERTIBLE BONDS - 1.6%
MOODY'S PRINCIPAL
RATINGS AMOUNT (C)
JAPAN - 1.5%
Canon, Inc. #3,
1.30%, 12/19/08 (d) A JPY 1,127,000 13,358,782
Matsushita Electric Works Ltd.
Ltd. #8, 2.70%, 5/31/02 (d) - JPY 36,000 476,752
13,835,534
LUXEMBOURG - 0.1%
Softe SA euro
4 1/4%, 7/30/98 (d) - ITL 2,000,000 1,331,800
TOTAL CONVERTIBLE BONDS
(Cost $14,325,419) 15,167,334
GOVERNMENT OBLIGATIONS (G) - 31.9%
ARGENTINA - 1.1%
Argentina Republic Brady euro:
5%, 3/31/23 (e) B1 $ 13,000,000 5,720,000
7 1/8%, 3/31/23 (e) B1 8,000,000 4,620,000
Province of Chaco 11 7/8%,
9/10/97 (f) - 250,000 244,775
10,584,775
DENMARK - 2.3%
Danish Government:
Bullet 8%, 5/15/03 Aa1 DKK 62,000,000 11,031,592
9%, 11/15/98 Aa1 DKK 55,500,000 10,520,674
21,552,266
FRANCE - 6.0%
French Government:
BTF 0%, 7/27/95 Aaa FRF 70,000,000 13,960,183
OAT 8 1/2%, 11/25/02 Aaa FRF 140,000,000 29,720,670
8 1/2%, 12/26/12 Aaa FRF 55,400,000 11,667,484
55,348,337
GERMANY - 9.1%
Federal Republic of Germany:
9%, 10/20/00 Aaa DEM 73,200,000 58,534,665
8%, 7/22/02 Aaa DEM 22,000,000 16,826,190
6%, 6/20/16 Aaa DEM 15,500,000 9,290,946
84,651,801
GOVERNMENT OBLIGATIONS (G) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (C) (NOTE 1)
ITALY - 0.9%
Italian Government 8 1/2%,
4/1/99 (d) - ITL 15,600,000 $ 8,221,556
NEW ZEALAND - 0.1%
New Zealand Government
9%, 11/15/96 Aaa NZD 1,500,000 1,016,896
UNITED KINGDOM - 7.1%
United Kingdom, Great Britain &
Northern Ireland:
9 3/4%, 1/19/98 Aaa GBP 11,600,000 19,420,384
12%, 11/20/98 Aaa GBP 11,200,000 19,992,413
9 3/4%, 8/27/02 Aaa GBP 15,200,000 26,102,407
65,515,204
UNITED STATES OF AMERICA - 5.3%
U.S. Treasury Notes:
9 1/4%, 1/15/96 (h) Aaa $ 7,000,000 7,140,000
6 1/4%, 2/15/03 Aaa 23,970,000 22,823,994
5 3/4%, 8/15/03 Aaa 13,760,000 12,642,000
12 3/8%, 5/15/04 Aaa 2,140,000 2,886,667
11 5/8%, 11/15/04 Aaa 2,810,000 3,677,588
49,170,249
TOTAL GOVERNMENT OBLIGATIONS
(Cost $285,136,654) 296,061,084
INDEXED SECURITIES - 0.3%
UNITED STATES OF AMERICA - 0.3%
Merrill Lynch & Co., Inc. Japan
Index equity participation
securities 0%, 1/31/00
(Cost $2,730,000) 2,730,000 2,337,563
REPURCHASE AGREEMENTS - 2.9%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 26,726,201 26,713,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $862,895,277) $ 927,155,842
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
70 Nikkei Stock Average
Contracts June 1995 $ 5,899,250 $ 158,236
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.6%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATES VALUE GAIN/(LOSS)
CONTRACTS TO SELL
77,495,436 FRF 6/15/95 $ 15,697,058 $ (352,035)
20,932,200,000 ITL 7/24/95 12,368,499 (368,499)
4,460,900,000 JPY 6/15/95 53,324,201 (3,324,201)
TOTAL CONTRACTS TO SELL
(Receivable amount $77,345,023) $ 81,389,758 $ (4,044,735)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 8.8%
CURRENCY ABBREVIATIONS
GBP - British pound
DKK - Danish krone
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
NZD - New Zealand dollar
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $11,689,154 or 1.3% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Principal amount in thousands.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco
11 7/8%, 9/10/97 3/9/94 $ 263,026
7. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
8. Security pledged to cover margin requirements for futures contracts. At
the period end, the value of securities pledged amounted to $1,918,784.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 31.3% AAA, AA, A 28.5%
Baa 0.0% BBB 0.0%
Ba 0.0% BB 0.0%
B 1.1% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 1.1%.
At the end of the period, restricted securities (excluding 144A issues)
amounted to $244,775 or 0.0% of net assets (see Note 2 of Notes to
Financial Statements).
Purchases and sales of securities, other than short-term securities,
aggregated $690,596,555 and $1,007,127,742, respectively, of which U.S.
government and government agency obligations aggregated $60,311,842 and
$59,416,042, respectively.
The market value of futures contracts opened and closed amounted to
$32,294,354 and $50,261,353, respectively (see Note 2 of Notes to Financial
Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $87,995 for the period (see Note 5 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $12,636,000 and $6,460,000, respectively. The
weighted average interest rate was 6.18% (see Note 7 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $863,277,140. Net unrealized appreciation aggregated
$63,878,702, of which $83,467,254 related to appreciated investment
securities and $19,588,552 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 8.4%
Conglomerates 0.1
Durables 9.6
Energy 5.2
Finance 4.1
Government Obligations 31.9
Health 2.4
Holding Companies 0.5
Industrial Machinery & Equipment 8.6
Media & Leisure 0.9
Nondurables 0.5
Precious Metals 1.0
Repurchase Agreements 2.9
Retail & Wholesale 4.5
Services 2.2
Technology 9.3
Transportation 0.9
Utilities 7.0
100.0%
INTERNATIONAL GROWTH & INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<ERROR: WIDE TABLE>
ERROR: The Following Table: "Assets" is Too Wide!
Table Width is 143 characters.
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $26,713,000) (cost $862,895,277) - See $ 927,155,842
accompanying schedule
Cash 3,737
Receivable for investments sold 137,730,306
Receivable for fund shares sold 3,395,612
Dividends receivable 2,314,264
Interest receivable 8,431,425
TOTAL ASSETS 1,079,031,186
LIABILITIES
Payable for investments purchased $ 136,778,024
Unrealized depreciation on foreign currency contracts 4,044,735
Payable for closed foreign currency contracts 7,017
Payable for fund shares redeemed 7,847,518
Accrued management fee 593,735
Payable for daily variation on futures contracts 19,250
Other payables and accrued expenses 403,138
TOTAL LIABILITIES 149,693,417
NET ASSETS $ 929,337,769
Net Assets consist of:
Paid in capital $ 908,259,527
Undistributed net investment income 28,727,178
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (68,615,694
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 60,966,758
NET ASSETS, for 53,672,855 shares outstanding $ 929,337,769
NET ASSET VALUE, offering price $17.31
and redemption price per share ($929,337,769 (divided by) 53,672,855 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 4,190,129
Dividends
Interest 20,411,252
24,601,381
Less foreign taxes withheld (374,868
)
TOTAL INCOME 24,226,513
EXPENSES
Management fee $ 4,467,655
Transfer agent fees 1,707,093
Accounting fees and expenses 251,659
Non-interested trustees' compensation 5,109
Custodian fees and expenses 171,708
Registration fees 28,622
Audit 26,131
Legal 10,142
Interest 2,219
Miscellaneous 7,997
Total expenses before reductions 6,678,335
Expense reductions (3,209 6,675,126
)
NET INVESTMENT INCOME 17,551,387
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (42,131,210
)
Foreign currency transactions (3,854,328
)
Futures contracts (3,676,527 (49,662,065
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities 23,337,823
Assets and liabilities in foreign currencies 10,890,670
Futures contracts 177,026 34,405,519
NET GAIN (LOSS) (15,256,546
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,294,841
OTHER INFORMATION
Deferred sales charge withheld $7,362
by FDC
Accounting fees paid to FSC $213,711
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 17,551,387 $ 28,691,450
Net investment income
Net realized gain (loss) (49,662,065) 29,756,601
Change in net unrealized appreciation (depreciation) 34,405,519 (45,604,352)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,294,841 12,843,699
Distributions to shareholders - (1,769,894)
From net investment income
From net realized gain (27,845,791) (2,997,808)
In excess of net realized gain (12,353,903) (1,647,620)
TOTAL DISTRIBUTIONS (40,199,694) (6,415,322)
Share transactions 247,315,379 1,287,341,882
Net proceeds from sales of shares
Reinvestment of distributions 39,643,295 6,281,612
Cost of shares redeemed (687,654,471) (934,960,509)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (400,695,797) 358,662,985
TOTAL INCREASE (DECREASE) IN NET ASSETS (438,600,650) 365,091,362
NET ASSETS
Beginning of period 1,367,938,419 1,002,847,057
End of period (including undistributed net investment income of $28,727,178 and $11,175,791, $ 929,337,769 $ 1,367,938,419
respectively)
OTHER INFORMATION
Shares
Sold 14,872,971 72,892,665
Issued in reinvestment of distributions 2,423,185 363,939
Redeemed (41,631,873) (53,381,201)
Net increase (decrease) (24,335,717) 19,875,403
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1995
(UNAUDITED)
SELECTED PER-SHARE DATA 1994 1993 1992 1991 1990
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87
Income from Investment Operations
Net investment income .39 .38 C .14 C .31 .30 E .25
Net realized and unrealized gain (loss) (.09) .02 F 4.14 (.84) .41 .75
Total from investment operations .30 .40 4.28 (.53) .71 1.00
Less Distributions - (.03) (.31) (.16) (.38) (.16)
From net investment income
From net realized gain (.37) (.05) (.01) D (.01) (.05) -
D D
In excess of net realized gain (.16) (.03) - - - -
Total distributions (.53) (.11) (.32) (.17) (.43) (.16)
Net asset value, end of period $ 17.31 $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71
TOTAL RETURN B 1.89% 2.33% 32.94% (3.81) 5.43% 7.79%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 929,338 $ 1,367,938 $ 1,002,847 $ 60,007 $ 49,738 $ 35,380
Ratio of expenses to average net assets 1.17% A 1.21% 1.52% 1.62% 1.89% 1.98%
Ratio of net investment income to average net assets 3.08% A 2.16% .87% 2.78% 2.86% 2.31%
Portfolio turnover rate 131% A 173% 24% 76% 117% 102%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
E INCLUDES $.02 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND AND INTEREST PAYMENT.
F THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD ENDED DUE
TO THE TIMING OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
INTERNATIONAL VALUE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). International
Value has a 3% sales charge, which which has been waived since the fund's
start on November 1, 1994 through June 30, 1995. The sales charge is being
eliminated July 1, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED LIFE OF
APRIL 30, 1995 FUND
INTERNATIONAL VALUE 1.70%
Morgan Stanley EAFE Index 1.24%
Average International Fund -4.55%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on November 1,
1994. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Morgan Stanley EAFE
index - a broad measure of the performance of stocks in Europe, Australia,
and the Far East. You can also compare the fund's performance to the
average international fund, which reflects the performance of 225 funds
with similar objectives tracked by Lipper Analytical Services. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year. In the fund's next report we'll report these
numbers for the fund and the benchmarks.
$10,000 OVER LIFE OF FUND
Fidelity InternEurope, Austral
11/01/94 10000.00 10000.00
11/30/94 9700.00 9507.72
12/31/94 9790.00 9567.26
01/31/95 9440.00 9199.73
02/28/95 9530.00 9173.32
03/31/95 10000.00 9745.47
04/28/95 10170.00 10111.99
Let's say you invested $10,000 in Fidelity International Value Fund on
November 1, 1994, when the fund started. By April 30, 1995, the value of
your investment would have grown to $10,170 - a 1.70% increase on your
initial investment. That compares to $10,000 invested in the Morgan Stanley
EAFE index, which would have grown to $10,124 over the same period - a
1.24% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
INTERNATIONAL VALUE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace,
Portfolio Manager of Fidelity International Value Fund
Q. RICK, HOW HAS THE FUND PERFORMED SO FAR?
A. From its inception on November 1, 1994, through April 30, 1995, the fund
had a total return of 1.70%. During the same period, the Morgan Stanley
EAFE index - which tracks the performance of stocks in Europe, Australia
and the Far East - returned 1.24%. The average international fund had total
return of -4.55%, according to Lipper Analytical Services.
Q. GRANTED, THE FUND HAS ONLY BEEN UP AND RUNNING FOR SIX MONTHS, BUT WHAT
FACTORS HAVE INFLUENCED ITS PERFORMANCE SO FAR?
A. Although the fund topped the performance of the EAFE index, it has been
a difficult past six months for international investors. Several sudden
events - most notably the fiscal crisis and devaluation of the peso in
Mexico - caused anxiety in overseas markets, and led investors to bring a
significant amount of capital back to the United States. More specifically
for the fund, its large stake in Japanese stocks - 36.8% at the end of the
period - came under pressure from several directions. First, an
extraordinarily strong yen slowed the Japanese economic recovery and made
it very difficult for companies there to post strong earnings gains. In
addition, the Kobe earthquake, the collapse of British investment bank
Barings and the recent subway nerve gas attack all helped to depress
consumer and investor sentiment, which resulted in lower stock prices.
However, there has been a silver lining to the strong yen. It has helped
boost returns on the fund's Japanese stocks when translated back into U.S.
dollars.
Q. LET'S TALK MORE SPECIFICALLY ABOUT JAPAN. WHY HAVE YOU FOCUSED YOUR
EFFORTS THERE?
A. Simply because I've found so many companies in Japan that offer
excellent business prospects coupled with cheap stock valuations - prices
relative to other measures such as earnings and cash flow. I've mostly
concentrated on three main groups: exporters, retailers and domestic
industrial companies. As a group, exporters such as Hitachi, Sony and Honda
have done an excellent job cleaning up their balance sheets and cutting
costs. The strong yen certainly has made it more expensive for exporters to
run their businesses and made their products less competitive overseas.
However, many have compensated to a certain extent by moving some
production abroad - which has saved on costs - and by raising product
prices. As for the retailers, several such as Ito-Yokado are well
positioned to rebound as the Japanese economy recovers and consumer
confidence picks up. Finally, I expect selected domestic industrial
companies to benefit from an improving economy as well. Examples include
Omron, which manufactures control components, and Mitsubishi Electric,
which makes electric machinery and consumer electronics.
Q. SO YOU FEEL THAT THE NEGATIVE SENTIMENT THAT HAS SURROUNDED THE JAPANESE
MARKET RECENTLY MAY BE SHORT-LIVED?
A. I can't predict when the Japanese economy will strengthen significantly
or the performance of Japanese stocks might improve. But I have seen
evidence of an upturn in business for many of these companies. Generally,
they are well-run with excellent balance sheets, and their stocks are very
cheap. In fact, I used the recent market downturn as an opportunity to
increase the fund's stake in Japan during March and April.
Q. LET'S SWITCH CONTINENTS. IT APPEARS AS IF THE NEXT LARGEST COUNTRIES
REPRESENTED IN THE FUND ARE IN EUROPE.
A. That's right. Generally, the fund's European stocks have been pretty
good performers over the past several months. In addition, most European
currencies also have been strong against the dollar, which has further
boosted returns. Some of the fund's European investments include
Koninklijke PPT Nederland (KPN), which runs the Netherlands' post office
and telephone operations. KPN just went public last year when the
government arranged for an initial public offering. The company's earnings
prospects are excellent, and its stock remains cheap. German utility and
chemical company Veba also has done well recently. Among the fund's best
performers over the past six months were Schlumberger - a worldwide oil
service company - and British Petroleum. Both benefited from effective
restructuring efforts and an upturn in oil prices.
Q. RICK, LET'S STEP BACK FOR A MINUTE. CAN YOU OUTLINE YOUR OVERALL
STOCK-PICKING PHILOSOPHY?
A. Sure. I take a bottom-up approach. That simply means that I build the
fund stock-by-stock based on the individual merits of each, rather than by
looking first at countries or market sectors. I search for companies whose
stocks are attractively valued, and whose fundamentals, or business
prospects, are improving. That's not to say I don't pay attention to the
dynamics of the markets in which the stocks are traded. However, I believe
that, over time, a company's fundamentals and earnings growth are the key
drivers of its stock price.
Q. HOW DO YOU DEFINE VALUE?
A. I always give the example of a person who walks into a store where
they're selling dollar bills for 80 cents apiece. That's value - paying
less for a stock than its worth. Ideally, many other investors then begin
to spot that same value and drive up the price of the stock to a more fair
valuation, at which time I'll sell at a profit. I use many tools to
determine what a stock is worth, including measures such as
price-to-earnings, price-to-cash flow and price-to-book value - a company's
assets minus its liabilities. I then determine whether the stock is
historically cheap, and whether it's cheap compared to other, similar
stocks.
Q. WILL YOU EVER BUY GROWTH STOCKS, OR THOSE OF COMPANIES WITH ACCELERATING
EARNINGS?
A. I will, but only at attractive valuations. Generally, I consider a stock
that's growing earnings at 20% to 25% a year and trading at 15 times
earnings to be a good value. What I won't do is buy a stock with a high
valuation in hopes of achieving premium growth. My objective is to maximize
return consistent with minimum risk.
Q. AT THE END OF APRIL, THE FUND'S NET ASSETS TOTALED ROUGHLY $56 MILLION.
ARE THERE ADVANTAGES TO MANAGING A RELATIVELY SMALL FUND?
A. There are. While the fund is still relatively small, it often can take
more meaningful positions in selected small-capitalization stocks than a
larger fund can. In other words, this fund's stake in a small-company stock
will have a larger impact on performance than would a similar dollar stake
in a larger fund. Although small-cap stocks can often be more volatile than
large-cap stocks, they also can provide some exciting opportunities.
Q. RICK, LET'S DISCUSS YOUR OUTLOOK. WHAT'S ON THE HORIZON?
A. I think the extent to which economies in Europe and Japan can continue
to recover will be very important. To that end, I'm optimistic not only
about these economies, but also about the potential earnings growth of the
European and Japanese companies in which the fund is invested. On a
cautionary note, as I mentioned earlier, the weak dollar has lifted the
returns of overseas investments thus far in 1995. Obviously, currencies can
move both up and down. So if the dollar strengthens, it could limit the
potential upside returns from international stocks. Because there is a high
level of uncertainty in the markets, good stock picking will be very
important.
FUND FACTS
GOAL: growth of capital by investing mainly in
the stocks of foreign companies that own
valuable assets or are undervalued in the
marketplace
START DATE: November 1, 1994
SIZE: as of April 30, 1995, more than $56 million
MANAGER: Richard Mace, since 1994; manager,
Fidelity International Growth & Income Fund,
since 1994; co-manager, Fidelity Global Balanced
Fund, since January 1995, and February 1993 -
December 1993; manager, Fidelity Select
Chemicals and Industrial Materials Portfolios,
1992; Fidelity Select Transportation Portfolio,
1989 - 1991; joined Fidelity in 1987
(checkmark)
RICK MACE ON THE IMPORTANCE OF CURRENCY
MOVEMENTS TO INTERNATIONAL INVESTORS:
"The past several months has provided an excellent
example of how currency movements can affect the
returns of overseas investments. To varying
degrees, the weak U.S. dollar has boosted the
returns of international stocks when those returns
were translated from their local currencies back into
dollars. However, it's important to remember that
currencies move both ways. If the dollar strengthens
over the next several months relative to the
currencies of the countries in which the fund is
invested, returns could be negatively affected.
Interestingly, because of currency movements, the
fund's returns sometimes can move up and down
when stocks aren't even traded. For example, the
Japanese stock market was closed for three days in
early May. During those three days, the yen
weakened by about 1% versus the dollar. That
means that the fund's Japanese stocks - about
36.8% of the fund - lost roughly 1% of their value
despite the fact that the Japanese market was
closed.
"One way I hope to remove some of the volatility
inherent in overseas investing is by selectively
hedging a limited portion of the fund's investments.
By using instruments known as forward foreign
currency contracts, I can convert the value of
selected foreign investments from their local
currencies into U.S. dollars. The goal of these
hedges is to reduce the volatility of the fund's share
price and to reduce the fund's exposure to currency
risk - the chance that movements in a country's
currency will negatively affect the fund's investments
there. Of course, there are risks to hedging. If the U.S.
dollar falls in value relative to the currencies of the
countries in which the fund is hedged, the fund will
give up any currency gains on those holdings. But it's
important to remember that I use these hedges not
because I believe a currency is going to move one
way or another, but rather to reduce wide stock price
fluctuations that can be caused by volatile local
currencies. At the end of April, roughly 10% of the
fund's investments was hedged."
(solid bullet) The fund's investment in short-term instruments
- - or its cash equivalent - was 24% on April 30.
That figure most likely will be reduced to roughly
10% over the next several months, as new assets
coming into the fund are invested.
(solid bullet) On April 30, the fund's top 10 investments
included six Japanese stocks, two British stocks,
one Dutch stock and one German stock.
INTERNATIONAL VALUE
INVESTMENT SUMMARY
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Norway 2.4%
United
Kingdom 7.2%
Row: 1, Col: 1, Value: 26.1
Row: 1, Col: 2, Value: 10.3
Row: 1, Col: 3, Value: 6.6
Row: 1, Col: 4, Value: 37.3
Row: 1, Col: 5, Value: 6.5
Row: 1, Col: 6, Value: 3.6
Row: 1, Col: 7, Value: 7.2
Row: 1, Col: 8, Value: 2.4
United States 26.1%
France 3.6%
Germany 6.5%
Other 10.3%
Netherlands 6.6%
Japan 37.3%
ASSET ALLOCATION
% OF FUND'S
INVESTMENTS
Stocks and equity futures 74.6
Bonds 1.4
Short-term investments 24.0
TOP TEN STOCKS
% OF FUND'S
INVESTMENTS
Hitachi Ltd. 4.2
(Japan, Electronics)
Omron Corp. 4.0
(Japan, Electrical Equipment)
Ito-Yokado Co. Ltd. 3.9
(Japan, General Merchandise Stores)
Koninklijke PPT Nederland 3.7
(Netherlands, Telephone Services)
Veba AG Ord. 3.3
(Germany, Electric Utility)
Mitsubishi Electric Co. Ord. 3.2
(Japan, Electrical Equipment)
British Petroleum PLC Ord. 2.6
(United Kingdom, Oil & Gas)
Nitto Denko Corp. 2.5
(Japan, Electronics)
BET PLC Ord. 2.1
(United Kingdom, Services)
Sony Corp. 1.8
(Japan, Consumer Electronics)
TOP TEN INDUSTRIES
% OF FUND'S
INVESTMENTS
Technology 11.8
Industrial Machinery & Equipment 10.8
Utilities 9.3
Basic Industries 7.6
Durables 7.4
Energy 6.6
Retail & Wholesale 4.6
Finance 4.3
Services 4.1
Health 4.0
INTERNATIONAL VALUE
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 73.7%
SHARES VALUE (NOTE 1)
AUSTRIA - 0.2%
Mayr Melnhof Karton AG (a) 1,900 $ 109,741
CANADA - 1.2%
Alcan Aluminium Ltd. 12,000 340,721
AT Plastics, Inc. 17,000 144,179
Canada Occidental Petroleum Ltd. 200 5,863
Intertape Polymer Group, Inc. 2,000 42,590
Methanex Corp. (a) 15,000 157,639
690,992
DENMARK - 1.0%
International Service Systems AS,
Series B 7,500 219,149
Teledanmark AS Class B 2,500 130,479
Unidanmark AS Class A 4,500 205,917
555,545
FINLAND - 1.3%
Kemira OY 50,000 422,139
Kemira OY sponsored ADR (a)(b) 4,880 80,520
Valmet OY Ord. 8,900 201,836
704,495
FRANCE - 3.3%
Accor SA 1,500 171,864
Carnaudmetalbox SA 4,000 141,717
Elf Aquitaine sponsored ADR 2,500 99,375
Generale des Eaux 5,000 526,155
Lagardere Groupe SA (Reg.) 5,000 112,037
Michelin SA Cie Generale des
Etablissements:
Class B (Reg.) 1,300 58,232
Class B (warrants) (a) 75,000 49,213
Roussel-Uclaf Ord. 1,700 243,474
Total SA Class B 7,000 436,851
1,838,918
GERMANY - 6.2%
Bayer AG 20 4,918
BMW AG 200 102,390
Deutsche Bank AG 1,500 735,263
Hoechst AG Ord. 200 42,629
Schering AG 1,000 741,609
Veba AG Ord. 5,000 1,860,331
3,487,140
IRELAND - 0.4%
Smurfit (Jefferson) Group PLC 35,000 208,190
ITALY - 1.2%
Fiat Spa (a) 150,000 612,093
Telecom Italia Ord. 30,000 79,886
691,979
JAPAN - 35.9%
Aida Engineering Ltd. Ord. 12,000 94,780
Amada Metrecs Co. Ltd. 4,000 58,911
Canon, Inc. 20,000 330,186
Daido Metal Co. 20,000 166,756
Daihatsu Motor Co. Ltd. 1,000 5,095
Daiwa Securities Co. Ltd. 20,000 251,796
Ezaki Glicko Co. 1,000 9,692
Fuji Electric Co. Ltd. 90,000 466,061
Fuji Photo Film Co. Ltd. 18,000 440,406
Hitachi Koki Co. Ltd. Ord. 14,000 139,842
SHARES VALUE (NOTE 1)
Hitachi Ltd. 230,000 $ 2,335,650
Hitachi Maxell Ltd. 3,000 46,677
Honda Motor Co. Ltd. 19,000 306,907
Ito-Yokado Co. Ltd. 40,000 2,152,147
Kaneka Corp. 1,000 7,340
Kansai Paint Co. Ltd. 10,000 57,486
Kawasaki Heavy Industries Ltd. 1,000 4,086
Kokuyo Co. Ltd. 5,000 128,274
Kyocera Corp. 5,000 386,009
Matsushita Electric Industrial Co. Ltd. 60,000 1,004,810
Matsushita Electric Works Co. Ltd. 10,000 119,960
Mazda Motor Corp. (a) 1,000 4,406
Mitsubishi Electric Co. Ord. 250,000 1,769,703
Mitsubishi Heavy Industries Ltd. 11,000 79,696
Murata Manufacturing Co. Ltd. Ord. 3,000 120,435
Nichicon Corp. 50,000 712,632
Nifco, Inc. 20,000 308,807
Nihon Unisys Ltd. 5,000 62,355
Nisshinbo Industries 5,000 49,765
Nitto Denko Corp. 90,000 1,400,321
Nomura Securities Co. Ltd. 26,000 524,972
Omron Corp. 115,000 2,253,696
Rohm Co. Ltd. 4,000 184,809
Sankyo Co. Ltd. 22,000 527,822
Sanyo Electric Co. Ltd. 10,000 56,298
Secom Co. Ltd. 2,000 130,174
Sekisui Chemical Co. Ltd. 32,000 399,074
Sharp Corp. 2,000 32,781
Shinetsu Chemical 10,000 193,598
Sony Corp. 20,000 1,007,186
Sumitomo Chemical Co. Ltd. 2,000 11,307
Suzuki Motor Corp. 8,000 85,516
Tayca Corp. (a) 55,000 228,636
TDK Corp. 5,000 228,042
Toppan Printing Co. Ltd. 20,000 289,803
Toyota Motor Corp. 1,000 20,310
Uny Co. Ltd. 20,000 361,067
Wako Electric Co. Ltd. 6,000 114,021
Yamanouchi Pharmaceutical Co. Ltd. 18,000 404,062
20,074,165
MEXICO - 0.1%
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 1,000 30,250
NETHERLANDS - 6.6%
AKZO Nobel NV Ord. 1,000 115,972
DSM NV 1,000 84,080
EVC International NV (a) 2,000 87,881
EVC International NV (a)(b) 3,400 149,398
Heineken NV 1,250 178,387
Hoogovens en Staalfabrieken 100 3,853
International Nederlanden Groep NV 6,000 316,217
KLM Royal Dutch Airlines Ord. (a) 200 6,082
Koninklijke PPT Nederland 60,000 2,091,360
Philips Electronics 7,000 266,993
Royal Dutch Petroleum Co. 2,000 248,000
Samas-Groep NV 1,000 38,593
Volker Stevin NV 2,000 121,126
3,707,942
NETHERLANDS ANTILLES - 1.4%
Schlumberger Ltd. 12,000 754,500
NEW ZEALAND - 0.0%
Brierley Investments Ltd. 36,600 27,561
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NORWAY - 2.4%
Helikopter Services AS 25,000 $ 288,925
Kverneland Gruppen AS 30,000 445,425
Norsk Hydro AS 10,000 407,705
Saga Petroleum AS Class B 14,000 192,135
1,334,190
SPAIN - 0.7%
Banco Bilbao Vizcaya SA Ord. (Reg.) 5,000 134,467
Tabacalera SA, Series A 7,000 236,736
371,203
SWEDEN - 1.6%
Atlas Copco AB Class A Free shares 3,000 41,328
Avesta Sheffield AB Ord. Free shares 2,100 22,565
Electrolux AB 5,000 255,545
Esselte AB Class B Free shares (a) 8,000 104,698
Pharmacia AB Class A Free shares 5,000 94,710
Svedala Industri 2,500 66,125
Volvo AB Class B 16,200 304,629
889,600
SWITZERLAND - 1.2%
Adia SA (Bearer) (a) 1,000 185,315
Kuoni Reisen Holding AG Class B (Reg.) 300 486,451
671,766
UNITED KINGDOM - 6.9%
ADT Ltd.:
(N.Y. Shares) (a) 17,000 201,875
(U.K. Reg.) (a) 3,000 35,061
Airtours PLC 3,000 20,311
BET PLC Ord. 600,000 1,146,132
British Petroleum PLC Ord. 200,000 1,442,740
Cookson Group 70,000 264,046
Eurocamp PLC 14,000 59,805
Forte PLC 70,000 257,275
Hanson Trust PLC Ord. 30,000 114,371
London Clubs International PLC 10,000 46,264
Smith (W.H.) Group PLC Ord. 3,000 19,780
WPP Group PLC 150,000 268,398
3,876,058
UNITED STATES OF AMERICA - 2.1%
Aluminum Co. of America 12,000 538,500
American Express Co. 500 17,375
Phelps Dodge Corp. 2,000 113,250
Pride Petroleum Services, Inc. (a) 10,000 80,000
Reynolds Metals Co. 3,800 191,425
Rhone-Poulenc Rorer, Inc. 5,000 209,375
1,149,925
TOTAL COMMON STOCKS
(Cost $38,678,916) 41,174,160
CONVERTIBLE BONDS - 0.5%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (C)
JAPAN - 0.5%
Canon, Inc. #3, 1.30%,
12/19/08 A JPY 20,000,000 $ 237,068
Matsushita Electric Works Co.
Ltd. #8, 2.70%, 5/31/02 - JPY 3,000,000 39,729
TOTAL CONVERTIBLE BONDS
(Cost $278,167) 276,797
GOVERNMENT OBLIGATIONS (D) - 1.1%
FRANCE - 0.3%
French Government OAT
8 1/2%, 11/25/02 Aaa FRF 774,000 164,313
GERMANY - 0.3%
Federal Republic of Germany
8%, 7/22/02 Aaa DEM 220,000 168,262
UNITED KINGDOM - 0.3%
United Kingdom Treasury
9 3/4%, 8/27/02 Aaa GBP 95,000 163,140
UNITED STATES OF AMERICA - 0.2%
U.S. Treasury Bill yield at time of
purchase 5.90%, 7/6/95 (e) Aaa $ 120,000 118,726
TOTAL GOVERNMENT OBLIGATIONS
(Cost $570,413) 614,441
REPURCHASE AGREEMENTS - 24.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 13,784,809 13,778,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $53,305,496) $ 55,843,398
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
6 Nikkei Stock
Average
Contracts June 1995 $ 505,650 $ 8,702
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.9%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
697,740,000 ITL 7/24/95 $ 412,283 $ (12,283)
446,090,000 JPY 6/15/95 5,332,420 (332,420)
TOTAL CONTRACTS TO SELL
(Receivable amount $5,400,000) $ 5,744,703 $ (344,703)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 10.3%
CURRENCY ABBREVIATIONS
GBP - British pound
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $229,918 or 0.4% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
5. Security pledged to cover margin requirements for futures contracts. At
the period end, the value of securities pledged amounted to $118,726.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $50,241,530 and $10,741,218, respectively.
The market value of futures contracts opened and closed amounted to
$4,273,413 and $3,623,138, respectively (see Note 2 of Notes to Financial
Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $4,670 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $53,305,496. Net unrealized appreciation aggregated
$2,537,902, of which $2,891,254 related to appreciated investment
securities and $353,352 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 7.6%
Conglomerates 0.2
Construction & Real Estate 0.3
Durables 7.4
Energy 6.6
Finance 4.3
Government Obligations 1.1
Health 4.0
Holding Companies 0.2
Industrial Machinery & Equipment 10.8
Media & Leisure 1.8
Nondurables 0.7
Repurchase Agreements 24.7
Retail & Wholesale 4.6
Services 4.1
Technology 11.8
Transportation 0.5
Utilities 9.3
100.0%
INTERNATIONAL VALUE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $13,778,000) (cost $53,305,496) - See $ 55,843,398
accompanying schedule
Cash 826
Receivable for investments sold 963,472
Receivable for fund shares sold 2,681,666
Dividends receivable 132,498
Interest receivable 19,814
Prepaid expenses 20,037
TOTAL ASSETS 59,661,711
LIABILITIES
Payable for investments purchased $ 2,168,765
Unrealized depreciation on foreign currency contracts 344,703
Payable for fund shares redeemed 774,319
Accrued management fee 32,767
Payable for daily variation on 1,650
futures contracts
Other payables and accrued expenses 88,956
TOTAL LIABILITIES 3,411,160
NET ASSETS $ 56,250,551
Net Assets consist of:
Paid in capital $ 54,141,404
Undistributed net investment income 166,075
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (265,799)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 2,208,871
NET ASSETS, for 5,530,697 shares outstanding $ 56,250,551
NET ASSET VALUE, offering price $10.17
and redemption price per share ($56,250,551 (divided by) 5,530,697 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 1, 1994 (COMMENCEMENT OF OPERATIONS) TO
APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 181,654
Dividends
Interest 356,011
537,665
Less foreign taxes withheld (27,299)
TOTAL INCOME 510,366
EXPENSES
Management fee $ 152,632
Transfer agent fees 82,455
Non-interested trustees' compensation 20
Accounting fees and expenses 22,342
Custodian fees and expenses 45,022
Registration fees 25,876
Audit 15,750
Legal 51
Miscellaneous 143
TOTAL EXPENSES 344,291
NET INVESTMENT INCOME 166,075
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (89,125)
Foreign currency transactions (23,347)
Futures contracts (153,327) (265,799)
Change in net unrealized appreciation (depreciation) on:
Investment securities 2,537,902
Assets and liabilities in foreign currencies (337,733)
Futures contracts 8,702 2,208,871
NET GAIN (LOSS) 1,943,072
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,109,147
OTHER INFORMATION $18,571
Accounting fees paid to FSC
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS NOVEMBER 1, 1994
(COMMENCEMENT
OF OPERATIONS) TO
APRIL 30, 1995
(UNAUDITED)
Operations $ 166,075
Net investment income
Net realized gain (loss) (265,799)
Change in net unrealized appreciation (depreciation) 2,208,871
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,109,147
Share transactions 88,236,939
Net proceeds from sales of shares
Cost of shares redeemed (34,095,535)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 54,141,404
TOTAL INCREASE (DECREASE) IN NET ASSETS 56,250,551
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $166,075) $ 56,250,551
OTHER INFORMATION
Shares
Sold 9,041,524
Redeemed (3,510,827)
Net increase (decrease) 5,530,697
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
NOVEMBER 1, 1994
(COMMENCEMENT
OF OPERATIONS) TO
APRIL 30, 1995
(UNAUDITED)
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .03
Net realized and unrealized gain (loss) .14
Total from investment operations .17
Net asset value, end of period $ 10.17
TOTAL RETURN B 1.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 56,251
Ratio of expenses to average net assets 1.78%
A
Ratio of net investment income to average net assets .86%
A
Portfolio turnover rate 69%
A
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A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
</TABLE>
OVERSEAS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Overseas has a
3% sales charge, which, beginning May 31, 1994, has been waived through
June 30, 1995. The sales charge is being eliminated July 1, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
APRIL 30, 1995 MONTHS YEAR YEARS YEARS
OVERSEAS -3.37% -2.61% 31.08% 408.18%
OVERSEAS
(INCL. 3% SALES CHARGE) -6.27% -5.53% 27.14% 392.93%
Morgan Stanley EAFE Index 1.24% 5.59% 43.03% 387.66%
Average International Fund -4.55% -1.09% 43.75% 317.46%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or 10
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Morgan Stanley EAFE
index - a broad measure of the performance of stocks in Europe, Australia,
and the Far East. To measure how the fund's performance stacked up against
its peers, you can compare it to the average international fund, which
reflects the performance of 225 funds with similar objectives tracked by
Lipper Analytical Services over the past six months. These benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
APRIL 30, 1995 YEAR YEARS YEARS
OVERSEAS -2.61% 5.56% 17.65%
OVERSEAS (INCL. 3% SALES CHARGE) -5.53% 4.92% 17.29%
Morgan Stanley EAFE Index 5.59% 7.42% 17.17%
Average International Fund -1.09% 7.33% 14.92%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER TEN YEARS
Overseas (094) Europe, Australia,
04/30/85 9700.00 10000.00
05/31/85 10509.69 10424.92
06/30/85 10705.98 10692.76
07/31/85 11360.28 11245.01
08/31/85 11851.01 11606.22
09/30/85 12276.30 12285.39
10/31/85 13020.57 13121.27
11/30/85 13952.95 13659.91
12/31/85 15036.98 14306.91
01/31/86 15490.15 14665.56
02/28/86 17772.47 16290.12
03/31/86 20829.30 18580.84
04/30/86 21471.98 19797.54
05/31/86 20788.10 18917.62
06/30/86 22411.27 20205.57
07/31/86 24940.78 21453.10
08/31/86 26596.91 23566.85
09/30/86 25360.99 23324.41
10/31/86 22172.33 21766.25
11/30/86 24248.67 23021.36
12/31/86 25449.77 24241.12
01/31/87 29366.36 26817.01
02/28/87 30308.60 27619.58
03/31/87 33735.75 29882.82
04/30/87 36257.62 33044.75
05/31/87 36119.05 33044.62
06/30/87 33578.71 31991.84
07/31/87 34077.54 31935.96
08/31/87 36913.49 34330.57
09/30/87 36460.84 33790.09
10/31/87 28544.21 28908.03
11/30/87 28313.27 29341.63
12/31/87 30124.32 30212.89
01/31/88 28953.10 30752.31
02/29/88 29872.44 32802.16
03/31/88 31685.95 34819.03
04/30/88 32517.14 35325.02
05/31/88 31862.26 34192.64
06/30/88 30955.51 33291.38
07/31/88 30552.51 34335.85
08/31/88 29633.16 32103.39
09/30/88 30741.41 33506.14
10/31/88 31862.26 36373.00
11/30/88 32693.45 38539.60
12/31/88 32611.65 38754.48
01/31/89 33011.24 39436.34
02/28/89 33874.86 39639.05
03/31/89 33578.40 38861.08
04/30/89 34300.23 39221.50
05/31/89 32650.32 37087.73
06/30/89 31696.46 36463.41
07/31/89 34841.61 41042.22
08/31/89 34029.54 39196.40
09/30/89 35847.03 40981.87
10/31/89 33900.64 39335.32
11/30/89 35821.25 41312.69
12/31/89 38133.93 42837.01
01/31/90 37268.48 41243.12
02/28/90 36497.68 38364.56
03/31/90 37701.20 34367.90
04/30/90 37606.54 34095.16
05/31/90 40162.33 37985.45
06/30/90 40879.03 37650.89
07/31/90 42893.91 38181.22
08/31/90 38147.45 34473.51
09/30/90 33914.85 29669.12
10/31/90 37146.77 34292.14
11/30/90 35916.21 32269.31
12/31/90 35616.16 32792.06
01/31/91 36406.36 33852.72
02/28/91 37728.13 37481.69
03/31/91 36492.56 35231.58
04/30/91 37009.78 35577.55
05/31/91 37081.61 35948.79
06/30/91 34754.13 33307.24
07/31/91 36650.60 34943.68
08/31/91 36923.57 34234.05
09/30/91 38547.06 36163.44
10/31/91 38676.37 36676.09
11/30/91 37282.75 34963.89
12/31/91 38683.92 36769.53
01/31/92 39128.03 35984.14
02/29/92 38316.38 34696.20
03/31/92 37520.03 32405.68
04/30/92 39801.86 32559.73
05/31/92 41517.06 34739.13
06/30/92 40536.95 33091.37
07/31/92 37964.15 32244.46
08/31/92 37642.55 34266.86
09/30/92 36080.49 33590.18
10/31/92 33630.20 31828.22
11/30/92 33461.74 32127.73
12/31/92 34252.40 32293.90
01/31/93 35250.71 32289.94
02/28/93 35973.62 33265.32
03/31/93 38417.76 36164.91
04/30/93 41085.66 39597.05
05/31/93 42032.34 40433.33
06/30/93 41034.03 39802.49
07/31/93 42910.16 41195.77
08/31/93 45337.09 43419.64
09/30/93 44941.21 42442.30
10/31/93 46748.50 43750.27
11/30/93 44614.18 39926.03
12/31/93 47971.89 42808.98
01/31/94 51382.21 46428.28
02/28/94 50420.32 46299.69
03/31/94 48968.75 44305.50
04/30/94 50612.70 46185.34
05/31/94 49965.61 45920.17
06/30/94 49301.04 46569.12
07/31/94 50682.66 47016.97
08/31/94 51417.19 48130.11
09/30/94 50000.59 46614.22
10/31/94 51014.94 48166.47
11/30/94 48916.28 45851.58
12/31/94 48581.52 46138.69
01/31/95 46499.46 44366.26
02/28/95 46535.05 44238.93
03/31/95 47923.09 46998.16
04/28/95 49293.34 48765.70
Let's say you invested $10,000 in Fidelity Overseas Fund on April 30, 1985,
and paid the 3% sales charge. By April 30, 1995, the value of your
investment would have grown to $49,293 - a 392.93% increase on your initial
investment. That compares to $10,000 invested in the Morgan Stanley EAFE
index, which would have grown to $48,766 over the same period - a 387.66%
increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
OVERSEAS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Hickling,
Portfolio Manager of Fidelity Overseas Fund
Q. JOHN, HOW HAS THE FUND PERFORMED?
A. For the six and 12 months ended April 30, 1995, the fund had total
returns of -3.37% and -2.61%, respectively. To compare, the Morgan Stanley
EAFE Index - a broad measure of stocks in Europe, Australia and the Far
East - returned 1.24% and 5.59% during the same periods. Over the same six-
and 12-month periods, the average international fund had returns of -4.55%
and -1.09%, respectively, according to Lipper Analytical Services.
Q. WHAT WERE THE FACTORS DRIVING THE FUND'S RELATIVE PERFORMANCE OVER THE
PAST SIX MONTHS?
A. Because this fund had less invested in emerging markets - which
performed poorly over the period - than most funds in the Lipper group, it
beat the average. It's hard to say why the fund lagged the index. I believe
it came down to the fact that the fund had about half the weighting in
Japan that the index did. Even though the Japanese market has dropped
sharply in yen terms, the marked appreciation of the yen has helped
dollar-based investments there.
Q. WHAT'S BEEN THE STORY BEHIND THE FUND'S INVESTMENTS IN JAPAN?
A. Even though Japan has the highest country representation in the fund,
I've kept the fund underweighted there, relative to the index. I believe
this position was the right one, considering the downward direction of the
Japanese market. The drop was due to a number of factors that affected
investor sentiment: the Barings debacle, the Kobe earthquake and the subway
gas attack. Alone, these occurrences only had fleeting impact, but together
they set a negative tone over the recent past. Some of the Japanese
investments I've kept in the fund are consumer electronics companies - such
as Toshiba and Hitachi - and other manufacturers and exporters that are
poised to take advantage of economic activity both in Japan and globally.
One might think that the strong yen has hurt these companies and it has, in
the short term. However, I would submit that these are the types of
companies in Japan that have been exposed to the appreciating yen for some
time now, and have had, as a result, the experience and exposure to
competition abroad that places them well in a global context to cut costs
and compete.
Q. WHAT ARE SOME OTHER JAPANESE OPPORTUNITIES OF NOTE?
A. There are three I'd like to mention, all of which fall broadly in the
financial sector. Nomura Securities is the Japanese investment with the
largest representation in the fund at the end of the period. At some point
the Japanese market is going to pick up, and Nomura is poised well to take
advantage of that, because it has been cutting costs aggressively. Tokio
Marine and Fire Insurance is selling at very attractive levels. In
addition, about half of Tokio's business is auto insurance, and rates in
that area have been moving up. Finally, it appears regulations will be
changing for the trust banks - such as Mitsubishi Trust and Sumitomo Trust
- - making it easier for them to improve interest margins - the difference
between what they charge for loans and what they pay to depositors.
Q. THE COUNTRY WITH THE SECOND-LARGEST REPRESENTATION IN THE FUND IS THE
UNITED KINGDOM. WHERE HAVE YOU FOUND OPPORTUNITIES THERE?
A. I spent two months in the U.K. last summer researching investment
possibilities but didn't find many at that time. However, I entered this
market at the right time, as the U.K. has been one of the better performing
markets due to two factors. First, I believe its correlation with the U.S.
helps, as the U.S. has been one of the strongest performers in the world
during the period. In addition, the sterling has been weak against other
currencies on the European continent, which helps British products in a
competitive context. I've been focusing the fund's British investments on
growth stocks of consumer nondurable companies, such as Guinness,
Cadbury-Schweppes and Bass, as well as financial stocks such as Barclay's
and National Westminster. I've also found some of the oil company stocks to
be attractive, such as Shell Transport and Lasmo.
Q. HOW HAS THE BROAD EUROPEAN MARKET FARED?
A. It's been a disappointment. I thought those markets would have caught up
to the U.S. market by now. Strengthening currencies and high interest rates
have hurt them. However, going forward I'm hoping that with economic trends
pointing to slower growth and lower inflation, the currency and interest
rate backdrop will become more positive. I've focused my European
investments on financial, growth-oriented or interest-rate sensitive
stocks, including Unilever, Nestle, Swiss Bank and C.S. Holdings, all of
which are among the fund's top 10 investments.
Q. MANY EMERGING MARKETS SUFFERED IN DECEMBER 1994, AFTER MEXICO DEVALUED
ITS CURRENCY. DID THAT NEGATIVELY AFFECT THE FUND?
A. It didn't have much of an effect because I didn't have many investments
in Latin American emerging markets. At the time of the devaluation the fund
had roughly less than a 2% stake in Mexico and roughly a 1% stake in
Argentina, Brazil and Chile. Since the devaluation, I have had my eye on
these emerging markets, but
haven't made any significant moves. However, now that these markets have
fallen, I'll be looking for buy opportunities.
Q. WHAT ABOUT SOUTHEAST ASIA?
A. The fund had virtually no investments there during most of the period,
which was a positive since these markets performed poorly. However, there
are ideas in Southeast Asia now that are attractive, both in terms of
favorable market backdrop and stock prices. In Thailand, I've targeted
banks and financial stocks, including Krung Thai Bank. In Indonesia, my
focus has been on retailers such as Matahari - known as the Wal-Mart of
Indonesia - and a cigarette company, Sampoerna. And in Hong Kong, I've
started adding to the fund's positions in property stocks such as Hong Kong
Land Holdings and financial stocks because they were cheap and had fallen
pretty sharply.
Q. WHAT'S YOUR OUTLOOK GOING FORWARD?
A. A lot of foreign markets have lagged the U.S. fairly significantly. For
the first time in a long time, it appears that these markets are starting
to perform well, and hopefully will catch up to the U.S. We've seen a bond
market rally in the U.S. and Japan, indicating that investors are less
fearful of inflation stemming from growth that is too strong. This might
bring a little more optimism to some of the markets. As far as specific
countries and regions are concerned, I think Japan's prospects look good
because I expect the country's economy to continue to improve. I'm also
fairly optimistic about Europe because I expect that stock and bond markets
there will begin to recover. Emerging markets are starting to offer some
inexpensive opportunities. Overall, I'll continue to look for opportunities
in any market that appear to have excellent value.
FUND FACTS
GOAL: long-term growth of capital by investing
in equity securities outside the United States
START DATE: December 4, 1984
SIZE: As of April 30, 1995, more than $2.3 billion
MANAGER: John Hickling, since 1993;
manager, Fidelity Advisor Overseas Portfolio,
since 1993; Fidelity VIP: Overseas, since
1993; previously managed the Fidelity Japan,
Fidelity Europe, Fidelity International Growth
and Income, Fidelity International
Opportunities (now Fidelity Emerging
Markets), and Fidelity Pacific Basin funds;
joined Fidelity in 1982
(checkmark)
JOHN HICKLING ON CENTRAL EUROPEAN
EMERGING MARKETS:
"I've recently been on a research trip through
Central Europe, in order to identify companies
whose stocks realistically can provide benefit as
investments for the fund. I want to know what to buy,
rather than blindly piling into various markets. While
I didn't find any direct ideas for the fund, I think it
bodes well for value opportunities in the
not-too-distant future, should some of these markets
continue to fall. Some of the markets are
dramatically off their highs of last year. For example,
the market in the Czech Republic peaked in early
1994 at about 1200 on the Czech index, and is now
at about 400.
"Hungarian companies stood out as the most
attractive, including the telephone company, Matav,
and several drug companies, such as Egis. I didn't
find many attractive possibilities in Poland and the
Czech Republic, although the brewing industry in
the latter is starting to look interesting. The industry
is consolidating, and some major global players
such as Bass and Anheuser Busch are trying to
increase their exposure there.
"I think we're close to having some reasonable
buying opportunities in some of the Central
European areas, but stock prices have to go down
and business has to get better before I'll invest
there."
(solid bullet) With the exception of some important
considerations, the fund manager has avoided cyclical
stocks - those that rise and fall with the economy -
because economic trends are pointing to slower
growth. Some companies from cyclical sectors have
been appealing. For example, the fund has
investments in two Scandinavian paper companies,
Mo Och Domsjoe (Modo) and Svenska Cellulosa.
Modo was attractive because it was the cheapest
stock in this out-of-favor sector. Svenska Cellulosa
looked attractive because of its restructuring efforts.
The manager also invested in Michelin, even though it
is considered a cyclical stock. Michelin - a company
the manager has followed for about 10 years - has
made a fairly significant change in its strategy
because it has achieved its market share goals. That
means Michelin no longer needs to effectively
compete on price, and instead can focus more on
maximizing profitability.
OVERSEAS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 12.0%
Row: 1, Col: 1, Value: 12.0
Row: 1, Col: 2, Value: 12.7
Row: 1, Col: 3, Value: 8.1
Row: 1, Col: 4, Value: 3.7
Row: 1, Col: 5, Value: 20.4
Row: 1, Col: 6, Value: 6.1
Row: 1, Col: 7, Value: 19.5
Row: 1, Col: 8, Value: 3.4
Row: 1, Col: 9, Value: 5.5
Row: 1, Col: 10, Value: 8.6
France 8.6%
Germany 5.5%
Sweden 3.4%
United
Kingdom 12.7%
Japan 19.5%
Switzerland 8.1%
Spain 3.7%
Netherlands 6.1%
Other 20.4%
AS OF OCTOBER 31, 1994
United States 12.3%
Row: 1, Col: 1, Value: 12.3
Row: 1, Col: 2, Value: 10.0
Row: 1, Col: 3, Value: 6.9
Row: 1, Col: 4, Value: 3.7
Row: 1, Col: 5, Value: 21.1
Row: 1, Col: 6, Value: 4.9
Row: 1, Col: 7, Value: 23.2
Row: 1, Col: 8, Value: 3.5
Row: 1, Col: 9, Value: 7.1
Row: 1, Col: 10, Value: 7.3
France 7.3%
Germany 7.0%
Italy 3.5%
United
Kingdom 10.0%
Switzerland 6.9%
Japan 23.2%
Spain 3.7%
Other 21.2%
Netherlands 4.9%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 86.5 86.1
Bonds 1.5 1.6
Short-term investments 12.0 12.3
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
C.S. Holdings (Bearer) 1.1 0.8
(Switzerland, Banks)
Unilever NV Ord. 1.1 0.0
(Netherlands, Household Products)
Deutsche Bank AG 1.1 1.3
(Germany, Banks)
Nestle SA (Reg.) 1.1 0.0
(Switzerland, Foods)
Swiss Bank Corp. (Bearer) 1.1 0.8
(Switzerland, Banks)
Total SA Class B 1.0 0.9
(France, Oil & Gas)
Nomura Securities Co. Ltd. 1.0 1.0
(Japan, Securities Industry)
Tokio Marine & 0.9 0.9
Fire Insurance Co. Ltd. (The)
(Japan, Insurance)
Hitachi Ltd. 0.9 1.0
(Japan, Electronics)
Baloise Holding (Reg.) 0.9 0.8
(Switzerland, Insurance)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 23.4 20.7
Durables 8.5 10.6
Utilities 7.7 7.1
Nondurables 7.5 2.4
Basic Industries 5.6 10.5
Energy 5.4 4.2
Technology 4.9 6.1
Health 4.4 2.9
Retail & Wholesale 4.4 3.8
Industrial Machinery & Equipment 3.2 4.0
OVERSEAS
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.3%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.5%
Buenos Aires Embotelladora SA
sponsored ADR 72,200 $ 1,985,500
Perez Companc Class B 590,826 2,410,452
Telecom Argentina Stet France
Telecom SA 443,600 1,925,126
YPF Sociedad Anonima sponsored ADR
representing Class D shares 257,700 5,218,425
11,539,503
AUSTRALIA - 1.7%
Brambles Industries Ltd. 541,000 5,338,009
FAI Insurance Ltd. Ord. 3,866,800 1,800,769
Lend Lease Corp. Ltd. 190,000 2,427,731
Pacific Dunlop 2,077,600 5,109,774
Pioneer International Ltd. 966,700 2,349,419
TNT Ltd. (a) 3,141,200 4,502,816
Westpac Banking Corp. 4,924,181 18,130,391
39,658,909
AUSTRIA - 0.8%
Mayr Melnhof Karton AG (a) 53,500 3,094,452
OEMV AG (a) 100,100 10,347,738
VA Technologie AG (a) 13,900 1,533,832
VA Technologie AG (a)(b) 24,000 2,648,344
17,624,366
BELGIUM - 1.4%
Bekaert SA 1,230 958,178
Delhaize Freres & Cie Le Lion SA 238,300 10,561,404
Petrofina SA 22,100 6,966,304
Petrofina SA (warrants)(a) 1,105 18,597
Solvay & Cie SA 23,775 12,921,196
31,425,679
BERMUDA - 0.1%
Consolidated Electric Power Asia Ltd.
sponsored ADR (b) 67,400 1,449,100
BRAZIL - 0.2%
Coteminas PN 4,900,000 1,287,769
Telebras PN (Pfd. Reg.) 103,073,815 3,675,587
4,963,356
CANADA - 0.4%
Midland Walwyn, Inc. 277,800 1,536,562
Noranda, Inc. 460,700 8,111,812
9,648,374
CHILE - 0.1%
Vina Concha y Toro SA sponsored ADR 102,300 1,969,275
FINLAND - 0.5%
Outokumpu OY Class A 17,340 309,875
Pohjola Class B 263,770 3,556,936
Valmet OY Ord. 355,800 8,068,918
11,935,729
FRANCE - 8.2%
Accor SA 109,318 12,525,212
Alcatel Alsthom CGE 51,200 4,742,956
Axa SA 116,100 6,113,381
BQE National Paris Ord. 378,720 18,387,826
SHARES VALUE (NOTE 1)
Carnaudmetalbox SA 96,900 $ 3,433,085
Club Mediterranee SA Ord. (a) 29,300 2,952,321
Compagnie Bancaire Ord. 102,200 11,273,662
Credit Lyonnais 40,400 1,995,173
Elf Aquitaine 247,744 19,764,159
Generale des Eaux 161,500 16,994,819
Havas SA 93,000 8,025,678
IMETAL SA Ord. 10,100 1,071,043
L'Oreal Co. Ord. 39,800 10,462,407
Lafarge Coppee SA 122,000 9,492,331
Lyonnaise des Eaux Dumez SA 26,900 2,671,147
Michelin SA Cie Generale des
Etablissements Class B (Reg.) 46,300 2,073,973
Peugeot SA Ord. (a) 34,700 4,997,928
Rhone Poulenc SA Class A 456,050 11,098,994
Societe Generale Class A 124,100 13,613,815
Total SA Class B 385,700 24,070,499
Vallourec SA (a) 105,600 5,266,592
191,027,001
GERMANY - 5.3%
Allianz Versich Holdings Ord. (Reg.) 3,650 6,682,302
BMW AG 21,272 10,890,233
Continental Gummi-Werke AG 44,300 6,580,236
Deutsche Bank AG 50,900 24,949,937
Duerr Beteiligungs AG (RFD) 16,573 5,258,045
Gildemeister AG (a) 57,780 4,999,531
Hoechst, AG Ord. 69,200 14,749,627
Karstadt AG 21,300 9,161,373
Kaufhof Holding AG 26,500 9,401,161
Schering AG 10,600 7,861,052
Schmalbach-Lubeca AG 7,700 1,551,826
SGL Carbon AG (a)(b) 55,000 2,193,100
Veba AG Ord. 47,130 17,535,480
121,813,903
HONG KONG - 1.5%
Amoy Properties Ltd. 3,399,000 2,831,775
Consolidated Electric Power Asia Ltd. 1,048,000 2,294,449
Dickson Concepts International Ltd. 4,277,000 2,209,755
Hong Kong Land Holdings Ltd. 4,078,000 7,666,640
Hopewell Holdings Ltd. 3,310,000 2,351,457
HSBC Holdings PLC 1,416,000 16,415,136
Peregrine Investments Holdings Ltd. 532,000 560,036
Sun Hung Kai Properties Ltd. 266,000 1,697,287
36,026,535
INDIA - 0.1%
Reliance Industries Ltd. GDS (a) 181,700 2,861,775
INDONESIA - 0.7%
Astra International PT (For. Reg.) 440,000 561,576
Bank International Indonesia PT Ord. 1,556,300 3,205,994
Jakarta International Hotels &
Development Ord. 3,017,400 2,499,856
Matahari Putra Prima PT (For. Reg.) 805,500 1,172,357
Sampoerna Hanjaya Mandala
(For. Reg.) 1,650,400 9,682,154
17,121,937
IRELAND - 0.9%
Bank of Ireland U.S. Holdings, Inc. 1,660,200 8,992,174
Fyffes PLC 2,367,000 4,006,384
Independent Newspapers PLC 940,650 4,245,718
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
IRELAND - CONTINUED
Waterford Wedgwood PLC Unit (1 Waterford
Wedgewood, Inc. (right) & 1 Waterford
Wedgewood, Inc. Ord.) (a) 2,950,000 $ 2,615,470
19,859,746
ITALY - 1.3%
Alitalia Linee Aeree Italiane Class A (a) 1,311,700 623,543
Assicurazioni Generali Spa 391,160 9,423,576
Fiat Spa (a) 1,988,400 8,113,905
Istituto Mobiliare Italiano 545,700 3,339,051
Montedison Spa Ord. (a) 5,637,300 4,127,406
SAI Sta Assieuratrice Industriale Spa 355,000 3,813,730
29,441,211
JAPAN - 19.5%
ADO Electronic Industrial Co. Ltd 76,000 1,597,720
Advantest Corp. 143,000 4,619,752
Aida Engineering Ltd. Ord. 314,000 2,480,076
Akita Bank Ltd. 151,200 1,301,977
Amada Metrecs Co. Ltd. 162,000 2,385,891
Amadasonoike Co. Ltd. 495,000 3,792,091
Autobacs Seven Co. Ltd. 34,700 3,614,455
Bridgestone Corp. 586,000 9,465,646
Canon, Inc. 829,000 13,686,201
Daicel Chemical Industries Co. 722,000 4,219,065
Daiwa House Industry Co. Ltd.
(warrants)(a) 75 33,750
East Japan Railway Co. Ord. 1,100 5,709,365
Fanuc Ltd. 161,600 7,293,545
Fujitsu Ltd. 1,274,000 12,997,998
Futaba Industrial Co. Ltd. 245,000 4,248,472
Hachijuni Bank Ltd. 155,000 1,969,831
Hanshin Department Store Ltd. 72,000 454,089
Higo Bank Ltd. Ord. 183,000 1,804,027
Hitachi Ltd. 2,049,000 20,807,595
Honda Motor Co. Ltd. 648,000 10,467,131
Ishihara Sangyo Kaisha Ltd. (a) 657,000 2,598,501
Japan Airlines Co. Ltd. 623,000 4,439,691
Komatsu Ltd. Ord. 693,000 5,498,234
Marubeni Corp. 662,000 3,640,431
Marukyo Corp. 55,000 1,313,023
Matsushita Electric Industrial Co. Ltd. 513,000 8,591,129
Minebea Co. Ltd. 924,000 6,837,129
Mitsubishi Chemical Industries Ltd. 159,000 931,017
Mitsubishi Estate Co. Ltd. 443,000 5,314,210
Mitsubishi Heavy Industries Ltd. 898,000 6,506,091
Mitsubishi Trust & Banking Corp. 813,000 14,001,429
Mitsui OSK Lines Ltd. 784,000 2,830,765
Murata Manufacturing Co. Ltd. Ord. 261,000 10,477,819
Nichido Fire & Marine Insurance
Co. Ltd. 912,000 7,560,735
Nikko Securities Co. Ltd. 612,000 5,989,522
Nippon Telegraph & Telephone
Corp. Ord. 696 6,142,028
Nippon Yusen Kabushiki Kaisha 586,000 3,772,340
Nissan Motor Co. Ltd. Ord. 947,000 6,906,083
Nisshinbo Industries 305,000 3,035,692
Nitto Denko Corp. 175,000 2,722,846
Nomura Securities Co. Ltd. 1,176,000 23,744,875
Omron Corp. 242,000 4,742,561
SHARES VALUE (NOTE 1)
Orix Corp. 441,000 $ 14,404,061
Pioneer Electronic Corp. 404,000 8,493,143
Rohm Co. Ltd. 207,000 9,563,870
Sankyo Co. Ltd. 545,500 13,087,592
Sanwa Bank Ltd. 183,000 3,955,818
Seino Transpotation Co. Ltd. 248,000 4,712,868
Sony Corp. 364,400 18,350,925
Sumitomo Marine and Fire
Insurance Co. Ltd. 655,000 5,500,146
Sumitomo Realty & Development
Co. Ltd. 1,127,000 7,402,237
Sumitomo Rubber Industries Ltd. 339,000 2,935,221
Sumitomo Trust & Banking Co. Ltd. 593,000 8,944,830
Suzuki Motor Corp. 443,000 4,735,435
Tadano Ltd. 29,000 258,329
Takashimaya Co. Ltd. 342,000 4,874,399
Takeda Chemical Industries Ltd. 883,000 11,746,063
TDK Corp. 144,000 6,567,611
Tokio Marine & Fire Insurance Co.
Ltd. (The) 1,849,000 21,960,924
Tokyo Style Co. Ltd. 331,000 5,071,443
Toshiba Corp. 2,749,000 18,251,573
Toyota Motor Corp. 810,000 16,451,092
Tsugami Corp. 336,000 1,612,256
Yamanouchi Pharmaceutical Co. Ltd. 591,000 13,266,703
452,691,367
KOREA (SOUTH) - 0.7%
Cho Hung Bank Co. Ltd. 96,362 1,169,211
Korea Electric Power Corp. ADR (a) 285,000 10,743,152
Korea First Securities Co. Ltd. (a) 6,614 89,361
Korea First Securities Co. Ltd. (New) (a) 7,604 110,716
Kyungki Bank (a) 171,523 1,552,448
Seoul Securities Co. (a) 124,496 1,518,742
15,183,630
MALAYSIA - 1.0%
Aokam Perdana BHD 101,000 453,887
Kuala Lumpur Industries Holdings BHD 570,000 752,309
Magnum Corp. BHD 960,000 1,748,986
Malaysian Banking BHD 227,000 1,553,159
Resorts World BHD 769,000 4,047,370
Sime Darby BHD 1,611,600 4,110,563
Telekom Malaysia BHD 1,038,000 7,144,128
Tenega Nasional BHD 717,000 3,193,116
Time Engineering BHD 317,000 763,624
23,767,142
MEXICO - 0.9%
Banacci SA de CV Class C 890,700 1,505,835
Cemex SA, Series B 1,010,000 3,278,440
Cifra SA Class C 3,117,100 4,373,946
Consorcio G Grupo Dina SA ADR 117,200 439,500
Grupo Carso SA de CV Class A-1 (a) 420,600 2,275,433
Grupo Dina sponsored ADR, Series L 42,244 105,610
Grupo Financiero Bancomer:
SA de CV sponsored
ADR, Series C (a)(b) 189,800 1,138,800
Series C 7,954,000 2,366,713
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 165,000 4,991,250
20,475,527
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - 6.1%
ABN-AMRO Holdings NV 79,000 $ 3,038,658
AKZO Nobel NV Ord. 162,500 18,845,435
Aegon NV Ord. 46,100 3,579,054
Heineken NV 53,750 7,670,656
International Nederlanden Groep NV 373,345 19,676,323
KLM Royal Dutch Airlines Ord. (a) 338,000 10,278,719
Koninklijke PPT Nederland 364,300 12,698,041
Koninklijke PPT Nederland (a)(b) 143,300 4,994,865
Oce Van der Grinten NV 288,500 14,312,546
Pirelli Tyre Holdings NV Ord. 1,069,600 6,615,658
Royal Dutch Petroleum Co. Ord. 115,100 14,201,180
Unilever NV Ord. 187,400 25,077,624
140,988,759
NETHERLANDS ANTILLES - 0.3%
Schlumberger Ltd. 115,300 7,249,488
NORWAY - 2.0%
Bergesen Group:
Class A 96,800 2,113,130
Class B 503,000 10,899,678
Christiania Bank Free shares Ord. 2,491,700 5,159,389
Den Norske Bank Class A Free shares (a) 1,830,400 4,847,778
Orkla AS Class B (non-vtg.) 106,400 4,312,360
Norsk Hydro AS 167,900 6,845,362
Saga Petroleum AS Class B 545,900 7,491,888
Unitor AS 286,300 4,388,707
46,058,292
PAKISTAN - 0.1%
Pakistan Telecommunications Voucher
GDR (a)(b) 14,900 1,549,600
SINGAPORE - 1.0%
Jardine Matheson Holdings Ltd. Ord. 582,943 4,634,397
Jardine Strategic Holdings Ltd. Ord. 894,500 3,041,300
Kim Engineering Holdings Ltd. 4,273,000 3,892,917
Neptune Orient Lines Ltd. 6,780,000 7,781,923
Overseas Union Bank Ltd. (For.) 456,000 2,633,286
Van Der Horst Ltd. 217,000 706,728
22,690,551
SPAIN - 3.7%
Banco Bilbao Vizcaya SA Ord. (Reg.) 596,300 16,036,582
Banco Intercontinental Espanol 100,750 8,242,811
Corporacion Mapfrecia International
de Reaseguros SA (Reg.) 287,150 12,560,633
EL Aguila SA (a) 120,135 931,302
Repsol SA Ord. 283,400 8,999,013
Tabacalera SA, Series A 389,700 13,179,405
Telefonica de Espana SA Ord. 1,504,500 18,341,615
Union Electrica Fenosa SA 1,827,000 7,636,549
85,927,910
SWEDEN - 3.4%
Electrolux AB 263,600 13,472,324
Investor AB Class B Free shares 560,200 15,704,736
Mo Och Domsjoe (Modo) AB 126,300 7,046,632
SKF AB Ord. 134,300 2,691,909
Skandia International Holding 114,600 1,957,625
Skandinaviska Enskilda Banken Class A
Free shares 1,603,200 7,487,040
SHARES VALUE (NOTE 1)
Svenska Cellulosa Aktiebolaget SCA
Ord. B 612,300 $ 10,881,208
Volvo AB Class B 1,021,700 19,212,292
78,453,766
SWITZERLAND - 8.1%
Adia SA (Bearer)(a) 94,000 17,419,581
Alusuisse-Lonza Holding AG (Reg.) 28,211 15,634,418
Baloise Holding (Reg.) 9,600 20,769,231
CIBA-GEIGY AG (Reg.) 25,665 17,566,167
C. S. Holdings:
(Bearer) 60,411 25,241,659
(Reg.) 135,600 11,349,388
Fischer (Georg) AG (Reg.) 23,300 5,234,353
Holderbank Financiere Glarus AG
(Bearer) 5,325 4,277,688
Nestle SA (Reg.) 25,100 24,551,486
Roche Holdings Ltd. (part. certs.) 2,900 17,453,234
Surveillance, Societe Generale (Bearer) 1,690 2,821,591
Swiss Bank Corp. (Bearer) 73,850 24,336,931
186,655,727
THAILAND - 0.9%
Bank of Asia PCL:
(For. Reg.) 598,300 1,089,259
(For. Reg.) (rights) (a) 59,830 60,244
Krung Thai Bank:
(Loc. Reg.) 169,016 512,274
(For. Reg.) 2,214,084 6,710,711
Phatra Thanakit PCL (For. Reg.)(a) 56,500 379,272
Siam City Bank PCL (For. Reg.) 11,405,400 11,716,288
20,468,048
TURKEY - 0.2%
Aksigorta (a) 897,800 211,001
Aksigoria (a)(b) 1,840,000 432,437
Cimentas AS (a) 900,000 666,279
Tofas Turk Otomobil Fabrikasi AS ADR (b) 150,900 671,505
Tofas Turk Otomobil Fabrikasi AS (a) 4,101,700 3,759,536
5,740,758
UNITED KINGDOM - 12.7%
Argyll Group PLC Ord. 1,146,000 5,283,427
Arjo Wiggins Appleton PLC 1,433,300 6,261,400
Barclays PLC Ord. 1,868,300 19,244,760
Bass PLC Ord. 1,347,900 11,928,753
Berkeley Group PLC 277,900 1,635,108
Booker PLC 247,900 1,654,405
Boots Co. PLC 769,400 6,325,391
BTR PLC Ord 978,600 5,174,210
Burmah Oil 357,100 5,025,383
Cadbury-Schweppes PLC Ord. 1,673,900 12,088,504
De La Rue PLC 863,000 12,464,758
Dixons Group PLC 2,273,000 8,812,103
English China Clay PLC 94 568
Forte PLC 3,051,200 11,214,258
Glaxo Holdings PLC Ord. 883,500 10,460,764
Great Universal Stores PLC Ord. Class A 658,400 6,272,524
Guinness PLC Ord. 2,039,900 15,455,098
Hanson PLC Ord. 1,101,300 4,198,574
Iceland Group PLC 1,029,400 2,937,125
Kleinwort Benson Group Ord. 104,000 1,077,977
Ladbroke Group PLC Ord. 3,180,300 9,227,958
Lasmo PLC 1,708,300 4,626,350
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Lloyds Abbey Life PLC 1,037,900 $ 6,223,913
London International Group PLC (a) 4,668,400 8,278,007
National Westminster Bank PLC Ord. 1,789,180 15,574,454
North West Water Group PLC Ord. 721,600 6,560,556
Nurdin & Peacock PLC Ord. 530,300 1,581,461
Redland PLC Ord. 430,300 2,837,002
Rolls Royce PLC Ord. 1,600,399 4,411,532
Royal Insurance Holdings PLC 1,882,600 9,195,296
Sainsbury (J.) PLC Ord. 969,165 6,835,036
Scottish Hydro-Electric PLC Ord. 1,368,900 7,105,467
Scottish Power PLC ADR 1,733,200 9,443,444
Shanks & McEwan Group PLC 1,297,300 1,808,929
Shell Transport & Trading PLC 1,280,900 15,197,007
Spring Ram Corp. PLC 3,788,500 2,503,895
Tesco PLC Ord. 2,409,200 10,854,747
Unigate Ltd. Ord. 524,400 3,229,171
Vodafone Group PLC 3,125,300 9,773,688
Whitbread Co. PLC Class A 1,277,800 11,679,143
294,462,146
TOTAL COMMON STOCKS
(Cost $1,758,360,865) 1,950,729,110
NONCONVERTIBLE PREFERRED STOCKS - 2.2%
AUSTRIA - 0.4%
Creditanstalt Bankverein 180,300 10,317,649
GERMANY - 0.2%
Henkel KGAA 11,900 4,573,458
ITALY - 1.6%
Banco Ambro Veneto 2,320,900 3,307,050
Fiat Spa (a) 3,282,000 8,480,852
SAI Sta Assiecuratrice Industriale Spa 1,190,200 5,626,528
Stet (Societa Finanziaria Telefonica) Spa 8,823,000 20,211,993
37,626,423
KOREA (SOUTH) - 0.0%
Korea First Securities Co. Ltd. 68,124 616,588
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $43,344,707) 53,134,118
CLOSED-END INVESTMENT COMPANIES - 0.1%
THAILAND - 0.1%
Ruam Pattana Fund II (For. Reg.) 2,683,000 1,528,156
Ruang Khao Unit Trust (For. Reg.) 2,633,900 1,687,698
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $2,651,231) 3,215,854
GOVERNMENT OBLIGATIONS (E) - 5.7%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (C)
ARGENTINA - 0.4%
Argentina Republic BOCON
6.1875%, 4/1/01 (d) B1 $ 15,425,553 $ 8,958,884
BRAZIL - 0.2%
Brazil Federative Republic IDU
euro 7.8125%, 1/1/01 (d) B1 6,499,000 4,947,364
DENMARK - 0.4%
Danish Government Bullet 7%,
12/15/04 Aa1 DKK 62,500,000 10,298,169
FRANCE - 0.4%
French Government Strips
0%, 4/25/23 Aaa FRF 420,000,000 8,251,026
UNITED STATES OF AMERICA - 4.3%
U.S. Treasury Bill, yield at date of
purchase 6.19%, 7/20/95 Aaa 100,000,000 98,742,000
TOTAL GOVERNMENT OBLIGATIONS
(Cost $134,876,734) 131,197,443
REPURCHASE AGREEMENTS - 7.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.93%,
dated 4/28/95 due 5/1/95 $ 178,127,981 178,040,000
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $2,117,273,537) $ 2,316,316,525
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
425,178,909 FRF 5/16/95 $ 86,271,680 $ (5,285,220)
3,966,217,000 JPY 7/11/95 47,577,685 150,558
1,621,440,000 ESP 7/12/95 13,049,294 (197,298)
TOTAL CONTRACTS TO SELL
(Receivable amount $141,566,699) $ 146,898,659 $ (5,331,960)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 6.3%
CURRENCY ABBREVIATIONS
DKK - Danish krone
FRF - French franc
JPY - Japanese yen
ESP - Spanish peseta
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $15,077,751 or 0.7% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $543,877,124 and $446,134,970, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $256,087 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $2,117,385,767. Net unrealized appreciation aggregated
$198,930,758, of which $287,973,800 related to appreciated investment
securities and $89,043,042 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.2%
Basic Industries 5.6
Conglomerates 0.2
Construction & Real Estate 2.7
Durables 8.5
Energy 5.4
Finance 23.4
Government Obligations 5.7
Health 4.4
Holding Companies 1.0
Industrial Machinery & Equipment 3.2
Media & Leisure 2.1
Nondurables 7.5
Repurchase Agreements 7.7
Retail & Wholesale 4.4
Services 2.7
Technology 4.9
Transportation 2.7
Utilities 7.7
100.0%
OVERSEAS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $178,040,000) (cost $2,117,273,537) - $ 2,316,316,525
See accompanying schedule
Cash 292
Receivable for investments sold 13,961,943
Unrealized appreciation on foreign currency contracts 150,558
Receivable for fund shares sold 13,947,242
Dividends receivable 12,600,718
Interest receivable 544,539
Other receivables 102,401
TOTAL ASSETS 2,357,624,218
LIABILITIES
Payable for investments purchased $ 31,975,334
Unrealized depreciation on foreign currency contracts 5,482,518
Payable for fund shares redeemed 16,530,705
Accrued management fee 1,220,288
Other payables and accrued expenses 893,169
TOTAL LIABILITIES 56,102,014
NET ASSETS $ 2,301,522,204
Net Assets consist of:
Paid in capital $ 2,085,891,104
Undistributed net investment income 10,181,785
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 11,548,799
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 193,900,516
NET ASSETS, for 83,083,752 shares outstanding $ 2,301,522,204
NET ASSET VALUE, offering price $27.70
and redemption price per share ($2,301,522,204 (divided by) 83,083,752 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 20,475,220
Dividends
Interest 8,882,876
29,358,096
Less foreign taxes withheld (2,067,962
)
TOTAL INCOME 27,290,134
EXPENSES
Management fee $ 8,378,197
Basic fee
Performance adjustment (746,803
)
Transfer agent fees 2,845,474
Accounting fees and expenses 379,324
Non-interested trustees' compensation 22,492
Custodian fees and expenses 534,455
Registration fees 25,666
Audit 43,167
Legal 33,272
Miscellaneous 11,405
TOTAL EXPENSES 11,526,649
NET INVESTMENT INCOME 15,763,485
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 23,224,602
Foreign currency transactions (11,619,244 11,605,358
)
Change in net unrealized appreciation (depreciation) on:
Investment securities (101,516,846
)
Assets and liabilities in foreign 475,639 (101,041,207
currencies )
NET GAIN (LOSS) (89,435,849
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (73,672,364
)
OTHER INFORMATION
Accounting fees paid to FSC $375,000
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
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<CAPTION>
<S> <C> <C>
Operations $ 15,763,485 $ 16,979,988
Net investment income
Net realized gain (loss) 11,605,358 86,756,748
Change in net unrealized appreciation (depreciation) (101,041,207) 43,064,867
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (73,672,364) 146,801,603
Distributions to shareholders - (8,339,198)
From net investment income
In excess of net investment income - (9,043,942)
From net realized gain (36,940,622) (6,172,422)
TOTAL DISTRIBUTIONS (36,940,622) (23,555,562)
Share transactions 701,998,333 1,731,601,947
Net proceeds from sales of shares
Reinvestment of distributions 36,072,003 22,888,570
Cost of shares redeemed (609,146,609) (1,085,191,412)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 128,923,727 669,299,105
TOTAL INCREASE (DECREASE) IN NET ASSETS 18,310,741 792,545,146
NET ASSETS
Beginning of period 2,283,211,463 1,490,666,317
End of period (including under (over) distribution of net investment income of $10,181,785
and $(5,581,700), $ 2,301,522,204 $ 2,283,211,463
respectively)
OTHER INFORMATION 26,100,813 60,924,762
Shares
Sold
Issued in reinvestment of distributions 1,345,468 855,349
Redeemed (22,636,265) (38,395,055)
Net increase (decrease) 4,810,016 23,385,056
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1995
(UNAUDITED)
SELECTED PER-SHARE DATA 1994 1993 1992 E 1991 1990
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.17 $ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30
Income from Investment Operations
Net investment income .19 .18 .27 .46 .54 D .35
Net realized and unrealized gain (loss) (1.19) 2.26 7.40 (3.82) .45 2.16
Total from investment operations (1.00) 2.44 7.67 (3.36) .99 2.51
Less Distributions - (.15) (.37) (.44) (.46) (.21)
From net investment income
In excess of net investment income - (.17) - - - -
From net realized gain (.47) (.11) (2.10) C (1.16) (1.08) (1.13) C
C
Total distributions (.47) (.43) (2.47) (1.60) (1.54) (1.34)
Net asset value, end of period $ 27.70 $ 29.17 $ 27.16 $ 21.96 $ 26.92 $ 27.47
TOTAL RETURN B (3.37)% 9.13% 39.01% (13.05) 4.12% 9.58%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 2,301,522 $ 2,283,211 $ 1,490,666 $ 801,845 $ 969,436 $ 1,011,152
Ratio of expenses to average net assets 1.08% A 1.24% 1.27% 1.52% 1.53% 1.26%
Ratio of net investment income to average net 1.48% A .90% 1.00% 1.78% 2.19% 1.34%
assets
Portfolio turnover rate 47% A 49% 64% 122% 132% 96%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D INCLUDES $0.08 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
E AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
WORLDWIDE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Worldwide has a
3% sales charge, which has been waived through June 30, 1995. The sales
charge is being eliminated July 1, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
WORLDWIDE -0.34% 1.63% 48.64%
WORLDWIDE
(INCL. 3% SALES CHARGE) -3.33% -1.42% 44.18%
Morgan Stanley World Index 4.56% 9.74% 39.79%
Average Global Fund -2.57% 1.47% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on May 30, 1990. For example, if you invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the Morgan
Stanley World index, a broad measure of the performance of stocks across
the world, weighted by each country's market capitalization (or the total
value of its outstanding shares). To measure how the fund's performance
stacked up against its peers, you can compare it to the average global
fund, which reflects the performance of 121 funds with similar objectives
tracked by Lipper Analytical Services over the past six months. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
WORLDWIDE 1.63% 8.38%
WORLDWIDE (INCL. 3% SALES CHARGE) -1.42% 7.72%
Morgan Stanley World Index 9.74% 7.04%
Average Global Fund 1.47% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Worldwide Fund (World Index
05/30/90 9700.00 10000.00
05/31/90 9729.10 10052.68
06/30/90 9981.30 9978.10
07/31/90 10252.90 10066.02
08/31/90 9098.60 9120.76
09/30/90 8196.50 8155.92
10/31/90 8681.50 8914.15
11/30/90 8681.50 8764.61
12/31/90 8631.28 8944.97
01/31/91 8875.93 9268.93
02/28/91 9365.23 10123.79
03/31/91 9042.29 9822.32
04/30/91 9130.37 9896.06
05/31/91 9198.87 10117.26
06/30/91 8543.20 9489.62
07/31/91 9071.65 9934.74
08/31/91 9208.65 9900.10
09/30/91 9365.23 10156.65
10/31/91 9404.37 10318.26
11/30/91 8905.29 9865.50
12/31/91 9311.08 10580.50
01/31/92 9410.03 10381.50
02/29/92 9696.98 10199.26
03/31/92 9469.40 9715.68
04/30/92 9884.99 9847.94
05/31/92 10300.57 10236.53
06/30/92 9944.35 9890.44
07/31/92 9845.41 9912.46
08/31/92 9706.88 10150.24
09/30/92 9706.88 10053.93
10/31/92 9528.77 9778.38
11/30/92 9677.19 9950.24
12/31/92 9889.02 10027.53
01/31/93 10214.25 10058.06
02/28/93 10458.17 10293.31
03/31/93 11057.81 10887.06
04/30/93 11332.22 11388.64
05/31/93 11687.94 11648.08
06/30/93 11565.98 11547.37
07/31/93 11820.07 11782.27
08/31/93 12562.00 12319.44
09/30/93 12429.87 12088.88
10/31/93 12968.54 12419.10
11/30/93 12734.78 11713.66
12/31/93 13503.03 12283.97
01/31/94 14466.79 13091.30
02/28/94 14249.17 12918.99
03/31/94 13710.29 12359.14
04/30/94 14186.99 12738.30
05/31/94 14166.26 12768.18
06/30/94 13876.10 12729.81
07/31/94 14300.98 12968.90
08/31/94 14539.33 13356.51
09/30/94 14259.53 13002.62
10/31/94 14466.79 13369.49
11/30/94 13969.36 12786.68
12/31/94 13902.83 12907.51
01/31/95 13826.08 12710.66
02/28/95 13990.55 12892.88
03/31/95 14067.30 13511.18
04/28/95 14418.16 13978.92
Let's say you invested $10,000 in Fidelity Worldwide Fund on May 30, 1990,
when the fund started, and paid a 3% sales charge. By April 30, 1995, the
value of your investment would have grown to $14,418 - a 44.18% increase on
your initial investment. That compares to $10,000 invested in the Morgan
Stanley World index, which would have grown to $13,979 over the same period
- - a 39.79% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
WORLDWIDE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Penny Dobkin,
Portfolio Manager of Fidelity Worldwide Fund
Q. PENNY, HOW HAS THE FUND PERFORMED?
A. For the six and 12 months ended April 30, 1995, the fund had total
returns of -0.34% and 1.63%, respectively. The average global fund, as
tracked by Lipper Analytical Services, had total returns of -2.57% and
1.47%, respectively. For the same periods, the Morgan Stanley World index
returned 4.56% and 9.74%, respectively.
Q. WHY DID THE FUND PERFORM BETTER THAN THE LIPPER AVERAGE, BUT WORSE THAN
THE INDEX?
A. As far as the Lipper group is concerned, the fund avoided difficult
markets, while many in the Lipper peer group did not. First, the fund had a
smaller percentage invested in Japan than the average fund. That market
declined because - among other things - the yen appreciated sharply versus
the dollar and the Kobe earthquake derailed the Japanese economic recovery.
Second, the fund had no investments in Southeast Asia, where markets -
including Thailand, Hong Kong, Singapore and Malaysia - dropped anywhere
from 6% to 19%. Finally, the fund had negligible exposure in Mexico and no
exposure in Brazil and Argentina, where returns dropped anywhere from 27%
to 54%. Because the fund had a smaller weighting in the U.S. - which was
the best performing market during the period - it underperformed the index.
Q. YET THE FUND STILL HAD A NEGATIVE RETURN OVER THE PAST SIX MONTHS.
WHAT'S THE STORY THERE?
A. There were two reasons. The fund's Japanese investments - over 10% of
investments at the end of the period - were principally in small- and
medium-sized domestic companies, where stock prices declined more than the
overall market. Secondly, some of the fund's holdings were in European
countries with strong currencies, such as Germany and Finland. When the
U.S. dollar weakened, investors sold stocks of export-oriented companies
due to concerns that U.S. demand would weaken. That being said, I've held
tight with most of the fund's investments over the past six months, because
I believe their medium- and long-term stories are sound.
Q. WHAT WERE THE MAIN THEMES YOU WERE PURSUING?
A. I positioned the fund to be in markets where I believed inflation was
well under control and to take advantage of stronger-than-expected economic
growth in Europe. In fact, domestic economic growth in Europe was good over
the period. At the same time, European markets presented a mixed picture
because some currencies strengthened against the dollar. In strong-currency
countries, stock prices of companies that sell products in U.S. dollars or
sell to the U.S. market have come under pressure.
Q. CAN YOU GIVE US SOME EXAMPLES?
A. Bremer Vulkan is one of the larger holdings in the fund. It is a German
ship builder and also performs ship engineering consulting services. When
the dollar started falling sharply in February, investors became concerned
because the company's costs are determined in Deutsche marks, but it prices
its products in dollars. The stock price of Repola, a paper and forest
products company in Finland, also suffered. Even though the paper pricing
environment was strong and demand was high, investors were anticipating
problems because the Finnish markka has been strong. In fact, any company
which had local currency costs, dollar revenues and operated in a strong
currency market also had stock price pressures. Although, fortunately, the
fund had little invested in capital goods exporters, Bremer Vulkan was one
of the fund's stocks that was affected by this backdrop.
Q. WHAT STOCKS HAVE PERFORMED WELL FOR THE FUND?
A. Kuoni, a Swiss travel agency, was a company that actually benefited from
the strength of its local currency, the Swiss franc. That's because people
travel when their home currency is strong. Kuoni also reorganized in such a
way as to lower its tax structure, and has become more communicative with
shareholders. Volker Stevin, one of the stocks I discussed in the last
report, has done well. This is a Dutch construction company involved in
public sector infrastructure construction. The stock has begun to move
upward because the company's earnings have improved, attracting investor
attention. And KBB, a Dutch retailer, has benefited from the perception
that consumption will increase due to two factors: employment has
stabilized - instead of declining - and wage settlements are running in
line with or higher than inflation.
Q. HAS THE FACT THAT THE DOLLAR HAS BEEN SO WEAK AFFECTED THE WAY YOU
MANAGE THE FUND?
A. Not really. Unless I have a strong belief about a particular currency, I
don't make decisions based on currency issues. Currency fluctuations can
have a positive impact on market returns or a negative impact on stocks.
Unless currency issues create a long-term problem for a company, it's not
an overriding issue.
Q. TURNING BACK TO LATIN AMERICA AND SOUTHEAST ASIA, HOW DID YOU MANAGE TO
AVOID THE PITFALLS OF INVESTING IN THOSE PLACES?
A. In the case of Southeast Asia, I felt that stocks were too expensive,
and companies were coming out with poor earnings reports. With Latin
America, I have been out of Mexico for two quarters. My main concern was
that foreign capital would be exiting the country because of a rise in
violence that started with the Chiapas uprising in 1994 and followed with
two political assassinations. In addition, strong consumption of imported
goods within Mexico was leading to a trade deficit and dwindling foreign
exchange reserves. This, of course, was the main driver behind the Mexican
government's decision to devalue the peso in December. At the time of the
devaluation, the fund had nothing in Brazil and a tiny position in
Argentine fixed-income instruments that was sold immediately. Anyone who
has observed currency turmoil - in Europe in 1992, for example - would have
learned that negative market sentiment doesn't affect only one country.
It's like a disease that spreads, fairly or unfairly. So, I didn't want to
be involved in the region.
Q. HOW HAVE YOU POSITIONED THE FUND'S U.S. INVESTMENTS?
A. I have liked a variety of stocks, but the fund's investments didn't
represent any broad, industry-led strategies. Of course, technology has
been the leader in the recent U.S. market surge, and IBM is the fund's main
U.S. technology holding, attractive because of its restructuring efforts.
Sears, Roebuck is one of the fund's new top holdings. I bought the stock
because its merchandising business was selling extremely cheaply. To be
honest, the U.S. market recovered more quickly than I thought, as the
interest rate environment became more friendly, earnings continued to be
strong, and money flowed back from emerging markets. I thought the move was
going to happen later in 1995. However, I don't think the U.S. is going to
outperform in the same way going forward.
Q. WHAT'S YOUR OUTLOOK?
A. Any global fund manager needs to keep an eye on how money flows from one
country or one region to another. As I've said, the U.S. market has
benefited from the repatriation of capital from foreign markets. If, on the
margin, Japan, Hong Kong or Mexico - all places where U.S. investors have
been involved historically - start looking attractive, that money could
come out of the U.S. market. But while the fund could have more invested in
those places in a year's time, earnings forecasts are still too high. In
the short run, it appears Europe could benefit from the good recent
performance of the U.S. market. That's because if the U.S. economy slows,
those in Europe could as well, leading to lower interest rates. That,
combined with no perceptible inflation, could help European markets make a
move over the next several months.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
from around the world
START DATE: May 30, 1990
SIZE: as of April 30, 1995, more than
$706 million
MANAGER: Penelope Dobkin, since 1990;
manager Fidelity Europe Fund, 1986-1990;
Fidelity United Kingdom Fund, 1987-1989;
Fidelity Select Financial Services Portfolio,
1983-1986; joined Fidelity in 1980
(checkmark)
PENNY DOBKIN ON PICKING STOCKS:
"I'm neither a growth-oriented nor a value investor.
That is, I don't necessarily look for growth stocks -
those with rapid earnings growth - or value stocks -
stocks that are cheap when measured by such
yardsticks as cash flow or current earnings. For me,
earnings momentum is most important in determining
which stocks to pick. I don't look at charts or spend a
lot of time looking at the overall valuations of markets.
Instead, I pursue fundamental research, visiting
companies to ascertain where their earnings are going
to go. I look at earnings per share growth and whether
that is accelerating or decelerating.
"Even if a stock has a relatively high valuation, if it has
high earnings per share growth I still might be
interested. But I pay more attention to earnings per
share potential growth looking out over the next
couple of years, versus how the stock has done over
the past few years. If a company has been growing
earnings 20% per year the past three years and that
decelerates to 10%, then I am concerned. This is the
type of situation - as well as those pointing to positive
earnings momentum - that I try to figure out before
the marketplace does."
(solid bullet) A total of 10.7% of the fund's investments were in
Japan at the end of the period. The Japanese stock
market has been affected by negative sentiment
caused by a number of factors. Those include the
strengthening of the yen versus the dollar, the
Barings debacle, the Kobe earthquake and the
subway gas attack. The manager has focused her
Japanese investments on domestic companies
whose earnings are not tied to the strength or
weakness of the yen. These are companies that can
benefit from the potential surge in economic growth
resulting from the rebuilding of Kobe. Any
weakening in the yen could help the broad Japanese
market as well.
(solid bullet) At the end of the period, the manager had 35.6% of
the fund invested in cash and short-term
investments, awaiting lower stock prices before
becoming more fully invested.
(solid bullet) The U.S.(50.0%), Japan (10.7%), The
Netherlands (9.9%), Germany (6.9%) and
Switzerland (5.7%) are the top five countries
represented in the fund's investments as of April 30,
1995.
WORLDWIDE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Other 8.1%
Finland 4.6%
Row: 1, Col: 1, Value: 8.1
Row: 1, Col: 2, Value: 9.9
Row: 1, Col: 3, Value: 10.7
Row: 1, Col: 4, Value: 5.7
Row: 1, Col: 5, Value: 4.1
Row: 1, Col: 6, Value: 50.0
Row: 1, Col: 7, Value: 6.9
Row: 1, Col: 8, Value: 4.6
Germany 6.9%
Netherlands 9.9%
Japan 10.7%
Switzerland 5.7%
France 4.1%
United States 50.0%
AS OF OCTOBER 31, 1994
France 3.4%
Row: 1, Col: 1, Value: 46.1
Row: 1, Col: 2, Value: 3.4
Row: 1, Col: 3, Value: 5.2
Row: 1, Col: 4, Value: 12.7
Row: 1, Col: 5, Value: 7.2
Row: 1, Col: 6, Value: 11.6
Row: 1, Col: 7, Value: 3.4
Row: 1, Col: 8, Value: 6.9
Row: 1, Col: 9, Value: 3.5
Germany 6.9%
Sweden 3.5%
United States 46.1%
Japan 11.6%
Netherlands 7.2%
Other 12.7%
Spain 3.4%
Switzerland 5.2%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 64.1 65.8
Bonds 0.3 1.7
Short-term investments 35.6 32.5
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
KBB NV Ord. 1.5 0.8
(Netherlands, Apparel Stores)
Volker Stevin NV 1.4 1.1
(Netherlands, Construction)
Sears, Roebuck & Co. 1.4 0.6
(United States, General Merchandise
Stores)
AKZO Nobel NV Ord. 1.1 1.0
(Netherlands, Chemical & Plastics)
SGL Carbon AG 1.1 0.0
(Germany, Banks)
Bremer Vulkan AG 1.0 0.9
(Germany, Ship Building & Repair)
Macintosh Confectie NV 1.0 0.5
(Netherlands, Apparel Stores)
Kuoni Reisen Holding AG 0.9 0.5
Class B (Reg.)
(Switzerland, Entertainment)
Kone Corp. Class B Ord. 0.9 0.7
(Finland, Industrial Machinery &
Equipment)
Fried Krupp AG, Hoesch-Krupp 0.9 0.7
(Germany, Industrial Machinery &
Equipment)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 14.1 14.5
Basic Industries 10.9 9.4
Retail & Wholesale 8.0 7.0
Durables 6.3 6.9
Construction & Real Estate 6.3 7.5
Industrial Machinery & Equipment 4.4 3.8
Energy 3.3 3.4
Media & Leisure 2.1 3.4
Technology 1.9 2.0
Nondurables 1.5 1.9
WORLDWIDE
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 61.1%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.6%
Tabcorp. Holding Ltd.
sponsored ADR (a)(b) 181,000 $ 4,149,268
BELGIUM - 0.6%
D'ieteren Trading SA 49,000 3,650,947
D'ieteren Trading BV (VVPR) (a) 4,339 323,295
3,974,242
CANADA - 1.2%
Imasco Ltd. 150,000 5,282,274
Methanex Corp. (a) 265,600 2,791,254
8,073,528
DENMARK - 0.7%
Unidanmark AS Class A 115,000 5,262,336
FINLAND - 4.6%
Enso-Gutzeit OY Class R Free shares 600,000 5,403,378
Kansallis-Osake-Pankki 2,532,000 2,541,495
Kemira OY 604,980 5,107,713
Kemira OY sponsored ADR (b) 168,600 2,781,900
Kone Corp. Class B Ord. 52,050 6,469,630
Repola OY 287,600 5,780,329
Unitas Bank Ltd. B Free shares (a) 841,700 2,487,198
Valmet OY Ord. 83,900 1,902,704
32,474,347
FRANCE - 4.1%
Bail Investissement SA 31,300 5,493,794
Immeubles de France, Ste Des 55,432 3,862,504
Klepierre SA 48,350 5,795,125
Michelin SA Cie General des Etablissements
Class B (Reg.) 5,900 261,970
Renault SA Ord. 60,000 2,069,680
Renault SA Ord. (b) 10,000 344,947
UFB Locabail SA (a) 24,000 1,657,694
Ugine SA 19,345 1,367,610
Ugine SA (b) 27,000 1,908,786
Unibail 57,000 5,708,685
28,470,795
GERMANY - 5.0%
Bremer Vulkan AG (a) 118,000 6,832,318
Deutsche Bank AG 9,500 4,656,668
Deutsche Bank AG (warrants) (a) 23,000 1,874,031
Fried Krupp AG, Hoesch-Krupp (a) 43,100 6,339,835
Karstadt AG 14,300 6,150,593
Kaufhof Holding AG 2,000 709,522
SGL Carbon AG (b) 200,500 7,994,845
Sixt AG (10% Part. Cert. ex warrants) 11,000 831,236
35,389,048
INDIA - 0.2%
Indian Aluminum Ltd. GDR (b) 73,700 700,150
SCICI Ltd. 235,500 524,455
1,224,605
JAPAN - 10.7%
Akita Bank Ltd. 269,850 2,323,668
Alps Electric Co. Ltd. 200,000 2,304,174
Aomori Bank Ltd. 470,000 3,237,722
Bank of the Ryukyus Ltd. 58,900 3,106,075
SHARES VALUE (NOTE 1)
Daiichi Corp. Ord. 142,000 $ 3,153,870
Daito Trust Construction 83,000 837,936
Daiwa Securities Co. Ltd. 100,000 1,258,982
Fukushima Bank Ltd. 440,000 2,456,203
Hankyu Department Stores, Inc. 162,000 1,839,444
Hanshin Department Store Ltd. 406,000 2,560,557
Higo Bank Ltd. Ord. 278,000 2,740,543
Hyogo Sogo Bank Ltd. (a) 372,000 905,753
Iwate Bank 45,000 2,859,434
Kajima Corp. 240,000 2,394,442
Kanto Auto Works Co. Ltd., Yokosuka 172,000 1,280,884
Kokuyo Co. Ltd. 60,000 1,539,284
Matsuya Co. Ltd. 251,000 1,654,552
Mazda Motor Corp. (a) 28,000 123,380
Michinoku Bank 370,000 3,339,864
Mitsubishi Motors Corp. 198,000 1,836,666
Mori Seiki Co. Ltd. Ord. 81,000 1,510,422
Namura Shipbuilding Co. Ltd. 201,000 1,193,659
Nikko Securities Co. Ltd. 276,000 2,701,157
Nikku Sangyo Co. Ltd. 96,800 1,425,643
Nomura Securities Co. Ltd. 291,000 5,875,645
Sankyo Co. Ltd. 115,500 2,771,067
Sekisui House Ltd. 220,000 2,900,410
Shimzu Bank Ltd. 32,000 2,664,291
Tachi-S Co. Ltd. 120,000 1,204,348
Toho Bank Ord. 320,000 2,546,470
Tokyo Nissan Auto Sales Ltd. 244,000 1,999,643
Toyoda Automatic Loom Works Ltd. 150,000 2,743,631
Yamaichi Securities Co. Ltd. 289,000 1,994,288
Yamanouchi Pharmaceutical Co. Ltd. 94,000 2,110,102
75,394,209
MEXICO - 0.4%
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (a)(b) 359,000 2,154,000
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 22,000 665,500
2,819,500
NETHERLANDS - 9.5%
AKZO Nobel NV Ord. 69,400 8,048,451
BAM Groep NV 28,832 1,820,460
CVG (Crown Van Gelder) NV 46,000 5,026,480
De Boer Winkelbedrijven NV 67,000 3,159,848
Econosto NV (a)(d) 285,500 3,899,619
EVC International NV 10,000 439,405
EVC International NV (b) 50,000 2,197,024
Geveke NV (d) 215,200 4,506,152
KBB NV Ord. 138,625 10,664,148
Koninklijke PPT Nederland 88,000 3,067,328
Koninklijke PPT Nederland (b) 74,400 2,593,286
Macintosh Confectie NV 214,900 6,784,421
Pirelli Tyre Holdings NV Ord. 84,466 522,437
Samas-Groep NV 93,613 3,612,794
Volker Stevin NV 165,000 9,992,913
66,334,766
NORWAY - 0.5%
Den Norske Bank Class A Free shares 874,700 2,316,625
Mosvold Shipping AS Class B 221,700 1,387,849
3,704,474
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - 2.6%
Banco Bilbao Vizcaya SA Ord. (Reg.) 129,600 $ 3,485,395
Banco de Santander SA:
Ord. (Reg.) 150,000 5,461,725
(RFD) 9,587 344,806
Banco de Valencia SA (Reg.) 377,363 4,631,067
Banco Popular Espanol 29,800 4,060,235
17,983,228
SWEDEN - 0.6%
Avesta Sheffield AB Ord. Free shares 191,428 2,056,947
Munksjo AB 295,200 2,480,672
4,537,619
SWITZERLAND - 5.7%
C. S. Holdings (Bearer) 7,630 3,188,059
Fuchs Petrolub AG (Bearer) 14,750 5,350,743
Globus Magazine (Part. Cert.) 1,100 730,769
Kuoni Reisen Holding AG Class B (Reg.) 4,000 6,486,014
Merkur Holdings AG Ord. (Reg.) 12,000 3,262,238
SIG AG (Reg.) 3,600 3,996,503
SMH (Bearer) 3,250 1,661,932
Swiss Bank Corp. (Reg.) 27,257 4,550,775
Swisslog Holding AG (Reg) 14,150 3,648,820
Von Moos Holdings AG Ord. (a)(d) 34,000 3,566,433
Winterthur Schweizerische
Versicherungs-Gesellschaft (Reg.) 6,450 3,647,858
40,090,144
UNITED KINGDOM - 0.4%
Wates City of London Properties PLC (a) 2,624,999 2,750,471
UNITED STATES OF AMERICA - 13.7%
AMR Corp. (a) 40,000 2,695,000
Allstate Corp. 46,700 1,418,513
Amerada Hess Corp. 92,700 4,692,938
Anadarko Petroleum Corp. 45,000 1,850,625
Armco, Inc. (a) 660,400 4,622,800
BJ Services Co. (a) 50,239 1,149,217
BJ Services Co. (warrants) (a) 11,000 52,250
Baker (J.), Inc. 151,000 1,887,500
Burlington Industries, Inc. (a) 221,000 2,431,000
Burlington Resources, Inc. 40,000 1,565,000
Caldor Corp. (a) 122,900 2,381,188
Chemical Banking Corp. 85,000 3,548,750
Consolidated Freightways, Inc. 67,300 1,716,150
Dayton Hudson Corp. 32,900 2,208,413
Exide Corp. 23,400 877,500
Exxon Corp. 61,000 4,247,125
Harveys Casino Resorts 66,300 1,102,238
Helmerich & Payne, Inc. 32,000 948,000
International Business Machines Corp. 63,700 6,035,575
Kerr-McGee Corp. 66,600 3,454,875
Kroger Co. (The) (a) 35,000 892,500
Lafarge Corp. 51,800 1,042,475
Liz Claiborne, Inc. 115,000 2,070,000
Medusa Corp. 47,400 1,072,425
OM Group, Inc. 90,000 2,148,750
Pfizer, Inc. 20,300 1,758,488
SHARES VALUE (NOTE 1)
Philip Morris Companies, Inc. 26,000 $ 1,761,500
President Casinos, Inc. 89,000 483,938
RJR Nabisco Holdings Corp. 118,740 3,250,508
Reynolds Metals Co. 67,100 3,380,163
Schering-Plough Corp. 47,000 3,542,625
Sears, Roebuck & Co. 175,500 9,520,875
Shawmut National Corp. 128,137 3,395,631
Station Casinos, Inc. (a) 199,900 2,448,775
Sundstrand Corp. 28,000 1,554,000
Texaco, Inc. 34,300 2,345,263
Tuboscope Vetco Corp. (a) 151,000 1,057,000
Union Planters Corp. 64,922 1,558,128
Unisys Corp. (a) 105,000 1,076,250
Westpoint Stevens, Inc. Class A (a) 95,400 1,729,125
Wolverine Tube, Inc. (a) 36,000 963,000
95,936,076
TOTAL COMMON STOCKS
(Cost $396,979,889) 428,568,656
PREFERRED STOCKS - 3.0%
CONVERTIBLE PREFERRED STOCKS - 1.1%
NETHERLANDS - 0.4%
Samas-Groep NV 59,306 2,712,922
UNITED STATES OF AMERICA - 0.7%
Reynolds Metals Co. $3.31 21,500 1,037,375
Unisys Corp., Series A, $3.75 96,600 3,864,000
4,901,375
TOTAL CONVERTIBLE PREFERRED STOCKS 7,614,297
NONCONVERTIBLE PREFERRED STOCKS - 1.9%
GERMANY - 1.9%
BMW AG 7,063 2,597,346
Escada AG (non-vtg.) 22,000 4,473,447
FAG Kugelfischer Georg Schaef 20,000 2,422,757
Kaufhof Holding AG 9,300 2,521,397
Schwabengarage AG 7,542 1,468,320
TOTAL NONCONVERTIBLE PREFERRED STOCKS 13,483,267
TOTAL PREFERRED STOCKS
(Cost $19,366,088) 21,097,564
GOVERNMENT OBLIGATIONS - 21.4%
MOODY'S PRINCIPAL
RATINGS AMOUNT (C)
MEXICO - 0.3%
Mexican Government Cetes
0%, 1/11/96 - MXN 15,000,000 1,786,124
UNITED STATES OF AMERICA - 21.1%
U.S. Treasury Bill, yield at
date of purchase 5.63%,
7/20/95 Aaa $ 150,000,000 148,113,000
TOTAL GOVERNMENT OBLIGATIONS
(Cost $150,342,709) 149,899,124
REPURCHASE AGREEMENTS - 14.5 %
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 102,041,401 $ 101,991,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $668,679,686) $ 701,556,344
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
4,431,990,000 JPY 7/17/95 $53,207,930 $(731,640)
(Receivable amount $52,476,290)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 7.6 %
CURRENCY ABBREVIATIONS
JPY - Japanese yen
MXN - Mexican peso
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $24,824,206 or 3.5% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Econosto NV (a) $ - $ 484,998 $ - $ 3,899,619
Geveke NV - - 148,909 4,506,152
Von Moos Holdings
AG Ord. (a) 44,619 - - 3,566,433
TOTAL $ 44,619 $ 484,998 $ 148,909 $ 11,972,204
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $110,199,588 and $161,988,734, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $25,208 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $668,771,875. Net unrealized appreciation aggregated
$32,784,469, of which $52,801,371 related to appreciated investment
securities and $20,016,902 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.3%
Basic Industries 10.9
Construction & Real Estate 6.3
Durables 6.3
Energy 3.3
Finance 14.1
Government Obligations 21.4
Health 1.5
Industrial Machinery & Equipment 4.4
Media & Leisure 2.1
Nondurables 1.5
Repurchase Agreements 14.5
Retail & Wholesale 8.0
Services 0.4
Technology 1.9
Transportation 1.2
Utilities 0.9
100.0%
WORLDWIDE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<ERROR: WIDE TABLE>
ERROR: The Following Table: "Assets" is Too Wide!
Table Width is 137 characters.
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $101,991,000) (cost $668,679,686) - $ 701,556,344
See accompanying schedule
Cash 620
Receivable for investments sold 14,852,496
Receivable for fund shares sold 8,032,054
Dividends receivable 1,833,252
TOTAL ASSETS 726,274,766
LIABILITIES
Payable for investments purchased $ 3,794,834
Unrealized depreciation on foreign currency contracts 731,640
Payable for fund shares redeemed 14,783,460
Accrued management fee 443,599
Other payables and accrued expenses 264,318
TOTAL LIABILITIES 20,017,851
NET ASSETS $ 706,256,915
Net Assets consist of:
Paid in capital $ 686,694,661
Undistributed net investment income 8,367,652
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (20,969,920
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 32,164,522
NET ASSETS, for 53,689,139 shares outstanding $ 706,256,915
NET ASSET VALUE, offering price $13.15
and redemption price per share ($706,256,915 (divided by) 53,689,139 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 4,608,216
Dividends (including $148,909 received from affiliated issuers)
Interest 7,393,855
12,002,071
Less foreign taxes withheld (530,361
)
TOTAL INCOME 11,471,710
EXPENSES
Management fee $ 2,695,072
Transfer agent fees 1,009,078
Accounting fees and expenses 181,496
Non-interested trustees' compensation 1,840
Custodian fees and expenses 100,135
Registration fees 14,272
Audit 23,921
Legal 5,513
Miscellaneous 8,576
Total expenses before reductions 4,039,903
Expense reductions (5,628 4,034,275
)
NET INVESTMENT INCOME 7,437,435
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including (14,390,140
realized loss of $33,623 on )
sales of investments in affiliated
issuers)
Foreign currency transactions (6,439,360 (20,829,500
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities 9,084,423
Assets and liabilities in foreign currencies 571,037 9,655,460
NET GAIN (LOSS) (11,174,040
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (3,736,605
)
OTHER INFORMATION $150,388
Accounting fees paid to FSC
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
<ERROR: WIDE TABLE>
ERROR: The Following Table: "Assets" is Too Wide!
Table Width is 140 characters.
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 7,437,435 $ 7,442,789
Net investment income
Net realized gain (loss) (20,829,500) 40,932,054
Change in net unrealized appreciation (depreciation) 9,655,460 (4,684,006)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (3,736,605) 43,690,837
Distributions to shareholders (3,665,383) (2,354,702)
From net investment income
From net realized gain (34,543,971) (3,532,293)
TOTAL DISTRIBUTIONS (38,209,354) (5,886,995)
Share transactions 306,410,574 948,710,537
Net proceeds from sales of shares
Reinvestment of distributions 37,492,403 5,746,798
Cost of shares redeemed (344,438,283) (530,801,158)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (535,306) 423,656,177
TOTAL INCREASE (DECREASE) IN NET ASSETS (42,481,265) 461,460,019
NET ASSETS
Beginning of period 748,738,180 287,278,161
End of period (including undistributed net investment income of $8,367,652 and $5,498,260,
respectively) $ 706,256,915 $ 748,738,180
OTHER INFORMATION
Shares
Sold 23,758,889 69,814,518
Issued in reinvestment of distributions 2,980,273 451,414
Redeemed (26,701,298) (39,135,881)
Net increase (decrease) 37,864 31,130,051
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA SIX MONTHS ENDED YEARS ENDED OCTOBER 31, MAY 30, 1990
APRIL 30, 1995 1994 1993 1992 1991 (COMMENCEMENT
(UNAUDITED) OF
OPERATIONS) TO
OCTOBER 31, 1990
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95 $ 10.00
Income from Investment Operations
Net investment income .12 .08 .11 .20 .21 .05
Net realized and unrealized gain (loss) (.20) 1.37 3.28 (.08) .53 (1.10)
Total from investment operations (.08) 1.45 3.39 .12 .74 (1.05)
Less Distributions (.07) (.10) (.24) (.10) (.08) -
From net investment income
From net realized gain (.66) (.15) (.02) D - - -
Total distributions (.73) (.25) (.26) (.10) (.08) -
Net asset value, end of period $ 13.15 $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95
TOTAL RETURN B, C (.34)% 11.55% 36.10% 1.32% 8.33% (10.50)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 706,257 $ 748,738 $ 287,278 $ 103,627 $ 105,029 $ 94,851
Ratio of expenses to average net assets 1.17% A 1.32% 1.40% 1.51% 1.69% 2.00% A
Ratio of expenses to average net assets before 1.18% A 1.32% 1.40% 1.51% 1.69% 2.46% A
expense reductions
Ratio of net investment income to average net assets 2.16% A 1.40% 1.99% 2.02% 2.19% 2.09% A
Portfolio turnover rate 49% A 69% 57% 130% 129% 123% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
CANADA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Canada Fund has
a 3% sales charge, which has been waived through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 MONTHS YEAR YEARS FUND
CANADA -1.22% -2.36% 41.34% 106.62%
CANADA (INCL. 3% SALES CHARGE) -4.18% -5.28% 37.10% 100.42%
TSE 300 (Toronto Stock
Exchange 300) Index 0.72% 4.71% 28.58% 79.12%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on November 17, 1987. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Toronto Stock Exchange (TSE) 300 index - a broad measure
of the performance of the Canadian stock market. This index includes
reinvested dividends and capital gains, if any, and excludes the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 YEAR YEARS FUND
CANADA -2.36% 7.17% 10.22%
CANADA (INCL. 3% SALES CHARGE) -5.28% 6.51% 9.77%
TSE 300 (Toronto Stock
Exchange 300) Index 4.71% 5.16% 7.46%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Canada (309) Toronto Stock Ex
11/17/87 9700.00 10000.00
11/30/87 9767.90 10153.53
12/31/87 10446.90 10895.36
01/31/88 10340.20 10759.36
02/29/88 11048.30 11447.90
03/31/88 11737.00 12111.13
04/30/88 12008.60 12268.35
05/31/88 11436.30 11947.11
06/30/88 12319.00 12906.84
07/31/88 12144.40 12762.32
08/31/88 11562.40 12139.94
09/30/88 11804.90 12401.15
10/31/88 12357.80 12753.48
11/30/88 12212.30 12830.11
12/31/88 12480.81 13188.28
01/31/89 13422.57 14213.27
02/28/89 13045.86 13881.50
03/31/89 13263.96 14027.96
04/30/89 13531.61 14346.43
05/31/89 13987.62 14383.31
06/30/89 14661.73 14845.75
07/31/89 15553.92 15890.01
08/31/89 15633.23 16147.42
09/30/89 15534.09 15922.92
10/31/89 15316.00 15949.98
11/30/89 15405.22 16197.04
12/31/89 15849.09 16474.68
01/31/90 14563.75 15023.40
02/28/90 14646.68 14920.74
03/31/90 14895.45 15084.12
04/30/90 14180.22 13930.65
05/31/90 15113.13 14884.87
06/30/90 15465.56 14908.13
07/31/90 15589.95 15161.03
08/31/90 14688.14 14235.18
09/30/90 14449.73 13514.44
10/31/90 14066.20 13073.85
11/30/90 14522.29 13439.96
12/31/90 14978.59 14019.82
01/31/91 15045.01 14077.13
02/28/91 16428.84 15100.37
03/31/91 17148.44 15213.01
04/30/91 17281.28 15194.26
05/31/91 18045.16 15713.88
06/30/91 18067.30 15474.06
07/31/91 18011.95 15696.55
08/31/91 17856.96 15774.78
09/30/91 17259.14 15380.42
10/31/91 18023.02 16117.15
11/30/91 17347.71 15691.20
12/31/91 17627.42 15764.11
01/31/92 17945.13 15903.64
02/29/92 18051.04 15778.39
03/31/92 17545.04 15003.00
04/30/92 17333.23 14750.06
05/31/92 17486.21 14781.51
06/30/92 17392.07 14899.21
07/31/92 17839.23 15353.94
08/31/92 17568.58 15073.09
09/30/92 16815.47 14065.44
10/31/92 16744.87 14331.45
11/30/92 16697.80 13610.56
12/31/92 17121.47 14127.27
01/31/93 17027.20 13986.24
02/28/93 18087.72 14844.82
03/31/93 19077.54 15446.95
04/30/93 19572.44 16106.36
05/31/93 19843.46 16559.37
06/30/93 20856.85 16822.63
07/31/93 20102.70 16806.78
08/31/93 20609.39 17107.05
09/30/93 19596.01 16373.43
10/31/93 20998.25 17654.85
11/30/93 20515.13 17182.05
12/31/93 21482.46 18005.65
01/31/94 22427.27 18880.15
02/28/94 21470.65 18093.83
03/31/94 20679.38 17332.87
04/30/94 20525.85 17106.99
05/31/94 20620.33 17383.62
06/30/94 19486.57 16219.73
07/31/94 19864.49 16810.87
08/31/94 20608.52 17737.69
09/30/94 20714.81 18158.66
10/31/94 20289.65 17783.29
11/30/94 18813.39 16716.54
12/31/94 18907.95 16946.85
01/31/95 17584.40 16109.65
02/28/95 18305.26 16775.46
03/31/95 19451.56 17486.08
04/28/95 20042.43 17912.15
Let's say you invested $10,000 in Fidelity Canada Fund on November 17,
1987, when the fund started, and paid the 3% sales charge. By April 30,
1995, the value of your investment would have grown to $20,042 - a 100.42%
increase on your initial investment. That compares to $10,000 invested in
the Toronto Stock Exchange (TSE) 300 index, which would have grown to
$17,912 over the same period - a 79.12% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
CANADA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with George Domolky,
Portfolio Manager of Fidelity Canada Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six months ended April 30, 1995, it had a -1.22% return, which
lagged the Toronto Stock Exchange (TSE) 300 index's .72% return. For the 12
months ended April 30, 1995, the fund returned -2.36%, trailing the TSE
300's 4.71% gain.
Q. WHAT FACTORS INFLUENCED THIS PERFORMANCE?
A. Generally speaking, the past six months in the Canadian marketplace have
been somewhat turbulent as concerns over the country's budget deficit, its
weak dollar, and uncertainty about the Quebec separation issue were
overhanging the market, and dampened investor confidence. There were other,
more specific factors as well.
Q. WHAT WERE THOSE OTHER FACTORS AFFECTING PERFORMANCE?
A. In the individual commodities, which represent the majority of the
Canadian market, there were several countervailing trends. Natural gas
prices had a very substantial decline, partly due to the unusually warm
winter weather. At the same time, gold acted poorly as inflation rates were
low and interest rates were high. Base metals, such as nickel, copper, zinc
and aluminum, fluctuated depending on changing scenarios relating to the
North American economic outlook. In view of these factors, the fund did
reasonably well over the past six months.
Q. WHAT HELPED THE FUND?
A. Natural gas prices, which had been in a tailspin between October 1994
and February 1995, started to recover in March and April. At the same time,
the per-barrel price of oil rose to above the $20 level from $15 a year
ago. This helped the fund's holdings in the energy sector, which is
overweighted in the portfolio by nearly twice that of the next largest
industry segment.
Q. HOW DID PRECIOUS METALS DO?
A. Gold has started to improve recently. Prices have begun a comeback and
are currently approaching the $400 level. This rebound has come on the
heels of the significant decline of the U.S. dollar versus the German mark
and the Japanese yen. Since gold is denominated in U.S. dollars, the metal
has become cheap in foreign currencies, especially in the mark and the yen,
and is an attractive buy. In addition, as inflationary fears grew,
particularly in the second half of 1994, gold's performance benefited from
investors' turning to the metal as a hedge against inflation. The fund is
currently heavily weighted in the precious metals sector, which is an
important part of the Canadian economy.
Q. WHAT SORT OF RESULTS DID YOU SEE IN THE FUND'S BASE
METAL STOCKS?
A. Base metals - aluminum, copper, nickel and zinc - showed good increases
in the last six months as world economies were in an expansionary phase and
the demand for these metals increased as inventories were depleted. Base
metals are used in the manufacture of such goods as automobiles and
household durables, for which there is increasing demand as economic growth
continues. The fund has been overweighted in this important sector, with
companies such as Alcan Aluminium and Noranda, both among its top 10
holdings.
Q. WHAT SECTORS OF THE PORTFOLIO HAVE BEEN WEAK?
A. Sectors representing the domestic side of the Canadian economy, as
opposed to its natural resource export products, have performed less well
during the period. The communications sectors, for instance, had
difficulties, which was perhaps most evident in the cable television
industry, where price increases were difficult to accomplish and
competition heated up. This competitive environment had an especially
negative effect on Rogers Communications. At the same time, newsprint
prices increased substantially, which affected the profit margins of
Torstar, publisher of the Toronto Star. In the consumer sector, Seagrams'
sale of its Dupont holdings negatively affected investor perceptions of the
company, but fortunately, the fund sold its position in Seagrams earlier in
the period.
Q. WHERE DID YOU FIND GOOD PERFORMANCE IN THE
DOMESTIC ECONOMY?
A. The fund maintains an overweighting in large conglomerates and has a
significant position in Canadian Pacific (CP) railways. It is my feeling
that the privatization of Canadian national railroads should help the
profitability of the country's railroad industry as a whole and be
especially beneficial to CP. In addition, Pan Canadian Petroleum, the
energy company that represents almost 50% of CP's earnings, has been
performing very well as a result of increased production and improved
margins.
Q. HOW DOES CANADA STAND IN ITS CURRENT ECONOMIC RECOVERY?
A. Historically, the Canadian and U.S. economies, which are closely tied,
perform similarly in an economic recovery. At present, however, there is a
significant discrepancy between the performances of the Canadian stock
market, as represented by the TSE 300, and that of the U.S. market (i.e.,
the Standard & Poor's 500). The TSE index is now up only about 1.5% for the
year-to-date, while the S&P is up approximately 12%. It is my feeling that
for the remainder of 1995 and into 1996, the Canadian economy should show
improvements and begin to narrow this gap.
Q. YOUR OUTLOOK FOR THE FUND WOULD SEEM TO BE FAIRLY
OPTIMISTIC THEN?
A. Yes, I would say that my outlook is basically optimistic. Growth in the
domestic Canadian economy is projected at about 3% for 1995, one of the
strongest among the G-7 nations, and a reasonable GDP growth rate of 2.8%
is projected for 1996. The expected near-term growth in the economy,
coupled with a strengthening Canadian dollar and the government's efforts
to reduce the country's significant budget deficit, augur well for the
future. At the same time, the possible separation of the province of Quebec
appears to be less likely than it was six months ago, which should improve
political stability within Canada and be a net benefit for both the markets
and the Canadian dollar. In combination, all of these factors may provide a
decent return for investors interested in Canada.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in Canadian
common stocks and convertible securities
START DATE: November 17, 1987
SIZE: as of April 30, 1995, more than $355 million
MANAGER: George Domolky, since the fund's
inception in 1987; manager, Fidelity Select
Food and Agriculture Portfolio, 1985-1987;
assistant, Fidelity Magellan Fund, 1983-1986;
joined Fidelity in 1981
(checkmark)
GEORGE DOMOLKY ON THE CANADIAN ECONOMY:
"When the U.S. economy is expanding, Canada's
proximity to the U.S. is generally beneficial, as 80% of
its exports move into the U.S. The Canadian currency
is relatively stable. Politically, Canada is a Western
democracy with a stable democratic heritage. Its
accounting system is similar to that in the U.S. At the
same time, the Canadian market is unique in many
ways.
"Investors who put their money in foreign markets
may subject themselves to higher risk than in
domestic markets. The unique characteristics of
Canada may reduce this risk to some extent.
"The country is richly endowed with natural
resources, such as gold, natural gas, oil, timber,
water, copper and nickel. As the world economies
and developing countries continue to grow and living
standards improve, the availability of these natural
resources will be of paramount importance as they
work to build stable societies. Such global economic
growth should augur well for the future of Canadian
natural resource equities."
(solid bullet) Energy (26.1%), Basic Industries (15.7%) and
Precious Metals (13.7%) were the top three
industries represented in the Canada Fund as of
April 30, 1995. They accounted for more than half of
the fund's investments.
(solid bullet) The fund's net assets decreased slightly during
the period, from $368 million on October 31, 1994, to
$355 million on April 30, 1995.
CANADA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 14.4%
Row: 1, Col: 1, Value: 14.4
Row: 1, Col: 2, Value: 85.59999999999999
Canada 85.6%
AS OF OCTOBER 31, 1994
United States 8.1%
Row: 1, Col: 1, Value: 8.1
Row: 1, Col: 2, Value: 91.90000000000001
Canada 91.9%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 95.9 93.3
Bonds 0.5 3.3
Short-term investments 3.6 3.4
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Barrick Gold Corp. 6.1 4.8
(Precious Metals)
Canadian Pacific Ltd. Ord 5.7 0.0
(Railroads)
Alcan Aluminium Ltd. 5.5 4.7
(Metals & Mining)
Renaissance Energy Ltd. 4.6 2.7
(Oil & Gas)
Placer Dome, Inc. 3.7 1.9
(Precious Metals)
Noranda, Inc. 3.2 4.1
(Metals & Mining)
Canadian Natural Resources Ltd. 2.7 2.5
(Oil & Gas)
Rogers Communications, Inc. Class B 2.4 2.2
(Cellular)
Torstar Corp. Class B 2.3 1.9
(Publishing)
Wal-Mart Stores, Inc. 2.2 0.0
(General Merchandise Stores)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Energy 26.1 21.6
Basic Industries 15.7 20.8
Precious Metals 13.7 9.9
Finance 8.8 10.0
Transportation 5.7 0.0
Nondurables 4.9 7.3
Media & Leisure 4.9 5.2
Retail & Wholesale 4.1 2.1
Utilities 3.0 5.6
Industrial Machinery & Equipment 2.8 3.3
CANADA
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.8%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 15.7%
CHEMICALS & PLASTICS - 1.7%
Betz Laboratories, Inc. 800 $ 33,337
Dupont Canada Inc., Class A, Series 1 26,700 354,438
Intertape Polymer Group, Inc. 100,500 2,140,151
Maax, Inc. (a)(d) 286,633 2,430,975
Methanex Corp. (a) 100,000 1,050,924
6,009,825
IRON & STEEL - 0.7%
Linamar Corp. 170,100 1,991,473
Samuel Manu-Tech, Inc. 25,000 401,010
2,392,483
METALS & MINING - 12.3%
Alcan Aluminium Ltd. 688,929 19,561,023
Aluminum Co. of America ALCOA 50,000 2,243,750
Cominco Ltd. (a) 80,600 1,352,299
Falconbridge Ltd. 236,000 3,655,003
Inco Ltd. 222,533 5,764,573
Noranda, Inc. 645,744 11,369,989
43,946,637
PAPER & FOREST PRODUCTS - 1.0%
Merfin Hygenic Products Ltd. (a) 456,200 1,934,548
Riverside Forest Products 134,400 1,635,458
3,570,006
TOTAL BASIC INDUSTRIES 55,918,951
CONGLOMERATES - 1.4%
Brascan Ltd. Class A 380,000 5,114,496
CONSTRUCTION & REAL ESTATE - 1.0%
REAL ESTATE - 0.3%
Cambridge Shopping Centres Ltd. 105,900 898,153
Markborough Properties, Inc. (a) 200,000 309,746
1,207,899
REAL ESTATE INVESTMENT TRUSTS - 0.7%
Trizec Ltd. (a) 400,000 2,654,964
TOTAL CONSTRUCTION & REAL ESTATE 3,862,863
DURABLES - 0.5%
AUTOS, TIRES, & ACCESSORIES - 0.2%
UAP Inc. Class A 45,150 541,088
CONSUMER DURABLES - 0.2%
Unican Security Systems Ltd. Class B 45,000 788,193
HOME FURNISHINGS - 0.1%
Leons Furniture Ltd. 57,100 421,107
TOTAL DURABLES 1,750,388
ENERGY - 26.1%
ENERGY SERVICES - 1.7%
Enserv Corp. (a) 94,700 689,674
Nowsco Well Service Ltd. 427,700 4,731,367
Precision Drilling Class A (a) 53,900 551,541
Veritas Energy Service, Inc. (a) 40,000 235,997
6,208,579
OIL & GAS - 24.4%
Anderson Exploration Ltd. (a) 617,400 7,228,309
Barrett Resources Corp. (a) 74,700 1,755,450
Barrington Petroleum Ltd. (a) 161,500 565,747
Beau Canada Exploration (a) 908,300 1,466,995
Beau Canada Exploration (a)(b) 150,000 242,265
Blue Range Resource Corp. Class A (a) 46,900 363,177
SHARES VALUE (NOTE 1)
Blue Range Resource Corp.
Class A (a)(b) 60,000 $ 464,619
Canadian Natural Resources Ltd. (a) 763,600 9,503,117
Canada Occidental Petroleum Ltd. 20,000 586,305
Chancellor Energy Resources (a) 380,000 445,592
Conwest Exploration Ltd. 53,200 980,862
Ensign Resource Service Group Ord. (a) 68,100 241,071
Excel Energy, Inc. (warrants) (a) 25,000 92
Global Natural Resources, Inc. 40,000 395,000
Grad & Walker Energy Corp. (a) 174,100 850,630
Home Oil Co. Ltd. (a) 140,000 1,592,500
Inverness Petroleum Ltd. (a) 678,200 4,501,491
Morgan Hydrocarbons, Inc. (a) 347,000 998,045
Morrison Petroleums Ltd. 504,000 3,531,105
Newfield Exploration Co. (a) 77,400 1,780,200
Northern Reef Exploration (a) 22,400 30,231
Northstar Energy Corp. (a) 501,900 4,534,295
Pan East Petroleum Corp., Inc. (a) 430,000 951,362
Pancanadian Petroleum Ltd. 232,200 7,877,281
Paramount Resources Ltd. 311,400 3,301,282
Poco Petroleums Ltd. (a) 190,000 1,278,624
Ranger Oil Ltd. 100,000 737,490
Renaissance Energy Ltd. (a) 730,022 16,555,315
Renaissance Energy Ltd. (a)(b) 15,000 340,167
Richland Petroleum Corp. Class A 10,000 71,905
Rigel Energy Corp. (a) 143,000 1,436,908
Rio Alto Exploration Ltd. (a) 715,300 2,769,513
Rio Alto Exploration Ltd. (a)(b) 11,000 42,590
Summit Resources Ltd. 218,300 1,609,941
Talisman Energy, Inc. (a) 105,000 2,023,028
Tarragon Oil & Gas Ltd. (a) 421,500 4,157,646
Transwest Energy, Inc. (a) 311,100 385,447
Tri Link Resources Ltd. Class A (a) 84,900 860,928
Ulster Petroleums Ltd. (a) 131,000 495,133
86,951,658
TOTAL ENERGY 93,160,237
FINANCE - 8.7%
BANKS - 5.2%
Bank of Montreal 175,000 3,581,438
Bank of Nova Scotia Halifax 265,000 5,398,890
Canadian Imperial Bank of Commerce 167,000 4,172,074
Royal Bank of Canada 246,200 5,424,406
18,576,808
CREDIT & OTHER FINANCE - 1.4%
Trimark Financial Corp. 145,300 5,089,974
SECURITIES INDUSTRY - 2.1%
First Marathon, Inc. Class A (non-vtg.) 154,300 1,422,435
Investors Group, Inc. 170,000 2,068,660
Mackenzie Financial Corp. 241,000 1,399,665
Pioneer Group, Inc. 84,500 2,133,625
Power Financial Corp. 20,000 479,369
7,503,754
TOTAL FINANCE 31,170,536
HEALTH - 0.5%
DRUGS & PHARMACEUTICALS - 0.4%
Bristol-Myers Squibb Co. 23,600 1,536,950
MEDICAL FACILITIES MANAGEMENT - 0.1%
Spectral Diagnostics, Inc. (a) 10,000 228,622
TOTAL HEALTH 1,765,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 2.8%
Enerflex Systems Ltd. (a) 15,000 $ 172,849
Exco Technologies Ltd. (a)(d) 972,800 5,739,442
Finning Ltd. 47,300 732,549
Osmonics, Inc. (a) 25,000 418,750
Trojan Technologies Corp. (a) 290,400 1,766,881
Valmont Industries, Inc. 48,700 1,047,050
9,877,521
MEDIA & LEISURE - 4.9%
BROADCASTING - 0.5%
Cogeco, Inc. 40,000 169,623
Shaw Cablesystems Ltd. Class B (b) 193,500 1,123,798
Videotron Group Ltd. 36,800 322,283
1,615,704
LODGING & GAMING - 0.2%
Four Seasons Hotels, Inc. 72,509 815,489
PUBLISHING - 4.2%
Thomson Corp. 487,598 6,652,586
Torstar Corp. Class B 539,000 8,248,274
14,900,860
RESTAURANTS - 0.0%
Spectra Group of Great Restaurants, Inc.
Class A (non-vtg.) (a) 4,900 15,720
TOTAL MEDIA & LEISURE 17,347,773
NONDURABLES - 4.9%
AGRICULTURE - 0.0%
DEKALB Genetics Corp. Class B 900 32,850
FOODS - 4.3%
Ault Foods Ltd. 177,300 2,255,559
Corporate Foods Ltd. 55,300 601,552
General Mills, Inc. 20,000 1,220,000
Kellogg Co. 62,500 3,968,750
RalCorp Holdings, Inc. (a) 34,000 786,250
Ralston Purina Co. 40,000 1,900,000
Tootsie Roll Industries, Inc. 41,341 2,723,338
Weston George Ltd. 55,000 1,723,884
15,179,333
HOUSEHOLD PRODUCTS - 0.6%
Tambrands, Inc. 49,400 2,056,275
TOTAL NONDURABLES 17,268,458
PRECIOUS METALS - 13.7%
Agnico Eagle Mines Ltd. 364,200 4,230,354
Barrick Gold Corp. 892,400 21,718,499
Battle Mountain Gold Co. 37,500 412,500
Euro-Nevada Mining Corp. 104,900 2,843,081
Franco Nevada Mining Corp. 45,600 2,286,810
Kinross Gold Corp. (a) 446,000 2,713,598
Placer Dome, Inc. 560,000 13,370,700
Prime Resources Group, Inc. (a) 95,300 658,901
Rayrock Yellowknife Resources, Inc. (a) 46,200 489,786
Viceroy Resources Corp. (a) 10,000 53,468
TOTAL PRECIOUS METALS 48,777,697
RETAIL & WHOLESALE - 4.1%
GENERAL MERCHANDISE STORES - 2.9%
Hudsons Bay Co. Ord. 86,000 1,585,604
Sears Canada, Inc. 170,000 924,628
Wal-Mart Stores, Inc. 335,000 7,956,250
10,466,482
SHARES VALUE (NOTE 1)
GROCERY STORES - 1.2%
Loblaw Companies Ltd. 111,800 $ 2,174,656
Van Houtte (A.L.) 175,500 1,957,622
4,132,278
TOTAL RETAIL & WHOLESALE 14,598,760
SERVICES - 2.5%
PRINTING - 1.7%
Moore Corporation Ltd. 301,700 5,979,709
SERVICES - 0.8%
G & K Services, Inc. Class A 107,500 1,961,875
Service Corp. International 35,000 988,750
2,950,625
TOTAL SERVICES 8,930,334
TECHNOLOGY - 0.3%
COMMUNICATIONS EQUIPMENT - 0.0%
Northern Telecom Ltd. 22 803
SR Telecom, Inc. 10,000 102,327
103,130
COMPUTERS & OFFICE EQUIPMENT - 0.3%
Stratus Computer, Inc. (a) 30,000 892,500
TOTAL TECHNOLOGY 995,630
TRANSPORTATION - 5.7%
RAILROADS - 5.7%
Canadian Pacific Ltd. Ord. 1,310,100 20,169,134
UTILITIES - 3.0%
CELLULAR - 3.0%
BCE Mobile Communications, Inc. (a) 46,900 1,487,297
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.)(a) 40,000 958,738
Rogers Communications, Inc. Class B (a) 701,600 8,408,129
10,854,164
GAS - 0.0%
Nova Corp. 445 3,938
TOTAL UTILITIES 10,858,102
TOTAL COMMON STOCKS
(Cost $332,614,724) 341,566,452
PREFERRED STOCKS - 0.1%
CONVERTIBLE PREFERRED STOCKS - 0.0%
PRECIOUS METALS - 0.0%
Battle Gold Co. 2,000 116,000
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
FINANCE - 0.1%
SECURITIES INDUSTRY - 0.1%
A G F Management Ltd. Class A 41,400 442,715
TOTAL PREFERRED STOCKS
(Cost $584,121) 558,715
CONVERTIBLE BONDS - 0.5%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (C)
CONSTRUCTION & REAL ESTATE - 0.5%
REAL ESTATE - 0.5%
Markborough Properties, Inc.
6%, 3/14/04 - CAD 2,700,000 $ 1,533,242
PRECIOUS METALS - 0.0%
Agnico Eagle Mines Ltd. yankee
3 1/2% 1/27/04 B1 $ 220,000 173,250
TOTAL CONVERTIBLE BONDS
(Cost $2,184,786) 1,706,492
REPURCHASE AGREEMENTS - 3.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.93%,
dated 4/28/95 due 5/1/95 $12,893,368 12,887,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $348,270,631) $ 356,718,659
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,213,439 or 0.6% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Exco Technologies Ltd. (a) $ - $ - $ - $ 5,739,442
Maax, Inc. (a) 39,397 - - 2,430,975
TOTAL $ 39,397 $ - $ - $ 8,170,417
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $127,492,618 and $129,947,347, respectively.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the periods for which loans were
outstanding amounted to $5,448,000 and $3,832,000, respectively. The
weighted average interest rate was 6.4%. (see Note 7 of Notes to Financial
Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $44,427 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $348,525,154. Net unrealized appreciation aggregated
$8,193,505, of which $27,602,856 related to appreciated investment
securities and $19,409,351 related to depreciated investment securities.
At October 31, 1994, the fund had a capital loss carryforward of
approximately $5,787,129 all of which will expire on October 31, 2002.
CANADA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $12,887,000) (cost $348,270,631) - See $ 356,718,659
accompanying schedule
Cash 517
Receivable for investments sold 6,694,009
Receivable for fund shares sold 3,021,052
Dividends receivable 241,939
Interest receivable 18,355
TOTAL ASSETS 366,694,531
LIABILITIES
Payable for investments purchased $ 7,230,809
Payable for fund shares redeemed 4,006,193
Accrued management fee 184,703
Other payables and accrued expenses 207,915
TOTAL LIABILITIES 11,629,620
NET ASSETS $ 355,064,911
Net Assets consist of:
Paid in capital $ 357,447,919
Undistributed net investment income 267,987
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (11,102,486
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 8,451,491
NET ASSETS, for 20,933,979 shares outstanding $ 355,064,911
NET ASSET VALUE, offering price and redemption price per share ($355,064,911 (divided by) 20,933,979 shares) $16.96
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,095,442
Dividends
Interest 486,047
2,581,489
Less foreign taxes withheld (289,043
)
TOTAL INCOME 2,292,446
EXPENSES
Management fee $ 1,230,590
Basic fee
Performance adjustment (39,981
)
Transfer agent fees 644,950
Accounting fees and expenses 96,770
Non-interested trustees' compensation 1,356
Custodian fees and expenses 29,241
Registration fees 12,438
Audit 20,227
Legal 2,219
Interest 1,363
Miscellaneous 1,611
Total expenses before reductions 2,000,784
Expense reductions (199,080 1,801,704
)
NET INVESTMENT INCOME 490,742
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (4,634,801
)
Foreign currency transactions (8,307 (4,643,108
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (3,083,637
)
Assets and liabilities in foreign 4,109 (3,079,528
currencies )
NET GAIN (LOSS) (7,722,636
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (7,231,894
)
OTHER INFORMATION $3,072
Deferred sales charges withheld
by FDC
Accounting fees paid to FSC $78,865
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
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<S> <C> <C>
Operations $ 490,742 $ (292,208
Net investment income (loss)
Net realized gain (loss) (4,643,108 (5,844,101
) )
Change in net unrealized appreciation (depreciation) (3,079,528 1,032,561
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (7,231,894 (5,103,748
) )
Distributions to shareholders (211,418 -
From net investment income )
In excess of net realized gain - (242,990
)
TOTAL DISTRIBUTIONS (211,418 (242,990
) )
Share transactions 151,348,829 568,300,531
Net proceeds from sales of shares
Reinvestment of distributions 205,157 238,390
Cost of shares redeemed (157,375,788 (290,839,654
) )
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (5,821,802 277,699,267
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (13,265,114 272,352,529
)
NET ASSETS
Beginning of period 368,330,025 95,977,496
End of period (including undistributed net investment income (loss) of $267,987 and $(11,337),
respectively) $ 355,064,911 $ 368,330,025
OTHER INFORMATION
Shares
Sold 9,479,650 32,698,397
Issued in reinvestment of distributions 12,903 13,408
Redeemed (9,995,915 (16,658,932
) )
Net increase (decrease) (503,362 16,052,873
)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1995
(UNAUDITED)
SELECTED PER-SHARE DATA 1994 1993 1992 1991 1990
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45
Income from Investment Operations
Net investment income .02 - (.15) (.02) D .03 D .05 D
Net realized and unrealized gain (loss) (.23) (.60) 3.76 (1.11) 3.59 (1.24)
Total from investment operations (.21) (.60) 3.61 (1.13) 3.62 (1.19)
Less Distributions (.01) - (.02) - (.06) (.01)
From net investment income
From net realized gain - - - (.92) (.85) (.68)
In excess of net realized gain - (.04) - - - -
Total distributions (.01) (.04) (.02) (.92) (.91) (.69)
Net asset value, end of period $ 16.96 $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57
TOTAL RETURN B,C (1.22)% (3.37)% 25.40% (7.09)% 28.13% (8.16)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 355,065 $ 368,330 $ 95,977 $ 21,701 $ 23,327 $ 17,736
Ratio of expenses to average net assets 1.15% A 1.57% 2.00% 2.00% 2.01% 2.05%
Ratio of expenses to average net assets before expense 1.27% A, 1.57% 2.00% 2.07% 2.26% 2.31%
reductions E
Ratio of net investment income to average net assets .31% A (.14)% (.66)% (.11)% .17% .34%
Portfolio turnover rate 83% A 59% 131% 55% 68% 164%
</TABLE>
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A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD(S) SHOWN.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INCLUDES THE EFFECT OF ANNUALIZING A VOLUNTARY REIMBURSEMENT OF FEES BY FMR (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
EUROPE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). The fund has a
3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 MONTHS YEAR YEARS FUND
EUROPE 1.15% 7.01% 38.60% 140.12%
EUROPE (INCL. 3% SALES CHARGE) -1.89% 3.80% 34.44% 132.92%
Morgan Stanley Europe Index 5.97% 9.25% 56.27% 151.75%
Average European
Region Fund 2.37% 3.55% 28.88% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on October 1, 1986. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Morgan Stanley Europe index - a broad measure of the
performance of stocks in Europe, weighted by each country's market
capitalization (or the total value of its outstanding shares). To measure
how the fund's performance stacked up against its peers, you can compare
it to the average European region fund, which reflects the performance of
44 funds with similar objectives tracked by Lipper Analytical Services over
the past six months. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 YEAR YEARS FUND
EUROPE 7.01% 6.75% 10.74%
EUROPE (INCL. 3% SALES CHARGE) 3.80% 6.10% 10.35%
Morgan Stanley Europe Index 9.25% 9.34% 11.35%
Average European Region Fund 3.55% 4.96% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Europe (301) Europe Index
10/01/86 9700.00 10000.00
10/31/86 9690.30 10061.24
11/30/86 10078.30 10600.17
12/31/86 10485.70 10866.14
01/31/87 11563.06 11347.33
02/28/87 12300.92 11751.88
03/31/87 12922.28 12332.46
04/30/87 13456.26 12815.21
05/31/87 13679.56 12743.90
06/30/87 14232.95 13107.17
07/31/87 15252.37 13548.56
08/31/87 15572.75 13660.75
09/30/87 16135.86 13749.78
10/31/87 11737.82 11135.61
11/30/87 11213.55 10645.49
12/31/87 12048.50 11264.74
01/31/88 11475.68 10802.62
02/29/88 11533.94 11438.32
03/31/88 12067.91 11753.00
04/30/88 12407.72 11972.00
05/31/88 12271.80 11748.03
06/30/88 11999.95 11629.54
07/31/88 11873.74 11655.59
08/31/88 11252.38 11126.51
09/30/88 11776.65 11732.04
10/31/88 12582.48 12818.60
11/30/88 12737.81 12976.68
12/31/88 12751.83 13046.37
01/31/89 13357.17 13518.81
02/28/89 13386.94 13365.30
03/31/89 13615.18 13462.17
04/30/89 14200.67 13835.82
05/31/89 13813.65 13126.86
06/30/89 14190.75 13668.45
07/31/89 15460.97 15277.34
08/31/89 15341.89 15086.51
09/30/89 16036.54 15345.58
10/31/89 14925.09 14339.46
11/30/89 15798.37 15135.61
12/31/89 16874.84 16764.74
01/31/90 17085.65 16719.83
02/28/90 16643.95 16319.18
03/31/90 17145.88 16549.43
04/30/90 16804.57 16110.24
05/31/90 17838.54 17421.38
06/30/90 18581.39 18033.25
07/31/90 19705.71 18792.65
08/31/90 17356.69 16929.38
09/30/90 15640.09 14935.59
10/31/90 16342.79 16194.23
11/30/90 16322.71 16356.96
12/31/90 16100.11 16120.73
01/31/91 16418.62 16663.17
02/28/91 17415.24 18120.73
03/31/91 16480.27 16904.64
04/30/91 16439.17 16727.91
05/31/91 16511.09 17221.35
06/30/91 15062.39 15776.03
07/31/91 15822.70 16867.89
08/31/91 16141.21 17175.85
09/30/91 16726.85 17692.04
10/31/91 16367.25 17319.34
11/30/91 15874.07 16911.64
12/31/91 16769.90 18234.47
01/31/92 16844.24 18229.22
02/29/92 17046.03 18299.21
03/31/92 16461.90 17658.79
04/30/92 17545.20 18633.42
05/31/92 18405.47 19693.79
06/30/92 18235.54 19327.03
07/31/92 17577.06 18636.54
08/31/92 17630.16 18575.77
09/30/92 17354.03 18268.54
10/31/92 16058.32 16993.88
11/30/92 16047.70 16985.58
12/31/92 16346.72 17375.24
01/31/93 16260.11 17404.43
02/28/93 16357.54 17603.55
03/31/93 17429.28 18509.13
04/30/93 18003.04 18917.36
05/31/93 18219.55 19120.87
06/30/93 17710.75 18841.54
07/31/93 17721.57 18906.21
08/31/93 19161.38 20565.25
09/30/93 19139.73 20501.36
10/31/93 19951.65 21355.45
11/30/93 19561.93 20894.47
12/31/93 20787.26 22463.18
01/31/94 22287.60 23607.14
02/28/94 21765.74 22771.11
03/31/94 21156.91 22126.61
04/30/94 21765.74 23042.85
05/31/94 20928.60 22063.34
06/30/94 20678.54 21831.69
07/31/94 21624.41 22975.89
08/31/94 22309.34 23704.62
09/30/94 22004.93 22764.65
10/31/94 23026.90 23756.36
11/30/94 22168.01 22846.39
12/31/94 22087.74 22976.26
01/31/95 21612.85 22796.38
02/28/95 21999.39 23312.88
03/31/95 22529.49 24394.72
04/28/95 23291.52 25174.86
Let's say you invested $10,000 in Fidelity Europe Fund on October 1, 1986,
when the fund started, and paid the 3% sales charge. By April 30, 1995, the
value of your investment would have grown to $23,292 - a 132.92% increase
on your initial investment. That compares to $10,000 invested in the Morgan
Stanley Europe index, which would have grown to $25,175 over the same
period - a 151.75% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EUROPE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Sally Walden,
Portfolio Manager of Fidelity Europe Fund
Q. SALLY, HOW'S THE FUND BEEN DOING?
A. Performance has been somewhat disappointing, I'd have to say,
particularly as of late. For the six months ended April 30, 1995, the fund
returned 1.15%, compared with the average European fund, which returned
2.37%, according to Lipper Analytical Services, and the Morgan Stanley
Europe index, which gained 5.97% during the same period. The fund did a bit
better for the 12 months, returning a total of 7.01%, versus the index's
9.25% gain, and beating the average European fund's return of 3.55%.
Q. WHAT'S BEEN THE STORY BEHIND THE FUND'S PERFORMANCE?
A. I don't suppose 1994 in Europe will be a year that most investors will
wish to remember. But if there's one reason that the fund has lagged the
index, it's that its bias is to own small- to medium-cap stocks, and over
the past six to 12 months in Europe, smaller companies have, in general,
underperformed the large index plays dramatically. This has been especially
true in the last six months. From about March of 1994, when most markets
peaked, the general tone in Europe was nervous and the general movement in
stock prices was down. One always finds in nervous markets that investors
are happier to own larger, more liquid securities. One also finds that in
falling markets, when liquidity is low, those investors that do try to
trade in smaller stocks tend to affect the price disproportionately. So at
the moment, the fund's bias toward small- to medium-cap stocks is working
against us.
Q. BUT THERE WERE SOME BRIGHT SPOTS ALONG THE WAY . . .
A. Yes, that's right. Many of the names among our top 10 holdings have done
enormously well during the period, recording gains of 20% to 30%. So it's
not so much that the big bets the fund has made have been wrong; it's more
that the bias of the fund toward smaller companies has caused us to lag the
indices.
Q. WHICH OF THESE STOCKS DID PARTICULARLY WELL?
A. Nokia, a Finnish cellular communications company, was the fund's largest
holding during most of the period, and it performed extremely well. The
cellular phone business continues to grow on a global basis, and Nokia,
which supplies both equipment and network infrastructure, certainly has
benefited from that growth trend. Industrie Natuzzi, an Italian firm that
is the world's leading manufacturer of leather furniture, also has done
well, up more than 40% for the year in U.S. dollar terms on the basis of
its consistently robust earnings growth. I also like International
Cabletel, a U.S. company whose cable television business is conducted
exclusively in the U.K., which is just beginning to develop its cable
television infrastructure. The company's stock price has increased more
than 30% in the past 12 months.
Q. SCHERING, THE GERMAN PHARMACEUTICALS COMPANY, IS NOW YOUR SECOND LARGEST
HOLDING. HOW HAS THIS STOCK BEEN DOING?
A. Schering was a very positive contributor to the fund during the past six
months. This was an improvement in performance and was based on growing
investor confidence that the company's recent cost-cutting initiatives and
its focus on core pharmaceutical products would improve profit margins.
However, it's been a bit of a bumpy road for Schering, as investor
sentiment - and consequently, the company's share price - has been somewhat
volatile around Schering's recent introduction of a drug therapy for
multiple sclerosis.
Q. WHICH OTHER STOCKS HAVE YOU LIKED?
A. Gehe AG, another German pharmaceutical company, was a very strong
performer during the past six months, increasing its stock price by more
than 20% in local currency terms. Gehe has fueled its strong earnings
largely on the basis of turning around the performance of recently acquired
companies, particularly in its wholesale distribution business. BIC, one of
the fund's largest holdings in France, also did very well, appreciating
approximately 25% in its local currency. This multinational manufacturer of
razors and disposable pens and lighters had extremely strong earnings
growth and is considered cheap in comparison with companies, such as
Gillette, that are in the same sort of business. BIC also is an interesting
story because the company seems ready to become more open with stockholders
and research analysts about providing information on the strengths of its
business, which could lead to a greater awareness among investors of the
value in BIC's share price. Kuoni Reisen, a Swiss tour operator, is another
example of this trend toward greater openness with shareholders.
Q. WERE THERE STOCKS WHOSE PERFORMANCE WAS DISAPPOINTING?
A. TF-1, France's largest commercial television station, didn't do
particularly well over the period. Television revenues depend solely on
advertising, and I think what happened with TF-1 was a general reluctance
among major advertisers to commit to large television campaigns in advance
of the uncertain outcome of France's recent presidential election. I do,
however, continue to like the stock's longer-term growth prospects as
France's economic recovery continues and as the company begins to recognize
the up-side of several new programming and distribution strategies.
Skandia, a Swedish insurance company, also has been a disappointment in the
short-term as sales of life insurance and retirement products have slowed
dramatically in the U.K., which has been one of the company's most
successful markets. This slowdown has resulted from growing competition and
a high level of confusion within the U.K. market.
Q. WHAT EFFECT DID RISING INTEREST RATES AND A FALLING BOND MARKET HAVE ON
THE PORTFOLIO OVER THE PERIOD?
A. One can clearly say that in 1994 the rising interest rate environment
was a negative for equity markets. In terms of earnings growth, it was a
fabulous time to be invested in Europe; there was a massive recovery in
earnings. But because the bond markets were weak, the general direction of
equity prices was disappointing. In many cases last year, companies came
through with extremely strong earnings, but their share prices barely moved
at all.
Q. DO YOU ANTICIPATE A CONTINUATION OF THIS TREND IN 1995?
A. I don't think the bond markets are likely to be a negative for equities
in 1995. In fact, I am more confident that the real earnings growth stories
will begin to be reflected in stock price appreciation in 1995.
Q. THEN YOUR OUTLOOK FOR THE FUND IS SOMEWHAT OPTIMISTIC?
A. Yes, in general, I think the outlook for earnings growth in Europe
remains very strong. The U.K. is further through its economic recovery, and
the rest of Europe is a bit earlier on in its recovery. So there's somewhat
of a distinction between the two. But if you look at the mainstream
continent of Europe, excluding the U.K., I think earnings growth prospects
for 1995 and into 1996 look quite encouraging. Furthermore, if the bond
markets rebound, I think that a lot of that earnings growth will support
better stock price performance.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
in Western Europe
START DATE: October 1, 1986
SIZE: as of April 30, 1995, more than $462 million
MANAGER: Sally Walden, since 1992; also
manages various funds for non-U.S. investors;
joined Fidelity in 1984
(checkmark)
SALLY WALDEN ON EUROPE FUND'S INVESTMENT
STRATEGY:
"I tend not to rotate the fund's holdings through
various industrial sectors depending on my view of
changing macroeconomic conditions. Perhaps unlike
some fund managers who may, for example, have a
strong feeling about interest rates and take a
particular position in interest-rate sensitive stocks, I
don't run the fund that way. Generally speaking, you'll
find that I always own the same sort of companies
and tend to hold them for some time.
"I am very much a bottom-up stock picker, and while
I'm always very aware of the macroeconomic
situation in which my companies have to operate, I
don't use that as my main criterion in deciding which
stocks to buy. I'm interested mainly in growth stocks
rather than recovery stocks. On the whole, I don't like
to own many cyclical manufacturing companies, and
I'm not really interested in companies that over an
economic cycle are not able to generate enough
cash to continue investing in their business. So I
clearly have a bias toward quality and would like to
own only the best companies in any industry.
"In Europe, when one looks for growth companies,
that tends to focus attention away from the cyclical
manufacturing area because, with labor costs being
relatively high in many parts of Europe, it's unrealistic
to suppose that the basic manufacturing industry has
significant growth prospects in the medium term.
Many of those businesses have already migrated
toward lower wage areas of the world. So if you're
looking for growth in Europe, it does tend to focus you
more on service-related businesses, and the
transition in much of Europe away from
manufacturing toward a more service-driven
economy is now well under way."
EUROPE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 8.1%
Sweden 8.2%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 28.4
Row: 1, Col: 3, Value: 6.9
Row: 1, Col: 4, Value: 4.4
Row: 1, Col: 5, Value: 11.4
Row: 1, Col: 6, Value: 3.5
Row: 1, Col: 7, Value: 5.4
Row: 1, Col: 8, Value: 11.6
Row: 1, Col: 9, Value: 3.4
Row: 1, Col: 10, Value: 5.2
Row: 1, Col: 11, Value: 9.6
Row: 1, Col: 12, Value: 8.199999999999999
France 9.6%
United
Kingdom 28.4%
Belgium 5.2%
Finland 3.4%
Germany 11.6%
Switzerland 6.9%
Netherlands 5.4%
Spain 4.4%
Other 5.3%
Italy 3.5%
AS OF OCTOBER 31, 1994
United States 6.3%
Sweden 7.9%
Row: 1, Col: 1, Value: 6.3
Row: 1, Col: 2, Value: 26.5
Row: 1, Col: 3, Value: 6.6
Row: 1, Col: 4, Value: 5.2
Row: 1, Col: 5, Value: 5.9
Row: 1, Col: 6, Value: 4.3
Row: 1, Col: 7, Value: 4.5
Row: 1, Col: 8, Value: 10.3
Row: 1, Col: 9, Value: 6.9
Row: 1, Col: 10, Value: 5.1
Row: 1, Col: 11, Value: 10.5
Row: 1, Col: 12, Value: 7.9
France 10.5%
United
Kingdom 26.5%
Belgium 5.1%
Finland 6.9%
Switzerland 6.6%
Germany 10.3%
Netherlands 4.5%
Spain 5.2%
Other 5.9%
Italy 4.3%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 92.9 94.8
Bonds 0.3 0.2
Short-term investments 6.8 5.0
TOP TEN STOCKS
% OF % OF FUND'S
FUND'S INVESTMENTS
INVESTMENT 6 MONTHS
S AGO
Nokia Corp. AB, Series K 2.0 3.5
(Finland, Electrical Equipment)
Schering AG 2.0 1.9
(Germany, Drugs & Pharmaceuticals)
Kuoni Reisen Holding AG Class B (Reg.) 1.8 1.2
(Switzerland, Entertainment)
Gehe AG 1.7 1.2
(Germany, Medical Equipment & Supplies)
Telvision Francaise 1 SA 1.6 1.1
(France, Broadcasting)
Industrie Natuzzi Spa ADR 1.4 1.0
(Italy, Consumer Electronics)
Telecom Italia Ord. 1.4 1.7
(Italy, Telephone Services)
International Cabletel, Inc. 1.3 1.2
(United States, Broadcasting)
PolyGram NV Ord. 1.3 0.7
(Netherlands, Entertainment)
Audiofina 1.3 1.3
(Belgium, Broadcasting)
TOP TEN INDUSTRIES
% OF % OF FUND'S
FUND'S INVESTMENTS
INVESTMENT 6 MONTHS
S AGO
Media & Leisure 14.5 14.0
Finance 13.0 15.5
Health 10.6 9.2
Retail & Wholesale 8.0 7.3
Durables 7.4 7.6
Utilities 6.9 6.8
Technology 6.3 1.0
Nondurables 5.8 5.4
Construction & Real Estate 4.5 4.5
Transportation 4.3 4.5
EUROPE
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.4%
SHARES VALUE (NOTE 1)
BELGIUM - 5.0%
Audiofina 10,966 $ 5,757,919
Colruyt SA 10,160 2,643,310
Generale de Banque SA 11,762 3,703,463
GIB Holdings Ltd. 53,625 2,613,561
Immob de Belgique 19,075 1,652,007
Quick Restaurants SA 42,995 3,565,329
UCB Group 3,007 2,678,044
22,613,633
BERMUDA - 0.4%
Bona Shipholdings Ltd. (a) 203,570 1,895,194
DENMARK - 2.0%
Kobenhaven Lufthave AS 59,530 3,828,999
Teledanmark AS Class B 48,825 2,548,249
Unidanmark AS Class A 56,010 2,562,986
8,940,234
FINLAND - 3.4%
Kone Corp. Class B Ord. 22,230 2,763,110
Nokia Corp. AB, Series K 218,920 8,984,757
Outokumpu OY Class A 119,250 2,131,062
WSOY (Werner Soderstrom) Class B 20,030 1,644,113
15,523,042
FRANCE - 9.6%
BIC 33,060 5,507,202
BQE National Paris Ord. 78,815 3,826,670
Canal Plus SA 21,700 2,949,172
Ecco SA 17,453 2,382,614
Generale des Eaux, Cie 20,990 2,208,800
Guilbert SA, Ste 27,400 2,476,993
Immeubles de France, Ste Des 28,316 1,973,060
Publications Filippachi 11,920 1,692,652
Salomon SA Class A 5,584 2,200,703
Scor SA 40 894
Taittinger SA 3,660 1,769,589
Television Francaise 1 SA 77,720 7,089,137
Thomson C.S.F. (a) 110,570 2,920,081
Total SA Class B 50,328 3,140,835
Ugine SA 33,001 2,333,031
Ugine SA (b) 21,000 1,484,611
43,956,044
GERMANY - 9.1%
Bayer AG 14,116 3,470,855
BMW AG 6,427 3,290,313
Duerr Beteiligungs AG (RFD) 7,050 2,236,823
Gehe AG 18,241 7,839,086
Holsten Brauerei AG 5,165 1,284,872
Mannesmann AG Ord. 16,540 4,484,292
Otto Reichelt AG 15,080 3,022,850
Rhoen Klinikum AG 2,700 2,433,572
Schering AG 12,020 8,914,136
Veba AG Ord. 12,061 4,487,490
41,464,289
IRELAND - 1.2%
CRH PLC 595,660 3,696,785
IWP International (U.K. Reg.) 367,530 2,014,358
5,711,143
ITALY - 3.5%
Industrie Natuzzi Spa ADR 173,000 6,465,875
Istituto Nazionale Delle
Assicurazioni Spa (a) 1,284,930 1,737,290
Mondadori Arnoldo Editore Spa 21,550 137,009
Mondadori Arnoldo Editore Spa (b) 216,900 1,378,989
Telecom Italia Ord. 2,394,040 6,375,041
16,094,204
SHARES VALUE (NOTE 1)
NETHERLANDS - 5.4%
Grolsche Bierbrouwerij NV 65,020 $ 2,304,040
Heineken NV 26,962 3,847,744
PolyGram NV Ord. 102,390 5,778,857
SGS-THOMSON
Microelectronics NV (a) 83,090 3,122,732
Unilever NV ADR 28,900 3,861,763
VNU Ord. 50,930 5,696,442
24,611,578
NORWAY - 1.6%
Bergesen Group Class A 61,140 1,334,678
Bergesen Group Class B 27,820 602,841
Bohler-Gruppen AS (a) 48,700 30,096
Helikopter Service AS 130,495 1,508,128
Smedvig Tankships Ltd. (a) 230,200 1,625,811
Veidekke AS 96,660 2,001,467
7,103,021
SPAIN - 4.4%
Banco Popular Espanol 18,100 2,466,116
Centros Comerciales Continente SA (a) 112,705 2,423,910
Corporacion Financiera Alba SA 47,970 2,420,843
Corporacion Mapfre Cia International
de Reaseguros SA (Reg.) 78,070 3,414,970
EL Aguila SA (a) 151,693 1,175,944
Empresa Nacional De Electricidad
SA Ord. 48,660 2,294,056
FOCSA (Fomento de Obras Y
Construcciones SA) 37,935 3,472,382
Mapfre Vida SA 3,688 163,712
Vallehermoso SA 130,295 2,237,550
20,069,483
SWEDEN - 8.2%
Arjo AB (b) 190,800 2,970,161
Assa Abloy AB Class B (a) 309,650 1,343,708
Astra AB Class A Free shares 132,445 3,868,072
Autoliv AB 66,850 3,029,846
Avesta Sheffield AB Ord. Free shares 350,941 3,770,959
Bergman & Beving AB Class B
Free shares 115,060 2,504,405
Custos AB Class A Free shares 4,230 50,697
Ericsson Telephon L.M. Class B 70,000 4,638,380
Getinge Industrier Class B 61,800 1,898,526
ICB Shipping Class B 351,160 2,684,857
Skandia International Holding 323,113 5,519,494
TV 4 AB Class A 67,930 1,300,767
Volvo AB Class B 205,320 3,860,887
37,440,759
SWITZERLAND - 6.9%
Ares Serono SA Class B (Bearer) 9,640 5,350,874
Baloise Holding (Reg.) (a) 1,575 3,407,452
Baloise Holding (warrants) 2,075 18,592
BBC Brown Boveri & Cie (Bearer) 4,840 4,785,000
Kuoni Reisen Holding AG Class B (Reg.) 5,056 8,198,322
Nestle SA (Reg.) 2,826 2,764,243
Oerlikon-Buhrle Holding Ltd. (Reg.) (a) 39,005 3,204,956
Swiss Reinsurance Corp. (Reg.) 5,453 3,808,520
31,537,959
COMMON STOCK - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - 28.4%
Abbey National PLC Ord. 406,470 $ 3,053,370
Angerstein Underwriting Trust PLC 1,356,770 1,662,206
Argyll Group PLC Ord. 649,101 2,992,563
Asda Group PLC 1,972,000 2,606,668
Associated British Ports Holdings
PLC Ord. 706,550 3,223,253
BAA PLC Ord. 305,734 2,336,077
Barclays PLC Ord. 391,370 4,031,377
Boots Co. PLC 418,630 3,441,641
British Sky Broadcasting Group 57,995 230,915
Cadbury-Schweppes PLC Ord. 626,946 4,527,654
Chubb Security PLC 529,620 2,569,780
CLM Insurance Fund PLC 1,219,500 1,680,788
Comcast UK Cable Partners PLC
Class A (a) 132,900 1,860,600
Compass Group PLC Ord. 611,077 3,290,087
De La Rue PLC 166,943 2,411,245
Electrocomponents PLC 328,160 2,835,407
Flextech PLC (a) 321,880 2,088,454
Hazlewood Foods PLC Ord. 120,740 185,874
London Insurance Market Investment
Trust PLC 2,689,770 4,032,396
MAI PLC 614,960 2,656,726
MFI Furniture Group PLC 1,007,307 2,045,961
Mirror Group Newspaper PLC 2,041,140 4,409,026
Prudential Corp. PLC 864,470 4,361,735
Reuters Holdings PLC Ord. 556,180 4,236,256
Royal Bank of Scotland Group PLC Ord. 528,160 3,541,799
Scottish & Newcastle Brewers PLC 536,162 4,636,933
Scottish Hydro-Electric PLC Ord. 219,165 1,137,607
Scottish Power PLC ADR (b) 35,500 1,925,875
Scottish Television PLC 481,330 3,553,640
Smith & Nephew PLC 829,590 2,280,095
Smith (W.H.) Group PLC Ord. 514,980 3,395,304
Smithkline Beecham PLC Ord. Units 426,260 3,253,566
Smiths Industries PLC Ord. 259,970 2,032,497
Standard Chartered Bank PLC 793,860 3,826,310
Storehouse PLC 703,400 2,789,347
Takare PLC Ord. 1,199,600 3,867,510
Telewest Communications PLC (a) 716,750 1,790,872
Tesco PLC Ord. 1,018,620 4,589,433
Vendome Luxury Group PLC SA 352,279 2,725,794
Vodafone Group PLC 1,333,825 4,171,244
Ulster Television Ltd. 234,020 2,904,750
Westminster Health Care Holdings PLC 448,870 2,192,443
Wickes PLC 1,433,850 2,519,389
Wolseley Ord. 533,250 2,991,405
Zeneca Group PLC Ord. 177,480 2,584,893
129,480,765
UNITED STATES OF AMERICA - 1.3%
International Cabletel, Inc. (a) 207,600 6,124,200
TOTAL COMMON STOCKS
(Cost $340,074,838) 412,565,548
NONCONVERTIBLE PREFERRED STOCKS - 2.5%
SHARES VALUE (NOTE 1)
GERMANY - 2.5%
Boss (Hugo) AG 4,850 $ 3,619,533
Hornbach AG 3,030 3,628,965
Moebel Walther AG 5,825 2,822,511
Porsche AG Ord. (a) 2,480 904,842
Porsche AG (RFD) (a) 1,117 391,033
TOTAL NONCONVERTIBLE
PREFERRED STOCKS
(Cost $8,833,668) 11,366,884
CONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS PRINCIPAL
AMOUNT (C)
BELGIUM - 0.2%
Audiofina 5% 12/31/96 - LUF 26,010,000 751,026
NORWAY - 0.1%
Color Lines 7 1/2%,
12/31/00 - NOK 2,299 344,942
TOTAL CONVERTIBLE BONDS
(Cost $1,094,316) 1,095,968
REPURCHASE AGREEMENTS - 6.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $31,148,385 31,133,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $381,135,822) $ 456,161,400
CURRENCY ABBREVIATIONS
LUF - Luxembourg franc
NOK - Norwegian krone
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $7,759,636 or 1.7% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $94,232,256 and $153,819,623, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $163 for the period (see Note 5 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the periods for which loans were
outstanding amounted to $2,235,000 and $1,401,333 respectively. The
weighted average interest rate was 5.92%. (See Note 7 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $381,278,151. Net unrealized appreciation aggregated
$74,883,249, of which $87,902,132 related to appreciated investment
securities and $13,018,883 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.8%
Basic Industries 3.9
Construction & Real Estate 4.5
Durables 7.4
Energy 0.7
Finance 13.0
Health 10.6
Holding Companies 0.6
Industrial Machinery & Equipment 2.5
Media & Leisure 14.5
Nondurables 5.8
Repurchase Agreements 6.8
Retail & Wholesale 8.0
Services 2.4
Technology 6.3
Transportation 4.3
Utilities 6.9
100.0%
EUROPE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $31,133,000) (cost $381,135,822) - See $ 456,161,400
accompanying schedule
Cash 307
Receivable for investments sold 3,162,346
Receivable for fund shares sold 6,690,482
Dividends receivable 3,917,500
Interest receivable 15,209
TOTAL ASSETS 469,947,244
LIABILITIES
Payable for investments purchased $ 298,590
Payable for fund shares redeemed 6,443,738
Accrued management fee 271,077
Other payables and accrued expenses 229,277
TOTAL LIABILITIES 7,242,682
NET ASSETS $ 462,704,562
Net Assets consist of:
Paid in capital $ 373,379,483
Distributions in excess of net investment income (520,095)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 14,807,562
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 75,037,612
NET ASSETS, for 21,939,027 shares outstanding $ 462,704,562
NET ASSET VALUE and redemption price per share ($462,704,562 (divided by) 21,939,027 shares) $21.09
Maximum offering price per share (100/97.00 of $21.09) $21.74
</TABLE>
STATEMENT OF OPERATIONS
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SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 3,924,782
Dividends
Interest 612,969
4,537,751
Less foreign taxes withheld (506,000)
TOTAL INCOME 4,031,751
EXPENSES
Management fee $ 1,772,860
Basic fee
Performance adjustment 97,327
Transfer agent fees 882,346
Accounting fees and expenses 139,363
Non-interested trustees' compensation 7,982
Custodian fees and expenses 123,722
Registration fees 37,102
Audit 24,317
Legal 3,146
Interest 691
Miscellaneous 2,741
Total expenses before reductions 3,091,597
Expense reductions (475,027) 2,616,570
NET INVESTMENT INCOME 1,415,181
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 15,518,770
Foreign currency transactions 157,102 15,675,872
Change in net unrealized appreciation (depreciation) on:
Investment securities (13,070,229)
Assets and liabilities in foreign (10,893) (13,081,122)
currencies
NET GAIN (LOSS) 2,594,750
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,009,931
OTHER INFORMATION $169,325
Sales charges paid to FDC
Deferred sales charges withheld $32,811
by FDC
Accounting fees paid to FSC $116,015
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
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INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
Operations $ 1,415,181 $ 4,182,034
Net investment income
Net realized gain (loss) 15,675,872 51,768,128
Change in net unrealized appreciation (depreciation) (13,081,122) 11,323,676
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,009,931 67,273,838
Distributions to shareholders (4,575,941) (2,098,083)
From net investment income
From net realized gain (2,516,901) -
TOTAL DISTRIBUTIONS (7,092,842) (2,098,083)
Share transactions 220,138,987 549,191,101
Net proceeds from sales of shares
Reinvestment of distributions 6,951,448 2,047,747
Cost of shares redeemed (268,763,082) (637,883,238)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (41,672,647) (86,644,390)
TOTAL INCREASE (DECREASE) IN NET ASSETS (44,755,558) (21,468,635)
NET ASSETS
Beginning of period 507,460,120 528,928,755
End of period (including under (over) distribution of net investment income of $(520,095) and $ 462,704,562 $ 507,460,120
$2,640,665, respectively)
OTHER INFORMATION
Shares
Sold 10,941,002 27,996,564
Issued in reinvestment of distributions 354,493 109,623
Redeemed (13,315,702) (32,845,483)
Net increase (decrease) (2,020,207) (4,739,296)
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
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SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995
SELECTED PER-SHARE DATA (UNAUDITED) 1994 1993 1992 F 1991 1990
Net asset value, beginning of period $ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04
Income from Investment Operations
Net investment income .07 .18 .25 .27 .43 E .46
Net realized and unrealized gain (loss).15 2.65 3.35 (.57) (.40) .97
Total from investment operations .22 2.83 3.60 (.30) .03 1.43
Less Distributions (.20) (.08) (.29) (.48) (.35) (.19)
From net investment income
From net realized gain (.11) - - (.03) D (.03) -
Total distributions (.31) (.08) (.29) (.51) (.38) (.19)
Net asset value, end of period $ 21.09 $ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28
TOTAL RETURN B, C 1.15% 15.41% 24.24% (1.89)% .15% 9.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)$ 462,705 $ 507,460 $ 528,929 $ 431,223 $ 297,831 $ 389,273
Ratio of expenses to average net assets 1.16% A 1.35% 1.25% 1.22% 1.31% 1.45%
Ratio of expenses to average net assets
before 1.37% A, 1.35% 1.25% 1.22% 1.31% 1.45%
expense reductions G
Ratio of net investment income to
average net assets .63% A .85% 1.44% 2.38% 2.83% 2.87%
Portfolio turnover rate 44% A 49% 76% 95% 80% 148%
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE, AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
E INCLUDES $.05 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
F AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
G INCLUDES THE EFFECT OF ANNUALIZING A VOLUNTARY REIMBURSEMENT OF FEES BY FMR (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
EUROPE CAPITAL APPRECIATION
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Europe Capital
Appreciation Fund has a 3% sales charge, which has been waived since the
fund's start on December 21, 1993 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
EUROPE CAPITAL APPRECIATION 2.64% 0.52% 16.50%
Morgan Stanley Europe Index 5.97% 9.25% 13.67%
Average European Region Fund 2.37% 3.55% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on December 21, 1993. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley Europe index - a broad measure of the performance of stocks
in Europe, weighted by each country's market capitalization (or the total
value of its outstanding shares). To measure how the fund's performance
stacked up against its peers, you can compare it to the average European
region fund, which reflects the performance of 44 funds with similar
objectives tracked by Lipper Analytical Services over the past six months.
These benchmarks include reinvested dividends and capital gains, if any,
and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
EUROPE CAPITAL APPRECIATION 0.52% 11.89%
Morgan Stanley Europe Index 9.25% 9.98%
Average European Region Fund 3.55% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity EuropeEurope Index
12/21/93 10000.00 10000.00
12/31/93 10030.00 10142.88
01/31/94 11490.00 10659.41
02/28/94 11000.00 10281.92
03/31/94 11120.00 9990.91
04/30/94 11590.00 10404.62
05/31/94 11160.00 9962.34
06/30/94 10930.00 9857.74
07/31/94 11490.00 10374.38
08/31/94 11690.00 10703.43
09/30/94 11280.00 10279.00
10/31/94 11350.00 10726.79
11/30/94 10860.00 10315.91
12/31/94 10720.00 10374.55
01/31/95 10590.00 10293.33
02/28/95 10890.00 10526.55
03/31/95 11120.00 11015.03
04/28/95 11650.00 11367.29
Let's say you invested $10,000 in Fidelity Europe Capital Appreciation Fund
on December 21, 1993, when the fund started. By April 30, 1995, the value
of your investment would have grown to $11,650 - a 16.50% increase on your
initial investment. That compares to $10,000 invested in the Morgan Stanley
Europe index, which would have grown to $11,367 over the same period - a
13.67% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EUROPE CAPITAL APPRECIATION
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Kevin McCarey,
Portfolio Manager of Fidelity Europe Capital
Appreciation Fund
Q. HOW HAS THE FUND PERFORMED, KEVIN?
A. Not particularly well. Europe Capital Appreciation returned 2.64% and
0.52% for the six months and one year ended April 30, 1995. That trails the
Morgan Stanley Europe index, which returned 5.97% and 9.25% for the same
time periods, respectively. However, the fund did manage to slightly
outperform over the recent six months. The average European region fund
returned 2.37% for the six months and 3.55% for the 12 months ended April
30, 1995, according to Lipper Analytical Service.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX?
A. Most international markets declined during the period - a reaction to
strengthening economies in 1994 and their effect on pushing long- and
short-term rates higher. Additionally, unless you owned the largest cap
stocks in the marketplace, you underperformed. Interestingly, the same
thing happened in the U.S. - large stocks outperformed and smaller stocks
were hurt. Unfortunately, the fund owned a fair number of small- and
medium-sized stocks which particularly impacted the fund's performance.
Another factor was the relatively strong performance of the U.K. market.
This fund is traditionally underweighted in the U.K., and it affected
performance during the period.
Q. DID CHANGES IN THE VALUE OF THE DOLLAR AND OTHER CURRENCIES AFFECT THE
FUND?
A. Yes. As the dollar collapsed, the deutsche mark and deutsche
mark-related currencies such as the Swiss franc strengthened. As a result,
stocks in those countries outperformed the Europe index. Unfortunately,
because of the dramatic currency gyrations, the most important investment
decision to make during the period wasn't which stocks to own, but what
currencies to be in. But I'm a stock picker and this fund doesn't really
bet on currencies.
Q. HAVE YOU MADE ANY ADJUSTMENTS TO THE FUND'S OVERALL STRATEGY?
A. Three of the stocks that are new to the fund's top 10 holdings are part
of a deliberate effort to transform the fund from investing in out-of-favor
value stocks to investing in those stocks with the best long-term growth
prospects. Roche Holding, one of the fund's top holdings, is a Swiss drug
company. In 1994, it made an acquisition and had fallen out of favor. I now
think that the stock is favorably priced and has very good growth prospects
going forward. Another is Vodafone. Vodafone operates a cellular phone
system in the U.K. but also has done a lot of investing outside the U.K. in
joint ventures. I don't think the market has recognized the company's
long-term growth potential and is distracted by its small negative earnings
growth right now. Ericsson is another play on the cellular industry, but on
the equipment side. The company is seeing terrific unit and revenue growth
and should be a strong growth stock going forward.
Q. AS OF APRIL 30, 1995, WHAT WAS THE FUND'S LARGEST HOLDING?
A. The fund's largest holding is Fiat, the Italian car maker. I believe
that European car sales will grow in 1995 and that Fiat is in a position to
prosper because of dramatic currency shifts that will give it a competitive
advantage over other European automobile manufacturers such as Volkswagen.
The company also has a new model that should allow it to continue to
increase its market share in Europe. Finally, our estimated profits for
Fiat are much higher than what others expect.
Q. THE FUND'S HOLDINGS IN ENERGY STOCKS HAVE INCREASED DURING THE PAST SIX
MONTHS . . .
A. Yes, and there are two reasons for that. One is that the price of oil
has gone up recently. Oil prices are hard to forecast but oil stocks tend
to move with the commodity and the momentum is building. Also, emerging
markets such as Colombia and Indonesia are finally allowing foreign energy
companies help them explore. I think that European oil companies such as
Elf Aquitaine and Total will particularly benefit since American oil
companies will be unable to participate in the exploration process in
certain countries such as Iran and Iraq because of political conflicts with
those countries.
Q. THERE WAS A LOT OF TURNOVER IN THE FUND'S TOP HOLDINGS DURING THE PAST
SIX MONTHS. IN FACT, ALL BUT ONE OF THE FUND'S TOP 10 HOLDINGS HAVE
CHANGED. WHY?
A. This has always been a high turnover fund. During the past six months
companies have reported both year-end and quarter-end earnings results
which allowed me to reassess individual stocks' outlooks. In addition,
Fidelity has dramatically increased its equity research department in
London. This has allowed the fund to fine tune its outlook on many stocks
since we've learned a lot more about the business prospects and financial
conditions of the European companies we follow.
Q. WHAT WERE YOUR BIGGEST DISAPPOINTMENTS DURING THE PAST SIX MONTHS?
A. Pechiney, the French aluminum producer, was a disappointing investment.
I felt that it was the best play on aluminum - which I'm bullish on - in
Europe. Unfortunately, the company announced a write down of assets and
plans to issue new shares. The result would have diluted the shares which
the fund already owned. I eventually sold the stock, but only after it had
declined. Another disappointment, which I alluded to earlier, was the
currency swings and their impact on overall performance. In this particular
period currencies played a greater role than the characteristics of
individual stocks in overall returns.
Q. WHAT OTHER OVERALL STRATEGIES DOES THE FUND REFLECT?
A. My strategy is reflected as much by what I don't own as what I do own.
The fund is underweighted in consumer stocks. European food, beverage and
tobacco companies are boasting modest growth rates and are not attractive
to me at current valuations. I also continue to keep the fund underweighted
in the U.K. as I find more attractive situations in continental Europe.
Q. WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Well, it's been a tough year and I think the next six months could be
better. I expect currencies to play less of a role as the panic surrounding
the dollar dissipates. I will continue to re-orient the fund towards growth
stocks as the economic cycle slows throughout Europe. Additionally, recent
bond market strength should allow the five-quarter-long European market
decline (in local currencies) to end, and probably reverse.
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in common stocks in Eastern and
Western Europe
START DATE: December 21, 1993
SIZE: as of April 30, 1995, more than
$246 million
MANAGER: Kevin McCarey, since 1993;
manager, Plymouth Europe Fund (now Fidelity
Advisor Overseas Fund), 1992-1993; Fidelity
Select Regional Banks Portfolio, 1986-1989;
joined Fidelity in 1985
(checkmark)
KEVIN MCCAREY ON GENERATING IDEAS:
"I generate my ideas for new stocks through many
sources including newspapers, earnings reports and
company contacts and visits. However, my primary
source is our internal research organization, and
fellow portfolio managers, in both London and the
U.S.
"Our internal research group in London has
quadrupled during the past three years. They will
increasingly be a great source of new ideas given
the tremendous number of companies that our
analysts are researching in Europe. Not only do we
learn about fundamentals of companies we visit, but
we also gain valuable knowledge about winners and
losers among their competitors.
"I believe in making buy and sell decisions when our
earnings estimates of a company differ greatly from
consensus earnings estimates. Accordingly, being
able to determine a company's shifting fundamental
outlook is critical - and our expanded London
research department has allowed us to do that.
"Since few of our competitors have the extensive
research Fidelity does, it should be one of our key
competitive advantages going forward."
EUROPE CAPITAL APPRECIATION
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Denmark 2.2%
Norway 3.3%
Row: 1, Col: 1, Value: 3.3
Row: 1, Col: 2, Value: 15.9
Row: 1, Col: 3, Value: 6.6
Row: 1, Col: 4, Value: 15.6
Row: 1, Col: 5, Value: 5.7
Row: 1, Col: 6, Value: 13.4
Row: 1, Col: 7, Value: 6.9
Row: 1, Col: 8, Value: 8.199999999999999
Row: 1, Col: 9, Value: 6.5
Row: 1, Col: 10, Value: 15.7
Row: 1, Col: 11, Value: 2.2
United
Kingdom 15.9%
France 15.7%
Switzerland 6.6%
Germany 6.5%
Italy 8.2%
Sweden 15.6
%
Netherlands 6.9%
Spain 5.7%
Other 13.4
%
AS OF OCTOBER 31, 1994
Ireland 3.0%
United States 4.1%
United
Kingdom 13.7%
Row: 1, Col: 1, Value: 4.1
Row: 1, Col: 2, Value: 13.7
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 7.9
Row: 1, Col: 5, Value: 7.4
Row: 1, Col: 6, Value: 9.300000000000001
Row: 1, Col: 7, Value: 16.9
Row: 1, Col: 8, Value: 6.4
Row: 1, Col: 9, Value: 8.699999999999999
Row: 1, Col: 10, Value: 14.6
Row: 1, Col: 11, Value: 3.0
France 14.6%
Switzerland 8.0%
Germany 8.7%
Italy 6.4%
Sweden 7.9%
Spain 7.4%
Netherlands 16.9%
Other 9.3%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 95.9 95.9
Bonds 0.0 0.0
Short-term investments 4.1 4.1
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Fiat Spa 3.0 0.0
(Italy, Autos, Tires & Accessories)
Credit Commercial de France Ord. 2.7 0.7
(France, Banks)
Ericsson (L.M.) Telephone Co. Class B 2.5 0.0
(Sweden, Communications Equipment)
Mo Och Domsjoe (Modo) Class B 2.3 0.0
Free shares
(Sweden, Paper & Forest Products)
BASF AG 2.3 0.6
(Germany, Chemicals & Plastics)
Vodafone Group PLC 2.3 0.0
(United Kingdom, Cellular)
Roche Holding AG (part. certs.) 2.3 0.0
(Switzerland, Drugs &
Pharmaceuticals)
Svedala Industri 2.2 0.7
(Sweden, Industrial Machinery
& Equipment)
Baloise Holding (Reg.) 2.1 2.1
(Switzerland, Insurance)
Total SA Class B 2.0 0.0
(France, Oil & Gas)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 19.7 25.4
Energy 11.9 5.5
Retail & Wholesale 9.9 8.0
Durables 9.8 6.9
Basic Industries 9.3 8.3
Industrial Machinery & Equipment 6.9 6.1
Health 6.2 7.2
Technology 4.2 0.5
Services 3.6 4.0
Utilities 3.5 6.9
EUROPE CAPITAL APPRECIATION
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.0%
SHARES VALUE (NOTE 1)
AUSTRIA - 0.6%
Bau Holdings AG 10,000 $ 640,969
Hemingway Holdings AG (a) 5,500 141,011
Leykam-Muerztaler Papier
und Zelstoff AG Ord. (a) 17,500 708,902
Maculan Holding AG Ord. 100 4,194
1,495,076
CZECH REPUBLIC - 0.6%
IPS AS 13,915 1,061,715
ZPS Zlin (a) 9,600 431,328
1,493,043
DENMARK - 2.2%
International Service Systems AS,
Series B 41,200 1,203,859
Unidanmark AS Class A 90,000 4,118,350
5,322,209
FINLAND - 2.1%
Outokumpu OY Class A 125,000 2,233,818
Valmet OY Ord. 127,600 2,893,743
5,127,561
FRANCE - 15.7%
BIS SA Ord. (a) 37,700 2,948,603
CERUS (Cie European Reunies) Ord. (a) 100,000 1,716,607
Credit Commercial de France Ord. 145,000 6,418,589
Ecco Travaille Tempoire SA 10,000 664,297
Elf Aquitaine 38,200 3,047,464
Elf Sanofi SA 30,000 1,651,600
Galeries Lafayette SA 5,060 2,168,939
Generale des Eaux 21,000 2,209,853
LVMH 13,000 2,469,274
Lyonnaise des Eaux Dumez SA 5,900 585,865
Michelin SA Cie Generale des
Etablissements Class B (Reg.) 5,400 241,889
Moulinex SA 54,000 1,272,524
Rexel SA 5,700 937,938
Roussel-Uclaf Ord. 7,500 1,074,149
SAGA (Societe de Gerance & D'Armen) 6,894 371,135
Synthelabo 40,000 2,011,173
Total SA Class B 76,700 4,786,641
Union Assurancesfederale SA 14,000 1,427,730
Vallourec SA (a) 33,800 1,685,708
37,689,978
GERMANY - 5.6%
BASF AG 25,000 5,552,151
Deutsche Bank AG 6,000 2,941,053
Ex-Cell-O Holding AG Ord. 3,350 350,254
Gildemeister AG (a) 12,600 1,090,240
Hornbach Baumarket AG (Bearer) 3,750 2,368,677
Springer Axel Verlag AG (Reg.) 2,500 1,144,680
13,447,055
GREECE - 0.9%
Alpha Credit Bank 12,740 620,288
Hellenic Bottling Co. SA 51,000 1,421,492
2,041,780
HUNGARY - 0.2%
Pick Szeged RT sponsored
GDS (b) 7,300 408,800
SHARES VALUE (NOTE 1)
IRELAND - 2.1%
Bank of Ireland U.S. Holdings, Inc. 680,000 $ 3,683,098
Jurys Hotel Group PLC (U.K. Reg.) 500,000 1,410,500
5,093,598
ITALY - 8.2%
Banca Fideuram Spa 3,000,000 3,642,270
Credito Italiano Ord. 2,061,900 2,328,483
Fiat Spa 1,750,000 7,141,085
FIDIS Spa Ord. 320,000 745,107
Magneti Marelli Spa 600,000 1,598,088
Marzotto & Figli Spa Ord. 250,000 1,791,580
Mondadori Arnoldo Editore Spa 200,000 1,271,544
Olivetti Ing C & Co. Spa Ord. 857,200 871,275
Saipem Spa Ord. 150,000 285,668
19,675,100
NETHERLANDS - 6.9%
BAM Groep NV 32,703 2,064,876
KBB NV Ord. 55,000 4,231,042
Macintosh Confectie NV 100,000 3,157,013
Royal Dutch Petroleum Co. Ord. 18,000 2,220,862
SGS-Thomson Microelectronic NV 60,000 2,235,000
Samas-Groep NV 65,000 2,508,537
16,417,330
NETHERLANDS ANTILLES - 2.0%
Schlumberger Ltd. 75,000 4,715,625
NORWAY - 3.3%
Norsk Hydro AS 100,000 4,077,047
Saga Petroleum AS Class A 204,000 2,963,402
Tomra Systems AS 230,000 845,425
7,885,874
POLAND - 0.2%
Zaklady Piwowarskie W Zywcu 7,000 531,993
PORTUGAL - 0.6%
Banco Commercial Portugues SA (Reg.) 100,000 1,374,945
SPAIN - 5.7%
ACERINOX SA (Reg.) 23,300 2,661,240
Banco de Santander SA Ord. (Reg.) 75,000 2,730,863
Banco Popular Espanol 20,000 2,724,990
Corporacion Mapfrecia International
de Reaseguros SA (Reg.) 35,000 1,530,984
Fasa Renault Ord. 50,000 1,478,332
FOCSA (Fomento de Obras
Y Construcciones SA) 13,500 1,235,723
Uralita SA (a) 118,500 1,291,069
13,653,201
SWEDEN - 15.6%
Atlas Copco AB Class A Free shares 265,000 3,650,640
Electrolux AB 80,000 4,088,718
Ericsson (L.M.) Telephone Co. Class B
Free shares 90,000 5,963,631
Investor AB Class B Free shares 70,000 1,962,391
Mo Och Domsjoe (Modo) Class B
Free shares 100,000 5,579,281
Pharmacia AB Class A Free shares 132,400 2,507,921
SKF AB Ord. 75,000 1,513,638
Stora Kopparbergs Bergslags AB
Class A Free shares 60,000 4,017,082
Svedala Industri 200,000 5,289,984
Trelleborg AB Class C Free shares 100,000 1,570,464
Volvo AB Class B 70,000 1,316,297
37,460,047
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SWITZERLAND - 6.6%
Adia SA (Bearer) 8,000 $ 1,482,518
Baloise Holding (Reg.) 2,300 4,975,962
Globus Magazine (part. certs.) 320 212,588
Roche Holding AG (part. certs.) 900 5,416,521
Union Bank of Switzeland
Ord. (Bearer) 4,000 3,685,315
15,772,904
UNITED KINGDOM - 15.9%
Argyll Group PLC Ord. 600,000 2,766,192
BET PLC Ord. 1,128,600 2,155,875
Barratt Developments PLC 605,000 1,833,489
British Land Ord. 100,000 593,216
British Petroleum PLC ADR 41,600 3,582,800
Chubb Security PLC 300,000 1,455,636
Hambros Ord. 74,300 253,916
Lex Service Ord. 440,900 2,345,412
London Clubs International PLC 300,000 1,387,932
National Westminster Bank PLC Ord. 280,000 2,437,344
Next PLC 900,000 4,591,782
Perkins Foods PLC 2,300,000 2,372,864
Persimmon PLC Ord. 144,600 470,852
Smith (W.H.) Group PLC Ord. 325,000 2,142,751
Stakis PLC 1,500,000 2,006,940
Tesco PLC Ord. 440,000 1,982,438
Vodafone Group PLC 1,750,000 5,472,740
Waste Management International
PLC sponsored ADR 25,400 219,075
38,071,254
TOTAL COMMON STOCKS
(Cost $213,663,943) 227,677,373
NONCONVERTIBLE PREFERRED STOCKS - 0.9%
GERMANY - 0.9%
Fresenius AG
(Cost $1,572,155) 3,500 2,208,242
REPURCHASE AGREEMENTS - 4.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.93%,
dated 4/28/95 due 5/1/95 $ 9,790,836 9,786,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $225,022,098) $ 239,671,615
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of this security amounted to $408,800 or 0.2% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $182,242,550 and $299,404,629, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $58,597 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $225,127,303. Net unrealized appreciation aggregated
$14,544,312, of which $21,601,557 related to appreciated investment
securities and $7,057,245 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 9.3%
Construction & Real Estate 3.4
Durables 9.8
Energy 11.9
Finance 19.7
Health 6.2
Holding Companies 1.3
Industrial Machinery & Equipment 6.9
Media & Leisure 3.0
Nondurables 3.0
Repurchase Agreements 4.1
Retail & Wholesale 9.9
Services 3.6
Technology 4.2
Transportation 0.2
Utilities 3.5
100.0%
EUROPE CAPITAL APPRECIATION
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<ERROR: WIDE TABLE>
ERROR: The Following Table: "Assets" is Too Wide!
Table Width is 138 characters.
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $9,786,000) $ 239,671,615
(cost $225,022,098) -
See accompanying schedule
Cash 366,688
Receivable for investments sold 19,031,830
Receivable for fund shares sold 6,566,896
Dividends receivable 1,076,702
TOTAL ASSETS 266,713,731
LIABILITIES
Payable for investments purchased $ 16,033,276
Payable for fund shares redeemed 3,372,705
Accrued management fee 173,417
Other payables and accrued expenses 206,712
TOTAL LIABILITIES 19,786,110
NET ASSETS $ 246,927,621
Net Assets consist of:
Paid in capital $ 246,208,431
Undistributed net investment income 120,537
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (14,055,704
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 14,654,357
NET ASSETS, for 21,201,408 shares outstanding $ 246,927,621
NET ASSET VALUE, offering price $11.65
and redemption price per share ($246,927,621 (divided by) 21,201,408 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,848,379
Dividends
Interest 384,975
2,233,354
Less foreign taxes withheld (85,896
)
TOTAL INCOME 2,147,458
EXPENSES
Management fee $ 1,072,270
Basic fee
Performance adjustment 104,233
Transfer agent fees 464,342
Accounting fees and expenses 84,370
Non-interested trustees' compensation 789
Custodian fees and expenses 99,307
Registration fees 11,819
Audit 18,798
Legal 1,703
Miscellaneous 1,614
Total expenses before reductions 1,859,245
Expense reductions (1,236 1,858,009
)
NET INVESTMENT INCOME 289,449
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (13,152,719
)
Foreign currency transactions 13,003 (13,139,716
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 14,646,365
Assets and liabilities in foreign (20,523 14,625,842
currencies )
NET GAIN (LOSS) 1,486,126
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,775,575
OTHER INFORMATION $71,690
Accounting fees paid to FSC
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED DECEMBER 21, 1993
APRIL 30, 1995 (COMMENCEMENT OF
(UNAUDITED) OPERATIONS) TO
OCTOBER 31,
1994
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 289,449 $ 1,968,835
Net investment income
Net realized gain (loss) (13,139,716) 55,763
Change in net unrealized appreciation (depreciation) 14,625,842 28,515
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,775,575 2,053,113
Share transactions 153,151,763 942,473,601
Net proceeds from sales of shares
Cost of shares redeemed (260,854,636) (591,671,795)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (107,702,873) 350,801,806
TOTAL INCREASE (DECREASE) IN NET ASSETS (105,927,298) 352,854,919
NET ASSETS
Beginning of period 352,854,919 -
End of period (including undistributed net investment income (loss) of $120,537 $ 246,927,621 $ 352,854,919
and $(168,912), respectively)
OTHER INFORMATION
Shares
Sold 14,020,697 83,509,152
Redeemed (23,910,067) (52,418,374)
Net increase (decrease) (9,889,370) 31,090,778
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED DECEMBER 21,
APRIL 30, 1995 1993
(UNAUDITED) (COMMENCEMENT
OF
OPERATIONS) TO
OCTOBER 31,
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.35 $ 10.00
Income from Investment Operations
Net investment income .01 .08 D
Net realized and unrealized gain (loss) .29 1.27 C
Total from investment operations .30 1.35
Net asset value, end of period $ 11.65 $ 11.35
TOTAL RETURN B 2.64% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 246,928 $ 352,855
Ratio of expenses to average net assets 1.36% 1.54%
A A
Ratio of net investment income to average net assets .21% .79%
A A
Portfolio turnover rate 138% 317%
A A
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD ENDED DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
JAPAN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Japan Fund has a
3% sales charge, which has been waived since the fund's start on September
15, 1992 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
JAPAN -9.72% -5.75% 33.13%
TOPIX Index -2.60% 1.13% 45.43%
Average Japanese Fund -11.06% -8.99% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on September 15, 1992. For example, if you invested $1,000 in a
fund that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance of
the TOPIX index - a broad measure of the Japanese stock market's
performance, similar to the Standard & Poor's 500 stock index in the U.S.
To measure how the fund's performance stacked up against its peers, you can
compare it to the average Japanese fund, which reflects the performance of
11 funds with similar objectives - in this case, a very small peer group -
tracked by Lipper Analytical Services over the past six months. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
JAPAN -5.75% 11.52%
TOPIX Index 1.13% 15.33%
Average Japanese Fund -8.99% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Japan TOPIX Total Ret
09/15/92 10000.00 10000.00
09/30/92 9940.00 9811.27
10/31/92 9840.00 9332.17
11/30/92 9940.00 9572.82
12/31/92 9960.00 9433.21
01/31/93 10050.00 9384.24
02/28/93 10620.00 9811.42
03/31/93 11840.00 11248.65
04/30/93 13440.00 13164.83
05/31/93 13820.00 13960.79
06/30/93 13000.00 13384.04
07/31/93 13870.00 14324.51
08/31/93 14110.00 14644.62
09/30/93 13730.00 13883.59
10/31/93 13350.00 13630.65
11/30/93 11600.00 11425.15
12/31/93 11997.00 11710.09
01/31/94 13412.66 13580.32
02/28/94 14043.00 14243.17
03/31/94 13805.33 13839.98
04/30/94 14125.66 14380.65
05/31/94 14518.33 14642.50
06/30/94 15396.66 15458.92
07/31/94 14890.33 14904.58
08/31/94 14838.66 14941.03
09/30/94 14477.00 14546.44
10/31/94 14745.66 14931.14
11/30/94 13743.33 14046.14
12/31/94 13971.70 14293.80
01/31/95 12771.09 13541.08
02/28/95 12176.10 12774.70
03/31/95 13153.59 13878.24
04/28/95 13312.96 14542.52
Let's say you invested $10,000 in Fidelity Japan Fund on September 15,
1992, when the fund started. By April 30, 1995, the value of your
investment would have grown to $13,313 - a 33.13% increase on your initial
investment. That compares to $10,000 invested in the TOPIX index, which
would have grown to $14,543 over the same period - a 45.43% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
JAPAN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Shigeki Makino,
Portfolio Manager of Fidelity Japan Fund
Q. SHIGEKI, HOW HAS THE FUND PERFORMED?
A. The fund had total returns of -9.72% and -5.75% for the six and 12
months ended April 30, 1995, respectively. The fund performed better than
the average Japanese fund, which returned -11.06% and -8.99% over the same
periods, according to Lipper Analytical Services. However, the fund
underperformed the TOPIX index - a measure of the overall performance of
the Japanese market - which returned -2.60% and 1.13% for the six- and
12-month periods, respectively.
Q. HOW DO YOU ACCOUNT FOR THE FUND'S PERFORMANCE, RELATIVE
TO ITS PEERS AND THE INDEX?
A. It's difficult to say why the fund did better than other Japanese funds.
I kept a fairly diversified portfolio of stocks, while my competitors may
have concentrated more on export companies. Those kinds of companies have
suffered because the yen has strengthened so much recently. This pushes up
the price of their products abroad, making it difficult for them to grow or
sustain earnings. In addition, other funds may have suffered from sharp
sell-offs in cyclical stocks - those whose fortunes rise and fall with the
economy. The fund's diversification probably mitigated some of the extreme
movements in individual securities or groups of securities. As far as the
index is concerned, there are several factors that affected the fund's
relative performance. First, the fund probably has underperformed because,
while it had less export-company stocks than the average fund, it had more
weighting in these investments than the index. Second, the fund was
underweighted in financial stocks, relative to the index. This sector has
been one of the strongest performers during the period.
Q. HOW WOULD YOU CHARACTERIZE THE JAPANESE MARKET OF THE PAST SIX MONTHS?
A. Almost everything imaginable has gone wrong for the market. The yen has
strengthened more than anyone expected. However, the market started going
down even before the yen reached its peak. That's because many non-Japanese
investors - who had helped to fuel strong returns in the Japanese market
through much of 1994 - were scared off by a string of events. First,
Mexico's devaluation of the peso in December shook up the overall risk
profile of international investing. Then, a major earthquake hit Kobe on
January 17. Those who looked at Japan as a safe investing environment in
terms of politics or crime suddenly found a new concern: earthquakes. In
February, the Barings debacle shook the market further. Finally, in March
there was a nerve gas attack on the Tokyo subway system. Excluding the yen
appreciation, each of these occurrences probably weren't significant enough
to rock the market. But in aggregate, they had a major impact.
Q. WHAT'S BEEN THE STATE OF THE JAPANESE ECONOMY?
A. It has picked up a fair amount over the past six months, although we
haven't seen the negative effects of a strong yen yet. Typically, there is
a lag of a few months before you see them. However, a variety of economic
measures - including industrial production and productivity - were showing
significant improvement this year, such that we thought this was going to
be a banner year in terms of earnings as well as sales. All of that being
said, things have been put on hold because of the yen. The negative impact
from the yen will cause investors to be cautious.
Q. WHAT ARE SOME OF THE COMPANIES THAT ARE INTERESTING YOU AT THE MOMENT?
A. The fund's top holding is Fuji Film. It's attractive to me because I'm a
value-oriented, contrarian investor. It's one of the cheapest blue chip
companies in the world and is in a dominant position among film
manufacturers. The stock has underperformed for some time because investors
seem to have decided that the company has stopped growing earnings.
However, people fail to realize that the company has been posting down
earnings because the strong yen has been like a strong wind in its face. In
addition, investors have not figured out that much of Fuji's domestic
business revolves around advertising and printing products, both of which
tend to be affected by the strength or weakness of the economy. I believe
Fuji can return to profit growth over the next couple of years, provided
the yen doesn't continue to appreciate at the same pace. Two other
interesting stocks are Omron and DDI.
Q. WHAT'S THE STORY WITH THOSE TWO?
A. Omron is a company that makes control devices used in manufacturing
processes. This is one of the first companies in Japan to take on the idea
that it wants to be not only operationally efficient, but also financially
efficient. It has said it wants to cut production costs and reduce overhead
in order to do the best it can for shareholders by focusing, for example,
on return on equity - a measure that indicates how well shareholder money
is being employed. DDI is the major cellular and domestic long distance
carrier in Japan. It is an operational business, poised for strong earnings
growth because cellular subscriber growth is exploding. Last year,
regulations were changed so that consumers could buy handsets instead of
having to lease or rent them. Handset prices, initiation fees and rates
have dropped. A new, less expensive cellular format is being developed that
will make the technology more available to lower income groups. DDI is in a
very good position in one of the best cellular opportunities in the world.
Q. DOESN'T DDI HAVE CLOSE TIES TO KYOCERA, WHICH USED TO BE
IN THE FUND?
A. Yes. Kyocera was involved in founding DDI, and is also involved with the
development of the new cellular format. It is an equipment-based business
and will be producing base stations for DDI. I sold out of Kyocera to take
profits. If you look at the company, it has strong points. But I sold out
of it because everyone seems to be interested in the stock. I generally
look for stocks that are out of favor or under-followed.
Q. WHAT STOCKS TURNED IN DISAPPOINTING PERFORMANCES
OVER THE PERIOD?
A. The brokerage houses - including Nomura Securities, but especially Daiwa
Securities - didn't do as well as I would have liked. With the market
falling, anemic trading volumes and less compelling valuations - stock
prices compared to other measures such as earnings - trading gains weren't
as sizable as in the past. In addition, the firms had latent securities and
valuation losses that they had to book in the past fiscal year. Sony also
was a disappointment and is now out of the fund. It was a disappointment
because it surprised investors by writing off a huge loss in its Sony
Pictures subsidiary. In addition, the company's third-quarter results were
disappointing. It appeared Sony was not cutting costs as much as reported.
Added to the pictures business problem, it didn't seem appropriate to stay
with the stock.
Q. WHAT'S YOUR OUTLOOK?
A. I find the market very interesting, because after the past few months,
valuations are generally attractive. Domestic Japanese investors have
seemed to remain sour on the market, and non-Japanese investors also have
pulled back in terms of their interest in Japanese stocks. The real
question going forward will be how companies' fundamentals - their business
prospects - fare against the appreciation of the yen. Although fundamentals
probably will weaken going forward, I don't think there are any disasters
lurking. Almost everything imaginable that could go wrong has taken place
already, so it appears there's limited downside going forward.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in Japanese
securities
START DATE: September 15, 1992
SIZE: As of April 30, 1995, more than $338 million
MANAGER: Shigeki Makino, since 1994;
analyst, Fidelity Japan Fund, 1993-1994;
joined Fidelity in 1990
(checkmark)
SHIGEKI MAKINO ON THE FOCUS OF JAPANESE
BUSINESS:
"If you asked the directors of a Japanese company
five years ago about their most important goal, they
would have said market share and sales. Now if you
asked them, they would say profitability. They want
to become operationally efficient: running the
business well, lowering costs, casting off
components and products that don't make money.
That leaves one problem: companies produce a lot
of cash that just gets stockpiled in CDs or in the bank,
when they don't even need it.
"The step that all Japanese companies will have to
take in order to make Japan interesting to investors
in the long haul will be to focus on maximizing their
return on equity - or the amount earned on a
company's shareholder equity. They need to do the
best they can for shareholders. From the
shareholders' standpoint, they'd much rather see the
companies pay out profits in the form of higher
dividends, buy back stock or invest in growth.
"There are some tax reasons why Japanese
companies don't buy back shares - an action
viewed as a positive for shareholders because it
increases the value of their investment and shows
them the company is confident enough in its own
prospects to buy its own shares. But there is hope
and some movement that the situation might
change. By buying back shares, companies would
reduce their cash position and improve their return
on equity. Some companies, such as Toyota, have
indicated they will focus on return on equity. This is
an important and significant new target for Japanese
companies, and if they succeed in reaching their
goal, it will mark an important change in how
Japanese companies do business."
(solid bullet) The manager cites Yamanouchi Pharmaceuticals
as a positive performer for the fund.
Pharmaceuticals have been some of the most
successful businesses in Japan, although they have
been under pricing pressure of late. They continue to
have attractive returns on equity within the context of
Japan. Yamanouchi stock had been very cheap after
underperforming - along with most pharmaceutical
company stocks - the past several years. When the
manager purchased shares, the stock had reached
the bottom range of performance and was cheap.
The company had gone through biannual price cuts
and was introducing a major product in 1994, and
produced a lot of free cash. The combination of
strong sales, free cash and a low purchase price has
helped the stock perform well for the fund.
JAPAN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 10.9%
Row: 1, Col: 1, Value: 10.9
Row: 1, Col: 2, Value: 2.5
Row: 1, Col: 3, Value: 86.59999999999999
Other 2.5%
Japan 86.6%
AS OF OCTOBER 31, 1994
United States 3.8%
Row: 1, Col: 1, Value: 3.8
Row: 1, Col: 2, Value: 6.5
Row: 1, Col: 3, Value: 89.7
Other 6.5%
Japan 89.7%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 88.8 96.3
Bonds 0.3 0.2
Short-term investments 10.9 3.5
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Fuji Photo Film Co. Ltd. 3.5 0.0
(Photographic Equipment)
Mitsubishi Electric Co. Ord. 2.5 0.9
(Electrical Equipment)
Yamanouchi Pharmaceutical Co. Ltd. 2.3 0.0
(Drugs & Pharmaceuticals)
Hitachi Ltd. 2.2 1.5
(Electronics)
Matsushita Electric Industrial Co. Ltd. 2.1 2.0
(Consumer Electronics)
Omron Corp. 2.1 1.0
(Electrical Equipment)
DDI Corp. Ord. 2.0 0.7
(Telephone Services)
Rohm Co. Ltd. 1.5 1.0
(Electronics)
Nitto Denko Corp. 1.4 0.2
(Electronics)
Ito-Yokado Co. Ltd. 1.4 0.8
(General Merchandise Stores)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Technology 17.0 13.1
Durables 16.1 19.3
Industrial Machinery & Equipment 12.4 11.5
Basic Industries 10.5 13.0
Finance 7.7 6.8
Retail & Wholesale 6.4 7.8
Health 4.1 1.2
Utilities 3.1 1.7
Services 3.0 2.5
Construction & Real Estate 2.5 6.7
JAPAN
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.4%
SHIP BUILDING & REPAIR - 0.4%
Namura Shipbuilding Co. Ltd. 117,000 $ 694,997
Sasebo Heavy Industries Co. Ltd. 229,000 726,207
1,421,204
BASIC INDUSTRIES - 10.5%
CHEMICALS & PLASTICS - 4.4%
Daicel Chemical Industries Ltd. 276,000 1,612,828
Gun-Ei Chemical Industries Co.
Ltd. Ord. 200,000 1,042,818
JSP Corp. 69,900 1,120,791
Kaneka Corp. 289,000 2,121,289
Kureha Chemical Industries Co. Ltd. 258,000 1,369,748
Oriental Chemical Industries Co. Ltd. 320 9,151
Sekisui Chemical Co. Ltd. 350,000 4,364,868
Tayca Corp. (a) 387,000 1,608,767
Tokuyama Corp. 324,000 2,001,069
15,251,329
IRON & STEEL - 2.9%
Kawasaki Steel Corp. (a) 291,000 1,175,128
Nakayama Steel Works Ltd. 418,000 2,983,763
Nippon Yakin Kogyo Co. Ltd. (a) 242,000 1,408,396
Nisshin Steel Co. Ltd. 329,000 1,649,004
Osaka Steel Co. Ltd. 58,000 1,157,313
Sanyo Special Steel Co. Ltd. 213,000 1,004,346
Sumitomo Metal Industries Ltd. 240,000 786,744
10,164,694
METALS & MINING - 0.9%
Kanamoto Co. Ltd. 16,000 304,056
Nittetsu Mining Co. Ltd. 186,000 1,857,902
Pacific Metals Co. Ltd. (a) 213,000 1,095,421
3,257,379
PACKAGING & CONTAINERS - 0.2%
Carnaudmetalbox Asia Ltd. 157,000 529,340
PAPER & FOREST PRODUCTS - 2.1%
Chuetsu Pulp & Paper Co. Ltd. (a) 301,000 1,723,168
Daio Paper Corp. 37,000 527,347
Kokuyo Co. Ltd. 139,000 3,566,007
Rengo Co. Ltd. 179,000 1,362,777
7,179,299
TOTAL BASIC INDUSTRIES 36,382,041
CONSTRUCTION & REAL ESTATE - 2.5%
BUILDING MATERIALS - 1.3%
Berger International 1,161,000 745,408
C.I. Holdings BHD 85,000 306,275
Chofu Seisaku Co. Ltd. 75,000 1,933,013
Maezawa Industries 47,000 1,256,013
Nakakita Seisakusho Co. Ltd. 47,000 222,733
4,463,442
CONSTRUCTION - 0.6%
Daito Trust Construction 65,000 656,215
Kaneshita Construction Co. Ltd. Ord. 62,000 898,391
Tsuken Corp. 60,000 513,095
2,067,701
REAL ESTATE - 0.6%
Mitsubishi Estate Co. Ltd. 168,000 2,015,321
TOTAL CONSTRUCTION & REAL ESTATE 8,546,464
SHARES VALUE (NOTE 1)
DURABLES - 15.8%
AUTOS, TIRES, & ACCESSORIES - 7.4%
Aichi Machine Industry Co. Ltd. 87,000 $ 543,524
Aichi Toyoto Motor Co. Ltd. 20,000 325,435
Aisin Seiki Co. Ltd. 125,000 1,544,035
Calsonic Corp. 235,000 1,856,108
Chuo Malleable Iron Co. Ltd. 27,000 171,566
Daido Metal Co. Ltd. 232,000 1,934,367
Gastec Service, Inc. 30,000 254,766
Gifu Hino Motor Co. Ltd. 1,000 24,348
Honda Motor Co. Ltd. 192,000 3,101,372
Izumi Industries Ltd. 10,000 104,401
Kansei Corp. 146,000 1,310,957
Kanto Auto Works Co. Ltd., Yokosuka 18,000 134,046
Kasai Kogyo Co. Ltd. 305,000 1,470,753
Keihin Seiki Manufacturing Co. Ltd. 107,000 700,243
Mitsuba Electric Manufacturing Co. Ltd. 63,000 748,263
Nippon Cable Systems, Inc. 33,000 368,823
Royal Ltd. 10,000 344,439
SNT Corp. 90,000 865,847
Sumitomo Rubber Industries Ltd. 117,000 1,013,041
Tokai Rika Denki Co. Ltd. 100,000 1,080,824
Tokyo Nissan Auto Sales Co. Ltd. 9,000 73,757
Tokyo Toyota Motor Co. Ltd. 23,000 149,973
Toyoda Gosei Co. (a) 186,000 1,570,710
Toyoda Machine Works Ltd. 238,000 1,797,826
Toyota Auto Body Co. Ltd. 63,000 643,506
Toyota Corrolla Gifu Co. Ltd. 10,000 400,261
Toyota Motor Corp. 119,000 2,416,889
Yamakawa Industrial Co. Ltd. 51,000 696,597
25,646,677
CONSUMER DURABLES - 0.8%
Aderans Co. Ltd. 73,200 1,156,316
Sankyo Co. Ltd. 27,000 1,561,732
2,718,048
CONSUMER ELECTRONICS - 3.6%
Daiichi Corp. Ord. 111,000 2,465,349
Matsushita Electric Industrial Co. Ltd. 439,000 7,351,863
Rinnai Corp. Ord. 70,000 1,795,831
Zojirushi Thermos 64,000 843,756
12,456,799
HOME FURNISHINGS - 0.9%
Komatsu Wall Industry Co. Ltd. 97,000 2,292,654
Matsuyadenki Co. Ltd. (a) 74,000 808,599
3,101,253
TEXTILES & APPAREL - 3.1%
Chiyoda Corp. 164,200 2,827,841
Daidoh Ltd. 75,000 668,092
Daiwabo Spinning Co. Ltd. (a) 343,000 1,067,354
Miyuki Keori Co. Ltd. 64,000 521,456
Morishita Co. Ltd. 44,000 418,077
Nisshinbo Industries 180,000 1,791,556
Roda Vivatex PT (For. Reg.) 865,000 522,953
Tokyo Style Co. Ltd. 70,000 1,072,511
Yagi Corp. 99,000 1,763,763
10,653,603
TOTAL DURABLES 54,576,380
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 0.1%
OIL & GAS - 0.1%
Portman Minning Ltd. (a) 850,000 $ 426,768
FINANCE - 6.5%
BANKS - 1.0%
Akita Bank Ltd. 301,350 2,594,913
Kagoshima Bank Ltd. 92,000 820,619
Union Bank of Philippines (a) 40,500 55,192
3,470,724
CREDIT & OTHER FINANCE - 1.7%
Acom Co. Ltd. 95,900 2,745,044
Japan Securities Finance Co. Ltd. 50,000 783,895
Promise Co. Ltd. 34,000 1,482,036
Sanyo Shinpan Finance Co. Ltd. 11,000 897,559
5,908,534
INSURANCE - 1.3%
Dai-Tokyo Fire & Marine Insurance Ord. 306,000 2,235,168
Sumitomo Marine and Fire
Insurance Co. Ltd. 260,000 2,183,264
4,418,432
SECURITIES INDUSTRY - 2.5%
Daiko Shoken Business Co. 21,000 261,892
Daiwa Securities Co. Ltd. 270,000 3,399,251
Nomura Securities Co. Ltd. 201,000 4,058,435
Osaka Securities Finance Co. Ltd. Ord. 165,000 940,673
8,660,251
TOTAL FINANCE 22,457,941
HEALTH - 4.1%
DRUGS & PHARMACEUTICALS - 3.9%
Ono Pharmaceutical Co. Ltd. 38,000 1,886,573
Sankyo Co. Ltd. 151,800 3,641,973
Yamanouchi Pharmaceutical Co. Ltd. 360,000 8,081,240
13,609,786
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
Hitachi Medical Corp. Ord. 52,000 784,370
TOTAL HEALTH 14,394,156
INDUSTRIAL MACHINERY & EQUIPMENT - 12.4%
ELECTRICAL EQUIPMENT - 8.3%
Hitachi Koki Co. Ltd. Ord. 208,000 2,077,654
Icom, Inc. 117,000 1,361,839
Inaba Denkisangyo Co. Ltd. 57,200 1,290,813
Mirai Industry Co. Ltd. 8,600 173,644
Mitsubishi Electric Co. Ord. 1,201,000 8,501,651
Murata Mfg. Co. Ltd. Ord. 119,000 4,777,243
Nifco, Inc. 149,000 2,300,612
Nippo Ltd. 13,000 277,926
Omron Corp. 370,000 7,251,023
Yaesu Musen Co. Ltd. 34,000 504,781
28,517,186
INDUSTRIAL MACHINERY & EQUIPMENT - 4.1%
Aida Engineering Ltd. Ord. 212,000 1,674,446
Amada Metrecs Co. Ltd. 111,000 1,634,777
Amadasonoike Co. Ltd. 119,000 911,634
Dengyosha Machine Works Ltd. 2,200 185,902
Fuji Machine Manufacturing Co.
Ltd. Ord. 50,000 1,217,412
Hamada Printing Press Co. Ltd. (a) 47,000 412,530
Heiwa Corp. 66,000 1,740,246
SHARES VALUE (NOTE 1)
Kyokuto Kaihatsu Kogyo Co. Ltd. Ord. 50,000 $ 1,163,965
Maki Manufactuting Co. Ltd. 10,000 232,791
Okuma Corp. (a) 200,000 1,710,316
Shintokogio Ltd. 99,000 843,079
Toshiba Machine Co. Ltd. 200,000 1,140,210
Toyo Machinery & Metal Co. Ltd. (a) 28,000 166,281
Tsugami Corp. 120,000 575,806
Zuiko Corp. 46,000 655,621
14,265,016
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 42,782,202
MEDIA & LEISURE - 1.8%
LEISURE DURABLES & TOYS - 0.5%
Takara Co. Ltd. 149,000 1,716,610
RESTAURANTS - 1.3%
Edosawa Co. Ltd. 18,000 376,269
Joyfull Co. Ltd. 31,000 736,386
Ohsho Food Service Corp. 78,900 1,789,880
Yoshinoya D&C Co. Ltd. Ord. 100 1,484,649
4,387,184
TOTAL MEDIA & LEISURE 6,103,794
NONDURABLES - 1.9%
BEVERAGES - 0.0%
Sanyo Coca-Cola Bottling Co. Ltd. 3,000 49,884
FOODS - 1.6%
Chubu Suisan Co. Ltd. 200,000 1,028,564
Ezaki Glicko Co. Ltd. 202,000 1,957,742
Marudai Food Co. Ltd. 151,000 1,108,355
Morozoff Ltd. 86,000 413,682
Sonton Food Industry Co. Ltd. 80,000 1,054,694
5,563,037
HOUSEHOLD PRODUCTS - 0.3%
Comany, Inc. 48,000 929,271
TOTAL NONDURABLES 6,542,192
RETAIL & WHOLESALE - 6.4%
APPAREL STORES - 0.9%
Charle Co. Ltd. 105,000 1,833,244
Esprit Asia Holdings Ltd. 2,236,000 779,805
Marutomi Group Co. Ltd. 34,300 411,461
3,024,510
APPLIANCE STORES - 0.4%
Japan CBM Corp. 50,000 1,300,553
GENERAL MERCHANDISE STORES - 1.6%
Ito-Yokado Co. Ltd. 91,000 4,896,134
Nikku Sangyo Co. Ltd. 33,000 486,015
5,382,149
GROCERY STORES - 2.0%
Heiwado Co. Ltd. 85,000 1,595,107
Heromini Supermarket PT (For. Reg.)(a) 430,000 654,727
Izumi Co. Ord. 140,000 3,558,407
Marukyo Corp. 48,000 1,145,911
6,954,152
RETAIL & WHOLESALE, MISCELLANEOUS - 1.5%
Amway Japan Ltd. 69,000 2,565,116
Belluna Co. Ltd. 19,500 474,791
Tachibana Shokai Ltd. 41,000 384,702
Uny Co. Ltd. 108,000 1,949,760
5,374,369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
TRADING COMPANIES - 0.0%
Namsung Corp. 36 $ 661
TOTAL RETAIL & WHOLESALE 22,036,394
SERVICES - 3.0%
LEASING & RENTAL - 1.0%
Orix Corp. 103,000 3,364,214
PRINTING - 1.2%
Komori Corp. 83,000 2,060,336
Toppan Printing Co. Ltd. 140,000 2,028,624
4,088,960
SERVICES - 0.8%
Secom Co. Ltd. 40,000 2,603,480
TOTAL SERVICES 10,056,654
TECHNOLOGY - 17.0%
COMMUNICATIONS EQUIPMENT - 0.2%
Aiphone Co. Ltd. 31,000 603,836
COMPUTER SERVICES & SOFTWARE - 0.5%
Hitachi Information Systems Co. Ltd. 83,000 1,104,103
Multipolar PT (For. Reg.) 690,000 309,003
NTT Data Communications System 15 254,766
1,667,872
COMPUTERS & OFFICE EQUIPMENT - 1.3%
Canon, Inc. 135,000 2,228,754
IO Data Device, Inc. 6,000 287,190
Nihon Unisys Ltd. 121,000 1,508,997
Nissho Electronics Corp. 34,100 518,415
4,543,356
ELECTRONICS - 11.5%
Aiwa Co. Ltd. 70,000 1,953,798
Alps Electric Co. Ltd. 138,000 1,589,880
Fujitsu Business Systems Ltd. 38,000 1,087,713
Hirose Electric Co. Ltd. 59,000 3,580,854
Hitachi Ltd. 750,000 7,616,250
Nichicon Corp. 270,000 3,848,210
Nitto Denko Corp. 321,000 4,994,478
Rohm Co. Ltd. 110,000 5,082,250
Ryoden Trading Co. Ltd. 135,000 1,098,344
Ryosan Co. Ltd. 70,000 1,696,063
Ryoyo Electro Corp. Ord. 202,000 4,558,465
Toyo Corp. 80,000 704,080
U-Shin Ltd. 51,000 424,016
Varitronix International Ltd. 440,000 642,211
Wako Electric Co. Ltd. 59,000 1,121,207
39,997,819
PHOTOGRAPHIC EQUIPMENT - 3.5%
Fuji Photo Film Co. Ltd. 494,000 12,086,703
TOTAL TECHNOLOGY 58,899,586
TRANSPORTATION - 2.1%
AIR TRANSPORTATION - 0.1%
Japan Airport Terminal Co. 40,000 494,091
SHIPPING - 0.6%
Isewan Terminal Service Co. Ltd. 21,000 142,918
Kawasaki Kisen Kaisha Ltd. (a) 506,000 1,808,965
Tokyo Kisen Co. Ltd. 18,000 180,224
2,132,107
SHARES VALUE (NOTE 1)
TRUCKING & FREIGHT - 1.4%
Fukuyama Transporting Co. Ltd. 95,000 $ 927,490
Hitachi Transport System Co. 268,000 2,817,031
Nippon Konpo Unyu Soko Co. Ltd. 100,000 976,305
4,720,826
TOTAL TRANSPORTATION 7,347,024
UTILITIES - 3.1%
TELEPHONE SERVICES - 3.1%
DDI Corp. Ord. 800 7,031,296
Nippon Telegraph & Telephone
Corp. Ord. 430 3,794,643
10,825,939
TOTAL COMMON STOCKS
(Cost $308,535,950) 302,798,739
CLOSED-END INVESTMENT COMPANIES - 1.2%
FINANCE - 1.2%
Japan OTC Equity Fund, Inc. 34,800 320,393
Morgan Stanley Asia-Pacific Fund, Inc. 359,900 3,868,925
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $4,053,519) 4,189,318
CONVERTIBLE BONDS - 0.3%
MOODY'S PRINCIPAL
RATINGS AMOUNT (B)
DURABLES - 0.3%
AUTOS, TIRES, & ACCESSORIES - 0.3%
Kiriu Machine Manufacturing
Co. Ltd. 5 1/5%, 9/30/98
(Cost $945,711) - JPY 69,000,000 917,873
U.S. TREASURY OBLIGATIONS - 0.2%
U.S. Treasury Bill yield at time
of purchase 5.84%, 7/6/95
(Cost $643,148) 650,000 642,987
REPURCHASE AGREEMENTS - 10.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 36,942,247 36,924,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $351,102,328) $ 345,472,917
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
3,422,765,000 JPY 5/1/95 $ 40,668,253 $ 443,925
(Payable amount $40,224,328)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 11.8%
CONTRACTS TO SELL
4,278,030,000 JPY 5/1/95 to
8/1/95 $ 50,956,883 (5,591,202)
(Receivable amount $45,365,681)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 14.7%
$ (5,147,277)
CURRENCY ABBREVIATIONS
JPY - Japanese yen
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $118,595,876 and $227,984,053, respectively.
The market value of futures contracts opened and closed amounted to
$10,040,540 and $9,260,535, respectively (see Note 2 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $8,356,000 and $5,260,286, respectively. The
weighted average interest rate was 6.48% (see Note 7 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $351,245,783. Net unrealized depreciation aggregated
$5,772,866, of which $14,006,315 related to appreciated investment
securities and $19,779,181 related to depreciated investment securities.
JAPAN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<ERROR: WIDE TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $36,924,000) (cost $351,102,328) - See $ 345,472,917
accompanying schedule
Cash 616
Receivable for investments sold 1,412,751
Unrealized appreciation on foreign currency contracts 628,171
Receivable for fund shares sold 2,832,792
Dividends receivable 1,302,425
Interest receivable 3,620
Redemption fees receivable 7,715
TOTAL ASSETS 351,661,007
LIABILITIES
Payable for investments purchased $ 4,002,487
Unrealized depreciation on foreign currency contracts 5,775,448
Payable for fund shares redeemed 2,811,975
Accrued management fee 172,171
Other payables and accrued expenses 172,490
TOTAL LIABILITIES 12,934,571
NET ASSETS $ 338,726,436
Net Assets consist of:
Paid in capital $ 371,488,046
Undistributed net investment income 193,804
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (22,266,083
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies (10,689,331
)
NET ASSETS, for 27,024,011 shares outstanding $ 338,726,436
NET ASSET VALUE, offering price and redemption price per share ($338,726,436 (divided by) 27,024,011 shares) $12.53
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,570,682
Dividends
Interest 614,219
2,184,901
Less foreign taxes withheld (230,825
)
TOTAL INCOME 1,954,076
EXPENSES
Management fee $ 1,385,010
Basic fee
Performance adjustment (189,107
)
Transfer agent 607,093
Fees
Redemption fees (19,245
)
Accounting fees and expenses 108,966
Non-interested trustees' compensation 1,338
Custodian fees and expenses 140,347
Registration fees 11,332
Audit 16,688
Legal 5,443
Interest 6,629
Miscellaneous 1,856
TOTAL EXPENSES 2,076,350
NET INVESTMENT INCOME (LOSS) (122,274
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (21,510,477
)
Foreign currency transactions 444,248
Futures contracts (780,005 (21,846,234
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (18,073,930
)
Assets and liabilities in foreign (4,483,336 (22,557,266
currencies ) )
NET GAIN (LOSS) (44,403,500
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (44,525,774
)
OTHER INFORMATION
Accounting fees paid to FSC $ 91,459
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
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<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (122,274) $ (1,174,746)
Net investment income (loss)
Net realized gain (loss) (21,846,234) 20,876,210
Change in net unrealized appreciation (depreciation) (22,557,266) 9,594,977
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (44,525,774) 29,296,441
Distributions to shareholders from net realized gains (10,780,525) (2,956,786)
Share transactions 128,540,781 1,298,877,029
Net proceeds from sales of shares
Reinvestment of distributions 10,607,069 2,893,660
Cost of shares redeemed (215,100,006) (977,683,984)
Redemption fees 345,801 1,017,597
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (75,606,355) 325,104,302
TOTAL INCREASE (DECREASE) IN NET ASSETS (130,912,654) 351,443,957
NET ASSETS
Beginning of period 469,639,090 118,195,133
End of period (including undistributed net investment income of $193,804 and $316,078,
respectively) $ 338,726,436 $ 469,639,090
OTHER INFORMATION
Shares
Sold 10,399,831 95,609,478
Issued in reinvestment of distributions 831,316 247,321
Redeemed (17,125,581) (71,792,044)
Net increase (decrease) (5,894,434) 24,064,755
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED SEPTEMBER 15, 1992
APRIL 30, 1995 YEARS ENDED OCTOBER 31, (COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1994 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.27 $ 13.35 $ 9.84 $ 10.00
Income from Investment Operations
Net investment income - (.04) C (.09) -
Net realized and unrealized gain (loss) (1.39) 1.31 3.60 (.16)
Total from investment operations (1.39) 1.27 3.51 (.16)
Less distributions from net realized gain (.36) (.39) - -
Redemption fees added to paid in capital 0.01 .04 - -
Net asset value, end of period $ 12.53 $ 14.27 $ 13.35 $ 9.84
TOTAL RETURN B (9.72)% 10.45% 35.67% (1.60)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 338,726 $ 469,639 $ 118,195 $ 2,953
Ratio of expenses to average net assets 1.17% A 1.42% 1.71% 2.00% A
Ratio of expenses to average net assets before expense reductions 1.17% A 1.42% 1.71% 3.59% A,
D
Ratio of net investment income to average net assets (.07)% A (.32)% (.77)% .03% A
Portfolio turnover rate 70% A 153% 257% -%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. THE TOTAL RETURN
WOULD HAVE BEEN LOWER HAD THE LIMITATION NOT BEEN IN EFFECT.
PACIFIC BASIN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Pacific Basin
has a 3% sales charge which, beginning May 31, 1994, has been waived
through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 MONTHS YEAR YEARS FUND
PACIFIC BASIN -14.74% -8.21% 33.68% 88.98%
PACIFIC BASIN
(INCL. 3% SALES CHARGE) -17.30% -10.96% 29.67% 83.31%
Morgan Stanley Pacific Index -2.51% 2.58% 33.01% 82.38%
Average Pacific Region Fund -13.22% -6.82% 55.55% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on October 1, 1986. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Morgan Stanley Pacific index, a broad measure of the
performance of stocks in the Pacific region, weighted by each country's
market capitalization (or total value of its outstanding shares). To
measure how the fund's performance stacked up against its peers, you can
compare it to the average Pacific region fund, which reflects the
performance of 70 funds with similar objectives tracked by Lipper
Analytical Services over the past six months. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1995 YEAR YEARS FUND
PACIFIC BASIN -8.21% 5.98% 7.69%
PACIFIC BASIN
(INCL. 3% SALES CHARGE) -10.96% 5.33% 7.31%
Morgan Stanley Pacific Index 2.58% 5.87% 7.25%
Average Pacific Region Fund -6.82% 9.01% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Pacific Basin (Pacific Index
10/01/86 9700.00 10000.00
10/31/86 9603.00 8862.00
11/30/86 10146.20 9399.07
12/31/86 10611.80 10088.05
01/31/87 12300.82 11598.87
02/28/87 12689.17 11904.22
03/31/87 13951.29 13131.82
04/30/87 15349.33 15062.31
05/31/87 15397.87 15062.31
06/30/87 14329.92 14116.01
07/31/87 14407.59 13782.70
08/31/87 15203.70 15420.34
09/30/87 14999.82 14974.05
10/31/87 12058.11 13345.52
11/30/87 12339.66 13875.39
12/31/87 13264.01 14088.57
01/31/88 13264.01 14793.36
02/29/88 13813.41 15831.10
03/31/88 14578.64 17064.31
04/30/88 15118.23 17280.12
05/31/88 14578.64 16620.65
06/30/88 13744.73 16055.73
07/31/88 13479.85 16785.08
08/31/88 13430.79 15542.64
09/30/88 13627.01 16142.75
10/31/88 13725.11 17469.62
11/30/88 14608.07 18911.35
12/31/88 14649.47 19018.54
01/31/89 14926.24 19193.41
02/28/89 15252.45 19438.67
03/31/89 14896.59 18821.29
04/30/89 15282.10 18832.42
05/31/89 14689.01 17780.12
06/30/89 14006.95 16987.42
07/31/89 15677.50 19192.02
08/31/89 14837.28 18004.64
09/30/89 16063.01 19105.05
10/31/89 15598.42 18593.72
11/30/89 16102.55 19478.89
12/31/89 16325.64 19500.06
01/31/90 15770.14 18396.74
02/28/90 14782.58 16611.35
03/31/90 13867.02 13619.98
04/30/90 13712.72 13711.64
05/31/90 15039.75 15616.28
06/30/90 15266.07 14987.13
07/31/90 15780.43 14873.33
08/31/90 13681.86 13454.50
09/30/90 11449.55 11345.09
10/31/90 13260.08 13796.09
11/30/90 12046.21 12266.22
12/31/90 11882.89 12788.36
01/31/91 12112.21 13186.92
02/28/91 13206.69 14812.56
03/31/91 13039.91 14005.66
04/30/91 13602.78 14365.60
05/31/91 13508.97 14309.99
06/30/91 13279.65 13374.87
07/31/91 13446.43 13825.95
08/31/91 12539.58 13124.61
09/30/91 13321.35 14157.05
10/31/91 13707.02 14759.53
11/30/91 13060.76 13809.99
12/31/91 13373.47 14233.78
01/31/92 13029.49 13682.29
02/29/92 12904.40 12724.00
03/31/92 12091.36 11513.90
04/30/92 11966.28 10986.10
05/31/92 12925.25 11842.95
06/30/92 12654.24 10911.67
07/31/92 12091.36 10759.99
08/31/92 12445.77 12234.05
09/30/92 12362.38 11953.73
10/31/92 12508.31 11531.67
11/30/92 12456.19 11749.15
12/31/92 12354.65 11614.67
01/31/93 12480.93 11593.05
02/28/93 13207.06 12155.13
03/31/93 14101.56 13623.52
04/30/93 15532.76 15794.04
05/31/93 16290.46 16253.52
06/30/93 15448.57 15987.05
07/31/93 16269.41 16932.23
08/31/93 17016.58 17433.05
09/30/93 17058.67 16781.05
10/31/93 18395.17 17153.59
11/30/93 17490.14 14733.35
12/31/93 20250.33 15760.40
01/31/94 20799.67 17584.75
02/28/94 21004.33 18038.08
03/31/94 19431.70 17042.36
04/30/94 19970.27 17779.27
05/31/94 20562.70 18202.23
06/30/94 20476.53 18797.67
07/31/94 20433.44 18394.37
08/31/94 21402.87 18714.06
09/30/94 21122.81 18245.66
10/31/94 21499.81 18707.18
11/30/94 19733.30 17663.27
12/31/94 19680.66 17782.12
01/31/95 17857.25 16659.13
02/28/95 17565.51 16246.54
03/31/95 18124.69 17493.87
04/28/95 18331.34 18237.90
Let's say you invested $10,000 in Fidelity Pacific Basin Fund on October 1,
1986, when the fund started, and paid the 3% sales charge. By April 30,
1995, the value of your investment would have grown to $18,331 - an 83.31%
increase on your initial investment. That compares to $10,000 invested in
the Morgan Stanley Pacific index, which would have grown to $18,238 over
the same period - an 82.38% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
PACIFIC BASIN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Simon Fraser,
Portfolio Manager of Fidelity Pacific Basin Fund
Q. HOW HAS THE FUND BEEN DOING, SIMON?
A. It's not done as well as I'd hoped. For the six months ended April 30,
1995, the fund returned -14.74%, which lagged the -2.51% return of the
Morgan Stanley Pacific index during the comparable period. For the 12
months, it returned -8.21%, compared with a gain of 2.58% for the regional
index. It also lagged the average Pacific region fund, which according to
Lipper Analytical Services returned -13.22% and -6.82% for the six and 12
months, respectively.
Q. THE FUND WAS PERFORMING QUITE WELL AS OF LATE 1994. WHAT'S CAUSED THE
DRAMATIC TURNAROUND IN PERFORMANCE,
PARTICULARLY AS COMPARED WITH THE REGIONAL INDICES?
A. An unfortunate thing about the Pacific region is that there really isn't
a perfect index to benchmark the fund's performance. The Morgan Stanley
Pacific index, for example, is calculated on the basis of approximately 80%
of assets invested in Japan, only about 5% each in Hong Kong, Malaysia,
Singapore and Australia, and no representation whatever from Indonesia,
Thailand or any of the other Asian markets. My long-term strategy has been
to structure the Pacific Basin Fund as a broadly diversified Asian fund,
with somewhere between 40% and 60% invested in Japanese securities and the
remainder invested elsewhere across the region. The result is that the fund
is significantly underweighted in Japan relative to the index, which would
explain the great difference that exists when we compare the two.
Irrespective of this mismatch, the fund's performance over the past six
months has not been particularly good.
Q. WHAT FACTORS AFFECTED FUND PERFORMANCE DURING THIS PERIOD?
A. There were two main factors. First, the Japanese market generally was
disappointing, which hurt the investments I had there. But more
significantly, the fund's holdings in companies located in Southeast Asia,
which experienced a tremendous regional boom during 1993, gave back much of
their previous gains, mainly because of rising U.S. interest rates and the
collapse of investor confidence in emerging markets surrounding Latin
America and the currency crisis in Mexico. Companies in Indonesia and
Thailand, where the fund has some current exposure, were especially hard
hit in the first quarter of 1995 as a result of this poor sentiment toward
emerging markets, as well as concerns about the countries' macro-economic
policies and their large current account deficits - an indication that
these economies are importing far more than they are exporting and are thus
heavily dependent on foreign capital.
Q. DO YOU THINK INVESTORS IN THE PACIFIC REGION OVERREACTED TO THIS
NEGATIVE SENTIMENT TOWARD EMERGING MARKETS AS A WHOLE?
A. Yes, I think there was overreaction in the market. My view is that the
long-term economic fundamentals in Asia are still basically very positive
and that investment in the region, particularly at current price levels,
represents quite good value. There are similarities in the economic
fundamentals of the emerging markets of Latin America and those of Asia,
but there are significant differences as well, and I believe the negative
sentiment overlooked that to some extent.
Q. WHAT WAS THE EXTENT OF INVESTOR REDEMPTIONS IN THE FUND?
A. There has been a general trend toward net redemptions in the fund since
early 1994, but it hasn't been nearly as dramatic as what has occurred in
some of the industry's more "pure" emerging market funds.
Q. THE FUND CURRENTLY HAS ABOUT 44% OF ITS ASSETS INVESTED IN JAPAN. HOW
HAVE YOU STRUCTURED THAT SEGMENT OF THE PORTFOLIO?
A. It's actually changed a bit over the past 12 months. Beginning in the
first quarter of 1994, I increased the fund's holdings in Japan to about
44% by April as the Japanese market began to pick up and the global economy
appeared to be recovering. I had bought stocks that weighted us more
heavily toward cyclical companies on the Japanese stock market, including
those in the steel, chemical and textile industries. The fund had big
positions in Sumitomo Metals and Sumitomo Chemicals, for instance, which
performed quite well during the summer of 1994. Toward the end of last
year, I reduced the fund's position in those industries slightly and
increased its exposure toward real estate and construction companies, such
as Obayashi Corp., which did relatively well early in 1995, particularly in
the wake of the Kobe earthquake. I subsequently reduced those holdings
somewhat and lengthened the fund's position in the pharmaceutical sector,
including such companies as Sankyo and Yamanouchi, which were good values
and represented a form of defensive strategy as the Japanese stock market
began to show signs of weakness.
Q. WHAT'S BEEN THE STORY IN THE HONG KONG MARKET?
A. I continued to reduce our position throughout 1994, reflecting our
concern for the inflated prices in the Hong Kong property market and the
ongoing trend among businesses there to look elsewhere for second offices.
The Hong Kong stock market is heavily weighted toward property and banking
stocks, and neither of these sectors has looked attractive to us. To take
advantage of some more opportunities, I recently have increased the fund's
Hong Kong exposure slightly, from a low of about 3% of assets toward
year-end 1994 to now about 5%. I bought a substantial position in Hong Kong
Land Holdings, the largest owner of high-end commercial real estate, which
was selling at about 50% of net asset value and represented great value.
This is currently one of the fund's top holdings and has performed
generally very well.
Q. AFTER JAPAN, THE FUND'S NEXT LARGEST EXPOSURES ARE IN MALAYSIA,
AUSTRALIA AND SINGAPORE. HOW HAVE THOSE MARKETS PERFORMED?
A. My strategy in Malaysia continues to follow the country's ongoing trend
toward infrastructure development. In particular, I've increased the fund's
holdings in the steel sector, as well as in companies involved in the
generation and distribution of electricity, the manufacture of building
materials, and the development of residential housing. I continue to be
optimistic about the economic recovery in Australia, and there are a lot of
attractive values and good earnings stories in that market. A number of
diversified Australian companies have been consolidating around core
businesses and are poised to benefit from expansion into the emerging
markets of Asia. Singapore's property stocks fell quite sharply in the
first quarter of 1995 in reaction to concerns about rising interest rates,
and this hurt performance of the fund, which was perhaps too heavily
weighted in that sector. My long-term prospects for the Singapore property
market continue to be high, however, based on the country's strong
macro-economic policies and its high savings rate.
Q. WHAT IS YOUR OVERALL OUTLOOK FOR THE REGION AND THE FUND GOING FORWARD?
A. The long-term growth of the Asian economies is still a story that we
believe in. This is based on their overall commitment to economic
development, their work ethic and low labor costs, and their ability to
export quality products at attractive prices to the world markets. The next
phase of growth will come as these economies develop their own domestic
markets and increase levels of consumption. On a long-term basis, I think
the outlook for Asia as a whole is very positive. Many of these economies
are still developing, however, so it is likely that fund performance will
continue to be somewhat volatile.
FUND FACTS
GOAL: To increase the value of the fund's
shares by investing mainly in stocks in the
Pacific Basin region
START DATE: October 1, 1986
SIZE: As of April 30, 1995, more than $401 million
MANAGER: Simon Fraser, since 1993; also
manages various funds for non-U.S. investors;
joined Fidelity in 1981.
(checkmark)
SIMON FRASER ON THE ECONOMIC FUNDAMENTALS
OF THE ASIAN MARKETS:
"My view is that investors' recent fears and concerns
about the macro-economic policies of many Asian
markets have been unfounded and were an
overreaction to negative sentiments about the
difficulties in Latin America. While there are obviously
similarities in the economic fundamentals of the
emerging markets of Asia and Latin America, there
are differences as well.
"What generally causes investors to fear currency
devaluation are large current account, or trade,
deficits and overdependence on foreign capital. In
Asia's emerging markets, the high level of imports and
foreign investment has tended to be for machinery
and equipment to develop productive capacity, while
in Latin America, it has tended to be more
consumer-oriented. In essence, the Latin markets
were borrowing money more for consumption than
for investment and economic development.
"I think a major misperception exists. While both
regional economies were being financed by
investment from oversees, the uses for the capital
were quite different. Furthermore, a greater share of
foreign capital coming into the Pacific Basin has been
direct investment in plant and equipment in the
region, compared with the more speculative,
portfolio-based foreign investment that was directed
toward Latin America."
PACIFIC BASIN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Thailand 5.9%
Australia 8.6%
Row: 1, Col: 1, Value: 5.9
Row: 1, Col: 2, Value: 7.1
Row: 1, Col: 3, Value: 9.1
Row: 1, Col: 4, Value: 9.5
Row: 1, Col: 5, Value: 4.0
Row: 1, Col: 6, Value: 44.1
Row: 1, Col: 7, Value: 6.7
Row: 1, Col: 8, Value: 5.0
Row: 1, Col: 9, Value: 8.6
Singapore 7.1%
Hong Kong 5.0%
Other 9.1%
Indonesia 6.7%
Malaysia 9.5%
Korea (South) 4.0%
Japan 44.1%
AS OF OCTOBER 31, 1994
United
States 3.7%
Australia 8.8%
Thailand 6.3%
Row: 1, Col: 1, Value: 3.7
Row: 1, Col: 2, Value: 6.3
Row: 1, Col: 3, Value: 8.1
Row: 1, Col: 4, Value: 6.3
Row: 1, Col: 5, Value: 8.800000000000001
Row: 1, Col: 6, Value: 3.7
Row: 1, Col: 7, Value: 40.8
Row: 1, Col: 8, Value: 7.7
Row: 1, Col: 9, Value: 5.8
Row: 1, Col: 10, Value: 8.800000000000001
Hong Kong 5.8%
Singapore 8.1%
Other 6.3%
Indonesia 7.7%
Malaysia 8.8%
Korea (South) 3.7%
Japan 40.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 94.9 93.1
Bonds 3.5 3.2
Short-term investments 1.6 3.7
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Nippon Shokubai Co. Ltd. 1.5 1.1
(Japan, Chemicals & Plastics)
Hong Kong Land Holdings Ltd. 1.4 0.0
(Hong Kong, Real Estate)
Sony Corp. 1.3 0.5
(Japan, Consumer Electronics)
Tenega Nasional BHD 1.1 0.0
(Malaysia, Electric Utilities)
Yamanouchi Pharmaceutical Co. Ltd. 1.1 0.6
(Japan, Drugs & Pharmaceuticals)
Ampolex Ltd. Ord. 1.0 0.9
(Australia, Oil & Gas)
Sungei Way Holdings BHD 1.0 0.7
(Malaysia, Metals & Mining)
Sankyo Co. Ltd. 1.0 0.7
(Japan, Drugs & Pharmaceuticals)
Kawasaki Kisen Kaisha Ltd. 1.0 1.0
(Japan, Shipping)
Yageo Corp. GDR 1.0 0.6
(Taiwan (Free China), Electronics)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Construction & Real Estate 16.9 17.4
Basic Industries 15.2 15.5
Finance 13.3 13.9
Industrial Machinery & Equipment 6.5 5.3
Technology 6.3 5.6
Nondurables 5.4 4.9
Durables 5.0 5.6
Media & Leisure 4.9 4.0
Transportation 4.0 4.9
Energy 3.9 3.2
PACIFIC BASIN
INVESTMENTS APRIL 30, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.3%
SHARES VALUE (NOTE 1)
AUSTRALIA - 8.4%
Accor Asia Pacific Ltd. 775,979 $ 412,372
Amcor Ltd. 126,885 934,358
Ampolex Ltd. Ord. 1,400,574 4,045,936
Australian National Industries Ltd. 1,351,935 1,396,900
Broken Hill Proprietary Co. Ltd. (The) 50,027 729,499
Coca-Cola Amatil Ltd. 129,016 788,579
Comalco Ltd. 42,900 160,763
Commonwealth Bank of Australia (b) 341,763 2,340,116
Country Road Ltd. 566,163 514,959
CSR Ltd. 159,374 509,101
Fosters Brewing Group Ltd. 2,250,000 2,128,388
Gold Mines of Kalgoorlie Ltd. 479,390 418,594
Memtec Ltd. Ord. 841,638 1,132,971
North Broken Hills Holdings Ltd. 154,231 374,835
Odin Mining & Investment Co. (a) 87,500 35,018
Oil Search Ltd. 4,302,500 3,099,392
Pacific BBA Ltd. (b) 1,119,832 2,175,643
Plutonic Resources Ltd. 500,000 2,306,650
Publishing & Broadcasting 350,000 1,005,977
QNI Ltd. 1,000,880 1,347,335
Rothmans Holdings Ltd. Ord. 344,500 1,331,086
Shomega Ltd. 715,000 749,191
VA Holdings Ltd. 1,010,000 169,034
W.D. & H.O. Wills Holdings Ltd. 155,700 314,961
Western Mining Corp. Holdings Ltd. 200,680 1,136,074
Woodside Petroleum Ltd. 500,000 2,048,335
Woolworths Ltd. 844,156 1,836,605
33,442,672
CANADA - 0.6%
Asia Pacific Resources Ltd. 1,000,000 2,212,470
CHINA (PEOPLES REP.) - 0.6%
Yizheng Chemical Fibre Co. Ltd. Class H 6,989,000 2,324,541
GRAND CAYMAN - 0.0%
Sanzo Finance Ltd. (warrants) (a) 250 9,375
HONG KONG - 4.4%
Benelux International Ltd. 3,250,000 209,885
CDL Hotels International Ltd. 700,465 321,191
Chinney Investments Ltd. 4,436,000 641,756
Chow Sang Sang Holdings
International Ltd. 1,500,000 494,055
Culturecom Holdings Ltd. (warrants) (a) 1,523,332 4,128
Dickson Concepts International Ltd. 1,568,000 810,123
Esprit Asia Holdings Ltd. 430,000 149,963
First Pacific Co. Ltd. 550,000 451,110
Fortei Holdings Ltd. 1,382,000 92,829
Grand Hotel Holdings Ltd. Class A 1,000,000 335,830
Great Eagle Holdings Ltd. (a) 200,000 359,080
Great Wall Electronic International Ltd.
(warrants) (a) 75,000 485
HKR International Ltd. 1,928,800 1,507,261
Hong Kong Ferry Holdings Ltd. 525,000 549,276
Hong Kong Land Holdings Ltd. 3,000,000 5,640,000
Hopewell Holdings Ltd. 456,000 323,947
International Bank of Asia Ltd. 2,184,000 994,397
International Tak Cheung Holdings Ltd. 2,700,067 613,806
JCG Holdings Ltd. 644,000 361,844
K Wah International Holding Ltd. Ord. 5,800,288 884,080
Lam Soon Food Industries Ltd. 1,400,000 251,356
Lamex Holdings Ltd. 270,000 48,824
Leefung-Asco Printers Holdings Ltd. 1,567,000 242,885
Mingly Corp. Ltd. 1,642,000 269,354
SHK Convertibles Ltd. 3,630 3,141
SHARES VALUE (NOTE 1)
Sime Darby Hongkong Ltd. 200,000 $ 219,582
Sino Hotels Holdings Ltd. (a) 60,200 12,208
Star Paging International Holdings Ltd.
(warrants)(a) 143,600 890
Tai Cheung Holdings Ltd. 767 654
Wah Kwong Shipping Holdings Ltd. 1,026,000 1,895,094
17,689,034
INDIA - 0.9%
Bombay Dyeing & Manufacturing Co.
GDR 35,000 350,000
CESC Ltd. (a)(b):
GDR 70,000 280,000
GDR (warrants) 38,000 1,900
Great Eastern Shipping Co. Ltd. GDR (a) 25,000 156,250
Himalayan Fund NV ISI (a) 67,299 921,996
Himalayan Fund NV ISI (warrants)(a) 13,459 10,094
Indo Gulf Fertilizer and Chemicals Corp.
Ltd. GDR (a)(b) 17,000 34,000
Southern Petrochemical Industries Corp.
GDS (a) 130,000 1,072,500
Tata Electric Companies GDR (a)(b) 210 73,500
Tube Investments of India Ltd. GDR (a) 110,000 522,500
3,422,740
INDONESIA - 5.9%
Andayani Megah PT 400,000 358,264
Argha Karya Prima PT 125,000 89,565
Astra International PT (For. Reg.) 1,286,400 1,641,845
Bakrie & Bros PT Ord. (For. Reg.) 970,000 2,866,990
Bank Dagang Nas Indonesia PT (a) 525,000 652,428
Bank International Indonesia PT Ord. 760,000 1,565,608
Bank Mashill Utama PT (For. Reg.) 226,500 202,867
Bank Tiara Asia PT 580,000 493,505
Barito Pacific Timber PT (For. Reg.) 480,000 537,394
Bukaka Teknik Utama (For. Reg.)(a) 200,000 396,328
Duta Pertiwa Nusantara PT (For. Reg.)(a) 85,000 95,163
Gadjah Tunggal PT (For. Reg.) 242,000 211,329
Indah Kiat Pulp & Paper (For. Reg.) 1,323,000 1,466,374
Inti Indorayon Utama PT (For. Reg.) 150,000 302,285
Jakarta International Hotels &
Development Ord. 225,000 186,408
Kabel Metal PT 100,000 156,740
Keramika Indonesia Assosiasi
(For. Reg.) (a) 125,000 151,143
Mayorma Indah PT 340,600 1,220,240
Medco Energi Corp. (For. Reg.) (a) 1,234,500 2,598,363
Modern Photo Film PT 432,500 1,810,960
Modernland Realty PT 247,000 398,208
Mulia Industrindo PT (For. Reg.) (a) 405,000 698,277
Pakuwon Jati PT (For. Reg.) 1,229,000 577,900
Panin Bank PT (For. Reg.) 1,275,000 1,256,156
Sampoerna Hanjaya
Mandala (For. Reg.) 443,000 2,598,882
Semen Cibinong PT (For. Reg.) 324,000 870,578
Sumalindo Lestari Jaya PT (For. Reg.) (a) 100,000 163,457
Unilever PT 802 10,416
23,577,673
JAPAN - 44.1%
Acom Co. Ltd. 101,200 2,896,752
Aida Engineering Ltd. Ord. 12,000 94,780
Aim Services Co. Ltd. (a) 50,000 1,128,333
Amway Japan Ltd. 78,000 2,899,697
Apic Yamada Corp. 6,600 234,384
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Aplus Co. Ltd. 120,000 $ 514,520
Asatsu, Inc. 23,000 915,138
Bandai Co. Ltd. 10,000 314,746
Bandai Co. Ltd. (warrants) (a) 100 47,500
C Itoh Fuel (warrants) (a) 360 36,000
Catena Corp. 29,400 439,979
Charle Co. Ltd. 26,000 453,946
Chiyoda Corp. 150,000 1,906,289
Chiyoda Fire & Marine
Insurance Co. Ltd. 200,000 1,258,982
Chofu Seisakusho Co. Ltd. 114,000 2,938,179
Chuo Trust & Banking Co. Ltd. 85,000 1,231,664
Citizens Watch Co. Ltd. (warrants) (a) 500 168,750
CMK Corp. 210,000 3,117,763
Daicel Chemical Industries Ltd. 40,000 233,743
Daiki Co. Ltd. 31,000 636,974
Daio Paper Corp. (warrants) (a) 1,250 1,718,750
Daito Trust Construction 136,100 1,374,013
Daiwa House Industry Co. Ltd.
(warrants)(a) 1,500 318,750
Daiwa Industries (warrants) (a) 250 93,750
Denki Kagaku Kogyo (a) 429,000 1,982,079
Denki Kogyo Co. Ltd. 200,000 2,080,884
Denki Kogyo Co. Ltd. (warrants) (a) 2,500 52,448
Denyo Co. Ltd. (warrants) (a) 740 555,000
Fanuc Ltd. 15,000 673,876
FCC Co. Ltd. 56,400 1,768,466
Fuji Coca-Cola Bottling Co. Ltd. 29,000 371,994
Fujikura Ltd. (warrants) (a) 3,000 377,622
Fujisash Co. Ltd. 14,700 157,135
Fujisawa Pharmaceutical Co. Ltd. 90,000 1,154,463
Fujitsu Kiden Ltd. 46,000 699,329
Funai Consulting Co. Ltd. 32,000 425,678
Fuso Pharmaceutical IndustriesLtd. 97,000 791,484
Geomatec Co. Ltd. 14,000 967,754
Heiwa Corp. 60,000 1,582,042
Hitachi Information Systems Co. Ltd. 8,000 106,420
Hitachi Ltd. 150,000 1,523,250
Hitachi Ltd. ADR 23,800 2,445,450
Hitachi Transport System Co. 150,000 1,576,697
Hokko Chemical Industries 69,000 434,349
House Food Industrial Co. Ltd. 55,000 1,110,517
IDEC Izumi Corp. 58,000 492,547
Impact 21 Co. Ltd. 10,000 173,407
Inui Tatemono Co. Ltd. 27,000 323,891
IO Data Device, Inc. 13,000 622,246
Japan Associated Finance Co. 2,000 244,670
Japan Radio Co. Ltd. (warrants) (a) 4,000 97,902
Kagoshima Bank Ltd. 150,000 1,337,966
Katokichi Co. Ltd. 25,000 579,013
Kawasaki Heavy Industries Ltd.
(warrants) (a) 1,000 25,000
Kawasaki Kisen Kaisha Ltd. (a) 1,107,000 3,957,558
Keiyo Co. Ltd. 30,000 347,051
Kinki Nippon Railway Co. Ltd. #3
(warrants) (a) 4,000 283,217
Komatsu Ltd. Ord. 265,000 2,102,499
Kumagai Gumi Co. Ltd. 500,000 2,779,260
Kyushu Matsushita Electric Co.Ltd. 50,000 1,039,254
Mabuchi Motor Co. 100 6,592
Mars Engineering Corp. 26,000 1,278,461
Maruha Corp. (a) 300,000 1,236,414
Marui Co. Ltd. 60,000 919,295
Marukyo Corp. 27,000 644,575
SHARES VALUE (NOTE 1)
Matsushita Electric Works Co. Ltd.
(warrants) (a) 500 $ 425,000
Matsushita-Kotobuk Electronics
Industries Ltd. 30,000 641,368
Miroku Jyoho Service Co. Ltd. 15,400 475,563
Mitsuba Electric Manufacturing Co.
Ltd. (warrants) (a) 3,000 537,587
Mitsubishi Chemical Industries Ltd. 300,000 1,756,635
Mitsubishi Estate Co. Ltd. 150,000 1,799,394
Mitsubishi Kakoki Kaisha Ltd.
(warrants) (a) 4,000 118,881
Mitsubishi Kasei (warrants) (a) 400 35,000
Mitsubishi Motors Corp. 126,000 1,168,787
Mitsui Engineer & Shipbuilding Co. Ltd. 1,000,000 2,886,160
Mitsui High-Tec, Inc. 76,000 1,615,773
Mitsui Mining & Smelting Co. Ltd. (a) 300,000 1,182,969
Mitsui Mining & Smelting Co. Ltd.
(warrants)(a) 1,200 18,283
Mitsui OSK Lines Ltd. 500,000 1,805,335
Miyosha Oil & Fat Co. Ltd. Ord. 150,000 694,815
Mori Seiki Co. Ltd. Ord. 185,000 3,449,730
Namura Shipbuilding Co. Ltd. 465,000 2,761,449
Navix Line Ltd. (a) 500,000 1,621,235
NGK Insulators Ltd. (warrants) (a) 2,650 397,500
Nichicon Corp. 170,000 2,422,947
Nichii Co. Ltd. (warrants) (a) 2,000 17,483
Nippon Computer Systems Corp. 247,500 3,439,337
Nippon Crane Works Ltd. (a) 100,000 302,868
Nippon Hodo Co. Ltd. 200,000 3,468,140
Nippon Kagaku Co. Ltd. 100,000 665,123
Nippon Kokan KK (a) 450,000 1,256,013
Nippon Shinyaku Co. Ltd. (warrants) (a) 3,000 204,545
Nippon Shokubai Co. Ltd. 600,000 6,150,012
Nippon Telegraph & Telephone Corp.
Ord. 200 1,764,950
Nippon Yakin Kogyo Co. Ltd. (a) 368,000 2,141,694
Nippon Zeon Co. Ltd. (a) 54,000 282,202
Nissan Fire & Marine Insurance Co. Ltd. 200,000 1,375,378
Nissei Build Kogyo Co. Ltd. 41,000 413,920
Nissha Printing Co. Ltd. 32,000 535,899
Nomura Securities Co. Ltd. 95,000 1,918,166
Obayashi Corp. 440,000 3,679,078
Ohkura Electric Co. Ltd. (a) 40,000 323,535
Oliver Corp. (warrants) (a) 2,000 115,385
Olympus Optical Co. Ltd. 100,000 997,684
Omron Corp. 150,000 2,939,604
Ono Pharmaceutical Co. Ltd. 15,000 744,700
Orient Finance Co. Ltd. 300,000 1,639,053
Promise Co. Ltd. 84,000 3,661,500
Ryoyo Electro Corp. Ord. 5,000 112,833
Sampei Construction Co. Ltd. 3 32,068
San-In Godo Bank Ltd. 30,000 285,053
Sankyo Co. Ltd. 167,200 4,011,449
Sanwa Shutter Corp. (warrants) (a) 1,500 18,750
Sanyo Coca-Cola Bottling Co. Ltd. 45,000 748,263
Sekisui Chemical Co. Ltd. 150,000 1,870,658
Sekisui House Ltd. (warrants) (a) 500 56,250
Senko Co. Ltd. (warrants) (a) 450 5,625
Shikoku Coca-Cola Bottling Co. Ltd. 26,400 388,812
Shinko Shoji Co. Ltd. 50,000 605,737
Showa Denko KK (a) 200,000 729,260
Sony Corp. 105,000 5,287,725
Sumisho Computer Service Corp. 6,000 71,263
Sumitomo Cement Co. Ltd. (warrants) (a) 750 65,625
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Sumitomo Chemical Co. Ltd.
(warrants) (a) 5,000 $ 511,952
Sumitomo Metal Industries Ltd. 750,000 2,458,575
Sumitomo Realty & Development Co. Ltd. 400,000 2,627,236
Sumitomo Rubber Industries Ltd. 100,000 865,847
Sumitomo Sitix Corp. 212,000 2,669,042
Sumitomo Trust & Banking Co. Ltd. 100,000 1,508,403
Sun Wave Co. Ltd. (warrants) (a) 300 3,750
Super Daiei Co. Ltd. 12,000 146,802
Tanseisha Co. Ltd. (a) 30,000 388,384
Taikisha Ltd. 62,000 1,207,673
Takara Co. Ltd. 173,000 1,993,111
Tasaki Shinju Co. Ltd. Ord. 50,000 555,259
Tohoku Telecommunications
Construction Co. Ltd. 20,000 142,289
Tokyo Kososushi Co. Ltd. 27,000 352,753
Tokyo Securities Co. Ltd. 234,000 1,322,928
Tomoku Co. Ltd. 43,000 255,360
Toshiba Chemical Corp. 16,000 126,563
Toshiba Corp. 525,000 3,485,659
Toshoku Co. Ltd. 93,000 552,290
Towa Pharmaceutical Co. Ltd. 11,000 637,568
Toyo Communication Equipment Ltd. 110,000 2,678,306
Techno Ryowa Ltd. 19,000 327,217
USC Corp. 27,500 783,895
Valor Co. Ltd. 6,600 86,228
Yamaha Corp. 200,000 2,684,244
Yamaichi Securities Co. Ltd. 150,000 1,035,098
Yamanouchi Pharmaceutical Co. Ltd. 192,000 4,309,995
Yaohan Japan Corp. (warrants) (a) 200 10,000
Yoshinoya D&C Co. Ltd. Ord. 30 445,395
176,613,010
KOREA (SOUTH) - 3.8%
Boram Bank (a) 37,130 394,508
Cheil Investment Finance (a) 30,000 570,604
Coryo Securities 100,000 1,310,421
Boram Securities Co. Ltd. 25,000 304,978
Daewoo Electronics (a) 41,200 526,923
Daewoo Electronics (New) (a) 2,060 23,712
Daeyu Securities 71,820 1,121,083
Dong Ah Construction Industries Co.
Ltd. (a) 21,277 563,777
Hanil Development Co. (a) 48,122 984,722
Hanshin Securities Co. Ltd. 466 9,903
Kia Motors Corp. GDR (a)(b) 71,500 1,018,875
Kolon Industries, Inc. 197 5,228
Korean Air 52,093 1,884,292
Miwon Co. Ltd. 26,792 913,743
Namsung Corp. 53,560 983,590
Nong Shim Co. 26,857 1,046,308
Sam Yang Co. Ltd. (warrants) (a) 300 75,000
Ssangyong Cement Co. 19,712 511,966
Ssangyong Investment & Securities
Co. Ltd. 42,848 719,426
Ssangyong Investment & Securities
Co. Ltd. (New) (a) 4,212 81,218
Tong Yang Investment & Finance
Co. Ltd. (a) 45,000 897,225
Tong Yang Securities Co. Ltd. 21,012 275,621
Yukong Ltd. (a) 26,504 1,175,097
15,398,220
SHARES VALUE (NOTE 1)
MALAYSIA - 9.1%
Asiatic Development BHD 3,000 $ 3,170
Bandar Raya Development BHD
(warrants) (a) 300,000 292,713
Bolton Properties BHD 866,000 1,051,818
CHG Industries BHD 453,000 1,192,106
CHG Industries BHD (warrants) (a) 101,500 87,117
Daiman Development BHD 550,000 605,666
DCB Holdings BHD (warrants) (a) 125,000 80,971
East Asiatic BHD 100,000 164,372
Ekovest BHD 119,000 440,830
General Lumber Fabric & Building BHD 738,000 1,404,289
Genting BHD 149,500 1,361,842
Golden Pharos BHD 61,000 153,117
Ho Hup Construction Co. BHD 90,000 331,579
Industrial Oxygen, Inc. BHD 120,000 143,320
Kim Hin Industry BHD (warrants) (a) 18,750 18,219
Kumpulan Guthrie BHD 940,000 1,423,320
Land & General BHD 150,000 434,211
Lion Land BHD 2,750,000 3,173,088
Malakoff BHD 489,000 1,286,843
Malayawata Steel BHD 607,000 1,115,702
MGR Corp. BHD 500,000 1,244,940
New Straits Times Press BHD 350,000 1,013,159
Oyl Industries BHD 75,000 431,174
Peladang Kimia BHD 31,000 92,874
Pengkalen Holdings BHD 3,333 3,225
PSC Industries 17,000 64,696
Public Finance BHD:
(For. Reg.) 61,000 111,133
(Loc. Reg.) 64,000 110,899
Rothmans of Pall Mall Malysia BHD Ord. 200,000 1,384,616
Seal, Inc. BHD (a) 364,000 639,581
Shah Alam Properties BHD (a) 60,000 126,316
Sime UEP Properties BHD 331,000 586,956
Sriwani Holdings BHD (warrants) (a) 62,500 33,907
Sungei Way Holdings BHD 1,011,500 4,013,238
Sungei Way Holdings BHD (warrants) (a) 144,500 193,056
Sunway Building Technology 135,000 491,902
Tan & Tan Development BHD 2,500,000 2,661,950
Tanjong PLC (Mlay Reg.) 775,000 2,212,044
Tenega Nasional BHD 1,000,000 4,453,440
Yeo Hiap Seng BHD 100,000 242,915
YTL Corp. BHD 350,000 1,587,044
36,463,358
NEW ZEALAND - 0.6%
Brierley Investments Ltd. 2,153,738 1,621,829
Ceramco Corp. Ltd. 314,300 538,864
U-Bix Business Machines Ltd. 105,858 101,067
2,261,760
PAKISTAN - 0.6%
Adamjee Insurance Ltd. (a) 119,520 492,360
Bank of Punjab (a) 42,900 36,876
National Development Leasing Corp. (a) 451,757 417,627
Pakistan International Airlines (a) 272,250 75,062
Pakistan State Oil Co. Ltd. (a) 141,336 1,384,519
Pakistan Suzuki Motors Ltd. (a) 26,000 22,349
Pakistan Suzuki Motors Ltd. (rights) (a) 26,000 548
2,429,341
PHILIPPINES - 1.6%
Ayala Corp. Class B 240,000 322,457
Ayala Land, Inc. Class B 1,655,500 2,065,402
Basic Petroleum & Mineral, Inc. (a) 91,000,000 41,860
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PHILIPPINES - CONTINUED
Benpress Holdings Corp. GDR (a) 59,220 $ 414,540
Filinvest Land, Inc. Ord. (a) 1,875,000 525,431
JG Summit Holdings, Inc. Class B 2,450,000 771,211
Manila Mining Corp. Class B 26,635,000 107,339
Meralco Class B 40,000 414,587
Oriental Petroleum & Mineral Corp.
Class B (a) 47,999,970 36,960
Petrofields Exploration & Development
Corp., Inc. (a) 136,000,000 44,880
Philex Mining Corp. (a) 2,389,000 261,380
SM Prime Holdings, Inc. (a) 2,063,000 625,625
Universal Robina Corp. (a) 1,520,500 846,341
6,478,013
SINGAPORE - 6.8%
Avimo Singapore Ltd. 635,000 439,579
Bukit Sembawang Estates Ltd. 32,000 555,524
Clipsal Industries Ltd. 1,114,000 2,350,540
Clipsal Industries Ltd. (warrants) (a) 83,200 56,576
Courts Singapore Ltd. 500,000 717,360
Creative Technology Corp. Ltd. (a) 60,000 607,500
DBS Land Ltd. 525,000 1,446,197
Falmac Ltd. 150,000 54,878
Far East-Levingston Shipbuilding Ltd. 600,000 2,625,540
First Capital Corp. Ltd. 493,015 1,308,575
Genting International 1,176,000 2,175,600
Hotel Plaza Ltd. (Loc. Reg.) 300,000 206,601
Hotel Properties Ltd. 760,000 1,417,506
Hotel Properties Ltd. (warrants) (a) 190,000 211,263
Informatics Holdings Ltd. 201,000 109,583
Jurong Shipyard Ltd. 500,000 3,837,875
Kim Engineering Holdings Ltd. 400,000 364,420
Malayan Credit Ltd. 842,000 1,709,369
Pacific Can Investment Holdings Ltd. 200,000 136,298
Pacific Can Investment Holdings Ltd.
(warrants) (a) 60,000 16,141
Parkway Holdings Ltd. (warrants) (a) 550,000 552,365
Pentex Schweizer Circuits Ltd. 146,000 174,907
Robinson & Co. Ltd. 95,000 395,266
ST Computer Systems & Services Ltd.
(For. Reg.) 200,000 144,906
Steamers Maritime Holdings Ltd. 200,000 136,298
United Overseas Bank Ltd. (warrants) (a) 219,293 1,148,378
United Overseas Land Ltd. 850,000 1,634,151
United Overseas Land Ltd. (warrants) (a) 545,000 445,696
Wing Tai Holdings Ltd. 1,350,000 2,285,510
27,264,402
SRI LANKA - 0.9%
Associated Motorways Ltd. (a) 13,500 15,485
Ceylon Tea Services Ltd. (a) 215,000 538,061
Development Finance Corp. of Ceylon (a) 214,933 1,806,424
Distilleries Co. of Sri Lanka (a) 2,542,000 331,324
John Keells Holdings Ltd. GDR (b) 70,000 437,500
Kelani Tyres Ltd. (Loc. Reg.) (a) 233,000 85,036
National Development Bank . 47,000 210,740
3,424,570
TAIWAN (FREE CHINA) - 0.9%
Yageo Corp. GDR (a)(b) 194,700 3,845,325
THAILAND - 3.9%
Asia Fiber Co. PCL (For. Reg.) 400,000 313,264
Asia Securities Trading (For. Reg.) 255,200 524,314
Bank of Ayudhya PCL (For. Reg.) 120,000 537,022
SHARES VALUE (NOTE 1)
Bangkok Metropolitan Bank PCL
(For. Reg.) 500,000 $ 508,545
Bangkok Steel Industry Co. Ltd.
(For. Reg.) 250,000 322,925
Dhana Siam Finance & Securities PCL
(For. Reg.) 42,000 179,414
Electricity Generating PCL (For. Reg.) (a) 100,000 305,126
Finance One PCL:
(For. Reg.) 245,000 1,345,606
(Loc. Reg.) (warrants) (a) 8,180 46,924
First Bangkok City Bank PCL (For. Reg.) 500,000 366,150
Five Star Property Co. Ltd. (For. Reg.) (a) 200,000 724,166
Goodyear (Thailand) Ltd. 23,600 316,843
International Engineering PCL (For. Reg.) 81,000 527,258
Kiatnakin Finance & Securities PCL
(For. Reg.) 76,000 187,063
Krisda Mahanakorn Co. PCL
(For. Reg.) (a) 188,500 371,939
Krung Thai Bank (For. Reg.) 100 303
Land & House PCL (For. Reg.) 105,000 1,853,946
MDX PCL (For. Reg.) 200,000 414,972
Padaeng Industry Co. Ltd. (For. Reg.) 460,000 524,004
Phatra Thanakit PCL (For. Reg.) (a) 60,400 405,451
Pizza PCL:
(For. Reg.) 150,000 305,126
(warrants) (a) 37,500 17,926
Precious Shipping Ltd. (For. Reg.) 56,900 611,131
Saha Union Corp. Ltd. (For. Reg.) 401,363 555,181
Siam Cement PCL (For. Reg.) 5,000 287,632
Siam City Bank PCL (For. Reg.) 500,000 513,630
Telecomasia Corp. PCL (For. Reg.) 150,000 558,381
Thai Airways International Ltd.
(For. Reg.) (a) 300,700 691,195
Thai German Ceramic Industries PCL.:
(For. Reg.) 200,000 508,544
(warrants) (a) 59,940 41,456
Thai Petrochemical Industry
(For. Reg.) (a) 263,000 417,292
Thai President Food Ltd. (For. Reg.) 30,500 325,102
Thai Telephone & Telecommunication
PCL (For. Reg.) (a) 110,000 859,235
United Foods Co. Ltd. (For. Reg.) 114,200 81,306
15,548,372
UNITED KINDOM - 0.2%
Rowe Evans Investments PLC 438,369 932,779
TOTAL COMMON STOCKS
(Cost $394,888,926) 373,337,655
PREFERRED STOCKS - 0.3%
CONVERTIBLE PREFERRED STOCKS - 0.2%
AUSTRALIA - 0.2%
Ampolex Ltd. 8% 300,000 921,204
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
KOREA (SOUTH) - 0.1%
Dongbu Construction Co. Ltd. (a) 10,910 105,901
Hanshin Securities Co. Ltd. (a) 23,320 295,190
Kolon Industries, Inc. (a) 9,882 133,514
534,605
TOTAL PREFERRED STOCKS
(Cost $1,898,237) 1,455,809
CLOSED-END INVESTMENT COMPANIES - 1.3%
SHARES VALUE (NOTE 1)
INDONESIA - 0.1%
Indonesia Development Fund Ltd. (SG) 70,000 $ 560,000
SINGAPORE - 0.2%
Singapore SESDAQ Fund Ltd. (a) 50,000 675,000
TAIWAN (FREE CHINA) - 0.1%
R.O.C. Taiwan Fund (SBI) (a) 52,500 584,063
THAILAND - 0.9%
Kamrai Tawee Capital Fund
(For. Reg.) (a) 947,900 751,998
Ruang Khao Unit Trust (For. Reg.) (a) 2,282,200 1,462,342
Thai Prime Fund 75,000 1,080,000
3,294,340
TOTAL CLOSED-END INVESTMENT
COMPANIES (Cost $4,614,348) 5,113,403
CORPORATE BONDS - 3.5%
MOODY'S RATINGS PRINCIPAL
AMOUNT (C)
CONVERTIBLE BONDS - 3.4%
GRAND CAYMAN - 0.5%
Henderson Capital
International Ltd. euro
4%, 10/27/96 (b) - $ 1,500,000 1,462,500
JG Summit Cayman Ltd.
euro 3 1/2%, 12/23/03 - 1,000,000 650,000
2,112,500
HONG KONG - 0.6%
Hon Kwok Land Treasury Ltd.
euro 4 7/8%, 12/15/00 - 1,530,000 1,109,250
Lai Fung Overseas Finance Ltd.
euro 5 1/2%, 2/5/98 (d) - 500,000 377,500
Stelux Holdings Ltd.
1 3/4%, 3/31/01 - CHF 2,000,000 786,713
2,273,463
INDONESIA - 0.7%
Inti Indorayon Utama PT
7%, 5/2/06 - 2,600,000 2,301,000
Modernland Realty PT
6%, 10/20/03 - IDR 247,000 238,925
2,539,925
KOREA (SOUTH) - 0.1%
Ssangyong Oil Refining euro
3 3/4%, 12/8/08 - 550,000 539,000
MALAYSIA - 0.4%
Land & General BHD euro
4 1/2%, 7/26/04 - 1,100,000 1,320,000
United Engineers Malaysia BHD
2%, 3/1/04 (b) - 380,000 386,650
1,706,650
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (C)
THAILAND - 1.1%
Asia Credit PCL 3 3/4%,
11/17/03 (b) - $ 505,000 $ 361,075
Hemaraj Land and
Development PCL euro
3 1/2%, 9/9/03 - 500,000 298,750
Juldis Development PCL euro
4 1/4%, 12/22/03 - 700,000 381,500
Phatra Thanakit PCL euro
3 1/2%, 12/13/03 - 1,100,000 1,119,250
Thai Central Chemical PCL
euro 3 3/4%, 10/25/03 - 1,000,000 885,000
Wattachak PCL euro
3 1/2%, 12/6/03 - 1,800,000 1,350,000
4,395,575
TOTAL CONVERTIBLE BONDS 13,567,113
NONCONVERTIBLE BONDS - 0.1%
MALAYSIA - 0.0%
Tongkah Holdings BHD
5%, 5/26/99 - MYR 133,333 40,486
SINGAPORE - 0.1%
Hotel Properties Ltd. 3 1/2%,
10/15/98 - SGD 304,000 201,722
Pacific Can Investment
Holdings Ltd. 2 1/2%,
4/30/99 - SGD 60,000 30,129
231,851
THAILAND - 0.0%
Finance One PCL
3 3/4%, 2/7/01 - THB 818 21,576
Thai German Ceramic
Industries PCL 3%, 7/8/99 - THB 666 186,501
208,077
TOTAL NONCONVERTIBLE BONDS 480,414
TOTAL CORPORATE BONDS
(Cost $17,091,587) 14,047,527
REPURCHASE AGREEMENTS - 1.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 6,144,035 6,141,000
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $424,634,098) $ 400,095,394
CURRENCY ABBREVIATIONS
IDR - Indonesian rupiah
MYR - Malaysian ringgit
SGD - Singapore dollar
CHF - Swiss franc
THB - Thai baht
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $12,417,084 or 3.1% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $105,800,518 and $177,708,956, respectively.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $8,540,000 and $4,612,412, respectively. The
weighted average interest rate was 6.18% (see Note 7 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $424,777,597. Net unrealized depreciation aggregated
$24,682,203, of which $41,711,209 related to appreciated investment
securities and $66,393,412 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 3.0%
Basic Industries 15.2
Conglomerates 0.2
Construction & Real Estate 16.9
Durables 5.0
Energy 3.9
Finance 13.3
Health 3.1
Holding Companies 1.9
Industrial Machinery & Equipment 6.5
Media & Leisure 4.9
Nondurables 5.4
Precious Metals 1.1
Repurchase Agreements 1.6
Retail & Wholesale 3.8
Services 1.6
Technology 6.3
Transportation 4.0
Utilities 2.3
100.0%
PACIFIC BASIN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $6,141,000) (cost $424,634,098) - See $ 400,095,394
accompanying schedule
Cash 5,779
Receivable for investments sold 6,687,985
Receivable for fund shares sold 1,512,209
Dividends receivable 1,689,420
Interest receivable 397,347
TOTAL ASSETS 410,388,134
LIABILITIES
Payable for investments purchased $ 5,275,245
Payable for fund shares redeemed 2,872,662
Accrued management fee 200,615
Other payables and accrued expenses 246,212
TOTAL LIABILITIES 8,594,734
NET ASSETS $ 401,793,400
Net Assets consist of:
Paid in capital $ 419,697,990
Distributions in excess of net investment income (1,343,082
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 7,926,702
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies (24,488,210
)
NET ASSETS, for 26,644,994 shares outstanding $ 401,793,400
NET ASSET VALUE, offering price and redemption price per share ($401,793,400 (divided by) 26,644,994 shares) $15.08
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 3,459,862
Dividends
Interest 787,974
4,247,836
Less foreign taxes withheld (464,000
)
TOTAL INCOME 3,783,836
EXPENSES
Management fee $ 1,685,008
Basic fee
Performance adjustment 129,566
Transfer agent 814,431
Fees
Redemption fees (272
)
Accounting fees and expenses 132,010
Non-interested trustees' compensation 3,571
Custodian fees and expenses 260,923
Registration fees 83,124
Audit 22,192
Legal 3,254
Interest 13,452
Miscellaneous 2,824
Total expenses before reductions 3,150,083
Expense reductions (231,426 2,918,657
)
NET INVESTMENT INCOME 865,179
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 8,126,909
Foreign currency transactions (4,504 8,122,405
)
Change in net unrealized appreciation (depreciation) on:
Investment securities (84,517,787
)
Assets and liabilities in foreign 39,585 (84,478,202
currencies )
NET GAIN (LOSS) (76,355,797
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (75,490,618
)
OTHER INFORMATION
Deferred sales charges withheld $12,979
by FDC
Accounting fees paid to FSC $110,908
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
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Operations $ 865,179 $ 227,067
Net investment income
Net realized gain (loss) 8,122,405 95,892,182
Change in net unrealized appreciation (depreciation) (84,478,202 (23,604,018
) )
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (75,490,618 72,515,231
)
Distributions to shareholders - (256,048
From net investment income )
In excess of net investment income (583,407 (2,801,167
) )
From net realized gain (52,235,883 (6,809,163
) )
TOTAL DISTRIBUTIONS (52,819,290 (9,866,378
) )
Share transactions 456,057,561 965,069,943
Net proceeds from sales of shares
Reinvestment of distributions 51,819,825 9,613,028
Cost of shares redeemed (531,315,171 (977,332,983
) )
Redemption fees 8,954 -
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (23,428,831 (2,650,012
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS (151,738,739 59,998,841
)
NET ASSETS
Beginning of period 553,532,139 493,533,298
End of period (including distributions in excess of net investment income of $1,343,082 and
$352,101, respectively) $ 401,793,400 $ 553,532,139
OTHER INFORMATION
Shares
Sold 29,767,002 51,298,442
Issued in reinvestment of distributions 3,265,316 566,134
Redeemed (34,120,511 (52,364,846
) )
Net increase (decrease) (1,088,193 (500,270
) )
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1995
(UNAUDITED)
SELECTED PER-SHARE DATA 1994 1993 1992 1991 E 1990
</TABLE>
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<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78
Income from Investment Operations
Net investment income .03 D .10 .20 .08 D .02 D .12
Net realized and unrealized gain (loss) (2.87) 2.78 5.39 (1.23) .40 (2.37)
Total from investment operations (2.84) 2.88 5.59 (1.15) .42 (2.25)
Less Distributions - (.01) (.11) - (.16) (.01)
From net investment income
In excess of net investment income (.02) (.11) - - - -
From net realized gain (2.02) (.28) - - - (.63)
Total distributions (2.04) (.40) (.11) - (.16) (.64)
Net asset value, end of period $ 15.08 $ 19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89
TOTAL RETURN B, C (14.74)% 16.88% 47.06% (8.75)% 3.37% (14.99)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 401,793 $ 553,532 $ 493,533 $ 116,277 $ 95,051 $ 86,354
Ratio of expenses to average net assets 1.36% A 1.54% 1.59% 1.84% 1.88% 1.59%
Ratio of expenses to average net assets before
expense 1.46% A, 1.54% 1.59% 1.84% 1.88% 1.59%
reductions F
Ratio of net investment income to average net
assets .40% A .04% .15% .65% .12% .88%
Portfolio turnover rate 50% A 88% 77% 105% 143% 118%
A ANNUALIZED B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. D NET INVESTMENT INCOME PER SHARE HAS
BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E AS OF NOVEMBER 1, 1991 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING. F INCLUDES THE
EFFECT OF ANNUALIZING A VOLUNTARY REIMBURSEMENT OF FEES BY FMR. (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
EMERGING MARKETS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Emerging Markets
Fund has a 3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
EMERGING MARKETS -26.69% -15.14% 48.31%
EMERGING MARKETS
(INCL. 3% SALES CHARGE) -28.89% -17.69% 43.86%
Morgan Stanley Emerging
Markets Free Index -20.18% -4.81% 159.46%
Average Emerging Markets Fund -19.22% -9.68% 68.92%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on November 1, 1990. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley Emerging Markets Free Index - a broad measure of the
performance of stocks in developing countries, weighted by each country's
market capitalization (or the total value of its outstanding shares).
Mexico, Malaysia, Brazil, and Thailand are most heavily weighted, and
together account for over 60% of the index. Keep in mind that before
February 1992, the fund's objective was more broadly defined, and did not
focus specifically on emerging markets. However, to measure how the fund's
performance stacked up against its peers, you can compare it to the average
emerging markets fund, which reflects the performance of 44 funds with
similar objectives tracked by Lipper Analytical Services over the past six
months. These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
EMERGING MARKETS -15.14% 9.16%
EMERGING MARKETS
(INCL. 3% SALES CHARGE) -17.69% 8.42%
Morgan Stanley Emerging Markets Free Index -4.81% 47.64%
Average Emerging Markets Fund -9.68% 12.29%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Emerging Morgan Stanley EMF
11/01/90 9700.00 10000.00
11/30/90 9564.20 9479.74
12/31/90 9777.33 9880.37
01/31/91 9709.16 10679.30
02/28/91 10118.18 12260.21
03/31/91 10108.44 12766.06
04/30/91 10332.42 12903.41
05/31/91 10332.42 13918.67
06/30/91 9972.10 13421.82
07/31/91 10186.35 14119.08
08/31/91 10108.44 14418.70
09/30/91 10225.30 13869.26
10/31/91 10127.92 14439.40
11/30/91 9991.58 14225.77
12/31/91 10438.07 15824.40
01/31/92 10517.68 17656.36
02/29/92 10826.14 18442.83
03/31/92 10806.24 19068.46
04/30/92 11064.96 18940.35
05/31/92 11542.58 18873.02
06/30/92 11522.68 17002.12
07/31/92 11144.56 17189.36
08/31/92 10865.95 16390.47
09/30/92 10796.29 16450.88
10/31/92 10995.30 17332.58
11/30/92 10905.75 17144.49
12/31/92 11048.91 17652.99
01/31/93 11201.38 17738.37
02/28/93 11770.60 18033.91
03/31/93 12095.86 18628.41
04/30/93 12482.12 19056.85
05/31/93 12756.56 19581.32
06/30/93 12919.19 20162.41
07/31/93 13142.81 20705.31
08/31/93 14057.63 22457.49
09/30/93 14372.73 23058.76
10/31/93 16446.31 25127.66
11/30/93 17096.84 26239.62
12/31/93 20082.32 30576.92
01/31/94 19501.26 31133.23
02/28/94 18950.78 30579.38
03/31/94 17115.84 27812.28
04/30/94 16952.74 27255.97
05/31/94 17391.08 28188.79
06/30/94 16167.80 27411.79
07/31/94 17401.28 29116.21
08/31/94 19613.39 32729.91
09/30/94 20112.90 33101.88
10/31/94 19623.58 32504.77
11/30/94 18267.77 30814.71
12/31/94 16480.81 28339.78
01/31/95 14212.53 25324.70
02/28/95 14376.01 24675.15
03/31/95 14089.92 24831.93
04/28/95 14386.23 25945.92
Let's say you invested $10,000 in Fidelity Emerging Markets Fund on
November 1, 1990, when the fund started, and paid the 3% sales charge. By
April 30, 1995, the value of your investment would have grown to $14,386 -
a 43.86% increase on your initial investment. That compares to $10,000
invested in the Morgan Stanley Emerging Markets Free Index, which would
have grown to $25,946 over the same period - a 159.46% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EMERGING MARKETS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Hazlewood,
Portfolio Manager of Fidelity Emerging Markets Fund
Q. RICHARD, HOW HAS THE FUND PERFORMED?
A. For the six and 12 months ended April 30, 1995, the fund had total
returns of -26.69% and -15.14%, respectively. During the same periods, the
Morgan Stanley Emerging Markets Free Index posted returns of -20.18% and
- -4.81%, respectively. The average emerging markets fund, as tracked by
Lipper Analytical Services, had total returns of -19.22% and -9.68% for the
six- and 12-month periods, respectively.
Q. HOW WOULD YOU CHARACTERIZE THE BACKDROP FOR EMERGING MARKETS OVER THE
PAST SIX MONTHS?
A. It's been a rough period, really a continuation of about a 15-month
downturn in emerging markets. Of course, the most significant occurrence
during the period was Mexico's devaluation of the peso in December. This
event sparked a huge sell-off in all emerging markets, but in Latin America
in particular. Beyond that, emerging markets also have suffered from the
relative attractiveness of alternative investments. Through the end of
1993, interest rates remained fairly low, and investors looked abroad to
take advantage of the stellar returns emerging markets were offering at the
time. However, when interest rates started rising at the beginning of 1994,
investors turned their focus back to the U.S., where, at the time, they
could get satisfactory returns of about 7% on a safer investment, such as a
2-year Treasury. Because of the combination of more attractive alternatives
and negative situations like the Mexican devaluation, emerging markets
suffered from a flight of capital back to the U.S.
Q. GRANTED, EMERGING MARKETS HAVE STRUGGLED, BUT WHY DID THE FUND TRAIL THE
INDEX AND THE AVERAGE FUND?
A. In terms of the index, I believe it was a matter of breadth. That is,
some of the larger stocks may have performed better, but the medium- and
smaller-sized company stocks - where the fund has more investments - really
suffered. These issues tend to rise and fall more quickly than the rest of
the market. As far as the Lipper average is concerned, the fund was more
fully invested than other funds, whose managers were content to keep more
cash in their portfolios, and cash performed better in the down market.
Q. AS FAR AS MEXICO IS CONCERNED, HOW DID THE GOVERNMENT'S DEVALUATION OF
THE PESO AFFECT THE FUND?
A. The fund had about 35% to 40% of its investments in Latin America when
the devaluation occurred. At the end of the period, that was down to about
25%. Obviously, the fund's Mexican investments were affected by the
devaluation. But other Latin American markets were as well. For example, I
felt that Argentina's currency structure was much sounder than Mexico's,
and the fund had more weighting there than the index. Unfortunately,
Mexico's difficulties brought Argentina down with it, because investors
were leery of another currency problem, devaluation. Brazil suffered as
well.
Q. WHAT TYPES OF INVESTMENTS HAVE YOU KEPT IN MEXICO?
A. I've concentrated the fund's investments on fewer names, increasing
holdings in larger companies and reducing the smaller ones. I've sold out
of the banking sector - because no one knows how bad the loan situation
will become as the economy enters recession - and the construction sector -
because most building will come to a halt. Exporters - such as the
diversified conglomerate Grupo Carso, which has reactivated an aluminum
facility and started exporting the metal - are attractive, because their
products have become cheaper to sell abroad. The currency situation also
has created a difficult environment for firms carrying significant debt,
but a positive backdrop for companies with large cash holdings. As interest
rates have gone sky-high, these businesses can lend money at up to 65%
interest. Grupo Carso - which generates a solid amount of cash from
cigarettes and other consumer nondurables - has benefited from this, as has
Cifra, a large retailer with a significant cash holding. I've also
purchased Mexican Cetes, short-term bonds that are yielding 75%.
Q. IN THE LAST REPORT, YOU TALKED ABOUT TARGETING COMPANIES IN THE
TELECOMMUNICATIONS, ELECTRICITY GENERATION AND BANKING INDUSTRIES. HAVE YOU
CONTINUED THAT THEME?
A. Yes, I have. I'll start with telecommunications, which has been a good
business; equipment costs have been going down while usage has been going
up, especially in the cellular telephone area. Cellular technology makes
more sense for remote areas, such as much of the Philippines, where it is
cheaper to install a wireless system than a fixed line. At the same time,
some problems have been cropping up in the telephone business.
Q. SUCH AS . . ?
A. One worry has been the proliferation of new licenses. It's easy to see
why a company with exclusive cellular rights to a particular area is an
appealing investment. However, as governments have realized that cellular
phone businesses have great potential, they've tended to reward political
allies with new licenses. For example, the Malaysian government has added
four new cellular licenses where there used to be only one. As a result,
I've reduced the fund's position in Technology Resources. At the same time,
I'm still positive about some cellular businesses, such as Metro Pacific in
the Philippines, and its parent company First Pacific in Hong Kong.
Q. WHAT'S BEHIND THE APPEAL OF ELECTRIC COMPANIES?
A. The main appeal is that companies such as YTL and Malakoff in Malaysia
have been able to not only build new power plants, but also maintain at
least partial ownership when the project is finished. That way, they can
make money constructing the plants and running them. Consolidated Electric
Power Asia (CEPA) is another company poised to take advantage of similar
situations in China, the Philippines and Indonesia.
Q. LET'S TURN TO THE BANKS . . .
A. The best values - that is the best trade-off of price to growth - have
been the Thai banks. These stocks did well last year, but have been
disasters during the first few months of 1995. That's because, on the heels
of Mexico's currency problems, the sentiment in the market was that
Thailand was going to devalue the baht. That didn't come to pass, although
the fund's bank stocks took a beating. I have seized the opportunity to buy
Thai bank stocks at cheaper prices. Finance is the largest sector
represented in the fund, and the fund's investments in Thailand are double
the weight of the index. Industrial Finance Corporation Thailand (IFTC) is
one of the fund's top holdings. It's a long-term lender and a beneficiary
of the higher interest rates that have hit the Thai market.
Q. WHAT'S YOUR OUTLOOK?
A. We've had about 15 months in which emerging market stocks have been
pretty well battered. Although stock valuations are at pretty low levels,
stock prices can always get cheaper. At the same time, now is the time to
buy, when prices are so low. We've seen some positive signs in that some of
the larger companies' stocks have started to rebound - such as IFTC and
CEPA. If earnings come through, stocks eventually will go up. It appears
capital is starting to flow back into the markets. Once we start to see
positive performance with some breadth, that will help the performance of
the fund.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
of emerging economies and developing capital
markets
START DATE: November 1, 1990
SIZE: as of April 30, 1995, more than $1.2
billion
MANAGER: Richard Hazlewood, since 1993;
assistant Fidelity Low-Priced Stock Fund and
Fidelity Contrafund, 1992-1993; analyst
Japanese stocks, 1991-1992; joined Fidelity
in 1991
(checkmark)
RICHARD HAZLEWOOD ON BUSINESS RISK:
"When investing in emerging markets, one factor that
I have to keep my eye on is business risk, including
the danger that good businesses can turn sour
because of overdiversification. Two stories from India
serve as good examples. In the first case, the fund
owned a fertilizer company that decided to invest in
an aluminum smelter; the fertilizer business suddenly
became a `cash cow,' funding an aluminum
subsidiary. The second story involved a textile and
cement company I wanted to buy. Without warning,
the family running the business merged their
loss-making tire business with the company.
"To minimize this kind of risk, I must get to know the
management and learn whom I can trust. That's why I
spend so much time visiting companies. It is crucial
that I undertake this kind of continual fundamental
research, in order to avoid the pitfalls of unexpected
situations like these."
(solid bullet) Foreign ownership in Korean stocks - where the
fund's stake was 4.3% of investments as of April 30 -
was limited to 12% of outstanding shares at the end of
the period. Subsequently, the Korean government
announced foreign ownership levels will expand to
15% of a company's stock. The government has
promised to open the market completely by 1997.
(solid bullet) Sampoerna, a cigarette manufacturer, was one of
the few Indonesian stocks that performed well during
the period. The manager has sold the position in
order to take profits.
(solid bullet) Hopewell Holdings, one of the fund's top 10
positions, is involved with two major infrastructure
projects. One is a highway from Hong Kong to
Guangzhou, in the People's Republic of China, one of
the fastest growing areas in the world. The company
owns property along the highway's interchanges,
where it plans to develop condominiums and
shopping centers. The second project is a
combination elevated highway/train line/shopping
arcade in Bangkok.
EMERGING MARKETS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
4.6.86.8
Argentina 4.3%
India 5.9%
Row: 1, Col: 1, Value: 5.9
Row: 1, Col: 2, Value: 16.3
Row: 1, Col: 3, Value: 3.8
Row: 1, Col: 4, Value: 17.3
Row: 1, Col: 5, Value: 3.8
Row: 1, Col: 6, Value: 7.4
Row: 1, Col: 7, Value: 20.3
Row: 1, Col: 8, Value: 4.5
Row: 1, Col: 9, Value: 9.6
Row: 1, Col: 10, Value: 6.8
Row: 1, Col: 11, Value: 4.1
Brazil 6.8%
Thailand 16.3
%
Hong Kong 9.6%
Korea (South) 4.5%
Philippines 3.8
%
Other 17.3
%
Malaysia 20.3%
United States 3.8%
Mexico 7.4%
AS OF OCTOBER 31, 1994
India 5.8%
Argentina 4.1%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 13.1
Row: 1, Col: 3, Value: 3.5
Row: 1, Col: 4, Value: 15.1
Row: 1, Col: 5, Value: 15.1
Row: 1, Col: 6, Value: 20.9
Row: 1, Col: 7, Value: 3.4
Row: 1, Col: 8, Value: 5.7
Row: 1, Col: 9, Value: 13.3
Row: 1, Col: 10, Value: 4.1
Thailand 13.1
%
Brazil 13.3
%
Philippines 3.5
%
Hong Kong 5.7%
Korea (South) 3.4%
Other 15.1
%
Malaysia 20.9%
Mexico 15.1%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 92.1 94.2
Bonds 4.3 4.4
Short-term investments 3.6 1.4
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L 2.8 1.3
(Mexico, Telephone Services)
Consolidated Electric Power Asia Ltd. 2.5 1.5
(Hong Kong, Electric Utility)
Industrial Finance Corp. (For. Reg.) 2.5 0.8
(Thailand, Credit & Other Finance)
Krung Thai Bank (For. Reg.) 2.3 1.0
(Thailand, Banks)
Bangkok Bank Ltd. 2.3 1.3
(Thailand, Banks)
Grupo Carso SA de CV Class A-1 2.2 1.9
(Mexico, Conglomerates)
Thai Farmers Bank PCL 2.2 1.3
(Thailand, Banks)
Hopewell Holdings Ltd. 1.8 1.0
(Hong Kong, Construction)
Siam City Bank PCL (For. Reg.) 1.6 0.6
(Thailand, Banks)
Telebras PN (Pfd. Reg.) 1.6 1.8
(Brazil, Telephone Services)
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 29.4 22.8
Utilities 15.7 12.6
Basic Industries 12.7 15.6
Construction & Real Estate 11.2 13.9
Holding Companies 6.6 6.6
Nondurables 4.2 5.3
Durables 3.0 4.9
Retail & Wholesale 2.9 3.0
Media & Leisure 2.5 2.5
Conglomerates 2.2 1.9
EMERGING MARKETS
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.2%
SHARES VALUE (NOTE 1)
ARGENTINA - 4.3%
Astra Comp Argentina de
Petroleum (Reg.) 1,836,420 $ 2,828,275
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing
Class B shares 406,602 6,556,457
Banco del Sud SA 23,652 139,540
Banco Frances del Rio de la Plata SA 344,459 2,187,315
Banco Frances del Rio de la Plata SA ADR 229,200 4,211,550
Buenos Aires Embotelladora SA
sponsored ADR 145,100 3,990,250
Capex SA Class A (a)(b) 100,000 744,963
Central Costanera SA ADR (b) 109,700 3,126,450
Commercial del Plata 1,411,040 3,174,685
Mirgor Sacifia Class C sponsored
ADR (b) 208,000 390,000
Molinos Rio de La Plata SA (Reg.) (a) 654,715 3,273,575
Perez Companc Class B 2,161,151 8,817,064
Telecom Argentina sponsored ADR
Class B 44,200 1,933,750
Telecom Argentina Stet France Telecom SA 1,456,779 6,322,100
Telefonica de Argentina SA:
Class B 223,000 524,023
sponsored ADR 166,500 3,912,750
Transportadora de Gas del Sur SA:
Class B 95,000 182,391
Class B (b) 185,000 355,182
52,670,320
AUSTRALIA - 0.0%
Odin Mining & Investment Co. 280,750 112,359
BANGLADESH - 0.2%
Advanced Chemical Industries 150,000 486,920
Bangladesh Lamps Ltd. (a) 161 11,200
Beximco Pharmaceuticals Ltd. (a) 392,680 1,253,442
Padma Textile Mills Ltd. (a) 55,000 541,770
Padma Textile Mills Ltd. (New) (a) 19,250 189,620
2,482,952
BERMUDA - 0.1%
AES China Generating Co. Class A 10,000 88,750
Central European Media Class C (a) 76,000 931,000
1,019,750
BRAZIL - 6.6%
Acesita Cia Acos Especiais Itabira Ord. 281,917,326 2,399,116
Bradesco PN 606,933,020 4,636,968
Brahma (Cia Cervejaria):
ON (warrants) (a) 1,676,255 96,703
PN (warrants) (a) 130,763 7,061
PN (Pfd. Reg.) Class B 7,350,087 2,124,175
Brasmotor PN 5,048,100 1,359,706
Casa Anglo PN Ord. 9,831,557 1,232,976
Compania Paulista de Forca Luz Ord. (a) 34,602,260 1,660,305
Compania Siderurgica Nacionalon 56,502,100 1,429,503
Compania Vale do Rio Doce PN Ord. 33,400,000 5,444,868
Copene Petroquimica do Nordeste SA 1,300,000 925,730
Coteminas PN 10,656,252 2,800,570
Eletrobras PN Class B 66,900,000 17,947,263
Itaubanco PN (Pfd. Reg.) 9,419,900 2,516,809
Karsten PN 1,451,638 41,952
Klabin Industria de Papel Celulose PN 1,806,910 2,581,297
Light Servicos de Electricidade SA Ord. 2,890,000 1,103,055
Moinho Santista-Industrias Gerais SA
Ord. 343,700 416,039
SHARES VALUE (NOTE 1)
Telebras:
ON 22,155,700 $ 659,797
PN (Pfd. Reg.) 547,600,000 19,527,416
Telesp PN (Pfd. Reg.) 48,411,308 6,071,746
Unibanco PN 51,278,034 1,498,857
Usiminas PN (Pfd. Reg.) 840,000,000 1,016,794
Votorantim Celulose E Paper SA:
(Pfd. Reg.) 42,740,000 1,794,427
Receipt Prorata 5,218,405 193,498
79,486,631
CANADA - 0.0%
Bolivar Goldfields Ltd. (a) 51,750 57,248
CHILE - 2.2%
Banco Osorno y la Union SA, Series A
sponsored ADR 185,700 2,228,400
Chilgener SA sponsored ADR 34,000 952,000
Compania Cervecerias Unidas SA ADR 306,300 7,274,625
Cristalerias de Chile SA sponsored ADR 73,200 1,354,200
Empresa Nacional de Electricidad SA 102,600 2,539,350
Empresas Telex Chile SA sponsored ADR 63,600 500,850
Enersis SA sponsored ADR 235,000 6,580,000
Madeco SA ADR 55,100 1,604,788
Maderas Y Sinteticos SA sponsored ADR 107,100 1,874,250
Quimica Y Minera de Chile SA ADR 38,900 1,356,638
Vina Concha Y Toro SA sponsored ADR (a) 20,200 388,850
26,653,951
CHINA (PEOPLES REP.) - 0.5%
China First Pencil Co. Ltd. Class B (a)(e) 3,299,802 983,341
Huaneng Power International, Inc. Class N
sponsored ADR 50,000 725,000
Shandong Huaneng Power Development
Ltd. Class N sponsored ADR 50,170 407,631
Shanghai Diesel Engine Class B (a) 896,800 581,126
Shanghai Hero Ltd. Class B (a)(e) 2,549,600 764,880
Shanghai Industrial Sewing Machine Corp.
Class B (a) 1,135,600 283,900
Shanghai New Asia Class B 100,000 35,000
Shanghai Refrigerator Compressor Co.
Ltd. Class B (a)(e) 3,644,420 1,166,214
Shanghai Vacuum Electron Devices Co.
Ltd. (a)(e) 5,619,598 1,011,528
Tsingtao Brewery Co. Ltd. 952,000 338,160
Yizheng Chemical Fibre Co. Ltd. Class H 1,000,000 332,600
6,629,380
COLOMBIA - 0.5%
Banco Ganadero SA Class C sponsored
ADR 58,000 1,044,000
CADENALCO Gran Cadena de
Almacenes Colombianos ADR (b) 50,500 833,250
Carulla & CIA SA Class B sponsored
ADR (a)(b) 88,100 1,585,800
Cementos Diamante SA Class B ADR (a)(b) 50,000 1,062,500
Cementos Paz del Rio sponsored
ADR (a)(b) 102,000 1,683,000
Corporacion Financiera del Valle
ADR Class B (a)(b) 8,185 112,544
6,321,094
CZECH REPUBLIC - 0.0%
Deza Valasske Mezirici AS 1,000 63,842
GREECE - 0.2%
Alpha Credit Bank 40,000 1,947,529
Hellenic Bottling Co. SA 11,250 313,565
2,261,094
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HONG KONG - 9.2%
CDL Hotels International Ltd. 21,659,583 $ 9,931,785
Chevalier International Holdings Ltd.
(warrants) (a) 660,400 11,088
Chinney Investments Ltd. 3,422,000 495,061
Chinese Estates Holdings Ltd. 1,000,000 710,410
Consolidated Electric Power Asia Ltd. 13,976,723 30,600,078
Dah Sing Financial Holdings Ltd. 1,966,875 3,556,739
Dao Heng Bank Group Ltd. 1,002,000 2,562,595
First Pacific Bancshares Holding Ltd. 5,050,000 704,475
First Pacific Co. Ltd. 11,487,309 9,421,891
Grand Hotel Holdings Ltd. Class A 3,497,000 1,174,398
Great Eagle Holdings Ltd. 240,000 430,896
Guoco Group Ltd. 1,114,000 4,230,382
Henderson Investment Ltd. 350,000 248,644
Henderson Investment Ltd. (warrants) (a) 390,000 22,164
HKR International Ltd. 1,400,000 1,094,030
Hon Kwok Land Investment Ltd. Ord. 10,000,000 2,325,000
Hong Kong & Shanghai Hotels 100,000 121,416
Hong Kong Ferry Holdings Ltd. 371,000 388,155
Hopewell Holdings Ltd. 30,883,439 21,939,904
International Bank of Asia Ltd. 3,710,000 1,689,200
Island Dyeing & Printing Co. Ltd. (a) 151,000 115,074
Jardine International Motor Corp. 308,000 314,286
JCG Holdings Ltd. 9,686,000 5,442,273
Kwong Sang Hong International Ltd. 5,000,000 1,307,800
Liu Chong Hing Bank Ltd. 1,500,000 1,443,420
Liu Chong Hing Investment Ltd. 3,174,000 2,562,307
Magnum International Holdings Ltd. 3,750,000 184,050
Magnum International Holdings Ltd.
(warrants) (a) 250,000 323
Mingly Corp. Ltd. 5,646,000 926,170
Nanyang Holdings Ltd. (a) 430,000 397,118
Peregrine Investments Holdings Ltd. 2,400,000 2,526,480
Pricerite Group Ltd. 2,756,000 295,471
Tai Cheung Holdings Ltd. 2,406,000 2,051,091
Tai Ping Carpets International Ltd. 50,000 26,641
Tian Teck Land Ltd. 2,800,000 531,636
Wing On Co. International Ltd. 1,208,000 1,271,662
111,054,113
HUNGARY - 0.1%
EGIS RT EDR 14,000 286,720
Gedeon Richter GDR 85,000 1,381,250
1,667,970
INDIA - 5.3%
Alacrity Housing Ltd. (a) 160,000 184,280
Apollo Hospitals Enterprises Ltd. (a) 100,000 116,122
Bajaj Auto Ltd. GDR 20,000 507,600
Bajaj Auto Ltd. GDR (b) 88,000 2,244,000
Bharat Heavy Electricals Ltd. 1,000,000 3,078,024
Bharti Telecom Ltd. (a) 14,000 34,875
Bombay Dyeing & Manufacturing Co. GDR 69,000 690,000
Century Textiles & Industries GDR (a)(b) 7,000 840,000
CESC Ltd. GDR 26,000 104,000
Chemicals & Plastics India Ltd. (a)(b) 315,000 1,740,730
Core Parenterals Ltd. GDR (a) 348,000 1,827,000
Cosmo Films Ltd. (a) 20,275 88,241
Crompton Greaves Ltd. (a) 300,000 1,479,360
E.I.D.-Parry Ltd. GDR 50,000 162,500
East India Hotels Ltd. GDR (a)(b) 130,000 1,820,000
Finolex Cables Ltd. GDR (a)(b) 175,000 1,531,250
Finolex Cables Ltd. GDR (a) 55,000 481,250
Grasim Industries GDR (b) 212,000 4,293,000
SHARES VALUE (NOTE 1)
Great Eastern Shipping Co. Ltd. 600,000 $ 824,624
Great Eastern Shipping Co. Ltd. GDR (a) 172,700 1,079,375
Gujarat Ambuja Cement Ltd. GDR 40,000 280,000
Himachal Futuristic Communications Ltd. (a) 20,000 56,120
Hindalco Industries Ltd. (RFD) GDR (a) 20,000 520,000
Housing Development Finance Corp.
Ltd. (a) 21,000 1,202,577
India Cements Ltd. GDR (b) 181,500 1,724,250
Indian Aluminum Ltd. GDR (b) 85,000 807,500
Indian Petrochemicals Corp. Ltd. GDR (b) 163,000 2,466,190
Indian Rayon & Industries, Inc. GDR (a) 110,000 1,609,300
Indo Gulf Fertilizer and Chemicals Corp.
Ltd. GDR (a)(b) 387,000 774,000
Industrial Credit & Investments Corp. Ltd. (a) 192,000 577,237
ITC Ltd. GDS unit (1 share &
1/3 warrants) (a)(b) 122,000 884,500
JCT Electronics Ltd. (a) 50,000 78,740
JCT Ltd. GDR (a) 43,000 763,250
JCT Ltd. GDR (a)(b) 168,000 2,982,000
JK Corp. Ltd. GDR 75,000 375,000
JK Corp. Ltd. GDR (b) 250,000 1,250,000
Larsen & Tourbo Ltd. GDR (b) 179,640 2,964,060
Mahindra & Mahindra Ltd. GDR 250,000 2,657,500
Maral Overseas Ltd. 405,000 487,044
Mukand Ltd. 95,000 693,629
Nicholas Piramal India Ltd. (a) 25,000 231,926
NIIT Ltd. (a) 10,000 75,877
Prime Securities 300,000 901,933
Ranbaxy Laboratories Ltd. GDR (a)(b) 40,000 890,000
Reliance Industries Ltd. (a) 1,000,000 7,122,405
Reliance Industries Ltd.:
GDR (b) 90,000 1,395,000
GDS (a) 120,000 1,890,000
Shriram Industrial Enterprises Ltd.:
GDR (b) 105,600 924,000
GDR (warrants) (a)(b) 35,200 352
Southern Petrochemical Industries Corp.
GDS (a) 50,000 412,500
State Bank of India (a) 20,000 99,069
Tata Electric Companies GDR 1,000 350,000
Tata Electric Companies GDR (a)(b) 1,200 420,000
Tata Engineering & Locomotive Ltd.:
GDR (a)(b) 52,000 858,000
(warrants) (a)(b) 357,000 1,028,160
Tube Investments of India Ltd. GDR (b) 62,000 294,500
Unitech Ltd. 254,350 888,495
Zee Telefilms Ltd. (a) 88,300 553,060
64,614,405
INDONESIA - 1.5%
Bank Bali PT (For. Reg.) 100,000 174,653
Bank Dagang Nas Indonesia PT (a) 825,000 1,025,244
Bank International Indonesia PT Ord. 100,000 206,001
Bank Niaga PT (a) 283,000 532,289
Barito Pacific Timber PT (For. Reg.) 80,000 89,566
Duta Anggada Realty Ord. 295,000 175,044
Gudang Garam PT Perusahaan 566,500 3,336,085
Heromini Supermarket PT (For. Reg.) (a) 547,000 832,873
Indo Rama Synthetics PT (For. Reg.) 225,000 690,215
Lippo Bank (For. Reg.) 1,493,050 2,139,615
Matahari Putra Prima PT (For. Reg.) 2,100,000 3,056,424
Mayatexdian Ord. (For. Reg.) 50,000 22,951
Pakuwon Jati PT (For. Reg.) 656,500 308,699
Panin Bank PT (For. Reg.) 1,971,000 1,941,869
Roda Vivatex PT (For. Reg.) 1,560,000 943,129
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDONESIA - CONTINUED
SUCACO PT 50,000 $ 138,827
Trias Sentosa (For. Reg.) 803,000 1,132,760
United Tractors PT (For. Reg.) 584,000 1,019,974
17,766,218
KOREA (SOUTH) - 4.3%
Boram Bank 27,067 287,588
Cheil Foods & Chemical Industries 5,814 396,574
Cho Hung Bank Co. Ltd. 13,537 164,252
Cho Kwang Paint Industry Co. Ltd. (a) 8,600 505,385
Chosun Brewery Co. Ltd. (a) 16,674 667,091
Chosun Refractories Co. (a) 21,824 901,759
Citizens National Bank 10,000 195,448
Dae Chang Industrial Co. 3,457 70,287
Daelim Industrial Co. 1,189 27,450
Daewoo Electronics Components Co. Ltd. 1,800 21,604
Daewoo Metal Co. Ltd. 1,127 18,627
Dai Han Investment & Finance (a) 30,000 802,781
Dong-A Investment & Finance (a) 38,603 617,769
Dong Chang Paper Mfg. Co. Ltd. (a) 20,000 275,464
Han Chang Co. Ltd. 10,200 485,682
Hanil Development Co. (a) 1,135 23,226
Hannong Corp. 5,070 320,553
Hung Chang Products Co. (a) 4,000 165,278
Hyundai International Merchant Bank 10,400 376,520
Hyundai Motor Service Co. Ltd. 16,250 939,887
Hyundai Securities Co. Ltd. (a) 31,202 605,745
Jinro Ltd. 28,000 767,626
Ke Yang Electric Machinery 10,000 389,585
Keumkang Development Industries Co. Ltd. 40,110 857,602
Kohap Ltd. 103,500 1,927,854
Kolon International Corp. 4,726 69,432
Korea Electric Power Corp. 249,410 9,401,577
Korea Electric Power Corp. ADR 10,000 210,000
Korea Electronics Co. Ltd. 10,000 386,961
Korea Line Corp. 38,060 1,278,069
Korea Mobile Telecommunications Corp. 11,200 8,197,807
Korean Air 1,304 47,168
Kukdong Construction Co. 79,605 1,242,604
Kumkang Industrial Co. Ltd. 600 9,759
LG Chemical Ltd. 6,190 176,366
LG Electronics 40,000 1,783,734
LG Securities Co. Ltd. 30,690 583,728
Mando Machinery Corp. 1,000 67,992
Miwon Co. Ltd. 10,609 361,821
Nae wae Semiconductor Co. 22,440 529,835
Namsung Corp. 8,110 148,934
Onyang Pulp Co. (a) 35,000 583,065
Ottogi Foods Co. Ltd. 10,000 314,816
Samsung Electronics Co. Ltd. 10,000 1,727,388
Samsung Electronics Co. Ltd.:
GDR (non-vtg.) 3,760 181,044
GDS (Reg.) (non-vtg.) 54,000 2,619,000
Samsung Fire & Marine Insurance 500 145,930
Samsung Heavy Industries Co. Ltd. 4,404 115,537
Samyang Foods Co. (a) 30,000 1,613,432
Shinhan Investment & Finance (a) 39,045 722,154
Ssangyong Cement Co. 40,258 1,045,593
Ssangyong Heavy Industries Co. Ltd. (a) 34,312 306,055
Ssangyong Oil Refining 20,000 527,317
Sunny-Emi Co. 10,000 284,646
Tae Gu Department Store Co. 31,500 1,152,817
Tai Han Electric Wire Co. Ltd. (a) 4,000 120,679
Taihan Textile Co. (a) 5,000 274,808
SHARES VALUE (NOTE 1)
Tongyang Nylon Co. 10,000 $ 419,755
Youl Chon Chemical Co. 1,500 49,780
Yu Hwa Securities Co. (a) 79,030 991,050
Yukong Ltd. NV GDR (a)(b) 192,000 2,112,000
51,614,290
LUXEMBOURG - 0.1%
Quilmes Industries SA 37,700 720,070
MALAYSIA - 20.1%
Advance Synergy BHD (a) 3,680,000 6,495,862
Affin Holdings BHD 1,264,000 1,770,624
Affin Holdings BHD (warrants) (a) 312,800 36,726
Aokam Perdana BHD 130,000 584,211
Arab Malaysian Corp. BHD 3,110,000 8,561,954
Arab Malaysian Finance BHD (For. Reg.) 2,760,666 7,488,445
Bandar Raya Development BHD 736,000 1,239,579
Berjaya Group BHD 8,600,000 7,033,166
Berjaya Group BHD (rights) (a) 4,300,000 226,309
Buildcon BHD 150,000 291,498
Chemical Co. of Malaysia BHD 93,000 342,632
CHG Industries BHD 444,000 1,168,422
Dunlop Estates BHD 100,000 238,866
Econstates BHD 100,000 151,417
Ekran BHD Ord. 616,000 1,870,447
Gadek BHD 1,233,000 6,539,388
Gamuda BHD 91,666 345,139
Gamuda BHD (warrants) (a) 100,000 89,069
Glenealy Plantations BHD 49,000 179,535
Golden Pharos BHD 1,347,000 3,381,131
Golden Plus Holdings BHD 370,000 1,078,543
Grand United Holding BHD (a) 42,000 49,312
Ho Hup Construction Co. BHD 108,000 397,895
Johan Holdings BHD 4,096,000 3,499,008
Johan Holdings BHD (warrants) (a) 465,000 235,323
John Hancock Life BHD 1,160,000 2,723,889
Hong Leong Bank BHD 890,000 2,396,156
Hong Leong Credit BHD 3,594,000 13,095,530
Hume Industries BHD 3,319,000 13,235,674
Industrial Oxygen, Inc. BHD 3,344,000 3,993,840
Island & Peninsular BHD 185,000 449,393
Jaya Tiasa Holdings BHD 3,000 11,113
Kamunting Corp. BHD 1,600,000 1,224,288
Kent (George) BHD 452,000 805,184
Kent (George) BHD (warrants) (a) 10,000 4,899
Kuala Lumpur Industries Holdings BHD 439,000 579,410
Land & General BHD 634,500 1,836,713
Larut Consolidated BHD 1,603,000 2,258,483
Larut Consolidated BHD (warrants) (a) 165,600 90,510
Leong Hup Holdings BHD 57,400 94,814
Lien Hoe Corp. BHD 100,000 115,789
London & Pacific Insurance Co. BHD 226,500 738,188
Long Huat Timber Industry BHD 342,000 401,539
Malakoff BHD 4,234,000 11,142,110
Malaysia British Assurance BHD 152,000 267,078
Malaysia Industrial Development Finance:
BHD Ord. 1,401,000 1,917,156
BHD (warrants) (a) 247,000 130,999
Malaysian Airlines Systems BHD 500,000 1,548,585
Malaysian Assurance Alliance BHD 600,000 1,955,466
Malaysian Plantations BHD 4,339,000 3,513,375
Malaysian Resources Corp. BHD 3,505,000 5,959,902
Maruichi Malaysia Steel Tube BHD 378,000 1,193,682
Mentiga Corp. BHD 100,000 279,352
SHARES VALUE (NOTE 1)
MALAYSIA - CONTINUED
Metacorp BHD 1,155,000 $ 3,436,945
Metroplex BHD 50,000 41,498
MGR Corp. BHD 1,496,000 3,724,860
Multi-Purpose Holdings BHD 100,000 143,320
Negara Properties BHD 336,000 1,373,928
North Borneo Timber BHD (a)(e) 10,000 30,567
Omega Holdings BHD 1,324,000 2,787,364
OSK Holdings BHD 877,000 3,373,074
Oyl Industries BHD 1,250,000 7,186,238
Park May BHD 1,073,000 2,584,760
Pelangi BHD 420,000 508,423
Perlis Plantations BHD 100,000 323,887
Pernas International Hotels & Properties
BHD 127,500 85,173
Pernas International Hotels & Properties
BHD (warrants) (a) 63,750 18,196
Prime Utilities BHD 1,218,000 9,073,357
Promet BHD 1,000,000 931,170
Public Finance BHD (For. Reg.) 1,713,000 3,120,846
Rashid Hussain BHD 594,000 1,394,819
Samanda Holdings BHD (a) 950,000 2,134,612
Shapadu Kontena BHD 100,000 315,789
Southern Bank BHD:
(For. Reg.) 207,000 402,267
(For. Reg.) Class A 51,750 98,053
(RFD) 62,100 107,104
Sungei Bagen Rubber Co. BHD 10,000 493,927
Sungei Way Holdings BHD 579,250 2,298,238
Sungei Way Holdings BHD (warrants) (a) 84,750 113,229
Syarikat Kayu Wangi BHD 326,000 422,349
TA Enterprise BHD 2,800,000 7,935,228
Technology Resources Industries BHD (a) 3,315,000 8,455,272
Time Engineering BHD 231,000 556,458
Tongkah Holdings BHD 1,124,600 1,456,976
Tongkah Holdings BHD (warrants) (a) 302,666 240,172
United Engineers BHD 782,000 4,495,710
United Merchant Group BHD 4,305,800 6,694,055
Westmont BHD 4,782,000 8,479,825
Wing Tiek Holdings BHD 2,120,000 5,278,546
Yangtzekiang BHD 400,000 1,732,792
Yeo Hiap Seng BHD 645,000 1,566,802
YTL Corp. BHD 3,456,400 15,672,735
YTL Corp. BHD (warrants) (a) 1,150,800 3,634,100
Zalik BHD 1,439,000 3,379,031
Zalik BHD (New) 959,333 2,252,687
243,612,000
MEXICO - 7.3%
Cifra SA Class C 9,789,100 13,736,163
Corporacion Geo SA de CV (a) 229,000 696,872
Corporacion Geo SA de CV Class B
sponsored ADR (b) 12,700 139,700
Emvasa del Valle de Enah Ord. (a) 1,217,000 1,028,742
Far-Ben SA de CV, Series B 575,800 673,634
Fomento Economico Mexicano SA
(FEMSA) Class B 998,300 2,197,438
Gruma SA Class B (a) 250,614 855,859
Grupo Carso SA de CV Class A-1 (a) 5,039,000 27,260,839
Grupo Casa Autrey SA sponsored ADR 70,000 1,076,250
Grupo Elektra SA 151,200 472,899
Grupo Embotellador de Mexico SA
GDR (a) 122,000 1,296,250
Grupo Financiero Bancrecer SA, Series LCP 572,900 343,837
SHARES VALUE (NOTE 1)
Grupo Financiero Inbursa SA:
Class B (a) 487,000 $ 938,595
Class C (a) 50,000 96,365
Grupo Financiero Probursa Class L 28,737 21,863
Grupo Posadas SA de CV Class L (a) 390,000 148,352
Herdez SA de CV Class A 239,407 89,854
Sears Roebuck de Mexico SA de CV (a) 681,000 2,486,828
Sears Roebuck de Mexico SA de CV ADR
representing Series B-1 (a)(b) 47,000 352,500
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 1,136,600 34,382,150
88,294,990
PAKISTAN - 1.9%
Adamjee Insurance Ltd. (a) 128,900 531,001
Al-Faysal Investment Bank Ltd. (a) 320,000 501,344
Askari Commercial Bank (a) 413,080 442,169
Askari Commercial Bank (rights) (a) 179,600 75,734
Askari Leasing Ltd. (a) 384,400 673,311
Bank of Punjab (a) 33,150 28,495
Crescent Investment Bank Ltd. (a) 650,000 769,568
Dandot Cement Co. Ltd. (a) 375,000 419,651
Dandot Cement Co. Ltd. (rights) (a) 93,750 9,123
DG Kahn Cement Ltd. (a)(e) 883,000 1,195,794
Engro Chemical Pakistan Ltd. (a) 24,000 119,887
Fauji Fertilizer Co. Ltd. (a) 850,000 1,902,428
First Grindlays Modarba (a) 565,200 394,165
Hub Power Co. Ltd. GDR 2,052,600 1,634,201
Ibrahim Energy Ltd. (a) 237,000 357,472
Maple Leaf Cement Factory Ltd. (a) 240,000 290,765
Muslim Commercial Bank Ltd. (a) 258,750 411,260
National Development Leasing Corp. (a) 347,630 321,367
Nishat Tek Ltd. (a) 51,700 54,921
Packages Ltd. (a) 10,000 43,465
Pak Electron Ltd. (a) 50,000 89,202
Pakistan State Oil Co. Ltd. (a) 354,640 3,474,032
Pakistan Telecommunications Voucher
GDR (a)(b) 63,890 6,644,560
Pakland Cement Ltd. (a) 200,000 622,788
PEL Appliances Ltd. (a) 35,750 98,568
Sui Southern Gas Pipelines Ltd. (a) 554,640 665,657
Sui Southern Gas Pipelines Ltd. (rights) (a) 277,320 242,877
Sunflo Cit-Russ Ltd. (a) 2,350,000 876,597
Trust Leasing Corp. Ltd. (a) 290,550 230,900
Union Bank Ltd. 555,300 407,074
23,528,376
PANAMA - 0.8%
Banco Latino Americano de Exportaciones
SA Class E (a) 127,100 3,940,100
Panamerican Beverages, Inc. Class A 211,000 5,486,000
9,426,100
PERU - 1.2%
Banco de Credito del Peru Class T 1,439,245 3,017,823
Banco Wiese Ltd. 209,719 449,096
Banco Weise Ltd. sponsored ADR 157,118 1,414,062
Cementos Lima SA Class C (b) 44,000 946,152
Cementos Notre Pacasmayo SA Class T 86,700 305,568
La Fabril SA Class T 610,446 544,677
Minsur SA Class T (a) 123,893 1,437,082
Southern Peru Copper Corp. Class T (a) 499,653 2,240,244
Southern Peru Copper Corp., Series 2 37,655 168,830
Telefonica del Peru (CPT) Class B 2,492,274 4,180,665
14,704,199
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PHILIPPINES - 3.6%
Aboitiz Equity Ventures, Inc. 5,993,000 $ 1,104,270
Aboitiz Equity Ventures, Inc. (b) 4,587,000 854,008
Ayala Corp. Class B 3,119,040 4,190,649
Ayala Land, Inc. Class B 1,503,625 1,875,923
Bacnotan Cement Corp. (a) 320,000 374,666
Bankard, Inc. 100,000 21,881
Belle Resources Corp. (a) 9,103,999 1,450,358
Benpress Holdings Corp. GDR (b) 175,000 1,268,750
Benpress Holdings Corp. GDR 81,000 567,000
Filinvest Land, Inc. Ord. (a) 5,562,750 1,558,849
First Philippines Holdings Corp. 2,408,960 6,010,837
Guoco Holdings, Inc. Class B (e) 33,490,000 5,528,194
House of Investments, Inc. 1,019,000 1,017,044
Interport Resources Corp. Class B (a) 100,000,000 77,000
Kuok Phil Properties, Inc. Class B (a) 311,200 13,378
Lepanto Consolidated Mining Co. 92,170,000 707,866
Liberty Telecoms Holdings, Inc. 38,304,000 1,705,677
Liberty Telecoms Holdings, Inc. (a)(b) 20,919,000 931,523
Manila Mining Corp. Class B 291,788,000 1,176,113
Metro Pacific, Inc. Class B (a) 71,830,766 6,838,399
Metropolitan Bank & Trust Co. 1,177 21,349
Mondragon International
Philippines, Inc. (a)(e) 5,270,000 1,001,405
Negros Navigation Co. (a) 1,000,000 333,970
Philex Mining Corp. (a) 7,552,934 826,367
PICOP Resources 8,000,000 2,702,480
Robinson's Land Corp. (a) 12,082,000 1,507,350
San Miguel Corp. Class B 6,500 23,205
Sanitary Wares Manufacure Corp. 186,000 68,545
SM Prime Holdings, Inc. (a) 1,000,000 303,260
Steniel Manufacturing Corp. 780,750 127,379
United Paragon Mining Corp. 4,500,000 1,395
44,189,090
POLAND - 0.2%
BRE (Bank Rozwoju Eksportu) 20,000 294,708
Debica SA Class A 5,000 63,333
Okocimskie Zaklady Piwowarskie SA 20,000 481,327
RAFAKO SA 10,000 103,443
Wedel SA 5,000 295,552
Zaklady Piwowarskie W Zywcu 10,500 797,990
2,036,353
PORTUGAL - 0.0%
CIN 6,250 185,056
Mague (Constru Metalom) 1,586 33,466
Unicer (Uniao Cervejeira) SA 10,000 154,171
372,693
SINGAPORE - 2.8%
Falmac Ltd. 50,000 18,293
Focal Finance Ltd. 403,200 757,806
Hong Leong Finance Ltd.:
(For. Reg.) 934,000 2,961,462
(warrants)(a) 424,600 395,969
Informatics Holdings Ltd. 980,000 534,286
Keppel Finance Ltd. 1,848,000 2,293,423
Overseas Union Trust Ltd. (For. Reg.) 741,000 1,828,581
Parkway Holdings Ltd. 1,325,000 2,946,562
Sembawang Maritime Ltd. 10,000 41,966
Singapore Finance Ltd. 3,211,400 4,860,871
Singapore Finance Ltd. (warrants)(a) 200,000 97,560
ST Capital Ltd. 200,000 157,820
Tat Lee Finance Ltd. 626,000 1,163,083
SHARES VALUE (NOTE 1)
Tat Lee Finance Ltd. (warrants)(a) 402,000 $ 227,817
Transmarco Ltd. (e) 1,969,000 10,311,121
Van Der Horst Ltd. 1,557,000 5,070,853
33,667,473
SOUTH AFRICA - 1.1%
AECI Ltd. 100,000 863,498
Anglovaal Ltd. Class N (b) 72,600 2,368,212
Cashbuild Ltd. 10,000 31,777
De Beers Consolidated Mines Ltd. ADR 200,000 5,525,000
First National Bank Holdings Ltd. 50,000 359,216
ISCOR Ltd. 11,900 14,764
Malbak Ltd. 100,000 642,443
Nedcor Ltd. 30,000 366,814
Pepkor Ltd. 200,000 1,326,334
Sasol Ltd. 200,865 1,942,602
Sappi Ltd. 2,000 41,310
South African Brewers Ltd. 113 3,122
South African Breweries Ltd.
sponsored ADR 5,000 136,875
Southern Life Association Ltd. (The) 10,000 91,185
Standard Bank Investment Corp. 5,000 179,608
13,892,760
SRI LANKA - 0.3%
Aitken Spence & Co. Ltd. 95,000 366,528
Asia Capital Ltd. (a) 903,100 254,259
Blue Diamond Jewelry Worldwide Ltd. (a) 532,356 283,107
Development Finance Corp. of Ceylon (a) 157,866 1,326,799
John Keells Holdings Ltd. 86,500 321,105
John Keells Holdings Ltd. GDR (a) 15,000 93,750
Kelani Tyres Ltd. (Loc. Reg.)(a) 114,100 41,642
Lanka Ceramic Ltd. (a) 101,300 105,631
Lanka Tiles Ltd. (a) 181,100 190,731
National Development Bank 100,800 451,971
Sampath Bank Ltd. (a) 90,000 84,463
Vanik, Inc. Ltd. (a) 48,000 33,035
Vanik, Inc. Ltd. (warrants)(a) 9,600 -
3,553,021
TAIWAN (FREE CHINA) - 0.3%
GVC Corp. GDR (b) 62,500 976,875
Hocheng Corp. GDR (a)(b) 2,539 38,720
Shanghai Tyre & Rubber Class B Free
shares 150,000 37,800
Yageo Corp. GDR 75,000 1,481,250
Yageo Corp. GDR (a)(b) 31,152 615,252
3,149,897
THAILAND - 15.4%
Ayudhya Insurance Co. (Loc. Reg.) 241,000 1,686,046
Ayudhya Life Assurance Co.:
(For. Reg.) 5,000 30,106
(For. Reg.) (rights)(a) 2,500 14,036
Bangkok Bank Ltd. 2,836,800 27,467,798
Bangkok Insurance PCL (For. Reg.) 96,500 1,719,569
Bank of Asia PCL:
(For. Reg.) 5,714,400 10,403,579
(For. Reg.) (rights)(a) 571,440 575,392
Bangkok Metropolitan Bank PCL (For. Reg.) 5,353,600 5,445,093
Bangkok Union Insurance (Loc. Reg.) 2,000 4,068
Berli Jucker PCL 5,000 11,798
Berli Jucker PCL (Loc. Reg.) 50,000 117,982
Charan Insurance PCL (Loc. Reg.) 50,000 179,008
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Dhana Siam Finance & Securities PCL
(For. Reg.) 177,850 $ 759,734
Electricity Generating PCL (For. Reg.) 614,000 1,873,474
First Bangkok City Bank PCL (For. Reg.) 231,200 169,308
General Engineering Ltd. (a) 20,000 43,124
Industrial Finance Corp. (For. Reg.) 14,237,266 30,409,092
International Broadcasting Corp. (For. Reg.) 20,000 67,128
Kiatnakin Finance & Securities PCL
(For. Reg.) 245,166 603,439
Krung Thai Bank (For. Reg.) 9,090,100 27,551,366
Loxley PCL (For. Reg.) 34,200 645,598
Nithipat Capital PCL (a) 405,000 1,400,531
Nithipat Capital PCL (Loc. Reg.) 60,000 207,486
Pacific Insurance PCL 66 234
Phatra Insurance PCL:
(For. Reg.) 3,900 29,988
(Loc. Reg.) 3,800 28,120
Property Perfect PCL (Loc. Reg.)
(warrants)(a) 4,444 4,701
Raimon Land Co. Ltd.:
(For. Reg.) 195,000 263,782
(Loc. Reg.) 5,000 6,764
Renown Leatherwears PCL (a) 45,600 278,275
S Khon Kaen Food Industry PCL (For. Reg.) 30,700 93,674
Safety Insurance PCL:
(For. Reg.) 239,200 435,485
(Loc. Reg.) 10,000 18,206
Securities One PCL:
(For. Reg.) 182,800 1,122,979
(Loc. Reg.) 141,900 871,721
Siam City Bank PCL (For. Reg.) 19,446,500 19,976,612
Siam City Credit Finance & Securities
PCL (a) 667,100 2,035,496
Siam City Credit Finance & Securities
PCL (Loc. Reg.) 200,000 610,252
Siam Commercial Life Assurance (For. Reg.) 215,100 393,796
Siam General Factoring PCL (For. Reg.) 75,000 124,339
Somprasong Land & Development PCL
(Loc. Reg.) 100,000 164,768
Swedish Motors Corp. PCL (For. Reg.) 178,400 468,136
Thai Farmers Bank PCL 2,977,100 26,161,653
Thai Military Bank Ltd.:
(For. Reg.) 5,371,600 17,264,322
(For. Reg.) (rights)(a) 1,058,380 2,109,870
Thai Reinsurance Co. Ltd. (For. Reg.) 170,000 622,457
Thai Wah Food Products PCL (For. Reg.) 270,375 307,995
Thai Wah Resorts Development PCL
(For. Reg.) 400,000 260,376
Tong Hua Daily News Co. Ltd. (For. Reg.) 669,000 714,452
United Communication Industry PCL
(For. Reg.) 87,900 1,287,388
187,040,596
TURKEY - 0.8%
Adana Cimento (a) 327,710 207,948
Akcimento AS 100,000 164,514
AKSA (Akrilik Kimya Sanayi) 1,200,000 1,071,696
Aksigorta 1,081,800 254,245
Aksigorta (b) 1,558,000 366,161
Anadolu Anonim Turk Sigorta SK (a) 1,000,000 213,870
Arcelik AS 312,500 86,297
Aygaz AS 111,000 56,087
SHARES VALUE (NOTE 1)
Cimentas AS 1,460,000 $ 1,080,853
Cukurova Electrik AS (a) 85,000 36,957
Enka Holding 229,000 95,530
Goodyear 430,875 318,981
Guney Biraciliu (a) 498,800 252,039
Maret (a) 306,000 93,492
Medya Holdings AS Class C 200,000 7,638
Migros 50,000 129,261
Raks Elektroniks AS 1,000,000 399,530
Sarkuysan Elektronics Bakir Sanayi AS 600,000 423,036
Tat Konserve 32,000 55,653
Turcas Petrolculuk AS 6,000,000 1,974,180
Turk Demir Dokum 185,598 43,619
Turkiye Garanti Bankasi AS (a) 4,015,250 1,014,453
Turkiye Garanti Bankasi AS ADR (b) 335,000 837,500
USAS (Ucak Servisi Anonim Sirketi) 30,000 250,296
9,433,836
UNITED KINGDOM - 0.0%
Cathay International Holdings PLC (a) 875,000 282,100
UNITED STATES OF AMERICA - 0.1%
Capaco Automotive Products Corp. 168,600 1,496,325
VENEZUELA - 0.2%
CA Venepal GDR Class A ADR (a)(b) 2,864 6,444
Corimon SA CA sponsored ADR 16,700 118,988
Electricidad de Caracas 1,908,837 1,975,837
Mavesa SA sponsored ADR (b) 272,650 817,950
Venezolana de Prerreducidos Caroni
Venpreca CA GDR (a)(b) 1,500 7,500
2,926,719
TOTAL COMMON STOCKS
(Cost $1,218,062,643) 1,106,802,215
PREFERRED STOCKS - 0.6%
CONVERTIBLE PREFERRED STOCKS - 0.2%
MALAYSIA - 0.2%
Arab Malaysia Corp. BHD 5% 3,015,000 1,049,763
Arab Malaysian Finance BHD 7 1/2% 2,242,666 953,357
TOTAL CONVERTIBLE PREFERRED STOCKS 2,003,120
NONCONVERTIBLE PREFERRED STOCKS - 0.4%
BRAZIL - 0.2%
COSIPA (CIA Sidurargica Paulista)
Class B (a) 1,587,000 2,924,793
KOREA (SOUTH) - 0.2%
Daelim Industrial Co. (a) 59,460 651,264
Hyundai Motor Service Co. Ltd. (a) 42,860 1,124,418
Kolon International Corp. (a) 20,000 177,346
Korea First Securities Co. Ltd. 2,121 19,197
1,972,225
TOTAL NONCONVERTIBLE
PREFERRED STOCKS 4,897,018
TOTAL PREFERRED STOCKS
(Cost $9,985,245) 6,900,138
CLOSED-END INVESTMENT COMPANIES - 0.3%
SHARES VALUE (NOTE 1)
CHILE - 0.2%
Chile Fund, Inc. 47,556 $ 2,252,966
PHILIPPINES - 0.1%
Private Development Corp. of
Philippines Class B 1,000,000 806,140
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $3,167,852) 3,059,106
CORPORATE BONDS - 4.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT (C)
CONVERTIBLE BONDS - 4.1%
GRAND CAYMAN - 0.9%
Bank of Asia PCL
3 3/4%, 2/9/04 - $ 2,500,000 1,912,500
Filinvest Cayman Islands Ltd. (b):
3 3/4%, 2/28/04 - 5,150,000 4,305,400
euro 3 3/4%, 2/28/04 - 2,500,000 2,090,000
House of Investments Cayman
Island Ltd. 4%, 10/17/01 (b) - 2,750,000 2,392,500
10,700,400
HONG KONG - 0.4%
Lai Fung Overseas Finance Ltd.
euro 5 1/2%, 2/5/98 (d) - 5,690,000 4,295,950
Regal International Ltd. euro
5 1/4%, 12/5/08 - 500,000 363,750
4,659,700
INDIA - 0.6%
Ballarpur Industries Ltd.
4%, 4/1/99 - 500,000 465,000
Essar Gujarat Ltd. euro
5 1/2%, 8/5/98 - 2,440,000 2,781,600
Gujarat Ambuja Cement Ltd.:
3 1/2%, 6/30/99 (b) - 190,000 242,250
euro 3 1/2%, 6/30/99 - 2,000,000 2,550,000
Jindal Strips Ltd. euro
4 1/4%, 3/31/99 (b) - 460,000 441,600
Nippon Denro Ispat Ltd. (b):
3%, 4/1/01 - 2,035,000 1,078,550
euro 3%, 4/1/01 - 550,000 291,500
7,850,500
MEXICO - 0.0%
Grupo Financiero Invermexico
7 1/2%, 6/16/01 (b) - 1,000,000 240,000
NETHERLANDS - 0.1%
Liblife International NV euro
6 1/2%, 9/30/04 - 1,000,000 1,155,000
PAKISTAN - 0.0%
Dewan Salman Fibre Ltd.
5%, 5/5/01 - 100,000 74,000
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (C) (NOTE 1)
PHILIPPINES - 0.1%
Bacnotan Concolidated
Industries, Inc. 5 1/2%,
6/21/04 (b) - $ 1,000,000 $ 860,000
TAIWAN (FREE CHINA) - 1.1%
Acer, Inc. 4%, 6/10/01 - 700,000 1,869,000
Cheng Loong Ltd.
2 1/2%, 10/11/01 (b) - 1,000,000 825,000
Formosa Chemicals & Fibre
Corp. 1 3/4%, 7/19/01 - 475,000 450,063
Kinpo Electronics, Inc. euro
3%, 7/21/01 - 1,600,000 1,200,000
Nan Ya Plastics Corp.
1 3/4%, 7/19/01 - 490,000 456,925
Teco Electric & Machinery Co.
Ltd. 2 3/4%, 4/15/04 (b) - 4,000,000 3,400,000
United Microelectronics Corp.
1 1/4%, 6/8/04 - 500,000 780,000
Walsin Lihwa Corp.
3 1/4%, 6/16/04 (b) - 1,000,000 1,260,000
euro 3 1/4%, 6/16/04 - 2,000,000 2,520,000
12,760,988
THAILAND - 0.9%
Asia Credit PCL:
3 3/4%, 11/17/03 (b) - 1,300,000 929,500
euro 3 3/4%, 11/17/03 - 1,255,000 909,875
Hemaraj Land and Development
PCL euro 3 1/2%, 9/9/03 - 200,000 119,500
Siam Commercial Bank PCL
3 1/4%, 1/24/04 (b) - 1,000,000 790,000
Siam Syntech Construction PCL
4 1/2%, 2/25/02 (b) - 500,000 305,000
Somprasong Land &
Development PCL euro
3 7/8%, 1/21/04 - 3,500,000 2,178,750
Wall St. Finance & Securities PCL
3 3/4%, 2/3/04 (b) - 480,000 229,200
Wattachak PCL euro 3 1/2%,
12/6/03 - 7,750,000 5,812,500
11,274,325
TOTAL CONVERTIBLE BONDS 49,574,913
NONCONVERTIBLE BONDS - 0.0%
MALAYSIA - 0.0%
Larut Consolidated BHD
5%, 1/1/99 - 165,600 49,278
THAILAND - 0.0%
Quality Houses PCL
5 3/4%, 1/1/00 - THB 6,000 1,761
TOTAL NONCONVERTIBLE BONDS 51,039
TOTAL CORPORATE BONDS
(Cost $61,261,260) 49,625,952
GOVERNMENT OBLIGATIONS (G) - 0.1%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (C) (NOTE 1)
ARGENTINA - 0.0%
Argentina Republic (d):
BOCON 6.1875%, 4/1/01 B1 $ 296,645 $ 172,286
Brady euro 5% 3/31/23 B1 250,000 110,000
282,286
ECUADOR - 0.0%
Republic of Ecuador (b)(d):
7 5/8%, 12/21/04 - 118,000 61,360
past due interest 7 1/4%,
2/28/15 - 1,048,000 285,580
346,940
MEXICO - 0.1%
Mexican Government Cetes
0%, 2/8/96 - MXN 9,944,070 1,169,956
TOTAL GOVERNMENT OBLIGATIONS
(Cost $1,755,847) 1,799,182
INDEXED SECURITIES - 0.1%
UNITED STATES OF AMERICA - 0.1%
Salomon, Inc. note (f):
7.20%, 11/22/96 (indexed to
common stock of St. Petersburg
Telephone Network, a Russian
joint-stock company) 500,000 233,350
7.90%, 12/20/96 (indexed to
common stock of Chernogorneft,
a Russian joint-stock company) 500,000 390,706
TOTAL INDEXED SECURITIES
(Cost $1,000,000) 624,056
REPURCHASE AGREEMENTS - 3.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 43,643,557 43,622,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,338,854,847) $ 1,212,432,649
CURRENCY ABBREVIATIONS
MXN - Mexican peso
THB - Thai baht
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $81,336,428 or 6.7% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Berjaya South Island BHD $ 1,630,448 $ 5,108,180 $ 38,646 $ -
China First Pencil Co. Ltd.
Class B (a) 33,190 - - 983,341
DG Kahn Cement Ltd. (a) 157,813 - - 1,195,794
Guoco Holdings, Inc.
Class B 245,314 - - 5,528,194
Mondragon International
Philippines, Inc. (a) - 540,060 - 1,001,405
North Borneo Timber
BHD (a) - 6,814,756 - 30,567
Shanghai Hero Ltd.
Class B (a) - - - 764,880
Shanghai Refrigerator
Compressor Co. Ltd.
Class B (a) - - - 1,166,214
Shanghai Vacuum Electron
Devices Co. Ltd. (a) 96,278 - - 1,011,528
Transmarco Ltd. 1,523,727 - - 10,311,121
TOTAL $ 3,686,770 $ 12,462,996 $ 38,646 $ 21,993,044
6. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Salomon, Inc. note:
7.20%, 11/22/96 (indexed to
common stock of St. Petersburg
Telephone Network, a Russian
joint-stock company) 11/1/94 $ 500,000
7.90%, 12/20/96 (indexed to
common stock of Chernogorneft,
a Russian joint-stock company) 12/6/94 $ 500,000
7. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A issues)
amounted to $624,056 or 0.1% of net assets (see Note 2 of Notes to
Financial Statements).
Purchases and sales of securities, other than short-term securities,
aggregated $512,006,895 and $789,593,801, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $23,718 for the period (see Note 5 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $2,135,000. The weighted average interest rate was
6.44% (see Note 7 of Notes to Financial Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $1,340,622,484. Net unrealized depreciation aggregated
$128,189,835, of which $102,050,994 related to appreciated investment
securities and $230,240,829 related to depreciated investment securities.
At September 30, 1994, the fund had a capital loss carryforward of
approximately $19,371,000 of which $2,160,000 and $17,211,000
will expire on September 30, 2001 and 2002, respectively.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 12.7%
Conglomerates 2.2
Construction & Real Estate 11.2
Durables 3.0
Energy 1.0
Finance 29.4
Government Obligations 0.1
Health 0.5
Holding Companies 6.6
Industrial Machinery & Equipment 1.5
Media & Leisure 2.5
Nondurables 4.2
Precious Metals 0.1
Repurchase Agreements 3.6
Retail & Wholesale 2.9
Services 0.5
Technology 1.8
Transportation 0.5
Utilities 15.7
100.0%
EMERGING MARKETS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
Investment in securities, at value (including repurchase agreements of $43,622,000) (cost $1,338,854,847) - $ 1,212,432,649
See accompanying schedule
Cash 1,161,665
Receivable for investments sold 35,541,336
Receivable for fund shares sold 9,250,119
Dividends receivable 4,766,264
Interest receivable 967,695
Redemption fees receivable 605
TOTAL ASSETS 1,264,120,333
LIABILITIES
Payable for investments purchased $ 36,275,049
Payable for fund shares redeemed 4,279,785
Accrued management fee 753,755
Other payables and accrued expenses 826,371
TOTAL LIABILITIES 42,134,960
NET ASSETS $ 1,221,985,373
Net Assets consist of:
Paid in capital $ 1,484,485,368
Distributions in excess of net investment income (5,372,107
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (130,698,433
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies (126,429,455
)
NET ASSETS, for 86,772,953 shares outstanding $ 1,221,985,373
NET ASSET VALUE and redemption price per share ($1,221,985,373 (divided by) 86,772,953 shares) $14.08
Maximum offering price per share (100/97.00 of $14.08) $14.52
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 12,143,982
Dividends (including $38,646 received from affiliated issuers)
Interest 2,528,982
14,672,964
Less foreign taxes withheld (1,140,348
)
TOTAL INCOME 13,532,616
EXPENSES
Management fee $ 5,439,537
Transfer agent 2,353,635
Fees
Redemption fees (39,120
)
Accounting fees and expenses 290,654
Non-interested trustees' compensation 5,013
Custodian fees and expenses 1,685,308
Registration fees 30,236
Audit 34,032
Legal 12,226
Interest 1,145
Miscellaneous 8,783
Total expenses before reductions 9,821,449
Expense reductions (2,620 9,818,829
)
NET INVESTMENT INCOME 3,713,787
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized loss of $631,065 on sales of investments in affiliated
issuers) (110,075,588
)
Foreign currency transactions (2,899,447 (112,975,035
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (387,832,303
)
Assets and liabilities in foreign currencies 103,470 (387,728,833
)
NET GAIN (LOSS) (500,703,868
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (496,990,081
)
OTHER INFORMATION $1,136,889
Sales charges paid to FDC
Accounting fees paid to FSC $245,393
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994
Operations $ 3,713,787 $ 6,347,187
Net investment income
Net realized gain (loss) (112,975,035) (18,434,477)
Change in net unrealized appreciation (depreciation) (387,728,833) 152,006,813
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (496,990,081) 139,919,523
Distributions to shareholders (3,891,779) (2,588,073)
From net investment income
In excess of net investment income - (549,335)
TOTAL DISTRIBUTIONS (3,891,779) (3,137,408)
Share transactions 227,658,985 2,784,381,422
Net proceeds from sales of shares
Reinvestment of distributions 3,798,312 3,076,294
Cost of shares redeemed (486,099,995) (1,715,598,654)
Redemption fees 1,138,525 9,993,085
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (253,504,173) 1,081,852,147
TOTAL INCREASE (DECREASE) IN NET ASSETS (754,386,033) 1,218,634,262
NET ASSETS
Beginning of period 1,976,371,406 757,737,144
End of period (including under (over) distribution of net investment income of
$(5,372,107) and $ 1,221,985,373 $ 1,976,371,406
$2,603,242, respectively)
OTHER INFORMATION
Shares
Sold 14,874,414 151,470,579
Issued in reinvestment of distributions 218,178 178,437
Redeemed (30,968,803) (95,823,026)
Net increase (decrease) (15,876,211) 55,825,990
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, NOVEMBER 1, 1990
APRIL 30, 1995 (COMMENCEMENT
(UNAUDITED) OF
OPERATIONS) TO
OCTOBER 31, 1991
SELECTED PER-SHARE DATA 1994 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.25 $ 16.18 $ 11.05 $ 10.40 $ 10.00
Income from Investment Operations
Net investment income .04 C .06 .06 C .08 .12
Net realized and unrealized gain (loss) (5.18) 2.97 5.28 .76 .30
Total from investment operations (5.14) 3.03 5.34 .84 .42
Less Distributions (.04) (.04) (.08) (.08) (.04)
From net investment income
In excess of net investment income - (.01) - - -
From net realized gain - - (.15) (.14) -
Total distributions (.04) (.05) (.23) (.22) (.04)
Redemption fees added to paid in capital .01 .09 .02 .03 .02
Net asset value, end of period $ 14.08 $ 19.25 $ 16.18 $ 11.05 $ 10.40
TOTAL RETURN B (26.69)% 19.32% 49.58% 8.56% 4.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 1,221,985 $ 1,976,371 $ 757,737 $ 13,732 $ 6,450
Ratio of expenses to average net assets 1.41% A 1.52% 1.91% 2.60% 2.60% D
D
Ratio of net investment income to average net assets .53% A .39% .44% .90% 1.34%
Portfolio turnover rate 74% A 107% 57% 159% 45%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
LATIN AMERICA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Latin America
Fund has a 3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
LATIN AMERICA -39.24% -28.42% -0.84%
LATIN AMERICA
(INCL. 3% SALES CHARGE) -41.06% -30.56% -3.81%
Morgan Stanley Latin America
Free Index -30.45% -13.01% 25.23%
Average Latin America Fund -37.54% -23.63% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 19, 1993. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley Latin America Free index, a broad measure of the performance
of stocks in Latin American markets weighted by each country's market
capitalization (or the total value of the shares outstanding). To measure
how the fund's performance stacked up against its peers, you can compare it
to the average Latin American fund, which reflects the performance of 17
funds with similar objectives - in this case, a very small peer group -
tracked by Lipper Analytical Services over the past six months. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
LATIN AMERICA -28.42% -0.41%
LATIN AMERICA (INCL. 3% SALES CHARGE) -30.56% -1.89%
Morgan Stanley Latin America Free Index -13.01% 11.70%
Average Latin American Fund -23.63% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
$12,523
$9,619
1994
1993
1995
Let's say you invested $10,000 in Fidelity Latin America Fund on April 19,
1993, when the fund started, and paid the 3% sales charge. By April 30,
1995, your investment would have been valued at $9,619 - a 3.81% decrease
on your initial investment. That compares to $10,000 invested in the Morgan
Stanley Latin America Free index, which would have grown to $12,523 over
the same period - a 25.23% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
LATIN AMERICA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Patti Satterthwaite,
Portfolio Manager of Fidelity Latin America Fund
Q. HOW HAS THE FUND PERFORMED PATTI?
A. The fund has had a very rough time. The fund's total return for the six
months and 12 months ended April 30, 1995, was -39.24% and -28.42%. That
trailed the average Latin American fund, which returned -37.54 and -23.63%
during the same time periods respectively, according to Lipper Analytical
Services. The fund also trailed the Morgan Stanley Latin America Free
index, which returned -30.45% and -13.01%.
Q. WHAT HAPPENED?
A. When the Mexican government devalued the peso on December 19, 1994, it
triggered a nasty bear market in the entire Latin American region. Between
December 1994 and mid-March 1995, the Mexican market fell more than 60%;
Brazil and Argentina were down more than 50%; Peru was down about 40%; and
Chile was down more than 20%. Fidelity Latin America Fund was one of the
more heavily weighted funds in Mexico, and therefore was one of the hardest
hit by the currency devaluation there.
Q. WHY WAS THE FUND SO HEAVILY WEIGHTED IN MEXICO?
A. The fund's investments in Mexico were made with the assumption that the
Mexican government wasn't going to make decisions that would negatively
impact the country's economy and stock market. Following the election and
change in government, a precipitous drop in international reserves led to a
series of policy decisions which brought on the crisis. In the future,
investors will focus on companies that are self-sufficient in capital
rather than dependent on foreign capital.
Q. WHAT WAS THE SITUATION IN MEXICO AT THE END OF THE PERIOD?
A. Things looked a bit better. Let me explain. By the end of January, the
government announced several measures to deal with inevitable inflation
that would follow the devaluation. Unfortunately, the initial plan was
viewed skeptically by the markets and caused further speculation in the
peso. Eventually, the U.S. government announced a program to lend Mexico
$20 billion through the Exchange Stabilization Fund. At about the same
time, the International Monetary Fund approved a credit of $18 billion to
Mexico. In total, $51 billion from several sources will be used to pay
maturing Mexican government bonds in 1995.
Q. THE FUND'S HOLDING IN MEXICO HAS DROPPED FROM 39.8% OF THE FUND TO 19.9%
OF THE FUND. WHAT STOCKS DID YOU HOLD ON TO?
A. The Mexican government has made some fiscal and monetary adjustments to
the economy since the loans went through. They announced an increase in the
Value Added Tax as well as a reduction in public spending. Inflation
remains high and the economy weak. Companies with U.S. dollar debt and no
export potential will have a difficult time. However, a couple of the
fund's top holdings such as Grupo Carso are well capitalized and represent
a good value at current levels. Grupo Carso, a conglomerate, operates an
aluminum smelter which was closed down two years ago because it wasn't
competitive at the prevailing exchange rate. With the current exchange
rate, the company has reopened the plant and sold out products for the next
two years; these products are mostly for export. The company also has net
cash and is looking to take advantage of the fall in asset prices in
Mexico. Another large holding, Cifra, has a net cash position and a great
retail franchise in Mexico. The company is using this time to gain market
share against financially weak competitors, acquire cheap real estate and
cut costs further. Although expansion plans have been curtailed recently,
we expect Cifra to gain significant operating efficiencies and market share
during this weak period in Mexico.
Q. HOW HAVE THE FUND'S BRAZILIAN HOLDINGS FARED?
A. The Brazilian market reacted negatively to the situation in Mexico, yet
Brazil is now the fund's largest country weighting, 29.8% of investments.
Although Brazil seemed like a likely "sell" candidate as foreign investors
sold their holdings in the region, it was the best performing Latin
American market in 1994, and the most liquid. The fund is still
underweighted in Brazil given the overvalued exchange rate and the
overheating economy, although there should be good news on the reform front
in the next six months. Earnings growth is robust and many of the fund's
holdings such as COSIPA, Brasmotor, and Brahma should show about 25%
earnings growth this year. The largest holdings in the fund such as
Telebras, Eletrobras and Compania Vale do Rio Doce, should eventually
benefit from privatization.
Q. WHERE ELSE ARE YOU FINDING OPPORTUNITIES?
A. I've increased the fund's weighting in Argentina because I believe the
consensus is too bearish there. Although the economy is weaker than it was
six months ago, I don't think it will be as weak as the market is
expecting. Perez Companc is new to the fund's top 10 and is the fund's
largest Argentine holding. A conglomerate with an oil and energy focus, the
company has a strong financial profile as many of its businesses are
recently privatized companies that should continue to show strong earnings
growth.
Q. WHAT ABOUT THE SMALLER COUNTRIES IN LATIN AMERICAN SUCH AS CHILE,
PANAMA, PERU AND COLOMBIA . . .
A. After I sold out a portion of the Mexican position, I had to find places
to invest in Latin America. I thought some of the smaller countries offered
the best opportunities. In Colombia, the market fell, but it was fairly
insulated from the Mexican situation because of the difficulty in buying
Colombian shares directly and the limited number of American Depository
Receipts (ADRs.) In addition, I've increased the fund's holding in Chile
from 4.9% of the fund six months ago to 7.5% of the fund. The fund remains
underweighted in Chile given the capital restrictions in the country.
Q. WHAT DO THE NEXT SIX MONTHS LOOK LIKE FOR LATIN AMERICA FUND?
A. The markets are up about 40% from the bottom in March. Mexico is still
in a precarious situation economically, even though interest rates and the
peso seem to have stabilized. However, it's still a tricky situation and
I'm not ready to overweight Mexico at this time. I also have some concerns
about Brazil. Although it's the largest and most liquid market in Latin
America, the Brazilian real is overvalued so it's not a very comfortable
place to be right now either. Argentina looks attractive, but the market
breadth is limited.
FUND FACTS
GOAL: high total investment return by investing
mainly in equity and debt securities in Latin
America
START DATE: April 19, 1993
SIZE: as of April 30, 1995, more than $589 million
MANAGER: Patti Satterthwaite, since 1993;
assistant manager, Latin American portion of
Fidelity Emerging Markets Fund, since 1990;
securities and Latin American analyst,
1986-1990; joined Fidelity in 1986
(checkmark)
PATTI SATTERTHWAITE ON THE IMPORTANCE OF FINANCIAL
ANALYSIS:
"With interest rates in Mexico and Latin America so
high, it's crucial to focus on the financial condition of a
company before investing. For that reason, I am
scrutinizing the balance sheets of companies very
carefully. I'm wary of companies that have to pay
dollar debt since interest rates are so high - 30% to
35%.
"Six months ago, the financial strength of individual
companies wasn't as much of an issue. If you are
investing in a market that is growing rapidly,
companies that are leveraged - or in debt - are
attractive since that indebtedness helps the company
to grow quickly and efficiently. Leverage also helps to
increase your return on equity.
"Now, however, the less-leveraged companies are
more attractive. Also attractive are companies that will
be able to finance their foreign currency debt with
exports. These are types of investments the fund will
seek going forward."
(solid bullet) In the past six months, the fund's holdings in Brazil,
Argentina and Chile increased. During the same
time period, the fund's position in Mexico decreased.
(solid bullet) The fund's short-term investments increased from
6.1% to 18.3% of the fund.
LATIN AMERICA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
Peru 3.4%
Panama 3.7%
United States 18.7%
Row: 1, Col: 1, Value: 18.7
Row: 1, Col: 2, Value: 3.7
Row: 1, Col: 3, Value: 19.9
Row: 1, Col: 4, Value: 7.5
Row: 1, Col: 5, Value: 29.8
Row: 1, Col: 6, Value: 13.3
Row: 1, Col: 7, Value: 3.7
Row: 1, Col: 8, Value: 3.4
Argentina 13.3%
Other 3.7%
Brazil 29.8%
Mexico 19.9%
Chile 7.5%
AS OF OCTOBER 31, 1994
United States 6.7%
Argentina 12.5%
Row: 1, Col: 1, Value: 6.7
Row: 1, Col: 2, Value: 7.1
Row: 1, Col: 3, Value: 39.8
Row: 1, Col: 4, Value: 4.9
Row: 1, Col: 5, Value: 29.0
Row: 1, Col: 6, Value: 12.5
Other 7.1%
Brazil 29.0%
Mexico 39.8%
Chile 4.9%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 79.5 90.8
Bonds 2.2 3.1
Short-term investments 18.3 6.1
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Grupo Carso SA de CV Class A-1 4.1 4.0
(Mexico, Conglomerates)
Telebras PN (Pfd. Reg.) 3.8 3.5
(Brazil, Telephone Services)
Telefonos de Mexico SA sponsored 2.9 3.4
ADR representing shares Ord. Class L
(Mexico, Telephone Services)
Perez Companc Class B 2.9 1.6
(Argentina, Basic Industries)
Panamerican Beverages, Inc. Class A 2.8 1.3
(Panama, Beverages)
Cifra SA Class C 2.5 1.7
(Mexico, General Merchandise Stores)
Cemex SA, Series B 2.2 3.7
(Mexico, Building Materials)
Compania Vale do Rio Doce PN Ord. 2.1 1.9
(Brazil, Metals & Mining)
Telesp PN (Pref. Reg.) 2.1 2.1
(Brazil, Telephone Services)
Eletrobras PN Class B 2.1 1.6
(Brazil, Electric Utility)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Utilities 23.6 21.0
Basic Industries 16.6 15.5
Nondurables 11.3 10.7
Finance 8.5 10.5
Construction & Real Estate 4.8 10.1
Retail & Wholesale 4.1 4.5
Conglomerates 4.1 4.0
Durables 3.1 4.7
Energy 2.6 4.5
Holding Companies 0.7 3.1
LATIN AMERICA
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 77.9%
SHARES VALUE (NOTE 1)
ARGENTINA - 12.9%
Astra Comp Argentina de Petroleum
(Reg.) 2,586,900 $ 3,983,512
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing
Class B shares 350,171 5,646,507
Banco del Sud SA 169,700 1,001,181
Banco Frances del Rio de la Plata SA 426,500 2,708,275
Banco Frances del Rio de la Plata SA ADR 172,100 3,162,338
Buenos Aires Embotelladora SA
sponsored ADR 165,600 4,554,000
Capex SA Class A (a)(b) 100,000 744,963
Central Costanera SA Class B
sponsored ADR (b) 120,700 3,439,950
Commercial del Plata 2,011,380 4,525,384
Mirgor Sacifia Class C sponsored
ADR (b) 245,710 460,706
Molinos Rio de La Plata SA (Reg.) (a) 1,034,773 5,173,865
Perez Companc Class B 4,074,211 16,621,966
Telecom Argentina sponsored ADR
Class B 48,800 2,135,000
Telecom Argentina Stet France
Telecom SA 1,384,900 6,010,161
Telefonica de Argentina SA:
sponsored ADR 201,700 4,739,950
Class B 1,423,000 3,343,879
Transportadora de Gas del Sur SA:
Class B 95,000 182,391
Class B (b) 185,000 355,182
YPF SA sponsored
ADR representing Class D shares 292,800 5,929,200
74,718,410
BRAZIL - 27.8%
Acesita Cia Acos Especiais Itabira Ord. 671,204,692 5,709,266
Bradesco PN 604,228,428 4,619,020
Brahma (Cia Cervejaria):
PN Class B (Pfd. Reg.) 30,428,254 8,793,765
ON (warrants) (a) 1,510,428 87,137
PN (warrants) (a) 117,827 6,363
Brasmotor PN 24,800,100 6,679,907
CESP (Cia Energetica de Sao Paulo) PN 14,400,000 557,424
Casa Anglo PN Ord. 3,192,269 400,342
Celesc PN Class B Ord. (a) 5,371,000 3,689,984
Compania Siderurgica Nacionalon 292,943,900 7,411,481
Compania Energertica Minas Gerais 154,438,070 3,603,040
Compania Vale do Rio Doce PN Ord. 76,167,700 12,416,858
Compania Paulista de Forca Luz Ord. (a) 74,903,597 3,593,875
Copene Petroquimica do Nordeste SA 3,137,000 2,233,858
Coteminas PN 22,725,310 5,972,439
Eletrobras PN Class B 45,493,810 12,204,624
Eletrobras ON 4,000,000 1,099,240
Iochpe Maxion PN Ord. 3,645,311 1,888,235
Itaubanco PN (Pfd. Reg.) 6,220,200 1,661,913
Klabin Industria de Papel e Celulose PN 5,024,132 7,177,306
Light Servicos de Electricidade SA Ord. 27,138,400 10,358,185
Lojas Americanas 24,000,000 523,440
Marco Polo PN Ord. Class B 4,052,000 475,016
Minas Gerais State Preference
(warrants) (a)(b) 2,000 92,000
Moinho Santista-Industrias
Gerais SA Ord. (a) 610,700 739,234
SHARES VALUE (NOTE 1)
Petrobras PN (Pfd. Reg.) 6,600,000 $ 606,413
Rhodia Ster SA GDR (b) 207,500 2,671,563
Souza Cruz Industria Comerico 100,000 634,298
Telebras PN (Pfd. Reg.) 616,131,197 21,971,238
Telebras ON 269,162,800 8,015,668
Telesp:
ON 580,000 75,899
PN (Pfd. Reg.) 97,678,857 12,250,882
Telepar PN 7,029,944 1,993,200
Telerj SA PN 1,864,540 104,526
Unibanco PN 59,279,808 1,732,749
Usiminas PN:
sponsored ADS (a)(b) 66,600 782,550
(Pfd. Reg.) 4,266,669,800 5,164,671
Votorantim Celulose e Paper SA
(Pfd. Reg.) 82,364,100 3,457,645
Receipt Prorata 6,766,499 250,902
161,706,156
CANADA - 0.0%
Bolivar Goldfields Ltd. (a) 51,750 57,248
CHILE - 7.1%
Banco Osorno y la Union SA Series A
sponsored ADR 310,900 3,730,800
Chilgener SA sponsored ADR 64,200 1,797,600
Compania Cervecerias Unidas SA ADR 399,600 9,490,500
Cristalerias de Chile SA sponsored ADR 124,700 2,306,950
Embotelladora Andina SA sponsored
ADR 28,200 810,750
Empresa Nacional de Electricidad SA 149,200 3,692,700
Empresas Telex Chile SA sponsored
ADR 75,400 593,775
Enersis SA sponsored ADR 253,300 7,092,400
Madeco SA ADR 120,200 3,500,825
Maderas Y Sinteticos SA sponsored ADR 173,800 3,041,500
Quimica y Minera de Chile SA ADR 117,700 4,104,788
Vina Concha y Toro SA sponsored ADR 66,000 1,270,500
41,433,088
COLOMBIA - 2.2%
Banco Ganadero SA sponsored ADR 81,800 1,472,400
Carulla & CIA SA Class B sponsored
ADR (a)(b) 88,200 1,587,600
Cementos Diamante SA Class B
ADR (a)(b) 25,000 531,250
Cementos Paz del Rio sponsored
ADR (a)(b) 122,000 2,013,000
Cementos Argos SA 216,000 1,730,311
Compania Nacional de Chocolates 136,000 1,323,130
CADENALCO, Gran Cadena de
Almacenes Colombianos ADR (b) 50,500 833,250
Noel (Industria Alimenticias) 112,997 578,598
Suramericana de Seguros SA 112,450 2,456,735
12,526,274
LUXEMBOURG - 0.5%
Quilmes Industries SA 155,550 2,971,005
MEXICO - 19.5%
Apasco SA de CV 805,600 2,880,552
Cemex SA, Series B 4,000,013 12,983,962
Cifra SA Class C 10,222,900 14,344,876
Corporacion Geo SA de CV (a) 286,640 872,277
Corporacion Geo SA de CV Class B
sponsored ADR (a)(b) 40,800 448,800
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - CONTINUED
DESC (Soc. de Fomento Industrial) SA:
Class B 1,711,400 $ 4,484,655
Class C 526,948 1,469,932
Empaques Ponderosa SA Class B Ord. 167,500 353,973
Emvasa del Valle de Enah Ord. (a) 2,243,600 1,896,538
Farmacia Benevides SA de CV Series B 1,698,700 1,987,326
Fomento Economico Mexicano SA
(FEMSA) Class B 3,472,200 7,642,937
Fondo Opcion SA de CV Class 2,
Series B (a) 142,000 122,915
Gruma SA Class B (a) 693,396 2,367,982
Grupo Carso SA de CV Class A-1 (a) 4,399,100 23,798,999
Grupo Cementos Chihuahua Class B 1,760,000 1,565,098
Grupo Posadas SA de CV Ord. (a) 1,292,000 484,913
Grupo Elektra SA 266,000 831,952
Grupo Financiero Banorte SA
Class C Ord. 1,190,000 1,569,229
Grupo Financiero Bancrecer SA
Series LCP 643,600 386,269
Grupo Financiero Inbursa SA:
Class B (a) 318,200 613,267
Class C (a) 1,518,800 2,927,183
Grupo Mexico SA Class B 452,800 1,454,471
Herdez SA de CV Class A 1,567,900 588,464
Sanluis Corp. Units (Class B, Class C,
and Class D) 221,733 3,310,063
Sears Roebuck de Mexico SA de CV (a) 638,900 2,333,090
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 554,400 16,770,600
Tolmex SA Class B2 1,235,800 4,178,524
Transport Maritima Mexicana
SA de CV Class A 47,300 286,279
112,955,126
PANAMA - 3.7%
Banco Latino Americano de
Exportaciones SA Class E (a) 159,900 4,956,900
Panamerican Beverages, Inc. Class A 629,100 16,356,600
21,313,500
PERU - 3.4%
Banco Wiese Ltd. sponsored ADR 173,819 1,564,371
Banco Wiese Ltd. 304,772 652,645
Banco de Credito del Peru Class T 2,965,908 6,218,946
Cementos Notre Pacasmayo SA Class T 124,760 439,708
La Fabril SA Class T (a) 1,001,931 893,983
Minsur SA Class T (a) 60,000 695,963
Southern Peru Copper Corp.:
Class T (a) 786,954 3,528,387
Series 2 59,308 265,913
Tele 2000 SA (a) 251,370 201,858
Telefonica del Peru (CPT) Class B 3,112,714 5,221,422
19,683,196
UNITED STATES OF AMERICA - 0.4%
Capaco Automotive Products Corp. 261,200 2,318,150
VENEZUELA - 0.4%
Electricidad de Caracas 1,160,110 1,200,830
Mavesa SA sponsored ADR (b) 342,622 1,027,866
2,228,696
TOTAL COMMON STOCKS
(Cost $558,671,057) 451,910,849
NONCONVERTIBLE PREFERRED STOCKS - 1.2%
SHARES VALUE (NOTE 1)
BRAZIL - 1.2%
COSIPA (CIA Sidurg Paulista) Class B (a)
(Cost $8,527,999) 3,927,400 $ 7,238,080
CLOSED-END INVESTMENT COMPANIES - 0.4%
CHILE - 0.4%
Chile Fund, Inc.
(Cost $2,519,133) 52,456 2,485,103
CORPORATE BONDS - 0.0%
MOODY'S PRINCIPAL
RATINGS AMOUNT (C)
CONVERTIBLE BONDS - 0.0%
MEXICO - 0.0%
Grupo Financiero Invermexico
7 1/2%, 6/16/01 (b) - $ 1,000,000 240,000
NONCONVERTIBLE BONDS - 0.0%
MEXICO - 0.0%
First Mexican Acceptance Corp.
euro 10 3/4%, 9/15/96 - 500,000 138,600
TOTAL CORPORATE BONDS
(Cost $1,493,375) 378,600
GOVERNMENT OBLIGATIONS (F) - 2.2%
ARGENTINA - 0.4%
Province of Chaco 11 7/8%,
9/10/97 (e) - 2,166,667 2,121,384
BRAZIL - 0.8%
Siderurgica Brasileiras Inflation
Indexed 6%, 8/15/99 (d) - BRR 37,408,700 4,452,002
ECUADOR - 0.6%
Republic of Ecuador:
7 5/8%, 12/21/04 (b)(h) - 835,000 434,200
discount 7 1/4%,
2/28/25 (b)(h) - 1,427,000 708,149
PAR 3%, 2/28/25 (b)(g) - 3,450,000 996,188
past due interest 7 1/4%,
2/28/15 (b)(h) - 4,751,000 1,294,648
3,433,185
MEXICO - 0.4%
Mexican Government Cetes
0%, 2/8/96 MXN 19,700,000 2,317,776
TOTAL GOVERNMENT OBLIGATIONS
(Cost $12,660,569) 12,324,347
REPURCHASE AGREEMENTS - 18.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $106,038,375 $ 105,986,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $689,858,133) $ 580,322,979
CURRENCY ABBREVIATIONS
BRR - Brazilian real
MXN - Mexican peso
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $18,661,865 or 3.2% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Principal amount shown is origanal face amount and does not reflect the
inflation adjustments.
5. Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco
11 7/8%, 9/10/97 3/9/94 $ 2,717,987
6. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
7. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
8. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A issues)
amounted to $2,121,384 or 0.4% of net assets (see Note 2 of Notes to
Financial Statements.
Purchases and sales of securities, other than short-term securities,
aggregated $181,630,804 and $219,982,766, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $20,716 for the period (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $690,282,661. Net unrealized depreciation aggregated
$109,959,682, of which $37,090,173 related to appreciated investment
securities and $147,049,855 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 16.6%
Conglomerates 4.1
Construction & Real Estate 4.8
Durables 3.1
Energy 2.6
Finance 8.5
Government Obligations 2.2
Holding Companies 0.7
Media & Leisure 0.1
Nondurables 11.3
Repurchase Agreements 18.3
Retail & Wholesale 4.1
Utilities 23.6
100.0%
LATIN AMERICA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $105,986,000) (cost $689,858,133) - $ 580,322,979
See accompanying schedule
Receivable for investments sold 316,256
Receivable for fund shares sold 27,402,075
Dividends receivable 1,819,856
Interest receivable 272,686
Redemption fees receivable 21,482
Other receivables 2,036
TOTAL ASSETS 610,157,370
LIABILITIES
Payable to custodian bank $ 479,607
Payable for investments purchased 15,919,935
Payable for fund shares redeemed 3,588,310
Accrued management fee 321,358
Other payables and accrued expenses 457,919
TOTAL LIABILITIES 20,767,129
NET ASSETS $ 589,390,241
Net Assets consist of:
Paid in capital $ 830,136,274
Undistributed net investment income 3,808,413
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (134,978,731
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies (109,575,715
)
NET ASSETS, for 59,814,420 shares outstanding $ 589,390,241
NET ASSET VALUE and redemption price per share ($589,390,241 (divided by) 59,814,420 shares) $9.85
Maximum offering price per share (100/97.00 of $9.85) $10.15
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 4,934,141
Dividends
Interest 2,607,324
7,541,465
Less foreign taxes withheld (283,972
)
TOTAL INCOME 7,257,493
EXPENSES
Management fee $ 2,286,626
Transfer agent 1,103,452
Fees
Redemption fees (50,002
)
Accounting fees and expenses 163,362
Non-interested trustees' compensation 2,373
Custodian fees and expenses 517,701
Registration fees 55,651
Audit 27,801
Legal 4,030
Miscellaneous 2,255
Total expenses before reductions 4,113,249
Expense reductions (1,044 4,112,205
)
NET INVESTMENT INCOME 3,145,288
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (net of Brazilian IPMF tax of $502,803) (129,472,516
)
Foreign currency transactions (482,758 (129,955,274
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (200,344,350
)
Assets and liabilities in foreign currencies 16,455 (200,327,895
)
NET GAIN (LOSS) (330,283,169
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (327,137,881
)
OTHER INFORMATION $1,086,412
Sales charges paid to FDC
Accounting fees paid to FSC $137,024
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 3,145,288 $ 3,669,803
Net investment income
Net realized gain (loss) (129,955,274) 2,312,139
Change in net unrealized appreciation (depreciation) (200,327,895) 58,380,222
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (327,137,881) 64,362,164
Distributions to shareholders - (1,988,207)
From net investment income
From net realized gain - (1,988,193)
TOTAL DISTRIBUTIONS - (3,976,400)
Share transactions 320,338,185 1,515,609,862
Net proceeds from sales of shares
Reinvestment of distributions - 3,877,609
Cost of shares redeemed (293,715,207) (1,041,351,744)
Redemption fees 1,375,163 7,074,858
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 27,998,141 485,210,585
TOTAL INCREASE (DECREASE) IN NET ASSETS (299,139,740) 545,596,349
NET ASSETS
Beginning of period 888,529,981 342,933,632
End of period (including undistributed net investment income of $3,808,413 and $2,630,483,
respectively) $ 589,390,241 $ 888,529,981
OTHER INFORMATION
Shares
Sold 30,805,781 95,990,469
Issued in reinvestment of distributions - 261,277
Redeemed (25,808,491) (67,265,359)
Net increase (decrease) 4,997,290 28,986,387
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED APRIL 19, 1993
APRIL 30, 1995 (COMMENCEMENT
(UNAUDITED) OF
OPERATIONS) TO
OCTOBER 31, 1993
SELECTED PER-SHARE DATA YEAR ENDED
OCTOBER 31,
1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 16.21 $ 13.28 $ 10.00
Income from Investment Operations
Net investment income .02 .07 .03
Net realized and unrealized gain (loss) (6.39) 2.82 3.23
Total from investment operations (6.37) 2.89 3.26
Less Distributions - (.05) -
From net investment income
From net realized gain - (.05) -
Total distributions - (.10) -
Redemption fees added to paid in capital .01 .14 .02
Net asset value, end of period $ 9.85 $ 16.21 $ 13.28
TOTAL RETURN B (39.24)% 22.89% 32.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 589,390 $ 888,530 $ 342,934
Ratio of expenses to average net assets 1.41% A 1.48% 1.94% A
Ratio of net investment income to average net assets 1.08% A .47% 1.21% A
Portfolio turnover rate 69% A 77% 72% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
SOUTHEAST ASIA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Southeast Asia
Fund has a 3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1995 MONTHS YEAR FUND
SOUTHEAST ASIA -13.55% -1.79% 26.90%
SOUTHEAST ASIA
(INCL. 3% SALES CHARGE) -16.15% -4.73% 23.09%
Morgan Stanley Far East
ex-Japan Free Index -13.67% -1.49% 41.93%
Average Pacific Region Fund -13.22% -6.82% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 19, 1993. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley Far East ex-Japan Free index, a broad measure of the
performance of stocks in the Far East region, excluding Japan. The index is
weighted by each country's market capitalization (or the total value of its
outstanding shares). To measure how the fund's performance stacked up
against its peers, you can compare it to the average Pacific region fund,
which reflects the performance of 70 funds with similar objectives tracked
by Lipper Analytical Services over the past six months. These benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED PAST 1 LIFE OF
APRIL 30, 1995 YEAR FUND
SOUTHEAST ASIA -1.79% 12.43%
SOUTHEAST ASIA (INCL. 3% SALES CHARGE) -4.73% 10.76%
Morgan Stanley Far East ex-Japan
Free Index -1.49% 18.80%
Average Pacific Region Fund -6.82% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Southeast MSCI EMF Combine
04/19/93 9700.00 10000.00
04/30/93 9651.50 10378.31
05/31/93 10078.30 10975.91
06/30/93 9835.80 10687.54
07/31/93 9826.10 10760.98
08/31/93 10543.90 11661.43
09/30/93 10873.70 12024.42
10/31/93 12842.80 14239.20
11/30/93 13240.50 14143.38
12/31/93 15992.99 17581.63
01/31/94 14696.79 16380.67
02/28/94 14004.83 15439.89
03/31/94 12221.33 13760.40
04/30/94 12533.20 14408.66
05/31/94 13069.23 15023.00
06/30/94 12299.30 14355.17
07/31/94 12952.27 15156.89
08/31/94 14141.27 16391.33
09/30/94 14131.53 16127.43
10/31/94 14238.73 16440.91
11/30/94 12845.07 14875.07
12/31/94 12513.71 14507.62
01/31/95 11198.02 12951.63
02/28/95 12162.86 14260.59
03/31/95 12318.79 14329.01
04/28/95 12309.05 14193.40
Let's say you invested $10,000 in Fidelity Southeast Asia Fund on April 19,
1993, when the fund started. By April 30, 1995, the value of your
investment would have grown to $12,309 - a 23.09% increase on your initial
investment. That compares to $10,000 invested in the Morgan Stanley Far
East ex-Japan Free index, which would have grown to $14,193 over the same
period - a 41.93% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
SOUTHEAST ASIA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Allan Liu,
Portfolio Manager of Fidelity Southeast Asia Fund
Q. HOW DID THE FUND PERFORM, ALLAN?
A. Recent results were somewhat disappointing. For the six months ended
April 30, 1995, the fund was down by 13.55%. This was slightly better than
the Morgan Stanley Far East ex-Japan Free index, which returned -13.67%,
and slightly worse than the average Pacific region fund, which returned
- -13.22% according to Lipper Analytical Services. For the twelve months, the
fund returned -1.79%, compared with -1.49% for the regional index and
- -6.82% for the average Pacific region fund.
Q. OBVIOUSLY, THE SOUTHEAST ASIAN MARKETS HAVE BEEN DIFFICULT OF LATE. WHY?
A. Generally speaking, the Southeast Asian markets have dropped by about
13% over the past six months as a result of continuing fears of rising
interest rates in the U.S., and perhaps more importantly, because of the
recent economic crisis in Mexico, which has shaken investor confidence in
the emerging markets of the world. A lot of money flowed out of Southeast
Asia out of concern about the Mexican currency crisis. This capital flight
also caused many of the Southeast Asian countries to increase their
domestic interest rates in order to protect their currencies against
devaluation.
Q. HOW DID THIS CAPITAL FLIGHT AFFECT FUND PERFORMANCE?
A. Asset shrinkage due to withdrawals from the fund was about 17% over the
last six months, but the outflow was gradual, unlike the heavy redemptions
that occurred in the first quarter of 1994 when the Southeast Asian markets
plummeted. The recent outflow of funds from the region dampened investor
sentiment and had a drag on stock prices generally across the board. This
made it difficult for the fund to outperform by stock picking. However,
toward the end of the period, there were signs that investor sentiment was
turning more positive.
Q. HOW DID YOUR STRATEGY CHANGE IN LIGHT OF THESE FACTORS?
A. There have been no major changes in strategy from what I outlined in the
previous report. Since the beginning of 1994, I have been following a more
defensive positioning for the fund, focusing on big capitalization stocks,
which are generally easier to sell. Therefore, even though there was some
shrinkage in the fund's assets over the last six months, the negative
impact of selling into falling markets was mitigated somewhat. I did reduce
some of the fund's more minor holdings during the period. This was done not
only to meet fund redemptions, but also to create a more concentrated
portfolio - that is, to focus the fund's holdings more around companies in
which I have the highest degree of confidence in times of great
uncertainty, both in terms of their upside potential and their limited
downside.
Q. WHAT STOCKS DO YOU LIKE AT THE MOMENT, ALLAN?
A. I continue to be enthusiastic about Hutchison Whampoa, which is a Hong
Kong-based conglomerate that has strong property earnings and also owns
container terminals and telecommunications operations. In addition to its
Hong Kong container terminals, the company also operates container
terminals in China, which I believe have tremendous long-term growth
potential. Samsung Electronics is a good example of a company that I still
like, but one that was a bit of a disappointment at one point during the
period. Samsung, one of Korea's largest companies and the world's largest
manufacturer of semiconductors, is also a good illustration of the virtue
of patience in these markets. During the last two months of 1994, Samsung's
stock price fell more than 20%, mainly because of the negative sentiment of
Korean institutions against the market in general and large-cap stocks in
particular. I continued to hold the stock, however, because the company's
fundamentals remain strong and its earnings have never disappointed. During
the first four months of 1995, the stock price increased by more than 32%.
Q. WERE THERE ANY MAJOR STOCKS THAT DISAPPOINTED?
A. Of course, one always wants to do better in terms of performance. But
no, there really weren't any specific major disappointments over the last
six months.
Q. WHAT IS YOUR GENERAL OUTLOOK FOR THE REGION'S ECONOMIES GOING FORWARD?
A. The markets in this part of the world are extremely sensitive in the
short term to changes in interest rates, investor confidence and currency
flows, which are somewhat difficult for a stock picker like me to predict.
But if we do look at the broad economic cycle in the region's more
sophisticated markets, it seems likely that interest rates are close to
peaking, and therefore, I do not expect there will be significant downside
pressure on the valuations of the Southeast Asian markets going forward.
That is, of course, barring any major international financial disruptions
such as the Mexican crisis or the collapse of Barings have had on investor
confidence in the recent past. It is also important to point out that,
despite the turbulence in the international markets over the last 16
months, economic growth in Southeast Asia has not slowed appreciably. In
fact, overall economic performance in the region remains strong, corporate
earnings growth is still reasonably good, and the prices of many regional
stocks are now at attractive levels.
Q. WHAT ARE YOU NEAR-TERM PROSPECTS FOR THE FUND?
A. I always say that it is best for investors to take a long-term view of
the Southeast Asian markets, because they tend to be far more volatile that
the U.S. market. At current price levels, however, there are quite a number
of stocks in the portfolio that are providing us with good earnings growth
and are trading on reasonable multiples. As a result, I'm cautiously
optimistic about future fund performance.
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in Southeast Asian issuers. The fund
does not anticipate investing in Japan
START DATE: April 19, 1993
SIZE: as of April 30, 1995, more than
$586 million
MANAGER: Allan Liu, since 1993; manager,
various funds for non-U.S. investors; analyst,
Southeast Asian markets, 1987-1990; joined
Fidelity in 1987
(checkmark)
ALLAN LIU ON THE EMERGING MARKETS OF
SOUTHEAST ASIA:
"There really hasn't been any one market in
Southeast Asia that has distinguished itself in terms
of valuations over the past year. Interest rate worries
and investor concerns about emerging markets
have, for the most part, had a dampening effect
throughout the region.
"The fund is still most heavily invested (20% of the
fund) in Hong Kong stocks, although that exposure
has been reduced over the past six months, partly as
a result of the relisting of Jardine Matheson
Holdings, one of the fund's top 10, on the Singapore
stock exchange. In the short- to medium-term, I think
Hong Kong and Thailand (about 19% of
investments) are the two markets in the region that
are most sensitive to interest rates. If U.S. interest
rates decrease, I think both of these markets are
likely to respond positively. The greatest impact of
high interest rates in the region has come at the
expense of the property and finance sectors.
"I like the prospects of air traffic growth in the region
and invested more heavily in two names -
Singapore International Airlines and Malaysian
Airline Systems - both of which are now among the
fund's top 10 holdings.
"There was a slight increase in the fund's holdings in
the People's Republic of China, which reflects a
lengthening of the fund's position in a local power
generation company that is listed on the New York
Stock Exchange."
SOUTHEAST ASIA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1995
United States 4.4%
Row: 1, Col: 1, Value: 4.4
Row: 1, Col: 2, Value: 18.7
Row: 1, Col: 3, Value: 17.3
Row: 1, Col: 4, Value: 3.7
Row: 1, Col: 5, Value: 1.2
Row: 1, Col: 6, Value: 13.9
Row: 1, Col: 7, Value: 12.8
Row: 1, Col: 8, Value: 8.300000000000001
Row: 1, Col: 9, Value: 19.7
Hong Kong 20.0%
Thailand 18.7%
Indonesia 8.3%
Singapore 17.0%
Korea (South) 12.8%
Philippines 3.7%
Malaysia 13.9%
Other 1.2%
AS OF OCTOBER 31, 1994
United States 2.3%
Row: 1, Col: 1, Value: 2.7
Row: 1, Col: 2, Value: 18.4
Row: 1, Col: 3, Value: 13.4
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 5, Value: 1.75
Row: 1, Col: 6, Value: 14.6
Row: 1, Col: 7, Value: 13.8
Row: 1, Col: 8, Value: 6.3
Row: 1, Col: 9, Value: 27.4
Row: 1, Col: 10, Value: 0.0
Thailand 18.4%
Hong Kong 27.4%
Singapore 13.3%
Indonesia 6.3%
Philippines 3.0%
Other 0.9%
Korea (South) 13.8%
Malaysia 14.6%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and closed-end
investment companies 95.4 96.6
Bonds 0.2 1.1
Short-term investments 4.4 2.3
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENT INVESTMENTS
S 6 MONTHS AGO
Hutchison Whampoa Ltd. Ord. 4.0 3.2
(Hong Kong, Electrical Equipment)
Sampoerna Hanjaya Mandala (For. Reg.) 3.7 1.6
(Indonesia, Tobacco)
Sun Hung Kai Properties Ltd. 3.1 3.5
(Hong Kong, Real Estate)
Samsung Electronics Co. Ltd. 3.1 2.1
(Korea (South), Electronics)
Singapore International Airlines Ltd. 2.9 0.4
(Singapore, Air Transportation)
Malaysian Airlines Systems BHD 2.8 0.7
(Malaysia, Air Transportation)
Jardine Matheson Holdings Ltd. 2.7 2.5
(Singapore, Holding Companies)
Development Bank of 2.6 0.4
Singapore Ltd. (For. Reg.)
(Singapore, Banks)
Swire Pacific Ltd. Class A 2.4 2.5
(Hong Kong, Air Transportation)
Siam Cement PCL (For. Reg.) 2.3 1.5
(Thailand, Building Materials)
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS
AGO
Construction & Real Estate 16.9 20.5
Utilities 15.8 10.8
Finance 15.6 21.5
Transportation 10.2 6.1
Industrial Machinery & Equipment 6.3 5.9
Media & Leisure 5.9 6.3
Nondurables 5.3 4.1
Holding Companies 4.7 4.8
Technology 4.6 4.6
Basic Industries 2.6 7.5
SOUTHEAST ASIA
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.1%
SHARES VALUE (NOTE 1)
CHINA (PEOPLES REP.) - 1.2%
Huaneng Power International, Inc.
Class N sponsored ADR (a) 467,850 $ 6,783,826
HONG KONG - 20.0%
Associated International Hotels Ltd. 1,190,000 653,215
Cheung Kong Holdings Ltd. 1,846,000 7,773,137
China Light & Power Co. Ltd. 870,000 4,101,650
Citic Pacific Ltd. Ord. 180,000 440,584
Consolidated Electric Power Asia Ltd. 1,250,000 2,736,700
First Pacific Co. Ltd. 2,500,000 2,050,500
Hang Seng Bank 288,000 1,897,186
Harbour Ring International Holdings Ltd.
(warrants)(a) 333 6
Henderson Land Development Co. Ltd. 962,000 4,957,869
Henderson Investment Ltd. 3,000,000 2,131,230
Henderson Investment Ltd. (warrants)(a) 164,000 9,320
Hong Kong Land Holdings Ltd. 900,000 1,692,000
Hong Kong Telecommunications Ltd. 6,600,000 12,915,276
Hopewell Holdings Ltd. 5,400,000 3,836,214
HSBC Holdings PLC 581,444 6,740,454
Hutchison Whampoa Ltd. Ord. 5,388,000 23,383,704
Hysan Development Co. Ltd. 1,900,000 4,049,337
Peregrine Investments Holdings Ltd. 1,792,000 1,886,438
Sun Hung Kai Properties Ltd. 2,828,000 18,044,846
Swire Pacific Ltd. 1,490,000 1,607,010
Swire Pacific Ltd. Class A 2,152,000 14,384,657
Wharf Holdings Ltd. (b) 800,000 2,397,312
117,688,645
INDONESIA - 8.3%
Astra International PT (For. Reg.) 3,020,000 3,854,456
Duta Anggada Realty Ord. 666,666 395,580
Gudang Garam PT Perusahaan 542,500 3,194,750
Indocement Tungaal Prakarsa PT
(For. Reg.) 1,253,000 4,152,354
Indofood Sukses Makmur (For. Reg.)(a) 1,062,000 3,757,186
Indosat (Indonesia Satellite)
sponsored ADR 214,000 7,730,750
Kalbe Farma (For. Reg.) 260,000 925,660
Sampoerna Hanjaya Mandala (For. Reg.) 3,755,500 22,031,829
SUCACO PT 350,000 971,786
United Tractors PT (For. Reg.) 1,007,000 1,758,756
48,773,107
KOREA (SOUTH) - 12.5%
Byucksan Engineering & Construction
Co. Ltd 50,000 832,951
Cheil Foods & Chemical Industries 1,723 117,526
Chosun Brewery Co. Ltd. (a) 319 12,763
Dae Chang Industrial Co. 43 874
Daelim Industrial Co. 34,770 802,718
Daewoo Corp. (a) 2,511 31,455
Daewoo Corp. (warrants)(a) 650 162,500
Daewoo Electronics 173 1,991
Daewoo Metal Co. Ltd. 154 2,545
Daewoo Telecommunication Co. Ltd. 1,343 15,221
Daewoo Telecommunication Co. Ltd.
(New) 116 1,183
Daeyoung Electronics Industries (a) 24 793
Dongbu Chemical Co. Ltd. 26,600 840,900
Hanil Cement Manufacturing Co. Ltd. (a) 14,940 823,086
Hanil Development Co. (a) 1,346 27,543
Hyundai Cement Co. Ltd. 84,070 3,639,154
Hyundai Engineering & Construction
Co. Ltd. 20,600 926,844
SHARES VALUE (NOTE 1)
Hyundai Motor Service Co. Ltd. (a) 26,542 $ 1,535,169
Hyundai Precision Industry Co. Ltd. 99,520 2,519,493
Keang Nam Enterprises 9 156
Kohap Ltd. 5,250 97,790
Korea Electric Power Corp. 344,510 12,986,397
Korea First Securities Co. Ltd. (a) 93 1,354
Korea Mobile Telecommunications
Corp. (a) 9,700 7,099,886
Korean Air 116,064 4,198,231
Kyung Nam Woolen Textile Industries (a) 79 1,907
Miwon Co. Ltd. 135 4,604
Pohang Iron & Steel Co. Ltd. 77,855 7,704,308
Samsung Construction Co. Ltd. (a) 1,592 42,183
Samsung Electronics Co. Ltd. 103,977 17,960,866
(bonus issued 3/95) 20,699 3,203,884
GDR (New) (b) 5,343 257,265
GDR (vtg.) (b) 2,983 208,810
GDR (vtg.) (New) 1,734 120,738
GDR (vtg.) (New) (b) 590 41,082
GDS (a) (b) 5,000 242,500
Samsung Engineering & Construction Co.:
GDR 1,110 12,088
GDR (vtg.) 2,885 37,505
Sang Up Securities Co. Ltd. (a) 24,577 470,682
Shin Won Corp. 33,670 1,404,480
Shinsegae Department Store 2,093 178,455
Shinsegae Department Store
(sub. offer 1995) 242 14,443
Sunkyong Industries 88,590 3,624,042
Sunny-Emi Co. 34,500 982,029
Yukong Ltd. 3,129 138,729
73,329,123
MALAYSIA - 13.9%
Berjaya Sports Toto BHD 1,020,833 1,380,401
Commerce Asset Holding BHD 809,000 3,537,328
Econstates BHD 246,000 372,486
EON (Edaran Otomobil Nasional) BHD 440,000 3,135,224
Gamuda BHD 58,666 220,888
Genting BHD 1,340,000 12,206,475
Jaya Tiasa Holdings BHD 1,117,000 4,137,871
Kian Joo Can Factory:
BHD 28,000 96,923
BHD Class A 50,000 165,992
Land & General BHD 654,000 1,893,160
Larut Consolidated BHD 302,000 425,491
Leader Universal Holdings:
BHD 305,000 994,029
BHD Class A 336,666 1,056,340
Malaysian Airlines Systems BHD 5,291,000 16,387,126
Malaysian Assurance Alliance BHD (a) 600,000 1,955,466
Malaysian Banking BHD 200,000 1,368,422
Press Metal BHD 100,000 232,794
Rashid Hussain BHD 210,000 493,118
Resorts World BHD 1,835,000 9,657,899
Sime Darby BHD 3,650,000 9,309,727
Technology Resources Industries BHD (a) 542,000 1,382,431
Tenega Nasional BHD 270,000 1,202,429
TH Loy Industry BHD (a) 300,000 1,099,191
United Engineers BHD 650,000 3,736,844
YTL Corp.:
BHD 1,077,000 4,883,560
(warrants)(a) 180,000 568,420
81,900,035
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PHILIPPINES - 3.7%
Bacnotan Consolidated Industries, Inc. 18,830 $ 119,269
Benpress Holdings Corp.:
GDR 73,200 512,400
GDR (b) 72,000 522,000
First Philippines Holdings Corp. 770,012 1,921,336
House of Investments, Inc. 2,062,000 2,058,041
Meralco Class B 364,155 3,774,350
Metropolitan Bank & Trust Co. 48,587 881,281
Petron Corp. 3,830,000 2,609,685
Philippine Long Distance Telephone Co.
sponsored ADR 90,000 5,737,500
Philippine National Bank 60 569
SM Prime Holdings, Inc. (a) 2,424,000 735,102
Universal Robina Corp. (a) 3,271,500 1,820,982
William Lines, Inc. 3,000,000 1,111,320
21,803,835
SINGAPORE - 17.0%
City Developments Ltd. 710,400 4,178,821
Cycle & Carriage Ltd. 41,000 335,294
Dairy Farm International Holdings Ltd.
(SG) 1,200,000 1,272,000
DBS Land Ltd. 300,000 826,398
Development Bank of Singapore Ltd.
(For. Reg.) 1,429,000 15,274,109
Ipco International Ltd. 200,000 600,000
Jardine Matheson Holdings Ltd. Ord. 1,968,366 15,648,510
Jardine Strategic Holdings Ltd. Ord. 200,000 680,000
Jurong Engineering Ltd. 203,000 1,143,150
Keppel Corp. Ltd. 940,000 7,619,800
Mandarin Oriental International Ltd. 1,950,000 2,691,000
Overseas Chinese Banking Corp. 198,000 2,158,966
Overseas Union Bank Ltd. (For. Reg.) 1,283,000 7,409,004
Singapore International Airlines Ltd. 1,775,000 17,062,418
Singapore Press Holdings Ltd. (For. Reg.) 560,000 9,641,318
Singapore Technology Shipbuilding &
Engineering Ltd. (For. Reg.) 28,600 69,756
Singmarine Industries Ltd. 411,000 978,854
Ssangyong Cement Ltd. 1,075,000 2,945,844
Straits Steamship Co. Ltd. Ord. 975,000 3,245,336
United Overseas Bank Ltd. (For. Reg.) 605,000 6,293,041
100,073,619
THAILAND - 18.5%
Advanced Information Services:
(For. Reg.) 150,000 2,209,113
(Loc. Reg.) 100,000 1,472,742
Ban pu Coal:
(For. Reg.) 31,700 619,040
(Loc. Reg.) 29,300 572,172
Bangkok Bank Ltd. (For. Reg.) 697,300 6,751,726
Bangkok Metropolitan Bank PCL
(For. Reg.) 2,084,700 2,120,328
Dhana Siam Finance & Securities PCL:
(For. Reg.) 485,500 2,073,944
(For. Reg.) (warrants)(a) 144,000 814,320
Ekachart Finance & Securities Co. Ltd.
(For. Reg.) (warrants)(a) 20,280 29,083
Electricity Generating PCL (For. Reg.) 1,178,600 3,596,215
SHARES VALUE (NOTE 1)
Finance One PCL:
(For. Reg.) 898,200 $ 4,933,157
(Loc. Reg.) (warrants)(a) 298,350 1,711,446
General Finance & Securities PCL
(For. Reg.) 179,600 716,062
Hemeraj Land & Development PCL
(For. Reg.) 73,500 158,482
Krung Thai Bank (For. Reg.) 1,850,100 5,607,505
Loxley PCL (For. Reg.) 56,300 1,062,783
National Finance & Securities PCL:
(For. Reg.) 480,000 1,640,357
(Loc. Reg.) 240,000 810,415
(warrants)(a) 160,000 -
Nithipat Capital PCL (Loc. Reg.) 171,600 593,410
One Holding PCL (For. Reg.)(a) 1,081,700 2,508,419
Phatra Thanakit PCL (For. Reg.)(a) 217,500 1,460,027
Prime Finance & Securities (For. Reg.)
(warrants)(a) 46,666 -
Property Perfect PCL:
(For. Reg.) 258,400 2,060,471
(Loc. Reg.) (warrants)(a) 66,800 70,659
PTT Exploration & Production (For.) 660,000 6,444,266
Quality Houses Co. Ltd.:
(For. Reg.) 104,400 320,675
(For. Reg.) (New) 52,200 160,338
Sammakorn Co. Ltd. (For. Reg.) 89,200 223,181
Securities One Ltd.:
(For. Reg.) 34,500 211,941
(Loc. Reg.) 81,000 497,474
Siam Cement PCL (For. Reg.) 233,300 13,420,921
Siam City Cement Co. Ltd. (For. Reg.) 366,800 5,640,782
Siam Commercial Bank PCL (For. Reg.) 163,800 1,386,102
Supalai PCL:
(For. Reg.) 20,500 38,365
(For. Reg.) (warrants)(a) 9,000 3,149
Telecomasia Corp. PCL (For. Reg.) 2,027,300 7,546,705
Thai Airways International Ltd.
(For. Reg.)(a) 898,500 2,065,310
Thai Farmers Bank PCL (For. Reg.) 577,400 5,073,978
Thai Military Bank Ltd.:
(For. Reg.) 1,113,300 3,578,146
(For. Reg.) (rights)(a) 188,660 376,092
Thai Telephone & Telecommunication
PCL (For. Reg.) 1,466,300 11,453,607
United Communication Industry:
(For. Reg.) 250,000 3,661,513
(Loc. Reg.) 100,000 1,464,605
Univest Land PCL (For. Reg.) 728,200 1,340,565
108,499,591
TOTAL COMMON STOCKS
(Cost $547,609,622) 558,851,781
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
KOREA (SOUTH) - 0.3%
Samsung Electronics Co. Ltd. 19,296 1,721,567
Samsung Electronics Co. Ltd.
(bonus issued 3/95) 3,818 295,484
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $1,669,516) 2,017,051
CORPORATE BONDS - 0.2%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (C) (NOTE 1)
CONVERTIBLE BONDS - 0.2%
KOREA (SOUTH) - 0.0%
Shin Won Corp. euro
0.5%, 12/31/08 - $ 350,000 $ 323,750
THAILAND - 0.2%
Siam Syntech Construction PCL
4 1/2%, 2/25/02 (b) - 1,500,000 915,000
TOTAL CONVERTIBLE BONDS 1,238,750
NONCONVERTIBLE BONDS - 0.0%
THAILAND - 0.0%
Finance One PCL
3 3/4%, 2/7/01 - THB 5,635 148,631
TOTAL CORPORATE BONDS
(Cost $2,072,463) 1,387,381
REPURCHASE AGREEMENTS - 4.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.93%,
dated 4/28/95 due 5/1/95 $ 25,829,758 25,817,000
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $577,168,601) $ 588,073,213
CURRENCY ABBREVIATIONS
THB - Thai baht
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,583,969 or 0.8% of net
assets.
3. Principal amount is stated in United States dollars unless otherwise
noted.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $271,607,093 and $404,728,761, respectively.
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $578,355,688. Net unrealized apreciation aggregated
$9,717,525, of which $59,613,269 related to appreciated investment
securities and $49,895,744 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.5%
Basic Industries 2.6
Construction & Real Estate 16.9
Durables 2.3
Energy 1.8
Finance 15.6
Health 0.2
Holding Companies 4.7
Industrial Machinery & Equipment 6.3
Media & Leisure 5.9
Nondurables 5.3
Repurchase Agreements 4.4
Retail & Wholesale 1.9
Technology 4.6
Transportation 10.2
Utilities 15.8
100.0%
SOUTHEAST ASIA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $25,817,000) (cost $577,168,601) - See $ 588,073,213
accompanying schedule
Receivable for investments sold 6,118,369
Receivable for fund shares sold 587,333
Dividends receivable 1,732,398
Interest receivable 9,301
Redemption fees receivable 587
TOTAL ASSETS 596,521,201
LIABILITIES
Payable to custodian bank $ 156,770
Payable for investments purchased 4,192,069
Payable for fund shares redeemed 4,518,942
Accrued management fee 278,484
Other payables and accrued expenses 411,709
TOTAL LIABILITIES 9,557,974
NET ASSETS $ 586,963,227
Net Assets consist of:
Paid in capital $ 625,579,703
Distributions in excess of net investment income (2,392,516
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (47,162,065
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 10,938,105
NET ASSETS, for 46,460,073 shares outstanding $ 586,963,227
NET ASSET VALUE and redemption price per share ($586,963,227 (divided by) 46,460,073 shares) $12.63
Maximum offering price per share (100/97.00 of $12.63) $13.02
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 5,416,781
Dividends
Interest 856,764
6,273,545
Less foreign taxes withheld (445,594
)
TOTAL INCOME 5,827,951
EXPENSES
Management fee $ 2,442,185
Basic fee
Performance adjustment (599,842
)
Transfer agent 932,952
Fees
Redemption fees (17,758
)
Accounting fees and expenses 171,558
Non-interested trustees' compensation 2,555
Custodian fees and expenses 535,444
Registration fees 72,720
Audit 27,528
Legal 3,822
Miscellaneous 4,047
TOTAL EXPENSES 3,575,211
NET INVESTMENT INCOME 2,252,740
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (41,241,248
)
Foreign currency transactions (390,818 (41,632,066
) )
Change in net unrealized appreciation (depreciation) on:
Investment securities (72,025,701
)
Assets and liabilities in foreign currencies 26,923 (71,998,778
)
NET GAIN (LOSS) (113,630,844
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (111,378,104
)
OTHER INFORMATION $399,493
Sales charges paid to FDC
Accounting fees paid to FSC $143,057
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 2,252,740 $ 1,794,901
Net investment income
Net realized gain (loss) (41,632,066) 6,125,880
Change in net unrealized appreciation (depreciation) (71,998,778) 8,854,396
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (111,378,104) 16,775,177
Distributions to shareholders - (2,133,538)
From net investment income
In excess of net investment income - (1,834,307)
TOTAL DISTRIBUTIONS - (3,967,845)
Share transactions 89,914,572 1,349,887,034
Net proceed from sales of shares
Reinvestment of distributions - 3,847,389
Cost of shares redeemed (217,923,677) (1,048,177,751)
Redemption fees 616,341 7,700,655
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (127,392,764) 313,257,327
TOTAL INCREASE (DECREASE) IN NET ASSETS (238,770,868) 326,064,659
NET ASSETS
Beginning of period 825,734,095 499,669,436
End of period (including distributions in excess of net investment income of $2,392,516 and
$1,366,477, $ 586,963,227 $ 825,734,095
respectively)
OTHER INFORMATION
Shares
Sold 7,166,327 92,561,106
Issued in reinvestment of distributions - 259,959
Redeemed (17,218,101) (74,053,904)
Net increase (decrease) (10,051,774) 18,767,161
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED APRIL 19, 1993
APRIL 30, 1995 OCTOBER 31, 1994 (COMMENCEMENT
(UNAUDITED) OF
OPERATIONS) TO
OCTOBER 31,
1993
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 14.61 $ 13.24 $ 10.00
Income from Investment Operations
Net investment income .05 D .04 .01
Net realized and unrealized gain (loss) (2.04) 1.23 3.22
Total from investment operations (1.99) 1.27 3.23
Less Distributions - (.04) -
From net investment income
In excess of net investment income - (.03) -
Total distributions - (.07) -
Redemption fees added to paid in capital .01 .17 .01
Net asset value, end of period $ 12.63 $ 14.61 $ 13.24
TOTAL RETURN B, C (13.55)% 10.87% 32.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 586,963 $ 825,734 $ 499,669
Ratio of expenses to average net assets 1.15% A 1.47% 2.00% A
Ratio of expenses to average net assets before expense reductions 1.15% A 1.47% 2.06% A
Ratio of net investment income to average net assets .72% A .22% .45% A
Portfolio turnover rate 90% A 157% 14% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1995 (Unaudited)
a SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Canada Fund, Fidelity Diversified International Fund, Fidelity
Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Latin America Fund,
Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast
Asia Fund and Fidelity Worldwide Fund (the funds) are funds of Fidelity
Investment Trust (the trust). The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. Each fund
is authorized to issue an unlimited number of shares. The following
summarizes the significant accounting policies of the funds:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities, including restricted securities, for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees. Korean
equity securities that have reached the limit for aggregate foreign
ownership and for which premiums to the local exchange prices may be paid
by foreign investors are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the funds are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to U.S. federal
income taxes to the extent that it distributes all of its taxable income
for its fiscal year. Each fund may be subject to foreign taxes on income,
gains on investments or currency repatriation. Each fund accrues such taxes
as applicable. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the funds are informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. The funds' investment adviser, Fidelity Management &
Research Company (FMR), bears all organizational expenses except for
registering and qualifying a fund and shares of a fund for distribution
under federal and state securities law. These expenses were borne by
International Value and are being amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Certain foreign currency gains (losses) are taxable as
ordinary income and, therefore, increase (decrease) taxable ordinary income
available for distribution.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
transactions, foreign currency transactions, passive foreign investment
companies (PFIC), market discount, and losses deferred due to wash sales
and excise tax regulations. Certain funds also utilized earnings and
profits distributed to shareholders on redemption of shares as a part of
the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income (loss),
distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences which
will reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REDEMPTION FEES. Shares held in Emerging Markets, Latin America and
Southeast Asia less than 90 days are subject to a redemption fee equal to
1.50% of the proceeds of the redeemed shares. Shares held in Japan less
than 90 days are subject to a redemption fee equal to 1.00% of the proceeds
of the redeemed shares. In December 1994, the Board of Trustees of Pacific
Basin approved a 1.00% redemption fee on shares held less than 90 days
which is effective for shares purchased after April 15, 1995. In May 1995,
the Board of Trustees of Canada, Europe and Europe Capital Appreciation
approved a 1.00% redemption fee on shares held less than 90 days which is
effective for shares purchased on September 1, 1995. A portion of the fee
is accounted for as a reduction of transfer agent expenses. This portion of
the redemption fee is used to offset the transaction costs and other
expenses that short-term trading imposes on those funds and their
shareholders. The remainder of the redemption fee is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
b OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The funds may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the funds' currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the funds' investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the Statement of Assets and Liabilities. The U.S. dollar value of the
currencies each applicable fund has committed to buy or sell is shown in
the schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
acquired or hedged through currency contracts at period end. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date. Contracts that have been offset with different
counterparties are reflected as both a contract to buy and a contract to
sell in the schedule of investments under the caption "Forward Foreign
Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds,
along with other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements that mature in 60 days or
less from the date of purchase, and are collateralized by U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The funds, through their custodian, receive delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. FMR is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
FUTURES CONTRACTS AND OPTIONS. The funds may use futures and options
contracts to manage their exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures, writing
puts, and buying calls tend to increase the funds' exposure to the
underlying instrument. Selling futures, buying puts, and writing calls tend
to decrease the funds' exposure to the underlying instrument, or hedge
other fund investments. Futures contracts involve, to varying degrees, risk
of loss in excess of the futures variation margin reflected in the
Statement of Assets and Liabilities. The underlying face amount at value is
shown in the schedule of investments under the caption "Futures Contracts."
This amount reflects each contract's exposure to the underlying instrument
at period end. Losses may arise from changes in the value of the underlying
instruments, if there is an illiquid secondary market for the contracts, or
if the counterparties do not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
INDEXED SECURITIES. The funds may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
funds use these securities to increase or decrease their exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The funds are permitted to invest in privately
placed restricted securities. These securities may be resold in
transactions exempt from registration or to the public if the securities
are registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may be
difficult. Restricted securities (excluding 144A issues) at the end of the
period are shown under the caption "Other Information" at the end of each
applicable fund's schedule of investments.
c JOINT TRADING ACCOUNT.
At the end of the period, International Value had 20% or more of its total
investments in repurchase agreements through a joint trading account. These
repurchase agreements were with entities whose creditworthiness has been
reviewed and found satisfactory by FMR. The repurchase agreements were
dated April 28, 1995 and due May 1, 1995. The maturity values of the joint
trading account investments were $13,778,000 at 5.93%. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING ACCOUNT
Number of dealers or banks 20
Maximum amount with one dealer or bank 18.9%
Aggregate principal amount of agreements $15,961,400,000
Aggregate maturity amount of agreements $15,969,281,000
Aggregate market value of collateral $16,304,796,000
Coupon rates of collateral 0% to 15 3/4%
Maturity dates of collateral 4/30/95 to 2/15/25
d PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and sales of securities (other than
short-term securities) and the market value of future contracts opened and
closed is included under the caption "Other Information" at the end of each
applicable fund's schedule of investments.
e FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of each fund.
The group fee rate is the weighted average of a series of rates and is
based on the monthly average net assets of all the mutual funds advised by
FMR. The rates ranged from .2700% to .5200% for the period. In the event
that these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted in
the same or a lower management fee. The annual individual fund fee rate is
.45% for each fund.
The basic fee for Canada, Diversified International, Europe, Europe Capital
Appreciation, International Value, Japan, Overseas, Pacific Basin, and
Southeast Asia is subject to a performance adjustment (up to a maximum of
(plus/minus) .20%) based on each fund's investment performance as compared
to the appropriate index over a specified period of time. The performance
adjustment for International Value will not take effect until October,
1995.
For the period, each fund's management fee was equivalent to the following
annualized rates expressed as a percentage of average net assets after the
performance adjustment, if applicable:
Canada .74%
Diversified International .67%
Emerging Markets, International Growth & Income,
International Value, Latin America and Worldwide. .77%
Europe Capital Appreciation .85%
Europe .81%
Japan .66%
Overseas .70%
Pacific Basin .83%
Southeast Asia .58%
SUB-ADVISER FEE. FMR, on behalf of the funds, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisers,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the sub-advisory
arrangements, FMR may receive investment advice and research services and
may grant the sub-advisers investment management authority to buy and sell
securities. FMR pays its sub-advisers either a portion of its management
fee or a fee based on costs incurred for these services. FIIA pays FIIAL
U.K. and FIIAL Japan a fee based on costs incurred for either service.
SALES LOAD. Fidelity Distributors Corporation (FDC), an affiliate of FMR,
is the general distributor of the funds. FDC is paid a 3% sales charge on
sales of shares of each fund, except for International Growth & Income
which is a no-load fund. The sales charge for Canada, Diversified
International, Europe Capital Appreciation, International Value, Japan,
Overseas, Pacific Basin, and Worldwide has been waived through June 30,
1995. Effective July 1, 1995, Diversified International, International
Value, Overseas and Worldwide will become no-load funds.
Shares of Canada, Europe, Pacific Basin and International Growth & Income
purchased before October 12, 1990 are subject to the deferred sales charge
upon redemption.
The amount received by FDC for sales charges and deferred sales charges are
shown under the caption "Other Information" on each applicable fund's
Statement of Operations.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
funds' transfer, dividend disbursing and shareholder servicing agent.
During the period November 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses. The accounting and pricing fees paid to FSC are shown under the
caption "Other Information" on each fund's Statement of Operations.
BROKERAGE COMMISSIONS. Certain funds placed a portion of their portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms are shown under the caption
"Other Information" at the end of each applicable fund's schedule of
investments.
f TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Information regarding affiliated
companies is included under the caption "Other Information" at the end of
each applicable fund's schedule of investments.
g BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. Each fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, each fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding are shown under the caption "Other
Information" at the end of each applicable fund's schedule of investments.
h EXPENSE REDUCTIONS.
FMR directed certain portfolio trades to brokers who paid a portion of
certain funds' expenses. For the period, the expenses of Canada,
Diversified International, Emerging Markets, Europe Capital Appreciation,
International Growth & Income, Latin America, and Worldwide were reduced by
$1,332, $21,769, $2,620, $1,236, $3,209, $1,044, and $5,628, respectively,
under this arrangement.
In addition, FMR voluntarily agreed to reimburse a portion of operating
expenses for certain funds. For the period, the reimbursement reduced
expenses for Canada, Europe and Pacific Basin by $197,748, $475,027 and
$231,426, respectively.
i CONCENTRATION OF RISK.
The relatively large investments of Emerging Markets, Latin America and
Southeast Asia in countries with limited or developing capital markets may
involve greater risks than investments in more developed markets and the
prices of such investments may be volatile. The consequences of political,
social or economic changes in these markets may have disruptive effects on
the market prices of these funds' investments and the income they generate,
as well as the fund's ability to repatriate such amounts.
TO CALL FIDELITY
FOR PORTFOLIO INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you to set up your Personal Identification Number (PIN). The PIN assures
that only you have automated telephone access to your account information.
Please have your Customer Number (T-account #) handy when you call --
you'll need it to establish your PIN. If you would ever like to change your
PIN, just choose the "Change your Personal Identification Number" option
when you call. If you forget your PIN, please call a Fidelity
representative at 1-800-544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1
For an individual fund quote.
2
For the ten most frequently
requested Fidelity fund quotes.
3
For quotes on Fidelity Select
Portfolios(registered trademark).
4
To change your Personal
Identification Number (PIN).
5
To speak with a Fidelity
representative.
6
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1
For your most recent fund activity
(purchases, redemptions, and
dividends).
2
To change your Personal
Identification Number (PIN).
3
To speak with a Fidelity
representative.
4
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL
ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR
SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE
TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS
ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES,
CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIRMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.,
London, England
Fidelity Management & Research (Far East) Inc.,
Tokyo, Japan
Fidelity Investments Japan Ltd. (FIJ)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors
(U.K.) Limited
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Penelope Dobkin, VICE PRESIDENT, WORLDWIDE FUND
George C. Domolky, VICE PRESIDENT, CANADA FUND
Gregory Fraser, VICE PRESIDENT, DIVERSIFIED INTERNATIONAL
Simon Fraser, VICE PRESIDENT, PACIFIC BASIN FUND
Richard Hazlewood, VICE PRESIDENT, EMERGING MARKETS
John R. Hickling, VICE PRESIDENT, OVERSEAS FUND
Patricia Satterthwaite, VICE PRESIDENT, LATIN AMERICA FUND
Sally Walden, VICE PRESIDENT, EUROPE FUND
Arthur S. Loring, SECRETARY
Stephen P. Jonas, TREASURER
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIANS
Chase Manhattan Bank, N.A.
New York, NY
DIVERSIFIED INTERNATIONAL FUND, INTERNATIONAL GROWTH & INCOME FUND,
INTERNATIONAL VALUE FUND, OVERSEAS FUND, WORLDWIDE FUND, EUROPE FUND,
EUROPE CAPITAL APPRECIATION FUND, JAPAN FUND, PACIFIC BASIN FUND, EMERGING
MARKETS FUND, SOUTHEAST ASIA FUND
Brown Brothers Harriman & Co.
Boston, MA
CANADA FUND, LATIN AMERICA FUND
FIDELITY'S INTERNATIONAL EQUITY FUNDS
Canada Fund
Emerging Markets Fund
Europe Fund
Europe Capital Appreciation Fund
Diversified International Fund
International Growth and Income Fund
International Value Fund
Japan Fund
Latin America Fund
Pacific Basin Fund
Southeast Asia Fund
Overseas Fund
Worldwide Fund
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
June 15, 1995
(registered trademark)
BULK RATE
U.S. POSTAGE
P A I D
F I D E L I T Y
INVESTMENTS
(registered trademark)
P.O. Box 193
Boston, MA 02101
INT-6-95S
Important Information About
Fidelity Canada Fund,
Fidelity Europe Fund,
and
Fidelity Europe Capital Appreciation Fund
This is to let you know that for shares purchased on or after September 1,
1995, the above-listed funds will charge a 1% redemption fee on shares held
less than 90 days.
These funds are designed as long-term investments for shareholders who seek
capital growth through investing in securities of issuers that have their
principal activities in Canada or Europe. The fund's Board of Trustees has
approved a redemption fee as a way to protect the interests of long-term
shareholders against the costs of short- term trading.
Redemption fees are designed to discourage short-term trading and to help
compensate the fund for commissions, transfer agent, and other costs that
short-term trading imposes on the fund's portfolio. As with all redemption
fees for Fidelity funds, this fee is paid to the fund, not to Fidelity.
Not authorized for distribution unless preceded or accompanied by a
current fund prospectus.
Fidelity Distributors Corporation, 82 Devonshire Street, Boston, MA 02109
6d
