SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-90649)
UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 64 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 (No. 811-4008) [x]
Amendment No. [ ]
Fidelity Investment Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number: (617) 563-7000
Arthur S. Loring, Secretary
82 Devonshire Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
( ) immediately upon filing pursuant to paragraph (b)
(x) on December 30, 1995 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on or before December 31, 1995.
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY DIVERSIFIED
INTERNATIONAL FUND, FIDELITY INTERNATIONAL VALUE FUND, FIDELITY
OVERSEAS FUND, AND FIDELITY WORLDWIDE FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c,d................................. Performance
..
4a Charter
i.................................
The Funds at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page: The Funds at a Glance; Doing Business
with Fidelity; Charter
Charter
(ii)..............................
(iii)........................... Expenses; Breakdown of Expenses
c................................ Charter
c, Charter; Breakdown of Expenses
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii...............................
*
b...................................
.
Exchange Restrictions; Transaction Details
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
*
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY INTERNATIONAL VALUE
FUND, FIDELITY DIVERSIFIED INTERNATIONAL FUND, FIDELITY OVERSEAS FUND, AND
FIDELITY WORLDWIDE FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. Description of the Trust
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a.............................. *
*
b..................................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with FMR Affiliates
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with FMR Affiliates
i.................................
17a - Portfolio Transactions
d............................
e.............................. *
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with FMR Affiliates
b..............................
*
c.................................
22a.............................. *
b.............................. Performance
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the fund s' most recent financial report and portfolio
listing s , or a copy of the Statement of Additional Information (SAI)
dated December 30, 1995. The SAI has been filed with the Securities
and Exchange Commission (SEC) and is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of either
document, call Fidelity at 1-800-544-8888.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED .
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED
BY THE SECURITIES AND
EXCHANGE COMMISSION OR
ANY STATE SECURITIES
COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
IBD -pro-1295
Each of these international funds is a n equity fund. Each
seeks to increase the value of your investment over the long-term by
investing in securities around the world.
FIDELITY'S
BROADLY DIVERSIFIED
INTERNATIONAL EQUITY
FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND
FIDELITY DIVERSIFIED INTERNATIONAL FUND
FIDELITY INTERNATIONAL VALUE FUND
FIDELITY OVERSEAS FUND
FIDELITY WORLDWIDE FUND
PROSPECTUS
DECEMBER 30, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EACH FUND'S YEARLY OPERATING EXPENSES
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE How each fund has done over
time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up
your account, including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
THE FUNDS AT A GLANCE
These broadly diversified funds do not focus on any one region or
country. Instead, they span the globe looking for investments that fit
their criteria. As with any mutual fund, there is no assurance that a fund
will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the funds.
INTERNATIONAL GROWTH & INCOME FUND
GOAL: Growth of capital and current income.
STRATEGY: Invests mainly in foreign securities. While the fund focuses on
equity securities, it also invests a significant portion of its assets in
debt securities.
SIZE: As of October 31, 1995, the fund had over $903 million in assets.
DIVERSIFIED INTERNATIONAL FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in foreign equity securities that are determined,
through both technical and fundamental analysis, to be undervalued compared
to others in their industries and countries.
SIZE: As of October 31, 1995, the fund had over $295 million in
assets.
INTERNATIONAL VALUE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of foreign issuers with
valuable assets or that FMR believes are undervalued in the marketplace.
SIZE: As of October 31, 1995, the fund had over $56 million in assets.
OVERSEAS FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities outside the U.S.
SIZE: As of October 31, 1995, the fund had over $2.2 billion in
assets.
WORLDWIDE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities issued by companies of all
sizes anywhere in the world, including the U.S.
SIZE: As of October 31, 1995, the fund had over $659 million in assets.
WHO MAY WANT TO INVEST
The funds may be appropriate for investors who want to pursue their
investment goals in markets outside the United States. By including
international investments in your portfolio, you can achieve additional
diversification and participate in growth opportunities around the world.
However, it is important to note that investments in foreign securities
involve risks in addition to those of U.S. investments.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other company,
political, or economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks have
shown greater growth potential than other types of securities. Bond values
fluctuate based on changes in interest rates and in the credit quality of
the issuer.
In addition to those general risks, international investing involves
different or increased risks. The performance of international funds
depends upon currency values, the political and regulatory environment, and
overall economic factors in the countries in which a fund invests. These
risks are particularly significant for funds that invest in emerging
markets. See "INVESTMENT PRINCIPLES AND RISKS" on page .
Broadly diversified funds could be appropriate for investors first entering
the international markets or those who are interested in broad
participation in multiple markets around the world. When you sell your
shares, they may be worth more or less than what you paid for them. By
themselves, the funds do not constitute a balanced investment
plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy ,
sell or hold shares of a fund. See page for more
information about these fees .
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee that, for Diversified International,
International Value , and Overseas Fund , varies based on its
performance. Each fund also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements and
financial reports. A fund's expenses are factored into its share price or
dividends and are not charged directly to shareholder accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets. A portion of the
brokerage commissions that the funds paid was used to reduce fund expenses.
Including this reduction, the total fund operating expenses
presented in the table would have been 1.12 % for Diversified
International Fund, 1.18 % for International Growth & Income
Fund , and 1.16 % for Worldwide Fund.
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, the table below indicates how much you would pay in
total expenses if you close your account after the number of years
indicated.
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
Transaction Operating Examples
expenses expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INTERN Maxim None Man .77% After $
ATIONA um age 1 1
L
sales ment year 2
GROWT charge fee
H & on
INCOM purcha
E ses
FUND and
reinves
ted
distribu
tions
Deferr None 12b- None After $
ed 1 fee 3 3
sales year 7
charge s
on
redem
ptions
Excha None Othe .41% After $
nge r 5 6
fee expe year 5
nses s
Annual $12.0 Total 1.18 After $
accoun 0 fund % 10 1
t oper year 4
mainte ating s 3
nance expe
fee
nses
(for
accoun
ts
under
$2,500
)
DIVER Maxim None Man .69 % After $
SIFIED um age 1 1
INTERN sales ment year 2
ATIONA charge fee
L FUND on
purcha
ses
and
reinves
ted
distribu
tions
Deferr None 12b- None After $
ed 1 fee 3 3
sales year 6
charge s
on
redem
ptions
Excha None Othe .44 % After $
nge r 5 6
fee expe year 2
nses s
Annual $12.0 Total 1.13 After $
accoun 0 fund % 10 1
t oper year 3
mainte ating s 7
nance expe
fee nses
(for
accoun
ts
under
$2,500
)
INTERN Maxim None Man .77 % After $
ATIONA um age 1 1
L sales ment year 7
VALUE charge fee
FUND on
purcha
ses
and
reinves
ted
distribu
tions
Deferr None 12b- None After $
ed 1 fee 3 5
sales year 4
charge s
on
redem
ptions
Excha None Othe .95 % After $
nge r 5 9
fee expe year 3
nses s
Annual $12.0 Total 1.72 After $
accoun 0 fund % 10 2
t oper year 0
mainte ating s 3
nance expe
fee
nses
(for
accoun
ts
under
$2,500
)
OVERS Maxim None Man .69 % After $
EAS um age 1 11
FUND sales ment year
charge fee
on
purcha
ses
and
reinves
ted
distribu
tions
Deferr None 12b- None After $
ed 1 fee 3 3
sales year 3
charge s
on
redem
ptions
Excha None Othe .36 % After $
nge r 5 5
fee expe year 8
nses s
Annual $12.0 Total 1.05 After $
accoun 0 fund % 10 1
t oper year 2
mainte ating s 8
nance expe
fee nses
(for
accoun
ts
under
$2,500
)
WORLD Maxim None Man .77 % After $
WIDE um age 1 1
FUND sales ment year 2
charge fee
on
purcha
ses
and
reinves
ted
distribu
tions
Deferr None 12b- None After $
ed 1 fee 3 3
sales year 7
charge s
on
redem
ptions
Excha None Othe .40 % After $
nge r 5 6
fee expe year 4
nses s
Annual $12.0 Total 1.17 After $
accoun 0 fund % 10 1
t oper year 4
mainte ating s 2
nance expe
fee nses
(for
accoun
ts
under
$2,500
)
</TABLE>
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds ' Annual
Report and have been audited by Coopers & Lybrand L.L.P., independent
accountants. Their reports on the financial statements and financial
highlights are included in the Annual Report. The financial statements and
financial highlights are incorporated by reference into (are legally a part
of) the funds' Statement of Additional Information.
INTERNATIONAL GROWTH & INCOME
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Sele
cted
Per-Sh
are
Data
and
Ratios
2.Years 1995 1994 1993 1992 1991 1990 1989 1988 1987G
ended
Octobe
r 31
3.Net $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81 $ 10.42 $ 10.00
asset
value,
beginni
ng of
period
4.Inco
me
from
Invest
ment
Operati
ons
5. Net .54 .38D .14D .31 .30B .25 .30 .16 .09
invest
ment
income
6. Net .28H .02H 4.14 (.84) .41 .75 .96 1.26 .39
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
7. Tota .82 .40 4.28 (.53) .71 1.00 1.26 1.42 .48
l from
invest
ment
operati
ons
8.Less
Distrib
utions
9. Fro (.21)K (.03) (.31) (.16) (.38) (.16) (.13) -- (.06)
m net
invest
ment
income
10. Fr (.32)K (.05) (.01)C (.01)C (.05) -- (.07)C (.03)C --
om net C
realize
d gain
11. In -- (.03) -- -- -- -- -- -- --
excess
of net
realize
d gain
12. To (.53) (.11) (.32) (.17) (.43) (.16) (.20) (.03) (.06)
tal
distribu
tions
13.Net $ 17.83 $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81 $ 10.42
asset
value,
end of
period
14.Tota 4.95% 2.33% 32.94% (3.81) 5.43 7.79% 10.85% 13.68% 4.69%
l % %
return F,
I
15.Net $ 903,235 $ 1,367,9 $ 1,002,8 $ 60,007 $ 49,73 $ 35,380 $ 26,333 $ 31,662 $ 40,822
assets, 38 47 8
end of
period
(000
omitted
)
16.Rati 1.18% 1.21% 1.52% 1.62% 1.89 1.98% 1.92% 2.58% 2.72%
o of % E E A
expens
es to
averag
e net
assets
17.Rati 2.98% 2.16% .87% 2.78% 2.86 2.31% 1.98% 1.08% 1.23%
o of % A
net
invest
ment
income
to
averag
e net
assets
18.Port 141% 173% 24% 76% 117 102% 147% 112% 158%
folio % A
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S><C>
A ANNUALIZED
B INCLUDES $.02 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND
AND INTEREST PAYMENTS.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E EFFECTIVE AUGUST 5, 1988, FMR VOLUNTARILY AGREED TO REIMBURSE THE
FUND TO THE EXTENT THAT
AGGREGATE OPERATING EXPENSES WERE IN EXCESS OF AN ANNUAL RATE OF
2.00% OF THE AVERAGE
NET ASSETS. FOR THE YEAR ENDED OCTOBER 31, 1989, NET INVESTMENT
INCOME PER SHARE
INCLUDED A REIMBURSEMENT OF $0.01 PER SHARE FROM FIDELITY SERVICE
CO. FOR ADJUSTMENTS TO
PRIOR PERIODS' FEES. IF THESE EXPENSE REDUCTIONS HAD NOT EXISTED,
THE RATIO OF EXPENSES TO
AVERAGE NET ASSETS WOULD HAVE BEEN 2.16%, FOR 1989 AND LIMITED TO
2.58% IN ACCORDANCE
WITH A STATE EXPENSE LIMITATION IN 1988.
F TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED AND DO NOT INCLUDE THE
ONE TIME SALES CHARGE.
G FROM DECEMBER 31, 1986 (COMMENCEMENT OF OPERATIONS) TO OCTOBER
31, 1987.
H 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.
I THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
J EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2 "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF
CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
K THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO
BOOK TO TAX DIFFERENCES.
</TABLE>
DIVERSIFIED INTERNATIONAL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
19.Sel
ected
Per-Sh
are
Data
and
Ratios
20.Year 1995 1994 1993 1992E
s
ended
Octobe
r 31
21.Net $ 12.46 $ 11.32 $ 8.46 $ 10.00
asset
value,
beginni
ng of
period
22.Inco
me
from
Invest
ment
Operati
ons
23. N .22 .05 .07 .07
et
invest
ment
income
24. N .47 1.20 2.89 (1.61)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
25. To .69 1.25 2.96 (1.54)
tal
from
invest
ment
operati
ons
26.Les
s
Distrib
utions
27. Fr (.03) (.01) (.10) --
om net
invest
ment
income
28. Fr (.39) (.10) -- --
om net
realize
d gain
29. To (.42) (.11) (.10) --
tal
distribu
tions
30.Net $ 12.73 $ 12.46 $ 11.32 $ 8.46
asset
value,
end of
period
31.Tota 6.02% 11.14% 35.38% (15.40)%
l
returnB,
C
32.Net $ 295,01 $ 351,15 $ 255,02 $ 36,439
assets, 7 2 9
end of
period
(000
omitted
)
33.Rati 1.13% 1.25% 1.47% 2.00%A,
o of G
expens
es to
averag
e net
assets
34.Rati 1.12% 1.25% 1.47% 2.00%A
o of G
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
35.Rati 1.55% .96% .84% 1.38%A
o of
net
invest
ment
income
to
averag
e net
assets
36.Port 101% 89% 56% 56%A
folio
turnov
er rate
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E FROM DECEMBER 27, 1991 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1992.
F EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2
"DETERMINATION, DISCLOSURE AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
INTERNATIONAL VALUE
37.Sel
ected
Per-Sh
are
Data
and
Ratios
38.Year 1995B
ended
Octobe
r 31
39.Net $ 10.00
asset
value,
beginni
ng of
period
40.Inco
me
from
Invest
ment
Operati
ons
41. N .11A
et
invest
ment
income
42. N .52
et
realize
d and
unreali
zed
gain
(loss)
43. To .63
tal
from
invest
ment
operati
ons
44.Net $ 10.63
asset
value,
end of
period
45.Tota 6.30%
l
return
46.Net $ 56,828
assets,
end of
period
(000
omitted
)
47.Rati 1.72%
o of
expens
es to
averag
e net
assets
48.Rati 1.08%
o of
net
invest
ment
income
to
averag
e net
assets
49.Port 109%
folio
turnov
er rate
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
B FROM NOVEMBER 1, 1994 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1995.
OVERSEAS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50.Sel
ected
Per-Sh
are
Data
and
Ratios
51.Year
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
s
ended
Octobe
r 31
52.Net
$ 29.17 $ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30 $ 25.30 $ 30.90 $ 26.91 $ 15.92
asset
value,
beginni
ng of
period
53.Inco
me
from
Invest
ment
Operati
ons
54. N
.31 .18 .27 .46 .54 .35 .30 .30 (.19) (.03)
et
invest
ment
income
55. N
(.44) 2.26 7.40 (3.82) .45 2.16 1.28 2.34 7.49 11.15
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
56. To
(.13) 2.44 7.67 (3.36) .99 2.51 1.58 2.64 7.30 11.12
tal
from
invest
ment
operati
ons
57.Les
s
Distrib
utions
58. Fr
(.02)F (.15) (.37) (.44) (.46) (.21) (.24) -- -- --
om net
invest
ment
income
59. In
- -- (.17) -- -- -- -- -- -- -- --
excess
of net
invest
ment
income
60. Fr
(.45)F (.11) (2.10) (1.16) (1.08) (1.13) (.34) (8.24) (3.31) (.13)
om net
realize
d gain
61. To
(.47) (.43) (2.47) (1.60) (1.54) (1.34) (.58) (8.24) (3.31) (.13)
tal
distribu
tions
62.Net
$ 28.57 $ 29.17 $ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30 $ 25.30 $ 30.90 $ 26.91
asset
value,
end of
period
63.Tota
(.34% 9.13% 39.01% (13.05) 4.12 9.58% 6.40 11.62% 28.74% 70.29
l ) % % % %
returnD
64.Net
$ 2,276,3 $ 2,283,2 $ 1,490,6 $ 801,84 $ 969,4 $ 1,011,1 $ 876,5 $ 1,149,7 $ 1,393,4 $ 1,766,
assets,
06 11 66 5 36 52 67 63 42 012
end of
period
(000
omitted
)
65.Rati
1.05% 1.24% 1.27% 1.52 1.53 1.26% 1.06 1.38% 1.71% 1.57
o of % % % %
expens
es to
averag
e net
assets
66.Rati
1.78% .90% 1.00% 1.78 2.19 1.34% 1.06 1.21% (.53) (.32)
o of net % % % % %
investm
ent
income
to
averag
e net
assets
67.Port
49% 49% 64% 122 132 96% 100 115% 122% 107
folio % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
B INCLUDES $.08 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY WITHHELD ON
DIVIDEND AND INTEREST PAYMENTS.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2 "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF
CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES. AS A RESULT, NET INVESTMENT INCOME PER
SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
WORLDWIDE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
68.Sel
ected
Per-Sh
are
Data
and
Ratios
69.Year 1995 1994 1993 1992 1991 1990F
s
ended
Octobe
r 31
70.Net $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95 $ 10.00
asset
value,
beginni
ng of
period
71.Inco
me
from
Invest
ment
Operati
ons
72. N .17 .08 .11 .20 .21 .05
et
invest
ment
income
73. N (.08) 1.37 3.28 (.08) .53 (1.10)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
74. To .09 1.45 3.39 .12 .74 (1.05)
tal
from
invest
ment
operati
ons
75.Les
s
Distrib
utions
76. Fr (.16) (.10) (.24) (.10) (.08) --
om net H
invest
ment
income
77. Fr (.57) (.15) (.02) -- -- --
om net H B
realize
d gain
78. To (.73) (.25) (.26) (.10) (.08) --
tal
distribu
tions
79.Net $ 13.32 $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95
asset
value,
end of
period
80.Tota .95 11.55 36.10 1.32 8.33 (10.50)%
l % % % % %
returnD
,E
81.Net $ 659,0 $ 748,7 $ 287,2 $ 103,6 $ 105,0 $ 94,851
assets, 45 38 78 27 29
end of
period
(000
omitted
)
82.Rati 1.17 1.32 1.40 1.51 1.69 2.00%A
o of %I % % % % ,C
expens
es to
averag
e net
assets
83.Rati 1.16 1.32 1.40 1.51 1.69 2.00%A
o of %I % % % %
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
84.Rati 2.05 1.40 1.99 2.02 2.19 2.09%A
o of % % % % %
net
invest
ment
income
to
averag
e net
assets
85.Port 70 69 57 130 129 123%A
folio % % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
A ANNUALIZED
B INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
C FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE FUND'S EXPENSE RATIO WOLD HAVE BEEN
HIGHER.
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO NOT
INCLUDE THE ONE TIME SALES CHARGE.
E THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
F FROM MAY 30, 1990 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1990.
G EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX DIFFERENCES.
H THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE
FUND'S EXPENSES.
</TABLE>
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Each fund's fiscal year runs from November 1 through October 31. The tables
below show each fund's performance over past fiscal years compared to two
measures: an unmanaged index of related stocks and not investing at all
( the Consumer Price Index (inflation or CPI) ) . To help you
compare these funds to other funds, the charts on pages and display
calendar-year performance. International Value Fund is not included
because it has not completed one full calendar year of operations when this
prospectus was printed.
1.
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 value of its
currency create these risks. Because these
funds invest in stocks, their performance is
also related to foreign stock markets. For
these reasons an international fund's
performance may be more volatile than that of
a fund that invests exclusively in the United
States.
(checkmark)
Fiscal Average Annual Total Cumulative Total Return
years Return
ended
Octob
er 31
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 Past 5 Life of Past 1 Past 5 Life of
year years fund year years fund
INTERN 4. 7. 8. 4. 44. 105.
ATION 95% 68% 51%A 95% 79% 89%A
AL
GROW
TH &
INCO
ME
FUND
*
Morg -. 6. 8. -. 39. 98.
an 37% 95% 06% 37% 94% 47%
Stanl
ey
EAFE
Index
DIVER 6. n 8. 6. n 34.
SIFIED 02% /a 10%B 02% /a 96%B
INTERN
ATION
AL
FUND
Morg . n 9. . n 39.
an 50% /a 04% 50% /a 55%
Stanl
ey
GDP-
weigh
ted
EAFE
Index
INTERN n n n n n 6.
ATION /a /a /a /a /a 30%C
AL
VALUE
FUND
Morg -. 6. n -. 39. -.
an 37% 95% /a 37% 94% 37%
Stanl
ey
EAFE
Index
OVER -. 6. 14. -. 36. 290.
SEAS 34% 48% 59%D 34% 87% 47%D
FUND
*
Morg -. 6. 13. -. 39. 265.
an 37% 95% 85% 37% 94% 72%
Stanl
ey
EAFE
Index
WORL . 10. 7. . 68. 50.
DWID 95% 96% 83%E 95% 23% 56%E
E
FUND
*
Morg 9. 10. 7. 9. 64. 46.
an 48% 43% 24% 48% 20% 17%
Stanl
ey
World
Index
Cons 2. 2. n 2. 15. n
umer 81% 86% /a 81% 13% /a
Price
Index
</TABLE>
A FROM DECEMBER 31, 1986
B FROM DECEMBER 27, 1991
C FROM NOVEMBER 1, 1994
D FOR 10 YEARS ENDED OCTOBER 31, 1995
E FROM MAY 30, 1990
* PREVIOUSLY, THE FUND IMPOSED A SALES CHARGE. IF THIS SALES CHARGE WERE
TAKEN INTO ACCOUNT, TOTAL RETURNS WOULD HAVE BEEN LOWER.
2.EXAMPLE: Mountain charts illustrate the growth of a hypothetical
investment over time. For International Growth & Income, Diversified
International and Worldwide Funds, the charts below show the growth in
value of a $10,000 investment made in each fund on its start date through
October 31, 1995. For Overseas Fund, the chart below shows the growth in
value of a $10,000 investment over the past ten fiscal years. A chart for
International Value will be included when the fund has more performance
history.
INTERNATIONAL GROWTH & INCOME FUND
ASSET MANAGER: GROWTH
Fiscal years 1986 1990 1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10670.0
Row: 3, Col: 1, Value: 11140.0
Row: 4, Col: 1, Value: 11620.0
Row: 5, Col: 1, Value: 12070.0
Row: 6, Col: 1, Value: 12150.0
Row: 7, Col: 1, Value: 12269.85
Row: 8, Col: 1, Value: 12780.68
Row: 9, Col: 1, Value: 13131.25
Row: 10, Col: 1, Value: 13241.61
Row: 11, Col: 1, Value: 10468.71
Row: 12, Col: 1, Value: 10197.45
Row: 13, Col: 1, Value: 10832.65
Row: 14, Col: 1, Value: 10449.73
Row: 15, Col: 1, Value: 10923.34
Row: 16, Col: 1, Value: 11396.96
Row: 17, Col: 1, Value: 11699.26
Row: 18, Col: 1, Value: 11548.11
Row: 19, Col: 1, Value: 11417.11
Row: 20, Col: 1, Value: 11417.11
Row: 21, Col: 1, Value: 10852.81
Row: 22, Col: 1, Value: 11245.8
Row: 23, Col: 1, Value: 11900.8
Row: 24, Col: 1, Value: 12112.42
Row: 25, Col: 1, Value: 12085.31
Row: 26, Col: 1, Value: 12310.82
Row: 27, Col: 1, Value: 12351.82
Row: 28, Col: 1, Value: 12351.82
Row: 29, Col: 1, Value: 12659.34
Row: 30, Col: 1, Value: 12300.57
Row: 31, Col: 1, Value: 12341.57
Row: 32, Col: 1, Value: 13510.13
Row: 33, Col: 1, Value: 13325.62
Row: 34, Col: 1, Value: 13858.64
Row: 35, Col: 1, Value: 13192.36
Row: 36, Col: 1, Value: 13684.38
Row: 37, Col: 1, Value: 14396.16
Row: 38, Col: 1, Value: 14147.23
Row: 39, Col: 1, Value: 13649.38
Row: 40, Col: 1, Value: 13639.01
Row: 41, Col: 1, Value: 13607.9
Row: 42, Col: 1, Value: 14489.5
Row: 43, Col: 1, Value: 14945.87
Row: 44, Col: 1, Value: 15640.78
Row: 45, Col: 1, Value: 14302.81
Row: 46, Col: 1, Value: 12923.35
Row: 47, Col: 1, Value: 14219.84
Row: 48, Col: 1, Value: 13898.31
Row: 49, Col: 1, Value: 13931.49
Row: 50, Col: 1, Value: 14424.45
Row: 51, Col: 1, Value: 15238.91
Row: 52, Col: 1, Value: 14692.37
Row: 53, Col: 1, Value: 14917.41
Row: 54, Col: 1, Value: 14895.98
Row: 55, Col: 1, Value: 14177.97
Row: 56, Col: 1, Value: 14670.93
Row: 57, Col: 1, Value: 14617.35
Row: 58, Col: 1, Value: 15088.88
Row: 59, Col: 1, Value: 14992.43
Row: 60, Col: 1, Value: 14574.48
Row: 61, Col: 1, Value: 15051.28
Row: 62, Col: 1, Value: 15029.58
Row: 63, Col: 1, Value: 15051.28
Row: 64, Col: 1, Value: 14562.96
Row: 65, Col: 1, Value: 15203.21
Row: 66, Col: 1, Value: 15886.86
Row: 67, Col: 1, Value: 15734.94
Row: 68, Col: 1, Value: 15224.91
Row: 69, Col: 1, Value: 15496.2
Row: 70, Col: 1, Value: 15235.76
Row: 71, Col: 1, Value: 14421.88
Row: 72, Col: 1, Value: 14389.33
Row: 73, Col: 1, Value: 14548.43
Row: 74, Col: 1, Value: 14681.8
Row: 75, Col: 1, Value: 15081.91
Row: 76, Col: 1, Value: 16204.44
Row: 77, Col: 1, Value: 17104.69
Row: 78, Col: 1, Value: 17504.8
Row: 79, Col: 1, Value: 17271.4
Row: 80, Col: 1, Value: 17849.33
Row: 81, Col: 1, Value: 18782.92
Row: 82, Col: 1, Value: 18660.67
Row: 83, Col: 1, Value: 19171.92
Row: 84, Col: 1, Value: 18516.18
Row: 85, Col: 1, Value: 19652.02
Row: 86, Col: 1, Value: 20681.04
Row: 87, Col: 1, Value: 20311.94
Row: 88, Col: 1, Value: 19226.99
Row: 89, Col: 1, Value: 19484.25
Row: 90, Col: 1, Value: 19842.17
Row: 91, Col: 1, Value: 19361.21
Row: 92, Col: 1, Value: 19685.58
Row: 93, Col: 1, Value: 19875.72
Row: 94, Col: 1, Value: 19417.14
Row: 95, Col: 1, Value: 19618.47
Row: 96, Col: 1, Value: 19014.48
Row: 97, Col: 1, Value: 19087.75
Row: 98, Col: 1, Value: 18441.1
Row: 99, Col: 1, Value: 18568.12
Row: 100, Col: 1, Value: 19630.47
Row: 101, Col: 1, Value: 19988.44
Row: 102, Col: 1, Value: 19734.4
Row: 103, Col: 1, Value: 19780.59
Row: 104, Col: 1, Value: 20946.87
Row: 105, Col: 1, Value: 20704.38
Row: 106, Col: 1, Value: 20854.49
Row: 107, Col: 1, Value: 20588.9
$
20,589
DIVERSIFIED INTERNATIONAL FUND
ASSET MANAGER: GROWTH
Fiscal years 1992 1994 1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10060.0
Row: 3, Col: 1, Value: 9860.0
Row: 4, Col: 1, Value: 9680.0
Row: 5, Col: 1, Value: 9140.0
Row: 6, Col: 1, Value: 9240.0
Row: 7, Col: 1, Value: 9750.0
Row: 8, Col: 1, Value: 9540.0
Row: 9, Col: 1, Value: 9190.0
Row: 10, Col: 1, Value: 9350.0
Row: 11, Col: 1, Value: 9140.0
Row: 12, Col: 1, Value: 8460.0
Row: 13, Col: 1, Value: 8460.0
Row: 14, Col: 1, Value: 8671.059999999999
Row: 15, Col: 1, Value: 8873.42
Row: 16, Col: 1, Value: 9176.959999999999
Row: 17, Col: 1, Value: 9915.57
Row: 18, Col: 1, Value: 10522.64
Row: 19, Col: 1, Value: 10785.71
Row: 20, Col: 1, Value: 10482.17
Row: 21, Col: 1, Value: 10805.94
Row: 22, Col: 1, Value: 11362.43
Row: 23, Col: 1, Value: 11210.66
Row: 24, Col: 1, Value: 11453.49
Row: 25, Col: 1, Value: 11028.54
Row: 26, Col: 1, Value: 11850.64
Row: 27, Col: 1, Value: 12739.44
Row: 28, Col: 1, Value: 12484.04
Row: 29, Col: 1, Value: 12085.61
Row: 30, Col: 1, Value: 12320.58
Row: 31, Col: 1, Value: 12300.15
Row: 32, Col: 1, Value: 12136.69
Row: 33, Col: 1, Value: 12555.55
Row: 34, Col: 1, Value: 12872.25
Row: 35, Col: 1, Value: 12504.47
Row: 36, Col: 1, Value: 12729.22
Row: 37, Col: 1, Value: 12044.75
Row: 38, Col: 1, Value: 11979.79
Row: 39, Col: 1, Value: 11428.51
Row: 40, Col: 1, Value: 11566.33
Row: 41, Col: 1, Value: 12128.21
Row: 42, Col: 1, Value: 12509.87
Row: 43, Col: 1, Value: 12615.88
Row: 44, Col: 1, Value: 12806.71
Row: 45, Col: 1, Value: 13633.63
Row: 46, Col: 1, Value: 13421.6
Row: 47, Col: 1, Value: 13676.04
Row: 48, Col: 1, Value: 13495.81
$
$13,496
OVERSEAS
ASSET MANAGER: GROWTH
Fiscal years 1985 1990 1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10716.08
Row: 3, Col: 1, Value: 11548.63
Row: 4, Col: 1, Value: 11896.67
Row: 5, Col: 1, Value: 13649.53
Row: 6, Col: 1, Value: 15997.22
Row: 7, Col: 1, Value: 16490.81
Row: 8, Col: 1, Value: 15965.58
Row: 9, Col: 1, Value: 17212.2
Row: 10, Col: 1, Value: 19154.9
Row: 11, Col: 1, Value: 20426.83
Row: 12, Col: 1, Value: 19477.63
Row: 13, Col: 1, Value: 17028.69
Row: 14, Col: 1, Value: 18623.35
Row: 15, Col: 1, Value: 19545.81
Row: 16, Col: 1, Value: 22553.8
Row: 17, Col: 1, Value: 23277.45
Row: 18, Col: 1, Value: 25909.56
Row: 19, Col: 1, Value: 27846.39
Row: 20, Col: 1, Value: 27739.97
Row: 21, Col: 1, Value: 25788.95
Row: 22, Col: 1, Value: 26172.06
Row: 23, Col: 1, Value: 28350.11
Row: 24, Col: 1, Value: 28002.47
Row: 25, Col: 1, Value: 21922.38
Row: 26, Col: 1, Value: 21745.01
Row: 27, Col: 1, Value: 23135.92
Row: 28, Col: 1, Value: 22236.41
Row: 29, Col: 1, Value: 22942.48
Row: 30, Col: 1, Value: 24335.28
Row: 31, Col: 1, Value: 24973.64
Row: 32, Col: 1, Value: 24470.69
Row: 33, Col: 1, Value: 23774.29
Row: 34, Col: 1, Value: 23464.78
Row: 35, Col: 1, Value: 22758.71
Row: 36, Col: 1, Value: 23609.86
Row: 37, Col: 1, Value: 24470.69
Row: 38, Col: 1, Value: 25109.05
Row: 39, Col: 1, Value: 25046.24
Row: 40, Col: 1, Value: 25353.13
Row: 41, Col: 1, Value: 26016.41
Row: 42, Col: 1, Value: 25788.71
Row: 43, Col: 1, Value: 26343.1
Row: 44, Col: 1, Value: 25075.93
Row: 45, Col: 1, Value: 24343.36
Row: 46, Col: 1, Value: 26758.88
Row: 47, Col: 1, Value: 26135.2
Row: 48, Col: 1, Value: 27531.06
Row: 49, Col: 1, Value: 26036.21
Row: 50, Col: 1, Value: 27511.26
Row: 51, Col: 1, Value: 29287.44
Row: 52, Col: 1, Value: 28622.76
Row: 53, Col: 1, Value: 28030.78
Row: 54, Col: 1, Value: 28955.1
Row: 55, Col: 1, Value: 28882.4
Row: 56, Col: 1, Value: 30845.28
Row: 57, Col: 1, Value: 31395.72
Row: 58, Col: 1, Value: 32943.18
Row: 59, Col: 1, Value: 29297.83
Row: 60, Col: 1, Value: 26047.13
Row: 61, Col: 1, Value: 28529.29
Row: 62, Col: 1, Value: 27584.2
Row: 63, Col: 1, Value: 27353.76
Row: 64, Col: 1, Value: 27960.64
Row: 65, Col: 1, Value: 28975.79
Row: 66, Col: 1, Value: 28026.85
Row: 67, Col: 1, Value: 28424.08
Row: 68, Col: 1, Value: 28479.25
Row: 69, Col: 1, Value: 26691.71
Row: 70, Col: 1, Value: 28148.22
Row: 71, Col: 1, Value: 28357.87
Row: 72, Col: 1, Value: 29604.74
Row: 73, Col: 1, Value: 29704.04
Row: 74, Col: 1, Value: 28633.73
Row: 75, Col: 1, Value: 29709.85
Row: 76, Col: 1, Value: 30050.94
Row: 77, Col: 1, Value: 29427.58
Row: 78, Col: 1, Value: 28815.97
Row: 79, Col: 1, Value: 30568.45
Row: 80, Col: 1, Value: 31885.75
Row: 81, Col: 1, Value: 31133.01
Row: 82, Col: 1, Value: 29157.06
Row: 83, Col: 1, Value: 28910.06
Row: 84, Col: 1, Value: 27710.38
Row: 85, Col: 1, Value: 25828.52
Row: 86, Col: 1, Value: 25699.14
Row: 87, Col: 1, Value: 26306.37
Row: 88, Col: 1, Value: 27073.09
Row: 89, Col: 1, Value: 27628.3
Row: 90, Col: 1, Value: 29505.44
Row: 91, Col: 1, Value: 31554.43
Row: 92, Col: 1, Value: 32281.49
Row: 93, Col: 1, Value: 31514.77
Row: 94, Col: 1, Value: 32955.67
Row: 95, Col: 1, Value: 34819.59
Row: 96, Col: 1, Value: 34515.55
Row: 97, Col: 1, Value: 35903.57
Row: 98, Col: 1, Value: 34264.38
Row: 99, Col: 1, Value: 36843.15
Row: 100, Col: 1, Value: 39462.34
Row: 101, Col: 1, Value: 38723.59
Row: 102, Col: 1, Value: 37608.75999999999
Row: 103, Col: 1, Value: 38871.34
Row: 104, Col: 1, Value: 38374.37
Row: 105, Col: 1, Value: 37863.96
Row: 106, Col: 1, Value: 38925.07
Row: 107, Col: 1, Value: 39489.2
Row: 108, Col: 1, Value: 38401.23
Row: 109, Col: 1, Value: 39180.27
Row: 110, Col: 1, Value: 37568.47
Row: 111, Col: 1, Value: 37311.37
Row: 112, Col: 1, Value: 35712.31
Row: 113, Col: 1, Value: 35739.65
Row: 114, Col: 1, Value: 36805.68
Row: 115, Col: 1, Value: 37858.06
Row: 116, Col: 1, Value: 38391.08
Row: 117, Col: 1, Value: 38678.09
Row: 118, Col: 1, Value: 40413.82
Row: 119, Col: 1, Value: 39293.11
Row: 120, Col: 1, Value: 39839.8
Row: 121, Col: 1, Value: 39047.1
$
$39,047
WORLDWIDE FUND
ASSET MANAGER: GROWTH
Fiscal years 1990 1993 1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10030.0
Row: 3, Col: 1, Value: 10290.0
Row: 4, Col: 1, Value: 10570.0
Row: 5, Col: 1, Value: 9380.0
Row: 6, Col: 1, Value: 8450.0
Row: 7, Col: 1, Value: 8950.0
Row: 8, Col: 1, Value: 8950.0
Row: 9, Col: 1, Value: 8898.230000000001
Row: 10, Col: 1, Value: 9150.440000000001
Row: 11, Col: 1, Value: 9654.879999999999
Row: 12, Col: 1, Value: 9321.949999999999
Row: 13, Col: 1, Value: 9412.75
Row: 14, Col: 1, Value: 9483.369999999999
Row: 15, Col: 1, Value: 8807.43
Row: 16, Col: 1, Value: 9352.220000000001
Row: 17, Col: 1, Value: 9493.459999999999
Row: 18, Col: 1, Value: 9654.879999999999
Row: 19, Col: 1, Value: 9695.230000000001
Row: 20, Col: 1, Value: 9180.710000000001
Row: 21, Col: 1, Value: 9599.059999999999
Row: 22, Col: 1, Value: 9701.07
Row: 23, Col: 1, Value: 9996.889999999999
Row: 24, Col: 1, Value: 9762.27
Row: 25, Col: 1, Value: 10190.71
Row: 26, Col: 1, Value: 10619.15
Row: 27, Col: 1, Value: 10251.92
Row: 28, Col: 1, Value: 10149.91
Row: 29, Col: 1, Value: 10007.1
Row: 30, Col: 1, Value: 10007.1
Row: 31, Col: 1, Value: 9823.48
Row: 32, Col: 1, Value: 9976.49
Row: 33, Col: 1, Value: 10194.86
Row: 34, Col: 1, Value: 10530.15
Row: 35, Col: 1, Value: 10781.62
Row: 36, Col: 1, Value: 11399.81
Row: 37, Col: 1, Value: 11682.71
Row: 38, Col: 1, Value: 12049.43
Row: 39, Col: 1, Value: 11923.7
Row: 40, Col: 1, Value: 12185.64
Row: 41, Col: 1, Value: 12950.52
Row: 42, Col: 1, Value: 12814.31
Row: 43, Col: 1, Value: 13369.63
Row: 44, Col: 1, Value: 13128.64
Row: 45, Col: 1, Value: 13920.64
Row: 46, Col: 1, Value: 14914.21
Row: 47, Col: 1, Value: 14689.86
Row: 48, Col: 1, Value: 14134.32
Row: 49, Col: 1, Value: 14625.76
Row: 50, Col: 1, Value: 14604.39
Row: 51, Col: 1, Value: 14305.25
Row: 52, Col: 1, Value: 14743.28
Row: 53, Col: 1, Value: 14989.0
Row: 54, Col: 1, Value: 14700.54
Row: 55, Col: 1, Value: 14914.21
Row: 56, Col: 1, Value: 14401.4
Row: 57, Col: 1, Value: 14332.82
Row: 58, Col: 1, Value: 14253.69
Row: 59, Col: 1, Value: 14423.25
Row: 60, Col: 1, Value: 14502.37
Row: 61, Col: 1, Value: 14864.08
Row: 62, Col: 1, Value: 15011.03
Row: 63, Col: 1, Value: 15214.49
Row: 64, Col: 1, Value: 15836.18
Row: 65, Col: 1, Value: 15440.56
Row: 66, Col: 1, Value: 15587.5
Row: 67, Col: 1, Value: 15056.24
$
15,056
INTERNATIONAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
88.Cal 1987 1988 1989 1990 1991 1992 1993 1994
endar
years
INTERN 8.33% 11.56% 19.12% -3.23% 8.04% -3.34% 35.08% -2.87%
ATIONA
L
GROWT
H &
INCOM
E
FUND
Lipper 7.89% 16.24% 21.75% -11.74% 12.76% -4.77% 39.40% -.71%
Interna
tional
Funds
Avera
ge
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 8.33
Row: 4, Col: 2, Value: 7.89
Row: 5, Col: 1, Value: 11.56
Row: 5, Col: 2, Value: 16.24
Row: 6, Col: 1, Value: 19.12
Row: 6, Col: 2, Value: 21.75
Row: 7, Col: 1, Value: -3.23
Row: 7, Col: 2, Value: -11.74
Row: 8, Col: 1, Value: 8.039999999999999
Row: 8, Col: 2, Value: 12.76
Row: 9, Col: 1, Value: -3.34
Row: 9, Col: 2, Value: -4.77
Row: 10, Col: 1, Value: 35.08
Row: 10, Col: 2, Value: 39.4
Row: 11, Col: 1, Value: -2.87
Row: 11, Col: 2, Value: -0.7100000000000001
(large solid box) INTERNATIONAL GROWTH &
INCOME FUND
(large hollow box) Lipper International
Funds Average
DIVERSIFIED INTERNATIONAL FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1992 1993 1994
ar
years
DIVERS -13.81% 36.67% 1.09 %
IFIED
INTERN
ATIONA
L FUND
Lipper -4.77% 39.40% -.71 %
Interna
tional
Funds
Avera
ge
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 0.0
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 0.0
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: 0.0
Row: 10, Col: 1, Value: -13.81
Row: 10, Col: 2, Value: -4.77
Row: 11, Col: 1, Value: 36.67
Row: 11, Col: 2, Value: 39.4
Row: 12, Col: 1, Value: 1.09
Row: 12, Col: 2, Value: -0.7100000000000001
(large solid box) DIVERSIFIED INTERNATIONAL FUND
(large hollow box) Lipper International
Funds Average
OVERSEAS FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
OVERS 78.67% 69.25% 18.37% 8.26% 16.93% -6.60% 8.61% -11.46% 40.05% 1.27%
EAS
FUND
Lipper 45.03% 47.03% 7.89% 16.24% 21.75% -11.74% 12.76% -4.77% 39.40% -.71%
Interna
tional
Funds
Avera
ge
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 78.66999999999999
Row: 2, Col: 2, Value: 45.03
Row: 3, Col: 1, Value: 69.25
Row: 3, Col: 2, Value: 47.03
Row: 4, Col: 1, Value: 18.37
Row: 4, Col: 2, Value: 7.89
Row: 5, Col: 1, Value: 8.26
Row: 5, Col: 2, Value: 16.24
Row: 6, Col: 1, Value: 16.93
Row: 6, Col: 2, Value: 21.75
Row: 7, Col: 1, Value: -6.6
Row: 7, Col: 2, Value: -11.74
Row: 8, Col: 1, Value: 8.609999999999999
Row: 8, Col: 2, Value: 12.76
Row: 9, Col: 1, Value: -11.46
Row: 9, Col: 2, Value: -4.77
Row: 10, Col: 1, Value: 40.05
Row: 10, Col: 2, Value: 39.4
Row: 11, Col: 1, Value: 1.27
Row: 11, Col: 2, Value: -0.7100000000000001
(large solid box) OVERSEAS FUND
(large hollow box) Lipper International
Funds Average
WORLDWIDE FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89. Cal 1991 1992 1993 1994
endar
years
WORLD 7.88 6.21% 36.55 2.96
WIDE % % %
FUND
Lipper 18.44 .01% 31.04 -3.03
Global % % %
Funds
Avera
ge
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 0.0
Row: 8, Col: 1, Value: 7.88
Row: 8, Col: 2, Value: 18.44
Row: 9, Col: 1, Value: 6.21
Row: 9, Col: 2, Value: 0.01
Row: 10, Col: 1, Value: 36.55
Row: 10, Col: 2, Value: 31.04
Row: 11, Col: 1, Value: 2.96
Row: 11, Col: 2, Value: -3.03
(large solid box) WORLDWIDE FUND
(large hollow box) Lipper Global
Funds Average
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD, if quoted, refers to the income generated by an investment in a fund
over a given period of time, expressed as an annual percentage rate. Yields
are calculated according to a standard that is required for all stock and
bond funds. Because this differs from other accounting methods, the quoted
yield may not equal the income actually paid to shareholders. This
difference may be significant for funds whose investments are denominated
in foreign currencies.
COMPARATIVE MARKET INDEXES used on page reflect the performance of
stocks in applicable regions. Each index is translated into U.S. dollars
and includes reinvestment of dividends.
BROADLY DIVERSIFIED INDEXES:
(small solid bullet) The EAFE Index, also known as the Morgan Stanley
Capital International Europe, Australia, Far East (EAFE Index) , is
an unmanaged index of over 1,000 foreign stock prices. The EAFE Index
may be compiled in two ways: a capitalization weighted (cap-weighted)
version and a gross domestic product weighted (GDP-weighted) version.
Diversified International uses the GDP-weighted version. International
Value and Overseas use the Cap-weighted version.
(small solid bullet) The World Index, also known as the Morgan Stanley
Capital International World Index, is an unmanaged index of over 1,400
foreign stock prices.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGES, on page s and , reflect the performance
of funds with similar objectives, and assume reinvestment of
distributions . These averages are published by Lipper Analytical
Services, Inc.
BROADLY DIVERSIFIED FUND AVERAGES:
(small solid bullet) International Growth & Income, Diversified
International, International Value, and Overseas are compared to the
Lipper International Funds average, which reflects the performance of 157
international funds.
(small solid bullet) Worldwide is compared to the Lipper Global Funds
average, which reflects the performance of 95 global funds.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, each fund is
currently a diversified fund of Fidelity Investment Trust, an open-end
management investment company organized as a Massachusetts business trust
on April 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs and,
with the assistance of foreign affiliates , chooses their
investments.
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR U.K.),
in London, England,
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR Far
East), in Tokyo, Japan,
(small solid bullet) Fidelity International Investment Advisors (FIIA), in
Pembroke, Bermuda, and
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIAL U.K.), in Kent, England .
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan , serves as a sub-adviser for International Value only .
Richard Mace is manager and Vice President of International Growth &
Income, and International Value which he has managed since January 1994 and
November 1994, respectively. He also co-manages Global Balanced.
Previously, he managed Select Transportation, Select Industrial Materials,
and Select Chemicals. Mr. Mace joined Fidelity in August 1987.
Greg Fraser is manager of Diversified International, which he has managed
since December 1991. Previously, he managed Select Defense and Aerospace
and Select Environmental Services. Mr. Fraser joined Fidelity in 1986.
John R. Hickling is manager and Vice President of Overseas, which he has
managed since January 1993. Mr. Hickling also manages VIP Overseas, Advisor
Overseas, and Advisor Annuity Overseas. Previously, he managed
International Growth & Income, Japan, Emerging Markets, Europe,
International Opportunities, and Pacific Basin. Mr. Hickling joined
Fidelity in 1982.
Penelope Dobkin is manager and Vice President of Worldwide, which she has
managed since May 1990. Previously, Ms. Dobkin managed Europe Fund,
Overseas, Advisor Overseas, and Select Financial Services. She also served
as the research analyst for the banking and savings and loans industries,
real estate investment trusts, and finance companies. Ms. Dobkin joined
Fidelity in 1981.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services. Fidelity Service
Co. (FSC) performs transfer agent servicing functions for each fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp. Fidelity International Limited
(FIL) is the parent company of FIIA, FIJ, and FIIAL U.K. The Johnson family
group also owns, directly or indirectly, more than 25% of the voting common
stock of FIL.
A broker-dealer may use a portion of the commissions paid by each fund to
reduce custodian or transfer agent fees for those funds. FMR may use
its broker-dealer affiliates and other firms that sell fund shares to carry
out a fund's transactions, provided that the fund receives brokerage
services and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
These broadly diversified funds increase diversification by spreading
investments among securities of both developed and emerging markets,
different countries and geographic regions.
The funds may invest in the securities of any issuer, including companies
and other business organizations as well as governments and government
agencies. The funds, however, will tend to focus on the equity securities
of both large and small companies. The funds may invest in short-term debt
securities and money market instruments for cash management purposes.
FMR may also use various investment techniques to hedge a portion of the
funds' risks, but there is no guarantee that these strategies will work as
FMR intends.
The value of the funds' investments varies in response to many factors.
Stock values fluctuate in response to the activities of individual
companies, and general market and economic conditions. The securities of
smaller, less well-known companies may be particularly volatile. Bond
values fluctuate based on changes in interest rates and in the credit
quality of the issuer. I nvestments in foreign securities may involve
risks in addition to those of U.S. investments, including increased
political and economic risk, as well as exposure to currency
fluctuations.
The funds' focus on international investing involves increased or
additional risks from those above. International funds have increased
economic and political risks as they are exposed to events and factors in
the various world markets. This is especially true for emerging markets.
Also, because many of the funds' investments are denominated in foreign
currencies, changes in the value of foreign currencies can significantly
affect a fund's share price. FMR may use a variety of techniques to either
increase or decrease a fund's exposure to any currency.
A s a mutual fund, each fund seeks to spread investment risk by
diversifying its holdings among many companies and industries. Of course,
when you sell your shares of a fund, they may be worth more or less than
what you paid for them. No one mutual fund, however, can provide an
appropriate balanced investment plan for all investors.
FMR determines where an issuer or its principal business are located by
looking at such factors as its country of organization, the primary trading
market for its securities, and the location of its assets, personnel,
sales, and earnings. When allocating the funds' investments among countries
and regions, FMR considers such factors as the potential for economic
growth, expected levels of inflation, governmental policies, and the
outlook for currency relationships.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
INTERNATIONAL GROWTH & INCOME FUND seeks capital growth and current
income by investing principally in foreign securities. FMR normally invests
at least 65% of the fund's total assets in securities of issuers whose
principal activities are outside of the U.S.
FMR normally invests a majority of the fund's assets in equity securities,
selected generally for growth potential. In pursuit of income, FMR normally
invests at least 25% of the fund's total assets in debt securities of any
quality and in repurchase agreements. The fund may invest in equity and
debt securities of U.S. issuers. FMR expects that the fund will normally
invest in at least six different countries, although it may invest all of
its assets in a single country.
DIVERSIFIED INTERNATIONAL FUND seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S. The
fund normally invests in equity securities of companies from at least three
countries outside of the U.S. The fund expects to invest most of its assets
in equity securities, but may also invest in debt securities of any
quality.
The fund invests in securities that FMR determines are undervalued compared
to industry norms within their countries. Using a highly disciplined
approach to help identify these instruments and focusing on companies with
market capitalizations of $100 million or more, FMR hopes to generate more
capital growth than that of the EAFE Index (GDP-weighted).
The disciplined approach involves computer-aided, quantitative analysis
supported by fundamental research. FMR's computer model systematically
reviews thousands of stocks, using historical earnings, dividend yield,
earnings per share, and many other factors. Then, potential investments are
analyzed further using fundamental criteria, such as the company's growth
potential and estimates of current earnings.
INTERNATIONAL VALUE FUND seeks long-term growth of capital by investing
mainly in securities of foreign companies that FMR believes are undervalued
in the marketplace or that possess valuable assets. FMR normally expects to
invest 65% of the fund's total assets in securities of foreign issuers.
FMR normally invests in securities of issuers from at least three different
countries, excluding the U.S. The fund may invest in securities of U.S.
issuers. The fund expects to invest a majority of its assets in equity
securities of large and small companies, but it may invest in debt
securities of any quality as well.
OVERSEAS FUND seeks long-term growth of capital by investing primarily in
securities of issuers whose principal activities are outside of the U.S.
FMR normally invests at least 65% of the fund's total assets in securities
of issuers from at least three different countries outside of North America
(the U.S., Canada, Mexico, and Central America). The fund expects to invest
a majority of its assets in equity securities, but may also invest in debt
securities of any quality.
WORLDWIDE FUND seeks growth of capital by investing in securities issued
anywhere in the world. The fund will normally invest in at least three
different countries, one of which will be the U.S. The fund expects its
equity investments to include established companies as well as newer or
smaller capitalization companies. The fund expects to invest a majority of
its assets in equity securities, but may also invest in debt securities of
any quality.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed
information about each fund ' s investments are contained
in the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports which are sent to shareholders twice a year. For a
free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of total assets, a fund may not own more
than 10% of the outstanding voting securities of a single issuer.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments
more volatile than U.S. investments.
EXPOSURE TO EMERGING MARKETS. Investments in emerging market
securities include additional risks to those generally associated with
foreign investing. The extent of economic development, political stability,
and market depth varies widely in comparison to more developed nations. The
economies of these countries may be subject to greater social, economic,
and political uncertainties or may be based on only a few industries. All
of these factors can make emerging market securities more volatile.
FISCAL 1995 DEBT HOLDINGS, BY STANDARD & POORS
S&PS International Diversified International
RATING Growth & Income International Value Overseas Worldwide
INVESTMENT GRADE
Highest quality AA
High quality AA 26.9% -- 2.6% 0.59% --
Upper-medium grade A
Medium grade BBB -- -- -- -- --
LOWER QUALITY
Moderately speculative BB 1.2% -- -- 0.10% --
Speculative B -- -- -- -- --
Highly speculative CCC -- -- -- -- --
Poor quality CC -- -- -- -- --
Lowest quality, no interest C -- -- -- -- --
In default, in arrears D -- -- -- -- --
28.1% -- 2.6% 0.69% --
FISCAL 1995 DEBT HOLDINGS, BY MOODY'S INVESTORS SERVICES INC.
MOODY'S International Diversified International
RATING Growth & Income International Value Overseas Worldwide
INVESTMENT GRADE
Highest quality Aaa
High quality Aa 29.9% -- 2.8% 0.59% --
Upper-medium grade A
Medium grade Baa 0.2% -- -- -- --
LOWER QUALITY
Moderately speculative Ba 0.2% -- -- -- --
Speculative B 0.5% -- 0.73% 0.2%
Highly speculative Caa -- -- -- -- --
Poor quality Ca -- -- -- -- --
Lowest quality, no interest C -- -- -- -- --
In default, in arrears -- -- -- -- -- --
30.8% -- 2.8% 1.32% 0.2%
FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR HAS ASSIGNED THE RATINGS OF
THE SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR
INDIRECTLY BY MOODY'S OR S&P ARE OUTLINED IN THE CHART
ON PAGE . THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED
RATING SERVICES, AS WELL AS UNRATED SECURITIES.
UNRATED SECURITIES ARE NOT NECESSARILY LOWER-QUALITY SECURITIES. REFER TO
THE FUNDS ' STATEMENT OF ADDITIONAL INFORMATION FOR
A MORE COMPLETE DISCUSSION OF THESE RATINGS.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness,
or they may already be in default. The market prices of these securities
may fluctuate more than higher-quality securities and may decline
significantly in periods of general economic difficulty.
The tables on the following pages provide a summary of ratings assigned to
debt holdings (not including money market instruments) in each funds'
portfolio. These figures are dollar-weighted averages of month-end
portfolio holdings during fiscal 1995, and are presented as a percentage of
total security investments. These percentages are historical and do not
necessarily indicate a fund's current or future debt holdings.
J Dollar Weighted
Average %
Debt Investme Below
Holding nt Grade Investment
s Not Grade
Rated
Directly
or
Indirectl
y by
Moody'
s or
S&P
Inte 0.07 1.67
rnat % %
iona
l
Gro
wth
&
Inco
me
Div -- --
ersif
ied
Inte
rnat
iona
l
Inte -- 0.19
rnat %
iona
l
Val
ue
Ove -- 0.01
rse %
as
Wor -- 0.23
ldwi %
de
RESTRICTIONS. Purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's
or rated in the equivalent categories by S&P, or is unrated but judged to
be of equivalent quality by FMR. Each fund currently intends to limit its
investments in lower than Baa-quality debt securities to less than 35% of
its assets.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also may
involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities, and for International Growth & Income
selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with
a fund's investments, these techniques could result in a loss,
regardless of whether the intent was to reduce risk or increase return.
These techniques may increase the volatility of a fund and may
involve a small investment of cash relative to the magnitude of the risk
assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
15% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include securities of closed-end investment
companies, and real estate-related investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: W ith respect to 75% of its total assets,
each fund may not purchase a security if, as a result, more
than 5% would be invested in the securities of any issuer. These
limitations do not apply to U.S. government securities.
BORROWING. Each fund may borrow from banks or from other funds
advised by FMR, or through reverse repurchase agreements. If a fund borrows
money, its share price may be subject to greater fluctuation until the
borrowing is paid off. If a fund makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering a fund's securities. A fund may also lend money to other funds
advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
INTERNATIONAL GROWTH & INCOME FUND seeks capital growth and current
income, consistent with reasonable investment risk, by investing
principally in foreign securities. Under normal conditions, the fund will
have at least 25% of its total assets invested in debt securities.
DIVERSIFIED INTERNATIONAL FUND seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S.
INTERNATIONAL VALUE FUND seeks long-term growth of capital.
OVERSEAS FUND seeks long-term growth of capital primarily through
investments in foreign securities. The fund defines foreign securities as
securities of issuers whose principal activities are located outside of the
U.S. Normally, at least 65% of the fund's total assets will be invested in
securities of issuers from at least three different countries outside of
North America. When market conditions warrant, FMR can make substantial
temporary defensive investments in U.S. government obligations or
investment-grade debt obligations of companies incorporated in and having
principal business activities in the U.S.
WORLDWIDE FUND seeks growth of capital by investing in securities issued
anywhere in the world.
EACH FUND, with respect to 75% of total assets, may not invest more than 5%
of total assets in any one issuer, and may not own more than 10% of the
outstanding voting securities of a single issuer. Each fund may borrow only
for temporary or emergency purposes, but not in an amount exceeding 33% of
its total assets. Loans, in the aggregate, may not exceed 33% of total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
INTERNATIONAL GROWTH & INCOME FUND AND WORLDWIDE FUND. The management fee
for each fund is calculated by adding a group fee rate to an individual
fund fee rate, and multiplying the result by the respective fund's average
net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase.
For October 1995, the group fee rate was . 3111 %. The individual fund
fee rate is .45% for each fund. The total management fee for fiscal 1995
was . 77 % for each fund. The management fee rate for the funds is
higher than that of most domestic mutual funds but not necessarily higher
than that of a typical international fund.
DIVERSIFIED INTERNATIONAL FUND, INTERNATIONAL VALUE FUND, AND OVERSEAS
FUND. The amount of the management fee is determined by taking a
BASIC FEE and then applying a PERFORMANCE ADJUSTMENT.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Management
= Basic
+/- Performance
Fee Fee Adjustment
</TABLE>
The performance adjustment either increases or decreases the management
fee, depending on how well the fund has performed relative to its benchmark
index.
FUND BENCH
MARK
INDEX
Diver EAFE
sified Index/
Intern GDP
ationa Weig
l hted
Intern EAFE
ationa Index/
l Cap
Value Weig
hted
Overs EAFE
eas Index/
Cap
Weig
hted
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management increase.
For October 1995, the group fee rate was .3111 %. The individual fund
fee rate is . 45 %. The basic fee for fiscal 1995 was .77 %
for Diversified International, .76% for International Value, and .77%
for Overseas .
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing a fund's
performance to that of its benchmark i ndex over the most recent
36-month period. The difference is translated into a dollar amount that
is added to or subtracted from the basic fee. (The performance period for
International Value began December 1, 1994 and will eventually span 36
months, but the performance adjustment did not take effect until November
1995.) The maximum annualized performance adjustment rate is ".20%.
The total management fee rate for fiscal 1995 is outlined in the following
chart. The rate for International Value was higher than those of most
domestic mutual funds, but not necessarily higher than that of the
typical international fund.
Fund Managem
ent
fee
Diversi .69 %
fied
Interna
tional
Interna .76 %
tional
Value
Overs .69 %
eas
FMR HAS SUB-ADVISORY AGREEMENTS with four affiliates: FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA in turn has a sub-advisory agreement with FIIAL
U.K. FMR U.K. focuses on issuers based in Europe. FMR Far East focuses on
issuers based in Asia and the Pacific Basin. FIJ focuses on issuers based
in Japan and elsewhere around the world. FIIA focuses on issuers based in
Hong Kong, Australia, New Zealand, and Southeast Asia (other than Japan).
FIIAL U.K. focuses on issuers based in the United Kingdom and Europe.
The sub-advisers are compensated for providing investment research and
advice. FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services. FMR pays FIJ and
FIIA 30% of its management fee associated with investments for which the
sub-adviser provided investment advice. FIIA pays FIIAL U.K. a fee equal to
110% of the cost of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50%
of its management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis. FIIA pays FIIAL U.K. a fee
equal to 110% of the cost of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In fiscal
1995, the funds paid FSC, as a percentage of average net assets, the fees
shown in the following chart.
Fee to
Fund FSC
Interna 0.4%
tional
Growt
h &
Incom
e
Diversi 0.4%
fied
Interna
tional
Interna 0.5 %
tional
Value
Overs 0.3 %
eas
World 0.3 %
wide
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce the fund's custodian or transfer agent
fees.
For fiscal 1995, each fund's portfolio turnover rate is outlined in the
table below. These rates vary from year to year. High turnover rates
increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of
short-term investing.
Fund Turnover
Interna 141%
tional
Growt
h &
Incom
e
Diversi 101 %
fied
Interna
tional
Interna 109 %
tional
Value
Overs 49 %
eas
World 70 %
wide
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in a fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
WAYS TO SET UP YOUR ACCOUNT
ASSET MANAGER: GROWTH
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and capital
gains from current taxes. In addition, contributions to these accounts may
be tax deductible. Retirement accounts require special applications and
typically have lower minimums.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under
70 with earned income to save up to $2,000 per tax year. Individuals can
also invest in a spouse's IRA if the spouse has earned income of less than
$250.
ROLLOVER IRAS retain special tax advantages for certain distributions from
employer-sponsored retirement plans.
KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners (and their employees) to
make tax deductible contributions for themselves and any eligible employees
up to $30,000 per year.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners
or those with self-employed income (and their eligible employees) with many
of the same advantages as a Keogh, but with fewer administrative
requirements.
403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt
institutions, including schools, hospitals, and other charitable
organizations.
401(K) PROGRAMS allow employees of corporations of all sizes to contribute
a percentage of their wages on a tax-deferred basis. These accounts need to
be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
INSTITUTIONS, OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is
calculated every business day. The funds' shares are sold without a sales
charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described at right. If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
ASSET MANAGER: GROWTH
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services, and with respect to Worldwide, a Fidelity Payroll
Deduction Program account in the fund. Refer to the program materials for
details.
Key Information
Phone 1#800#544#7777
S
To open an account, exchange from another Fidelity fund account with the
same
registration, including name, address, and taxpayer ID number.
S
To add to an account, exchange from another Fidelity fund account with the
same registration, including name, address, and taxpayer ID number. You can
also use Fidelity Money Line to transfer from your bank account. Call
before
your first use to verify that this service is in place on your account.
Maximum
Money Line: $50,000.
Mail
S
To open an account, complete and sign the application. Make your check
payable
to the complete name of the fund of your choice. Mail to the address
indicated
on the application.
S
To add to an account, make your check payable to the complete name of the
fund.
Indicate your fund account number on your check. Mail to the address
printed
on your account statement.
S
Exchange by mail: Call 1#800#544#6666 for instructions.
In Person
S
To open an account, bring your application and check to a Fidelity Investor
Center. Call 1#800#544#9797 for the center nearest you.
S
To add to an account, bring your check to a Fidelity Investor Center. Call
1#800#544#9797 for the center nearest you.
Wire
Not available for retirement accounts.
S
To open an account, call 1#800#544#7777 to set up your account and to
arrange
a wire transaction. Wire within 24 hours to the wire address below. Specify
the complete name of the fund and include your new account number and your
name.
S
To add to an account, wire to the wire address below. Specify the complete
name of the fund and include your account number and your name.
S
Wire address: Bankers Trust Company, Bank Routing #021001033, Account #
00163053.
Automatically
New accounts cannot be opened with these services.
S
Use Fidelity Automatic Account Builder or Direct Deposit to automatically
purchase
more shares. Sign up for these services when opening your account, or call
1#800#544#6666.
S
Use Directed Dividends or Fidelity Automatic Exchange Service to
automatically
send money from one Fidelity fund into another. Call 1#800#544#6666 for
instructions.
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fees and Key Information
Phone 1#800#544#7777
All account types except retirement
S
Maximum check request: $100,000.
S
For Money Line transfers to your bank account; minimum: $10; maximum:
$100,000.
All account types
S
You may exchange to other Fidelity funds if both accounts are registered
with
the same name(s), address, and taxpayer ID number.
Mail or in Person
Individual, Joint Tenants, Sole Proprietorships, UGMA, UTMA
S
The letter of instruction must be signed by all persons required to sign
for
transactions, exactly as their names appear on the account.
Retirement accounts
S
The account owner should complete a retirement distribution form. Call
1#800#544#6666
to request one.
Trusts
S
The trustee must sign the letter indicating capacity as trustee. If the
trustee's
name is not in the account registration, provide a copy of the trust
document
certified within the last 60 days.
Businesses or Organizations
S
At least one person authorized by corporate resolution to act on the
account
must sign the letter.
S
Include a corporate resolution with corporate seal or a signature
guarantee.
Executors, Administrators, Conservators, Guardians
S
Call 1#800#544#6666 for instructions.
Wire
All account types except retirement
S
You must sign up for the wire feature before using it. To verify that it is
in place, call 1#800#544#6666. Minimum wire: $5,000.
S
Your wire redemption request must be received by Fidelity before 4 p.m.
Eastern
time for money to be wired on the next business day.
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing. The shares you exchange
will carry credit for any sales charge you previously paid in connection
with their purchase.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT BALANCES 1-800-544-7544
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
QUOTES 1-800-544-8544
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTOR PLANS
ASSET MANAGER: GROWTH
FIDELITY AUTOMATIC ACCOUNT BUILDER SM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account,
quarterly complete the
appropriate section
on the fund
application.
(small solid bullet) For existing
accounts, call
1-800-544-6666 for
an application.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800- 544-6666
at least three
business days prior
to your next
scheduled
investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the
period appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization
form.
(small solid bullet) Changes require a
new authorization
form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call
bimonthly, 1-800-544-6666
quarterly, or after both accounts
annually are opened.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800-544-6666.
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days.
UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes its earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. The fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These are
passed along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
the funds may adjust their dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and
its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. If quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and
REDEMPTION PRICE (price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY SHARES OF THE FUNDS (AT THE OFFERING PRICE) OR SELL THEM
THROUGH A BROKER, who may charge you a fee for this service. If you invest
through a broker or other institution, read its program materials for any
additional service features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. In some instances, these incentives may be
offered only to certain institutions whose representatives provide services
in connection with the sale or expected sale of significant amounts of
shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND , FIDELITY
DIVERSIFIED INTERNATIONAL FUND, FIDELITY INTERNATIONAL VALUE FUND,
FIDELITY OVERSEAS FUND , AND FIDELITY WORLDWIDE FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated December 30, 1995). Please
retain this document for future reference. The funds' financial statements
and financial highlights, included in the Annual Report for the fiscal year
ended October 31, 1995, are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Affecting Europe
Special Considerations Affecting Japan, The Pacific Basin, and Southeast Asia
Special Considerations Affecting Canada
Special Considerations Affecting Latin America
Special Considerations Affecting Africa
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.)
Fidelity Investments Japan Ltd. (FIJ) (International Value only)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
IBD-ptb-1295
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The funds' fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below the
investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF INTERNATIONAL GROWTH & INCOME FUND
(INTERNATIONAL GROWTH & INCOME)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 5% of the value of its total
assets would be invested in the securities of any single issuer, or it
would hold more than 10% of the voting securities of such issuer, except
that up to 25% of the fund's assets may be invested without regard to these
limitations;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities, or by foreign governments or their political
subdivisions, or by supranational organizations) if, as a result, more than
25% of the fund's total assets (taken at current value) would be invested
in the securities of issuers having their principal business activities in
the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT POLICIES AND LIMITATIONS OF DIVERSIFIED INTERNATIONAL FUND
(DIVERSIFIED INTERNATIONAL)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments to
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF INTERNATIONAL VALUE FUND
(INTERNATIONAL VALUE)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, not withstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commissions is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the fund.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF OVERSEAS FUND
(OVERSEAS)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (a) more than 5% of the fund's total assets (taken at
current value) would be invested in the securities of such issuer, or (b)
the fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed), less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF WORLDWIDE FUND
(WORLDWIDE)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three business days to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to purchase or sell futures
contracts on physical commodities.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(x) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (ix), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund ' s limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
beginning on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed on the following pages are eligible investments
for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES. Each fund may purchase the
shares of closed-end investment companies to facilitate investment in
certain countries. Shares of closed-end investment companies may trade at a
premium or a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions , and
custodial costs, are generally higher than for U.S. investors. In general,
there is less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depository Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depository Receipts (EDRs) and Global Depository
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, Options and Futures Relating to Foreign
Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put
and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract.
Futures can be held until their delivery dates, or can be closed out before
then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets . The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 15% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
ISSUER LOCATION. FMR determines where an issuer is located by looking at
such factors as its country of organization, the primary trading market for
its securities, and the location of its assets, personnel, sales, and
earnings. The issuer of a security is located in a particular country if:
1) the security is issued or guaranteed by the government of the country;
or 2) the issuer is organized under the laws of the country, derives at
least 50% of its revenues or profits from goods sold, investments made or
services performed in the country, or has at least 50% of its assets
located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and
(5) . For purposes of these limitations, each fund generally will treat
the borrower as the "issuer" of indebtedness held by the fund. In the case
of loan participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the fund, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated
to the coupon rate or maturity of the purchased security. To protect the
fund from the risk that the original seller will not fulfill its
obligation, the securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not presently
appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfa ctory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SECURITIES OF SMALL CAPITALIZATION COMPANIES. Smaller capitalization
companies may have limited product lines, markets, or financial resources.
These conditions may make them more susceptible to setbacks and reversals.
Therefore, their securities may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of
larger companies.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with opening,
maintaining, and closing short sales against the box.
SHORT SALES - INTERNATIONAL GROWTH & INCOME FUND. The fund may enter into
short sales with respect to stocks underlying its convertible security
holdings. For example, if FMR anticipates a decline in the price of the
stock underlying a convertible security the fund holds, it may sell the
stock short. If the stock price subsequently declines, the proceeds of the
short sale could be expected to offset all or a portion of the effect of
the stock's decline on the value of the convertible security. The fund
currently intends to hedge no more than 15% of its total assets with short
sales on equity securities underlying its convertible security holdings
under normal circumstances.
When the fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities and will be required to
hold them aside while the short sale is outstanding. The fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales.
SOVEREIGN DEBT OBLIGATIONS. Each fund may purchase sovereign debt
instruments issued or guaranteed by foreign governments or their agencies,
including debt of Latin American nations or other developing countries.
Sovereign debt may be in the form of conventional securities or other types
of debt instruments such as loans or loan participations. sovereign debt of
developing countries may involve a high degree of risk, and my be in
default or present the risk of default. Governmental entities responsible
for repayment of the debt may be unable or unwilling to repay principal and
interest when due, and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest
may depend on political as well as economic factors.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the swap
agreement would tend to decrease the fund's exposure to U.S. interest rates
and increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
WARRANTS. Warrants are securities that give a fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
if the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
SPECIAL CONSIDERATIONS AFFECTING EUROPE
New developments surrounding the creation of a unified common market in
Europe have helped to reduce physical and economic barriers promoting the
free flow of goods and services throughout Western Europe. These new
developments could make this new unified market one of the largest in the
world. However, in 1993 Europe's economies began to slow and subsequently
slid into recession as tight monetary conditions and a lack of progress
toward inflation convergence and budgetary consolidation in many countries
weakened consumer and business confidence. More generally, the turbulence
in foreign exchange markets since the middle of 1992 and escalating
tensions over trade contributed to increased uncertainty in many countries.
The U.S. dollar continued on its downward track with respect to both the
German mark and many other of Europe's currencies such as the Italian lira,
the Spanish peseta and the Swedish krona which have been affected by
political uncertainties and fiscal problems.
Subsequently, Europe's economies began to improve in 1995 as continued
growth in the United States and the Southeast Asian countries provided the
foundation for an export-led recovery. This recovery was aided by a sharp
rebound of the U.S. dollar after reaching postwar lows in the spring of
1995.
The Eastern European countries, after several years of declining output,
have generally shown dramatic growth in 1994 and 1995. Despite formidable
obstacles and major differences among countries and regions, many nations
are making substantial progress in their efforts to become market-oriented
economies. However, these economies are becoming increasingly disparate and
the experience of countries in the region varies markedly. Those nations
making the most successful transitions include Poland, the Czech Republic,
and Hungary, while some of the former Soviet republics continue to suffer
from the consequences of the break-up of the Union and have not made much
progress in implementing effective market oriented reforms. Key aspects of
the reform and stabilization efforts have not yet been fully implemented,
and there remain risks of policy slippage. In the Russian Federation and
most other countries of the former Soviet Union, economic conditions are of
particular concern because of economic instability due to political unrest
and armed conflicts in many regions.
Notwithstanding the continued economic difficulties in many countries,
recent positive developments offer hope for a cooperative growth strategy
in the near term, which could also permit a strengthening of global
economic performance over the medium term. Many developing countries are
reaping the fruits of sustained reform and stabilization efforts. Efforts
to enhance assistance to countries affected by the transition to
market-based trading systems occurring in central Europe and the former
Soviet Union, and to low-income countries to support strengthened
stabilization and restructuring efforts, are moving forward. In Europe,
exchange market tensions have eased, interest rates have been falling and
may continue to do so as evidence accumulates of the waning of inflationary
pressures.
The European Community (EC) consists of Belgium, Denmark, France, Germany,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and the
United Kingdom (the member states). In 1986, the member states of the EC
signed the "Single European Act", an agreement committing these countries
to the establishment of a market among themselves, unimpeded by internal
barriers or hindrances to the free movement of goods, persons, services, or
capital. To meet this goal, a series of directives have been issued to the
member states. Compliance with these directives is designed to eliminate
three principal categories of barriers: (1) physical frontiers, such as
customs posts and border controls; (2) technical barriers (which include
restrictions operating within national territories) such as regulations and
norms for goods and services (product standards); discrimination against
foreign bids (bids by other EC members) on public purchases; or
restrictions on foreign requests to establish subsidiaries; and (3) fiscal
frontiers, notably the need to levy value-added taxes, tariffs, or excises
on goods or services imported from other EC states.
The ultimate goal of this project is to achieve a large unified domestic
European market in which available resources would be more efficiently
allocated through the elimination of the above-mentioned barriers and the
added costs associated with those barriers. Elimination of these barriers
would simplify product distribution networks, allow economies of scale to
be more readily achieved, and free the flow of capital and other resources.
The Maastricht Treaty on economic and monetary union (EMU) attempts to
provide its members with a stable monetary framework consistent with the
EC's broad economic goals. But until the EMU takes effect, which is
intended to occur between 1997 and 1999, the community will face the need
to reinforce monetary cooperation in order to reduce the risk of a
recurrence of tensions between domestic and external policy objectives.
The total European market, as represented by both EC and non-EC countries,
consists of over 370 million consumers, making it larger currently than
either the United States or Japanese markets. European businesses compete
nationally and internationally in a wide range of industries including:
telecommunications and information services, roads and transportation,
building materials, food and beverages, broadcast and media, financial
services, electronics, and textiles. Actual and anticipated actions on the
part of member states to conform to the unified Europe directives have
prompted interest and activity not only by European firms, but also by
foreign entities anxious to establish a presence in Europe that will result
from these changes. Indications of the effect of this response to a unified
Europe can be seen in the areas of mergers and acquisitions, corporate
expansion and development, GNP growth, and national stock market activity.
The early experience of the former centrally planned economies has already
demonstrated the crucially important link between structural reforms,
macroeconomic stabilization, and successful economic transformation. Among
the central European countries, the Czech Republic, Hungary, and Poland
have made the greatest progress in structural reform; inflationary
pressures there have abated following price liberalization, and output has
begun to recover. These achievements will be difficult to sustain, however,
in the absence of strong efforts to contain the large fiscal deficits that
have accompanied the considerable losses of output and tax revenue since
the start of the reform process.
In the Baltic countries there are encouraging signs that reforms are taking
hold and are being supported by strong stabilization efforts. In most other
countries of the former Soviet Union, in contrast, inadequate stabilization
efforts now threaten to lead to hyper-inflation, which could derail the
reform process. Inflation, which had abated following the immediate impact
of price liberalization in early 1992, surged to extremely high levels in
late 1992 and early 1993. The main reason for this development has been
excessive credit expansion to the government and to state enterprises. The
transformation process is being seriously hampered by he widespread
subsidization of inefficient enterprises and the resulting misallocation of
resources. The lack of effective economic and monetary cooperation among
the countries of the former Soviet Union exacerbates other problems by
severely constraining trade flows and impeding inflation control. Partly as
a result of these difficulties, some countries have decided that the
introduction of separate currencies offers the best scope for avoiding
hyper-inflation and for improving economic conditions. This development can
facilitate the implementation of stronger stabilization programs. Economic
conditions in the former Soviet Union have continued to deteriorate. Real
GDP in Russia fell 11.9 percent in 1993, after an 18 percent decline in
1992. In many other countries of the region, output losses have been even
larger. These declines reflect the adjustment difficulties during the early
stages of the transition, high rates of inflation, the compression of
imports, disruption in trade among the countries of the former Soviet
Union, and uncertainties about the reform process itself. Large-scale
subsidies are delaying industrial restructuring and are exacerbating the
fiscal situation. A reversal of these adverse factors is not anticipated in
the near term and output is expected to decline further in most of these
countries.
Economic conditions appear to have improved for some of the transition
economies of central Europe during the past year. Following three
successive years of output declines, there has been a turnaround in the
former Czech and Slovak Federal Republic, Hungary and Poland: growth in
private sector activity and strong exports, especially to Western Europe,
now appear to have contained the fall in output. Most central European
countries in transition have achieved positive real growth in 1994 and
early 1995 as market reform depend. The strength of the projected output
gains will depend crucially on the ability of the reforming countries to
contain fiscal deficits and inflation and on their continued access to, and
success in, export markets. A number of their governments, including those
of Hungary, and Poland, are currently implementing or considering reforms
directed at political and economic liberalization, including efforts to
foster multi-party political systems, decentralize economic planning, and
move toward free market economies. At present, no Eastern European country
has developed stock markets but Poland, Hungary and the Czech Republic have
small securities markets in operation. Ethnic and civil conflict continued
to rate throughout the former Yugoslavia. The outcome is uncertain.
Both the EC and Japan, among others, have made overtures to establish
trading arrangements and assist in the economic development of the Eastern
European nations. In the rest of Europe, monetary policy and financial
market developments have been dominated by the currency turmoil that began
in September 1992. At the same time, conditions are improving for
significant reductions of official interest rates in Europe, which should
help to contain recessionary forces and provide support to the overall
economic recovery in the region by early 1996. With the passage of the
General Agreement on Trade and Tariffs (GATT) earlier this year, Europe has
taken a step forward to resist protectionist pressures. Interest rates
continue to decline, but some countries' tight monetary conditions remain
an obstacle to stronger growth and a threat to exchange market stability.
However, in the long-term, economic unification of Europe could prove to be
an engine for domestic and international growth.
The conditions that have given rise to these developments are changeable,
and there is no assurance that reforms will continue or that their goals
will be achieved.
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1994
Denmark 4.6
France 2.5
G e rmany 2.9
Ita ly 2.5
Net herlands 2.4
S pain 1.9
Sw itzerland 2.0
Un ited Kingdom 3.8
Source: World Economic Outlook, May 199 5
(International Monetary Fund)
For national stock market index performance, please see the section
entitled "Performance" beginning on page .
SPECIAL CONSIDERATIONS AFFECTING JAPAN, THE PACIFIC BASIN, AND SOUTHEAST
ASIA
Many Asian countries may be subject to a greater degree of social,
political and economic instability than is the case in the United States
and Western European countries. Such instability may result from (i)
authoritarian governments or military involvement in political and economic
decision-making; (ii) popular unrest associated with demands for improved
political, economic, and social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and (v) ethnic,
religions, and racial disaffection.
The economies of most of the Asian countries continue to depend heavily
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners,
principally, the United States, Japan, China and the European Community.
The enactment by the United States or other principal trading partners of
projectionist trade legislation, reduction of foreign investment in the
local economies, and general declines in the international securities
markets could have a significant adverse effects upon the securities
markets of the Asian countries.
The success of market reforms, a surge in infrastructure spending have
fueled rapid growth in many developing countries in Asia. Rapidly rising
household incomes have fostered large middle classes and new waves of
consumer spending. Increases in infrastructure spending and consumer
spending have made domestic demand the growth engine for these countries.
Thus their growth now depends less upon exports to OECD countries. While
exports may no longer be the sole source of growth for developing
economies, improved competitiveness in exports markets has contributed to
growth in many of these nations. The increased productivity of many Asian
countries has enabled them to achieve, or continue, their status as top
exporters while improving their national living standards.
Thailand has one of the fastest-growing stock markets in the world. The
manufacturing sector is becoming increasingly sophisticated and is
benefiting from export-oriented investing. The manufacturing and service
sectors continue to account for the bulk of Thailand's economic growth. The
agricultural sector continues to become less important. The government has
followed fairly sound fiscal and monetary policies, aided by increased tax
receipts from a fast moving economy. The government also continues to move
ahead with new projects - especially telecommunications, roads and port
facilities - needed to refurbish the country's overtaxed infrastructure.
The country enjoys an able bureaucracy, which has maintained economic
policy during the country's many coups. In recent years, the risk of a coup
has diminished, but corruption remains widespread.
In terms of GDP, industrial standards and level of education, South Korea
is second only to Japan in Asia. It enjoys the benefits of a diversified
economy with well-developed sectors in electronics automobiles, textiles
and shoe manufacture steel and shipbuilding among others. The driving force
behind the economy's dynamic growth has been the planned development of an
export-oriented economy in a vigorously entrepreneurial society. Real GDP
grew about 8.3% in 1994. Both Koreas joined the United Nations separately
in late 1991, creating another forum for negotiation and joint cooperation.
Reunification of North Korea and South Korea could have a detrimental
effect on the economy of South Korea.
Indonesia is a mixed economy with many socialist institutions and central
planning but with a recent emphasis on deregulation and private enterprise.
Like Thailand, Indonesia has extensive natural wealth yet with a large and
rapidly increasing population. Dependent on oil exports during the 1980s,
its manufactured products now predominate, contributing 21% of GDP.
Indonesia's development is progressing smoothly, and it has become the
world's 12 largest economy.
Malaysia has one of the fastest-growing economies in the Asian-Pacific
region. Malaysia has become the world's third-largest producer of
semiconductor devices (after the U.S. and Japan) and the world's largest
exporter of semiconductor devices. More remarkable is the country's ability
to achieve rapid economic growth with relative price stability as the
government followed prudent fiscal/monetary policies. Malaysia's high
export dependence level leaves it vulnerable to a recession in the
Organization for Economic Cooperation and Development countries or a fall
in world commodity prices.
Singapore has an open entrepreneurial economy with strong service and
manufacturing sectors and excellent international trading links derived
from its history. During the 1970s and the early 1980s the economy expanded
rapidly, achieving an average annual growth rate of 9%. Per capita GDP is
among the highest in Asia. Singapore holds a position as a major oil
refining and services center.
Japan currently has the second-largest GDP in the world. The Japanese
economy has grown substantially over the last three decades. Its growth
rate averaged over 5% in the 1970s and 1980s. However in 1994, the growth
rate in Japan slowed to 0.6% and their budget showed a deficit of 7.8% of
GDP. Despite small rallies and market gains Japan has been plagued with
economic sluggishness. Economic conditions have weakened considerably in
Japan since October 1992. The boom in Japan's equity and property markets
during the expansion of the late 1980's supported high rates of investment
and consumer spending on durable goods, but both of these components of
demand have now retreated sharply following the decline in asset prices. It
is suffering through its worst recession in two decades. Profits have
fallen sharply, unemployment has reached a historical high of 3.2% and
consumer confidence is low. The banking sector continues to suffer from
non-performing loans. Nine discount rate cuts since its 6% peak in 1991, a
succession of fiscal stimulus packages, support plans for the debt-burdened
financial system and spending for reconstruction following the Kobe
earthquake should help to contain the recessionary forces, but substantial
uncertainties remain. The general government position has deteriorated as a
result of weakening economic growth, as well as stimulative measures taken
recently to support economic activity and to restore financial stability.
In addition to a cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration of
their competitiveness due to high wages, a strong currency and structural
rigidities. Japan has also become a mature industrial economy and, as a
result, will see its long-term growth rate slow down over the next ten
years. Finally, Japan is reforming its political process and deregulating
its economy. This has brought about turmoil, uncertainty and a crisis of
confidence.
Japan is heavily dependent upon international trade and, accordingly, has
been and may continue to be adversely affected by trade barriers and other
protectionist or retaliatory measures of, as well as economic conditions in
the U.S. and other countries with which they trade. Industry, the most
important sector of the economy is heavily dependent on imported raw
materials and fuels. Japan's major industries are in the engineering,
electrical, textile, chemical, automobile fishing and telecommunication
fields. Japan imports iron ore, copper, and many forest products. Only 19%
of its land is suitable for cultivation. Japan's agricultural economy is
subsidized and protected. It is about 50% self-sufficient in food
production. Even though Japan produces a minute rice surplus, it is
dependent upon large imports of wheat, sorghum and soybeans from other
countries. Japan's high volume of exports such as automobiles machine tools
and semiconductors have caused trade tensions with other countries,
particularly the United States. Some trading agreements between the
countries have reduced the friction caused by the current trade imbalance.
A record high value of the yen in first half of 1995 threatened to derail
Japan's recovery from a long economic downturn, mainly because it made
Japanese products more expensive overseas and eroded the value of foreign
earnings when repatriated to Japan. However, the recent ease of the yen has
created expectations that Japanese earnings will improve for the fiscal
year ending March 1996.
Australia has a prosperous Western-style capitalist economy, with a per
capita GDP comparable to levels in industrialized Western European
countries. Economic growth accelerated markedly in 1994 as robust domestic
spending boosted activity. It is rich in natural resources and is the
world's largest exporter of beef and wool, second-largest for mutton, and
it is among the lop wheat exporters. Australia is also a major exporter of
minerals, metals and fossil fuels. Due to the nature of its exports, a
downturn in world commodity prices can have a big impact on its economy.
EMERGING MARKETS: ASIA
MARKET CAPITALIZATION IN U.S. DOLLARS
JUNE 1995
Millions
In dia 147,210
I nd onesia 52,243
Kor e a 178,670
Ma lay sia 224,176
P ak istan 9,469
Phi lippines 55,038
S ri Lanka 2,259
Taiwa n 186,822
Th ailand 150,584
Source: IFC (International Finance Corporation , Second Quarter 1995)
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1994
C hina 12.0
Ho ng Kong 5.7
I n dia 4.9
Ind o nesia 7.0
Ja pa n n/a
Kor ea 8.3
Malay sia 8.5
Ph ilipp ines 4.5
Sin gapor e 7.0
Taiw an 6.2
Th ai land 8.5
Source: World Economic Outlook, May 1995 (International Marketing Fund)
For national stock market index performance, please see the section
entitled "Performance" beginning on page .
SPECIAL CONSIDERATIONS AFFECTING CANADA
Canada occupies the northern part of North America and is the
second-largest country in the world (3.97 million square miles in area)
extending from the Atlantic Ocean to the Pacific. The companies in which
the fund may invest may include those involved in the energy industry,
industrial materials (chemicals, base metals, timber, and paper), and
agricultural materials (grain cereals). The securities of companies in the
energy industry are subject to changes in value and dividend yield which
depend, to a large extent, on the price and supply of energy fuels. Rapid
price and supply fluctuations may be caused by events relating to
international politics, energy conservation, and the success of exploration
projects. Canada is one of the world's leading industrial countries, as
well as a major exporter of agricultural products. Canada is rich in
natural resources such as zinc, uranium, nickel, gold, silver, aluminum,
iron, and copper. Forest covers over 44% of its land area, making Canada a
leading world producer of newsprint. The economy of Canada is strongly
influenced by the activities of companies and industries involved in the
production and processing of natural resources. Canada is a major producer
of hydroelectricity, oil, and gas. The business activities of companies in
the energy field may include the production, generation, transmission,
marketing, control, or measurement of energy or energy fuels. Economic
prospects are changing due to recent government attempts to reduce
restrictions against foreign investment.
Canadian securities are not considered by FMR to have the same level of
risk as other nation's securities. Canadian and U.S. companies are
generally subject to similar auditing and accounting procedures, and
similar government supervision and regulation. Canadian markets are more
liquid than many other foreign markets and share similar characteristics
with U.S. markets. The political system is more stable than in some other
foreign countries, and the Canadian dollar is generally less volatile
relative to the U.S. dollars.
Many factors affect and could have an adverse impact on the financial
condition of Canada, including social, environmental, and economic
conditions; factors which are not within the control of Canada. In Canada,
where recovery is not yet as firmly established as in the United States,
interest rates have been coming down after a sharp rise associated with
exchange market developments in the fall of 1992. In light of the cyclical
situation, there should be room for a further easing of interest rates
without jeopardizing the progress made toward price stability. Continued
perseverance in reducing the structural budget deficit also is required.
FMR is unable to predict what effect, if any, such factors would have on
instruments held in the fund's portfolio.
The U.S. - Canada Free Trade Agreement which became effective in January
1989, will be phased in over a period of 10 years. This agreement will
remove tariffs on U.S. technology and Canadian agricultural products in
addition to removing trade barriers affecting other important sectors of
each country's economy. Canada, the U.S. and Mexico have implemented the
North American Free Trade Agreement which was entered into in 1994. This
cooperation is expected to lead to increased trade and to reduce barriers.
The majority of new equity issues or initial public offerings in Canada are
through underwritten offerings. The fund may elect to participate in these
issues.
For national stock market index performance, please see the section
entitled "Performance" beginning in page .
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICA
Latin America is a region rich in natural resources such as oil, copper,
tin, silver, iron ore, forestry, fishing, livestock, and agriculture. The
region has a large population (over 300 million) representing a large
domestic market. The region has been transitional over the last five years
from the stagnant 1980s which were characterized by poor economic policies,
higher international interest rates, and limited access to new foreign
capital.
High inflation and low economic growth have given way to stable manageable
inflation rates and higher economic growth. Changes in political
leadership, the implementation of market-oriented economic policies, such
as privatization, trade reform and monetary reform have been among the
recent steps taken to modernize the Latin American economies and to
regenerate growth in the region. Various trade agreements have also been
formed within the region such as the Andean Pact, Mercosur and NAFTA. The
largest of these is NAFTA, which was implemented on January 1, 1994.
Latin American equity markets can be extremely volatile and in the past
have shown little correlation with the U.S. market. Currencies are
typically weak, but most are now relatively free floating, and it is not
unusual for the currencies to undergo wide fluctuations in value over short
periods of time due to changes in the market.
Mexico's economy has been transformed significantly over the last 6-7
years. In the past few years the government has sold the telephone company,
the major steel companies, the banks and many others. The major state
ownership remaining is in the oil sector and the electricity sector. The
U.S. is Mexico's major trading partner, accounting for two-thirds of its
exports and imports. The government in consultation with international
economic agencies, is implementing programs to stabilize the economy and
foster growth. For example, Mexico, the U.S. and Canada implemented the
North American Free Trade Agreement. This cooperation is expected to lead
to increased trade and reduced barriers.
In the early 1980s Mexico experienced a foreign debt crisis. By 1987,
foreign debt had reached prohibitive levels, accounting for 90 to 95
percent of GDP, thus draining Mexico of all its resources. By the end of
1994, a large current account deficit, fueled in part by expansionary
policy, and the burden of its large national debt forced the Mexican
government to devalue the peso, triggering a severe crisis of confidence.
Both the crisis and the measures taken to stabilize the economy since, have
led to severely reduced domestic demand, which has been only partially
offset by positive trade-related activity.
Brazil entered the 1990s with declining real growth, runaway inflation, un
unserviceable foreign debt of $122 billion, and a lack of policy direction.
Over the past two years, Brazil was able to stabilize its domestic economy
through a relentless process of balancing the government budget, the
privatization of state enterprises, deregulation and reduction of red tape
and introducing greater competition in the domestic business environment.
Inflation has been reduced to about 3% a month from 50% a month since mid
1994. A major long-run strength is Brazil's natural resources. Iron ore,
bauxite, tin, god, and forestry products make up some of Brazil's basic
natural resource base, which includes some of the largest mineral reserves
in the world. In terms of population, Brazil is the sixth-largest in the
world with about 155 million people and represents a huge domestic market.
Chile, like Brazil, is endowed with considerable mineral resources, in
particular copper. Economic reform has been ongoing in Chile for at least
15 years, but political democracy has only recently returned to Chile.
Privatization of the public sector beginning in the early 1980s has
bolstered the equity market. A well organized pension system has created a
long-term domestic investor base.
Argentina is strong in wheat production and other foodstuffs and livestock
ranching. A well-educated and skilled population boasts one of the highest
literacy rates in the region. The country has been ravaged by decades of
extremely high inflation and political instability. Thanks to structural
reforms, the revitalized Argentine economy has been among the top three
fastest growing economies in the world over the last three years. The newly
created Argentine economic institutions have integrated the country with
the rest of the world, leaving the state to concentrate on its essential
functions. Privatization is ongoing and should reduce the amount of
external debt outstanding. The markets for labor, capital and goods and
services have been de-regulated. Nearly all non-tariff barriers and export
taxes have been eliminated, the tariff structure simplified and tariffs
sharply reduced.
Venezuela has substantial oil reserves. External debt is being
renegotiated, and the government is implementing economic reform in order
to reduce the size of the public sector. Internal gasoline prices, which
are one-third those of international prices, are being increased in order
to reduce subsidies. Plans for privatization and exchange and interest rate
liberalization are examples of recently introduced reforms.
EMERGING MARKETS: LATIN AMERICA
MARKET CAPITALIZATION IN U.S. DOLLARS
JUNE 1995
Millions
Ar gen tina 33,498
Braz il 149,110
Ch i le 83,453
Colo mbia 18,176
Me xic o 93,638
Pe ru 9,997
Ven ezu ela 4,936
Source: IFC (International Finance Corporation, Second Quarter 1995)
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1994
Ar gen tina 7.1
B ra zil 5.7
Chi le 4.2
Me xic o 3.5
Ven ezuel a 3.3
Source: World Economic Outlook, May 1995
(International Monetary Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING AFRICA
Africa is a continent of roughly 50 countries with a total population of
approximately 840 million people. Literacy rates (the percentage of people
who are over 15 years of age and who can read and write) are relatively
low, ranging from 20% to 60%. The primary industries include crude oil,
natural gas, manganese ore, phosphate, bauxite, copper, iron, diamond,
cotton, coffee, cocoa, timber, tobacco, sugar, tourism, and cattle.
Many of the countries are fraught with political instability. However,
there has been a trend over the past five years toward democratization.
Still, there remain many countries that do not have a stable political
process. Other countries have been enmeshed in civil wars and border
clashes.
Economically, the Northern Rim countries (including Morocco, Egypt, and
Algeria) and Nigeria, Zimbabwe, and South Africa are the wealthier
countries on the continent due to their strong ties with the European
nations. The market capitalization of these countries has been growing
recently as more international companies invest in Africa and as local
companies start to list on the exchanges. However, religious strife has
been a significant source of instability.
On the other end of the economic spectrum are countries, such as Burkina
Faso, Madagascar, and Malawwi, that are considered to be among the poorest
or least developed in the world. These countries are generally landlocked
or have poor natural resources. The economies of many African countries are
heavily dependent on international oil prices. Of all the African
industries, oil has been the most lucrative, accounting for 40% to 60% of
many countries' Gross Domestic Product. However, the general decline in oil
prices has had an adverse impact on many economies.
For national stock market index performance, please see the section
entitled "Performance" beginning on page .
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contracts"), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services ren dered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges and
may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability
of investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the
extent possible consistent with execution considerations) in accordance
with a ranking of broker-dealers determined periodically by FMR's
investment staff based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for
the benefit of the Johnson family own, directly or indirectly, more than
25% of the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of port folio
transactions on behalf of the funds and review the commissions paid by each
fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
Each fund's turnover rates for the fiscal periods ended October 31 are
indicated in the table below. Because a high turnover rate increases
transaction costs an d may increase taxable gains, FMR carefully weighs
the anticipated benefits of short-term investing against these
consequences. An increased turnover rate is due to a greater volume of
shareholder purchase orders, short-term interest rate volatility and other
special market conditions.
TURNOVER 1995 1994
RATES
International 141% 173%
Growth &
Income
Diversified 101 % 89 %
International
International 109%* n/a
Value
Overseas 49% 49%
Worldwide 70% 69%
* From November 1, 1994 (commencement of operations)
BROKERAGE COMMISSIONS. The table below lists the total brokerage
commissions and the dollar amount of commissions paid to FBSI and
FBS/FBSL for the fiscal periods ended October 31, 1995, 1994, and 1993.
Fiscal Total To FBSI To FBS/FBSL
Period Ended
October 31
<TABLE>
<CAPTION>
<S> <C> <C> <C>
International
Growth &
Income
1995 $ 2,887,378 $ 19,397 $ 216,219
1994 $ 5,999,970 $ 60,703 $ 0
1993 $ 1,928,776 $ 2,625 $ 0
Diversified
International
1995 $ 1,413,822 $ 66,332 $ 61,995
1994 $ 1,369,819 $ 23,550 $ 0
1993 $ 826,386 $ 4,142 $ 0
International
Value
1995* $ 273,209 $ 2,231 $ 14,110
Overseas
1995 $ 4,412,811 $ 12,927 $ 486,380
1994 $ 4,197,237 $ 4,808 $ 0
1993 $ 3,401,287 $ 3,290 $ 0
Worldwide
1995 $ 1,705,701 $ 55,908 $ 57,267
1994 $ 1,750,893 $ 46,548 $ 0
1993 $ 708,837 $ 22,678 $ 0
</TABLE>
* From November 1, 1994 (commencement of operations)
The table below lists for fiscal 1995, the percentage of aggregate
brokerage commissions paid to FBSI, FBS and FBSL and the percentage of the
aggregate dollar amount of transactions for which each fund paid brokerage
commissions to FBSI, FBS, and FBSL. The difference in the percentage of the
brokerage commissions paid to and the percentage of the dollar amount of
transactions effected through FBSI and FBSL is a result of the low
commission rates charged by FBSI. The table also includes the amount of
brokerage commissions paid to brokerage firms that provided research
services; and the approximate amount of transactions effected through
brokerage firms that provided research services.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal % of % of % of % of Commissions Transactions
Period Commissions Commissions Transactions Transactions Paid To with Brokerage
Ended Paid to FBSI Paid Effected Effected Firms Firms Providing
Octob To FBS/FBSL through through Providing Research
er 31, FBSI FBS/FBSL Research Services
1995 Services
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Intern 0.67% 7.49% 2.50% 9.09% $ 2,634,632 $ 1,043,202,699
ational
Growt
h
&
Incom
e
Divers 4.69% 4.38% 7.62% 5.93% $ 1,315,770 $ 449,432,375
ified
Intern
ational
Intern 0.81% 5.16% 3.35% 7.12% $ 255,178 $ 91,149,870
ational
Value
Overs 0.29% 11.02% 0.97% 13.82% $ 3,813,724 $ 1,470,106,385
eas
World 3.27% 3.36% 6.87% 3.59% $ 1,586,935 $ 553,889,401
wide
</TABLE>
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the U.S. are valued at last sale price or, if no sale
has occurred, at the closing bid price. Most equity securities for which
the primary market is outside the U.S. are valued using the official
closing price or the last sale price in the principal market where they are
traded. If the last sale price (on the local exchange) is unavailable, the
last evaluated quote or last bid price is normally used. Short-term
securities are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. Convertible
securities and fixed-income securities are valued primarily by a pricing
service that uses a vendor security valuation matrix which incorporates
both dealer-supplied valuations and electronic data processing techniques.
This two-fold approach is believed to more accurately reflect fair value
because it takes into account appropriate factors such as institutional
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data,
without exclusive reliance upon quoted, exchange, or over-the counter
prices. Use of pricing services has been approved by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by a fund are
determined as of such time for the purpose of computing the fund's net
asset value. Foreign security prices are furnished by independent brokers
or quotation services which express the value of securities in their local
currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local currency into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of net
asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be valued
as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields are computed by dividing a fund's interest and
dividend income for a given 30-day or one month period, net of expenses, by
the average number of shares entitled to receive distributions during the
period, dividing this figure by the fund's net asset value (NAV) at
the end of the period and annualizing the result (assuming compounding of
income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. Dividends from equity
investments are treated as if they were accrued on a daily basis, solely
for the purposes of yield calculation. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income. For the fund's investments denominated in
foreign currencies, income and expenses are calculated first in their
respective currencies and are then converted to U.S. dollars either when
they are actually converted or at the end of 30-day or one month period,
whichever is earlier. Capital gains and losses generally are excluded from
the calculation as are gains and losses from currency exchange rate
fluctuations.
Income calculated for purposes of determining the fund's yield differs from
income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations , the fund's yield may not equal its
distribution rate, the income paid to your account, or income reported in a
fund's financial statements.
In calculating the fund's yield, the fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in order
to reflect the risk premium on that security. This practice will have the
effect of reducing the fund's yield.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
Total return figures do not include the effects of each fund's sales charge
which was eliminated as of July 1, 1995. Sales charges for Diversified
International, International Value, Overseas, and Worldwide were waived
through June 30, 1995 and International Growth & Income's sales charge was
in effect November 1, 1993 through May 31, 1994. Total returns for
International Growth & Income and Overseas also do not include the effect
of paying the fund's $25.00 exchange fee, which was in effect from December
1, 1987 through October 1, 1989.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On October 27, 1995, the 13-week and 39-week long-term moving
averages for each fund are outlined in the chart below.
FUND NAME 13 WEEK LONG-TERM 39 WEEK LONG-TERM
MOVING AVERAGE MOVING AVERAGE
International Growth & Income 17.94 17.30
Diversified International 12.79 12.07
International Value 10.77 10.27
Overseas 29.02 28.10
Worldwide 13.67 13.33
HISTORICAL FUND RESULTS. The following tables show the funds' total
returns for periods ended October 31 , 1995. Previously,
International Growth & Income and Overseas imposed a sales charge. If this
sales change were taken into account, total returns would have been
lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
One
Five
Life of
One
Five
Life of
Year Years Fund* Year Years Fund*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
International Growth & Income 4.95% 7.68% 8.51% 4.95% 44.79% 105.89%
</TABLE>
* From December 31, 1986 (commencement of operations).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Diversified International 6.02 % n/a 8.10 % 6.02 % n/a 34.96 %
</TABLE>
* From December 27, 1991 (commencement of operations).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
One
Five
Life of
One
Five
Life of
Year Years Fund* Year Years Fund*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
International Value n/a n/a 6.30% n/a n/a 6.30%
</TABLE>
* From November 1, 1994 ( commencement of operations).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One
Five
Ten
One
Five
Ten
Year Years Years Year Years Years
Overseas -.34% 6.48% 14.59% -.34% 36.87% 290.47%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
Worldwide .95 % 10.96 % 7.83 % .95 % 68.23 % 50.56 %
</TABLE>
* From May 30, 1990 (commencement of operations).
HISTORICAL FUND RESULTS. The following tables show the income and capital
elements of each fund's return through October 31, 1995. The
funds may compare their returns to the record of the Morgan Stanley Capital
International Europe, Australia, Far East Index (EAFE Index) and the Morgan
Stanley Capital International World Index published by Morgan Stanley
Capital International, S.A. The EAFE Index is an unmanaged index of 900
foreign common stocks. The addition of Canada, the U.S., and South African
Gold Mines to the EAFE Index comprises the World Index which includes over
1400 companies. The companies included in the indices change only in the
event of mergers, takeovers, failures and the like, and minor
adjustments may be made when Morgan Stanley Capital International, S.A.
reviews the companies covered as to suitability every three or four years.
Each table compares a fund's returns to the record of the Standard &
Poor's Composite Index of 500 Stocks (S&P 500 (registered
trademark) ), the Dow Jones Industrial Average (DJIA), a foreign stock
market index as described above, and the cost of living (measured by the
Consumer Price Index, or CPI) over the same period. The CPI information is
as of the month end closest to the initial investment date for each fund.
The S&P 500 and DJIA comparisons are provided to show how each fund's total
return compared to the record of a broad range of U.S. common stocks and a
narrower set of stocks of major U.S. industrial companies, respectively,
over the same period. The funds have the ability to invest in securities
not included in the indices, and their investment portfolios may or may not
be similar in composition to the indices. The EAFE Index, World Index, S&P
500, and DJIA are based on the prices of unmanaged groups of stocks and,
unlike each fund's returns, their returns do not include the effect of
paying brokerage commissions and other costs of investing.
INTERNATIONAL GROWTH & INCOME FUND: During the period from December 31,
1986 (commencement of operations) through October 31, 1995, a hypothetical
$10,000 investment in Fidelity International Growth & Income Fund would
have grown to $20,589 assuming all distributions were reinvested. This was
a period of fluctuating stock and bond prices and the figures below should
not be considered representative of the dividend income or capital gain or
loss that could be realized from an investment in the fund today.
FIDELITY INTERNATIONAL GROWTH & INCOME FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total EAFE
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 17,830 $ 2,055 $ 704 $ 20,589 $ 19,847 $ 31,566 $ 33,003 $ 13,910
1994 17,540 2,022 56 19,618 19,922 24,965 26,452 13,529
1993 17,250 1,922 0 19,172 18,095 24,036 24,244 13,186
1992 13,290 1,132 0 14,422 13,164 20,910 20,643 12,833
1991 13,990 1,002 0 14,992 15,169 19,014 19,069 12,434
1990 13,710 510 0 14,220 14,183 14,241 14,660 12,081
1989 12,870 322 0 13,192 16,269 15,395 15,276 11,367
1988 11,810 91 0 11,901 15,044 12,179 11,958 10,878
1987* 10,420 49 0 10,469 11,956 10,609 10,704 10,434
</TABLE>
* From December 31, 1986 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on November
1, 1994, assuming the 2% sales load had been in effect, the net amount
invested in fund shares was $10,000. The cost of the initial investment
($10,000), together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested), amounted to $12,146. If distributions had not
been reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $1,430 for dividends and $580 for capital gains distributions.
Tax consequences of different investments (with the exception of foreign
tax withholding) have not been factored into the above figures. The fund's
1% deferred sales charge on shares purchased prior to December 30, 1990,
its 2% sales charge in effect from January 1, 1991 through June 1, 1994,
and the fund's $25.00 exchange fee in effect from December 1, 1987 through
October 1, 1989 are not factored into the figures above. Prior to April
1991, the fund imposed a 2% sales charge which is no longer in effect and
is not reflected in the figures above.
FIDELITY DIVERSIFIED INTERNATIONAL FUND: During the period from December
27, 1991 (commencement of operations) to October 31, 1995, a hypothetical
$10,000 investment in Fidelity Diversified International Fund would have
grown to $13,496 assuming all distributions were reinvested. This was a
period of widely fluctuating stock prices and should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
FIDELITY DIVERSIFIED INTERNATIONAL FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of GDP-
Initial Reinvested Reinvested Weighted
Year Ended $10,000 Dividend Capital Gain Total EAFE
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 12,730 $ 197 $ 569 $ 13,496 $ 13,955 $ 15,999 $ 17,151 $ 11,146
1994 12,460 158 111 12,729 13,886 12,654 13,747 10,841
1993 11,320 133 0 11,453 12,587 12,183 12,599 10,566
1992* 8,460 0 0 8,460 9,240 10,598 10,728 10,283
</TABLE>
* From December 27, 1991 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on December
27, 1991 . The cost of the initial investment ($10,000), together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested), amounted to $10,640. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller and cash payments for the period would have
amounted to $140 for dividends and $490 for capital gains distributions.
Tax consequences of different investments (with the exception of foreign
tax withholding) have not been factored into the above figures.
INTERNATIONAL VALUE FUND during the period from November 1, 1994
(commencement of operations) through October 31, 1995, a hypothetical
$10,000 investment in Fidelity International Value Fund would have grown to
$10,630 assuming all distribu tions were reinvested. This was a period
of fluctuating stock and bond prices and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY INTERNATIONAL VALUE FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total EAFE
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 10,6 3 0 $ 0 $ 0 $ 10,6 3 0 $ 9,963 $ 12,644 $ 12,477 $ 10,281
</TABLE>
* From November 1, 1994 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on
November 1, 1994, the net amount invested in fund shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$10,630. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $0 for dividends and $0
for capital gains distributions. Tax consequences of different investments
(with the exception of foreign tax withholding) have not been factored into
the above figures.
OVERSEAS FUND: During the per year period ending October 31, 1995, a
hypothetical $10,000 investment in Fidelity Overseas Fund would have grown
to $39,047 assuming that all distributions were reinvested. This was a
period of fluctuating stock prices the figures below and should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY OVERSEAS FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total EAFE
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 17,946 $ 3,560 $ 17,541 $ 39,047 $ 36,572 $ 42,174 $ 47,811 $ 14,140
1994 18,323 3,635 17,222 39,180 36,709 33,355 38,320 13,753
1993 17,060 2,808 16,035 35,904 33,343 32,113 35,122 13,404
1992 13,794 1,791 10,244 25,829 24,257 27,937 29,905 13,045
1991 16,910 1,657 11,138 29,704 27,952 25,403 27,625 12,640
1990 17,253 906 10,370 28,529 26,135 19,027 21,238 12,282
1989 16,520 598 8,918 26,036 29,978 20,568 22,129 11,555
1988 15,892 0 8,579 24,471 27,721 16,272 17,323 11,058
1987 19,410 0 2,152 21,922 22,031 14,174 15,506 10,607
1986 16,903 0 126 17,029 16,589 13,320 14,170 10,147
</TABLE>
Explanatory Notes: With an initial investment of $10,000 made on October
31, 1985, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $27,436.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and the cash
pay ments for the period would have amounted to $1,746 for dividends and
$10,886 for capital gain distributions. Tax consequences of different
investments (with the exception of foreign tax withholding) have not been
factored into the above figures. The fund's 3% sales charge which was
waived through June 30, 1995 and eliminated as of July 1, 1995 and the
fund's $25.00 exchange fee, which was in affect from December 1, 1987
through October 1, 1989, are not reflected in the figures above. Prior to
May 1994, the fund imposed a 3% sales charge which is no longer in effect
and is not reflected in the figures above.
WORLDWIDE FUND: During the period from May 30, 1990 (commencement of
operations) through October 31, 1995, a hypothetical $10,000 investment in
Fidelity Worldwide Fund would have grown to $15,056, assuming all dividends
were reinvested. This was a period of fluctuating stock prices and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
the fund today.
FIDELITY WORLDWIDE FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total World
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 13,320 $ 825 $ 911 $ 15,056 $ 14,617 $ 18,943 $ 19,478 $ 11,896
1994 13,960 782 172 14,914 13,351 14,982 15,612 11,571
1993 12,760 610 0 13,370 12,402 14,424 14,309 11,277
1992 9,630 193 0 9,823 9,765 12,548 12,183 10,975
1991 9,610 85 0 9,695 10,304 11,410 11,255 10,635
1990* 8,950 0 0 8,950 8,902 8,546 8,652 10,333
</TABLE>
* From May 30, 1990 (commencement of operations).
Explanatory Notes: With an initial $10,000 investment made on May 30, 1990,
assuming the 3% sales load had been in effect, the net amount invested in
fund shares was $ 10,000 . The cost of the initial investment
($10,000), together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested), amounted to $11,488. If distributions had
not been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would have
amounted to $610 for dividends and $810 for capital gains distributions.
Tax consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the above figures.
INTERNATIONAL INDICES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database, the total market capitalization of Latin American countries
according to the International Finance Corporation Emerging Markets
database, and the performance of national stock markets as measured in U.S.
dollars by the Morgan Stanley Capital International stock market indices
for the twelve months ended October 31, 1995. Of course, these results are
not indicative of future stock market performance or the funds'
performance. Market conditions during the periods measured fluctuated
widely. Brokerage commissions and other fees are not factored into the
values of the indices.
MARKET CAPITALIZATION. Companies outside the U.S. now make up nearly
two-thirds of the world's stock market capitaliza tion. According to
Morgan Stanley Capital International, the size of the markets as measured
in U.S. dollars grew from $2,011 billion in 1982 to $8,512 billion in
1995.
The following table measures the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices'
database. The value of the markets are measured in billions of U.S. dollars
as of October 31, 1995.
TOTAL MARKET CAPITALIZATION
Australia $ 183.9 Japan $ 1,935.2
Austria 17 Netherlands 23.7
Belgium 56.3 Norway 186.7
Canada 191.7 Singapore/Malaysia 73.2
Denmark 49.6 Spain 91.5
France 319.9 Sweden 101.2
Germany 333.7 Switzerland 296.7
Hong Kong 137.5 United Kingdom 836.4
Italy 112.4 United States 3,541.4
The following table measures the total market capitalization of Latin
American countries according to the International Fi nance Corporation
Emerging Markets database. The value of the markets is measured in billions
of U.S. dollars as of October 31, 1995.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 20.9
Brazil 78.6
Chile 36.4
Colombia 5.4
Mexico 52.9
Venezuela 3.9
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents the
performance of national stock markets as measured in U.S. dollars by the
Morgan Stanley Capital International Stock Market Indices for the twelve
months ended October 31, 1995. The second table shows the same
performance as measured in local currency. Each table measures total
return based on the period's change in price, dividends paid on stocks in
the index, and the effect of reinvesting dividends net of any applicable
foreign taxes. These are unmanaged indices composed of a sampling of
selected companies representing an approximation of the market structure of
the designated country.
STOCK MARKET PERFORMANCE (CUMULATIVE TOTAL RETURNS)
MEASURED IN U.S. DOLLARS (INCLUDES NET DIVIDENDS REINVESTED MONTHLY)
12 MONTHS ENDED OCTOBER 31, 1995
Australia $ 4.92 Japan $ -13.12
Austria -2.67 Netherlands 15.62
Belgium 16.84 Norway 9.86
Canada 8.54 Singapore/Malaysia -7.75
Denmark 13.56 Spain 6.18
France 5.12 Sweden 26.30
Germany 10.66 Switzerland 37.36
Hong Kong 0.77 United Kingdom 12.46
Italy -7.36 United States 26.79
The following table shows average annualized stock market returns
measured in U.S. dollars as of October 31, 1995.
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
October 31, 199 5 October 31, 199 5
Germany $ 8.83 $ 11.52
Hong Kong 29.50 26.14
Japan 1.67 12.27
Spain 4.33 16.69
United Kingdom 10.96 15.03
United States 16.68 14.39
The results are not indicative of future stock market performance or of
any fund's performance. Market conditions during the periods measured
fluctuated widely. Brokerage commissions and other fees are not factored
into the values of the indices.
PERFORMANCE COMPARISONS. A fund's performance may be compared to
the performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. In addition to the mutual fund
rankings, a fund's performance may be compared to stock, bond, and money
market mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to remember
the risk and return characteristics of each type of investment. For
example, while stock mutual funds may offer higher potential returns, they
also carry the highest degree of share price volatility. Likewise, money
market funds may offer greater stability of principal, but generally do not
offer the higher potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the C PI ), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of October 31, 1995, FMR advised over $26.5 billion in
tax-free fund assets, $80 billion in money market fund assets, $224 billion
in equity fund assets, $51 billion in international fund assets, and $23
billion in Spartan fund assets. The funds may refe rence the growth and
variety of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1996:
New Year's Day, Presidents' Day (observed), Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time. In addition,
the funds will not process wire purchases and redemptions on days when the
Federal Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
On December 30, 1990, International Growth & Income changed its sales
charge policy from a 1% sales charge upon purchase and 1% deferred sales
charge upon redemption to a 2% sales charge upon purchase. The sales charge
was eliminated on June 1, 1994. If your shares were purchased prior to
December 30, 1990 and you did not qualify for a front-end sales charge
reduction then, when you redeem those shares, a deferred sales charge
amounting to 1% of the net asset value of shares redeemed will be withheld
from your redemption proceeds and paid to FDC.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund invests significantly in foreign securities,
corporate shareholders should not expect fund dividends to qualify for the
dividends-received deduction. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received deduction.
Each fund will notify corporate shareholders annually of the percentage of
fund dividends that qualify for the dividends-received deduction. Gains
(losses) attributable to foreign currency fluctuations are generally
taxable as ordinary income, and therefore will increase (decrease) dividend
distributions. Each fund will send each shareholder a notice in January
describing the tax status of dividend and capital gain distributions for
the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
The following table displays each funds capital gain dividend for the
purpose of the dividend paid deduction as of October 31, 1995.
Diversified International $ 2,480,000
International Value $ 172,000
Overseas $ 12,234,000
Worldwide $ 55,000
As of October 31, 1995, International Growth & Income had a capital loss
carryforward aggregating approximately $23,289,000. This loss carryforward
which will expire on October 31, 2003 is available to offset future capital
gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Investment Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act) ,
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. All persons named as
Trustees also serve in similar capacities for other funds advised by FMR.
The business address of each Trustee and officer who is an "interested
person" (as defined in the Investment Company Act of 1940) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are
"interested persons" by virtue of their affiliation with either the trust
or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management
& Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of
Greenhill Petroleum Corporation (petroleum exploration and production,
1990). Until March 1990, Mr. Cox was President and Chief Operating Officer
of Union Pacific Resources Company (exploration and production). He is a
Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill
Companies (engineering). In addition, he served on the Board of Directors
of the Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and previously served as
a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc.
In addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity M agellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals) and Morrison Knudsen Corpor ation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he
was Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
prod ucts), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr.
Malone was Chairman, General Electric Inves tment Corporation and a Vice
President of General Electric Company. He is a Director of Allegheny Power
Systems, Inc. (electric utility), General Re Corporation (reinsurance) and
Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of
Corporate Property Investors, the EPS Foundation at Trinity College, the
Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM J. HAYES (61), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
PENELOPE DOBKIN (41), Vice President, Worldwide Fund (1990), is a vice
president of FMR.
GREGORY FRASER (35), Vice President, Diversified International, is an
employee of FMR.
JOHN HICKLING (36), Vice President, Overseas (1993), and another fund
advised by FMR, is a vice president of FMR.
RICHARD MACE (34), Vice President, International Growth & Income (1995),
and International Value (1995), is a Vice President of FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995)
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended October 31, 1995.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph Phylli Richa Edward E. Donal Peter S. Gerald Edward Marvin Thomas
Burkhe F. Cox s rd J. C. Bradley d C. H. L. R.
ad** Burke Flynn Johnson Jones J. Lynch* McDon Malone Mann William
Davis 3d** Kirk * ough s
Inter $ 0 $ 521 $ 498 $ 656 $ 0 $ 521 $ 528 $ 0 $ 520 $ 521 $ 521 $ 516
natio
nal
Gro
wth
&
Inco
me
Dive 0 134 128 169 0 134 135 0 133 134 134 132
rsifie
d
Inter
natio
nal
Inter 0 20 19 24 0 19 19 0 19 19 19 19
natio
nal
Valu
e
Over 0 990 953 1,252 0 990 1,001 0 990 990 990 979
seas
Worl 0 315 303 398 0 315 318 0 314 315 315 312
dwid
e
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Benefits Upon Compensation
Accrued as Part of Fund Retirement from the from the Fund
Expenses from the Fund Complex* Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
On October 31, 1995 the Trustees and officers of each fund owned, in
the aggregate, less than 1% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid on behalf of each fund
include interest, taxes, brokerage commissions, and each fund's
proportionate share of insurance premiums and Investment Company Institute
dues. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which each fund may be a party,
and any obligation it may have to indemnify its officers and Trustees with
respect to litigation.
FMR is Diversified International, International Growth & Income, Overseas,
and Worldwide 's manager pursuant to management contracts dated March
1, 1992, which were approved by shareholders on February 19, 1992. FMR is
International Value Fund's manager pursuant to a management contract dated
September 16, 1994, which was approved by FMR, then the sole shareholder of
the fund on September 23, 1994.
COMPUTING THE MANAGEMENT FEE. For the services of FMR under the
contract, International Growth & I ncome and Worldwide pay FMR a
monthly management fee composed of the sum of two elements: a group fee
rate and an individual fund fee rate.
For the services of FMR under the contract, Diversified International,
Overseas, and International Value pay FMR a monthly management fee composed
of the sum of two elements: a basic fee, which is the sum of the group fee
rate and and individual fund fee rate and a performance adjustment based on
a comparison of each fund's performance to that of the Morgan Stanley
Capital International Europe, Australia, Far East Index (the EAFE Index).
The EAFE Index may be compiled in two ways: a capitalization weighted
(cap-weighted) version and a gross domestic product weighted (GDP-weighted)
version. The cap-weighted EAFE is an approximate representation of each
country's share of the stock market value of all countries in the index.
The GDP-weighted version is an approximate representation of each country's
share of the value of goods and services produced by all the countries in
the index. The primary difference between the two is that while the value
of a country's stock may be very large, its relative GDP may be smaller.
Diversified International uses the Gross Domestic Product (GDP) weighted
version of the EAFE Index because it represents each countries relative
production. International Value and Overseas use the capitalization (Cap)
weighted EAFE because it approximates each countries share of stock market
value. The EAFE Index is published by Morgan Stanley Capital International,
an international investment management and research company. The EAFE Index
covers equity securities of over 900 companies in such countries as the
United Kingdom, Germany, France, Switzerland, the Netherlands, Italy,
Belgium, Spain, Sweden, Denmark, Austria, Norway, Australia, Japan, Hong
Kong, and Singapore.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 352 billion of group net
assets - the approximate level for October 1995 - was .3111 %, which
is the weighted average of the respective fee rates for each level of group
net assets up to $ 352 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under each fund's current management contract with FMR, the group fee rate,
except for International Value , is based on a schedule with
breakpoints ending at .3000% for average group assets in excess of $174
billion. Prior to March 1992, the group fee rate breakpoints shown above
for average group assets in excess of $138 billion and under $228 billion
were voluntarily adopted by FMR, and went into effect on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group
assets in excess of $210 billion and under $390 billion as shown in the
schedule below . The revised group fee rate schedule, for all funds
except International Value, was identical to the above schedule for average
group assets under $210 billion. International Value's current management
contract reflects these extensions of the group fee rate schedule .
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
174 - 210 billion .3000 % $ 150 billion .3371%
210 - 246 .2950 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
Each fund's individual fund fee rate is .45%. Based on the average group
net assets of the funds advised by FMR for October , 1995, the annual
management fee rate for International Growth & Income and Worldwide and the
annual basic fee rate for Diversified International, International Value,
and Overseas would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
. 3111 % + .45 % = .7611 %
</TABLE>
One-twelfth of this annual basic fee/management fee rate is applied to each
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the basic/management fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT FOR DIVERSIFIED INTERNATIONAL,
INTERNATIONAL VALUE, AND OVERSEAS. The basic fee is subject to upward
or downward adjustment, depending upon whether, and to what extent, each
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the EAFE Index (the Index) over the same
period. Starting with the twelfth month, the performance adjustment takes
effect. Each month subsequent to the twelfth month, a new month is added to
the performance period until the performance period equals 36 months.
Thereafter, the performance period consists of the most recent month plus
the previous 35 months. Each percentage point of difference, calculated to
the nearest 1.0% (up to a maximum difference of (plus/minus)10.00 ) is
multiplied by a performance adjustment rate of .02%. Thus, the maximum
annualized adjustment rate is (plus/minus).20%. This performance comparison
is made at the end of each month. One twelfth (1/12) of this rate is then
applied to each fund's average net assets for the entire performance
period, giving a dollar amount which will be added to (or subtracted from)
the basic fee.
Each fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested
in fund shares at the net asset value as of the record date for payment.
The record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on each fund's performance
compared to the investment record of the Index, the controlling factor is
not whether each fund's performance is up or down per se, but whether it is
up or down more or less than the record of the Index. Moreover, the
comparative investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
INTERNATIONAL GROWTH & INCOME AND WORLDWIDE. The tables below show the
management fee paid to FMR; and the management fee as a percentage of each
fund's average net assets for the fiscal years ended October 31,
1995, 1994, and 1993.
MANAGEMENT FEE MANAGEMENT FEE AS A
% OF AVERAGE
NET ASSETS
INTERNATIONAL GROWTH & INCOME
1995 $7,967,320 .7676 %
1994 10,246,289 .7717
1993 2,323,230 .7706
WORLDWIDE
1995 $ 5,378,156 .7657%
1994 4,088,335 .7704
1993 1,155,519 .7760
DIVERSIFIED INTERNATIONAL, INTERNATIONAL VALUE, AND OVERSEAS. The
tables below show the management fee paid to FMR (including the effect of
the performance adjustment); the dollar amount of negative or positive
performance adjustments; and the net management fee as a percentage of the
funds' average net assets for the periods ended October 31, 1995, 1994, and
1993.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE
PERFORMANCE
MANAGEMENT FEE AS A
INCLUDING PERFORMANCE
ADJUSTMENT % OF AVERAGE
ADJUSTMENT NET ASSETS
</TABLE>
DIVERSIFIED INTERNATIONAL
1995 $ 2,058,906 $ (211,273) .6942 %
1994 2,271,534 (169,790) .7178
1993 875,321 (27,280) .7346
INTERNATIONAL VALUE
1995 $ 361,109 n/a .7642 %
OVERSEAS
1995 $ 15,598,603 $ (1,750,190) .6880 %
1994 15,137,411 516,209 .7985
1993 7,925,648 (58,499) .7731
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On behalf of each fund, FMR has entered into sub-advisory
agreements with FMR U.K., FMR Far East, and FIIA. FIIA, in turn, has
entered into a sub-advisory agreement with FIIAL U.K. On behalf of
International Value, FMR has also entered into a sub-advisory agreement
with FIJ. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from the
sub-advisers. On behalf of the funds FMR may also grant the sub-advisers
investment manage ment authority as well as the authority to buy and
sell securities if FMR believes it would be beneficial to the funds.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIAL U.K. each focus on
issuers in countries other than the United States such as those in Europe,
Asia, and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of Fidelity
International Limited (FIL), a Bermuda company formed in 1968 which
primarily provides investment advisory services to non-U.S. investment
companies and institutional investors investing in securities throughout
the world. Edward C. Johnson 3d, Johnson family members, and various trusts
for the benefit of the Johnson family owns, directly or indi rectly, more
than 25% of the voting common stock of FIL. FIJ was organized in Japan in
1986. FIIA was organized in Bermuda in 1983. FIIAL U.K. was organized in
the United Kingdom in 1984, and is a wholly owned subsidiary of Fidelity
International Management Holdings Limited, an indirect wholly owned
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIAL U.K. For
providing non-discretionary investment advice and research services the
sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to 110%
and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by the
fund for which the sub-adviser has provided FMR with investment advice and
research services.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing investment advice and
research services.
For providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee
equal to 50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing discretionary investment
management services.
FMR U.K., FMR Far East, FIIA and FIIAL U.K. each serve as a sub-advisor
for all the funds. FIJ serves as a sub-advisor for International Value.
FMR entered into the sub-advisory agreements described above with respect
to Diversified International on September 16, 1992; with respect to
International Growth & Income, Overseas, and Worldwide on March 1, 1992
following shareholder approval of the agreements on February 19, 1992; and
with respect to International Value Fund on September 7, 1994.
For providing investment advice and research services, the fees paid to the
sub-advisers for fiscal 1995, 1994, and 1993 were as follows:
FEES PAID TO FOREIGN SUB-ADVISERS
FMR U.K. FMR FAR FIIA FIJ
EAST
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Intern
ational
Growt
h &
Incom
e
1995 $ 565,989 $ 508,935 $ 0 N/A
1994 358,767 426,768 0 N/A
1993 58,672 91,684 0 N/A
Divers
ified
Intern
ational
1995 $ 163,681 $ 148,965 $ 0 N/A
1994 106,564 124,103 0 N/A
1993 25,908 36,692 0 N/A
Intern
ational
Value
1995 $ 25,758 $ 24,224 $ 0 $ 0
Overs
eas
1995 $ 1,303,012 $ 1,193,082 $ 0 N/A
1994 643,371 749,224 0 N/A
1993 281,303 53,000 0 N/A
World
wide
1995 $ 249,660 $ 231,114 $ 0 N/A
1994 120,642 140,039 0 N/A
1993 22,728 34,227 0 N/A
</TABLE>
The funds' have not incurred discretionary investment management fees
for the fiscal years ended October 31, 1995, 1994, and 1993.
CONTRACTS WITH FMR AFFILIATES
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's net
asset value per share and dividends, and maintains each fund's accounting
records. The annual fee rates for these pricing and bookkeeping services
are based on each fund's average net assets, specifically, .06% for the
first $500 million of average net assets and .03% for average net assets in
excess of $500 million. The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year.
FSC is transfer, dividend disbursing, and shareholder servicing agent for
each fund. FSC receives annual account fees and asset-based fees for each
retail account and certain institutional accounts based on account size. In
addition, the fees for retail accounts are subject to increase based on
postal rate changes. With respect to certain institutional retirement
accounts, FSC receives asset-based fees only. With respect to certain other
institutional retirement accounts, FSC receives annual account fees and
asset based fees based on fund type. The asset-based fees are subject to
adjustment if the year-to-date total return of the Standard & Poor's
Composite Index of 500 Stocks is greater than positive or negative 15%. FSC
also collects small account fees from certain accounts with balances of
less than $2,500.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses, during the fiscal
periods ending October 31, 1995, 1994, and 1993.
PRICING AND BOOKKEEPING FEES PAID TO FSC
FISCAL FISCAL FISCAL
1995 1994 1993
Intern $462,071 $548,580 $158,558
ational
Growt
h &
Incom
e
Divers 177,924 191,050 79,178
ified
Intern
ational
Intern 43,939 n/a n/a
ational
Value
Overs 750,000 715,901 458,583
eas
World 360,752 296,919 89,027
wide
For fiscal 19 95 , 19 94 , and 19 93 , there were no
securities lending fees incurred by the funds.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR. The table
below shows the sales charge revenue paid to FDC for those funds that
imposed sales charges during the following fiscal periods:
SALES CHARGE REVENUE PAID TO FDC
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993
Fidelity International Growth & Income n/a n/a $ 87,704
Fidelity Overseas Fund n/a $ 1,120,737 1,367,026
Fidelity Worldwide Fund n/a n/a 109,770
</TABLE>
For the fiscal years ended 1995, 1994 and 1993, FDC received $12,868,
$6,314, and $29,135, respectively in deferred sales charge revenue on
behalf of International Growth & Income.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity International Growth & Income Fund ,
Fidelity Diversified International Fund, Fidelity International Value
Fund, Fidelity Overseas Fund , and Fidelity Worldwide Fund are funds
of Fidelity Investment Trust, an open-end management investment company
originally organized as a Massachusetts business trust on April 20, 1984.
On November 3, 1986, the trust's name was changed from Fidelity Overseas
Fund to Fidelity Investment Trust. Currently, there are twenty-four
funds of the trust: Fidelity Overseas Fund, Fidelity Europe Fund, Fidelity
Europe Capital Appreciation Fund, Fidelity Pacific Basin Fund, Fidelity New
Markets Income Fund, Fidelity International Growth & Income Fund, Fidelity
Global Bond Fund, Fidelity Canada Fund, Fidelity Worldwide Fund, Fidelity
Emerging Market Fund, Fidelity Short-Term World Income Fund, Fidelity
Diversified International Fund, Fidelity International Value Fund, Fidelity
Diversified Global Fund, Fidelity Japan Fund, Fidelity Emerging Markets
Fund, Fidelity Latin America Fund, Fidelity Southeast Asia Fund ,
Fidelity France Fund, Fidelity Germany Fund, Fidelity Japan Small Companies
Fund, Fidelity Hong Kong Fund, Fidelity Nordic Fund, and Fidelity United
Kingdom Fund . The Declaration of trust permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust or any fund may be
terminated upon the sale of its assets to another open-end management
investment company, or upon liquidation and distribution of its assets, if
approved by vote of the holders of a majority of the outstanding shares of
the trust or the fund. If not so terminated, the trust or the fund
will continue indefinitely.
CUSTODIAN. Chase Manhattan Bank, N.A. 12111 Avenue of the Americas, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of a fund's assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian. The Bank of New York and Chemical Bank, each headquartered in
New York, also may serve as a special purpose custodian of certain assets
in connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential
custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square,
Boston, Massachusetts serves as the funds' independent accountant. The
auditor examines financial statements for the funds and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended October 31, 1995 are included in the funds' Annual
Report, which is a separate report supplied with this Statement of
Additional Information. Each fund's financial statements and financial
highlights are incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND, FIDELITY
GERMANY FUND, FIDELITY HONG KONG & CHINA FUND, FIDELITY JAPAN FUND,
FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA FUND, FIDELITY
NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND,
FIDELITY UNITED KINGDOM FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c,d................................. Performance
..
4a Charter
i.................................
The Funds at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page: The Funds at a Glance; Doing Business
with Fidelity; Charter
Charter
(ii)..............................
(iii)........................... Expenses; Breakdown of Expenses
c................................ Charter
c, Charter; Breakdown of Expenses
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii...............................
*
b...................................
.
Exchange Restrictions; Transaction Details
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
Sales Charge Reductions and Waivers
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND, FIDELITY
GERMANY FUND, FIDELITY HONG KONG & CHINA FUND, FIDELITY JAPAN FUND,
FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA FUND, FIDELITY
NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND,
FIDELITY UNITED KINGDOM FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. Description of the Trust
..
13a - Investment Policies and Limitations
c............................
Portfolio Transactions
d..................................
14a - Trustees and Officers
c............................
15a.............................. *
*
b..................................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with FMR Affiliates
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with FMR Affiliates
i.................................
17a - Portfolio Transactions
d............................
e.............................. *
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with FMR Affiliates
b..............................
*
c.................................
22a.............................. *
b.............................. Performance
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds' most recent financial reports and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated December 30, 1995.
The SAI has been filed with the Securities and Exchange Commission (SEC)
and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity at
1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board, or any other agency, and are subject to investment
risk s , including possible loss of principal amount invested .
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
TIF-pro-1295
Each of these international funds is a growth fund and seeks to
increase the value of your investment over the long-term by investing
mainly in equity securities.
FIDELITY'S
TARGETED INTERNATIONAL
EQUITY
FUNDS
FIDELITY CANADA FUND
FIDELITY EMERGING MARKETS FUND
FIDELITY EUROPE FUND
FIDELITY EUROPE CAPITAL APPRECIATION FUND
FIDELITY FRANCE FUND
FIDELITY GERMANY FUND
FIDELITY HONG KONG AND CHINA FUND
FIDELITY JAPAN FUND
FIDELITY JAPAN SMALL COMPANIES FUND
FIDELITY LATIN AMERICA FUND
FIDELITY NORDIC FUND
FIDELITY PACIFIC BASIN FUND
FIDELITY SOUTHEAST ASIA FUND
FIDELITY UNITED KINGDOM FUND
PROSPECTUS
DECEMBER 30, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales charge (load) and
its yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE How each fund has done over
time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up
your account, including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
</TABLE>
KEY FACTS
THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager. Foreign affiliates of FMR may
help choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
CANADA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Canadian issuers.
SIZE: As of October 31, 1995, the fund had over $ 326 million in
assets.
EMERGING MARKETS FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of emerging market
issuers. These countries can be found in regions such as Southeast Asia,
Latin America, and Eastern Europe.
SIZE: As of October 31, 1995, the fund had over $1 billion in assets.
EUROPE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Western European issuers.
SIZE: As of October 31, 1995, the fund had over $492 million in assets.
EUROPE CAPITAL APPRECIATION FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Eastern and Western
European issuers.
SIZE: As of October 31, 1995, the fund had over $194 million in assets.
FRANCE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of French issuers.
GERMANY FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of German issuers.
HONG KONG AND CHINA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Hong Kong and
Chinese issuers.
JAPAN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Japanese issuers.
SIZE: As of October 31, 1995, the fund had over $343 million in assets.
JAPAN SMALL COMPANIES FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Japanese issuers with
small market capitalizations.
LATIN AMERICA FUND
GOAL: High total investment return.
STRATEGY: Invests mainly in equity and debt securities of Latin
American issuers.
SIZE: As of October 31, 1995, the fund had over $466 million in
assets.
NORDIC FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of issuers in Denmark,
Finland, Norway, and Sweden.
PACIFIC BASIN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Pacific Basin
issuers.
SIZE: As of October 31, 1995, the fund had over $317 million in
assets.
SOUTHEAST ASIA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Southeast Asian
issuers. The fund does not anticipate investing in Japan.
SIZE: As of October 31, 1995, the fund had over $649 million in
assets.
UNITED KINGDOM FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of British issuers.
WHO MAY WANT TO INVEST
The funds are designed for investors looking to target a particular
region, country, or emerging market . By including international
investments in your portfolio, you can achieve additional diversification
and participate in growth opportunities around the world. However, it is
important to note that investments in foreign securities involve risks in
addition to those of U.S. investments.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other company,
political, or economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks have
shown greater growth potential than other types of securities. Bond values
fluctuate based on changes in interest rates and in the credit quality of
the issuer.
In addition to those general risks, international investing involves
different or increased risks. The performance of international funds
depends upon currency values, the political and regulatory environment, and
overall economic factors in the countries in which a fund invests. These
risks are particularly significant for funds that focus on a single
country, group of countries or emerging markets . France Fund,
Germany Fund, Hong Kong and China Fund, Japan Small Companies Fund, Nordic
Fund, and United Kingdom Fund are non-diversified funds.
Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result,
changes in the market value of a single issuer could cause greater
fluctuations in share value than would occur in a more diversified fund.
See "INVESTMENT PRINCIPLES AND RISKS" on page .
When you sell your shares, they may be worth more or less than what you
paid for them. By themselves, the funds do not constitute a
balanced investment plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page and pages - for an
explanation of how and when these charges apply. Lower sales charges may be
available for accounts over $250,000.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee that, in certain cases, varies based on its
performance. Each fund also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements and
financial reports. A fund's expenses are factored into its share price or
dividends and are not charged directly to shareholder accounts (see page
).
The following are projections based on estimated or historical
expenses , adjusted for current fees, and are calculated as a
percentage of average net assets. A portion of the brokerage
commissions that Canada Fund paid was used to reduce fund expenses.
Had the effect of the reduction been included, the total operating expenses
for Canada Fund would have been 1.08%. For France Fund, Germany Fund,
Hong Kong and China Fund, Japan Small Companies Fund, Nordic Fund, and
United Kingdom Fund, annual fund operating expenses are based on each
fund's estimated expenses for its first year of operation.
EXAMPLES. Let's say, hypothetically, that each fund's annual return
is 5% and that its operating expenses are exactly as described. For every
$1,000 you invested, here's how much you would pay in total expenses
if you close your account after the number of years indicated.
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
Transaction Operating Examples
expenses expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
CANA Maxim 3.00 Man . 72 % After $
DA um % age 1 4
FUND sales ment year 1
charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 6
sales year 6
charge s
on
reinves
ted
distribu
tions
Deferr None Othe . 44 % After $
ed r 5 9
sales expe year 2
charge nses s
on
redem
ptions
Redem 1. 5 0 Total 1. 16 After $
ption % A fund % 10 1
fee ( as oper year 6
a % of ating s 7
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
EMERG Maxim 3.00 Man .77% After $
ING um % age 1 4
MARKE sales ment year 3
TS charge fee
FUND on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 6
sales year 9
charge s
on
reinves
ted
distribu
tions
Deferr None Othe .51% After $
ed r 5 9
sales expe year 8
charge nses s
on
redem
ptions
Redem 1.50 Total 1.28 After $
ption % fund % 10 1
fee (as oper year 8
a % of ating s 0
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
EUROP Maxim 3.00 Man .80% After $
E um % age 1 4
FUND sales ment year 2
charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 6
sales year 9
charge s
on
reinves
ted
distribu
tions
Deferr None Othe . 46 % After $
ed r 5 9
sales expe year 7
charge nses s
on
redem
ptions
Redem 1.00 Total 1.26 After $
ption % fund % 10 1
fee (as oper year 7
a % of ating s 8
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
f ee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
</TABLE>
A REDEMPTION FEE FOR CANADA FUND IS EFFECTIVE ON FEBRUARY 1, 1996.
REDEMPTION FEE BEFORE FEBRUARY 1, 1996 IS 1.0% ON SHARES HELD LESS THAN 90
DAYS.
Transaction Operating Examples
expenses expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
EUROP Maxim 3.00 Man . 85 % After $
E um % age 1 4
CAPITA sales ment year 3
L charge fee
APPRE on
CIATIO purcha
N ses
FUND (as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 7
sales year 2
charge s
on
reinves
ted
distribu
tions
Deferr None Othe . 51 % After $
ed r 5 1
sales expe year 0
charge nses s 2
on
redem
ptions
Redem 1.00 Total 1. 36 After $
ption % fund % 10 1
fee ( as oper year 8
a % of ating s 9
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
f ee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
FRANC Maxim 3.00 Mana 0% After $
E um % geme 1 5
FUND sales nt fee year 0
charge (after
on reimb
purcha urse
ses ment)
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 9
sales year 1
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 2.00
ed r %
sales expe
charge nses
on (after
redem reim
ptions burs
eme
nt)
Redem 1.5 0 Total 2.00
ption % fund %
fee (as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
GERM Maxim 3.00 Mana 0% After $
ANY um % geme 1 5
FUND sales nt fee year 0
charge
on (after
purcha reimb
ses urse
(as a ment)
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 9
sales year 1
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 2.00
ed r %
sales expe
charge nses
on
redem (after
ptions reim
burs
eme
nt)
Redem 1.5 0 Total 2.00
ption % fund %
fee (as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
HONG Maxim 3.00 Man .50% After $
KONG um % age 1 5
AND
sales ment year 0
CHINA charge fee
FUND on (after
purcha reim
ses
burs
(as a eme
% of nt)
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 9
sales year 1
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 1.50
ed r %
sales expe
charge nses
on
redem
ptions
Redem 1.50 Total 2.00
ption % fund %
fee (as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
</TABLE>
Transaction Operating Examples
expenses expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
JAPAN Maxim 3.00 Man . 66 % After $
FUND um % age 1 4
sales ment year 1
charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 6
sales year 5
charge s
on
reinves
ted
distribu
tions
Deferr None Othe . 49 % After $
ed r 5 9
sales expe year 1
charge nses s
on
redem
ptions
Redem 1. 5 0 Total 1. 15 After $
ption % A fund % 10 1
fee ( as oper year 6
a % of ating s 6
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
JAPAN Maxim 3.00 Man .76% After $
SMALL
um % age 1 4
COMP sales ment year 9
ANIES charge fee
FUND on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 8
sales year 9
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 1.18
ed r %
sales expe
charge nses
on
redem
ptions
Redem 1. 5 0 Total 1.94
ption % fund %
fee ( as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
LATIN Maxim 3.00 Man .77% After $
AMERI um % age 1 4
CA sales ment year 4
FUND charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 7
sales year 3
charge s
on
reinves
ted
distribu
tions
Deferr None Othe .64% After $
ed r 5 1
sales expe year 0
charge nses s 5
on
redem
ptions
Redem 1.50 Total 1.41 After $
ption % fund % 10 1
fee (as oper year 9
a % of ating s 4
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
NORDI Maxim 3.00 Man 0% After $
C um % age 1 5
FUND sales ment year 0
charge fee
on (after
purcha reim
ses burs
(as a eme
% of nt)
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 9
sales year 1
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 2.00
ed r %
sales expe
charge nses
on
redem (after
ptions reim
burs
eme
nt)
Redem 1.5 0 Total 2.00
ption % fund %
fee (as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
</TABLE>
A REDEMPTION FEE FOR JAPAN FUND IS EFFECTIVE ON
FEBRUARY 1, 199 6 . REDEMPTION FEE BEFORE FEBRUARY 1, 1996 IS
1.0% ON SHARES HELD LESS THAN 90 DAYS.
Transaction Operating Examples
expenses expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
PACIFI Maxim 3.00 Man . 79 % After $
C um % age 1 4
BASIN sales ment year 4
FUND charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 7
sales year 3
charge s
on
reinves
ted
distribu
tions
Deferr None Othe . 61 % After $
ed r 5 1
sales expe year 0
charge nses s 4
on
redem
ptions
Redem 1.00 Total 1. 40 After $
ption % fund % 10 1
fee (as oper year 9
a % of ating s 3
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
SOUTH Maxim 3.00 Man .59% After $
EAST um % age 1 4
ASIA sales ment year 1
FUND charge fee
on
purcha
ses
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 6
sales year 4
charge s
on
reinves
ted
distribu
tions
Deferr None Othe .51% After $
ed r 5 8
sales expe year 9
charge nses s
on
redem
ptions
Redem 1.50 Total 1.10 After $
ption % fund % 10 1
fee (as oper year 6
a % of ating s 0
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
UNITE Maxim 3.00 Mana 0% After $
D um % geme 1 5
KINGD sales nt fee year 0
OM charge (after
FUND on reimb
purcha urse
ses ment)
(as a
% of
offerin
g
price)
Maxim None 12b- None After $
um 1 fee 3 9
sales year 1
charge s
on
reinves
ted
distribu
tions
Deferr None Othe 2.00
ed r %
sales expe
charge nses
on
redem (after
ptions reim
burs
eme
nt)
Redem 1.5 0 Total 2.00
ption % fund %
fee (as oper
a % of ating
amoun expe
t nses
redee
med
on
shares
held
less
than
90
days)
Excha None
nge
fee
Annual $12.0
accoun 0
t
mainte
nance
fee
(for
accoun
ts
under
$2,500
)
</TABLE>
FMR has voluntarily agreed to temporarily limit France Fund's, Germany
Fund's, Hong Kong and China Fund's, Japan Small Companies Fund's, Nordic
Fund's, and United Kingdom Fund's operating expenses to 2.00% of
each fund's average net assets. If these agreements were not in
effect, and there were no state expense limitations, the management fee,
other expenses, and total operating expenses would be .76%, 4.92%, and
5.68%, respectively, for France Fund; .76%, 2.70%, and 3.46%, respectively,
for Germany Fund ; .76%, 1.50%, and 2.26%, respectively, for Hong Kong
and China Fund; .76%, 2.23%, and 2.99%, respectively, for Nordic
Fund ; and .76%, 4.76%, and 5.52%, respectively, for United Kingdom
Fund. Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, or extraordinary expenses.
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds' Annual Report and have
been audited by either Coopers & Lybrand L.L.P. (Canada Fund ,
Europe Fund , Japan Fund , Pacific Basin Fund , and
Emerging Markets Fund ) or Price Waterhouse LLP, (Europe Capital
Appreciation Fund , Latin America Fund, and Southeast Asia
Fund ) independent accountants. Their reports on the financial
statements and financial highlights are included in the Annual Report. The
financial statements and financial highlights are incorporated by reference
into (are legally a part of) the funds ' Statement of Additional
Information. Financial highlights information for France Fund, Germany
Fund, Hong Kong and China Fund, Japan Small Companies Fund, Nordic Fund,
and United Kingdom Fund is not included because the funds commenced
operations on November 1, 1995.
CANADA FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.Sele
cted
Per-Sh
are
Data
and
Ratios
2.Years 1995 1994 H 1993 1992 1991 1990 1989 1988F
ended
Octobe
r 31
3.Net $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74 $ 10.00
asset
value,
beginni
ng of
period
4.Inco
me
from
Invest
ment
Operati
ons
5. Net .05 -- (.15) (.02)B .03B .05B .02B .32
invest
ment
income
(loss)
6. Net .33 (.60) 3.76 (1.11) 3.59 (1.24) 2.96 2.42
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
7. Tota .38 (.60) 3.61 (1.13) 3.62 (1.19) 2.98 2.74
l from
invest
ment
operati
ons
8.Less
Distrib
utions
9. Fro (.01) -- (.02) -- (.06) (.01) (.12) --
m net
invest
ment
income
10. Fr -- -- -- (.92) (.85) (.68) (.15)C --
om net
realize
d gain
11. In -- (.04) -- -- -- -- -- --
excess
of net
realize
d gain
12. To (.01) (.04) (.02) (.92) (.91) (.69) (.27) --
tal
distribu
tions
13.Red .00 -- -- -- -- -- -- --
emptio
n fees
added
to paid
in
capital
14.Net $ 17.55 $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74
asset
value,
end of
period
15.Tota 2.22% (3.37) 25.40% (7.09) 28.13% (8.16) 23.94% 27.40%
l % % %
returnE,
G
16.Net $ 326,763 $ 368,33 $ 95,977 $ 21,701 $ 23,327 $ 17,736 $ 24,331 $ 10,802
assets, 0
end of
period
(000
omitted
)
17.Rati 1.09% 1.57% 2.00% 2.00% 2.01% 2.05% 2.06% 2.02%
o of D,I D D D D A,D
expens
es to
averag
e net
assets
18.Rati 1.08% 1.57% 2.00% 2.00% 2.01% 2.05% 2.06% 2.02%A
o of I
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
19.Rati .26% (.14) (.66) (.11) .17% .34% .16% 4.24%A
o of % % %
net
invest
ment
income
(loss)
to
averag
e net
assets
20.Port 75% 59% 131% 55% 68% 164% 152% 401%A
folio
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B N ET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD .
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
D FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT
THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN
HIGHER.
E THE TOTAL RETURN S WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
F FROM NOVEMBER 17, 1987 (COMMENCEMENT OF OPERATIONS) TO OCTOBER
31, 1988.
G TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME
SALES CHARGE.
H EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO
PAID A PORTION OF THE FUND'S EXPENSES.
</TABLE>
EMERGING MARKETS FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21.Sel
ected
Per-Sh
are
Data
and
Ratios
22.Yea 1995 1994E 1993 1992 1991D
rs
ended
Octobe
r 31
23.Net $ 19.25 $ 16.18 $ 11.05 $ 10.40 $ 10.00
asset
value,
beginni
ng of
period
24.Inco
me
from
Invest
ment
Operati
ons
25. N .05 .06 .06C .08 .12
et
invest
ment
income
26. N (4.13) 2.97 5.28 .76 .30
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
27. To (4.08) 3.03 5.34 .84 .42
tal
from
invest
ment
operati
ons
28.Les
s
Distrib
utions
29. Fr (.04) (.04) (.08) (.08) (.04)
om net
invest
ment
income
30. In -- (.01) -- -- --
excess
of net
invest
ment
income
31. Fr -- -- (.15) (.14) --
om net
realize
d gain
32. To (.04) (.05) (.23) (.22) (.04)
tal
distribu
tions
33.Red .01 .09 .02 .03 .02
emptio
n fees
added
to paid
in
capital
34.Net $ 15.14 $ 19.25 $ 16.18 $ 11.05 $ 10.40
asset
value,
end of
period
35.Tota (21.17)% 19.32% 49.58% 8.56% 4.41%
l
return
,
36.Net $ 1,095,583 $ 1,976,371 $ 757,737 $ 13,732 $ 6,450
assets,
end of
period
(000
omitted
)
37.Rati 1.28% 1.52% 1.91% 2.60% 2.60%B
o of B
expens
es to
averag
e net
assets
38.Rati .46% .39% .44% .90% 1.34%
o of
net
invest
ment
income
to
averag
e net
assets
39.Port 78% 107% 57% 159% 45%
folio
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B EXPENSES LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D FROM NOVEMBER 1, 1990 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31,
1991.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
</TABLE>
EUROPE FUND
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40.Sel
ected
Per-Sh
are
Data
and
Ratios
41.Yea
1995 1994 H 1993 1992D 1991 1990 1989 1988 1987 1986G
rs
ended
Octobe
r 31
42.Net
$ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04 $ 12.96 $ 12.09 $ 9.99 $ 10.00
asset
value,
beginni
ng of
period
43.Inco
me
from
Invest
ment
Operati
ons
44. N
.27 .18 .25 .27 .43F .46 .25E .12 .08 .01
et
invest
ment
income
45. N
2.37 2.65 3.35 (.57) (.40) .97 2.11 .75 2.03 (.02)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
46. To
2.64 2.83 3.60 (.30) .03 1.43 2.36 .87 2.11 (.01)
tal
from
invest
ment
operati
ons
47.Les
s
Distrib
utions
48. Fr
(.20) (.08) (.29) (.48) (.35) (.19) (.24) -- (.01) --
om net
invest
ment
income
49. Fr
(.11) -- -- (.03)B (.03)B - (.04)B -- -- --
om net
realize
d gain
50. To
(.31) (.08) (.29) (.51) (.38) (.19) (.28) -- (.01) --
tal
distribu
tions
51. R
.00 -- -- -- -- -- -- -- -- --
edemp
tion
fees
added
to paid
in
capital
52.Net
$ 23.51 $ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04 $ 12.96 $ 12.09 $ 9.99
asset
value,
end of
period
53.Tota
12.76% 15.41 24.24 (1.89) .15 9.50 18.62% 7.20 21.13 (.10)
l % % % % % % % %
return
,
54.Net
$ 492,86 $ 507,4 $ 528,9 $ 431,22 $ 297,8 $ 389,2 $ 97,288 $ 102,0 $ 131,4 $ 19,375
assets, 7 60 29 3 31 73 29 31
end of
period
(000
omitted
)
55.Rati
1.18% 1.35 1.25 1.22% 1.31 1.45 1.89% 2.66 1.91 1.50%
o of
I % % % % E % % A
expens
es to
averag
e net
assets
56.Rati
1.12% .85 1.44 2.38% 2.83 2.87 1.67% .97 .48 2.77%
o of % % % % % % A
net
invest
ment
income
to
averag
e net
assets
57.Port
38% 49 76 95% 80 148 160% 180 241 9%
folio % % % % % % A
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME
SALES CHARGE.
D AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
E FOR THE PERIOD ENDED OCTOBER 31, 1989, NET INVESTMENT INCOME PER
SHARE INCLUDES A REIMBURSEMENT
OF $.008 PER SHARE FROM FIDELITY SERVICE CO. FOR ADJUSTMENTS TO PRIOR
PERIODS' FEES. IF THIS EXPENSE
REDUCTION HAD NOT EXISTED, THE RATIO OF EXPENSES TO AVERAGE NET
ASSETS WOULD HAVE BEEN 1.94% .
F INCLUDES $.05 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND AND INTEREST
PAYMENTS.
G OCTOBER 1, 1986 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1986.
H EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT
INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
I FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER.
J THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS
SHOWN.
</TABLE>
EUROPE CAPITAL APPRECIATION FUND
58.Sel
ected
Per-Sh
are
Data
and
Ratios
59.Year 1995 1994B
ended
Octobe
r 31
60.Net $ 11.35 $ 10.00
asset
value,
beginni
ng of
period
61.Inco
me
from
Invest
ment
Operati
ons
62. N .23 .08E
et
invest
ment
income
63. N .50 1.27D
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
64. To .73 1.35
tal
from
invest
ment
operati
ons
65. R .00 --
edemp
tion
fees
added
to paid
in
capital
66.Net $ 12.08 $ 11.35
asset
value,
end of
period
67.Tota 6.43% 13.50%
l
returnC
68.Net $ 194,43 $ 352,85
assets, 3 5
end of
period
(000
omitted
)
69.Rati 1.36% 1.54%
o of A
expens
es to
averag
e net
assets
70.Rati 1.45% .79%
o of A
net
invest
ment
income
to
averag
e net
assets
71.Port 176% 317%
folio A
turnov
er rate
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B DECEMBER 21, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1994.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME
SALES CHARGE.
D 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.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
</TABLE>
JAPAN FUND
72.Sel
ected
Per-Sh
are
Data
and
Ratios
73.Year 1995 1994 G 1993 1992D
s
ended
Octobe
r 31
74.Net $ 14.27 $ 13.35 $ 9.84 $ 10.00
asset
value,
beginni
ng of
period
75.Inco
me
from
Invest
ment
Operati
ons
76. N (.02) (.04)E (.09) --
et
invest
ment
income
(loss)
77. N (1.89) 1.31 3.60 (.16)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
78. To (1.91) 1.27 3.51 (.16)
tal
from
invest
ment
operati
ons
79.Les
s
Distrib
utions
80. Fr (.36) (.39) -- --
om net
realize
d gain
81. R .08 .04 -- --
edemp
tion
fees
added
to paid
in
capital
82.Net $ 12.08 $ 14.27 $ 13.35 $ 9.84
asset
value,
end of
period
83.Tota (12.96) 10.45% 35.67% (1.60)%
l %
returnC
,F
84.Net $ 343,98 $ 469,63 $ 118,19 $ 2,953
assets, 1 9 5
end of
period
(000
omitted
)
85.Rati 1.15% 1.42% 1.71% 2.00%A
o of ,B
expens
es to
averag
e net
assets
86.Rati (.06) (.32) (.77) .03%A
o of % % %
net
invest
ment
income
(loss)
to
averag
e net
assets
87.Port 86% 153% 257% --
folio
turnov
er rate
<TABLE>
<CAPTION>
<S> <C> <C>
A ANNUALIZED
B FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE
FUND'S EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN
HIGHER.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED AND DO NOT INCLUDE THE ONE TIME SALES CHARGE.
D FROM SEPTEMBER 15, 1992 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31, 1992.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN.
G EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT
OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND
RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
LATIN AMERICA FUND
88.Sel
ected
Per-Sh
are
Data
and
Ratios
89.Yea 1995 1994D 1993C
rs
ended
Octobe
r 31
90.Net $ 16.21 $ 13.28 $ 10.00
asset
value,
beginni
ng of
period
91.Inco
me
from
Invest
ment
Operati
ons
92. N .04 .07 .03
et
invest
ment
income
93. N (6.52) 2.82 3.23
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
94. To (6.48) 2.89 3.26
tal
from
invest
ment
operati
ons
95.Les
s
distribu
tions
96. Fr -- (.05) --
om net
invest
ment
income
97. Fr -- (.05) --
om net
realize
d gain
98. To -- (.10) --
tal
distribu
tions
99.Red .02 .14 .02
emptio
n fees
added
to paid
in
capital
100.Ne $ 9.75 $ 16.21 $ 13.28
t asset
value,
end of
period
101.Tot (39.85) 22.89% 32.80%
al %
returnB
102.Ne $ 466,28 $ 888,53 $ 342,93
t 9 0 4
assets,
end of
period
(000
omitted
)
103.Ra 1.41% 1.48% 1.94%
tio of A
expens
es to
averag
e net
assets
104.Ra .97% .47% 1.21%
tio of A
net
invest
ment
income
to
averag
e net
assets
105.Po 57% 77% 72%
rtfolio A
turnov
er rate
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C FROM APRIL 19, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31,
1993.
D EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT
PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
PACIFIC BASIN FUND
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
106.Se
lected
Per-Sh
are
Data
and
Ratios
107.Ye
1995 1994 J 1993 1992B 1991 1990 1989 1988 1987 1986F
ars
ended
Octobe
r 31
108.Ne
$19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78 $ 13.99 $ 12.42 $ 9.90 $ 10.00
t asset
value,
beginni
ng of
period
109.Inc
ome
from
Invest
ment
Operati
ons
110. N
.07D .10 .20 .08D .02D .12 (.027)D --D (.11) .012
et
invest
ment
income
(loss)
111. Ne
(3.12) 2.78 5.39 (1.23) .40 (2.37) 1.927 1.71 2.64 (.112)
t
realize
d and
unreali
zed
gain
(loss)
on
investm
ents
112. To
(3.05) 2.88 5.59 (1.15) .42 (2.25) 1.900 1.71 2.53 (.100)
tal
from
invest
ment
operati
ons
113.Le
ss
Distrib
utions
114. Fr
- -- (.01) (.11) -- (.16) (.01) (.003) -- (.01) --
om net
invest
ment
income
115. In
(.02) (.11) -- -- -- -- -- -- -- --
excess
of net
invest
ment
income
116. Fr
(2.02) (.28) -- -- -- (.63) (.107)C (.14)C -- --
om net
realize
d gain
117. To
(2.04) (.40) (.11) -- (.16) (.64) (.110) (.14) (.01) --
tal
distribu
tions
118.Re
$ .01 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
dempti
on fee
added
to paid
in
capital
119.Ne
$ 14.88 $ 19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78 $ 13.99 $ 12.42 $ 9.90
t asset
value,
end of
period
120.Tot
(15.87) 16.88 47.06 (8.75) 3.37 (14.99) 13.65% 13.82 25.57% (1.00)%
al
% % % % % % %
returnE,
H
121.Ne
$ 317,63 $ 553,5 $ 493,5 $ 116,27 $ 95,05 $ 86,354 $ 111,811 $ 136,0 $ 159,91 $ 22,020
t
5 32 33 7 1 60 7
assets,
end of
period
(000
omitted
)
122.Ra
1.32 1.54 1.59 1.84 1.88 1.59% 1.40% 1.80 2.10% 1.50%A
tio of
%I % % % % % ,G
expens
es to
averag
e net
assets
123.Ra
.44 .04 .15 .65 .12 .88% (.18) .04 (.83) 3.53%A
tio of
% % % % % % % %
net
invest
ment
income
(loss)
to
averag
e net
assets
124.Po
65 88 77 105 143 118% 133% 228 324% --
rtfolio
% % % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN C ALCULATED
BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD.
E TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME
SALES CHARGE.
F FROM OCTOBER 1, 1986 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1986.
G EXPENSES LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
H THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIOD
SHOWN.
I FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER.
J EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
SOUTHEAST ASIA FUND
125.Se
lected
Per-Sh
are
Data
and
Ratios
126.Ye 1995 1994 F 1993D
ars
ended
Octobe
r 31
127.Ne $ 14.61 $ 13.24 $ 10.00
t asset
value,
beginni
ng of
period
128.Inc
ome
from
Invest
ment
Operati
ons
129. N .15 .04 .01
et
invest
ment
income
130. N (.91) 1.23 3.22
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
131. To (.76) 1.27 3.23
tal
from
invest
ment
operati
ons
132.Le
ss
Distrib
utions
133. Fr -- (.04) --
om net
invest
ment
income
134. In -- (.03) --
excess
of net
invest
ment
income
135. To -- (.07) --
tal
distribu
tions
136.Re .03 .17 .01
dempti
on fees
added
to paid
in
capital
137.Ne $ 13.88 $ 14.61 $ 13.24
t asset
value,
end of
period
138.Tot (5.00) 10.87% 32.40%
al %
returnB,
C
139.Ne $ 649,86 $ 825,73 $ 499,669
t 8 4
assets,
end of
period
(000
omitted
)
140.Ra 1.10% 1.47% 2.00%A
tio of ,E
expens
es to
averag
e net
assets
141.Ra .90% .22% .45%A
tio of
net
invest
ment
income
to
averag
e net
assets
142.Po 94% 157% 14%A
rtfolio
turnov
er rate
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR
ARE NOT ANNUALIZED AND DO NOT INCLUDE THE
ONE TIME SALES CHARGE.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIOD SHOWN.
D FROM APRIL 19, 1993 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31, 1993.
E FMR VOLUNTARILY AGREED TO REIMBURSE A
PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE
FUND'S EXPENSE RATIO WOULD HAVE BEEN
HIGHER.
F EFFECTIVE NOVEMBER 1, 1993, THE FUND
ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes. An explanation of the terms and performance measures
appears on page .
The following chart shows each fund's performance over past fiscal years
compared to groupings of funds with similar objectives and the Consumer
Price Index (CPI). The CPI indicates inflation or loss of purchasing power
if no investment was made. Comparisons for Canada Fund are not included
because there is no appropriate competitive average. Because France Fund,
Germany Fund, Hong Kong and China Fund, Japan Small Companies Fund, Nordic
Fund, and United Kingdom Fund are new, their performance is not included.
Each fund's fiscal years runs from November 1 through October 31.
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal years ended October 31 Average Annual Total Return Cumulative Total Return
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
CANA
2.22% 8.07% 10.01% 2.22% 47.44% 113.81%
DA
FUND
B
CANA
-0.85% 7.42% 9.59% -0.85% 43.02% 107.40%
DA
FUND
(LOAD
ADJ.A)
EMER
-21.17% n/a 9.78% -21.17% n/a 59.48%
GING
MARK
ETS
FUND
C
EMER
-23.53% n/a 9.11% -23.53% n/a 54.69%
GING
MARK
ETS
FUND
(LOAD
ADJ.A)
Lipper
-18.99% n/a 10.74% -18.99% n/a 66.60%
Emer
ging
Marke
t
Fund
s
Avera
ge
EURO
12.76% 9.70% 11.44% 12.76% 58.87% 167.67%
PE
FUN
D
EURO
9.37% 9.03% 11.07% 9.37% 54.11% 159.64%
PE
FUND
(LOAD
ADJ.A)
Lipper
9.33% 6.70% n/a 9.33% 42.45% n/a
Europ
ean
Regio
n
Fund
s
Avera
ge
EURO
6.43% n/a 10.68% 6.43% n/a 20.80%
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
E
EURO
3.24% n/a 8.88% 3.24% n/a 17.18%
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
(LOAD
ADJ.A)
Lipper
9.33% 6.70% n/a 9.33% 42.45% n/a
Europ
ean
Regio
n
Fund
s
Avera
ge
JAPA
-12.96% n/a 8.30% -12.96% n/a 28.35%
N
FUND
F
JAPA
-15.57% n/a 7.25% -15.57% n/a 24.50%
N
FUND
(LOAD
ADJ.A)
Lipper
-11.26% -3.12% n/a 11.26% -14.48% n/a
Japan
ese
Fund
s
Avera
ge
LATIN
-39.85% n/a -0.73% -39.85% n/a -1.84%
AMER
ICA
FUND
G
LATIN
-41.66% n/a -1.92% -41.66% n/a -4.79%
AMER
ICA
FUND
(LOAD
ADJ.A)
Lipper
-38.94% n/a n/a -38.94 n/a n/a
Latin
Ameri
ca
Regio
n
Fund
s
Avera
ge
PACIFI
-15.87% 6.41% 7.10% -15.87% 36.41% 86.48%
C
BASIN
FUND
D
PACIFI
-18.39% 5.76% 6.74% -18.39% 32.32% 80.88%
C
BASIN
FUND
(LOAD
ADJ.A)
Lipper
-9.48 7.45 n/a -9.48 44.12 n/a
Pacifi
c
Regio
n
Fund
s
Avera
ge
SOUT
-5.00% n/a 14.01% -5.00% n/a 39.46%
HEAST
ASIA
FUND
G
SOUT
-7.85% n/a 12.65% -7.85% n/a 35.27%
HEAST
ASIA
FUND
(LOAD
ADJ.A)
Lipper
-10.49 n/a n/a -10.49 n/a n/a
Pacific
ex-Ja
pan
Regio
n
Funds
Avera
ge
Cons
2.81% 2.86% n/a 2.81% 15.13% n/a
umer
Price
Index
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING A FUND'S SALES CHARGE
B FROM NOVEMBER 17, 1987
C FROM NOVEMBER 1, 1990
D FROM OCTOBER 1, 1986
E FROM DECEMBER 21, 1993
F FROM SEPTEMBER 15, 1992
G FROM APRIL 19, 1993
The following charts illustrate the performance and volatility of the
stock market returns for each fund's focal area (see page ).The performance
for Emerging Markets Fund, Europe Fund, Europe Capital Appreciation Fund,
Japan Fund, Latin America Fund, Pacific Basin Fund, and Southeast Asia Fund
is also included. Some of the indexes may weight a particular country or
group of countries more heavily than a specific fund. The indexes do not
represent the performance of any fund and their composition may differ
significantly from that of the fund that invests in that stock market. In
addition, the charts do not necessarily use the same scale. Please see page
for descriptions of the indexes.
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Calend 1988 1989 1990 1991 1992 1993 1994
ar
years
CANAD 19.47% 26.99% -5.49% 17.68% -2.87% 25.47% -11.98%
A
FUND
TSE 21.04% 24.92% -14.90% 12.44% -10.38% 27.45% -5.88%
300
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 19.47
Row: 5, Col: 2, Value: 21.04
Row: 6, Col: 1, Value: 26.99
Row: 6, Col: 2, Value: 24.92
Row: 7, Col: 1, Value: -5.49
Row: 7, Col: 2, Value: -14.9
Row: 8, Col: 1, Value: 17.68
Row: 8, Col: 2, Value: 12.44
Row: 9, Col: 1, Value: -2.87
Row: 9, Col: 2, Value: -10.38
Row: 10, Col: 1, Value: 25.47
Row: 10, Col: 2, Value: 27.45
Row: 11, Col: 1, Value: -11.98
Row: 11, Col: 2, Value: -5.88
(large solid box) CANADA FUND
(large hollow box) TSE 300 Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Calend 1988 1989 1990 1991 1992 1993 1994
ar
years
EMERG n/a n/a n/a 6.76% 5.85% 81.76% -17.93%
ING
MARKE
TS
FUND
MSCI 40.70% 65.32% -10.34% 60.16% 11.56% 73.21% -7.32%
EMERG
ING
MARKE
TS
FREE
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 40.7
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 65.31999999999999
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -10.34
Row: 8, Col: 1, Value: 6.76
Row: 8, Col: 2, Value: 60.16
Row: 9, Col: 1, Value: 5.85
Row: 9, Col: 2, Value: 11.56
Row: 10, Col: 1, Value: 81.76000000000001
Row: 10, Col: 2, Value: 73.21000000000001
Row: 11, Col: 1, Value: -17.93
Row: 11, Col: 2, Value: -7.319999999999999
(large solid box) EMERGING MARKETS FUND
(large hollow box) MSCI Emerging Markets
Free Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
EUROP n/a n/a 14.90% 5.84% 32.33% -4.59% 4.16% -2.52% 27.16% 6.26%
E
FUND
MSCI 78.93% 43.84% 3.67% 15.82% 28.50% -3.84% 13.11% -4.71% 29.28% 2.28%
EUROP
E
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 78.93000000000001
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 43.84
Row: 4, Col: 1, Value: 14.9
Row: 4, Col: 2, Value: 3.67
Row: 5, Col: 1, Value: 5.84
Row: 5, Col: 2, Value: 15.82
Row: 6, Col: 1, Value: 32.33
Row: 6, Col: 2, Value: 28.5
Row: 7, Col: 1, Value: -4.59
Row: 7, Col: 2, Value: -3.84
Row: 8, Col: 1, Value: 4.159999999999999
Row: 8, Col: 2, Value: 13.11
Row: 9, Col: 1, Value: -2.52
Row: 9, Col: 2, Value: -4.71
Row: 10, Col: 1, Value: 27.16
Row: 10, Col: 2, Value: 29.28
Row: 11, Col: 1, Value: 6.26
Row: 11, Col: 2, Value: 2.28
(large solid box) EUROPE FUND
(large hollow box) MSCI Europe Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
EUROP n/a n/a n/a n/a n/a n/a n/a n/a n/a 6.88%
E
CAPITA
L
APPRE
CIATIO
N
FUND
MSCI 78.93 43.84 3.67% 15.82% 28.50% -3.84% 13.11% -4.71% 29.28% 2.28%
EUROP
E
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 78.93000000000001
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 43.84
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 3.67
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 15.82
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 28.5
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -3.84
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 13.11
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -4.71
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 29.28
Row: 11, Col: 1, Value: 6.88
Row: 11, Col: 2, Value: 2.28
(large solid box) EUROPE FUND
(large hollow box) MSCI Europe Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Calend 1990 1991 1992 1993 1994
ar
years
JAPAN n/a n/a n/a 20.45% 16.46%
FUND
TOPIX -35.83% 8.16% -22.91% 24.14% 22.06%
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -35.83
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 8.16
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -22.91
Row: 10, Col: 1, Value: 20.45
Row: 10, Col: 2, Value: 24.14
Row: 11, Col: 1, Value: 16.46
Row: 11, Col: 2, Value: 22.06
(large solid box) JAPAN FUND
(large hollow box) TOPIX Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Calend 1988 1989 1990 1991 1992 1993 1994
ar
years
LATIN n/a n/a n/a n/a n/a n/a -23.17%
AMERI
CA
FUND
MSCI 80.06% 55.74% -7.83% 149.06% 13.41% 53.92% .64%
LATIN
AMERI
CA
FREE
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 80.06
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 55.74
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -7.83
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 149.06
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: 13.41
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 53.92
Row: 11, Col: 1, Value: -23.17
Row: 11, Col: 2, Value: 0.6400000000000001
(large solid box) LATIN AMERICA FUND
(large hollow box) MSCI Latin America
Free Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
PACIFI n/a n/a 24.99% 10.45% 11.44% -27.21% 12.54% -7.62% 63.91% -2.81%
C
BASIN
FUND
MSCI 39.03% 93.44% 39.66% 34.99% 2.53% -34.42% 11.30% -18.40% 35.69% 12.83%
PACIFI
C
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 39.03
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 93.44000000000001
Row: 4, Col: 1, Value: 24.99
Row: 4, Col: 2, Value: 39.66
Row: 5, Col: 1, Value: 10.45
Row: 5, Col: 2, Value: 34.99
Row: 6, Col: 1, Value: 11.44
Row: 6, Col: 2, Value: 2.53
Row: 7, Col: 1, Value: -27.21
Row: 7, Col: 2, Value: -34.42
Row: 8, Col: 1, Value: 12.54
Row: 8, Col: 2, Value: 11.3
Row: 9, Col: 1, Value: -7.619999999999999
Row: 9, Col: 2, Value: -18.4
Row: 10, Col: 1, Value: 63.91
Row: 10, Col: 2, Value: 35.69
Row: 11, Col: 1, Value: -2.81
Row: 11, Col: 2, Value: 12.83
(large solid box) PACIFIC BASIN FUND
(large hollow box) MSCI Pacific Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Calend 1988 1989 1990 1991 1992 1993 1994
ar
years
SOUTH n/a n/a n/a n/a n/a n/a -21.76%
EAST
ASIA
FUND
MSCI 30.16% 32.37% -6.35% 31.20% 21.99% 101.72% -17.48%
FAR
EAST
JAPAN
FREE
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 30.16
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 32.37
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -6.35
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 31.2
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: 21.99
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 101.72
Row: 11, Col: 1, Value: -21.76
Row: 11, Col: 2, Value: -17.48
(large solid box) SOUTHEAST ASIA FUND
(large hollow box) MSCI Far East ex-Japan
Free Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 83.21% 79.14% -13.42% 38.66% 36.80% -13.35% 18.52% 3.41% 21.56% -4.70%
FRANC
E
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 83.21000000000001
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 79.14
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: -13.42
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 38.66
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 36.8
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -13.35
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 18.52
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: 3.41
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 21.56
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: -4.7
(large hollow box) MSCI France Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 136.45% 35.90% -24.33% 21.39% 47.06% -8.88% 8.78% -9.74% 36.32% 5.11%
GERM
ANY
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 136.45
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 35.9
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: -24.33
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 21.39
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 47.06
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -8.880000000000001
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 8.779999999999999
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -9.739999999999998
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 36.32
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: 5.109999999999999
(large hollow box) MSCI Germany Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 51.69% 56.11% -4.11% 28.12% 8.39% 9.17% 49.52% 32.29% 116.70% -28.90%
HONG
KONG
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 51.69
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 56.11
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: -4.109999999999999
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 28.12
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 8.390000000000001
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 9.17
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 49.52
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: 32.29000000000001
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 116.7
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: -28.9
(large hollow box) MSCI Hong Kong Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 43.37% 99.72% 43.18% 35.53% 1.81% -36.02% 9.09% -21.29% 25.70% 21.62%
JAPAN
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 43.37
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 99.72
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 43.18
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 35.53
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 1.81
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -36.02
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 9.09
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -21.29
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 25.7
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: 21.62
(large hollow box) MSCI Japan Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 49.06% 41.77% -7.22% 8.90% -16.76% 39.69% 20.81%
NORDI
C
COUNT
RIES
FREE
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 49.06
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 41.77
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: -7.22
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 8.9
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -16.76
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 39.69
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: 20.81
(large hollow box) MSCI Nordic Countries
Free Index
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calend 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
ar
years
MSCI 53.02% 26.95% 35.09% 5.95% 21.87% 10.29% 16.02% -3.65% 24.44% -1.63%
UNITED
KINGD
OM
INDEX
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 2, Col: 2, Value: 53.02
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 26.95
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 35.09
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 5.95
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 21.87
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 10.29
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 16.02
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -3.65
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 24.44
Row: 11, Col: 1, Value: 0.0
Row: 11, Col: 2, Value: -1.63
(large hollow box) MSCI United Kingdom
Index
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results. Average annual total returns covering
periods of less than one year assume that performance will remain constant
for the rest of the year.
COMPARATIVE MARKET INDEXES used on pages - reflect the performance and
volatility of stocks in a fund's focal area. The performance of each index
includes changes in price, dividends paid on stocks in the index, and the
effect of reinvesting dividends. Each index is translated into U.S.
dollars.
(small solid bullet) The TSE 300 Index, also known as the Toronto Stock
Exchange Composite 300 Index, is an unmanaged index of 300 stocks traded on
the Toronto Stock Exchange.
(small solid bullet) The MSCI Emerging Markets Index, also known as
the Morgan Stanley Capital International Emerging Markets Free Index, is an
unmanaged index of over 560 foreign stock prices.
(small solid bullet) The MSCI Europe Index, also known as the
Morgan Stanley Capital International Europe Index, is an unmanaged index of
over 600 companies representing twelve European countries.
(small solid bullet) The TOPIX Index, also known as the Tokyo Stock
Price Index, includes over 1,200 companies representing over 90% of the
total market capitalization in Japan.
(small solid bullet) The MSCI Latin America Index, also known as the
Morgan Stanley Capital International Latin America Free Index, is an
unmanaged index of over 130 foreign stock prices.
(small solid bullet) The MSCI Pacific Index, also known as the
Morgan Stanley Capital International Pacific Index, is an unmanaged index
of over 400 companies from Australia, Hong Kong, Japan, and
Singapore/Malaysia.
(small solid bullet) The MSCI Far East ex-Japan Free Index, also
known as the Morgan Stanley Capital International Combined Far East
ex-Japan Free Index, is an unmanaged index of over 380 foreign stock
prices.
(small solid bullet) The MSCI France Index, also known as the Morgan
Stanley Capital International France Index, is an unmanaged index of over
75 foreign stock prices.
(small solid bullet) The MSCI Germany Index, also known as the
Morgan Stanley Capital International Germany Index, is an unmanaged index
of over 75 foreign stock prices.
(small solid bullet) The MSCI Hong Kong Index, also known as the
Morgan Stanley Capital International Hong Kong Index, is an unmanaged index
of over 38 foreign stock prices.
(small solid bullet) The MSCI Japan Index, also known as the Morgan
Stanley Capital International Japan Index, is an unmanaged index of over
317 foreign stock prices.
(small solid bullet) The MSCI Nordic Countries Free Index, also
known as the Morgan Stanley Capital International Nordic Countries Index,
is an unmanaged index of over 95 foreign stock prices.
(small solid bullet) The MSCI United Kingdom Index, also known as
the Morgan Stanley Capital International United Kingdom Index, is an
unmanaged index of over 143 foreign stock prices.
THE CONSUMER PRICE INDEX is a widely recognized measure of
inflation, calculated by the U.S. government.
COMPETITIVE FUNDS AVERAGES used on page reflect the performance of
funds with similar objectives. Each average is published by Lipper
Analytical Services and assumes reinvestment of distributions.
(small solid bullet) Emerging Markets Fund is compared to the Lipper
Emerging Markets Funds Average, which reflects the performance of
46 funds investing in emerging markets.
(small solid bullet) Europe Fund and Europe Capital
Appreciation Fund are compared to the Lipper European Region Funds
A verage, which reflects the performance of 41 funds investing
in Europe.
(small solid bullet) Japan Fund is compared to the Lipper
Japanese Funds A verage, which reflects the performance of 12
funds investing in Japan.
(small solid bullet) Latin America Fund is compared to the Lipper
Latin America Region Fund s Average, which reflects the
performance of 1 7 funds investing in Latin America.
(small solid bullet) Pacific Basin Fund is compared to the
Lipper Pacific Region Funds Average, which reflects the performance of
36 funds investing in the Pacific region.
(small solid bullet) Southeast Asia Fund is compared to the
Lipper Pacific Region ex-Japan Funds A verage, which reflects
the performance of over 34 funds investing in the Pacific region
excluding Japan .
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE. 1.
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 value of its
currency create these risks. Because these
funds invest in stocks, their performance is
also related to foreign stock markets. For
these reasons an international fund's
performance may be more volatile than that of
a fund that invests exclusively in the United
States.
(checkmark)
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, France
Fund , Germany Fund, Hong Kong and China Fund, Japan Small
Companies Fund , Nordic Fund, and United Kingdom
Fund are currently non-diversified funds of Fidelity Investment Trust
and Canada Fund, Emerging Markets Fund, Europe Fund, Europe Capital
Appreciation Fund, Japan Fund, Latin American Fund, Pacific Basin Fund, and
Southeast Asia Fund are currently diversified fund s of Fidelity
Investment Trust, an open-end management investment company organized as a
Massachusetts business trust on April 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs and,
with the assistance of the foreign affiliates listed below , may
choose the funds' investments.
Affiliates may assist FMR with foreign securities:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for all the funds .
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR Far
East), in Tokyo, Japan, serves as a sub-adviser for all the funds.
(small solid bullet) Fidelity International Investment Advisors (FIIA), in
Pembroke, Bermuda, serves as a sub-adviser for all the funds. Currently,
FIIA exercises discretionary management authority over Southeast Asia Fund
and Hong Kong and China Fund in its capacity as sub-adviser.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIAL U.K.), in Kent, England, serves as a sub-adviser for Europe
Capital Appreciation Fund, France Fund, Germany Fund, Hong Kong and China
Fund, Japan Small Companies Fund, Latin America Fund, Nordic Fund,
Southeast Asia Fund, and United Kingdom Fund. Currently, FIIAL U.K.
exercises discretionary management authority over Europe Fund, France Fund,
Germany Fund, Nordic Fund, Pacific Basin Fund, and United Kingdom Fund in
its capacity as sub-adviser.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan serves as a sub-adviser for Hong Kong and China Fund, Japan
Fund , Japan Small Companies Fund , and Southeast Asia
Fund . Currently, FIJ provides Japan Fund and Japan Small Companies
Fund discretionary investment management authority in its capacity as
sub-adviser.
George Domolky is vice president and manager of Canada Fund , which
he has managed since November 1987. Mr. Domolky also manages several funds
for Fidelity Investments Canada Limited. Previously, he managed Select Food
and Agriculture and assisted on Magellan. Mr. Domolky joined Fidelity in
1981.
Richard Hazlewood is vice president and manager of Emerging Markets
Fund, which he has managed since July 1993. Previously, he assisted on
Low-Priced Stock and Contrafund, and served as a U.S. equities analyst. He
joined Fidelity Investments Japan Ltd. in March 1991 as an analyst
specializing in Japanese equities. Before that, he was a director of
research at Sassoon Ltd. in Tokyo.
Sally Walden is vice president and manager of Europe Fund , which she
has managed since July 1992. Ms. Walden also serves as investment director
for Fidelity Investment Services Ltd. and Fidelity Pensions Management Ltd.
In addition, she manages European Opportunities and U.K. Growth Trust, a
number of Canadian retail products, as well as institutional money for
various international investors. Ms. Walden joined Fidelity in 1984.
Kevin McCarey is manager of Europe Capital Appreciation Fund , which
he has managed since December 1993. Previously, Mr. McCarey managed Advisor
Overseas and served as an equity analyst in both the London and Boston
offices. He joined Fidelity in 1985.
Renaud Saleur is manager of France Fund, which he has managed since
November 1995. He also manages several funds for Fidelity International,
Limited. Mr. Saleur joined Fidelity in 1986.
Simon Roberts has managed Germany Fund since November 1995. He also manages
a Fidelity Funds Germany Fund for Fidelity International, Limited, and is
Director of Equity Research, Europe. Before joining Fidelity as a research
analyst in 1992, Mr. Roberts was a management consultant for Schroder
Securities, Limited in London.
Joseph Tse has managed Hong Kong & China Fund since November 1995. He also
is director of investment and research for Fidelity Investments Management
(Hong Kong), Limited. Mr. Tse joined Fidelity as an analyst in 1990.
Shigeki Makino is manager of Japan Fund, which he has managed since October
1994. Mr. Makino is an employee of FIJ for whom he previously was an
analyst for the fund. Mr. Makino joined FMR in 1990.
Patricia Satterthwaite is vice president and manager of Latin America
Fund, which she has managed since April 1993. Ms. Satterthwaite also
manages Latin America Capital, a closed-end fund. Previously, she managed
Pacific Basin and served as an analyst following the U.S., Mexico, Brazil,
and Far East markets. Ms. Satterthwaite joined Fidelity in 1986.
Colin Stone has managed Nordic Fund since November 1995. He also manages
Fidelity Funds Iberian Fund and Fidelity Funds Nordic Fund for Fidelity
International, Limited. Mr. Stone joined Fidelity in 1987.
Simon Fraser is manager and Vice President of Pacific Basin Fund and
manager of Japan Small Companies Fund, which he has managed since May 1993
and November 1995, respectively. Mr. Fraser also manages several funds for
United Kingdom, European and Asian investors including Growth, Japan OTC &
Regional Markets and Japan Smaller Companies Trust. He joined Fidelity in
1981 as an investment analyst.
FIDELITY FACTS
Fidelity offers the broadest selection of mutual
funds in the world.
(solid bullet) Number of Fidelity mutual funds: over 210
(solid bullet) Assets in Fidelity mutual funds: over $337
billion
(solid bullet) Number of shareholder accounts: over 22
million
(solid bullet) Number of investment analysts and portfolio
managers: over 200
(checkmark)
Allan Liu is manager of Southeast Asia Fund, which he has managed since
April 1993. Previously, he was an analyst and manager for Fidelity
Investments Management Ltd. in Hong Kong. Mr. Liu joined Fidelity in
1987.
Samuel Morse has managed United Kingdom Fund since November 1995. He also
manages three funds for Fidelity International, Limited: United Kingdom
Growth and Income Fund, United Kingdom Dividend Growth Fund and United
Kingdom Fidelity Strategic Income Fund. Mr. Morse also manages the United
Kingdom and European portions of Fidelity Canada's Fidelity International
Portfolio and Fidelity Funds International Fund. Mr. Morse joined Fidelity
in 1990.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR, FMR Far East, and FMR U.K.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares to carry out a fund's transactions, provided, that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The funds offer investors the ability to concentrate an investment in a
particular country or group of countries that they believe to offer strong
long-term growth potential. The country or group of countries in which each
fund focuses is the fund's "focal area." Each fund's performance is
expected to be closely tied to economic and political conditions within its
focal area. Because each fund invests in one country or group of related
countries, each fund's performance is expected to be more volatile than
more geographically diversified funds. Changes in regulatory, tax, or
economic policy in a country could significantly affect the market in that
country, and therefore a fund's performance. Many foreign stock markets are
more concentrated than the U.S. market, with a small number of companies
making up a large percentage of the local market. As a result, the
performance of one company or a small number of companies could have a
relatively large effect on a fund's performance.
The funds may invest in the securities of any issuer, including companies
and other business organizations as well as governments and government
agencies. The funds, however, will tend to focus on equity securities ,
but may also invest in debt securities of any quality . The funds may
invest in short-term debt securities and money market instruments for cash
management purposes.
FMR determines where an issuer or its principal business is located
by looking at such factors as its country of organization, the primary
trading market for its securities, and the location of its assets,
personnel, sales, and earnings. When allocating the funds' investments
among countries and regions, FMR considers such factors as the potential
for economic growth, expected levels of inflation, governmental policies,
and the outlook for currency relationships.
The value of a fund's investments varies in response to many factors. Stock
values fluctuate in response to the activities of individual companies and
general market and economic conditions. The securities of smaller, less
well-known companies may be particularly volatile. In addition to currency
fluctuations, investments in foreign securities are generally subject to
increased economic and political risk.
International funds have increased economic and political risks as they are
exposed to events and factors in the various world markets. This is
especially true for emerging markets. Also, because a substantial portion
of the funds' investments are denominated in foreign currencies, changes in
the value of foreign currencies can significantly affect a fund's share
price. FMR may use a variety of techniques to either increase or decrease a
fund's exposure to any currency.
FMR may use various investment techniques to hedge a portion of a fund's
risks, but there is no guarantee that these strategies will work as FMR
intends. Of course, when you sell your shares of a fund, they may be worth
more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
CANADA FUND seeks growth of capital over the long term by investing in
securities of issuers that have their principal activities in Canada or are
registered in Canadian markets. FMR normally invests at least 65% of the
fund's total assets in these securities. FMR expects that most of the
fund's investments will be Canadian securities listed on the Toronto Stock
Exchange, but it may also invest in U.S. securities.
Canadian securities are sensitive to conditions within Canada, but also
tend to follow the U.S. market. The country's economy relies strongly on
the production and processing of natural resources. Also, the government
has attempted to reduce restrictions against foreign investment, and its
recent trade agreements with the U.S. and Mexico are expected to increase
trade. Demand by many citizens in the Province of Quebec for succession
from Canada may significantly impact the Canadian economy.
EMERGING MARKETS FUND seeks capital appreciation aggressively by investing
in the world's emerging markets. In pursuit of its goal, the fund
emphasizes countries with relatively low gross national product per capita
compared to the world's major economies, and with the potential for rapid
economic growth. FMR normally invests at least 65% of the fund's total
assets in securities of emerging markets issuers.
Countries with emerging markets include those that have an emerging stock
market as defined by the International Finance Corporation, those with low-
to middle-income economies according to the World Bank, and those listed in
World Bank publications as developing. FMR expects that the fund will
normally invest in at least six different countries, although it may invest
all of its assets in a single country.
EUROPE FUND seeks growth of capital over the long term by investing in
securities of issuers that have their principal activities in Western
Europe. FMR normally invests at least 65% of the fund's total assets in
these securities. Western European countries include Austria, Belgium,
Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United
Kingdom. The fund may also invest in Eastern Europe. FMR expects that the
fund will normally invest in at least three different countries, although
it may invest all of its assets in a single country.
The fund's performance is closely tied to economic and political conditions
within Europe and the European Economic Area (formerly the Common
Market) . Some European countries, particularly those in Eastern Europe,
have less stable economies than those in Western Europe. Much of
Europe remains in a recession. The movement of many Eastern European
countries toward market economies, and the movement toward a unified common
market may significantly affect European economies and markets. Eastern
European countries are considered emerging markets.
EUROPE CAPITAL APPRECIATION FUND seeks capital appreciation over the long
term by investing in securities of issuers that have their principal
activities in Eastern and Western Europe. In addition to Western European
countries listed above, European countries also include Belarus, Bulgaria,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Russia,
Slovakia, Slovenia, and Turkey. These additional countries are
considered emerging markets. FMR normally invests at least 65% of the
fund's total assets in the securities of Eastern and Western European
issuers. In addition , the fund's investments are subject to the same
risks as Europe Fund.
FRANCE FUND seeks long-term growth of capital by investing in
securities of French issuers. FMR normally invests at least 65% of the
fund's total assets in securities of French issuers. The balance, however,
may be invested in securities of other European issuers.
Commercial, corporate, and securities laws govern the sale and resale of
securities, while contractual and corporate restrictions may also apply.
Planned privatizations and possible government incentives may result in
major changes in the market and increased investments by private
individuals. However, a future change in government, market, or economic
factors could result in an unfavorable change in the policy on
privatization.
GERMANY FUND seeks long-term growth of capital by investing in
securities of German issuers. FMR normally invests at least 65% of the
fund's total assets in securities of German issuers. The balance, however,
may be invested in securities of other European issuers.
The German economy has experienced a recession with inflationary pressure
as a result of increased domestic demand and the high cost of the
unification of East and West Germany. The Bundesbank, Germany's central
bank, has maintained relatively high interest rates to counter inflationary
pressures. The future growth of Germany will depend on its ability to unite
the country successfully. Also, a small number of companies represent a
large percentage of the market.
HONG KONG AND CHINA FUND seeks long-term growth of capital by investing in
securities of Hong Kong and Chinese issuers. FMR normally invests at least
65% of the fund's total assets in securities of these issuers. The balance,
however, may be invested in securities of other Southeast Asian issuers.
Currently, the fund anticipates that most of its investments will be in
Hong Kong issuers. In the future, more of its investments may be in shares
of companies listed on mainland Chinese exchanges.
Although China has committed by treaty to preserve the economic and social
freedoms enjoyed in Hong Kong for 50 years after regaining control of Hong
Kong in 1997, the continuation of the current form of the economic system
in Hong Kong after the reversion will depend on the actions of the
government of China. Business confidence in Hong Kong, therefore, can be
significantly affected by such developments, which in turn can affect
markets and business performance. In addition, a small number of companies
represent a large percentage of the market. Also, it is important to note
that a substantial portion of the companies listed on the Hong Kong Stock
Exchange are involved in real estate related business. The securities
market in China is relatively new and China has yet to develop
comprehensive securities, corporate or commercial laws; or to adhere to
internationally accepted accounting principles. There is greater risk of
expropriation, naturalization, freezes, or confiscation in China than in
many other countries. Foreign ownership limits exist on all securities.
JAPAN FUND seeks long term growth of capital by investing in securities of
Japanese issuers. FMR normally invests at least 65% of the fund's total
assets in these securities. The balance, however, may be invested in
securities of other Southeast Asian issuers.
Japan's economic growth has declined significantly since 1990. The
general government position has deteriorated as a result of weakening
economic growth and stimulative measures taken to support economic activity
and to restore financial stability. Although the decline in interest rates
and fiscal stimulus packages have helped to contain recessionary forces,
uncertainties remain. Japan is also heavily dependent upon international
trade, so its economy is especially sensitive to trade barriers. In
addition, Japan's banking industry is undergoing problems related to bad
loans and declining values of real estate.
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital by
investing in securities of Japanese issuers with small market
capitalizations. FMR normally invests at least 65% of the fund's total
assets in securities of these issuers. The balance, however, may be
invested in securities of other Southeast Asian issuers or Japanese
issuers with larger market capitalizations.
FMR defines Japanese small market capitalization companies as those with
market capitalizations of 100 billion Yen (approximately US $1 billion as
of October 31 , 1995) or less at the time of the fund's investment.
Companies whose capitalization exceeds 100 billion Yen after purchase will
continue to be considered small-capitalized for purposes of the 65% policy.
In addition to the risks associated with investing in Japan,
i nvesting in small capitalization stocks may involve greater risk than
investing in medium and large capitalization stocks, since they can be
subject to more abrupt or erratic movements. Small capitalization companies
may have more limited product lines, markets, or financial resources.
LATIN AMERICA FUND seeks high total investment return, which is the
combination of income and changes in the fund's value per share. FMR
normally invests at least 65% of the fund's total assets in securities of
Latin American issuers. Latin America includes Argentina, Brazil, Chile,
Colombia, Ecuador, Mexico, Peru, Panama, and Venezuela.
In pursuit of its goal, the fund tends to focus on equity securities, but
may invest in any combination of equity and debt securities of any quality.
Although there has been significant improvement in some Latin American
economies, others continue to struggle with high interest and inflation
rates. Recovery will depend on stability of the Mexican Peso, economic
conditions in other countries and on world commodity prices. This region is
vulnerable to political instability. The North American Free Trade
Agreement will also continue to have a significant impact on the region.
NORDIC FUND seeks long-term growth of capital by investing in
securities of Danish, Finnish, Norwegian, and Swedish issuers. FMR normally
invests at least 65% of the fund's total assets in securities of these
issuers. The balance, however, may be invested in securities of other
European issuers.
The Nordic region is differentiated from the rest of Europe by its high
exposure to cyclical industries such as oil, shipping, and pulp and
paper. In addition, a small number of companies represent a large
percentage of the market.
PACIFIC BASIN FUND seeks growth of capital over the long term by investing
in securities of issuers that have their principal activities in the
Pacific Basin. FMR normally invests at least 65% of the fund's total assets
in these securities. The balance, however, may be invested in securities of
issuers in other Asian countries. The Pacific Basin includes Australia,
Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the People's
Republic of China, the Philippines, Singapore, Taiwan, and Thailand. FMR
expects that the fund will normally invest in at least three different
countries, although it may invest all of its assets in a single country.
Because the fund normally invests a significant percentage of its assets in
Japanese issuers, the Japanese market will significantly impact the
performance of the fund.
Countries in the Pacific Basin are in various stages of economic
development - some are considered emerging markets - but each has unique
risks. Most countries in the Pacific Basin are heavily dependent on
international trade. Some have prosperous economies, but are sensitive to
world commodity prices. Others are especially vulnerable to recession in
other countries. Some countries in the Pacific Basin have experienced rapid
growth, although many suffer with obsolete financial systems, economic
problems, or archaic legal systems. The return of Hong Kong to Chinese
dominion will affect the entire Pacific Basin.
SOUTHEAST ASIA FUND seeks capital appreciation by investing in
securities of Southeast Asian issuers. FMR normally invests at least 65% of
the fund's total assets in these securities. Southeast Asia includes Hong
Kong, Indonesia, South Korea, Malaysia, the Philippines, the People's
Republic of China, Singapore, Taiwan, and Thailand, but the fund does not
anticipate investing in Japan. The balance, however, may be invested in
securities of other Asian and South Pacific issuers.
In pursuit of its goal, the fund focuses on equity securities, but it may
also invest in other types of instruments, including debt securities of any
quality. In addition, the fund's investments are subject to the same types
of risks as Pacific Basin Fund.
UNITED KINGDOM FUND seeks long-term growth of capital by investing in
securities of British issuers. FMR normally invests at least 65% of the
fund's total assets in securities of these issuers. The balance, however,
may be invested in securities of other European issuers.
The pace of economic growth in the United Kingdom has slowed in
1995, while continued tough monetary and fiscal policy helps keep inflation
under control.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about the funds' investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports which are sent to shareholders twice a year. For a
free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of total assets, each fund may not own
more than 10% of the outstanding voting securities of a single issuer.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments
more volatile than U.S. investments .
EXPOSURE TO EMERGING MARKETS. Investments in emerging market securities
include additional risks to those generally associated with foreign
investing. The extent of economic development, political stability, and
market depth varies widely in comparison to more developed nations. The
economies of these countries may be subject to greater social, economic,
and political uncertainties or may be based on only a few industries. All
of these factors can make emerging market securities more volatile.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness,
or they may already be in default. The market prices of these securities
may fluctuate more than higher-quality securities and may decline
significantly in periods of general economic difficulty.
The tables below and on page provide a summary of ratings assigned
to debt holdings (not including money market instruments) in each fund's
portfolio. The figures below are dollar-weighted averages of
month-end portfolio holdings during fiscal 1995, and are presented as a
percentage of total security investments. These percentages are historical
and do not necessarily indicate a fund's current or future debt holdings.
RESTRICTIONS: Purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's
or rated in the equivalent categories by S&P, or is unrated but judged to
be of equivalent quality by FMR. Each fund currently intends to limit its
investments in lower than Baa-quality debt securities to less than 35% of
its assets.
Dollar Weighted
Average %
Debt Investme Below
Holding nt Grade Investment
s Not Grade
Rated
Directly
or
Indirectl
y by
Moody'
s or
S&P
Can -- .56%
ada
Fun
d
Em -- 2.99
ergi %
ng
Mar
kets
Fun
d
Eur -- .17%
ope
Fun
d
Eur -- --
ope
Cap
ital
App
reci
atio
n
Fun
d
Jap -- .27%
an
Fun
d
Lati 1.00 1.34
n % %
Am
eric
a
Fun
d
Pac -- 3.34
ific %
Bas
in
Fun
d
Sou .02% .31%
the
ast
Asi
a
Fun
d
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also may
involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
FISCAL 1995 DEBT HOLDINGS, BY S&P RATING
G
S&P Canada Emerging Europe Europe Capital Japan Latin America Pacific
Southeast
Asia
RATING Fund Markets Fund Fund Appreciation Fund Fund Fund Basin Fund
Fund
INVESTMENT GRADE
Highest quality AAA
High quality AA .23% .01% -- -- .11% -- -- --
Upper-medium grade A
Medium grade BBB -- -- -- -- -- -- -- --
LOWER QUALITY
Moderately speculative BB -- .01% -- -- -- -- -- --
Speculative B .05% -- -- -- -- -- -- --
Highly speculative CCC -- -- -- -- -- -- -- --
Poor quality CC,C -- -- -- -- -- -- -- --
Lowest quality, no interest D -- -- -- -- __ -- --
- --
In default, in arrears -- -- -- -- -- -- -- -- --
.28% .02% -- -- .11% -- -- --
FISCAL 1995 DEBT HOLDINGS, BY MOODY'S RATING
H
MOODY'S Canada Emerging Europe Europe Capital Japan Latin America
Pacific Southeast
Asia
RATING Fund Markets Fund Fund Appreciation Fund Fund Fund Basin Fund
Fund
INVESTMENT GRADE
Highest quality Aaa
High quality Aa .23% .02% -- .11% .11% .01% .17% --
Upper-medium grade A
Medium grade Baa .10% -- -- -- -- -- -- --
LOWER QUALITY
Moderately speculative Ba -- -- -- -- -- .03% -- --
Speculative B .05% .06% -- -- -- .02% -- --
Highly speculative Caa -- -- -- -- -- -- -- --
Poor quality Ca -- -- -- -- -- -- -- --
Lowest quality, no interest C -- -- -- -- -- -- --
- --
In default, in arrears -- -- -- -- -- -- -- -- --
.38% .08% -- .11% .11% .06% .17% --
FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR HAS ASSIGNED THE RATINGS OF
THE SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR
INDIRECTLY BY MOODY'S OR S&P ARE OUTLINED IN THE CHART
ON PAGE . THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED
RATING SERVICES, AS WELL AS UNRATED SECURITIES.
UNRATED SECURITIES ARE NOT NECESSARILY LOWER-QUALITY SECURITIES. REFER TO
THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION FOR
A MORE COMPLETE DISCUSSION OF THESE RATINGS.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
15% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include securities of closed-end investment
companies and real estate-related investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. A fund that
is not diversified may be more sensitive to changes in the market value of
a single issuer or industry.
RESTRICTIONS: France Fund , Germany Fund, Hong Kong and China
Fund , Japan Small Companies Fund , Nordic Fund , and United
Kingdom Fund are considered non-diversified. Generally, to meet
federal tax requirements at the close of each quarter, a fund does not
invest more than 25% of its total assets in any one issuer and, with
respect to 50% of total assets, does not invest more than 5% of its total
assets in any one issuer. A fund may not invest more than 25% of its total
assets in any one industry. These limitations do not apply to U.S.
government securities.
Canada Fund, Emerging Markets Fund , Europe Fund , Europe
Capital Appreciation Fund , Japan Fund , Latin America
Fund, Pacific Basin Fund , and Southeast Asia Fund are
diversified funds. With respect to 75% of total assets, a fund may not
invest more than 5% of its total assets in any one issuer. A fund may not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering a fund's securities. A fund may also lend money to other funds
advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND
RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
CANADA FUND seeks growth of capital over the long term through investments
in securities of issuers that have their principal activities in Canada or
are registered in Canadian markets.
EMERGING MARKETS FUND seeks capital appreciation.
EUROPE FUND seeks growth of capital over the long-term through investments
in securities of issuers that have their principal activities in Western
Europe. Normally, at least 65% of the fund's total assets will be invested
in such securities. In determining whether an issuer's principal activities
are in Western Europe, FMR will look at such factors as the location of its
assets, personnel, sales, and earnings. When allocating investments among
geographic regions and individual countries, FMR will consider various
criteria, such as the relative economic growth potential of the various
economies and securities markets, expected levels of inflation, government
policies influencing business conditions, and the outlook for currency
relationships. When market conditions warrant, FMR can make substantial
temporary defensive investments in U.S. government obligations or
investment-grade debt obligations of companies incorporated in and having
principal business activities in the U.S.
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
FRANCE FUND seeks long-term growth of capital.
GERMANY FUND seeks long-term growth of capital.
HONG KONG AND CHINA FUND seeks long-term growth of capital.
JAPAN FUND seeks long-term growth of capital.
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital.
LATIN AMERICA FUND seeks high total investment return.
NORDIC FUND seeks long-term growth of capital.
PACIFIC BASIN FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal activities
in the Pacific Basin Fund . Normally, at least 65% of the fund's
total assets will be invested in such securities. In determining whether an
issuer's principal activities are in the Pacific Basin, FMR will look at
such factors as the location of its assets, personnel, sales, and earnings.
When allocating investments among geographic regions and individual
countries, FMR will consider various criteria, such as the relative
economic growth potential of the various economies and securities markets,
expected levels of inflation, government policies influencing business
conditions, and the outlook for currency relationships. When market
conditions warrant, FMR can make substantial temporary defensive
investments in U.S. government obligations or investment-grade debt
obligations of companies incorporated in, and having principal business
activities in, the U.S.
SOUTHEAST ASIA FUND seeks capital appreciation.
UNITED KINGDOM FUND seeks long-term growth of capital.
With respect to 75% of total assets, Canada Fund , Europe Fund,
Emerging Markets Fund , Europe Capital Appreciation Fund ,
Japan Fund, Latin America Fund , Pacific Basin Fund , and
Southeast Asia Fund may not invest more than 5% of total assets in
any one issuer, and may not own more than 10% of the outstanding voting
securities of a single issuer.
Each fund may not invest more than 25% of its total assets in any one
industry. Each fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets. Loans, in the
aggregate, may not exceed 33% of total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
EMERGING MARKETS FUND, FRANCE FUND, GERMANY FUND, HONG KONG
AND CHINA FUND, JAPAN SMALL COMPANIES FUND, LATIN AMERICA FUND ,
NORDIC FUND, AND UNITED KINGDOM FUND . The management fee is calculated
and paid to FMR every month. The fee for each fund is calculated by adding
a group fee rate to an individual fund fee rate, and multiplying the result
by the respective fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase. For October 1995, the group fee
rate was . 3111 %. The individual fund fee rate is .45% for each fund.
The total management fee for fiscal 1995 was . 77 % for Emerging
Markets Fund and Latin America Fund . The estimated total
management fee for fiscal 1996 is .76% for Japan Small Companies Fund.
Before reimbursement, the estimated total management fee rate for fiscal
1996 is .76% for France Fund, Germany Fund, Hong Kong and China Fund,
Nordic Fund, and United Kingdom Fund. The management fee rate for
the se funds is higher than that of most domestic mutual funds, but
not necessarily higher than that of the typical international fund.
CANADA FUND, EUROPE FUND, EUROPE CAPITAL APPRECIATION FUND, JAPAN FUND,
PACIFIC BASIN FUND, AND SOUTHEAST ASIA FUND. The management fee is
calculated and paid to FMR every month. The amount of the fee is determined
by taking a BASIC FEE and applying a PERFORMANCE ADJUSTMENT. The
performance adjustment either increases or decreases the management fee,
depending on how well the fund has performed relative to its benchmark
index.
Management = Basic +/- Performance
fee fee adjustment
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management increase.
For October 1995, the group fee rate was .3111 %. The individual fund
fee rate for each fund is .45%. The basic fee rate for fiscal 1995
was .76% for Canada Fund and Southeast Asia Fund and .77% for Europe
Fund, Europe Capital Appreciation Fund, Japan Fund, and Pacific Basin
Fund .
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing each
fund's performance to that of its benchmark index over the most recent
36-month period. The difference is translated into a dollar amount that is
added to or subtracted from the basic fee. The maximum annualized
performance adjustment rate is ".20%.
FUND BENCH
MARK
Cana TSE
da 300
Fund Index
Europ MSCI
e Europ
Fund e
Index
Europ MSCI
e Europ
Capit e
al Index
Appre
ciatio
n
Fund
Japan TOPI
Fund X
Index
Pacifi MSCI
c Pacifi
Basin c
Fund Index
South MSCI
east Far
Asia East
Fund ex-Ja
pan
Free
Index
Manage
Fund ment
Fee
Canad .72%
a
Fund
Europ .80%
e
Fund
Europ .85%
e
Capital
Appre
ciation
Fund
Japan .66%
Fund
Pacific .79%
Basin
Fund
South .59%
east
Asia
Fund
FMR HAS SUB-ADVISORY AGREEMENTS with three affiliates: FMR U.K., FMR Far
East, and FIIA. FIIA in turn has a sub-advisory agreement with FIIAL U.K.
In addition, FMR has sub-advisory agreements with FIJ on behalf of Japan
Fund, Japan Small Companies Fund, and Hong Kong and China Fund. FMR U.K.
focuses on issuers based in Europe. FMR Far East focuses on issuers based
in Asia and the Pacific Basin. FIJ focuses on issuers based in Japan and
elsewhere around the world. FIIA focuses on issuers based in Hong Kong,
Australia, New Zealand, and Southeast Asia (other than Japan). FIIAL U.K.
focuses on issuers based in the United Kingdom and Europe.
The sub-advisers are compensated for providing investment research and
advice. FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services. FMR pays FIJ and
FIIA 30% of its management fee associated with investments for which the
sub-adviser provided investment advice. FIIA pays FIIAL U.K. a fee equal to
110% of the cost of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50%
of its management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis. FIIA pays FIIAL U.K. a fee
equal to 110% of the cost of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In fiscal
1995 the funds paid FSC the fees outlined in the following chart:
Fee to
Fund FSC
Canad 0.3 %
a
Fund
Emerg 0.4%
ing
Market
s Fund
Europ 0.3 %
e
Fund
Europ 0.4 %
e
Capital
Appre
ciation
Fund
Japan 0.4 %
Fund
Latin 0.4%
Americ
a
Fund
Pacific 0.4 %
Basin
Fund
South 0.3 %
east
Asia
Fund
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce the fund's custodian or transfer agent
fees.
For fiscal 1995, the p ortfolio turnover rates are outlined in the
table below. For fiscal 1996 (the first fiscal year) t he estimated
portfolio turnover rate for France Fund, Germany Fund , Hong Kong and
China Fund , Japan Small Companies Fund, Nordic Fund, and United Kingdom
Fund is not expected to exceed 200%. These rates vary from year to
year. High turnover rates increase transaction costs, and may increase
taxable capital gains. FMR considers these effects when evaluating the
anticipated benefits of short-term investing.
Fund Turnover
%
Canad 75 %
a
Fund
Emerg 78%
ing
Market
s Fund
Europ 38 %
e
Fund
Europ 176 %
e
Capital
Appre
ciation
Fund
Japan 86 %
Fund
Latin 57%
Americ
a
Fund
Pacific 65 %
Basin
Fund
South 94 %
east
Asia
Fund
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and capital
gains from current taxes. In addition, contributions to these accounts may
be tax deductible. Retirement accounts require special applications and
typically have lower minimums.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under
70 with earned income to save up to $2,000 per tax year. Individuals can
also invest in a spouse's IRA if the spouse has earned income of less than
$250.
ROLLOVER IRAS retain special tax advantages for certain distributions from
employer-sponsored retirement plans.
KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners (and their employees) to
make tax deductible contributions for themselves and any eligible employees
up to $30,000 per year.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners
or those with self-employed income (and their eligible employees) with many
of the same advantages as a Keogh, but with fewer administrative
requirements.
403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt
institutions, including schools, hospitals, and other charitable
organizations.
401(K) PROGRAMS allow employees of corporations of all sizes to contribute
a percentage of their wages on a tax-deferred basis. These accounts need to
be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
INSTITUTIONS, OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR EACH FUND:
the offering price and the net asset value (NAV). If you qualify for a
waiver as described on page , your share price will be the offering price.
If you pay a sales charge, or qualify for a reduction as described on page
, your share price will be the offering price. When you buy shares at the
offering price, Fidelity deducts the appropriate sales charge and invests
the rest in the fund.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. Refer to the program material for details.
Key Information
Phone 1#800#544#7777
S
To open an account, exchange from another Fidelity fund account with the
same
registration, including name, address, and taxpayer ID number.
S
To add to an account, exchange from another Fidelity fund account with the
same registration, including name, address, and taxpayer ID number. You can
also use Fidelity Money Line to transfer from your bank account. Call
before
your first use to verify that this service is in place on your account.
Maximum
Money Line: $50,000.
Mail
S
To open an account, complete and sign the application. Make your check
payable
to the complete name of the fund of your choice. Mail to the address
indicated
on the application.
S
To add to an account, make your check payable to the complete name of the
fund.
Indicate your fund account number on your check. Mail to the address
printed
on your account statement.
S
Exchange by mail: Call 1#800#544#6666 for instructions.
In Person
S
To open an account, bring your application and check to a Fidelity Investor
Center. Call 1#800#544#9797 for the center nearest you.
S
To add to an account, bring your check to a Fidelity Investor Center. Call
1#800#544#9797 for the center nearest you.
(null)Wire
Not available for retirement accounts.
S
To open an account, call 1#800#544#7777 to set up your account and to
arrange
a wire transaction. Wire within 24 hours to the wire address below. Specify
the complete name of the fund and include your new account number and your
name.
S
To add to an account, wire to the wire address below. Specify the complete
name of the fund and include your account number and your name.
S
Wire address: Bankers Trust Company, Bank Routing #021001033, Account #
00163053.
Automatically
New accounts cannot be opened with these services.
S
Use Fidelity Automatic Account Builder or Direct Deposit to automatically
purchase
more shares. Sign up for these services when opening your account, or call
1#800#544#6666.
S
Use Directed Dividends or Fidelity Automatic Exchange Service to
automatically
send money from one Fidelity fund into another. Call 1#800#544#6666 for
instructions.
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
FEES AND KEY INFORMATION
IF YOU SELL SHARES OF EMERGING MARKETS FUND , FRANCE FUND ,
GERMANY FUND , JAPAN SMALL COMPANIES FUND , HONG KONG AND
CHINA FUND , LATIN AMERICA FUND , NORDIC FUND , SOUTHEAST
ASIA FUND , AND UNITED KINGDOM FUND AFTER HOLDING THEM LESS
THAN 90 DAYS, THE FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO 1.50% OF THE
VALUE OF THOSE SHARES. IF YOU SELL SHARES OF JAPAN FUND , EUROPE
FUND , EUROPE CAPITAL APPRECIATION FUND , AND CANADA FUND
AFTER HOLDING THEM LESS THAN 90 DAYS, THE FUND WILL DEDUCT A REDEMPTION FEE
EQUAL TO 1.00% OF THE VALUE OF THE SHARES. AS OF FEBRUARY 1, 1996 IF
YOU SELL SHARES OF JAPAN FUND AND CANADA FUND AFTER HOLDING
THEM LESS THAN 90 DAYS, THE FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO
1.5 0 % OF THE VALUE OF THOSE SHARES.
Phone 1#800#544#7777
All account types except retirement
S
Maximum check request: $100,000.
S
For Money Line transfers to your bank account; minimum: $10; maximum:
$100,000.
All account types
S
You may exchange to other Fidelity funds if both accounts are registered
with
the same name(s), address, and taxpayer ID number.
Mail or in Person
Individual, Joint Tenants, Sole Proprietorships, UGMA, UTMA
S
The letter of instruction must be signed by all persons required to sign
for
transactions, exactly as their names appear on the account.
Retirement accounts
S
The account owner should complete a retirement distribution form. Call
1#800#544#6666
to request one.
Trusts
S
The trustee must sign the letter indicating capacity as trustee. If the
trustee's
name is not in the account registration, provide a copy of the trust
document
certified within the last 60 days.
Businesses or Organizations
S
At least one person authorized by corporate resolution to act on the
account
must sign the letter.
S
Include a corporate resolution with corporate seal or a signature
guarantee.
Executors, Administrators, Conservators, Guardians
S
Call 1#800#544#6666 for instructions.
Wire
All account types except retirement
S
You must sign up for the wire feature before using it. To verify that it is
in place, call 1#800#544#6666. Minimum wire: $5,000.
S
Your wire redemption request must be received by Fidelity before 4 p.m.
Eastern
time for money to be wired on the next business day.
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange will
carry credit for any sales charge you previously paid in connection with
their purchase.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account. Because of the funds' sales charge, you may not want to set up a
systematic withdrawal plan during a period when you are buying shares on a
regular basis.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT BALANCES 1-800-544-7544
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
QUOTES 1-800-544-8544
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTOR PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDER SM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account,
quarterly complete the
appropriate section
on the fund
application.
(small solid bullet) For existing
accounts, call
1-800-544-6666 for
an application.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800- 544-6666
at least three
business days prior
to your next
scheduled
investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the
period appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization
form.
(small solid bullet) Changes require a
new authorization
form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call
bimonthly, 1-800-544-6666
quarterly, or after both accounts
annually are opened.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800-544-6666.
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to the funds' 3% sales charge. Likewise, if
you direct distributions to a fund with a 3% sales charge, you will not pay
a sales charge on those purchases.
UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes these earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. A fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These are
passed along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send
you and the IRS a statement showing the taxable distributions paid to you
in the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
the funds may adjust their dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and
its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. If quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) is the fund's NAV
divided by the sum of one minus the sales charge percentage . The
sales charge is 3% of the offering price. The REDEMPTION PRICE (price to
sell one share) is the fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY SHARES OF THE FUNDS (AT THE OFFERING PRICE) OR SELL THEM
THROUGH A BROKER, who may charge you a fee for this service. If you invest
through a broker or other institution, read its program materials for any
additional service features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
THE REDEMPTION FEE, if applicable, will be deducted from the amount of your
redemption. This fee is paid to the fund rather than FMR, and it does not
apply to shares that were acquired through reinvestment of distributions.
If shares you are redeeming were not all held for the same length of time,
those shares you held longest will be redeemed first for purposes of
determining whether the fee applies.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500 (including any amount paid
as a sales charge), subject to an annual maximum charge of $60.00 per
shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30 will
not be subject to the fee for that year. The fee, which is payable to the
transfer agent, is designed to offset in part the relatively higher costs
of servicing smaller accounts. The fee will not be deducted from retirement
accounts (except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets in Fidelity funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity
mutual fund accounts maintained by FSC or FBSI which are registered under
the same social security number or which list the same social security
number for the custodian of a Uniform Gifts/Transfers to Minors Act
account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from each fund's 3% sales charge and may pay a
portion of them to securities dealers who have sold the fund's shares, or
to others, including banks and other financial institutions (qualified
recipients), under special arrangements in connection with FDC's sales
activities. The sales charge paid to qualified recipients is 1.50 %
of a fund's offering price.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. In some instances, these incentives may be
offered only to certain institutions whose representatives provide services
in connection with the sale or expected sale of significant amounts of
shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. A fund's sales charge may be reduced if you invest directly
with Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of your
account, must fall within the ranges shown below. However, purchases made
with assistance or intervention from a financial intermediary are not
eligible. Call Fidelity to see if your purchase qualifies.
<TABLE>
<CAPTION>
<S> <C> <C>
Sales Charge
Ranges (as a % of offering price) (as approximate % of net
amount invested)
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
</TABLE>
The sales charge will also be reduced by the percentage of any sales charge
you previously paid on investments in other Fidelity funds (not including
Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for
any sales charge you would have paid if the reductions in the table above
had not existed. These sales charge credits only apply to purchases made in
one of the ways listed below, and only if you continuously owned Fidelity
fund shares or a Fidelity brokerage core account, or participated in The
CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund (except for Fidelity Foreign
Currency Funds) .
2. With proceeds of a transaction within a Fidelity brokerage core account,
including any free credit balance, core money market fund, or margin
availability, to the extent such proceeds were derived from redemption
proceeds from another Fidelity fund.
3. With redemption proceeds from one of Fidelity's Foreign Currency Funds,
if the Foreign Currency Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page ).
5. By participants in The CORPORATEplan for Retirement Program when shares
are purchased through plan-qualified loan repayments, and for exchanges
into and out of the Managed Income Portfolio.
WAIVERS. A fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more than
200 eligible employees or a minimum of $3 million in plan assets invested
in Fidelity mutual funds.
2. To shares in a Fidelity Rollover IRA account purchased with the proceeds
of a distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan that
both qualified for waiver (1) above and had at least some of its assets
invested in Fidelity-managed products.
3. If you are a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code).
5. If you are an investor participating in the Fidelity Trust Portfolios
program.
6. To shares purchased through Portfolio Advisory Services or Fidelity
C haritable Advisory Services.
7. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or regular employee of FMR Corp. or
its direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity trustee or employee, a Fidelity trustee or employee
acting as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee.
8. If you are a bank trust officer, registered representative, or other
employee of a qualified recipient, as defined on page .
9. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed and
distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
10. If you invest through a non-prototype pension or profit-sharing plan
that maintains all of its mutual fund assets in Fidelity mutual funds,
provided the plan executes a Fidelity non-prototype sales charge waiver
request form confirming its qualification.
11. If you are a registered investment adviser (RIA) purchasing for your
discretionary accounts, provided you execute a Fidelity RIA load waiver
agreement which specifies certain aggregate minimum and operating
provisions. Except for correspondents of National Financial Services
Corporation, this waiver is available only for shares purchased directly
from Fidelity, and is unavailable if the RIA is part of an organization
principally engaged in the brokerage business.
12. If you are a trust institution or bank trust department purchasing for
your non-discretionary, non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), (5), (9) , and (11) is contained
in the Statement of Additional Information. A representative of your plan
or organization should call Fidelity for more information.
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND , FIDELITY EMERGING MARKETS FUND , FIDELITY
EUROPE FUND, FIDELITY EUROPE CAPITAL APPRECIATION FUND , LEGAL NAME
1 , LEGAL NAME 2 , LEGAL NAME 3, FIDELITY JAPAN FUND ,
LEGAL NAME 4 , FIDELITY LATIN AMERICA FUND, LEGAL NAME 5,
FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND, FIDELITY
UNITED KINGDOM FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated December 30, 1995). Please retain this
document for future reference. The funds' financial statements and
financial highlights, included in the Annual Report for the fiscal year
ended October 31, 1995, are incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual Report, please call
Fidelity Distributors Corporation at 1-800-544-8888.
<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Affecting Europe
Special Considerations Affecting Japan, the Pacific Basin, and Southeast Asia
Special Considerations Affecting Canada
Special Considerations Affecting Latin America
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity Investments Japan Ltd. (FIJ)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
TIF -ptb-1295
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
Each fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF CANADA FUND
(CANADA FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three business days to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EMERGING MARKETS FUND
(EMERGING MARKETS FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, and
provided that transactions in futures contracts and options are not deemed
to constitute short sales;
(4) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts and
options on futures contracts shall not constitute purchasing securities on
margin;
(5) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed 33
1/3% of the fund's total assets by reason of a decline in net assets will
be reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
(6) underwrite securities issued by others except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in companies whose principal business activities
are in the same industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing or selling options and futures contracts or instruments backed
by physical commodities); or
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (for this purpose,
purchasing debt securities and engaging in repurchase agreements do not
constitute lending).
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (5)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(vii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (vii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EUROPE FUND
(EUROPE FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (i) more than 5% of the fund's total assets would be
invested in the securities of such issuer or (ii) the fund would hold more
than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of a fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of the fund's total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commissions is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EUROPE CAPITAL APPRECIATION FUND
(EUROPE CAPITAL APPRECIATION FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commissions is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF FRANCE FUND
(FRANCE FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v i ) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF GERMANY FUND
(GERMANY FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v i ) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF HONG KONG AND CHINA FUND
(HONG KONG AND CHINA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF JAPAN FUND
(JAPAN FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) With respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF JAPAN SMALL COMPANIES FUND
(JAPAN SMALL COMPANIES FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v i ) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF LATIN AMERICA FUND
(LATIN AMERICA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U. S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF NORDIC FUND
(NORDIC FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v i ) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF PACIFIC BASIN FUND
(PACIFIC BASIN FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (i) more than 5% of the fund's total assets would be
invested in the securities of such issuer or (ii) the fund would hold more
than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of a fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of the fund's total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commissions is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF SOUTHEAST ASIA FUND
(SOUTHEAST ASIA FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the funds net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(xii) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xiii) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of those
securities of such issuers together own more than 5% of such issuer's
securities.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF UNITED KINGDOM FUND
(UNITED KINGDOM FUND )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(v i ) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT POLICIES FOR FIDELITY EMERGING MARKETS FUND
COUNTRIES NOT CONSIDERED TO HAVE EMERGING MARKETS . Countries
currently not considered to have an emerging market economy are as follows:
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland, the United Kingdom, and the United States.
INVESTMENT POLICIES SHARED BY THE FUNDS
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES. A fund may purchase the equity securities
of closed-end investment companies to facilitate investment in certain
countries. Equity securities of closed-end investment companies generally
trade at a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depository Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depository Receipts (EDRs) and Global Depository
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Purchasing Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract.
Futures can be held until their delivery dates, or can be closed out before
then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Japan Fund has filed
and each of the remaining funds intend to file a notice of eligibility
for exclusion from the definition of the term "commodity pool operator"
with the Commodity Futures Trading Commission (CFTC) and the National
Futures Association, which regulate trading in the futures markets ,
before engaging in any purchases or sales of futures contracts or options
on futures contracts . The funds intend to comply with Rule 4.5 under
the Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 15% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
ISSUER LOCATION. FMR determines where an issuer is located by looking at
such factors as its country of organization, the primary trading market for
its securities, and the location of its assets, personnel, sales, and
earnings. The issuer of a security is located in a particular country if:
1) the security is issued or guaranteed by the government of the country;
or 2) the issuer is organized under the laws of the country, derives at
least 50% of its revenues or profits from goods sold, investments made or
services performed in the country, or has at least 50% of its assets
located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and (5)
for Canada Fund , Europe Fund , Europe Capital Appreciation
Fund , Japan Fund, Latin America Fund , Pacific Basin Fund ,
and Southeast Asia Fund ; limitations (1) and (7) for Emerging
Markets Fund ; and limitations (4) and (i) for France Fund ,
Germany Fund, Hong Kong and China Fund , Japan Small Companies
Fund , Nordic Fund , and United Kingdom Fund ). For purposes
of these limitations, each fund generally will treat the borrower as the
"issuer" of indebtedness held by the fund. In the case of loan
participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the fund, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SECURITIES OF SMALL CAPITALIZATION COMPANIES. Smaller capitalization
companies may have limited product lines, markets, or financial resources.
These conditions may make them more susceptible to setbacks and reversals.
Therefore, their securities may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of
larger companies.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with opening,
maintaining, and closing short sales against the box.
SOVEREIGN DEBT OBLIGATIONS. Each fund may purchase sovereign debt
instruments issued or guaranteed by foreign governments or their agencies,
including debt of Latin American nations or other developing countries.
Sovereign debt may be in the form of conventional securities or other types
of debt instruments such as loans or loan participations. S overeign
debt of developing countries may involve a high degree of risk, and
m a y be in default or present the risk of default. Governmental
entities responsible for repayment of the debt may be unable or unwilling
to repay principal and interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and interest may depend on political as well as economic factors.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
WARRANTS. Warrants are securities that give a fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
if the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
SPECIAL CONSIDERATIONS AFFECTING EUROPE
New developments surrounding the creation of a unified common market in
Europe have helped to reduce physical and economic barriers promoting the
free flow of goods and services throughout Western Europe. These new
developments could make this new unified market one of the largest in the
world. However, in 1993 Europe's economies began to slow and subsequently
slid into recession as tight monetary conditions and a lack of progress
toward inflation convergence and budgetary consolidation in many countries
weakened consumer and business confidence. More generally, the turbulence
in foreign exchange markets since the middle of 1992 and escalating
tensions over trade contributed to increased uncertainty in many countries.
The U.S. dollar continued on its downward track with respect to both the
German mark and many other of Europe's currencies such as the Italian lira,
the Spanish peseta and the Swedish krona which have been affected by
political uncertainties and fiscal problems.
Subsequently, Europe's economies began to improve in 1995 as continued
growth in the United States and the Southeast Asian countries provided the
foundation for an export-led recovery. This recovery was aided by a sharp
rebound of the U.S. dollar after reaching postwar lows in the spring of
1995.
The Eastern European countries, after several years of declining output,
have generally shown dramatic growth in 1994 and 1995. Despite formidable
obstacles and major differences among countries and regions, many nations
are making substantial progress in their efforts to become market-oriented
economies. However, these economies are becoming increasingly disparate and
the experience of countries in the region varies markedly. Those nations
making the most successful transitions include Poland, the Czech Republic
and Hungary, while some of the former Soviet republics continue to suffer
from the consequences of the break-up of the Union and have not made much
progress in implementing effective market oriented reforms. Key aspects of
the reform and stabilization efforts have not yet been fully implemented,
and there remain risks of policy slippage. In the Russian Federation and
most other countries of the former Soviet Union, economic conditions are of
particular concern because of economic instability due to political unrest
and armed conflicts in many regions.
Notwithstanding the continued economic difficulties in many countries,
recent positive developments offer hope for a cooperative growth strategy
in the near term, which could also permit a strengthening of global
economic performance over the medium term. Many developing countries are
reaping the fruits of sustained reform and stabilization efforts. Efforts
to enhance assistance to countries affected by the transition to
market-based trading systems occurring in central Europe and the former
Soviet Union, and to low-income countries to support strengthened
stabilization and restructuring efforts, are moving forward. In Europe,
exchange market tensions have eased, interest rates have been falling and
may continue to do so as evidence accumulates of the waning of inflationary
pressures.
The European Community (EC) consists of Belgium, Denmark, France, Germany,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and the
United Kingdom (the member states). In 1986, the member states of the EC
signed the "Single European Act", an agreement committing these countries
to the establishment of a market among themselves, unimpeded by internal
barriers or hindrances to the free movement of goods, persons, services, or
capital. To meet this goal, a series of directives have been issued to the
member states. Compliance with these directives is designed to eliminate
three principal categories of barriers: (1) physical frontiers, such as
customs posts and border controls; (2) technical barriers (which include
restrictions operating within national territories) such as regulations and
norms for goods and services (product standards); discrimination against
foreign bids (bids by other EC members) on public purchases; or
restrictions on foreign requests to establish subsidiaries; and (3) fiscal
frontiers, notably the need to levy value-added taxes, tariffs, or excises
on goods or services imported from other EC states.
The ultimate goal of this project is to achieve a large unified domestic
European market in which available resources would be more efficiently
allocated through the elimination of the above-mentioned barriers and the
added costs associated with those barriers. Elimination of these barriers
would simplify product distribution networks, allow economies of scale to
be more readily achieved, and free the flow of capital and other resources.
The Maastricht Treaty on economic and monetary union (EEMU) attempts to
provide its members with a stable monetary framework consistent with the
EC's broad economic goals. But until the EMU takes effect, which is
intended to occur between 1997 and 1999, the community will face the need
to reinforce monetary cooperation in order to reduce the risk of a
recurrence of tensions between domestic and external policy objectives.
The total European market, as represented by both EC and non-EC countries,
consists of over 370 million consumers, making it larger currently than
either the United States or Japanese markets. European businesses compete
nationally and internationally in a wide range of industries including:
telecommunications and information services, roads and transportation,
building materials, food and beverages, broadcast and media, financial
services, electronics, and textiles. Actual and anticipated actions on the
part of member states to conform to the unified Europe directives have
prompted interest and activity not only by European firms, but also by
foreign entities anxious to establish a presence in Europe that will result
from these changes. Indications of the effect of this response to a unified
Europe can be seen in the areas of mergers and acquisitions, corporate
expansion and development, GNP growth, and national stock market activity.
The early experience of the former centrally planned economies has already
demonstrated the crucially important link between structural reforms,
macroeconomic stabilization, and successful economic transformation. Among
the central European countries, the Czech Republic, Hungary, and Poland
have made the greatest progress in structural reform; inflationary
pressures there have abated following price liberalization, and output has
begun to recover. These achievements will be difficult to sustain, however,
in the absence of strong efforts to contain the large fiscal deficits that
have accompanied the considerable losses of output and tax revenue since
the start of the reform process.
In the Baltic countries there are encouraging signs that reforms are taking
hold and are being supported by strong stabilization efforts. In most other
countries of the former Soviet Union, in contrast, inadequate stabilization
efforts now threaten to lead to hyper-inflation, which could derail the
reform process. Inflation, which had abated following the immediate impact
of price liberalization in early 1992, surged to extremely high levels in
late 1992 and early 1993. The main reason for this development has been
excessive credit expansion to the government and to state enterprises. The
transformation process is being seriously hampered by he widespread
subsidization of inefficient enterprises and the resulting misallocation of
resources. The lack of effective economic and monetary cooperation among
the countries of the former Soviet Union exacerbates other problems by
severely constraining trade flows and impeding inflation control. Partly as
a result of these difficulties, some countries have decided that the
introduction of separate currencies offers the best scope for avoiding
hyper-inflation and for improving economic conditions. This development can
facilitate the implementation of stronger stabilization programs. Economic
conditions in the former Soviet Union have continued to deteriorate. Real
GDP in Russia fell 11.9 percent in 1993, after an 18 percent decline in
1992. In many other countries of the region, output losses have been even
larger. These declines reflect the adjustment difficulties during the early
stages of the transition, high rates of inflation, the compression of
imports, disruption in trade among the countries of the former Soviet
Union, and uncertainties about the reform process itself. Large-scale
subsidies are delaying industrial restructuring and are exacerbating the
fiscal situation. A reversal of these adverse factors is not anticipated in
the near term and output is expected to decline further in most of these
countries.
Economic conditions appear to have improved for some of the transition
economies of central Europe during the past year. Following three
successive years of output declines, there has been a turnaround in the
former Czech and Slovak Federal Republic, Hungary and Poland: growth in
private sector activity and strong exports, especially to Western Europe,
now appear to have contained the fall in output. Most central European
countries in transition have achieved positive real growth in 1994 and
early 1995 as market reform depend. The strength of the projected output
gains will depend crucially on the ability of the reforming countries to
contain fiscal deficits and inflation and on their continued access to, and
success in, export markets. A number of their governments, including those
of Hungary, and Poland, are currently implementing or considering reforms
directed at political and economic liberalization, including efforts to
foster multi-party political systems, decentralize economic planning, and
move toward free market economies. At present, no Eastern European country
has developed stock markets but Poland, Hungary and the Czech Republic have
small securities markets in operation. Ethnic and civil conflict continued
to rate throughout the former Yugoslavia. The outcome is uncertain.
Both the EC and Japan, among others, have made overtures to establish
trading arrangements and assist in the economic development of the Eastern
European nations. In the rest of Europe, monetary policy and financial
market developments have been dominated by the currency turmoil that began
in September 1992. At the same time, conditions are improving for
significant reductions of official interest rates in Europe, which should
help to contain recessionary forces and provide support to the overall
economic recovery in the region by early 1996. With the passage of the
General Agreement on Trade and Tariffs (GATT) earlier this year, Europe has
taken a step forward to resist protectionist pressures. Interest rates
continue to decline, but some countries' tight monetary conditions remain
an obstacle to stronger growth and a threat to exchange market stability.
However, in the long-term, economic unification of Europe could prove to be
an engine for domestic and international growth.
FRANCE has welcomed foreign trade and foreign investment and, along with
Germany, has emerged as a driving force within the Union. More than a
quarter of France's total sales, and 22% of its employment, derive from
foreign-owned companies. The country ranks high in manufacturing
productivity, while its unionization rate of 12% is the lowest in the
Union. The workforce is well-educated, yet labor is cheaper than in
Germany. Both national and local officials have been actively soliciting
international companies, particularly those with technological businesses
encouraging them to build factories and subsidiaries in France. Recognizing
the need for decentralization, the country has taken steps to build up
industrial and technological areas away from Paris, in cities such as
Marseilles. The government of prime minister Edouard Balladur has
drastically cut the corporate tax rate from one-half to one-third, and has
pledged to keep inflation at its current very low levels. Its successor
under Alain Juppe is expected to continue with these policies. However,
France faces two problems that are not uncommon in Europe: persistent high
unemployment (currently around 12%) and a high budget deficit. These
problems, although apparently not out of control, serve to hamper
prosperity and will probably not be solved anytime soon.
As of the end of 1994, France had the fourth largest Gross Domestic Product
in the world and was the fifth largest market, with market capitalization
equal to U.S. $265 billion (the U.S. market for that year was the largest,
with $278 trillion in capitalization). There are nearly a thousand listed
companies in the equity markets, and trading is on a par with
capitalization by world standards.
The French equity securities market is relatively small compared to the
United States' market. Trading practices are regulated by the French
securities exchange authorities and the sale and resale of securities are
generally less regulated than in the United States. Issuers of securities
in France are not subject to the same degree of regulation as are U.S.
issuers with respect to such matters as insider trading rules, tender offer
regulation, shareholder proxy requirements, and the timely disclosure of
information. In addition, accounting, auditing, and financial reporting
standards are not comparable to United States standards and, therefore,
less information may be available to investors investing in French
securities than would be available in respect of investments in the
securities of U.S. issuers in the United States. The French securities
market may be more volatile and is less liquid than the major U.S. markets.
As in the case of all foreign investments, the fund's investments may be
adversely affected by any increase in applicable foreign taxes or by
political, economic, or diplomatic developments.
A significant number of French enterprises are owned, directly or
indirectly, in whole or in part, by the French state. In 1986, the French
government announced an extensive privatization program, which was
discontinued following the parliamentary elections of June 1988, after 31
state-controlled enterprises had been sold to the public. Recently, the
previous French government had announced a new program of privatization
which is expected to continue under the current government. However,
investors should be aware that a future change of government, market, or
economic factors in France could result in a change in policy on
privatization.
Under current law, subject to certain exceptions, shares of French
companies may be owned by, and transferred to, non-residents of France
without limitation for portfolio investment. However, existing foreign
direct investment regulations provide that the acquisition by any
non-resident of the European Union of a controlling interest in a French
company is subject to prior approval of the Treasury Department of the
French Ministry of Economy. Under existing administrative rulings,
ownership of 20% or more of a listed company's share capital or, in the
case of unlisted companies, ownership of 33 1/3% or more, is regarded as a
controlling interest in such company, but a lower percentage might be held
to constitute a controlling interest in certain circumstances. Direct
investments by non-European Union residents, including the acquisition,
creation or expansion of French companies, and the increase in control of
French companies engaged in agricultural, industrial, or commercial,
financial, or real estate activities, require prior approval by French
authorities. In general, prior approval by French authorities is always
necessary (even if the investor is a European Union resident) if the
investment is to be made in certain specific industries such as the defense
and health industries. Pursuant to current legislation relating to
privatization of certain state-controlled companies, transfer by the French
authorities directly or indirectly to non-European Union persons and
entities under non-European Union control of equity shares of a French
company in connection with its privatization may not exceed a total of 20%
of such company's share capital. A lower percentage may be adopted if
considered vital to protect national interests. Furthermore, the Ministry
of Economy has the power to transfer an ordinary share of such company's
stock held by the French State into a "special share," thereby possibly
giving the Ministry of Economy a right of approval for an unlimited period
with respect to the ownership by any single person, or group of persons
acting together, or an equity interest representing more than 10% of such
company's share capital and/or the right to designate one or two
representatives of the French State to the board of directors of such
company, and/or the right of refusal with respect to decisions to sell
assets or grant guarantees which are considered against national interests.
GERMANY is generally regarded as the chief player in the Union. Germany is
highly integrated into the world's economy and capital markets, and should
continue to benefit from an ongoing world recovery from recession. From
1988 through 1992, real Gross National Product in Germany grew at a healthy
average of 3.5%. But 1993, which saw GNP down 2.1%, was the worst year
since the beginning of the postwar WIRTSCHAFTSWUNDER. In 1994, Germany
began to recover from recession, but rising interest rates kept the lid on
market advances. As of the end of 1993, Germany was the fourth largest
market in the world, with market capitalization equal to U.S. $450 billion
(the U.S. market for that year was number 1, with $5.2 trillion in
capitalization). In terms of the number of listed companies, Germany ranked
further down, at number 14 with 426 listed companies (by comparison, the
U.S. had over 7,600 listed companies). It follows that the average size of
German companies is large: over $1 billion in 1993, which placed it number
3 in that category. Exports, a key part of the German economy, may be
poised to increase, although the weak U.S. dollar means that German goods
will be more expensive in the important U.S. market, thus reducing demand.
While Germany's equity market appears to be highly valued by some measures,
the market as a whole is small compared to the economy. European investors
have lagged their U.S. counterparts in making equity investments, although
this has been changing. At the same time, new issues are not abundant in
Germany, meaning that any increasing market demand will be focused largely
on existing issues. The high valuations of German stocks may also prove
supportable by the country's central role in the Union and its success in
developing the Eastern part of the country and the former Eastern bloc
countries for its manufacturing purposes.
In Germany the progress of the European Union continues to be the slow but
steady and the costs of assimilating the former East German states
continues to pose the greatest financial pressure. Costs for this project
were greatly underestimated: since unification in 1990, the government has
had to transfer money to the east in the amount of 4% - 5% of Gross
Domestic Product. To raise this money, the government has had to levy extra
taxes. These taxes have effectively offset advances in consumer income, and
have lead to the political necessity of down sizing government and
maintaining a tight monetary policy. In order to comply with the terms of
Maastricht, Germany must cut government debt from a projected 64% of GDP
next year to less than 60%. The failure, either political or economic, of
Germany's ability to cut spending while also finding the money to restore
the east to fiscal health could have repercussions for the German stock
market.
Germany is also facing pressures to reform its welfare and social security
programs, and must also comply with a court order to reform its tax system.
While the country does not appear to be in any risk of governmental crisis,
all of the factors mentioned above could lead to a shift in domestic
policies, with a potential shift in the political landscape not out of the
question.
Much of Germany's fiscal health and prosperity over the next few years
depends on the continued growth of capitalism in the former Eastern bloc
states. If this growth does not materialize, or if political events
intercede, there could be negative financial repercussions for Germany.
In 1995, Germany could be at risk of over expansion. Rapid growth of
production could bring the economy to the limits of current capacity, which
would likely prompt the central bank to tighten the money supply. However,
if Germany opts for slow growth in the short term in order to pave the way
for longer-term stability, profits over the short term could suffer.
NORDIC COUNTRIES. Denmark is a member of the Union. Sweden, Finland, and
Norway recently agreed to join the Union. These Nordic countries have a
combined total population of only 23 million, roughly equal to that of the
state of California. Productivity, as measured by Gross Domestic Product
per capita, is well above the European average in all countries except
Finland, where it stands at about 90% of the average. The Nordic countries
appear poised to embark on a path of rapid growth. Real GDP in Sweden is
expected to increase by 2.5% for 1995, and by 4.0% to 4.5% in Denmark,
Finland, and Norway. At the end of 1993, all four Nordic countries ranked
in the top 35 worldwide in terms of market capitalization and total market
value traded per year, meaning that the Nordic markets tend to be fairly
liquid for their size. The chief industries in the region are machinery,
textiles, furniture, electronics, dairy, metals, ship building, clothing,
engineering, chemicals, food processing, fishing, paper, oil and gas,
autos, and shipping. The number of listed companies is small; in 1993
Denmark had more than 250, but no other Nordic country had more than 125,
fewer even than such countries as Peru, Sri Lanka, and Iran. As a result of
the high level of market capitalization and the low number of listed
companies, Sweden, Finland, and Norway rank among the top 25 countries in
the world for average company size.
Foreign ownership of Nordic stocks has increased dramatically, growing from
U.S. $316 million in 1992 to $7.4 billion in 1994. One reason for the
appeal of Nordic stocks is that the companies in these countries tend to be
widely diversified in the geographic areas in which they do business; thus
the performance of a company may not be as closely linked to the state of
the local economy as it is in many countries. There are, however, potential
disincentives to foreign investors. The non-refundable dividend withholding
tax rate is currently 30% for both Denmark and Sweden, and 25% for both
Finland and Norway.
The establishment of stronger links with their neighbors to the south will
likely be accompanied by substantial change in several aspects of the
Nordic countries' economies, particularly in the area of government
spending. The extensive social welfare system that was the envy of much of
the world in the 1960s and 1970s has proved to be extremely costly during
the subsequent decades of more modest prosperity. In Norway, these benefits
were financed through oil and gas exports, but in other Nordic countries
they have tended to result in growing government debts and deficits.
The populations of the Nordic countries have become accustomed to generous
benefits for unemployment, sick leave, child care, elder care, and general
public welfare, along with state-provided medical care. With the exception
of Denmark, each country also has a history of supporting an inefficient
agricultural sector with subsidies ranging up to 75% (the recent average
for Europe has been approximately 35% - 45%). Public spending on social
programs in Sweden accounted for a full one-third of GDP during the 1980s.
Unemployment remains fairly high, ranging from 6% in Norway to 19% in
Finland. The income scale in the Nordic countries tends to be comparatively
flat, both with regard to age and skill; thus there is little income
advantage to be gained by career advancement. Almost half of personal
disposable income received by Swedes was the result of transfer payments, a
system for redistributing wealth. In Norway, the number of industrial jobs
has fallen by 100,000 since 1972, while government employment has doubled.
Once the Nordic countries become members of the Union, and once the full
terms of the Maastricht Treaty and other Union agreements are implemented,
there will be strong pressures on the Nordic countries to bring their
government spending more closely into line with those of Europe. Farms,
particularly those closest to the European continent, will either be forced
to improve efficiency or close down, while exports of Norwegian oil and gas
and Finnish timber and mineral resources will need to find a place in the
Union's trade policies if the Nordic countries are to prosper. National
debts, which are high in Finland and Sweden, will need to be reduced. How
well these goals can be accomplished without reversing the long-awaited
growth trends that are now emerging in the Nordic countries remains to be
seen.
The Nordic countries will also be challenged to keep their most skilled
workers. Such workers are essential to the region's significant
manufacturing and engineering businesses, but the implementation of the
Union will make it easier for Nordic workers to seek employment in other
member states. And while a favorable corporate tax structure has aided the
largest Nordic companies in amassing the capital to make investments, many
of them have been investing outside the region rather than domestically.
While these problems are not insurmountable, a failure to address them
could impair the prosperity of the Nordic countries, and with it the
performance of their markets.
UNITED KINGDOM. Occupying most of the land area of the British Isles, the
U.K. includes England, Wales, Scotland, and Northern Ireland. As of the end
of 1993, the U.K. was the third largest market in the world, with market
capitalization equal to U.S. $1.2 trillion (the U.S. market for that year
was the world's largest market, with $5.2 trillion in capitalization).
There are 1,650 listed companies in the U.K. equity markets, and trading
volume is on a par with capitalization by world standards. The U.K. ranks
tenth worldwide in terms of average company size. The relatively high
number of listings and the relatively low average company size mean that
the behavior of the U.K. stock market is less likely to be dominated by the
trading actions of a few large stocks.
The U.K. experienced a long post-war recession which ended in 1992;
however, it did not escape the effects of worldwide recession in 1993 and
1994. Exports were hurt by the lack of demand from depressed foreign
markets. Still, the U.K. was one of a very few European economies to post
positive GDP numbers for 1993, with a 2% growth rate.
Foreign investment is strong in the U.K., particularly in Wales and
Scotland, which have made international efforts to attract investors and
development by foreign companies. At the end of 1992, more than 3,500 U.S.
companies had made investments in the U.K., for a total of $78 billion, a
number that represents nearly 40% of all U.S. investment in the member
states. This far exceeds U.S. investment in Germany, which was $35 billion
in 1992. The companies of other nations have been attracted to the U.K. for
investing as well, drawn by low labor costs, relative political stability,
and tax incentives. Foreign investment is crucial to the continued economic
strength of the U.K.
While foreign investment has been high, there are signs that it may not
continue to grow at the same rate. Other Union members are actively
recruiting investors, advertising their increased level of participation in
the Union as a key to important trade benefits. Even some major British
corporations, such as British Petroleum and Pilkington, have moved their
headquarters onto the European continent. The U.K. lags in the percentage
of its population that goes on to higher education, an important factor for
technology-based businesses. Despite the opening of the new English Channel
tunnel rail link to the continent, the government's spending on railways
and other parts of the transportation infrastructure is well behind that of
France and Germany.
Going forward, the U.K. appears poised for continued growth. Business
investment has risen since 1992, and as asset utilization approaches
current capacity, investment should continue to rise, with businesses
needing to expand beyond their current size in order to meet increasing
demand. Unemployment began to fall in early 1993, and employment growth
resumed.
While the U.K. is a member of the Union, domestic sentiment has not been
wholly favorable towards Union involvement. A failed bid to tie the pound
to the European Currency Unit (ECU), the proposed single currency for the
Union, resulted in higher inflation and almost forced British Prime
Minister John Major out of office. This event did not discourage negative
sentiments. As a result, the U.K. has not been as actively involved in
working with the architects of Union policies as it might have been, and
has thus been less successful in ensuring that its needs and viewpoints
were reflected in these policies. So far, the U.K. has allowed Germany and
France to play the major roles in shaping the Union framework.
The Conservative government, which was strongly entrenched during the 1980s
under Margaret Thatcher, has not been as powerful since that time and
currently faces the possibility that it may lose control of the government.
A shift of sentiment towards the Labour Party, or a further weakening of
the Conservative's power, could produce a government that lacks the focus
or the political will to address domestic issues and to play a strong role
in the Union.
Like many European countries, the U.K. has been plagued with persistent
high inflation, and it has run a current account trade deficit for many
years. Both of these factors have been a hindrance to prosperity, and both
are likely to continue to exist in some form in the future.
The conditions that have given rise to these developments are
changeable, and there is no assurance that reforms will continue or that
their goals will be achieved.
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1994
Denmark 4.6 %
France 2.5 %
G e rmany 2.9 %
Ita ly 2.5 %
Net herlands 2.4 %
S pain 1.9 %
Sw itzerland 2.0 %
Un ited Kingdom 3.8 %
Source: World Economic Outlook, May 199 5 (International Monetary
Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING JAPAN, THE PACIFIC BASIN, AND SOUTHEAST
ASIA
Many Asian countries may be subject to a greater degree of social,
political and economic instability than is the case in the United States
and Western European countries. Such instability may result from (i)
authoritarian governments or military involvement in political and economic
decision-making; (ii) popular unrest associated with demands for improved
political, economic, and social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and (v) ethnic,
religions, and racial disaffection.
The economies of most of the Asian countries continue to depend heavily
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners,
principally, the United States, Japan, China and the European Community.
The enactment by the United States or other principal trading partners of
projectionist trade legislation, reduction of foreign investment in the
local economies, and general declines in the international securities
markets could have a significant adverse effects upon the securities
markets of the Asian countries.
The success of market reforms, a surge in infrastructure spending have
fueled rapid growth in many developing countries in Asia. Rapidly rising
household incomes have fostered large middle classes and new waves of
consumer spending. Increases in infrastructure spending and consumer
spending have made domestic demand the growth engine for these countries.
Thus their growth now depends less upon exports to OECD countries. While
exports may no longer be the sole source of growth for developing
economies, improved competitiveness in exports markets has contributed to
growth in many of these nations. The increased productivity of many Asian
countries has enabled them to achieve, or continue, their status as top
exporters while improving their national living standards.
Thailand has one of the fastest-growing stock markets in the world. The
manufacturing sector is becoming increasingly sophisticated and is
benefiting from export-oriented investing. The manufacturing and service
sectors continue to account for the bulk of Thailand's economic growth. The
agricultural sector continues to become less important. The government has
followed fairly sound fiscal and monetary policies, aided by increased tax
receipts from a fast moving economy. The government also continues to move
ahead with new projects - especially telecommunications, roads and port
facilities - needed to refurbish the country's overtaxed infrastructure.
The country enjoys an able bureaucracy, which has maintained economic
policy during the country's many coups. In recent years, the risk of a coup
has diminished, but corruption remains widespread.
In terms of GDP, industrial standards and level of education, South Korea
is second only to Japan in Asia. It enjoys the benefits of a diversified
economy with well-developed sectors in electronics automobiles, textiles
and shoe manufacture steel and shipbuilding among others. The driving force
behind the economy's dynamic growth has been the planned development of an
export-oriented economy in a vigorously entrepreneurial society. Real GDP
grew about 8.3% in 1994. Both Koreas joined the United Nations separately
in late 1991, creating another forum for negotiation and joint cooperation.
Reunification of North Korea and South Korea could have a detrimental
effect on the economy of South Korea.
Indonesia is a mixed economy with many socialist institutions and central
planning but with a recent emphasis on deregulation and private enterprise.
Like Thailand, Indonesia has extensive natural wealth yet with a large and
rapidly increasing population. Dependent on oil exports during the 1980s,
its manufactured products now predominate, contributing 21% of GDP.
Indonesia's development is progressing smoothly, and it has become the
world's 12 largest economy.
Malaysia has one of the fastest-growing economies in the Asian-Pacific
region. Malaysia has become the world's third-largest producer of
semiconductor devices (after the U.S. and Japan) and the world's largest
exporter of semiconductor devices. More remarkable is the country's ability
to achieve rapid economic growth with relative price stability as the
government followed prudent fiscal/monetary policies. Malaysia's high
export dependence level leaves it vulnerable to a recession in the
Organization for Economic Cooperation and Development countries or a fall
in world commodity prices.
Singapore has an open entrepreneurial economy with strong service and
manufacturing sectors and excellent international trading links derived
from its history. During the 1970s and the early 1980s the economy expanded
rapidly, achieving an average annual growth rate of 9%. Per capita GDP is
among the highest in Asia. Singapore holds a position as a major oil
refining and services center.
JAPAN. Japan currently has the second-largest GDP in the world. The
Japanese economy has grown substantially over the last three decades. Its
growth rate averaged over 5% in the 1970s and 1980s. However in 1994, the
growth rate in Japan slowed to 0.6% and their budget showed a deficit of
7.8% of GDP. Despite small rallies and market gains Japan has been plagued
with economic sluggishness. Economic conditions have weakened considerably
in Japan since October 1992. The boom in Japan's equity and property
markets during the expansion of the late 1980's supported high rates of
investment and consumer spending on durable goods, but both of these
components of demand have now retreated sharply following the decline in
asset prices. It is suffering through its worst recession in two decades.
Profits have fallen sharply, unemployment has reached a historical high of
3.2% and consumer confidence is low. The banking sector continues to suffer
from non-performing loans. Nine discount rate cuts since its 6% peak in
1991, a succession of fiscal stimulus packages, support plans for the
debt-burdened financial system and spending for reconstruction following
the Kobe earthquake should help to contain the recessionary forces, but
substantial uncertainties remain. The general government position has
deteriorated as a result of weakening economic growth, as well as
stimulative measures taken recently to support economic activity and to
restore financial stability.
In addition to a cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration of
their competitiveness due to high wages, a strong currency and structural
rigidities. Japan has also become a mature industrial economy and, as a
result, will see its long-term growth rate slow down over the next ten
years. Finally, Japan is reforming its political process and deregulating
its economy. This has brought about turmoil, uncertainty and a crisis of
confidence.
Japan is heavily dependent upon international trade and, accordingly, has
been and may continue to be adversely affected by trade barriers and other
protectionist or retaliatory measures of, as well as economic conditions in
the U.S. and other countries with which they trade. Industry, the most
important sector of the economy is heavily dependent on imported raw
materials and fuels. Japan's major industries are in the engineering,
electrical, textile, chemical, automobile fishing and telecommunication
fields. Japan imports iron ore, copper, and many forest products. Only 19%
of its land is suitable for cultivation. Japan's agricultural economy is
subsidized and protected. It is about 50% self-sufficient in food
production. Even though Japan produces a minute rice surplus, it is
dependent upon large imports of wheat, sorghum and soybeans from other
countries. Japan's high volume of exports such as automobiles machine tools
and semiconductors have caused trade tensions with other countries,
particularly the United States. Some trading agreements between the
countries have reduced the friction caused by the current trade imbalance.
A record high value of the yen in first half of 1995 threatened to derail
Japan's recovery from a long economic downturn, mainly because it made
Japanese products more expensive overseas and eroded the value of foreign
earnings when repatriated to Japan. However, the recent ease of the yen has
created expectations that Japanese earnings will improve for the fiscal
year ending March 1996.
The relaxing of official and de facto barriers to imports, or hardships
created by any pressures brought by trading partners, could adversely
affect Japan's economy. A substantial rise in world oil or commodity prices
could also have a negative affect. The strength of the yen itself may prove
an impediment to strong continued exports, because of the high prices it
means for Japanese goods sold in other countries. Because the Japanese
economy is so dependent on exports, any fall-off in exports may be seen as
a sign of economic weakness, which may adversely affect the market and the
fund.
The Tokyo Stock Exchange is the largest of eight exchanges in Japan which
has very well developed primary and secondary equity markets. The Tokyo
Stock Exchange is followed by the Osaka Stock Exchange and the Nagoya Stock
Exchange. These three exchanges divide the market for domestic stocks into
two sections, with newly listed companies and smaller companies assigned to
the second section and larger companies assigned to the first section.
However, the growth of the Japanese securities market has not been without
its setbacks. In 1990, the Japanese stock market, as measured by the Toyko
Stock Price Index (TOPIX), began a spectacular decline which lasted through
the middle of 1992. During this period the TOPIX lost over 55% of its
value. Since then, the market has failed to rebound substantially, and the
TOPIX remains far closer today to its bottom in 1992 than to its peak in
1989 and 1990.
The decline in the Japanese securities markets has contributed to a
weakness in the Japanese economy, and the impact of a further decline
cannot be ascertained. The common stocks of many Japanese companies
continue to trade at high price-earnings ratios in comparison with those in
the United States, even after recent market decline. Differences in
accounting methods make it difficult to compare the earnings of Japanese
companies with those of companies in other countries, especially the United
States.
While the Japanese governmental system itself seems stable, the dynamics of
the country's politics have been unpredictable in recent years. The
economic crisis of 1990-92 brought the downfall of the conservative Liberal
Democratic Party, which had ruled since 1955. Since then, the country has
seen a series of unstable multi-party coalitions and several prime
ministers come and go, because of politics as well as personal scandals.
While there appears to be no reason for anticipating civic unrest, it is
impossible to know when the political instability will end and what trade
and fiscal policies might be pursued by the government that emerges.
With the general economic sluggishness of the past few years, banks have
seen an increase in non-performing assets. While at the moment these do not
appear to pose any major threat to the health of the institutions, any
continued or intensified decline in the Japanese economy could throw
additional strain onto the country's banking institutions.
Geologically, Japan is located in a volatile area of the world, and has
historically been vulnerable to earthquakes, volcanoes and other natural
disasters. As demonstrated by the Kobe earthquake in January of 1995, in
which 5,000 people were killed and billions of dollars of damage was
sustained, these natural disasters can be significant enough to affect the
country's economy.
As in the U.S. and other markets, small company stocks are typically more
volatile than large company stocks, reacting more extremely to good or bad
news. Since Japan's market is dominated by large stocks (the average
company size in Japan is the largest anywhere in the world), the behavior
of the Japanese stock market in general and of the small-stock segment in
particular also may be affected by the trading activity on a relatively
small number of large-company stocks to a much greater degree than is
typically seen in the U.S. Further, during periods of economic difficulty,
small companies can find it harder to compete or survive. Since August
1990, the shares of smaller Japanese companies have underperformed those of
larger companies, as they tend to do in periods of declining industrial
production. However, the reverse tends to apply in periods of economic
recovery.
There are two factors that may influence the future corporate structure of
Japan, to the benefit of smaller Japanese companies. First, Japan is likely
to follow the pattern set by the economies of the United Kingdom and
Germany in reducing its dependence on manufacturing and increasing the
contribution of service industries to the economy. This should benefit
small companies, many of which are less capital intensive and often more
entrepreneurial. Also, many sectors of the Japanese economy, such as food,
retail, distribution, and financial services, are subject to regulations
which are in the process of being released or removed. Deregulation should
provide opportunities for smaller, more flexible companies. In addition,
the removal of artificial price restrictions and reductions in personal
taxes could lead to an upturn in Japanese domestic consumption as a
percentage of Gross Domestic Product, which is currently significantly
lower than in the United States. This increase in spending could also
benefit smaller Japanese firms. However, the continuation of economic
weakness could make it difficult for small companies to prosper, or could
make their stocks appear unattractive to investors.
The influence of the factors mentioned above, against a background of
potential recovery in the Japanese economy, may result in an attractive
long-term opportunity for selective investment in smaller Japanese
companies, and that such companies may outperform larger Japanese companies
over the longer term if economic recovery is realized.
Australia has a prosperous Western-style capitalist economy, with a per
capita GDP comparable to levels in industrialized Western European
countries. Economic growth accelerated markedly in 1994 as robust domestic
spending boosted activity. It is rich in natural resources and is the
world's largest exporter of beef and wool, second-largest for mutton, and
it is among the lop wheat exporters. Australia is also a major exporter of
minerals, metals and fossil fuels. Due to the nature of its exports, a
downturn in world commodity prices can have a big impact on its economy.
HONG KONG AND CHINA. Hong Kong's impending return to Chinese dominion in
1997 has not initially had a positive effect on its economic growth which
was vigorous in the 1980s. Although China has committed by treaty to
preserve the economic and social freedoms enjoyed in Hong Kong for 50 years
after regaining control of Hong Kong, the continuation of the current form
of the economic system in Hong Kong after the reversion will depend on the
actions of the government of China. Business confidence in Hong Kong,
therefore, can be significantly affected by such developments, which in
turn can affect markets and business performance. In preparation for 1997,
Hong Kong has continued to develop trade with China, where it is the
largest foreign investor, while also maintaining its long-standing export
relationship with the United States (U.S.). Spending on infrastructure
improvements is a significant priority of the colonial government while the
private sector continues to diversify abroad based on its position as an
established international trade center in the Far East. It is important to
note that a substantial portion of the companies listed on the Hong Kong
Stock Exchange are involved in real estate related business.
China's economy may be described as transitional. While the government
still controls the production and pricing in a major portion of the
country's economy, the country has also seen a sharp rise in capitalist
activities. The opening of China to U.S. trade by President Nixon in 1972
marked an important step towards capitalism, but the most significant step
was the liberalization brought about by Deng Xiaoping, who assumed power in
the late 1970s. Deng believed that the advancement of the economy was
essential to the advancement of socialism an argument which effectively
neutralized the traditional Party objections to capitalism and foreign
investment. Under Deng's rule, China has prospered. At the time he came to
power, more than a quarter of the population was living in absolute
poverty; today, less than 10% of the population is in that category. The
real incomes of many workers have doubled and tripled, and some 80 million
urban dwellers are able to afford middle-class luxuries such as cosmetics
and Western-style fast food.
China's economy has grown at the extraordinary rate of 10% per year on
average over the past decade, with the industrial segment leading the way:
industrial growth in China exceeded 20% a year in 1992 and 1993. China's
economic growth itself has not been smooth, however, being characterized by
spurts of almost uncontrolled growth alternating with periods of harsh
austerity measures. Both the speed and the erratic nature of the growth
have caused inefficiencies and dislocations within China, including
troublesome inflation rates of 20% - 30% per year over the past five years.
Most of China's trading activity is funnelled through Hong Kong. The value
of the Hong Kong market has grown from U.S. $54 million in 1986 to more
than $380 million in 1993, with China estimated as being the largest
investor in the market. Among Asian markets, only the Japanese market is
larger than Hong Kong, worldwide, Hong Kong ranked 6th at the end of 1993.
China itself has two stock exchanges that are set up to accommodate foreign
investment, in Shenzhen and in Shanghai. In both cases, foreign trading is
limited to a special class of shares (Class B) which was created for that
purpose. Only foreign investors may own Class B shares, but the government
must approve sales of Class B shares among foreign investors. As of
December 1994, there were 54 companies with Class B shares on the two
exchanges, for a total Class B market capitalization of U.S. $2.1 billion.
In Shanghai, all "B" shares are denominated in Chinese renminbi but all
transactions in "B" shares must be settled in US dollars, and all
distributions made on "B" shares are payable in U.S. dollars, the exchange
rate being the weighted average exchange rate for the U.S. dollar as
published by the Shanghai Foreign Exchange Adjustment Center. In Shenzhen,
the purchase and sale prices for "B" shares are quoted in Hong Kong
dollars. Dividends and other lawful revenue derived from "B" shares are
calculated in renminbi but payable in Hong Kong dollars, the rate of
exchange being the average rate published by the Shenzhen Foreign Exchange
Adjustment Center. There are no foreign exchange restrictions on the
repatriation of gains made on or income derived from "B" shares, subject to
the repayment of taxes imposed by China thereon.
Since 1978, China has designated certain areas of the country where
overseas investors can receive special investment incentives and tax
concessions in order to attract foreign investment. There are five Special
Economic Zones (Shenzhen, Shanton, and Zhuhai in Guangdong Province, Xiamen
in Fujiam Province, and Hainan Island, which itself is a province).
Fourteen coastal cities have been designated as "open cities" and certain
Open Economic Zones have been established in coastal areas. Shanghai has
established the Pudong New Area. Twenty seven High and New Technology
Industrial Development Zones have been approved where preferential
treatment is given to enterprises which are confirmed as technology
intensive.
Economically and financially, China is categorized as an emerging nation,
and thus presents the investor with many of the general risks that are
typical of such markets. However, in the case of China, there are two main
risk factors than eclipse all others: the political uncertainty surrounding
the succession to Deng and the 1997 relinquishment of Hong Kong to China by
Great Britain.
If economic growth and market liberalization have been the major positive
results of Deng's tenure, the drawbacks include a significant potential for
political instability. Deng's policies have had the effect of making the
Communist Party, and indeed much of the government, obsolete, however, both
the Party and the government remain firmly entrenched. There is little
possibility of predicting what type of government will eventually stabilize
itself in post-Deng China, but the possibilities range from old-line
conservative to ambitiously pro-growth. Even if the latter type should
prevail, there is no assurance that such a government would succeed in
controlling growth or inflation even to the fairly crude degree that Deng's
government has managed.
In the meantime, the economic weight of government entities is one of the
significant factors driving inflation in China and acting to impede
commerce and economic efficiency. The Party does not govern directly, but
only by controlling access to official government positions and by
monitoring government and private activities. Thus each governmental body
has its own corresponding body within the Party, leading to a double
bureaucracy which is both inefficient and highly prone to corruption.
While the fact of economic growth has been the result of planning, the
nature, speed, and extent of that growth have not been tightly controlled
or carefully planned. The combination of a burgeoning economy, a weakened
central government, and a power vacuum left by the demise of Deng may prove
volatile in the coming years, however bright China's long-term future may
be. Nor does China have a unified legal system or a set of national laws
governing business and securities trading practices on which to fall back.
There is still no free press, no viable opposition party, and no right to
freedom of expression. The massacre in Tienanmen Square in June of 1989 is
only the most recent reminder of this.
Much speculation centers around what China will do when it comes back into
possession of Hong Kong. Naturally, much of the answer will depend on who
is in power in China at that time, which is unknown. However, tensions that
have arisen between the current governor, Chris Patten, and the Chinese
government have led to speculation that China may try to punish Hong Kong
by sabotaging it economically, an option which is considered a real
possibility even though it would not necessarily be to China's economic
advantage to do so. The Hong Kong market's spectacular growth over the past
decade has not come without much volatility, and there is no reason to
doubt that volatility will continue to characterize the market, not only
because of political uncertainties but because the market has traditionally
been dominated by the actions of a few large trading blocs.
China is greatly dependent on foreign trade, particularly with Japan, the
U.S., and Germany. If political events become severe in China, there is
always the danger that the U.S. or other nations could alter their trade
stance towards China, which could hurt its economy by reducing exports.
However, China's exports continue to rise strongly while imports are also
expected to rise and may outstrip exports in terms of growth rates.
The strength of the economy and the weakness of the government could lead
to substantially higher inflation in coming years, which would erode
investors' earnings through the mechanism of changing rates of currency
exchange. Even under the most favorable circumstances, inflation is likely
to remain very high by Western standards. At the other extreme, a
tightening of government-imposed austerity measures could choke economic
growth and serve to discourage foreign investment, which would likely
result in lower prices for Class B shares.
A particularly significant factor within the region over the last 13 years
has been the increasing influence which China has had in the determination
of the economic development of certain countries. This influence has been
principally in providing manufacturing facilities, in providing a market
for goods and services, and in creating a demand for export outlets, both
directly and indirectly, through Hong Kong.
The effect of China's economic development has been an increase in economic
integration among the countries in the China region. The links between
China and Hong Kong and China and other countries within the region, where
there is a significant Chinese element of the population, have by now been
strengthened to a degree which makes a reversal unlikely. Moreover,
although these links have been developed to a stage where economic
co-operation in trade operates smoothly, the full potential of the market,
both in terms of domestic consumption and of export growth, has hardly
begun to be realized.
EMERGING MARKETS: ASIA
MARKET CAPITALIZATION IN U.S. DOLLARS
JUNE 1995
Millions
In dia 147,210
I nd onesia 52,243
Kor e a 178,670
Ma lay sia 224,176
P ak istan 9,469
Phi lippines 55,038
S ri Lanka 2,259
Taiwa n 186,822
Th ailand 150,584
Source: IFC (International Finance Corporation , Second Quarter 1995)
REAL GDP ANNUAL RATE OF GROWTH
(ANNUAL % CHANGE)
1994
C hina 12.0 %
Ho ng Kong 5.7 %
I n dia 4.9 %
Ind o nesia 7.0 %
Ja pa n n/a
Kor ea 8.3 %
Malay sia 8.5 %
Ph ilipp ines 4.5 %
Sin gapor e 7.0 %
Taiw an 6.2 %
Th ai land 8.5 %
Source: World Economic Outlook, May 1995 (International Marketing Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING CANADA
Canada occupies the northern part of North America and is the
second-largest country in the world (3.97 million square miles in area)
extending from the Atlantic Ocean to the Pacific. The companies in which
the fund may invest may include those involved in the energy industry,
industrial materials (chemicals, base metals, timber, and paper), and
agricultural materials (grain cereals). The securities of companies in the
energy industry are subject to changes in value and dividend yield which
depend, to a large extent, on the price and supply of energy fuels. Rapid
price and supply fluctuations may be caused by events relating to
international politics, energy conservation, and the success of exploration
projects. Canada is one of the world's leading industrial countries, as
well as a major exporter of agricultural products. Canada is rich in
natural resources such as zinc, uranium, nickel, gold, silver, aluminum,
iron, and copper. Forest covers over 44% of its land area, making Canada a
leading world producer of newsprint. The economy of Canada is strongly
influenced by the activities of companies and industries involved in the
production and processing of natural resources. Canada is a major producer
of hydroelectricity, oil, and gas. The business activities of companies in
the energy field may include the production, generation, transmission,
marketing, control, or measurement of energy or energy fuels. Economic
prospects are changing due to recent government attempts to reduce
restrictions against foreign investment.
Canadian securities are not considered by FMR to have the same level of
risk as other nation's securities. Canadian and U.S. companies are
generally subject to similar auditing and accounting procedures, and
similar government supervision and regulation. Canadian markets are more
liquid than many other foreign markets and share similar characteristics
with U.S. markets. The political system is more stable than in some other
foreign countries, and the Canadian dollar is generally less volatile
relative to the U.S. dollars.
Many factors affect and could have an adverse impact on the financial
condition of Canada, including social, environmental, and economic
conditions; factors which are not within the control of Canada. In Canada,
where recovery is not yet as firmly established as in the United States,
interest rates have been coming down after a sharp rise associated with
exchange market developments in the fall of 1992. In light of the cyclical
situation, there should be room for a further easing of interest rates
without jeopardizing the progress made toward price stability. Continued
perseverance in reducing the structural budget deficit also is required.
FMR is unable to predict what effect, if any, such factors would have on
instruments held in the fund's portfolio.
The U.S. - Canada Free Trade Agreement which became effective in January
1989, will be phased in over a period of 10 years. This agreement will
remove tariffs on U.S. technology and Canadian agricultural products in
addition to removing trade barriers affecting other important sectors of
each country's economy. Canada, the U.S. and Mexico have implemented the
North American Free Trade Agreement which was entered into in 1994. This
cooperation is expected to lead to increased trade and to reduce barriers.
The majority of new equity issues or initial public offerings in Canada are
through underwritten offerings. The fund may elect to participate in these
issues.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICA
Latin America is a region rich in natural resources such as oil, copper,
tin, silver, iron ore, forestry, fishing, livestock, and agriculture. The
region has a large population (over 300 million) representing a large
domestic market. The region has been transitional over the last five years
from the stagnant 1980s which were characterized by poor economic policies,
higher international interest rates, and limited access to new foreign
capital.
High inflation and low economic growth have given way to stable manageable
inflation rates and higher economic growth. Changes in political
leadership, the implementation of market-oriented economic policies, such
as privatization, trade reform and monetary reform have been among the
recent steps taken to modernize the Latin American economies and to
regenerate growth in the region. Various trade agreements have also been
formed within the region such as the Andean Pact, Mercosur and NAFTA. The
largest of these is NAFTA, which was implemented on January 1, 1994.
Latin American equity markets can be extremely volatile and in the past
have shown little correlation with the U.S. market. Currencies are
typically weak, but most are now relatively free floating, and it is not
unusual for the currencies to undergo wide fluctuations in value over short
periods of time due to changes in the market.
Mexico's economy has been transformed significantly over the last 6-7
years. In the past few years the government has sold the telephone company,
the major steel companies, the banks and many others. The major state
ownership remaining is in the oil sector and the electricity sector. The
U.S. is Mexico's major trading partner, accounting for two-thirds of its
exports and imports. The government in consultation with international
economic agencies, is implementing programs to stabilize the economy and
foster growth. For example, Mexico, the U.S. and Canada implemented the
North American Free Trade Agreement. This cooperation is expected to lead
to increased trade and reduced barriers.
In the early 1980s Mexico experienced a foreign debt crisis. By 1987,
foreign debt had reached prohibitive levels, accounting for 90 to 95
percent of GDP, thus draining Mexico of all its resources. By the end of
1994, a large current account deficit, fueled in part by expansionary
policy, and the burden of its large national debt forced the Mexican
government to devalue the peso, triggering a severe crisis of confidence.
Both the crisis and the measures taken to stabilize the economy since, have
led to severely reduced domestic demand, which has been only partially
offset by positive trade-related activity.
Brazil entered the 1990s with declining real growth, runaway inflation,
a n unserviceable foreign debt of $122 billion, and a lack of policy
direction. Over the past two years, Brazil was able to stabilize its
domestic economy through a relentless process of balancing the government
budget, the privatization of state enterprises, deregulation and reduction
of red tape and introducing greater competition in the domestic business
environment. Inflation has been reduced to about 3% a month from 50% a
month since mid 1994. A major long-run strength is Brazil's natural
resources. Iron ore, bauxite, tin, god, and forestry products make up some
of Brazil's basic natural resource base, which includes some of the largest
mineral reserves in the world. In terms of population, Brazil is the
sixth-largest in the world with about 155 million people and represents a
huge domestic market.
Chile, like Brazil, is endowed with considerable mineral resources, in
particular copper. Economic reform has been ongoing in Chile for at least
15 years, but political democracy has only recently returned to Chile.
Privatization of the public sector beginning in the early 1980s has
bolstered the equity market. A well organized pension system has created a
long-term domestic investor base.
Argentina is strong in wheat production and other foodstuffs and livestock
ranching. A well-educated and skilled population boasts one of the highest
literacy rates in the region. The country has been ravaged by decades of
extremely high inflation and political instability. Thanks to structural
reforms, the revitalized Argentine economy has been among the top three
fastest growing economies in the world over the last three years. The newly
created Argentine economic institutions have integrated the country with
the rest of the world, leaving the state to concentrate on its essential
functions. Privatization is ongoing and should reduce the amount of
external debt outstanding. The markets for labor, capital and goods and
services have been de-regulated. Nearly all non-tariff barriers and export
taxes have been eliminated, the tariff structure simplified and tariffs
sharply reduced.
Venezuela has substantial oil reserves. External debt is being
renegotiated, and the government is implementing economic reform in order
to reduce the size of the public sector. Internal gasoline prices, which
are one-third those of international prices, are being increased in order
to reduce subsidies. Plans for privatization and exchange and interest rate
liberalization are examples of recently introduced reforms.
EMERGING MARKETS: LATIN AMERICA
MARKET CAPITALIZATION IN U.S. DOLLARS
JUNE 1995
Millions
Ar gen tina 33,498
Braz il 149,110
Ch i le 83,453
Colo mbia 18,176
Me xic o 93,638
Pe ru 9,997
Ven ezu ela 4,936
Source: IFC (International Finance Corporation, Second Quarter 1995)
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1994
Ar gen tina 7.1 %
B ra zil 5.7 %
Chi le 4.2 %
Me xic o 3.5 %
Ven ezuel a 3.3 %
Source: World Economic Outlook, May 1995 (International Monetary Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contract s "), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges and
may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) in accordance with a
ranking of broker-dealers determined periodically by FMR's investment staff
based upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
Each fund's turnover rates for the fiscal years ended October 31, 1995 and
1994 are presented in the table below. The estimated portfolio turnover
rate for France Fund , Germany Fund, Hong Kong and China Fund ,
Japan Small Companies Fund , Nordic Fund , and United
Kingdom Fund is not expected to exceed 200%. Because a high turnover
rate increases transaction costs and may increase taxable gains, FMR
carefully weighs the anticipated benefits of short-term investing against
these consequences. An increased turnover rate is due to a greater volume
of shareholder purchase orders, short-term interest rate volatility and
other special market conditions.
TURNOVER RATES 1995 1994
Canada Fund 75 % 59%
Emerging Markets Fund 78% 107%
Europe Fund 38% 49 %
Europe Capital Appreciation Fund Fund 176% 317 % *
Japan Fund 86% 153 %
Latin America Fund 57% 77%
Pacific Basin Fund 65% 88 %
Southeast Asia Fund 94% 157 %
* Annualized
BROKERAGE COMMISSIONS. The table below lists the total brokerage
commissions; and the dollar amount of commissions paid to FBS, FBSI and
FBSL for the fiscal periods ended October 31, 1995, 1994, and 1993.
Fiscal
Period Ended
October 31 Total To FBSI To FBS /FBSL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CANADA FUND
1995 $ 941,962 $ 120,137 $ 0
1994 $ 950,009 $ 76,201 $ 0
1993 $ 559,269 $ 6,234 $ 0
EMERGING MARKETS FUND
1995 $ 11,637,638 $ 86,207 $ 0
1994 $ 20,130,994 $ 52,584 $ 0
1993 $ 4,396,375 $ 12,982 $ 0
EUROPE FUND
1995 $ 1,033,151 $ 36 $ 3,490
1994 $ 856,517 $ 182 $ 0
1993 $ 1,377,988 $ 0 $ 0
EUROPE CAPITAL APPRECIATION FUND
1995 $ 2,336,212 $ 3,628 $ 70,372
19941 $ 3,052,874 $ 7,959 $ 0
JAPAN FUND
1995 $ 2,422,928 $ 0 $ 0
1994 $ 4,816,464 $ 0 $ 0
1993 $ 1,680,833 $ 0 $ 0
LATIN AMERICA FUND
1995 $ 2,102,089 $ 53,346 $ 0
1994 $ 1,918,285 $ 57,533 $ 0
19932 $ 902,099 $ 15,080 $ 0
PACIFIC BASIN FUND
1995 $ 2,937,153 $ 0 $ 0
1994 $ 3,629,075 $ 0 $ 0
1993 $ 3,067,285 $ 0 $ 0
SOUTHEAST ASIA FUND
1995 $ 6,876,440 $ 0 $ 0
1994 $ 13,659,606 $ 0 $ 0
19932 $ 2,709,357 $ 0 $ 0
</TABLE>
_____
1 From December 21, 1993 (commencement of operations).
2 From April 19, 1993 (commencement of operations).
The table below lists for fiscal 1995, the percentage of aggregate
brokerage commissions paid to FBSI, FBS and FBSL and the percentage of the
aggregate dollar amount of transactions for which each fund paid brokerage
commissions to FBSI, FBS, and FBSL. The difference in the percentage of the
brokerage commissions paid to and the percentage of the dollar amount of
transactions effected through FBSI and FBSL is a result of the low
commission rates charged by FBSI. The table also includes the amount of
brokerage commissions paid to brokerage firms that provided research
services; and the approximate amount of transactions effected through
brokerage firms that provided research services.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
% of % of Commissions Transactions with
% of % of Transactions Transactions Paid To Firms Brokerage Firms
Fiscal Commissions Commissions Effected Effected Providing Providing
Period Ended Paid Paid To through through Research Research Services
October 31, 1995 to FBSI FBS/FBSL FBSI FBS/FBSL Services
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CANADA FUND 2.76% 0% 22.38% 0% $ 902,171 $ 402,801,995
EMERGING MARKETS FUND .74% 0% 3.70% 0% $ 10,608,451 $ 2,011,767,472
EUROPE FUND 0% .34% .06% .68% $ 983,978 $ 328,129,069
EUROPE CAPITAL APPRECIATION FUND .16% 3.01% .59% 3.64% $ 2,229,603 $ 873,046,912
JAPAN FUND 0% 0% 0% 0% $ 2,361,039 $ 597,261,674
LATIN AMERICA FUND 2.54% 0% 8.10% 0% $ 1,660,229 $ 486,620,306
PACIFIC BASIN FUND 0% 0% 0% 0% $ 2,611,090 $ 522,401,734
SOUTHEAST ASIA FUND 0% 0% 0% 0% $ 6,785,349 $ 1,268,560,255
</TABLE>
_____
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the U.S. are valued at last sale price or, if no sale
has occurred, at the closing bid price. Most equity securities for which
the primary market is outside the U.S. are valued using the official
closing price or the last sale price in the principal market where they are
traded. If the last sale price (on the local exchange) is unavailable, the
last evaluated quote or last bid price is normally used. Short-term
securities are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. Convertible
securities and fixed-income securities are valued primarily by a pricing
service that uses a vendor security valuation matrix which incorporates
both dealer-supplied valuations and electronic data processing techniques.
This two-fold approach is believed to more accurately reflect fair value
because it takes into account appropriate factors such as institutional
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data,
without exclusive reliance upon quoted, exchange, or over-the counter
prices. Use of pricing services has been approved by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by a fund are
determined as of such time for the purpose of computing the fund's net
asset value. Foreign security prices are furnished by independent brokers
or quotation services which express the value of securities in their local
currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local currency into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of net
asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be valued
as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's net asset
value (NAV) over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then calculating
the annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. For example, a cumulative total return of 100% over ten years would
produce an average annual total return of 7.18%, which is the steady annual
rate of return that would equal 100% growth on a compounded basis in ten
years. Average annual total returns covering periods of less than one year
are calculated by determining a fund's total return for the period,
extending that return for a full year (assuming that return remains
constant over the year), and quoting the result as an annual return. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis and may be quoted with or without taking each
fund's 3% maximum sales charge into account and may or may not include the
effect of Canada Fund's, Emerging Markets Fund's, Europe
Fund's , Europe Capital Appreciation Fund's , Pacific Basin
Fund's, Japan Fund's 1.00% redemption fee or France Fund's ,
Germany Fund's, Hong Kong and China Fund's , Japan Small Companies
Fund's , Latin America Fund's, Nordic Fund's , Southeast
Asia Fund's, and United Kingdom Fund 's 1.50% redemption fee on
shares held less than 90 days. (As of February 1, 1996, Japan
Fund 's and Canada Fund 's redemption fee will increase to
1.5 0 %.) Excluding a fund's sales charge or redemption fee from a
total return calculation produces a higher total return figure. Total
returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On October 27, 1995, the 13-week and 39-week long-term moving
averages for the funds are outlined in the chart below.
13 Week Long-Term 39 Week Long-Term
Fund Name Moving Average Moving Average
Canada Fund 18.15 17.28
Emerging Markets Fund 15.99 15.25
Europe Fund 23.25 21.88
Europe Capital Appreciation Fund 12.33 11.83
Japan Fund 12.27 12.12
Latin America Fund 10.69 10.05
Pacific Basin Fund 15.47 15.18
Southeast Asia Fund 14.02 13.51
HISTORICAL FUND RESULTS. The following table shows the funds' total returns
for the periods ended October 31, 199 5 . Total return figures include
the effect of the funds' sales charges. Total returns do not include the
effect of paying a fund's $25 exchange fee, which was in effect from
December 1, 1987 through October 23, 1989, or other charges for special
transactions or services, such as Canada Fund's, Europe Fund's, Europe
Capital Appreciation Fund's, Japan Fund's, and Pacific Basin Fund's 1.00%
redemption fee or Emerging Market Fund 's, Latin America
Fund 's, and Southeast Asia Fund 's redemption fee of 1.5%
for shares held less then 90 days. Total returns may be quoted on a
before-tax or after-tax basis.
Average Annual Total Returns* * Cumulative Total Returns* *
One Five Life of One Five Life of
Year Years Fund Year Years Fund
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Canada Fund (11/17/87)* (0.85)% 7.42% 9.59% (0.85)% 43.02 % 10 7.40 %
Emerging Markets Fund (11/1/90)* (23.53)% n/a 9.11% (23.53)% n/a 54.69%
Europe Fund (10/1/86)* 9.37% 9.03% 11.07% 9.37% 54.11 % 159.64 %
Europe Capital Appreciation Fund (12/21/93)* 3.24% n/a 8.88% 3.24% n/a 1 7.18 %
Japan Fund (9/15/92)* (15.57)% n/a 7.25% (15.57)% n/a 24.50 %
Latin America Fund (4/19/93)* (41.66)% n/a (1.92)% (41.66)% n/a (4.79)%
Pacific Basin Fund (10/1/86)* (18.39)% 5.76% 6.74% (18.39)% 3 2.32 % 80.88 %
Southeast Asia Fund (4/19/93)* (7.85)% n/a 12.65% (7.85)% n/a 35.27 %
</TABLE>
* Commencement of Operations
* * Load Adjusted
The following tables show the income and capital elements of each fund's
total return from the date it commenced operations through October 31,
1995. The funds may compare their total returns to the record of the
following Morgan Stanley Capital International indices: the World Index;
EAFE Index; the Europe Index; the Pacific Index; the Combined Far East
ex-Japan Free Index; and the Latin America Free Index. The EAFE Index
combines the Europe and Pacific indices. The addition of Canada, the U.S.,
and South African Gold Mines to the EAFE index compiles the World Index
which includes over 1400 companies. The Europe Index and Pacific Index are
subsets of the Morgan Stanley Capital International World Index, which is
also published by Morgan Stanley Capital International, S.A. The Europe and
Pacific Indices are weighted by the market value of each country's stock
exchange(s). The companies included in the indices change only in the event
of mergers, takeovers, failures and the like, and minor adjustments may be
made when Morgan Stanley Capital International, S.A. reviews the companies
covered as to suitability every three or four years.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Comparative Index Description of Index
Canada Fund Toronto Stock Exchange 300 An unmanaged index of over 300 companies
Composite Index (TSE 300 Index). in Canada published by the Toronto Stock
Exchange.
Emerging Markets Fund Morgan Stanley Capital International An unmanaged index over 560 foreign
E merging Markets Free Index. common stocks .
Europe Fund , Europe Morgan Stanley Capital International An unmanaged index of more than 6 00
Capital Appreciation Europe Index (Europe Index) . companies throughout Europe .
Fund
Japan Fund Tokyo Stock Exchange Price Index Includes over 1,200 companies representing
(TOPIX) . over 90% of the total market capitalization in
Japan .
Latin America Fund Morgan Stanley Latin America Free Includes performance of over 130 companies
Index. in over 7 countries.
Pacific Basin Fund Morgan Stanley Capital International An unmanaged index of more than 400
Pacific Index (Pacific Index). companies from Australia, Hong Kong,
Japan, Singapore, and Malaysia.
Southeast Asia Fund Morgan Stanley Capital International Includes performance of over 380 companies
Combined Far East Ex-Japan Index . in over 8 countries .
</TABLE>
Each table compares the funds' returns to the record of the Standard &
Poor's Composite Index of 500 Stocks (S&P 500), the Dow Jones Industrial
Average (DJIA), a foreign stock market index as described above, and the
cost of living (measured by the Consumer Price Index, or CPI) over the same
period. The CPI information is as of the month end closest to the initial
investment date for each fund. The S&P 500 and DJIA comparisons are
provided to show how each fund's total return compared to the record of a
broad range of U.S. common stocks and a narrower set of stocks of major
U.S. industrial companies, respectively, over the same period. The funds
have the ability to invest in securities not included in the indices, and
their investment portfolios may or may not be similar in composition to the
indices. The EAFE Index, Europe Index, Latin America Index, Pacific
Index, Combined Far East Free Ex-Japan Index, TSE 300 Index, TOPIX Index,
S&P 500, and DJIA are based on the prices of unmanaged groups of stocks
and, unlike each fund's returns, their returns do not include the effect of
paying brokerage commissions and other costs of investing.
CANADA FUND: During the period from November 17, 1987 (commencement of
operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Canada Fund would have grown to $ 20,740 after deducting the
fund's 3% sales charge and assuming all distributions were reinvested. This
was a period of fluctuating stock prices and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in the fund today.
FIDELITY CANADA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total TSE 300
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 17,024 $ 301 $ 3,415 $ 20,740 $ 19,040 $ 30,309 $ 31,485 $ 13,319
1994 16,665 282 3,343 20,290 17,783 23,971 25,235 12,955
1993 17,285 292 3,421 20,998 17,655 23,079 23,129 12,626
1992 13,803 21 1 2,731 16,745 14,331 20,078 19,693 12,288
1991 15,792 24 0 1,991 18,023 16,117 18,257 18,192 11,906
1990 13,163 13 7 766 14,066 13,074 13,674 13,986 11,568
1989 14,987 146 183 15,316 15,950 14,782 14,573 10,884
1988* 12,358 0 0 12,358 12,753 11,694 11,408 10,416
</TABLE>
* From November 17, 1987 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on November
17, 1987, assuming the 3% load had been in effect, the net amount invested
in fund shares was $ 9,700 . The cost of the initial investment
($10,000), together with the aggregate cost of reinvested dividend and
capital gain distributions for the period covered (their cash value at the
time they were reinvested), amounted to $ 12,990 . If distributions
had not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period would
have amounted to $ 213 for dividends and $ 2,561 for capital
gains distributions. Tax consequences of different investments (with the
exception of foreign tax withholdings) have not been factored into the
above figures. The figures shown do not reflect the fund's 1.0%
redemption fee or shares held less than 90 days.
EMERGING MARKETS FUND: During the period from November 1, 1990
(commencement of operations) to October 31, 1995, a hypothetical $10,000
investment in the Fidelity Emerging Markets Fund would have grown to
$15,469 after deducting the fund's 3% sales charge and assuming all
dividends were reinvested. This was a period of fluctuating stock prices
and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in the fund today.
FIDELITY EMERGING MARKETS FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of Emerging
Initial Reinvested Reinvested Market
Year Ended $10,000 Dividend Capital Gain Total Free
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI**
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 14,686 $ 367 $ 416 $ 15,469 $ 26,190 $ 22,165 $ 22,512 $ 11,513
1994 18,673 422 529 19,624 32,505 17,530 18,044 11,199
1993 15,695 307 444 16,446 25,128 16,878 16,538 10,914
1992 10,719 127 149 10,995 17,333 14,683 14,081 10,622
1991* 10,088 40 0 10,128 14,439 13,351 13,008 10,292
</TABLE>
* From November 1, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on November
1, 1990 assuming the 3% load had been in effect, the net amount invested in
fund shares was $9,700. The cost of the initial investment ($10,000),
together with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested), amounted to $10,574. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $281 for dividends and $281 for capital gain distributions. Tax
consequences of different investments (with the exception of foreign tax
withholdings) have not been factored into the above figures. The figures
shown above do not reflect the fund's 1.5% redemption fee applicable to
shares held less than 90 days.
EUROPE FUND: During the period from October 1, 1986 (commencement of
operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Europe Fund would have grown to $ 25,964 after deducting
the fund's 3% sales charge and assuming that all distributions were
reinvested. This was a period of fluctuating stock prices and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in the fund
today.
FIDELITY EUROPE FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total Europe S&P
October 31 Investment Distributions Distributions Value Index 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 22,805 $ 3,016 $ 143 $ 25,964 $ 26,894 $ 33,489 $ 35,950 $ 13,947
1994 20,545 2,482 0 23,027 23,756 26,486 28,814 13,566
1993 17,877 2,075 0 19,952 21,355 25,500 26,409 13,221
1992 14,666 1,392 0 16,058 16,994 22,184 22,486 12,868
1991 15,452 915 0 16,367 17,319 20,172 20,772 12,468
1990 15,792 551 0 16,343 16,194 15,109 15,969 12,114
1989 14,589 336 0 14,925 14,339 16,332 16,640 11,397
1988 12,571 11 0 12,582 12,819 12,921 13,026 10,907
1987 11,727 11 0 11,738 11,136 11,255 11,659 10,463
1986* 9,690 0 0 9,690 10,061 10,577 10,655 10,009
</TABLE>
* From October 1, 1986 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on October 1,
1986, assuming the 3% load had been in effect, the net amount invested in
fund shares was $9,700. The cost of the initial investment ($10,000),
together with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested), amounted to $ 12,107 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 1,882 for dividends and $107 for capital gains
distributions . Tax consequences of different investments (with the
exception of foreign tax withholding s ) have not been factored into
the above figures. The figures shown do not reflect the fund's 1.0%
redemption fee or shares held less than 90 days.
EUROPE CAPITAL APPRECIATION FUND: During the period from December 21, 1993
(commencement of operations) to October 31, 1995, a hypothetical $10,000
investment in Fidelity Europe Capital Appreciation Fund would have grown to
$ 11,718 after deducting the fund's 3% sales charge and assuming that
all distributions were reinvested. This was a period of fluctuating stock
prices and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in the fund today.
FIDELITY EUROPE CAPITAL APPRECIATION FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total Europe
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 11,718 $ 0 $ 0 $ 11,718 $ 12,131 $ 13,127 $ 13,294 $ 10,542
1994* 11,010 0 0 11,010 10,716 10,382 10,655 10,254
</TABLE>
* From December 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on December
21, 1993 , assuming the 3% load had been in effect, the net amount
invested in fund shares was $ 9,700 . The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $ 10,000 . The
fund did not distribute any distributions or capital gains during the
period. Tax consequences of different investments (with the exception of
foreign tax withholding s ) have not been factored into the above
figures. The figures shown do not reflect the fund's 1.0% redemption fee
applicable to shares held less than 90 days.
JAPAN FUND: During the period from September 15, 1992 (commencement of
operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Japan Fund would have grown to $12,835 after deducting the fund's
3% sales charge and assuming all distributions were reinvested. This was a
period of fluctuating stock prices and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY JAPAN FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total TOPIX
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI**
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 11,718 $ 0 $ 732 $ 12,450 $ 12,716 $ 14,904 $ 15,336 $ 10,878
1994 13,842 0 461 14,303 14,931 11,787 12,292 10,580
1993 12,950 0 0 12,950 13,631 11,349 11,266 10,311
1992* 9,545 0 0 9,545 9,332 9,873 9,593 10,035
</TABLE>
* From September 15, 1992 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on September
15, 1992, assuming the 3% load had been in effect, the net amount invested
in fund shares was $9,700. The cost of the initial investment ($10,000),
together with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested) amounted to $10,739. If distributions had not been
reinvested the amount of distributions earned by the fund over time would
have been smaller and cash payments for the period would have amounted to
$728 for capital gain distributions. The fund did not pay any dividends.
Tax consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the above figures. The
figures shown above do not reflect the fund's 1.00% redemption fee
applicable to shares held less than 90 days.
LATIN AMERICA FUND: During the period from April 19, 1993 (commencement of
operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Latin America Fund would have grown to $ 9,521 after
deducting the fund's 3% sales charge and assuming all distributions were
reinvested. This was a period of fluctuating stock prices and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in the fund
today.
FIDELITY LATIN AMERICA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested Latin
Year Ended $10,000 Dividend Capital Gain Total America
October 31 Investment Distributions Distributions Value Free Index S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 9,458 $ 31 $ 32 $ 9,521 $ 12,365 $ 13,891 $ 14,622 $ 10,674
1994 15,724 53 53 15,830 18,006 10,986 11,719 10,382
1993* 12,882 0 0 12,882 12,314 10,577 10,741 10,118
</TABLE>
* From April 19, 1993 (commencement of operations) through October 31,
1993.
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on April 19,
1993, assuming the 3% load had been in effect, the net amount
invested in fund shares was $9,700. The cost of the initial investment
($10,000), together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested), amounted to $ 10,097 . If distributions
had not been reinvested, the amount of distributions earned from the fund
over time would have been smaller and cash payments for the period would
have amounted to $ 49 for dividends and $ 49 for capital gain
distributions. Tax consequences of different investments (with the
exception of foreign tax withholdings) have not been factored into the
above figures. The figures shown above do not reflect the fund's 1.5%
redemption fee applicable to shares held less than 90 days.
PACIFIC BASIN FUND: During the period from October 1, 1986 (commencement
of operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Pacific Basin Fund would have grown to $18,088 after deducting the
fund's 3% sales charge and assuming all distributions were reinvested. This
was a period of widely fluctuating stock prices and should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY PACIFIC BASIN FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total Pacific
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI**
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 14,434 $ 756 $ 2,898 $ 18,088 $ 16,609 $ 33,489 $ 35,950 $ 13,947
1994 19,361 988 1,151 21,500 18,707 26,486 28,814 13,566
1993 16,956 723 716 18,395 17,154 25,500 26,409 13,221
1992 11,640 377 491 12,508 11,532 22,184 22,486 12,868
1991 12,756 413 538 13,707 14,760 20,172 20,772 12,468
1990 12,503 229 528 13,260 13,796 15,109 15,969 12,114
1989 15,307 270 21 15,598 18,594 16,332 16,640 11,397
1988 13,570 155 0 13,725 17,470 12,921 13,026 10,907
1987 12,047 11 0 12,058 13,346 11,255 11,659 10,463
1986* 9,603 0 0 9,603 8,862 10,577 10,655 10,009
</TABLE>
* From October 1, 1986 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on October 1,
1986, assuming the 3% load had been in effect, the net amount invested in
fund shares was $9,700. The cost of the initial investment ($10,000),
together with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested) amounted to $13,784. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and the cash payments for the period would have
amounted to $650 for dividend and $2,852 for capital gain distributions.
Tax consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the above figures. The
figures shown do not reflect the fund's 1.0% redemption fee or shares held
less than 90 days.
SOUTHEAST ASIA FUND: During the period from April 19, 1993 (commencement of
operations) to October 31, 1995, a hypothetical $10,000 investment in
Fidelity Southeast Asia Fund would have grown to $ 13,527 after
deducting the fund's 3% sales charge and assuming all distributions were
reinvested. This was a period of fluctuating stock prices and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in the fund
today.
FIDELITY SOUTHEAST ASIA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of Combined
Initial Reinvested Reinvested Far East
Year Ended $10,000 Dividend Capital Gain Total Ex-Japan
October 31 Investment Distributions Distributions Value Free Index S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 13,464 $ 63 $ 0 $ 13,527 $ 15,202 $ 13,891 $ 14,622 $ 10,674
1994 14,172 67 0 14,239 16,441 10,986 11,719 10,382
1993* 12,843 0 0 12,843 14,239 10,577 10,741 10,118
</TABLE>
* From April 19, 1993 (commencement of operations) through October 31,
1993.
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on April 19,
1993, assuming the 3% load had been in effect, the net amount
invested in fund shares was $9,700. The cost of the initial investment
($10,000), together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $10,068 . If distributions had
not been reinvested, the amount of distributions earned from the fund over
time would have been smaller and cash payments for the period would have
amounted to $ 68 for dividends. The fund did not distribute any
capital gains during the period. Tax consequences of different investments
with the exception of foreign withholding tax have not been factored into
the above figures. The figures shown above do not reflect the fund's 1.5%
redemption fee applicable to shares held less than 90 days.
MARKET CAPITALIZATION AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the International Finance Corporation as of June
30, 1995 and the performance of national stock markets as measured in
U.S. dollars by the Morgan Stanley Capital International stock market
indices for the 1, 5 and ten year periods ending October 31, 1995 .
Of course, these results are not indicative of future stock market
performance or the funds' performance. Market conditions during the periods
measured fluctuated widely. Brokerage commissions and other fees are not
factored into the values of the indices.
MARKET CAPITALIZATION. Companies outside the U.S. now make up nearly
two-thirds of the world's stock market capitalization. According to Morgan
Stanley Capital International, the size of the markets as measured in U.S.
dollars grew from $2,011 billion in 1982 to $8,512 billion in 1995.
TOTAL MARKET CAPITALIZATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Australia $ 183.9 Japan $ 1,935.2
Austria 17 Netherlands 23.7
Belgium 56.3 Norway 186.7
Canada 191.7 Singapore/Malaysia 73.2
Denmark 49.6 Spain 91.5
France 319.9 Sweden 101.2
Germany 333.7 Switzerland 296.7
Hong Kong 137.5 United Kingdom 836.4
Italy 112.4 United States 3,541.4
</TABLE>
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of the markets is measured in billions
of U.S. dollars as of October 31, 1995.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 20.9
Brazil 78.6
Chile 36.4
Colombia 5.4
Mexico 52.9
Venezuela 3.9
NATIONAL STOCK MARKET INDEX PERFORMANCE. Certain national stock
markets have outperformed the U.S. stock market. The table below
represents the performance of national stock market indices as
measured in U.S. dollars by the Morgan Stanley Capital International stock
market indices for the 1, 5, and ten year periods ending July 31,
1995. The table measures total return based on the period's change
in price, dividends paid on stocks in the index, and the effect of
reinvesting dividends net of any applicable foreign taxes. These are
unmanaged indices composed of a sampling of selected companies representing
an approximation of the market structure of the designated country.
NATIONAL STOCK MARKET INDEX PERFORMANCE
<TABLE>
<caption?
<S> <C> <C> <C>
1 year % 5 years % 10 years %
Argentina -21.45% 24.15% N/A
Australia 9.46% 9.95% 15.02%
Austria 5.11% -6.02% 16.23%
Belgium 19.84% 10.55% 25.24%
Brazil -1.23% 25.93% N/A
Canada 17.95% 4.44% 8.16%
Chile 31.09% 38.64% N/A
Columbia -26.76% N/A N/A
Denmark 12.44% 3.83% 15.28%
Finland 67.32% 16.67% N/A
France 9.99% 6.55% 19.88%
Germany 20.85% 5.54% 16.60%
Greece 27.89% -12.28% N/A
Hong Kong 0.02% 24.95% 23.78%
India -22.13% N/A N/A
Indonesia 5.86% -8.32% N/A
Ireland 24.34% 6.15% N/A
Israel 11.40% N/A N/A
Italy -5.58% -2.29% 12.47%
Japan -3.93% 2.37% 15.22%
Jordan -1.30% 10.05% N/A
Korea 9.50% 6.11% N/A
Malaysia 8.73% 13.61% N/A
Mexico -46.17% 12.55% N/A
Netherlands 29.07% 16.68% 21.24%
New Zealand 28.09% 12.50% N/A
Norway 18.08% -0.00% 14.36%
Pakistan -24.91% N/A N/A
Peru 56.60% N/A N/A
Philippines 1.81% 27.18% N/A
Portugal 11.41% -4.78% N/A
Singapore 12.07% 14.00% 17.41%
Spain 13.03% 2.68% 19.87%
Sri Lanka -26.38% N/A N/A
Sweden 30.92% 6.70% 22.75%
Switzerland 30.77% 16.64% 19.81%
Taiwan -21.09% 0.78% N/A
Thailand 0.02% 9.47% N/A
Turkey 57.48% -11.41% N/A
United Kingdom 19.43% 9.31% 16.35%
USA 27.32% 13.32% 15.03%
Venezuela -13.61% N/A N/A
</TABLE>
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. In addition to the mutual fund
rankings, a fund's performance may be compared to stock, bond, and money
market mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to remember
the risk and return characteristics of each type of investment. For
example, while stock mutual funds may offer higher potential returns, they
also carry the highest degree of share price volatility. Likewise, money
market funds may offer greater stability of principal, but generally do not
offer the higher potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of October 31, 1995, FMR advised over $ 26.5 billion in tax-free
fund assets, $ 80 billion in money market fund assets, $ 224
billion in equity fund assets, $ 51 billion in international fund
assets, and $ 23 billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940
Act), FDC exercises its right to waive each fund's front-end sales charge
on shares acquired through reinvestment of dividends and capital gain
distributions or in connection with the fund's merger with or acquisition
of any investment company or trust. In addition, FDC has chosen to waive
each fund's sales charge in certain instances because of efficiencies
involved in those sales of shares. The sales charge will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs but
otherwise as defined in the Employee Retirement Income Security Act)
maintained by a U.S. employer and having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a U.S. employer
that is a member of a parent-subsidiary group of corporations (within the
meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%"
substituted for "80%") any member of which maintains an employee benefit
plan having more than 200 eligible employees, or a minimum of $3,000,000 in
plan assets invested in Fidelity mutual funds, or as part of an employee
benefit plan maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual
funds, the assets of which are held in a bona fide trust for the exclusive
benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used to
fund annuity contracts purchased by employee benefit plans (including
403(b) programs, but otherwise as defined in the Employee Retirement Income
Security Act), which, in the aggregate, have either more than 200 eligible
employees or a minimum of $3,000,000 in assets invested in Fidelity funds;
3. to shares in a Fidelity IRA account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit plan
provided that: (i) at the time of the distribution, the employer, or an
affiliate (as described in exemption 1 above) of such employer,
maintained at least one employee benefit plan that qualified for exemption
1 and that had at least some portion of its assets invested in one
or more mutual funds advised by FMR, or in one or more accounts or pools
advised by Fidelity Management Trust Company; and (ii) the distribution is
transferred from the plan to a Fidelity Rollover IRA account within 60 days
from the date of the distribution;
4. to shares purchased by a charitable organization (as defined in Section
501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code);
6. to shares purchased by an investor participating in the Fidelity Trust
Portfolios program (these investors must make initial investments of
$100,000 or more in the Trust Portfolios funds and must, during the initial
six-month period, reach and maintain an aggregate balance of at least
$500,000 in all accounts and subaccounts purchased through the Trust
Portfolios program);
7. to shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services.
8. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity
Trustee or employee), the spouse of a Fidelity Trustee or employee, a
Fidelity Trustee or employee acting as custodian for a minor child, or a
person acting as trustee of a trust for the sole benefit of the minor child
of a Fidelity Trustee or employee;
9. to shares purchased by a bank trust officer, registered representative,
or other employee of a qualified recipient. Qualified recipients are
securities dealers or other entities, including banks and other financial
institutions, who have sold the fund's shares under special arrangements in
connection with FDC's sales activities;
10. to shares purchased by contributions and exchanges to the following
prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR
and that are marketed and distributed directly to plan sponsors or
participants without any intervention or assistance from any intermediary
distribution channel: The Fidelity IRA, the Fidelity Rollover IRA, The
Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined
Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The
Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and
The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan);
11. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains all
of its mutual fund assets in Fidelity mutual funds, provided the plan
executes a Fidelity non-prototype sales charge waiver request form
confirming its qualification;
12. to shares purchased by a registered investment adviser (RIA) for his
or her discretionary accounts, provided he or she executes a Fidelity RIA
load waiver agreement which specifies certain aggregate minimum and
operating provisions. This waiver is available only for shares purchased
directly from Fidelity, without a broker, unless purchased through a
brokerage firm which is a correspondent of National Financial Services
Corporation (NFSC). The waiver is unavailable, however, if the RIA is part
of an organization principally engaged in the brokerage business, unless
the brokerage firm in the organization is an NFSC correspondent; or
13. to shares purchased by a trust institution or bank trust department
for its non-discretionary, non-retirement fiduciary accounts, provided it
executes a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
Each fund's sales charge may be reduced to reflect sales charges previously
paid, or that would have been paid absent a reduction for some purchases
made directly with Fidelity as noted in the prospectus, in connection with
investments in other Fidelity funds. This includes reductions for
investments in prototype-like retirement plans sponsored by FMR or FMR
Corp., which are listed above.
On December 30, 1990, Europe, Pacific Basin, and Canada changed their sales
charge policy from a 2% sales charge upon purchase and 1% deferred sales
charge upon redemption, to a 3% sales charge upon purchase. If your shares
were purchased prior to that date and you do not qualify for a front-end
sales charge reduction under applicable conditions noted above, then, when
you redeem those shares, a deferred sales charge amounting to 1% of the net
asset value of shares redeemed will be withheld from your redemption
proceeds and paid to FDC.
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1996: New Year's
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
NYSE may modify its holiday schedule at any time. In addition, the funds
will not process wire purchases and redemptions on days when the Federal
Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund invests significantly in foreign securities,
corporate shareholders should not expect fund dividends to qualify for the
dividends-received deduction. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received deduction.
Each fund will notify corporate shareholders annually of the percentage of
fund dividends that qualify for the dividends-received deduction. Gains
(losses) attributable to foreign currency fluctuations are generally
taxable as ordinary income, and therefore will increase (decrease) dividend
distributions. Each fund will send each shareholder a notice in January
describing the tax status of dividend and capital gain distributions for
the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
As of October 31 , 1995, Europe Fund hereby designates $10,366,000
as a capital gain dividend for the purpose of the dividend-paid
deduction.
As of October 31, 1995, Canada F und had a capital loss carryforward
aggregating approximately $ 10,603,000 . This loss carryforward, of
which $ 5,787,000, and $ 4,816,000 will expire on October 31,
2002 , and 2003 , respectively, is available to offset future
capital gains.
As of October 31, 1995, Emerging Markets Fund had a capital loss
carryforward aggregating approximately $11,421,000. This loss carryforward,
all of which will expire on October 31, 2003, is available to offset future
capital gains.
As of October 31 , 1995, Europe Capital Appreciation Fund had a
capital loss carryforward aggregating approximately $1,744,000. This loss
carryforward, all of which will expire on October 31 , 2003, is
available to offset future capital gains.
As of October 31 , 1995, Japan Fund had a capital loss carryforward
aggregating approximately $34,385,000. This loss carryforward, all of which
will expire on October 31 , 2003, is available to offset future
capital gains.
As of October 31 , 1995, Latin America Fund had a capital loss
carryforward aggregating approximately $147,415,000. This loss
carryforward, all of which will expire on October 31 , 2003, is
available to offset future capital gains.
As of October 31 , 1995, Pacific Basin Fund had a capital loss
carryforward aggregating approximately $10,407,000 This loss carryforward,
all of which will expire on October 31 , 2003, is available to offset
future capital gains.
As of October 31 , 1995, Southeast Asia Fund had a capital loss
carryforward aggregating approximately $28,533,000. This loss carryforward,
all of which will expire on October 31 , 2003, is available to offset
future capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Investment Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. All persons named as
Trustees also serve in similar capacities for other funds advised by FMR.
The business address of each Trustee and officer who is an "interested
person" (as defined in the Investment Company Act of 1940) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are
"interested persons" by virtue of their affiliation with either the trust
or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and she previously
served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member of the President's Advisory
Council of The University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc, and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling,
Inc.(1985-1995). In addition, he serves as a Trustee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield and Society for the
Preservation of New England Antiquities, and as an Overseer of the Museum
of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM J. HAYES (61), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's
equity funds, is Vice President of FMR.]
RICHARD HAZLEWOOD (35), Vice President, Emerging Markets Fund (1993) is an
employee of FMR.
GEORGE DOMOLKY (64), Vice President, Canada Fund (1989), is a vice
president of FMR.
SIMON FRASER (36), Vice President, Pacific Basin Fund (1993), is an
employee of FMR.
PATRICIA SATTERTHWAITE (36), Vice President, Latin America Fund (1993), is
a vice president of FMR.
SALLY WALDEN (36), Vice President, Europe Fund (1992), is an employee of
FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended October 31, 1995.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** F. Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams
Canada Fund
$ 0 $ 154 $ 148 $ 195 $ 0 $ 154 $ 155 $ 0 $ 159 $ 154 $ 154 $ 152
Emerging
$ 0 $ 662 $ 632 $ 838 $ 0 $ 662 $ 668 $ 0 $ 659 $ 662 $ 663 $ 655
Markets Fund
Europe Fund
$ 0 $ 210 $ 202 $ 266 $ 0 $ 210 $ 213 $ 0 $ 210 $ 210 $ 210 $ 208
Europe
$ 0 $ 125 $ 120 $ 158 $ 0 $ 125 $ 127 $ 0 $ 125 $ 125 $ 125 $ 124
Capital
Appreciation
Fund
France Fund+
$ 0 $ 3 $ 3 $ 5 $ 0 $ 3 $ 3 $ 0 $ 3 $ 3 $ 3 $ 3
Germany
$ 0 $ 5 $ 5 $ 7 $ 0 $ 5 $ 5 $ 0 $ 5 $ 5 $ 5 $ 5
Fund+
Hong Kong
$ 0 $ 25 $ 25 $ 30 $ 0 $ 25 $ 25 $ 0 $ 25 $ 25 $ 25 $ 25
& China
Fund +
Japan Fund
$ 0 $ 161 $ 154 $ 204 $ 0 $ 161 $ 164 $ 0 $ 161 $ 161 $ 162 $ 160
Japan Small
$ 0 $ 25 $ 25 $ 30 $ 0 $ 25 $ 25 $ 0 $ 25 $ 25 $ 25 $ 25
Companies
Fund +
Latin
$ 0 $ 285 $ 271 $ 361 $ 0 $ 285 $ 288 $ 0 $ 284 $ 285 $ 286 $ 283
America
Fund
Nordic Fund +
$ 0 $ 10 $ 10 $ 15 $ 0 $ 10 $ 10 $ 0 $ 10 $ 10 $ 10 $ 10
Pacific Basin
$ 0 $ 195 $ 186 $ 246 $ 0 $ 195 $ 198 $ 0 $ 194 $ 195 $ 195 $ 193
Fund
Southeast
$ 0 $ 301 $ 289 $ 382 $ 0 $ 301 $ 305 $ 0 $ 300 $ 301 $ 301 $ 298
Asia Fund
United
$ 0 $ 3 $ 3 $ 5 $ 0 $ 3 $ 3 $ 0 $ 3 $ 3 $ 3 $ 3
Kingdom
Fund +
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from the Fund
as Part of Fund from the Complex*
Expenses from the Fund Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
+ Estimated
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the "Plan"). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee. The amount paid to the Trustee under the Plan
will be determined based upon the performance of such investments. Deferral
of Trustees' fees in accordance with the Plan will have a negligible effect
on the fund's assets, liabilities, and net income per share, and will not
obligate the fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. The fund may invest in
such designated securities without shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of October 31, 1995, FMR owned the majority of the outstanding shares of
France F und, Germany Fund, Hong Kong and China Fund, Japan Small
Companies Fund, Nordic Fund, and United Kingdom Fund. Also as of October
31, 1995, the Trustees and officers of the funds owned, in the aggregate,
less than 1% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is Canada Fund's, Europe Fund's, and Pacific Basin
Fund's manager pursuant to management contracts dated March 1, 1992,
which were approved by shareholders on February 19, 1992. FMR is Japan's
manager pursuant to a management contract dated July 16, 1992, which was
approved by FMR, then the sole shareholder of Japan Fund , on
September 10, 1992. FMR is Emerging Markets Fund's manager pursuant
to a management contract dated March 1, 1992, which was approved by
shareholders on February 19, 1992. FMR is Latin America Fund's and
Southeast Asia Fund 's manager pursuant to management contracts dated
March 18, 1993, which were approved by FMR, then the sole shareholder of
Latin America Fund and Southeast Asia Fund , on March 24,
1993. FMR is Europe Capital Appreciation Fund's manager pursuant to a
management contract dated November 22, 1993, which was approved by FMR,
then the sole shareholder of the fund on November 18, 1993. FMR is
France Fund's , Germany Fund's, Hong Kong and China Fund's ,
Japan Small Companies Fund's , Nordic Fund 's , and United
Kingdom Fund 's manager pursuant to management contracts dated
September 14, 1995 which were approved by FMR as the then sole shareholder
of the fund on October 17, 1995.
For the services of FMR under the contracts , Emerging Markets
Fund , France Fund , Germany Fund, Hong Kong and China
Fund , Japan Small Companies Fund , Latin America Fund ,
Nordic Fund , and United Kingdom Fund pay FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate. For the services of FMR under the contracts
Canada Fund , Europe Fund , Europe Capital Appreciation
Fund , Japan Fund , Pacific Basin Fund , and Southeast
Asia Fund pay FMR a monthly management fee composed of the sum of
two elements: a basic fee and a performance adjustment based on a
comparison of each fund's performance to that of its comparative index .
COMPUTING THE BASIC FEE. The basic fee rate is composed of two elements: a
group fee rate and an individual fund fee rate.
COMPUTING THE MANAGEMENT FEE. For each fund, the group fee rate is based on
the monthly average net assets of all of the registered investment
companies with which FMR has management contracts and is calculated on a
cumulative basis pursuant to the graduated fee rate schedule shown below on
the left. The schedule below on the right shows the effective annual group
fee rate at various asset levels, which is the result of cumulatively
applying the annualized rates on the left. For example, the effective
annual fee rate at $ 352 billion of group net assets - the
approximate level for October 1995 - was .3111 %, which is the
weighted average of the respective fee rates for each level of group net
assets up to $ 352 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Group
Annualized
Group Net
Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
</TABLE>
Under the current management contract with FMR, the group fee rate for all
funds except France Fund , Germany Fund, Hong Kong and China
Fund , Japan Small Companies Fund , Nordic Fund , and United
Kingdom Fund , is based on a schedule with breakpoints ending at
.3000% for average group assets in excess of $174 billion. Prior to March
1992, the group fee breakpoints shown above for average group assets in
excess of $138 billion and under $228 billion were voluntarily adopted by
FMR and went into effect on January 1, 1992. The additional breakpoints
shown above for average group assets in excess of $228 billion were
voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule with respect to all funds previously discussed, and
added new breakpoints for average group assets in excess of $210 billion
and under $390 billion as shown in the schedule below. The revised group
fee rate schedule was identical to the above schedule for average group
assets under $210 billion.
Under the current management contract with FMR, the group fee rate for
France Fund, Germany Fund, Hong Kong and China Fund, Japan Small Companies
Fund, Nordic Fund and United Kingdom Fund is based on a schedule with
breakpoints ending at .2700%.
On January 1, 1996, FMR will voluntarily add new breakpoints to the
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Group
Annualized
Group Net
Effective Annual
Assets Rate Assets Fee Rate
174 - $210 billion .3000% $ 150 billion .3371%
210 - 246 .2950 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
</TABLE>
Each fund's individual fund fee rate is .45%. Based on the average net
assets of funds advised by FMR for October 1995, the annual management fee
rate and the annual basic fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
. 3111 % + .45% = . 7611 %
</TABLE>
One-twelfth (1/12) of this annual management/basic fee rate is then applied
to a fund's average net assets for the current month, giving a dollar
amount which is the fee for that month.
BENCHMARK INDICES. Canada Fund compares its performance to the Toronto
Stock Exchange 300 Composite Index (TSE 300 Index). Europe Fund and
Europe Capital Appreciation Fund compare their performance to the
Morgan Stanley Capital International Europe Index (Europe Index); Pacific
Basin Fund compares its performance to the Morgan Stanley Capital
International Pacific Index (Pacific Index). Japan Fund compares its
performance to the Tokyo Stock Exchange Price Index (TOPIX Index).
Southeast Asia Fund compares its performance to the record of the Morgan
Stanley Capital International Combined Far East ex-Japan Free Index
(combined Far East ex-Japan Free Index) over the same period.
COMPUTING THE PERFORMANCE ADJUSTMENT The basic fee is subject to an upward
or downward adjustment, depending upon whether, and to what extent, a
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of its Comparative Index over the same period. The
performance period consists of the most recent month plus the previous 35
months. Europe Capital Appreciation Fund , Japan Fund , and
Southeast Asia Fund 's performance periods commenced the first day of
the first full month of operation following commencement of operations
(January 1, 1994, October 1, 1992, and May 1, 1993, respectively). Each
month subsequent to the twelfth month, a new month will be added to the
performance period until the performance period equals 36 months.
Thereafter, the performance period will consist of the most recent month
plus the previous 35 months. Each percentage point of difference (up to a
maximum difference of + 10) is multiplied by a performance adjustment rate
of .02%. Thus, the maximum annualized adjustment rate is +.20%. This
performance comparison is made at the end of each month. One twelfth (1/12)
of this rate is then applied to each fund's average net assets for the
entire performance period, giving a dollar amount which will be added to
(or subtracted from) the basic fee.
Each fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested
in fund shares at the net asset value as of the record date for payment.
The record of the Comparative Index is based on change in value and is
adjusted for any cash distributions from the companies whose securities
compose the I ndex.
FMR pays any costs of subscribing to the indices and of obtaining
additional information needed to compute the management fee in conformance
with applicable laws and regulations.
Because the adjustment to the basic fee is based on each fund's performance
compared to the investment record of the appropriate Comparative
Index , the controlling factor is not whether each fund's performance is
up or down per se, but whether it is up or down more or less than the
record of its respective Comparative Index . Moreover, the
comparative investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
EMERGING MARKETS FUND AND LATIN AMERICA FUND . The tables
below show the management fee paid to FMR; and the management fee as a
percentage of each fund's average net assets for the fiscal periods ended
October 31, 1995, 1994, and 1993.
Management Fee as a
% of Average
Management Fee Net Assets
EMERGING MARKETS FUND
1995 $ 10,483,318 .7660%
1994 12,659,735 .7723%
1993 1,111,793 .7701%
LATIN AMERICA FUND
1995 $ 4,473,579 .7661%
1994 6,050,004 .7732%
1993* 479,545 .7697%**
* From April 19, 1993 (commencement of operations).
** Annualized
CANADA FUND , EUROPE FUND , EUROPE CAPITAL APPRECIATION
FUND , JAPAN FUND , PACIFIC BASIN FUND , AND SOUTHEAST ASIA
FUNDS. The tables below show the management fee paid to FMR (including the
effect of the performance adjustment); the dollar amount of negative or
positive performance adjustments; and the net management fee as a
percentage of the funds' average net assets for the periods ended October
31, 1995, 1994, and 1993.
Management Fee Management Fee as a
Including Performance Performance % of Average
Adjustment Adjustment Net Assets
CANADA FUND
1995 $ 2,498,644 $ (167,417) .7163%
1994 1,714,068 60,175 .7978%
1993 22,566 50,721 .8552%
EUROPE FUND
1995 $ 3,767,736 $ 145,908 .7962%
1994 3,565,039 243,702 .7226%
1993 3,100,828 (703,601) .6350%
EUROPE CAPITAL APPRECIATION FUND
1995 $ 2,171,262 $ 208,549 .8482%
1994* 1,908,662 0 .7678%**
* From December 21, 1993 (commencement of operations).
** Annualized
JAPAN FUND
1995 $ 2,258,147 $ (362,948) .6601%
1994 2,699,594 (76,576) .7450%
1993 754,644 (4,307) .7666%
PACIFIC BASIN FUND
1995 $ 3,184,306 $ 86,567 .7882%
1994 4,375,724 443,566 .8583%
1993 2,003,886 58,458 .7976%
SOUTHEAST ASIA FUND
1995 $ 3,949,976 $ (1,128,697) .5949%
1994 5,598,064 (633,730) .6937%
1993* 582,244 0 .7688%**
* From April 19, 1993 (commencement of operations).
** Annualized
The figures shown above reflect FMR's voluntary implementation of group fee
rate schedule changes for the funds as described on page . If FMR
had not voluntarily implemented these group fee rate changes, the funds'
management fees would have been higher.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating a fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISORS. FMR has entered into sub-advisory agreements with FMR U.K.,
FMR Far East, and FIIA. FIIA, in turn, has entered into a sub-advisory
agreement with its wholly owned subsidiary FIIAL U.K. On behalf of Hong
Kong and China Fund, Japan Fund , Japan Small Companies
Fund , and Southeast Asia Fund , FMR also has entered into a
sub-advisory agreement with FIJ. Pursuant to the sub-advisory agreements,
FMR may receive investment advice and research services outside the U.S.
from the sub-advisors. FMR may grant the sub-advisors investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
FMR entered into the sub-advisory agreements described above with respect
to Canada Fund, Emerging Markets Fund , Europe Fund ,
Pacific Basin Fund , and on March 1, 1992 following shareholder
approval of the agreements on February 19, 1992. FMR entered into the
sub-advisory agreements described above with respect to Japan Fund
on July 16, 1992, which was approved by FMR, then the sole shareholder of
Japan Fund , on September 10, 1992; with respect to Latin America
Fund and Southeast Asia Fund on March 18, 1993, which were
approved by FMR, then the sole shareholder of Latin America Fund and
Southeast Asia Fund , on March 24, 1993; with respect to Europe
Capital Appreciation Fund on November 18, 1993, which was approved
by FMR, then the sole shareholder of the fund on November 18, 1993; and
with respect to France Fund , Germany Fund, Hong Kong and China
Fund , Japan Small Companies Fund , Nordic Fund , and United
Kingdom Fund on September 14, 1995, which were approved by FMR as
the then sole shareholder of each fund on October 17, 1995.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of Fidelity
International Limited (FIL), a Bermuda company formed in 1968 which
primarily provides investment advisory services to non-U.S. investment
companies and institutional investors investing in securities throughout
the world. Edward C. Johnson 3d, Johnson family members, and various trusts
for the benefit of the Johnson family owns, directly or indirectly, more
than 25% of the voting common stock of FIL. FIJ was organized in Japan in
1986. FIIA was organized in Bermuda in 1983. FIIAL U.K. was organized in
the United Kingdom in 1984, and is a wholly owned subsidiary of Fidelity
International Management Holdings Limited, an indirect wholly owned
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIAL U.K. For
providing non-discretionary investment advice and research services the
sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to 110%
and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by the
fund for which the sub-adviser has provided FMR with investment advice and
research services.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing investment advice and
research services.
For providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee
equal to 50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing discretionary investment
management services.
Currently, FIIA exercises discretionary management authority over Hong
Kong and China Fund and Southeast Asia Fund is its capacity as sub-adviser.
currently, FIIAL U.K. exercises discretionary management authority over
Europe Fund, France Fund, Germany Fund, Nordic Fund, Pacific Basin Fund,
and United Kingdom Fund is its capacity as sub-adviser. Currently, FIJ
provides Japan Fund and Japan Small Companies Fund with investment
management authority is its capacity as sub-adviser.
For providing discretionary investment management and executing portfolio
transactions on behalf of the funds, the fees paid to each of the
sub-advisors for fiscal 1995, 1994, and 1993 are listed in the table
below. There were no fees paid to FMR U.K., FMR Far East, and FIJ for
fiscal 1995, 1994, and 1993.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Name Fiscal Year FIIA
Canada Fund 1995 $ 0
1994 0
1993 0
Emerging Markets Fund 1995
$ 0
1994
0
1993 0
Europe Fund 1995 $ 1,812,402
1994 1,756,433
1993 2,335,345
Europe Capital Appreciation Fund 1995 $ 0
1994 0
1993 0
Japan Fund 1 1995 $ 1,311,538
1994
305,758
1993 0
Latin America Fund 2 1995
$ 0
1994
0
1993 0
Pacific Basin Fund 1995 $ 1,550,062
1994 2,190,484
1993 687,196
Southeast Asia Fund 2 1995 $ 2,541,446
1994 2,844,499
1993 291,008 2
</TABLE>
1 From September 15, 1992 (commencement of operations).
2 From April 19, 1993 (commencement of operations).
CONTRACTS WITH FMR AFFILIATES
FSC is transfer, dividend disbursing, and shareholder servicing agent for
each fund. FSC receives annual account fees and asset-based fees for each
retail account and certain institutional accounts based on account size. In
addition, the fees for retail accounts are subject to increase based on
postal rate changes. With respect to certain institutional retirement
accounts, FSC receives asset-based fees only. With respect to certain other
institutional retirement accounts, FSC receives annual account fees and
asset based fees based on fund type. The asset-based fees are subject to
adjustment if the year-to-date total return of the Standard & Poor's
Composite Index of 500 Stocks is greater than positive or negative 15%. FSC
also collects small account fees from certain accounts with balances of
less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's net
asset value per share and dividends, and maintains each fund's accounting
records. The annual fee rates for these pricing and bookkeeping services
are based on each fund's average net assets, specifically, .06% for the
first $500 million of average net assets and .03% for average net assets in
excess of $500 million. The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993
Canada Fund $ 209,805 $ 129,038 $ 50,881
Emerging Markets Fund $ 560,714 $ 641,914 $ 100,767
Europe Fund $ 283,887 $ 294,804 $ 286,229
Europe Capital Appreciation Fund $ 153,762 $ 151,780 1 n/a
Japan Fund $ 205,394 $ 208,003 $ 76,445
Latin America Fund 2 $ 323,090 $ 382,374 $ 44,467 2
Pacific Basin Fund $ 242,212 $ 299,541 $ 150,276
Southeast Asia Fund 2 $ 349,043 $ 395,097 $ 49,486 2
</TABLE>
1 From December 21, 1993 (commencement of operations).
2 From April 19, 1993 (commencement of operations).
FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. For fiscal 1995, 1994, and 1993 there were
no securities lending fees incurred by the funds.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FDC. The table below shows the sales
charge revenue paid to FDC for the following fiscal periods:
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
PAID TO FDC
Sales Charge Revenue Deferred Sales Charge Revenue
1995 1994 1993 1995 1994 1993
Canada Fund
$ 872,526 n/a $ 50,670 $ 3,075 $ 5,130 $ 12,252
Emerging Markets Fund
$ 2,207,409 $ 2,416,374 $ 103,572 n/a n/a n/a
Europe Fund
$ 389,484 $ 814,169 $ 2,116,938 $ 66,854 $ 85,678 $ 213,896
Europe Capital Appreciation Fund
$ 155,891 n/a n/a n/a n/a n/a
Japan Fund
$ 375,382 n/a n/a n/a n/a n/a
Latin America Fund
$ 1,673,435 $ 1,245,357 n/a n/a n/a n/a
Pacific Basin Fund
$ 94,810 $ 1,709,242 $ 2,239,532 $ 10,008 $ 24,748 $ 56,119
Southeast Asia Fund
$ 805,224 $ 763,269 n/a n/a n/a n/a
</TABLE>
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Canada Fund , Fidelity Emerging Markets
Fund , Fidelity Europe Fund, Fidelity Europe Capital Appreciation, Legal
Name 1, Legal Name 2, Legal Name 3 , Fidelity Japan Fund, Fidelity
Japan Small Companies Fund , Fidelity Latin America Fund , Fidelity
Nordic Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund,
and Fidelity United Kingdom Fund are funds of Fidelity Investment
Trust (the trust), an open-end management investment company originally
organized as a Massachusetts business trust on April 20, 1984. On November
3, 1986, the trust's name was changed from Fidelity Overseas Fund to
Fidelity Investment Trust. Currently, there are 24 funds of the trust:
Fidelity Overseas Fund, Fidelity Europe Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity Pacific Basin Fund, Fidelity New Markets Income
Fund, Fidelity International Growth & Income Fund, Fidelity Global Bond
Fund, Fidelity Canada Fund, Fidelity Worldwide Fund, Fidelity Emerging
Market Fund, Fidelity Short-Term World Income Fund, Fidelity Diversified
International Fund, Fidelity International Value Fund, Fidelity Diversified
Global Fund, Fidelity Japan Fund, Fidelity Emerging Markets Fund, Fidelity
Latin America Fund, Fidelity Southeast Asia Fund, Fidelity France Fund,
Fidelity Germany Fund, Fidelity Japan Small Companies Fund, Fidelity Hong
Kong and China, Fund, Fidelity Nordic Fund, and Fidelity United Kingdom
Fund. The Declaration of Trust permits the Trustees to create additional
funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust or any fund may be
terminated upon the sale of its assets to another open-end management
investment company, or upon liquidation and distribution of its assets, if
approved by vote of the holders of a majority of the outstanding shares of
the trust or the fund. If not so terminated, the trust and the funds will
continue indefinitely.
CUSTODIAN. Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New
York, New York, is custodian of the assets of Canada Fund, Emerging
Markets Fund , Europe Fund , Europe Capital Appreciation
Fund , Japan Fund, Latin America Fund , Pacific Basin Fund ,
and Southeast Asia Fund . Brown Brothers Harriman & Co., 40 Water
Street, Boston, Massachusetts, is custodian of France Fund ,
Germany Fund, Hong Kong and China Fund , Japan Small Companies
Fund , Nordic Fund , and United Kingdom Fund . The
custodians are responsible for the safekeeping of a fund's assets and the
appointment of the subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of a fund or in
deciding which securities are purchased or sold by a fund. However, a fund
may invest in obligations of the custodian and may purchase securities from
or sell securities to the custodian. Morgan Guaranty Trust Company of New
York, The Bank of New York, and Chemical Bank, each headquartered in New
York, also may serve as a special purpose custodian of certain assets in
connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR. The
Boston branch of Brown Brothers Harriman & Co. leases its office space from
an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred to
date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as Canada Fund's, Emerging Markets Fund's ,
Europe Fund's , and Pacific Basin Fund's , independent
accountant. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as Europe Capital Appreciation Fund's, Japan Fund's,
France Fund's , Germany Fund's, Hong Kong and China
Fund's , Japan Small Companies Fund's , Latin America Fund's,
Nordic Fund's , Southeast Asia Fund's and United
Kingdom Fund 's independent accountant. The auditor examines
financial statements for the funds and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
Financial statements and financial highlights for Canada Fund,
Emerging Markets Fund , Europe Fund , Europe Capital
Appreciation Fund , Japan Fund, Latin America Fund , Pacific
Basin Fund , and Southeast Asia Fund 's for the fiscal year
ended October 31, 1995 are included in the funds' Annual Report, which is a
separate report supplied with this Statement of Additional Information.
Each fund's financial statements and financial highlights are incorporated
herein by reference. Because France Fund , Germany Fund, Hong Kong
and China Fund , Japan Small Companies Fund , Nordic Fund ,
and United Kingdom Fund are new funds of the trust, no financial
statements and highlights are incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements for Fidelity Canada Fund for the fiscal year
ended December 31, 1995 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 22, 1995 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(2) Financial Statements for Fidelity Emerging Markets Fund for the
fiscal year ended December 31, 1995 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
22, 1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(3) Financial Statements for Fidelity Europe Fund for the fiscal year
ended December 31, 1995 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 22, 1995 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(4) Financial Statements for Fidelity Europe Capital Appreciation Fund
for the fiscal year ended December 31, 1995 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 22, 1995 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(5) Financial Statements for Fidelity Japan Fund for the fiscal year
ended December 31, 1995 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 22, 1995 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(6) Financial Statements for Fidelity Latin America Fund for the fiscal
year ended December 31, 1995 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 22,
1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(7) Financial Statements for Fidelity Pacific Basin Fund for the fiscal
year ended December 31, 1995 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 22,
1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(8) Financial Statements for Fidelity Southeast Asia Fund for the
fiscal year ended December 31, 1995 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
22, 1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(9) Financial Statements for Fidelity International Growth & Income
Fund for the fiscal year ended December 31, 1995 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 22, 1995 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(10) Financial Statements for Fidelity Diversified International Fund
for the fiscal year ended December 31, 1995 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 22, 1995 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(11) Financial Statements for Fidelity International Value Fund for the
fiscal year ended December 31, 1995 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
22, 1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(12) Financial Statements for Fidelity Overseas Fund for the fiscal year
ended December 31, 1995 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 22, 1995 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(13) Financial Statements for Fidelity Worldwide Fund for the fiscal
year ended December 31, 1995 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 22,
1995 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(b) Exhibits:
(1) Restated Declaration of Trust, dated February 16, 1995, is incorporated
herein by reference to Exhibit 1 to Post-Effective Amendment No. 58.
(2) By-Laws of the Trust are incorporated herein by reference to Exhibit 2
to Fidelity Union Street Trust Post-Effective Amendment No. 87 (File No.
2-50318).
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract, dated October 1, 1992, between Fidelity
Diversified International Fund and Fidelity Management & Research Company
is incorporated herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 58.
(b) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Diversified International Fund dated October 1, 1992, is incorporated
herein by reference to Exhibit 5(p) to Post-Effective Amendment No. 51.
(c) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity
Diversified International Fund dated October 1, 1992 is incorporated herein
by reference to Exhibit 5(nn) to Post-Effective Amendment No. 51.
(d) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Diversified International Fund dated October 1, 1992 is
incorporated herein by reference as Exhibit 5(yyy) to Post-Effective
Amendment No. 51.
(e) Management Contract dated March 1, 1992, between Fidelity
International Growth & Income Fund and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(e) to
Post-Effective Amendment No. 57.
(f) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity International Growth & Income Fund is incorporated
herein by reference to Exhibit 5(f) to Post-Effective Amendment No. 57.
(g) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity International Growth & Income Fund is incorporated herein by
reference to Exhibit 5(g) to Post-Effective Amendment No. 57.
(h) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity International Growth & Income
Fund is incorporated herein by reference to Exhibit 5(h) to Post-Effective
Amendment No. 57.
(i) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Growth & Income Fund is
incorporated herein by reference to Exhibit 5(i) to Post-Effective
Amendment No. 57.
(j) Management Contract dated September 16, 1994, between Fidelity
International Value Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(j) to Post-Effective
Amendment No. 57.
(k) Sub-Advisory Agreement dated September 16, 1994 between Fidelity
Management & Research Company and Fidelity Management & Research (Far East)
Inc. on behalf of Fidelity International Value Fund is incorporated herein
by reference to Exhibit 5(k) to Post-Effective Amendment No. 57.
(l) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Fidelity International Value Fund is incorporated herein
by reference to Exhibit 5(l) to Post-Effective Amendment No. 57.
(m) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity International Value Fund is filed herein as Exhibit
5(m).
(n) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Value Fund is incorporated
herein by reference to Exhibit 5(n) to Post-Effective Amendment No. 57.
(o) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited on
behalf of Fidelity International Value Fund is incorporated herein by
reference to Exhibit 5(o) to Post-Effective Amendment No. 57.
(p) Management Contract dated March 1, 1992, between Fidelity Overseas
Fund and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit No. 5(p) to Post-Effective Amendment No. 57.
(q) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Overseas Fund is incorporated herein by reference to
Exhibit 5(q) to Post-Effective Amendment No. 57.
(r) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) on behalf of
Fidelity Overseas Fund is incorporated herein by reference to Exhibit 5(r)
to Post-Effective Amendment No. 57.
(s) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Overseas Fund is incorporated
herein by reference to Exhibit 5(s) to Post-Effective Amendment No. 57.
(t) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Overseas Fund is incorporated herein by
reference to Exhibit 5(t) to Post-Effective Amendment No. 57.
(u) Management Contract dated March 1, 1992, between Fidelity Worldwide
Fund, and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(u) to Post-Effective Amendment No. 57.
(v) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Worldwide Fund is incorporated herein by reference to
Exhibit 5(v) to Post-Effective Amendment No. 57.
(w) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
5(w) to Post-Effective Amendment No. 57.
(x) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Worldwide Fund is
incorporated herein by reference to Exhibit 5(x) to Post-Effective
Amendment No. 57.
(y) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 5(y) to Post-Effective Amendment No. 57.
(z) Management Contract dated March 1, 1992, between Fidelity Canada Fund
and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(z) to Post-Effective Amendment No. 57.
(aa) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Canada Fund is incorporated herein by reference to
Exhibit 5(aa) to Post-Effective Amendment No. 57.
(bb) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Canada Fund is incorporated herein by reference to Exhibit
5(bb) to Post-Effective Amendment No. 57.
(cc) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Canada Fund is incorporated
herein by reference to Exhibit 5(cc) to Post-Effective Amendment No. 57.
(dd) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Canada Fund is incorporated herein by
reference to Exhibit 5(dd) to Post-Effective Amendment No. 57.
(ee) Management Contract dated March 1, 1992, between Fidelity Europe Fund
and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(ee) to Post-Effective Amendment No. 57.
(ff) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Europe Fund is incorporated herein by reference to
Exhibit 5(ff) to Post-Effective Amendment No. 57.
(gg) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Europe Fund is incorporated herein by reference to Exhibit
5(gg) to Post-Effective Amendment No. 57.
(hh) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Europe Fund is incorporated
herein by reference to Exhibit 5(hh) to Post-Effective Amendment No. 57.
(ii) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Fund is incorporated herein by
reference to Exhibit 5(ii) to Post-Effective Amendment No. 57.
(jj) Management Contract between Fidelity Europe Capital Appreciation Fund
and Fidelity Management & Research Company dated November 18, 1993 is
incorporated herein by reference to Exhibit 5(o) to Post-Effective
Amendment No. 51.
(kk) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Europe Capital Appreciation Fund dated November 18, 1993 is incorporated
herein by reference to Exhibit 5(dd) to Post- Effective Amendment No. 53.
(ll) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Europe
Capital Appreciation Fund dated November 18, 1993 is incorporated herein by
reference to Exhibit 5(ss) to Post- Effective Amendment No. 53.
(mm) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Europe Capital Appreciation Fund, dated November 18,
1993, is incorporated herein by reference to Exhibit 5(ggg) to
Post-Effective Amendment No. 55.
(nn) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Europe
Capital Appreciation Fund dated November 18, 1993, is incorporated herein
by reference as Exhibit 5(uuu) to Post-Effective Amendment No. 55.
(oo) Management Contract between Fidelity Japan Fund and Fidelity
Management & Research Company dated July 16, 1992 is incorporated herein by
reference to Exhibit 5(k) to Post-Effective Amendment No. 51.
(pp) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Japan Fund dated July 16, 1992 is incorporated herein by reference to
Exhibit 5(z) to Post-Effective Amendment No. 53.
(qq) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Japan
Fund dated July 16, 1992 is incorporated herein by reference to Exhibit
5(oo) to Post Effective Amendment No. 53.
(rr) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Japan Fund dated July 16, 1992, is incorporated herein
by reference to Exhibit 5(ccc) to Post-Effective Amendment No. 55.
(ss) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Japan
Fund dated July 16, 1992, is incorporated herein by reference to Exhibit
5(qqq) to Post-Effective Amendment No. 55.
(tt) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Investments Japan Limited on behalf of Fidelity Japan Fund
dated April 12, 1994 is incorporated herein by reference to Exhibit No.
5(ss)(i) to Post-Effective Amendment No. 57.
(uu) Management Contract dated March 1, 1992, between Fidelity Pacific
Basin Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(tt) to Post-Effective Amendment No. 57.
(vv) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Pacific Basin Fund is incorporated herein by reference
to Exhibit 5(uu) to Post-Effective Amendment No. 57.
(ww) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Pacific Basin Fund is incorporated herein by reference to
Exhibit 5(vv) to Post-Effective Amendment No. 57.
(xx) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Pacific Basin Fund is
incorporated herein by reference to Exhibit 5(ww) to Post-Effective
Amendment No. 57.
(yy) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Pacific Basin Fund is incorporated herein by
reference to Exhibit 5(xx) to Post-Effective Amendment No. 57.
(zz) Management Contract dated March 1, 1992, between Fidelity Emerging
Markets Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(yy) to Post-Effective Amendment No. 57.
(aaa) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
Management & Research Company and Fidelity Management & Research (Far East)
Inc. on behalf of Fidelity Emerging Markets Fund is incorporated herein by
reference to Exhibit 5(zz) to Post-Effective Amendment No. 57.
(bbb) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
Management & Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Fidelity Emerging Markets Fund is incorporated herein by
reference to Exhibit 5(aaa) to Post-Effective Amendment No. 57.
(ccc) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Emerging Markets Fund is
incorporated herein by reference to Exhibit 5(bbb) to Post-Effective
Amendment No. 57.
(ddd) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Emerging Markets Fund is incorporated herein
by reference to Exhibit 5(ccc) to Post-Effective Amendment No. 57.
(eee) Management Contract between Fidelity Latin America Fund and Fidelity
Management & Research Company dated March 18, 1993 is incorporated herein
by reference to Exhibit 5(l) to Post-Effective Amendment No. 48.
(fff) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Latin America Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(z) to Post-Effective Amendment No. 48.
(ggg) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Latin
America Fund is incorporated herein by reference to Exhibit 5(nn) to
Post-Effective Amendment No. 48.
(hhh) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Latin America Fund dated March 18, 1993, is incorporated
herein by reference to Exhibit 5(ddd) to Post-Effective Amendment No. 55.
(iii) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Latin
America Fund dated March 18, 1993 is incorporated herein by reference as
Exhibit 5(rrr) to Post-Effective Amendment No. 51.
(jjj) Management Contract between Fidelity Southeast Asia Fund and Fidelity
Management & Research Company dated March 18, 1993 is incorporated herein
by reference to Exhibit 5(m) to Post-Effective Amendment No. 48.
(kkk) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Southeast Asia Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(aa) to Post-Effective Amendment No. 48.
(lll) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity
Southeast Asia Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(oo) to Post-Effective Amendment No. 48.
(mmm)Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Southeast Asia Fund dated March 18, 1993, is
incorporated herein by reference to Exhibit 5(eee) to Post-Effective
Amendment No. 55.
(nnn) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity
International Investment Advisors on behalf of Fidelity Southeast Asia
Fund dated March
18, 1993 is incorporated herein by reference as Exhibit 5(sss) to
Post-Effective Amendment
No. 51.
(ooo) Sub-Advisory Agreement dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Southeast Asia Fund dated March 18, 1993
is incorporated herein by reference to Exhibit 5(nnn) to Post-Effective
Amendment No. 57.
(ppp) Management Contract between Fidelity Global Bond Fund and Fidelity
Management & Research Company, dated March 1, 1992, is incorporated herein
by reference to Exhibit 5(ooo) to Post-Effective Amendment No. 58.
(qqq) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Global Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(ppp) to Post-Effective Amendment No. 58.
(rrr) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Global
Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(qqq) to Post-Effective Amendment No. 58.
(sss) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Global Bond Fund dated April 1, 1992, is incorporated
herein by reference to Exhibit 5(rrr) to Post-Effective Amendment No. 58.
(ttt) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Global
Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(sss) to Post-Effective Amendment No. 58.
(uuu) Management Contract between Fidelity Short-Term World Income Fund and
Fidelity Management & Research Company, dated March 1, 1992, is
incorporated herein by reference to Exhibit 5(ttt) to Post-Effective
Amendment No. 58.
(vvv) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Short-Term World Income Fund dated April 1, 1992, is incorporated herein by
reference to Exhibit 5(uuu) to Post-Effective Amendment No. 58.
(www) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) on behalf of Fidelity Short-Term
World Income Fund dated April 1, 1992, is incorporated herein by reference
to Exhibit 5(vvv) to Post-Effective Amendment No. 58.
(xxx) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Short-Term World Income Fund dated April 1, 1992, is
incorporated herein by reference to Exhibit 5(www) to Post-Effective
Amendment No. 58.
(yyy) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity
Short-World Income Fund dated April 1, 1992, is incorporated herein by
reference to Exhibit 5(xxx) to Post-Effective Amendment No. 58.
(zzz) Management Contract between Fidelity New Markets Income Fund and
Fidelity Management & Research Company dated April 15, 1993 is incorporated
herein by reference to Exhibit 5(n) to Post-Effective Amendment No. 48.
(aaaa) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity New Markets Income Fund dated April 15, 1993 is incorporated
herein by reference to Exhibit 5(bb) to Post-Effective Amendment No. 48.
(bbbb) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. dated April 15, 1993
on behalf of Fidelity New Markets Income Fund is incorporated herein by
reference to Exhibit 5(pp) to Post-Effective Amendment No. 48.
(cccc) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity New Markets Income Fund is incorporated herein by
reference to Exhibit 5(fff) to Post-Effective Amendment No. 50.
(dddd) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity New Markets Income Fund is incorporated herein by reference to
Exhibit 5(ttt) to Post-Effective Amendment No. 50.
(eeee) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Investments Japan Limited on behalf of Fidelity New
Markets Income Fund dated April 15, 1993, is incorporated herein by
reference to Exhibit 5(dddd) to Post-Effective Amendment No. 58.
(ffff) Form of Management Contract between Fidelity France Fund and
Fidelity Management & Research Company is incorporated herein by reference
as Exhibit 5(ffff) to Post-Effective Amendment No. 62.
(gggg)Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
France Fund is incorporated herein by reference as Exhibit 5(gggg) to
Post-Effective Amendment No. 62.
(hhhh) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity France Fund is incorporated herein by reference as Exhibit 5(hhhh)
to Post-Effective Amendment No. 62.
(iiii) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity France Fund is incorporated herein by
reference as Exhibit 5(iiii) to Post-Effective Amendment No. 62.
(jjjj) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity France Fund is incorporated herein by reference as Exhibit
5(jjjj) to Post-Effective Amendment No. 62.
(kkkk) Form of Management Contract between Fidelity Germany Fund and
Fidelity Management & Research Company is incorporated herein by reference
as Exhibit 5(kkkk) to Post-Effective Amendment No. 62.
(llll) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Germany Fund is incorporated herein by reference as Exhibit
5(llll) to Post-Effective Amendment No. 62.
(mmmm) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Germany Fund is incorporated herein by reference as Exhibit
5(mmmm) to Post-Effective Amendment No. 62.
(nnnn) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity Germany Fund is incorporated herein by
reference as Exhibit 5(nnnn) to Post-Effective Amendment No. 62.
(oooo) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Germany Fund is incorporated herein by reference as Exhibit
5(ffff) to Post-Effective Amendment No. 62.
(pppp)Form of Management Contract between Fidelity United Kingdom Fund
and Fidelity Management & Research Company is incorporated herein by
reference as Exhibit 5(pppp) to Post-Effective Amendment No. 62.
(qqqq)Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
United Kingdom Fund is incorporated herein by reference as Exhibit 5(qqqq)
to Post-Effective Amendment No. 62.
(rrrr) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity United Kingdom Fund is incorporated herein by reference as Exhibit
5(rrrr) to Post-Effective Amendment No. 62.
(ssss) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity United Kingdom Fund is incorporated herein by reference
as Exhibit 5(ssss) to Post-Effective Amendment No. 62.
(tttt) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity United Kingdom Fund is incorporated herein by reference as Exhibit
5(ffff) to Post-Effective Amendment No. 62.
(uuuu) Form of Management Contract between Fidelity Japan Small
Companies Fund and Fidelity Management & Research Company is incorporated
herein by reference as Exhibit 5(uuuu) to Post-Effective Amendment No. 60.
(vvvv) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Japan Small Companies Fund is incorporated herein by reference as
Exhibit 5(vvvv) to Post-Effective Amendment No. 62.
(wwww) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Japan Small Companies Fund is incorporated herein by reference as
Exhibit 5(wwww) to Post-Effective Amendment No. 62.
(xxxx) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Japan Small Companies Fund is incorporated herein by
reference as Exhibit 5(xxxx) to Post-Effective Amendment No. 62.
(yyyy) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Japan Small Companies Fund is incorporated herein by reference as
Exhibit 5(yyyy) to Post-Effective Amendment No. 62.
(zzzz) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Investments Japan Limited on behalf of
Fidelity Japan Small Companies Fund was filed as Exhibit 5(zzzz) in
Post-Effective Amendment No. 60.
(aaaaa) Form of Management Contract between Fidelity Hong Kong and
China Fund and Fidelity Management & Research Company is incorporated
herein by reference as Exhibit 5(aaaaa) to Post-Effective Amendment No. 60.
(bbbbb) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference as
Exhibit 5(bbbbb) to Post-Effective Amendment No. 62.
(ccccc) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference as
Exhibit 5(ccccc) to Post-Effective Amendment No. 62.
(ddddd) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Hong Kong and China Fund is incorporated herein by
reference as Exhibit 5(ddddd) to Post-Effective Amendment No. 62.
(eeeee) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference as
Exhibit 5(eeeee) to Post-Effective Amendment No. 62.
(fffff) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Investments Japan Limited on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference as
Exhibit 5(fffff) to Post-Effective Amendment No. 60.
(ggggg) Form of Management Contract between Fidelity Nordic Fund and
Fidelity Management & Research Company is incorporated herein by reference
as Exhibit 5(ggggg) to Post-Effective Amendment No. 62.
(hhhhh) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Nordic Fund is incorporated herein by reference as Exhibit
5(hhhhh) to Post-Effective Amendment No. 62.
(iiiii) Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Nordic Fund is incorporated herein by reference as Exhibit
5(iiiii) to Post-Effective Amendment No. 62.
(jjjjj) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity Nordic Fund is incorporated herein by
reference as Exhibit 5(jjjjj) to Post-Effective Amendment No. 62.
(kkkkk) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Nordic Fund is incorporated herein by reference as Exhibit
5(kkkkk) to Post-Effective Amendment No. 62.
(6) (a) General Distribution Agreement dated April 1, 1987 between Fidelity
Overseas Fund, Fidelity Europe Fund, Fidelity Pacific Basin Fund, Fidelity
International Growth & Income Fund, Fidelity Canada Fund, dated May 19,
1990, between Fidelity Worldwide Fund, dated September 30, 1990, between
Fidelity Emerging Markets Fund (formerly "Fidelity International
Opportunities Fund", dated December 12, and between Fidelity Diversified
International Fund and Fidelity Distributors Corporation are incorporated
herein by reference to Exhibit Nos. 6(a)(1-8) to Post-Effective Amendment
No. 57.
(b) General Distribution Agreement between Fidelity Global Bond Fund and
Fidelity Distributors Corporation dated April 1, 1987, is incorporated
herein by reference to Exhibit 6(b) to Post-Effective Amendment No. 58.
(c) Amendment, dated January 1, 1988, to General Distribution Agreement
between Fidelity Global Bond Fund and Fidelity Distributors Corporation,
dated April 1, 1987, is incorporated herein by reference to Exhibit 6(c) to
Post-Effective Amendment No. 58.
(d) General Distribution Agreement between Fidelity Short-Term World Income
Fund and Fidelity Distributors Corporation dated September 20, 1991, is
incorporated herein by reference to Exhibit 6(d) to Post-Effective
Amendment No. 58.
(e) Amendment, dated May 10, 1994, to General Distribution Agreement
between Fidelity Short-Term World Income Fund and Fidelity Distributors
Corporation, dated September 20, 1991, is incorporated herein by reference
to Exhibit 6(e) to Post-Effective Amendment No. 58.
(f) General Distribution Agreement between Fidelity Diversified
International Fund and Fidelity Distributors Corporation dated December 12,
1991 is incorporated herein by reference to Exhibit 6(k) to Post-Effective
Amendment No. 38.
(g) General Distribution Agreement between Fidelity Japan Fund and Fidelity
Distributors Corporation dated July 16, 1992, is incorporated herein by
reference to Exhibit 6(l) to Post-Effective Amendment No. 55.
(h) General Distribution Agreement between Fidelity Latin America Fund and
Fidelity Distributors Corporation dated March 18, 1993, is incorporated
herein by reference to Exhibit 6(m) to Post-Effective Amendment No. 55.
(i) General Distribution Agreement between Fidelity Southeast Asia Fund and
Fidelity Distributors Corporation dated March 18, 1993, is incorporated
herein by reference to Exhibit 6(n) to Post-Effective Amendment No. 55.
(j) General Distribution Agreement between Fidelity New Markets Income Fund
and Fidelity Distributors Corporation was filed as Exhibit 6(o) to
Post-Effective Amendment No. 50.
(k) General Distribution Agreement between Fidelity Europe Capital
Appreciation Fund and Fidelity Distributors Corporation dated November 18,
1993, is incorporated herein by reference to Exhibit 6(p) to Post-Effective
Amendment No. 55.
(l) General Distribution Agreement between Fidelity International Value
Fund and Fidelity Distributors Corporation, dated September 16, 1994, is
incorporated herein by reference to Exhibit 6(j) to Post-Effective
Amendment No. 58.
(m) Form of General Distribution Agreement between Fidelity France Fund and
Fidelity Distributors Corporation was filed as Exhibit 6(m) in
Post-Effective Amendment No. 60.
(n) Form of General Distribution Agreement between Fidelity Germany Fund
and Fidelity Distributors Corporation was filed as Exhibit 6(n) in
Post-Effective Amendment No. 60.
(o) Form of General Distribution Agreement between Fidelity United Kingdom
Fund and Fidelity Distributors Corporation was filed as Exhibit 6(o) in
Post-Effective Amendment No. 60.
(p) Form of General Distribution Agreement between Fidelity Japan Small
Companies Fund and Fidelity Distributors Corporation was filed as Exhibit
6(p) in Post-Effective Amendment No. 60.
(q) Form of General Distribution Agreement between Fidelity Hong Kong and
China Fund and Fidelity Distributors Corporation was filed as Exhibit 6(q)
in Post-Effective Amendment No. 60.
(r) Form of General Distribution Agreement between Fidelity Nordic Fund and
Fidelity Distributors Corporation was filed as Exhibit 6(r) in
Post-Effective Amendment No. 60.
(7) (a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, is incorporated herein by reference to Exhibit 7 to
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1,1995 is
incorporated herein by reference to Exhibit 7(b) to Fidelity School Street
Trust's (File No. 2-57167) Post-Effective Amendment No. 47.
(8)(a) Custodian Agreement, Appendix A, and Appendix C, dated August 1,
1994, between The Chase Manhattan Bank, N.A. and Fidelity Investment Trust
on behalf of Fidelity Diversified Global Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity Europe Fund, Fidelity Global Bond Fund,
Fidelity International Growth & Income Fund, Fidelity International Value
Fund, Fidelity Japan Fund, Fidelity New Markets Income Fund, Fidelity
Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund,
and Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
8(a) to Post-Effective Amendment No. 59..
(8)(b) Appendix B, dated December 15, 1994, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and Fidelity
Investment Trust on behalf of Fidelity Diversified Global Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity
Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global
Bond Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity New Markets Income
Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity
Southeast Asia Fund, and Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 8(b) to Post-Effective Amendment No. 59.
(8)(c) Custodian Agreement, Appendix A, and Appendix C, dated September 1,
1994, between Brown Brothers Harriman & Company and Fidelity Investment
Trust on behalf of Fidelity France Fund, Fidelity Germany Fund, Fidelity
Japan Small Companies Fund, Fidelity United Kingdom Fund, Fidelity Hong
Kong and China Fund, Fidelity Nordic Fund, Fidelity Canada Fund, Fidelity
Latin America Fund, and Fidelity Short-Term World Income Fund is
incorporated herein by reference to Exhibit 8(a) to Fidelity Commonwealth
Trust's Post-Effective Amendment No. 56 (File No. 2-52322).
(8)(d) Appendix B, dated December 15, 1994, to the Custodian Agreement,
dated December 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity France Fund, Fidelity
Germany Fund, Fidelity Japan Small Companies Fund, Fidelity United Kingdom
Fund, Fidelity Hong Kong and China Fund, Fidelity Nordic Fund, Fidelity,
Fidelity Canada Fund, Fidelity Latin America Fund, and Fidelity Short-Term
World Income Fund is incorporated herein by reference to Exhibit 8(b) to
Fidelity Commonwealth Trust's Post-Effective Amendment No. 56 (File No.
2-52322).
(9) Not applicable.
(10) Not applicable.
(11) (a) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
11(a).
(b) Consent of Price Waterhouse LLP is filed herein as Exhibit 11(b).
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) to Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) to Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) to Fidelity Commonwealth Trust's (File
No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) to Fidelity Commonwealth Trust's (File No. 2-52322) Post
Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) to Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) to Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) to Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) to Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) to Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
to Fidelity Securities Fund's (File No. 2-93601) Post Effective Amendment
No. 33.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Global Bond Fund is incorporated herein as by reference to Exhibit 15(a)
to Post-Effective Amendment No. 58.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Short-Term World Income Fund is incorporated herein by reference to
Exhibit 15(b) to Post-Effective Amendment No. 58.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity New
Markets Income Fund is incor- porated herein by reference to Exhibit 15(c)
to Post-Effective Amendment No. 58.
(16) (a) Schedule for computation of total return calculations for
Fidelity Canada Fund is filed herein as Exhibit 16(a).
(b) Schedule for computation of moving averages is incorporated herein by
reference to Exhibit 16(c) to Post Effective Amendment No. 53.
(17) Financial Data Schedules are filed herein as Exhibit 27.
(18) Not applicable.
Item 25. Persons Controlled by or Under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities: October 31, 1995
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Overseas Fund
549,515
Fidelity Europe Fund 57,145
Fidelity Pacific Basin Fund 58,589
Fidelity International Growth & Income Fund
152,178
Fidelity International Value Fund 6,646
Fidelity Global Bond Fund
26,929
Fidelity Canada Fund 34,627
Fidelity Worldwide Fund 98,284
Fidelity Emerging Markets Fund
129,650
Fidelity New Markets Income Fund
12,641
Fidelity Short-Term World Income Fund 8,641
Fidelity Diversified International Fund 29,765
Fidelity Japan Fund 37,152
Fidelity Latin America Fund 68,161
Fidelity Southeast Asia Fund 63,107
Fidelity Europe Capital Appreciation Fund 20,416
Fidelity France Fund
0
Fidelity Germany Fund
0
Fidelity United Kingdom Fund
0
Fidelity Hong Kong and China Fund
0
Fidelity Japan Small Companies Fund
0
Fidelity Nordic Fund
0
Fidelity Diversified Global Fund
1
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit, or
proceeding in which he is involved by virtue of his service as a Trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Service Company ("Service") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, which names the Transfer Agent and/or the Registrant as a party
and is not based on and does not result from the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its duties, and
arises out of or in connection with the Transfer Agent's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith, negligence or
reckless disregard of its duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; Director of Technical Research.
Curtis Hollingsworth Vice President of FMR (1993).
Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught III Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Richard Spillane Vice President of FMR; Senior Vice President and Director
of Operations and Compliance of FMR U.K. (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management & Research
(Far East) Inc.; President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director of
Worldwide Research of FMR.
Richard Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K. (1993).
Stephen P. Jonas Treasurer of FMR U.K. (1993), Fidelity Management &
Research (Far East) Inc. (1993), and FMR Texas Inc. (1993);
Treasurer and Vice President of FMR (1993).
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management & Research
(Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The directors
and officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management &
Research (U.K.) Inc.; Senior Vice President and Trustee
of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research (U.K.)
Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Stephen P. Jonas Treasurer of FMR Far East (1993), Fidelity Management
& Research (U.K.) Inc. (1993), and FMR Texas Inc.
(1993); Treasurer and Vice President of FMR (1993).
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management &
Research (U.K.) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(4) FIDELITY INTERNATIONAL INVESTMENT ADVISORS
Pembroke Hall, 42 Crow Lane, Pembroke, Bermuda
The directors and officers of Fidelity International Investment Advisors
(FIIA) have held, during the past two fiscal years, the following positions
of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Anthony J. Bolton Director of FIIA and FIIAL (U.K.); Director of Fidelity
International Management Holdings Limited.
Martin P. Cambridge Director of FIIA and FIIAL (U.K.); Chief Financial
Officer of Fidelity International Ltd. and Fidelity
Investment Services Ltd.
Charles T. Collis Director of FIIA; Partner in Conyers, Dill & Pearman,
Hamilton, Bermuda; Secretary to many companies in the
Fidelity international group of companies.
William R. Ebsworth Director of FIIA.
Brett P. Goodin Director, Vice President, and Secretary of FIIA (1994).
Terrence V. Richards Assistant Secretary of FIIA (1994).
David J. Saul Director and President of FIIA; Director of Fidelity
International Limited.
(5) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
27-28 Lovat Lane, London, England
The directors and officers of Fidelity International Investment Advisors
(U.K.) Limited (FIIAL (U.K.)) have held, during the past two fiscal years,
the following positions of a substantial nature.
Anthony J. Bolton Director of FIIAL (U.K.) and FIIA; Director of Fidelity
International Management Holdings Limited.
Martin P. Cambridge Director and Secretary of FIIAL (U.K.) and FIIA; Chief
Financial Officer of Fidelity Investments Japan Limited,
Fidelity International Ltd., and Fidelity Investment
Services Ltd.
C. Bruce Johnstone Director of FIIAL (U.K.).
</TABLE>
(6) FIDELITY INVESTMENTS JAPAN LIMITED
Shiroyama JT Mori Bldg., 3-1, Toranomon 4-chome, Minato-ku, Tokyo
105, Japan
The directors and officers of Fidelity Investments Japan Limited have
held, during the past two fiscal years, the following positions of a
substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman & Representative Director of Fidelity
Investments Japan Limited, Chairman and Director of
FMR Far East, Chairman of the Executive Committee of
FMR, Chief Executive Officer of FMR Corp., Chairman
of the Board and a Director of FMR, FMR Corp., FMR
Texas Inc. and Fidelity Management & Research (U.K.)
Inc., President and Trustee of funds advised by FMR.
Yasuo Kuramoto Vice Chairman & Representative Director & Portfolio
Manager of Fidelity Investments Japan Limited,
Chairman & Representative Director & Portfolio
Adviser of Fidelity International Investment Advisors
(Japan) Limited (1991-1993)
Yasukazu Akamatsu President & Representative Director of Fidelity
Investments Japan Limited, Portfolio Manager of
Fidelity Investments Japan Limited (1993).
Hiroshi Yamashita Managing Director & Portfolio Manager of Fidelity
Investments Japan Limited.
Nobuhide Kamiyama Director & General Manager of Planning and Marketing
of Fidelity Investments Japan Limited.
Arthur M. Jesson Director & General Manager of Information Systems
and Trading of Fidelity Investments Japan Limited.
Martin P. Cambridge Director of Fidelity Investments Japan Limited, Chief
Financial Officer of Fidelity International Limited,
Financial Officer of Fidelity Investments International,
Director of Fidelity International Investment Advisors,
Director of Fidelity Investments (Taiwan) Limited,
Director & Secretary of Fidelity International
Investment Advisors (U.K.) Limited.
Noboru Kawai Director & General Manager of Administration of
Fidelity Investments Japan Limited.
Dan H. Blanks Director of Fidelity Investments Japan Limited,
President of Fidelity International Investments Limited,
Director of Fidelity International Limited (1993).
Shinobu Kasaya Portfolio Manager of Fidelity Investments Japan
Limited.
Ken-ichi Mizushita Portfolio Manager of Fidelity Investments Japan
Limited.
Edward S.J. Bang Portfolio Manager of Fidelity Investments Japan
Limited (1994), Senior Analyst of Fidelity Management
& Research (Far East) Inc. (1991-1994).
Shigeki Makino Portfolio Manager of Fidelity Investments Japan
Limited (1994), Senior Analyst of Fidelity Management
& Research (Far East) Inc. (1991-1994).
Asako Kibe Portfolio Manager of Fidelity Investments Japan
Limited (1995), Senior Analyst of Fidelity Management
& Research (Far East) Inc. (1991-1995).
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective
custodians The Chase Manhattan Bank, 1211 Avenue of the Americas, New
York, N.Y. and Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant on behalf of Fidelity Overseas Fund, Fidelity Europe
Fund, Fidelity Pacific Basin Fund, Fidelity International Growth & Income
Fund, Fidelity Global Bond Fund, Fidelity Canada Fund, Fidelity Worldwide
Fund, Fidelity Emerging Markets Fund, Fidelity New Markets Income Fund,
Fidelity Short-Term World Income Fund, Fidelity Diversified International
Fund, Fidelity Japan Fund, Fidelity Diversified Global Fund, Fidelity Latin
America Fund, Fidelity Southeast Asia Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity International Value Fund, Fidelity France Fund,
Fidelity Germany Fund, Fidelity Hong Kong and China Fund, Fidelity Japan
Small Companies Fund, Fidelity Nordic Fund, and Fidelity United Kingdom
Fund undertakes to deliver to each person who has received the prospectus
or annual or semiannual financial report for a fund in an electronic
format, upon his or her request and without charge, a paper copy of the
prospectus or annual or semiannual report for the fund.
(b) The Registrant undertakes to file a Post-Effective Amendment, using
financial statements which need not be certified, within six months of
Fidelity Diversified Global Fund's effectiveness.
(c) Each Registrant undertakes: 1) to call a meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or
trustees, when requested to do so by record holders of not less than 10% of
its outstanding shares; and 2) to assist in communications with other
shareholders pursuant to Section 16(c)(1) and (2), whenever shareholders
meeting the qualifications set forth in 16(c) seek the opportunity to
communicate with other shareholders with a view toward requesting a
meeting.
(d) The Registrant undertakes to file a Post-Effective Amendment, using
financial statements for Fidelity France Fund, Fidelity Germany Fund,
Fidelity United Kingdom Fund, Fidelity Japan Small Companies Fund, Fidelity
Hong Kong and China Fund, and Fidelity Nordic Fund that need not be
certified, within six months of the funds' effectiveness, unless permitted
by the SEC to extend this period.
(e) The Registrant, on behalf of all funds, provided the information
required by Item 5A is contained in the annual report, undertakes to
furnish to each person to whom a prospectus has been delivered, upon their
request and without charge, a copy of the Registrant's latest annual report
to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 64 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Massachusetts, on the 26th day of December 1995.
Fidelity Investment Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee December 26 , 1995
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer December 26, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee December 26, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee December 26, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee December 26, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee December 26, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee December 26, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee December 26, 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee December 26, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee December 26, 1995
Edward H. Malone
/s/Marvin L. Mann_____* Trustee December 26 , 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee December 26 , 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee December, 1995
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as President and Board Member (collectively, the "Funds"), hereby
severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994
Edward C. Johnson 3d
Exhibit 5m
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 18th day of November, 1993, by Fidelity International
Investment Advisors (U.K.) Limited, 27-28 Lovat Lane, London, England
(hereinafter called the "U.K. Sub-Advisor") and Fidelity International
Investment Advisors, a Bermuda company with principal offices at Pembroke
Hall, Pembroke, Bermuda (hereinafter called the "Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity Investment Trust, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust"), on behalf of Fidelity
International Value (hereinafter called the "Portfolio"), pursuant to which
the Advisor acts as investment advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement with
the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries,
including securities issued and issuers located outside of North America,
principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Sub-Advisor and the U.K. Sub-Advisor agree as
follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with respect
to all or a portion of the investments of the Portfolio, in connection with
the Sub-Advisor's duties under the Sub-Advisory Agreement. The services
and the portion of the investments of the Portfolio advised or managed by
the U.K. Sub-Advisor shall be as agreed upon from time to time by the
Sub-Advisor and the U.K. Sub-Advisor. The U.K. Sub-Advisor shall pay the
salaries and fees of all personnel of the U.K. Sub-Advisor performing
services for the Portfolio relating to research, statistical and investment
activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Sub-Advisor,
the U.K. Sub-Advisor shall provide investment advice to the Sub-Advisor
with respect to all or a portion of the investments of the Portfolio, and
in connection with such advice shall furnish the Sub-Advisor such factual
information, research reports and investment recommendations as the Advisor
may reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Sub-Advisor, the U.K. Sub-Advisor shall manage all or a portion of the
investments of the Portfolio in accordance with the investment objective,
policies and limitations provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment Company
Act of 1940 (the"1940 Act") and rules thereunder, as amended from time to
time, and such other limitations as the Trust or Advisor may impose with
respect to the Portfolio by notice to the U.K. Sub-Advisor. With respect
to the portion of the investments of the Portfolio under its management,
the U.K. Sub-Advisor is authorized to make investment decisions on behalf
of the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale of
such securities through such broker-dealers as the U.K. Sub-Advisor may
select. The U.K. Sub-Advisor may also be authorized, but only to the
extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money or lending securities on behalf of the Portfolio. All investment
management and any other activities of the U.K. Sub-Advisor shall at all
times be subject to the control and direction of the Sub-Advisor, the
Advisor and the Trust's Board of Trustees.
2. Information to be Provided to the Trust and the Advisor: The U.K.
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust, the Advisor, and the Sub-Advisor as the Trust's
Board of Trustees, the Advisor or the Sub-Advisor may reasonably request
from time to time, or as the U.K. Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the U.K. Sub-Advisor, at
its own expense, shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the U.K. Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor, Sub-Advisor or U.K. Sub-Advisor. The U.K.
Sub-Advisor shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and to any other accounts
over which the U.K. Sub-Advisor, the Sub-Advisor or Advisor exercise
investment discretion. The U.K. Sub-Advisor is authorized to pay a broker
or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction if the U.K. Sub-Advisor determines in good faith
that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the U.K. Sub-Advisor and
the Sub-Advisor have with respect to accounts over which they exercise
investment discretion. The Trustees of the Trust shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K. Sub-Advisor
on the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, the Sub-Advisor agrees to pay the U.K.
Sub-Advisor a monthly U.K. Sub-Advisory Fee. The U.K. Sub-Advisory Fee
shall be equal to 110% of the U.K. Sub-Advisor's costs incurred in
connection rendering the services referred to in subparagraph (a) of
paragraph 1 of this Agreement. The U.K. Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the Sub-Advisor
or Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor agrees to pay the
U.K. Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to 110% of the U.K. Sub-Advisor's costs
incurred in connection rendering the services referred to in subparagraph
(b) of paragraph 1 of this Agreement. The U.K. Sub-Advisory Fee shall not
be reduced to reflect expense reimbursements or fee waivers by the
Sub-Advisor or Advisor, if any, in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the U.K. Sub-Advisor with respect to such investments
shall be calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory Agreement
or by the Advisor under the Management Contract with the Portfolio.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors, officers or
otherwise and that directors, officers and stockholders of the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor are or may be or become similarly
interested in the Trust, and that the Advisor, the Sub-Advisor or the U.K.
Sub-Advisor may be or become interested in the Trust as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The Services of the U.K.
Sub-Advisor to the Sub-Advisor are not to be deemed to be exclusive, the
U.K. Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the U.K. Sub-Advisor's ability to meet all of its
obligations hereunder. The U.K. Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor, the
Sub-Advisor or the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the U.K. Sub-Advisor, the U.K. Sub-Advisor shall not be
subject to liability to the Sub-Advisor, the Advisor, the Trust or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until July 31, 1994 and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
U.K. Sub-Advisor, the Sub-Advisor and the Portfolio, such consent on the
part of the Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Advisor, the Sub-Advisor, the U.K. Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to the
other parties, terminate this Agreement, without payment of any penalty, by
action of its Board of Trustees or Directors, or with respect to the
Portfolio by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its assignment.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust or other organizational document of the Trust and
agrees that any obligations of the Trust or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the U.K. Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the U.K. Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual
Trustee.
11. Governing Law: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
BY: /s/ Martin Cambridge
Director
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
BY: /s/ Martin Cambridge
Director
BY: /s/Brett Goodin
Treasurer
Exhibit 11a
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 64 to the Registration Statement on Form N-1A of Fidelity
Investment Trust: Fidelity Diversified International Fund; Fidelity
International Growth & Income Fund; Fidelity Overseas Fund; Fidelity
Worldwide Fund; Fidelity Canada Fund; Fidelity Europe Fund; Fidelity Japan
Fund; Fidelity Pacific Basin Fund; and Fidelity Emerging Markets Fund, of
our reports dated December 20, 1995 on the financial statements and
financial highlights included in the October 31, 1995 Annual Reports to
Shareholders of the aforementioned funds.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
COOPERS & LYBRAND L.L.P.
/S/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 26, 1995
Exhibit 11b
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 64 to the Registration Statement on Form N-1A of Fidelity
Investment Trust: Fidelity Europe Capital Appreciation Fund, Fidelity Latin
America Fund, Fidelity Southeast Asia Fund, Fidelity France Fund, Fidelity
Germany Fund, Fidelity Hong Kong and China Fund, Fidelity Japan Small
Companies Fund, Fidelity Nordic Fund and Fidelity United Kingdom Fund of
our report dated December 20, 1995 on the financial statements and
financial highlights included in the October 31, 1995 Annual Report to
Shareholders of Fidelity Investment Trust: Fidelity Europe Capital
Appreciation Fund, Fidelity Latin America Fund, Fidelity Southeast Asia
Fund, Fidelity France Fund, Fidelity Germany Fund, Fidelity Hong Kong and
China Fund, Fidelity Japan Small Companies Fund, Fidelity Nordic Fund, and
Fidelity United Kingdom Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and Fidelity Europe Capital
Appreciation Fund, Fidelity Latin America Fund, Fidelity Southeast Asia
Fund Fidelity France Fund, Fidelity Germany Fund, Fidelity Hong Kong and
China Fund, Fidelity Japan Small Companies Fund, Fidelity Nordic Fund, and
Fidelity United Kingdom Fund"Auditor" in the Statement of Additional
Information.
PRICE WATERHOUSE LLP
/s/PRICE WATERHOUSE LLP
Boston, Massachusetts
December 22, 1995
Exhibit 16(a)
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
FIDELITY CANADA FUND
Name: Canada (309)
Notes: 3% Load waived from 4/17/93 to June 95.
Load: 0.97
Redemption:
FiscYear: 31-Oct
Cum Total
Pay-date X-Date X-NAV MonthEnd Shares Value
1.00 17-Nov-87 970.000 9700
1.00 Nov-87 970.000 9768
1.00 Dec-87 970.000 10447
1.00 Jan-88 970.000 10340
1.00 Feb-88 970.000 11048
1.00 Mar-88 970.000 11737
1.00 Apr-88 970.000 12009
1.00 May-88 970.000 11436
1.00 Jun-88 970.000 12319
1.00 Jul-88 970.000 12144
1.00 Aug-88 970.000 11562
1.00 Sep-88 970.000 11805
1.00 Oct-88 970.000 12358
1.00 Nov-88 970.000 12212
30-Dec 19-Dec 12.28 Dec-88 970.000 12212
1.00 Jan-89 970.000 13134
1.00 Feb-89 970.000 12765
1.00 Mar-89 970.000 12979
1.00 Apr-89 970.000 13241
1.00 May-89 970.000 13687
1.00 Jun-89 970.000 14346
1.00 Jul-89 970.000 15219
1.00 Aug-89 970.000 15297
1.00 Sep-89 970.000 15200
1.00 Oct-89 970.000 14987
1.00 Nov-89 970.000 15074
26-Dec 12-Dec 15.12 Dec-89 970.000 14831
1.00 Jan-90 970.000 13629
1.00 Feb-90 970.000 13706
1.00 Mar-90 970.000 13939
1.00 Apr-90 970.000 13270
1.00 May-90 970.000 14143
1.00 Jun-90 970.000 14472
1.00 Jul-90 970.000 14589
1.00 Aug-90 970.000 13745
1.00 Sep-90 970.000 13522
1.00 Oct-90 970.000 13163
1.00 Nov-90 970.000 13590
07-Dec 07-Dec 13.38 Dec-90 970.000 13124
1.00 Jan-91 970.000 13182
1.00 Feb-91 970.000 14395
1.00 Mar-91 970.000 15025
1.00 Apr-91 970.000 15142
1.00 May-91 970.000 15811
1.00 Jun-91 970.000 15830
1.00 Jul-91 970.000 15782
1.00 Aug-91 970.000 15646
1.00 Sep-91 970.000 15122
1.00 Oct-91 970.000 15792
1.00 Nov-91 970.000 15200
09-Dec 06-Dec 14.62 Dec-91 970.000 14531
1.00 Jan-92 970.000 14793
1.00 Feb-92 970.000 14880
1.00 Mar-92 970.000 14463
1.00 Apr-92 970.000 14288
1.00 May-92 970.000 14414
1.00 Jun-92 970.000 14337
1.00 Jul-92 970.000 14705
1.00 Aug-92 970.000 14482
1.00 Sep-92 970.000 13861
1.00 Oct-92 970.000 13803
1.00 Nov-92 970.000 13764
21-Dec 18-Dec 14.50 Dec-92 970.000 14094
1.00 Jan-93 970.000 14017
1.00 Feb-93 970.000 14890
1.00 Mar-93 970.000 15704
1.00 Apr-93 970.000 16112
1.00 May-93 970.000 16335
1.00 Jun-93 970.000 17169
1.00 Jul-93 970.000 16548
1.00 Aug-93 970.000 16965
1.00 Sep-93 970.000 16131
1.00 Oct-93 970.000 17285
1.00 Nov-93 970.000 16888
06-Dec 03-Dec 17.78 Dec-93 970.000 17644
1.00 Jan-94 970.000 18420
1.00 Feb-94 970.000 17635
1.00 Mar-94 970.000 16985
1.00 Apr-94 970.000 16859
1.00 May-94 970.000 16936
1.00 Jun-94 970.000 16005
1.00 Jul-94 970.000 16315
1.00 Aug-94 970.000 16927
1.00 Sep-94 970.000 17014
1.00 Oct-94 970.000 16665
1.00 Nov-94 970.000 15452
19-Dec 16-Dec 15.90 Dec-94 970.000 15520
1.00 Jan-95 970.000 14434
1.00 Feb-95 970.000 15025
1.00 Mar-95 970.000 15966
1.00 Apr-95 970.000 16451
1.00 May-95 970.000 16965
1.00 Jun-95 970.000 17198
1.00 Jul-95 970.000 17790
1.00 Aug-95 970.000 17567
1.00 Sep-95 970.000 17819
1.00 Oct-95 970.000 17024
Value of Value of
Rep Reinvst Reinvst Total
DIV CGLONG CGSHORT NAV Div Cap GainsValue
10.00 9700
10.07 0 0 9768
10.77 0 0 10447
10.66 0 0 10340
11.39 0 0 11048
12.10 0 0 11737
12.38 0 0 12009
11.79 0 0 11436
12.70 0 0 12319
12.52 0 0 12144
11.92 0 0 11562
12.17 0 0 11805
12.74 0 0 12358
12.59 0 0 12212
0.12 0.06 0.09 12.59 119 149 12481
13.54 128 160 13423
13.16 125 156 13046
13.38 127 159 13264
13.65 129 162 13532
14.11 134 167 13988
14.79 140 175 14662
15.69 149 186 15554
15.77 149 187 15633
15.67 149 186 15534
15.45 146 183 15316
15.54 147 184 15405
0.01 0.05 0.63 15.29 155 863 15849
14.05 142 793 14564
14.13 143 797 14647
14.37 146 811 14895
13.68 139 772 14180
14.58 148 823 15113
14.92 151 842 15466
15.04 152 849 15590
14.17 144 800 14688
13.94 141 787 14450
13.57 138 766 14066
14.01 142 791 14522
0.06 0.63 0.22 13.53 200 1654 14979
13.59 201 1662 15045
14.84 219 1815 16429
15.49 229 1894 17148
15.61 231 1909 17281
16.30 241 1993 18045
16.32 241 1996 18067
16.27 241 1990 18012
16.13 238 1972 17857
15.59 230 1906 17259
16.28 241 1991 18023
15.67 232 1916 17348
0.67 0.25 14.98 221 2875 17627
15.25 225 2927 17945
15.34 227 2944 18051
14.91 220 2862 17545
14.73 218 2827 17333
14.86 220 2852 17486
14.78 218 2837 17392
15.16 224 2910 17839
14.93 221 2866 17569
14.29 211 2743 16815
14.23 210 2731 16745
14.19 210 2724 16698
0.02 14.53 238 2789 17121
14.45 237 2774 17027
15.35 252 2946 18088
16.19 266 3108 19078
16.61 273 3188 19572
16.84 276 3232 19843
17.70 290 3397 20857
17.06 280 3275 20103
17.49 287 3357 20609
16.63 273 3192 19596
17.82 292 3421 20998
17.41 286 3342 20515
0.04 18.19 298 3540 21482
18.99 312 3695 22427
18.18 298 3538 21471
17.51 287 3407 20679
17.38 285 3382 20526
17.46 286 3398 20620
16.50 271 3211 19487
16.82 276 3273 19864
17.45 286 3396 20609
17.54 288 3413 20715
17.18 282 3343 20290
15.93 261 3100 18813
0.010000 16.00 274 3114 18908
14.88 255 2896 17584
15.49 266 3014 18305
16.46 282 3203 19452
16.96 291 3300 20042
17.49 300 3404 20669
17.73 304 3450 20952
18.34 315 3569 21673
18.11 311 3524 21401
18.37 315 3575 21709
17.55 301 3415 20740
DividendsCap GainsCost of
Received Received Reinvst
in Cash in Cash Distrib
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
116 146 262
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
126 805 946
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 1630 1889
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
184 2522 2908
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2522 2931
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
204 2561 2978
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
213 2561 2990
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
<NUMBER> 21
<NAME> Fidelity Europe Fund
<MULTIPLIER> 1,000
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<ACCUM-APPREC-OR-DEPREC> 112,544
<NET-ASSETS> 492,867
<DIVIDEND-INCOME> 10,652
<INTEREST-INCOME> 1,451
<OTHER-INCOME> (1,238)
<EXPENSES-NET> 5,571
<NET-INVESTMENT-INCOME> 5,294
<REALIZED-GAINS-CURRENT> 26,528
<APPREC-INCREASE-CURRENT> 24,426
<NET-CHANGE-FROM-OPS> 56,248
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 2,517
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<NUMBER-OF-SHARES-SOLD> 18,217
<NUMBER-OF-SHARES-REDEEMED> 21,566
<SHARES-REINVESTED> 354
<NET-CHANGE-IN-ASSETS> (14,593)
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<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 6,046
<AVERAGE-NET-ASSETS> 473,240
<PER-SHARE-NAV-BEGIN> 21.180
<PER-SHARE-NII> .270
<PER-SHARE-GAIN-APPREC> 2.370
<PER-SHARE-DIVIDEND> .200
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<PER-SHARE-NAV-END> 23.510
<EXPENSE-RATIO> 118
<AVG-DEBT-OUTSTANDING> 0
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
<NUMBER> 31
<NAME> Fidelity Pacific Basin Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> oct-31-1995
<PERIOD-END> oct-31-1995
<INVESTMENTS-AT-COST> 322,629
<INVESTMENTS-AT-VALUE> 311,828
<RECEIVABLES> 10,215
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 322,060
<PAYABLE-FOR-SECURITIES> 2,378
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,047
<TOTAL-LIABILITIES> 4,425
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<PAID-IN-CAPITAL-COMMON> 339,411
<SHARES-COMMON-STOCK> 21,350
<SHARES-COMMON-PRIOR> 27,733
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 67
<ACCUMULATED-NET-GAINS> (10,897)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (10,812)
<NET-ASSETS> 317,635
<DIVIDEND-INCOME> 6,690
<INTEREST-INCOME> 1,347
<OTHER-INCOME> (918)
<EXPENSES-NET> 5,328
<NET-INVESTMENT-INCOME> 1,791
<REALIZED-GAINS-CURRENT> (10,059)
<APPREC-INCREASE-CURRENT> (70,802)
<NET-CHANGE-FROM-OPS> (79,070)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 583
<DISTRIBUTIONS-OF-GAINS> 52,236
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,935
<NUMBER-OF-SHARES-REDEEMED> 44,584
<SHARES-REINVESTED> 3,265
<NET-CHANGE-IN-ASSETS> (235,897)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 93,264
<OVERDISTRIB-NII-PRIOR> 352
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,184
<INTEREST-EXPENSE> 14
<GROSS-EXPENSE> 5,560
<AVERAGE-NET-ASSETS> 404,004
<PER-SHARE-NAV-BEGIN> 19.960
<PER-SHARE-NII> .070
<PER-SHARE-GAIN-APPREC> (3.120)
<PER-SHARE-DIVIDEND> .020
<PER-SHARE-DISTRIBUTIONS> 2.020
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.880
<EXPENSE-RATIO> 132
<AVG-DEBT-OUTSTANDING> 0
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<TABLE> <S> <C>
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
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<NAME> Fidelity Canada Fund
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<INVESTMENTS-AT-COST> 274,537
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<PAYABLE-FOR-SECURITIES> 3,582
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,454
<TOTAL-LIABILITIES> 10,036
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,439
<SHARES-COMMON-STOCK> 18,622
<SHARES-COMMON-PRIOR> 21,437
<ACCUMULATED-NII-CURRENT> 748
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,724)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22,300
<NET-ASSETS> 326,763
<DIVIDEND-INCOME> 4,385
<INTEREST-INCOME> 917
<OTHER-INCOME> (599)
<EXPENSES-NET> 3,783
<NET-INVESTMENT-INCOME> 920
<REALIZED-GAINS-CURRENT> (4,225)
<APPREC-INCREASE-CURRENT> 10,769
<NET-CHANGE-FROM-OPS> 7,464
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 211
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15,726
<NUMBER-OF-SHARES-REDEEMED> 18,554
<SHARES-REINVESTED> 13
<NET-CHANGE-IN-ASSETS> (41,567)
<ACCUMULATED-NII-PRIOR> (11)
<ACCUMULATED-GAINS-PRIOR> (6,459)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,499
<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 3,984
<AVERAGE-NET-ASSETS> 348,807
<PER-SHARE-NAV-BEGIN> 17.180
<PER-SHARE-NII> .050
<PER-SHARE-GAIN-APPREC> .330
<PER-SHARE-DIVIDEND> .010
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 17.550
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
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<CIK> 0000744822
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<SERIES>
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<NAME> Fidelity Emerging Markets Fund
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<PERIOD-TYPE> year
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<TOTAL-LIABILITIES> 13,071
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<SHARES-COMMON-PRIOR> 102,649
<ACCUMULATED-NII-CURRENT> 2,813
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (132,540)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (29,430)
<NET-ASSETS> 1,095,583
<DIVIDEND-INCOME> 22,190
<INTEREST-INCOME> 4,228
<OTHER-INCOME> (2,516)
<EXPENSES-NET> 17,561
<NET-INVESTMENT-INCOME> 6,341
<REALIZED-GAINS-CURRENT> (108,432)
<APPREC-INCREASE-CURRENT> (290,729)
<NET-CHANGE-FROM-OPS> (392,820)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,892
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,937
<NUMBER-OF-SHARES-REDEEMED> 56,461
<SHARES-REINVESTED> 218
<NET-CHANGE-IN-ASSETS> (880,788)
<ACCUMULATED-NII-PRIOR> 2,603
<ACCUMULATED-GAINS-PRIOR> (17,723)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,483
<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 17,564
<AVERAGE-NET-ASSETS> 1,368,537
<PER-SHARE-NAV-BEGIN> 19.250
<PER-SHARE-NII> .050
<PER-SHARE-GAIN-APPREC> (4.130)
<PER-SHARE-DIVIDEND> .040
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.140
<EXPENSE-RATIO> 128
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
<NUMBER> 151
<NAME> Fidelity Europe Capital Appreciation Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> oct-31-1995
<PERIOD-END> oct-31-1995
<INVESTMENTS-AT-COST> 181,611
<INVESTMENTS-AT-VALUE> 190,980
<RECEIVABLES> 5,606
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196,591
<PAYABLE-FOR-SECURITIES> 1,120
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,038
<TOTAL-LIABILITIES> 2,158
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 183,457
<SHARES-COMMON-STOCK> 16,101
<SHARES-COMMON-PRIOR> 31,091
<ACCUMULATED-NII-CURRENT> 3,688
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,081)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,369
<NET-ASSETS> 194,433
<DIVIDEND-INCOME> 7,210
<INTEREST-INCOME> 766
<OTHER-INCOME> (795)
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Worldwide Fund
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity International Value Fund
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
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<NAME> Fidelity Diversified International Fund
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity International Growth & Income Fund
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