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 a fund and its investments, you can obtain a copy of
each fund's most recent financial report and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated June 29, 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, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.
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.
INT-pro-695
Each of these international funds is a growth fund. Each seeks to increase
the value of your investment over the long-term by investing in securities
around the world.
FIDELITY'S
INTERNATIONAL EQUITY
FUNDS
BROADLY DIVERSIFIED FUNDS
Fidelity Diversified International Fund
Fidelity International Growth & Income Fund
Fidelity International Value Fund
Fidelity Overseas Fund
Fidelity Worldwide Fund
REGIONAL/SINGLE COUNTRY FUNDS
Fidelity Canada Fund
Fidelity Europe Fund
Fidelity Europe Capital Appreciation Fund
Fidelity Japan Fund
Fidelity Pacific Basin Fund
EMERGING MARKET FUNDS
Fidelity Emerging Markets Fund
Fidelity Latin America Fund
Fidelity Southeast Asia Fund
PROSPECTUS
JUNE 29, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
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 of and closing
your account.
INVESTOR SERVICES Services
to help you manage your
account.
SHAREHOLDER AND ACCOUNT DIVIDENDS, CAPITAL GAINS,
POLICIES AND TAXES
TRANSACTION DETAILS Share
price calculations and the
timing of purchases and
redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS
AND WAIVERS
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.
BROADLY DIVERSIFIED FUNDS
The broadly diversified funds do not focus on any one region or country.
Instead, they span the globe looking for investments that fit their
criteria.
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, 1994, the fund had over $351 million in assets.
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, 1994, the fund had over $1.3 billion 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.
OVERSEAS FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities outside the U.S.
SIZE: As of October 31, 1994, 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, 1994, the fund had over $748 million in assets.
REGIONAL/SINGLE COUNTRY FUNDS
The regional/single country funds focus on particular regions or countries.
Because of their narrow focus, these funds are less diversified than the
broadly diversified funds.
CANADA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Canadian issuers.
SIZE: As of October 31, 1994, the fund had over $368 million 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, 1994, the fund had over $507 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, 1994, the fund had over $352 million in assets.
JAPAN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Japanese issuers.
SIZE: As of October 31, 1994, the fund had over $469 million in assets.
PACIFIC BASIN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Pacific Basin issuers.
SIZE: As of October 31, 1994, the fund had over $553 million in assets.
EMERGING MARKET FUNDS
The emerging market funds focus on countries with developing economies and
markets fueled by political and economic changes.
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, 1994, the fund had over $1.9 billion in assets.
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, 1994, the fund had over $888 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, 1994, the fund had over $825 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 all 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
or region, or on 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. The REGIONAL/SINGLE
COUNTRY funds are designed for investors looking to target their
investments in particular regions or countries. The EMERGING MARKET funds
may be better suited for more aggressive investors who hope to take
advantage of opportunities available in developing countries. When you sell
your shares, they may be worth more or less than what you paid for them. By
themselves, none of these funds constitutes 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 historical expenses and are
calculated as a percentage of average net assets. For International Value,
annual fund operating expenses are based on a fund's estimated expenses for
its first year of operation. FMR has voluntarily agreed to temporarily
limit the total operating expenses of each fund to 2.00% of average net
assets.
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, the examples show how much you would have to 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.
BROADLY DIVERSIFIED FUNDS
Transaction expenses Operating expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DIVERSIFIE Maximum sales Management .72% After 1 $13
D charge on 3.00 fee year
INTERNATIO purchases %A
NAL FUND (as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $40
charge on years
redemptions
Redemption fee None Other .53% After 5 $69
expenses years
Annual account Total fund 1.25 After 10 $15
maintenance $12.0 operating % years 1
fee 0 expenses
(for accounts
under $2,500)
INTERNATIO Maximum sales Management .77% After 1 $12
NAL charge on None fee year
GROWTH & purchases
INCOME (as a % of
FUND offering price)
Deferred sales None 12b-1 fee None After 3 $38
charge on years
redemptions
Redemption fee None Other .44% After 5 $66
expenses years
Annual account Total fund 1.21 After 10 $14
maintenance $12.0 operating % years 7
fee 0 expenses
(for accounts
under $2,500)
INTERNATIO Maximum sales Management .77%
NAL charge on 3.00 fee
VALUE purchases %A
FUND (as a % of
offering price)
Deferred sales None 12b-1 fee None After 1 $15
charge on year
redemptions
Redemption fee None Other .68% After 3 $46
expenses years
Annual account Total fund 1.45
maintenance $12.0 operating %
fee 0 expenses
(for accounts
under $2,500)
OVERSEAS Maximum sales Management .80% After 1 $13
FUND charge on 3.00 fee year
purchases %A
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $39
charge on years
redemptions
Redemption fee None Other .44% After 5 $68
expenses years
Annual account Total fund 1.24 After 10 $15
maintenance $12.0 operating % years 0
fee 0 expenses
(for accounts
under $2,500)
WORLDWID Maximum sales Management .77% After 1 $13
E FUND charge on 3.00 fee year
purchases %A
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $42
charge on years
redemptions
Redemption fee None Other .55% After 5 $72
expenses years
Annual account Total fund 1.32 After 10 $15
maintenance $12.0 operating % years 9
fee 0 expenses
(for accounts
under $2,500)
</TABLE>
A EFFECTIVE JULY 1, 1995, THE FUND'S SALES CHARGE WILL BE ELIMINATED.
REGIONAL/SINGLE COUNTRY FUNDS
Transaction expenses Operating expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CANADA FUND Maximum sales 3.00 Management .80% After 1 $46
charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $78
charge on years
redemptions
Redemption fee 1.00 Other .77% After 5 $113
(on shares held % expenses years
less than 90
days) e ffective
September 1,
1995)
Annual account $12.0 Total fund 1.57 After 10 $211
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
EUROPE FUND Maximum sales 3.00 Management .72% After 1 $43
charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $71
charge on years
redemptions
Redemption fee 1.00 Other .63% After 5 $102
(on shares held % expenses years
less than 90
days) effective
September 1,
1995)
Annual account $12.0 Total fund 1.35 After 10 $188
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
EUROPE CAPITAL Maximum sales 3.00 Management .77% After 1 $45
APPRECIATION charge on % fee year
FUND purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $77
charge on years
redemptions
Redemption fee 1.00 Other .77% After 5 $ 111
(on shares held % expenses years
less than 90
days) e ffective
September 1,
1995)
Annual account $12.0 Total fund 1.54 After 10 $208
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
JAPAN FUND Maximum sales 3.00 Management .75% After 1 $44
charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $74
charge on years
redemptions
Redemption fee 1.00 Other .67% After 5 $105
(on shares held % expenses years
less than 90
days)
Annual account $12.0 Total fund 1.42 After 10 $195
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
PACIFIC BASIN Maximum sales 3.00 Management .86% After 1 $45
FUND charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $77
charge on years
redemptions
Redemption fee 1.00 Other .68% After 5 $111
(on shares held % expenses years
less than 90
days)
Annual account $12.0 Total fund 1.54 After 10 $208
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
</TABLE>
EMERGING MARKET FUNDS
Transaction expenses Operating expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
EMERGING Maximum sales 3.00 Management .77% After 1 $45
MARKETS FUND charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $78
charge on years
redemptions
Redemption fee 1.50 Other .75% After 5 $113
(on shares held % expenses years
less than 90
days)
Annual account $12.0 Total fund 1.52 After 10 $211
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
LATIN AMERICA Maximum sales 3.00 Management .77% After 1 $45
FUND charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $75
charge on years
redemptions
Redemption fee 1.50 Other .71% After 5 $108
(on shares held % expenses years
less than 90
days)
Annual account $12.0 Total fund 1.48 After 10 $202
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
SOUTHEAST Maximum sales 3.00 Management .69% After 1 $45
ASIA FUND charge on % fee year
purchases
(as a % of
offering price)
Deferred sales None 12b-1 fee None After 3 $76
charge on years
redemptions
Redemption fee 1.50 Other .78% After 5 $110
(on shares held % expenses years
less than 90
days)
Annual account $12.0 Total fund 1.47 After 10 $206
maintenance 0 operating % years
fee expenses
(for accounts
under $2,500)
</TABLE>
FINANCIAL HIGHLIGHTS
The tables that follow(except for International Value) are included in each
fund's Annual Report and have been audited by either Coopers & Lybrand
L.L.P. or Price Waterhouse LLP, (Europe Capital Appreciation, Latin America
and Southeast Asia) independent accountants. Their reports on the financial
statements and financial highlights are included in the Annual Report. For
International Value, the information is as of the fund's semiannual period
and is unaudited. The financial statements and financial highlights are
incorporated by reference into (are legally a part of) the fund's Statement
of Additional Information.
DIVERSIFIED INTERNATIONAL
1.Selected
Per-Share Data
and Ratios
2.Years ended 1992E 1993 1994
October 31
3.Net asset $ 10.00 $ 8.46 $ 11.32
value,
beginning of
period
4.Income from
Investment
Operations
5. Net .07 .07 .05
investment
income
6. Net realized (1.61) 2.89 1.20
and unrealized
gain (loss) on
investments
7. Total from (1.54) 2.96 1.25
investment
operations
8.Less
Distributions
9. From net -- (.10) (.01)
investment
income
10. From net -- -- (.10)
realized gain
11. Total -- (.10) (.11)
distributions
12.Net asset $ 8.46 $ 11.32 $ 12.46
value, end of
period
13.Total (15.40)% 35.38 11.14
returnB,C,D % %
14.Net assets, $ 36,439 $ 255,0 $ 351,1
end of period 29 52
(000 omitted)
15.Ratio of 2.00%A 1.47 1.25
expenses to ,C % %
average net
assets
16.Ratio of 2.34%A 1.47 1.25
expenses to % %
average net
assets before
expense
reductions
17.Ratio of net 1.38%A .84 .96
investment % %
income to
average net
assets
18.Portfolio 56%A 56 89
turnover rate % %
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO
NOT INCLUDE THE ONE TIME SALES CHARGE.
D DURING THE PERIOD DECEMBER 27, 1991 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1992, THE FUND'S INVESTMENT ADVISER VOLUNTARILY AGREED TO
REDUCE THE FUND'S EXPENSES TO THE EXTENT THAT THE AGGREGATE OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES) OF THE FUND WERE IN EXCESS OF AN ANNUAL RATE OF
2.00% OF THE AVERAGE NET ASSETS. TOTAL RETURN FOR THE PERIOD WOULD HAVE
BEEN LOWER HAD THE ADVISER NOT REDUCED EXPENSES.
E FROM DECEMBER 27, 1991 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1992.
INTERNATIONAL GROWTH & INCOME
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
19.Selected
Per-Share Data
and Ratios
20.Years ended 1987G 1988 1989 1990 1991 1992 1993 1994
October 31
21.Net asset $ 10.00 $ 10.42 $ 11.81 $ 12.87 $ 13.71 $ 13.99 $ 13.29 $ 17.25
value,
beginning of
period
22.Income from
Investment
Operations
23. Net .09 .16 .30 .25 .30B .31 .14D .38D
investment
income
24. Net .39 1.26 .96 .75 .41 (.84) 4.14 .02H
realized and
unrealized gain
(loss) on
investments
25. Total from .48 1.42 1.26 1.00 .71 (.53) 4.28 .40
investment
operations
26.Less
Distributions
27. From net (.06) -- (.13) (.16) (.38) (.16) (.31) (.03)
investment
income
28. From net -- (.03)C (.07)C -- (.05) (.01)C (.01)C (.05)
realized gain C
29. In excess -- -- -- -- -- -- -- (.03)
of net realized
gain
30. Total (.06) (.03) (.20) (.16) (.43) (.17) (.32) (.11)
distributions
31.Net asset $ 10.42 $ 11.81 $ 12.87 $ 13.71 $ 13.99 $ 13.29 $ 17.25 $ 17.54
value, end of
period
32.Total 4.69% 13.68% 10.85% 7.79% 5.43 (3.81) 32.94% 2.33%
returnE,F % %
33.Net assets, $ 40,822 $ 31,662 $ 26,333 $ 35,380 $ 49,73 $ 60,007 $ 1,002,8 $ 1,367,9
end of period 8 47 38
(000 omitted)
34.Ratio of 2.72% 2.58% 1.92% 1.98% 1.89 1.62% 1.52% 1.21%
expenses to A E E %
average net
assets
35.Ratio of net 1.23% 1.08% 1.98% 2.31% 2.86 2.78% .87% 2.16%
investment A %
income to
average net
assets
36.Portfolio 158% 112% 147% 102% 117 76% 24% 173%
turnover rate A %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <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 FOR THE PERIOD INDICATED, NET INVESTMENT INCOME PER SHARE WAS CALCULATED USING
AVERAGE SHARES OUTSTANDING.
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 AND
TOTAL RETURNS WOULD HAVE BEEN LOWER.
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 INVESTMENTS OF THE FUND.
</TABLE>
INTERNATIONAL VALUE
37.Se lected
Per-Share Data
and Ratios
38.Period ended 1995 C
April 30
39.Net asset $ 10.00
value,
beginning of
period
40.Income from
Investment
Operations
41. Net .03
investment
income
42. Net .14
realized and
unrealized gain
(loss)
43. Total from .17
investment
operations
44.Net asset $ 10.17
value, end of
period
45.Total 1.70%
Return B
46.Ratios and
Supplemental
Data
47.Net assets, $ 56,251
end of period
(000 omitted)
48.Ratio of 1.78%
expenses to A
average net
assets
49.Ratio of net .86%
investment A
income to
average net
assets
50.Portfolio 69%
turnover rate A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED.
C NOVEMBER 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1995 (UNAUDITED).
</TABLE>
OVERSEAS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
51.Sel
ected
Per-Sh
are
Data
and
Ratios
52.Year 1985F 1986 1987 1988 1989 1990 1991 1992B 1993 1994
s
Ended
Octobe
r 31
53.Net $ 10.00 $ 15.92 $ 26.91 $ 30.90 $ 25.30 $ 26.30 $ 27.47 $ 26.92 $ 21.96 $ 27.16
asset
value,
beginni
ng of
period
54.Inco
me
from
Invest
ment
Operati
ons
55. N .19 (.03) (.19) .30 .30 .35 .54C .46 .27 .18
et
invest
ment
income
56. N 5.73 11.15 7.49 2.34 1.28 2.16 .45 (3.82) 7.40 2.26
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
57. To 5.92 11.12 7.30 2.64 1.58 2.51 .99 (3.36) 7.67 2.44
tal
from
invest
ment
operati
ons
58.Les
s
Distrib
utions
59. Fr -- -- -- -- (.24) (.21) (.46) (.44) (.37) (.15)
om net
invest
ment
income
60. In -- -- -- -- -- -- -- -- -- (.17)
excess
of net
invest
ment
income
61. Fr -- (.13) (3.31) (8.24) (.34) (1.13)D (1.08) (1.16) (2.10)D (.11)
om net D D
realize
d gain
62. To -- (.13) (3.31) (8.24) (.58) (1.34) (1.54) (1.60) (2.47) (.43)
tal
distribu
tions
63.Net $ 15.92 $ 26.91 $ 30.90 $ 25.30 $ 26.30 $ 27.47 $ 26.92 $ 21.96 $ 27.16 $ 29.17
asset
value,
end of
period
64.Tota 59.20% 70.29 28.74% 11.62% 6.40 9.58% 4.12 (13.05) 39.01% 9.13%
l % % % %
returnE,
G
65.Net $ 119,199 $ 1,766, $ 1,393,4 $ 1,149,7 $ 876,5 $ 1,011,1 $ 969,4 $ 801,84 $ 1,490,6 $ 2,283,2
assets, 012 42 63 67 52 36 5 66 11
end of
period
(000
omitted
)
66.Rati 1.72%A 1.57 1.71% 1.38% 1.06 1.26% 1.53 1.52 1.27% 1.24%
o of ,G % % % %
expens
es to
averag
e net
assets
67.Rati .73%A (.32) (.53) 1.21% 1.06 1.34% 2.19 1.78 1.00% .90%
o of net % % % % %
investm
ent
income
to
averag
e net
assets
68.Port 63%A 107 122% 115% 100 96% 132 122 64% 49%
folio % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A ANNUALIZED
B AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
C INCLUDES $.08 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY WITHHELD ON
DIVIDEND AND INTEREST PAYMENTS.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
E TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO NOT INCLUDE
THE ONE TIME SALES CHARGE.
F FROM DECEMBER 4, 1984 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1985.
G DURING THE PERIOD DECEMBER 4, 1984 (COMMENCEMENT OF OPERATIONS) TO AUGUST 19,
1985, 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. IF THESE EXPENSE REDUCTIONS HAD NOT EXISTED, THE RATIO OF EXPENSES TO AVERAGE
NET ASSETS WOULD HAVE BEEN 2.16% AND TOTAL RETURN WOULD HAVE BEEN LOWER.
</TABLE>
WORLDWIDE
69.Sel
ected
Per-Sh
are
Data
and
Ratios
70.Year 1990F 1991 1992 1993 1994
s
ended
Octobe
r 31
71.Net $ 10.00 $ 8.95 $ 9.61 $ 9.63 $ 12.76
asset
value,
beginni
ng of
period
72.Inco
me
from
Invest
ment
Operati
ons
73. N .05 .21 .20 .11 .08
et
invest
ment
income
74. N (1.10) .53 (.08) 3.28 1.37
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
75. To (1.05) .74 .12 3.39 1.45
tal
from
invest
ment
operati
ons
76.Les
s
Distrib
utions
77. Fr -- (.08) (.10) (.24) (.10)
om net
invest
ment
income
78. Fr -- -- -- (.02) (.15)
om net B
realize
d gain
79. To -- (.08) (.10) (.26) (.25)
tal
distribu
tions
80.Net $ 8.95 $ 9.61 $ 9.63 $ 12.76 $ 13.96
asset
value,
end of
period
81.Tota (10.50)% 8.33 1.32 36.10 11.55
l % % % %
returnC
,D,E
82.Net $ 94,851 $ 105,0 $ 103,6 $ 287,2 $ 748,7
assets, 29 27 78 38
end of
period
(000
omitted
)
83.Rati 2.00%A 1.69 1.51 1.40 1.32
o of ,C % % % %
expens
es to
averag
e net
assets
84.Rati 2.09%A 2.19 2.02 1.99 1.40
o of % % % %
net
invest
ment
income
to
averag
e net
assets
85.Port 123%A 129 130 57 69
folio % % % %
turnov
er rate
<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 DURING THE PERIOD MAY 30, 1990 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31,
1990, FMR VOLUNTARILY AGREED TO REDUCE THE FUND'S EXPENSES TO THE EXTENT THAT THE
AGGREGATE OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE
COMMISSIONS AND EXTRAORDINARY EXPENSES) OF THE FUND WERE IN EXCESS OF AN
ANNUAL RATE OF 2.00% OF THE AVERAGE NET ASSETS. IF THESE EXPENSES HAD BEEN
INCURRED BY THE FUND, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE
BEEN 2.46% (ANNUALIZED) AND TOTAL RETURN FOR THE PERIOD WOULD HAVE BEEN LOWER.
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 RETURN 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.
</TABLE>
CANADA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
86.Sel
ected
Per-Sh
are
Data
and
Ratios
87.Year 1988F 1989 1990 1991 1992 1993 1994
s
ended
Octobe
r 31
88.Net $ 10.00 $ 12.74 $ 15.45 $ 13.57 $ 16.28 $ 14.23 $ 17.82
asset
value,
beginni
ng of
period
89.Inco
me
from
Invest
ment
Operati
ons
90. N .32 .02B .05B .03B (.02)B (.15) --
et
invest
ment
income
91. N 2.42 2.96 (1.24) 3.59 (1.11) 3.76 (.60)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
92. To 2.74 2.98 (1.19) 3.62 (1.13) 3.61 (.60)
tal
from
invest
ment
operati
ons
93.Les
s
Distrib
utions
94. Fr -- (.12) (.01) (.06) -- (.02) --
om net
invest
ment
income
95. Fr -- (.15) (.68) (.85) (.92) -- --
om net C
realize
d gain
96. In -- -- -- -- -- -- (.04)
excess
of net
realize
d gain
97. To -- (.27) (.69) (.91) (.92) (.02) (.04)
tal
distribu
tions
98.Net $ 12.74 $ 15.45 $ 13.57 $ 16.28 $ 14.23 $ 17.82 $ 17.18
asset
value,
end of
period
99.Tota 27.40% 23.94 (8.16) 28.13 (7.09) 25.40% (3.37)
l % % % % %
returnE,
G
100.Ne $ 10,802 $ 24,33 $ 17,736 $ 23,32 $ 21,701 $ 95,977 $ 368,33
t 1 7 0
assets,
end of
period
(000
omitted
)
101.Ra 2.02% 2.06 2.05% 2.01 2.00% 2.00% 1.57%
tio of A % %
expens
es to
averag
e net
assets
D
102.Ra 4.17% 2.87 2.31% 2.26 2.07% 2.00% 1.57%
tio of A % %
expens
es to
averag
e net
assets
before
expens
e
reducti
onsD
103.Ra 4.24% .16 .34% .17 (.11) (.66) (.14)
tio of A % % % % %
net
invest
ment
income
to
averag
e net
assets
104.Po 401% 152 164% 68 55% 131% 59%
rtfolio A % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A ANNUALIZED
B FOR THE YEARS ENDED OCTOBER 31, 1992, 1991, 1990 AND 1989, NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN CALCULATED USING AVERAGE SHARES OUTSTANDING.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D EFFECTIVE AUGUST 5, 1988, FMR VOLUNTARILY AGREED TO REDUCE THE FUND'S EXPENSES TO
THE EXTENT THAT AGGREGATE OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE
COMMISSIONS AND EXTRAORDINARY EXPENSES) OF THE FUND WERE IN EXCESS OF AN ANNUAL
RATE OF 2.00% OF THE AVERAGE NET ASSETS.
E THE TOTAL RETURN WOULD HAVE BEEN LOWER IF THE ADVISER HAD NOT REDUCED EXPENSES OF
THE FUND 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.
</TABLE>
EUROPE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
105.Se
lected
Per-Sh
are
Data
and
Ratios
106.Ye 1986G 1987 1988 1989 1990 1991 1992D 1993 1994
ars
ended
Octobe
r 31
107.Ne $ 10.00 $ 9.99 $ 12.09 $ 12.96 $ 15.04 $ 16.28 $ 15.93 $ 15.12 $ 18.43
t asset
value,
beginni
ng of
period
108.Inc
ome
from
Invest
ment
Operati
ons
109. N .01 .08 .12 .25E .46 .43F .27 .25 .18
et
invest
ment
income
110. N (.02) 2.03 .75 2.11 .97 (.40) (.57) 3.35 2.65
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
111. To (.01) 2.11 .87 2.36 1.43 .03 (.30) 3.60 2.83
tal
from
invest
ment
operati
ons
112.Le
ss
Distrib
utions
113. Fr -- (.01) -- (.24) (.19) (.35) (.48) (.29) (.08)
om net
invest
ment
income
114. Fr -- -- -- (.04)B - (.03) (.03)B -- --
om net B
realize
d gain
115. To -- (.01) -- (.28) (.19) (.38) (.51) (.29) (.08)
tal
distribu
tions
116.Ne $ 9.99 $ 12.09 $ 12.96 $ 15.04 $ 16.28 $ 15.93 $ 15.12 $ 18.43 $ 21.18
t asset
value,
end of
period
117.Tot (.10) 21.13 7.20 18.62% 9.50 .15 (1.89) 24.24 15.41
al % % % % % % % %
returnC
,E,H
118.Ne $ 19,375 $ 131,4 $ 102,0 $ 97,288 $ 389,2 $ 297,8 $ 431,22 $ 528,9 $ 507,4
t 31 29 73 31 3 29 60
assets,
end of
period
(000
omitted
)
119.Ra 1.50% 1.91 2.66 1.89% 1.45 1.31 1.22% 1.25 1.35
tio of A % % E % % % %
expens
es to
averag
e net
assets
120.Ra 2.77% .48 .97 1.67% 2.87 2.83 2.38% 1.44 .85
tio of A % % % % % %
net
invest
ment
income
to
averag
e net
assets
121.Po 9% 241 180 160% 148 80 95% 76 49
rtfolio A % % % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <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% AND TOTAL RETURN FOR THE PERIOD WOULD HAVE BEEN LOWER.
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 THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIOD.
</TABLE>
EUROPE CAPITAL APPRECIATION FUND
122.Selected
Per-Share Data
and Ratios
123.Year ended 1994B
October 31
124.Net asset $ 10.00
value,
beginning of
period
125.Income
from
Investment
Operations
126. Net .08E
investment
income
127. Net 1.27D
realized and
unrealized gain
(loss) on
investments
128. Total from 1.35
investment
operations
129.Less
Distributions
130. From net --
investment
income
131. From net --
realized gain
132. Total --
distributions
133.Net asset $ 11.35
value, end of
period
134.Total 13.50%
returnC
135.Net assets, $ 352,85
end of period 5
(000 omitted)
136.Ratio of 1.54%
expenses to A
average net
assets
137.Ratio of net .79%
investment A
income to
average net
assets
138.Portfolio 317%
turnover rate A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <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
139.Selected
Per-Share Data
and Ratios
140.Years 1992D 1993 1994
ended October
31
141.Net asset $ 10.00 $ 9.84 $ 13.35
value,
beginning of
period
142.Income
from
Investment
Operations
143. Net -- (.09) (.04)E
investment
income
144. Net (.16) 3.60 1.31
realized and
unrealized gain
(loss) on
investments
145. Total from (.16) 3.51 1.27
investment
operations
146.Less
Distributions
147. From net -- -- (.39)
realized gain
148. Redemptio -- -- .04
n fees added to
paid in capital
149.Net asset $ 9.84 $ 13.35 $ 14.27
value, end of
period
150.Total (1.60)% 35.67% 10.45%
returnC B
151.Net assets, $ 2,953 $ 118,19 $ 469,63
end of period 5 9
(000 omitted)
152.Ratio of 2.00%A 1.71% 1.42%
expenses to
average net
assets
153.Ratio of 3.59%A 1.71% 1.42%
expenses to ,B
average net
assets before
expense
reductions
154.Ratio of net .03%A (.77) (.32)
investment % %
income to
average net
assets
155.Portfolio -- 257% 153%
turnover rate
A ANNUALIZED
B EXPENSES LIMITED IN ACCORDANCE WITH A STATE
EXPENSE LIMITATION. TOTAL RETURN WOULD HAVE
BEEN LOWER HAD THE LIMITATION NOT BEEN IN EFFECT.
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.
PACIFIC BASIN
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
156.Se
lected
Per-Sh
are
Data
and
Ratios
157.Ye 1986F 1987 1988 1989 1990 1991 1992B 1993 1994
ars
ended
Octobe
r 31
158.Ne $ 10.00 $ 9.90 $ 12.42 $ 13.99 $ 15.78 $ 12.89 $ 13.15 $ 12.00 $ 17.48
t asset
value,
beginni
ng of
period
159.Inc
ome
from
Invest
ment
Operati
ons
160. N .012 (.11) --D (.027)D .12 .02D .08D .20 .10
et
invest
ment
income
161. N (.112) 2.64 1.71 1.927 (2.37) .40 (1.23) 5.39 2.78
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
162. To (.100) 2.53 1.71 1.900 (2.25) .42 (1.15) 5.59 2.88
tal
from
invest
ment
operati
ons
163.Le
ss
Distrib
utions
164. Fr -- (.01) -- (.003) (.01) (.16) -- (.11) (.01)
om net
invest
ment
income
165. In -- -- -- -- -- -- -- -- (.11)
excess
of net
invest
ment
income
166. Fr -- -- (.14) (.107)C (.63) -- -- -- (.28)
om net C
realize
d gain
167. To -- (.01) (.14) (.110) (.64) (.16) -- (.11) (.40)
tal
distribu
tions
168.Ne $ 9.90 $ 12.42 $ 13.99 $ 15.78 $ 12.89 $ 13.15 $ 12.00 $ 17.48 $ 19.96
t asset
value,
end of
period
169.Tot (1.00)% 25.57% 13.82 13.65% (14.99) 3.37 (8.75) 47.06 16.88
al % % % % % %
returnE,
G
170.Ne $ 22,020 $ 159,91 $ 136,0 $ 111,811 $ 86,354 $ 95,05 $ 116,27 $ 493,5 $ 553,5
t 7 60 1 7 33 32
assets,
end of
period
(000
omitted
)
171.Ra 1.50%A 2.10% 1.80 1.40% 1.59% 1.88 1.84% 1.59 1.54
tio of ,G % % % %
expens
es to
averag
e net
assets
172.Ra 3.53%A (.83) .04 (.18) .88% .12 .65% .15 .04
tio of % % % % % %
net
invest
ment
income
to
averag
e net
assets
173.Po -- 324% 228 133% 118% 143 105% 77 88
rtfolio % % % %
turnov
er rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <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 FOR THE YEARS ENDED OCTOBER 31, 1992, 1991, 1989, AND 1988, NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED 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. TOTAL RETURN WOULD HAVE
BEEN LOWER HAD THE LIMITATION NOT BEEN IN EFFECT.
</TABLE>
EMERGING MARKETS
174.Se
lected
Per-Sh
are
Data
and
Ratios
175.Ye 1991D 1992 1993 1994
ars
ended
Octobe
r 31
176.Ne $ 10.00 $ 10.40 $ 11.05 $ 16.18
t asset
value,
beginni
ng of
period
177.Inc
ome
from
Invest
ment
Operati
ons
178. N .12 .08 .06C .06
et
invest
ment
income
179. N .30 .76 5.28 2.97
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
180. To .42 .84 5.34 3.03
tal
from
invest
ment
operati
ons
181.Le
ss
Distrib
utions
182. Fr (.04) (.08) (.08) (.04)
om net
invest
ment
income
183. In -- -- -- (.01)
excess
of net
invest
ment
income
184. Fr -- (.14) (.15) --
om net
realize
d gain
185. To (.04) (.22) (.23) (.05)
tal
distribu
tions
186.Re .02 .03 .02 .09
dempti
on fees
added
to paid
in
capital
187.Ne $ 10.40 $ 11.05 $ 16.18 $ 19.25
t asset
value,
end of
period
188.Tot 4.41% 8.56% 49.58% 19.32%
al
returnA,
B
189.Ne $ 6,450 $ 13,732 $ 757,73 $ 1,976,3
t 7 71
assets,
end of
period
(000
omitted
)
190.Ra 2.60%B 2.60% 1.91% 1.52%
tio of B
expens
es to
averag
e net
assets
191.Ra 1.34% .90% .44% .39%
tio of
net
invest
ment
income
to
averag
e net
assets
192.Po 45% 159% 57% 107%
rtfolio
turnov
er rate
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
B EXPENSES LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE
LIMITATIONS NOT BEEN IN EFFECT.
C FOR THE PERIOD, NET INVESTMENT INCOME PER SHARE WAS
CALCULATED USING AVERAGE SHARES OUTSTANDING.
D FROM NOVEMBER 1, 1990 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1991.
</TABLE>
LATIN AMERICA
193.Se
lected
Per-Sh
are
Data
and
Ratios
194.Ye 1993C 1994
ars
ended
Octobe
r 31
195.Ne $ 10.00 $ 13.28
t asset
value,
beginni
ng of
period
196.Inc
ome
from
Invest
ment
Operati
ons
197. N .03 .07
et
invest
ment
income
198. N 3.23 2.82
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
199. To 3.26 2.89
tal
from
invest
ment
operati
ons
200.Le
ss
distribu
tions
201. Fr -- (.05)
om net
invest
ment
income
202. Fr -- (.05)
om net
realize
d gain
203. To -- (.10)
tal
distribu
tions
204.Re .02 .14
dempti
on fees
added
to paid
in
capital
205.Ne $ 13.28 $ 16.21
t asset
value,
end of
period
206.Tot 32.80% 22.89%
al
returnB,
D
207.Ne $ 342,93 $ 888,53
t 4 0
assets,
end of
period
(000
omitted
)
208.Ra 1.94% 1.48%
tio of A
expens
es to
averag
e net
assets
209.Ra 1.21% .47%
tio of A
net
invest
ment
income
to
averag
e net
assets
210.Po 72% 77%
rtfolio A
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 FROM APRIL 19, 1993
(COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1993.
D THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
SOUTHEAST ASIA
211.Se
lected
Per-Sh
are
Data
and
Ratios
212.Ye 1993D 1994
ars
ended
Octobe
r 31
213.Ne $ 10.00 $ 13.24
t asset
value,
beginni
ng of
period
214.Inc
ome
from
Invest
ment
Operati
ons
215. N .01 .04
et
invest
ment
income
216. N 3.22 1.23
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
217. To 3.23 1.27
tal
from
invest
ment
operati
ons
218.Le
ss
Distrib
utions
219. Fr -- (.04)
om net
invest
ment
income
220. In -- (.03)
excess
of net
invest
ment
income
221. To -- (.07)
tal
distribu
tions
222.Re .01 .17
dempti
on fees
added
to paid
in
capital
223.Ne $ 13.24 $ 14.61
t asset
value,
end of
period
224.Tot 32.40% 10.87%
al
returnB,
C
225.Ne $ 499,66 $ 825,73
t 9 4
assets,
end of
period
(000
omitted
)
226.Ra 2.00% 1.47%
tio of A
expens
es to
averag
e net
assets
227.Ra 2.06% 1.47%
tio of A
expens
es to
averag
e net
assets
before
expens
e
reducti
ons
228.Ra .45% .22%
tio of A
net
invest
ment
income
to
averag
e net
assets
229.Po 14% 157%
rtfolio A
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 THE ADVISER NOT
REDUCED CERTAIN EXPENSES DURING
THE PERIOD SHOWN.
D FROM APRIL 19, 1993
(COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1993.
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 .
Each fund's fiscal year runs from November 1 through October 31. The tables
below and on page show each fund's performance over past fiscal years
compared to two measures: an unmanaged index of related stocks and the
Consumer Price Index (CPI). The unmanaged index shows the general
performance of stocks in a region; the CPI indicates inflation, or loss of
purchasing power if no investment was made.
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)
BROADLY DIVERSIFIED FUNDS
Fiscal Average Annual Total Return Cumulative Total Return
years
ended
Octob
er 31
<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
DIVER 11.14% N/A 8.84%B 11.14% N/A 27.29%
SIFIED
INTERN
ATION
AL
FUND
N
DIVER 7.80% N/A 7.68% 7.80% N/A 23.47%
SIFIED
INTERN
ATION
AL
FUND
(LOAD
ADJ.A)
Morg 10.32% N/A 12.21% 10.32% N/A 38.86%
an
Stanl
ey
GDP-
weigh
ted
EAFE
Index
D
INTERN 2.33% 8.26% 8.97%C 2.33% 48.71% 96.18%
ATION
AL
GROW
TH &
INCO
ME
FUND
Q
INTERN 0.28% 7.82% 8.69% 0.28% 45.74% 92.26%
ATION
AL
GROW
TH &
INCO
ME
FUND
(LOAD
ADJ.A)
Morg 10.09% 4.13% 9.19% 10.09% 22.45% 99.22%
an
Stanl
ey
EAFE
Index
OVER 9.13% 8.52% 20.28% 9.13% 50.48% 523.75
SEAS D %
FUND
M
OVER 5.85% 7.86% 19.91% 5.85% 45.97% 505.04
SEAS %
FUND
(LOAD
ADJ.A)
Morg 10.09% 4.13% 18.45% 10.09% 22.45% 435.93
an %
Stanl
ey
EAFE
Index
WORL 11.55% N/A 9.45%E 11.55% N/A 49.14%
DWID
E
FUND
M
WORL 8.21% N/A 8.70% 8.21% N/A 44.67%
DWID
E
FUND
(LOAD
ADJ.A)
Morg 7.65% N/A 6.75% 7.65% N/A 33.51%
an
Stanl
ey
World
Index
Cons 2.61% 3.55% N/A 2.61% 19.03% N/A
umer
Price
Index
</TABLE>
REGIONAL/SINGLE COUNTRY FUNDS
Fiscal Average Annual Total Return Cumulative Total Return
years
ended
Octob
er 31
<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 -3.37% 5.79% 11.18%F -3.37% 32.47% 109.17
DA %
FUND
M
CANA -6.27% 5.14% 10.70% -6.27% 28.50% 102.90
DA %
FUND
(LOAD
ADJ.A)
TSE 0.73% 2.20% 8.62% 0.73% 11.49% 77.83%
300
(Toron
to
Stock
Excha
nge
300)
Index
EURO 15.41% 9.06% 11.28%G 15.41% 54.28% 137.39
PE %
FUND
EURO 11.95% 8.40% 10.86% 11.95% 49.65% 130.27
PE %
FUND
(LOAD
ADJ.A)
Morg 11.24% 10.62% 11.29% 11.24% 65.67% 137.56
an %
Stanl
ey
Europ
e
Index
EURO N/A N/A N/A N/A N/A 13.50%P
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
N
EURO N/A N/A N/A N/A N/A 10.09%
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
(LOAD
ADJ.A)
Morg N/A N/A N/A N/A N/A 7.16%
an
Stanl
ey
Europ
e
Index
JAPA 10.45% N/A 20.01%H 10.45% N/A 47.46%
N
FUND
N
JAPA 7.14% N/A 18.31% 7.14% N/A 43.03%
N
FUND
(LOAD
ADJ.A)
TOPI 9.54% N/A 20.72% 9.54% N/A 49.31%
X
Index
PACIFI 16.88% 6.63% 10.34%I 16.88% 37.83% 121.65
C %
BASIN
FUND
M
PACIFI 13.37% 5.98% 9.92% 13.37% 33.70% 115.00
C %
BASIN
FUND
(LOAD
ADJ.A)
Morg 9.06% 0.12% 8.05% 9.06% 0.61% 87.07%
an
Stanl
ey
Pacifi
c
Index
Cons 2.61% 3.55% N/A 2.61% 19.03% N/A
umer
Price
Index
</TABLE>
EMERGING MARKET FUNDS
Fiscal Average Annual Total Return Cumulative Total Return
years
ended
Octob
er 31
<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
EMER 19.32% N/A 19.25%J 19.32% N/A 102.30
GING %
MARK
ETS
FUND
EMER 15.74% N/A 18.34% 15.74% N/A 96.24%
GING
MARK
ETS
FUND
(LOAD
ADJ.A)
Morga 29.36% N/A 34.24% 29.36% N/A 225.05
n %
Stanle
y
Emer
ging
Marke
ts
Free
Index
LATIN 22.89% N/A 37.53%K 22.89% N/A 63.19%
AMER
ICA
FUND
LATIN 19.20% N/A 34.83% 19.20% N/A 58.30%
AMER
ICA
FUND
(LOAD
ADJ.A)
Morg 46.22% N/A 46.61% 46.22% N/A 80.06%
an
Stanl
ey
Latin
Ameri
ca
Free
Index
SOUT 10.87% N/A 28.37% 10.87% N/A 46.79%
HEAST L
ASIA
FUND
SOUT 7.54% N/A 25.85% 7.54% N/A 42.39%
HEAST
ASIA
FUND
(LOAD
ADJ.A)
Morga 15.46% N/A 38.19% 15.46% N/A 64.41%
n
Stanle
y Far
East
Ex-Ja
pan
Free
Index
Cons 2.61% 3.55% N/A 2.61% 19.03% N/A
umer
Price
Index
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING A FUND'S SALES CHARGE
B FROM DECEMBER 27, 1991
C FROM DECEMBER 31, 1986
D FROM DECEMBER 4, 1984
E FROM MAY 30, 1990
F FROM NOVEMBER 17, 1987
G FROM OCTOBER 1, 1986
H FROM SEPTEMBER 15, 1992
I FROM OCTOBER 1, 1986
J FROM NOVEMBER 1, 1990
K FROM APRIL 19, 1993
L FROM APRIL 19, 1993
M THE FUND'S SALES CHARGE HAS BEEN WAIVED THROUGH JUNE 30, 1995.
N THE FUND'S 3% SALES CHARGE HAS BEEN WAIVED SINCE ITS INCEPTION THROUGH
JUNE 30, 1995.
O 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 FUND HAS CHOSEN TO COMPARE ITS PERFORMANCE TO
THE GDP-WEIGHTED VERSION BECAUSE IT MORE ACCURATELY REPRESENTS EACH
COUNTRY'S RELATIVE PRODUCTION.
P FROM DECEMBER 21, 1993
Q THE FUND'S SALES CHARGE HAD BEEN WAIVED THROUGH MAY 31, 1994. EFFECTIVE
JUNE 1, 1994, THE FUND BECAME A NO LOAD FUND.
The following charts show the funds' performance over past calendar years
compared to groupings of funds with similar objectives. Comparisons for
Canada Fund and International Value Fund are not included because the
competitive average does not represent Canada Fund's objective and
International Value Fund has not completed one full calendar year of
operations.
DIVERSIFIED INTERNATIONAL FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1992 1993 1994
DIVERSIFIED INTERNATIONAL FUND -13.81% 36.67% 1.09%
Lipper International Funds Average -4.77% 39.40% -.71%
</TABLE>
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
%
%
%
%
INTERNATIONAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994
INTERNATIONAL GROWTH & INCOME 8.33% 11.56% 19.12% -3.23% 8.04% -3.34% 35.08% - 2.87%
FUND
Lipper International Funds Average 7.89% 16.24% 21.75% -11.74% 12.76% -4.77% 39.40% -.71%
</TABLE>
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
%
%
%
%
OVERSEAS FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
OVERSEAS FUND 78.67% 69.25% 18.37% 8.26% 16.93% -6.60% 8.61% -11.46% 40.05% 1.27%
Lipper International Funds
Average 45.03% 47.03% 7.89% 16.24% 21.75% -11.74% 12.76% -4.77% 39.40% -.71%
</TABLE>
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>
Calendar years 1991 1992 1993 1994
WORLDWIDE FUND 7.88 6.21% 36.55 2.96
% % %
Lipper Global Funds Average 18.44 .01% 31.04 -3.03
% % %
</TABLE>
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
%
%
%
%
EUROPE FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994
EUROPE FUND 14.90% 5.84% 32.33% -4.59% 4.16% -2.52% 27.16% 6.26%
Lipper European Region Funds 17.12% 7.23% 25.22% -3.51% 6.60% -7.93% 25.76% 1.22%
Average
</TABLE>
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: 14.9
Row: 4, Col: 2, Value: 17.12
Row: 5, Col: 1, Value: 5.84
Row: 5, Col: 2, Value: 7.23
Row: 6, Col: 1, Value: 32.33
Row: 6, Col: 2, Value: 25.22
Row: 7, Col: 1, Value: -4.59
Row: 7, Col: 2, Value: -3.51
Row: 8, Col: 1, Value: 4.159999999999999
Row: 8, Col: 2, Value: 6.6
Row: 9, Col: 1, Value: -2.52
Row: 9, Col: 2, Value: -7.930000000000001
Row: 10, Col: 1, Value: 27.16
Row: 10, Col: 2, Value: 25.76
Row: 11, Col: 1, Value: 6.26
Row: 11, Col: 2, Value: 1.22
%
(large solid box) EUROPE FUND
(large hollow box) Lipper European Region
Funds Average
%
%
%
%
EUROPE CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year 1994
EUROPE CAPITAL APPRECIATION FUND 6.88%
Lipper European Region Funds 1.22%
Average
</TABLE>
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: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
Row: 11, Col: 1, Value: 6.88
Row: 11, Col: 2, Value: 1.22
%
(large solid box) EUROPE CAPITAL APPRECIATION
FUND
(large hollow box) Lipper European Region
Funds Average
%
%
%
JAPAN FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1993 1994
JAPAN FUND 20.45% 16.46%
Lipper Japanese Funds Average 22.94% 15.39%
</TABLE>
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: 20.45
Row: 10, Col: 2, Value: 22.94
Row: 11, Col: 1, Value: 16.46
Row: 11, Col: 2, Value: 15.39
%
(large solid box) JAPAN FUND
(large hollow box) Lipper Japanese
Funds Average
%
%
%
%
PACIFIC BASIN FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994
PACIFIC BASIN FUND 24.99% 10.45% 11.44% -27.2 12.54% -7.62% 63.91% -2.81%
1%
Lipper Pacific Region Funds Average 17.54% 21.34% 24.47% -16.0 17.04% 1.14% 63.81% -12.45%
5%
</TABLE>
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: 24.99
Row: 4, Col: 2, Value: 17.54
Row: 5, Col: 1, Value: 10.45
Row: 5, Col: 2, Value: 21.34
Row: 6, Col: 1, Value: 11.44
Row: 6, Col: 2, Value: 24.47
Row: 7, Col: 1, Value: -27.21
Row: 7, Col: 2, Value: -16.05
Row: 8, Col: 1, Value: 12.54
Row: 8, Col: 2, Value: 17.04
Row: 9, Col: 1, Value: -7.619999999999999
Row: 9, Col: 2, Value: 1.14
Row: 10, Col: 1, Value: 63.91
Row: 10, Col: 2, Value: 63.81
Row: 11, Col: 1, Value: -2.81
Row: 11, Col: 2, Value: -12.45
%
%
(large solid box) PACIFIC BASIN FUND
(large hollow box) Lipper Pacific Region
Funds Average
%
%
%
%
%
%
EMERGING MARKETS FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1991 1992 1993 1994
EMERGING MARKETS FUND 6.76% 5.85% 81.76% - 17.93%
Lipper International Funds Average 12.76% -4.77% 39.40% -9.57%
</TABLE>
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: 6.76
Row: 8, Col: 2, Value: 12.76
Row: 9, Col: 1, Value: 5.85
Row: 9, Col: 2, Value: -4.77
Row: 10, Col: 1, Value: 81.76000000000001
Row: 10, Col: 2, Value: 39.4
Row: 11, Col: 1, Value: -17.93
Row: 11, Col: 2, Value: -9.57
%
%
(large solid box) EMERGING MARKETS FUND
(large hollow box) Lipper International
Funds Average
%
%
%
%
%
%
%
%
SOUTHEAST ASIA FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year 1994
SOUTHEAST ASIA FUND -21.76%
Lipper Pacific Region Funds Average -12.45%
</TABLE>
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Row: 6, Col: 2, Value: 0.0
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Row: 9, Col: 2, Value: 0.0
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 0.0
Row: 11, Col: 1, Value: -21.76
Row: 11, Col: 2, Value: -12.45
%
(large solid box) SOUTHEAST ASIA FUND
(large hollow box) Lipper Pacific Region
Funds Average
%
%
%
LATIN AMERICA FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year 1994
LATIN AMERICA FUND - 23.17%
Lipper Latin America Region Funds Average -14.24%
</TABLE>
Row: 1, Col: 1, Value: 0.0
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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: 0.0
Row: 10, Col: 2, Value: 0.0
Row: 11, Col: 1, Value: -23.17
Row: 11, Col: 2, Value: -14.24
%
(large solid box) LATIN AMERICA FUND
(large hollow box) Lipper Latin America Region
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. Average annual total returns covering
periods of less than one year assume that performance will remain constant
for the rest of the year.
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 pages and 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, is an unmanaged index of
over 1,000 foreign stock prices.
(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.
REGIONAL/SINGLE COUNTRY INDEXES:
(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 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 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.
EMERGING MARKET INDEXES:
(small solid bullet) The 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 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 Southeast Asia 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.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation,
calculated by the U.S. government.
COMPETITIVE FUNDS AVERAGES used on pages - reflect the performance of funds
with similar objectives. Each average is published by Lipper Analytical
Services and assumes reinvestment of distributions.
BROADLY DIVERSIFIED FUND AVERAGES:
(small solid bullet) Diversified International, International Growth &
Income, International Value, Overseas, and Emerging Markets 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.
REGIONAL/SINGLE COUNTRY FUND AVERAGES:
(small solid bullet) Europe and Europe Capital Appreciation are compared to
the Lipper European Region Funds average, which reflects the performance of
32 funds investing in Europe.
(small solid bullet) Japan is compared to the Lipper Japanese Funds
average, which reflects the performance of 7 funds investing in Japan.
(small solid bullet) Pacific Basin is compared to the Lipper Pacific Region
Funds Average, which reflects the performance of 43 funds investing in the
Pacific region.
EMERGING MARKETS FUND AVERAGES:
(small solid bullet) Southeast Asia is compared to the Lipper Pacific
Region Funds average, which reflects the performance of over 43 funds
investing in the Pacific region.
(small solid bullet) Latin America is compared to the Lipper Latin America
Fund Average, which reflects the performance of 11 funds investing in Latin
America.
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.
EACH FUND 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
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIAL U.K.), in Kent, England, and serves as a sub-adviser for
Diversified International, International Value, Europe Capital
Appreciation, Latin America, and Southeast Asia.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo, Japan
serves as a sub-adviser for Japan, Southeast Asia, and International Value.
Greg Fraser is vice president and 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 as an equity analyst.
Rick Mace is manager of International Value which he has managed since
November 1994, and International Growth & Income, which he has managed
since January 1994. Previously, he managed Select Transportation. He joined
Fidelity in 1988 as an analyst.
John R. Hickling is a manager and vice president of Overseas, which he has
managed since January 1993. Mr. Hickling also manages Advisor Overseas and
VIP Overseas. Previously, he managed Japan, Emerging Markets, Europe,
International Opportunities, and Pacific Basin. Mr. Hickling joined
Fidelity in 1982.
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 $285
billion
(solid bullet) Number of shareholder accounts: over 20
million
(solid bullet) Number of investment analysts and portfolio
managers: over 200
(checkmark)
Penelope Dobkin is manager and vice president of Worldwide, which she has
managed since its inception in May 1990. Previously, Ms. Dobkin managed
Europe, United Kingdom, 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 1980.
George Domolky is vice president and manager of Canada, 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.
Sally Walden is vice president and manager of Europe, 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, 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.
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.
Simon Fraser is manager and vice president of Pacific Basin, which he has
managed since May 1993. 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.
Richard Hazlewood is vice president and manager of Emerging Markets, 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.
Patricia Satterthwaite is vice president and manager of Latin America,
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.
Allan Liu is manager of Southeast Asia, 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.
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 parent company of FMR, FMR Far East, and FMR U.K. Through
ownership of voting common stock, members of the Edward C. Johnson 3d
family form a controlling group with respect to FMR Corp. Changes may occur
in the Johnson family group, through death or disability, which would
result in changes in each individual family member's holding of stock. Such
changes could result in one or more family members becoming holders of over
25% of the stock. FMR Corp. has received an opinion of counsel that changes
in the composition of the Johnson family group under these circumstances
would not result in the termination of the funds' management or
distribution contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts. Fidelity Investments
Limited (FIL) is the ultimate parent company of FIIA and FIIAL U.K., and
FIJ. The Johnson family group also owns, directly or indirectly, more than
25% of the voting common stock of FIL.
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 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.
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.
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.
FMR may also use different investment techniques in an attempt to hedge the
funds' risks, but there is no guarantee that these strategies will work as
FMR intends. Also, as 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.
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.
No one mutual fund, however, can provide an appropriate balanced investment
plan for all investors.
BROADLY DIVERSIFIED FUNDS
These funds increase diversification by spreading investments among
different countries and geographic regions. These funds invest in
securities of both developed and emerging markets.
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 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.
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. Th e 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.
REGIONAL/SINGLE COUNTRY FUNDS
These funds offer investors the ability to concentrate an investment in a
particular region or country that they believe to offer strong long-term
growth potential. The region in which each fund focuses is the fund's
"focal region." Each fund's performance is closely tied to economic and
political conditions within its focal region. The funds may invest in all
types of issuers that have their principal activities within their focal
regions. The funds focus on equity securities, but may also invest in debt
securities of any quality.
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.
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. Some European countries, particularly those in Eastern
Europe, have less stable economies than those in Western Europe. Most 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, Bosnia,
Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, R ussia, the Slovak Republic, 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 to the risks associated with investments in
Eastern European countries, the fund's investments are subject to the same
risks as Europe Fund.
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 is a major force in the global economy. The country is heavily
dependent upon international trade, so its economy is especially sensitive
to trade barriers. Japan's recession has abated somewhat, and as of
November 1994, its market had recovered somewhat from decline.
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.
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. In addition, many are experiencing
political and social uncertainties. Japan's recession has abated somewhat,
and as of November 1994, its market had recovered somewhat from decline.
The return of Hong Kong to Chinese dominion will affect the entire Pacific
Basin.
EMERGING MARKET FUNDS
These funds are designed for aggressive investors who want to focus on
emerging markets. While FMR believes that these investments present the
possibility for significant growth over the long-term, they also entail
significant risks. Many investments in emerging markets can be considered
speculative, and their prices can be much more volatile than those in the
more developed nations of the world. This difference reflects the greater
uncertainties of investing in less established markets and economies.
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. The fund focuses on equity
securities, but may also invest in other types of instruments, including
debt securities of any quality.
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 economic conditions in other countries and
on world commodity prices. This region is vulnerable to political
instability. Approval of the North American Free Trade Agreement will also
have a significant impact on the region.
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.
Countries in Southeast Asia are in various stages of economic development -
some are considered emerging markets - but each has its own risks. Most
countries in Southeast Asia 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 Southeast Asia have experienced rapid growth, although
many suffer with obsolete financial systems, economic problems, or archaic
legal systems. Most Southeast Asian countries are heavily dependent upon
international trade, and many are experiencing political and social
uncertainties. In addition, the return of Hong Kong to Chinese dominion
will affect the entire Southeast Asian region.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of each fund's policies
and limitations and more detailed information about the funds' investments
is 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 to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. Current holdings and recent investment
strategies are described in the funds' 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.
FOREIGN SECURITIES and foreign currencies may involve additional risks.
These include currency fluctuations, risks relating to political or
economic conditions in the foreign country, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
In addition to the political and economic factors that can affect foreign
securities, a governmental issuer may be unwilling to repay principal and
interest when due and may require that the conditions for payment be
renegotiated. These factors could make foreign investments, especially
those in developing countries, 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 often
considered to be speculative 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 page provide a summary of ratings assigned to debt holdings
(not including money market instruments) in each fund's portfolio. These
figures are dollar-weighted averages of month-end portfolio holdings during
fiscal 1994, 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 35% of its assets.
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, purchasing
indexed securities, and selling securities short (International Growth &
Income only).
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.
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.
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 other securities, including illiquid 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 rights, 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: 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. For International Growth & Income
Fund, the last restriction also does not apply to securities issued by
foreign governments and supranational organizations.
FISCAL 1994 DEBT HOLDINGS, BY S&P RATING
E
S&P Diversified International Europe Capital Emerging Latin South
east
RATING International Growth & Income Overseas Worldwide Canada Europe
Appreciation Japan Pacific Basin Markets Ameri
ca Asia
INVESTMENT GRADE
Highest quality AAA
High quality AA -- 13.8% 1.1% 0.2% 1.4% -- -- -- -- -- -- --
Upper-medium grade A
Medium grade BBB -- -- -- -- -- -- -- -- -- -- -- --
LOWER QUALITY
Moderately speculative BB -- 3.8% -- -- -- -- -- -- -- 0.8% 0.5% --
Speculative B -- -- -- -- 0.1% -- -- -- -- -- -- --
Highly speculative CCC -- -- -- -- -- -- -- -- -- -- -- --
Poor quality CC,C -- -- -- -- -- -- -- -- -- -- -- --
Lowest quality, no interest D -- -- -- -- -- -- -- -- -- -- --
- --
In default, in arrears -- -- -- -- -- -- -- -- -- -- -- -- --
-- 17.6% 1.1% 0.2% 1.5% -- -- -- -- 0.8% 0.5% --
FISCAL 1994 DEBT HOLDINGS, BY MOODY'S RATING
MOODY'S Diversified International Europe Capital Emerging Latin
South
east
RATING International Growth & Income Overseas Worldwide Canada Europe
Appreciation Japan Pacific Basin Markets Ameri
ca Asia
INVESTMENT GRADE
Highest quality Aaa
High quality Aa -- 14.7% 1.1% 0.3% 1.4% -- -- -- -- -- -- --
Upper-medium grade A
Medium grade Baa -- 0.1% -- -- -- -- -- -- -- -- -- --
LOWER QUALITY
Moderately speculative Ba -- 0.8% -- -- -- -- -- -- -- 0.2% 0.5% --
Speculative B -- 3.5% 1.1% 1.4% 0.1% -- -- -- -- 1.1% 2.4% --
Highly speculative Caa -- -- -- -- -- -- -- -- -- -- -- --
Poor quality Ca -- -- -- -- -- -- -- -- -- -- -- --
Lowest quality, no interest C -- -- -- -- -- -- -- -- -- -- --
- --
In default, in arrears -- -- -- - -- -- -- -- -- -- -- -- --
-- 19.1% 2.2% 1.7% 1.5% -- -- -- -- 1.3% 2.9% --
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 STATEMENT OF ADDITIONAL INFORMATION FOR A MORE
COMPLETE DISCUSSION OF THESE RATINGS.
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.
Debt Dollar Weighted
Holdings Average %
Not Rated
Directly or
Indirectly by
Moody's or
S&PE
Diversified
Internation
al
Internation 3.5%
al Growth
& Income
Overseas 0.2%
Worldwide 1.9%
Canada 0.9%
Europe 0.1%
Europe --
Capital
Appreciati
on
Japan 0.3%
Pacific 3.5%
Basin
Emerging 5.4%
Markets
Latin 6.4%
America
Southeast 2.4%
Asia
FMR has determined that unrated debt securities that are lower-quality
account for 2.5% and 5.2% of the total value of investment in securities in
Latin America and Emerging Markets, respectively.
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.
DIVERSIFIED INTERNATIONAL FUND seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S.
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.
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.
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.
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.
JAPAN 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. 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.
EMERGING MARKETS FUND seeks capital appreciation.
LATIN AMERICA FUND seeks high total investment return.
SOUTHEAST ASIA FUND seeks capital appreciation.
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 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 provide
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, decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
INTERNATIONAL GROWTH & INCOME FUND, WORLDWIDE FUND, EMERGING MARKETS FUND,
AND LATIN AMERICA 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 1994, the group fee
rate was .3191%. The individual fund fee rate is .45% for each fund. The
total management fee for fiscal 1994 was .77% for International Growth &
Income, Emerging Markets, Latin America, and Worldwide. The management fee
rate for the funds is higher than that of most domestic mutual funds, but
not necessarily higher than that of the typical international fund.
DIVERSIFIED INTERNATIONAL FUND, INTERNATIONAL VALUE FUND, OVERSEAS 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. However, for International Value and Europe Capital Appreciation,
the performance adjustment will not take effect until November 1995 and
December 1994, respectively.
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 1994, the group fee rate was .3191%. The individual fund fee
rate is .45%. The basic fee for fiscal 1994 was .67% for Europe Fund, .77%
for Overseas Fund, and .77% for Diversified International Fund, Canada
Fund, Japan Fund, Pacific Basin Fund, and Southeast Asia Fund.
FUND BENCHMARK
Diversified International EAFE Index/GDP Weighted
International Value EAFE Index/ Cap Weighted
Overseas EAFE Index/Cap Weighted
Canada TSE 300 Index
Europe Europe Index
Europe Capital Appreciation Europe Index
Japan TOPIX Index
Pacific Basin Pacific Index
Southeast Asia Combined Far East ex-Japan Free Index
THE PERFORMANCE ADJUSTMENT RATE is calculated monthly by comparing a 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%.
The total management fee for the funds for fiscal 1994 is outlined in the
chart below. The management fee rate for the funds is higher than that of
most domestic mutual funds, but not necessarily higher than that of the
typical international fund.
Fund Managem
ent
fee
Diversified International .72%
International Value .77%
Overseas .80%
Canada .80%
Europe .72%
Europe Capital Appreciation .77%
A
Japan .75%
Pacific Basin .86%
Southeast Asia .69%
A ANNUALIZED
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 companies based in Europe. FMR Far East focuses on
companies based in Asia and the Pacific Basin. FIJ focuses on companies
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 companies 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 FIJ
and FIIA provided investment advice. FIIA pays FIIAL U.K. a fee equal to
110% of these costs 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 costs of providing these services. Currently, FIJ
provides Japan Fund with investment management services.
F GHOTHER 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
1994 the funds paid FSC the fees outlined in the following chart:
Fee to
Fund FSC
Diversified International 0.4%
International Growth & Income 0.3%
Overseas 0.3%
Worldwide 0.4%
Canada 0.6%
Europe 0.5%
Europe Capital Appreciation 0.5%
Japan 0.5%
Pacific Basin 0.5%
Emerging Markets 0.4%
Latin America 0.4%
Southeast Asia 0.5%
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 1994, 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
%
Diversified International 89%
International Growth & Income 173%
Overseas 49%
Worldwide 69%
Canada 59%
Europe 49%
Europe Capital Appreciation 317%A
Japan 153%
Pacific Basin 88%
Emerging Markets 107%
Latin America 77%
Southeast Asia 157%
A ANNUALIZED.
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 75 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
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 WITH
A SALES CHARGE: the offering price and the net asset value (NAV). The
offering price includes any sales charge, which you pay when you buy
shares, unless you qualify for a reduction or waiver as described on page .
When you buy shares of the funds at the offering price, Fidelity deducts
the appropriate sales charge and invests the rest at the NAV. Shares of
International Growth & Income are sold without a sales charge. Effective
July 1, 1995 Diversified International, International Value, Overseas, and
Worldwide will be 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
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
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
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 this page.
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, LATIN AMERICA, AND SOUTHEAST ASIA
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 OR
PACIFIC BASIN 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 SEPTEMBER
1, 1995 IF YOU SELL SHARES OF EUROPE, EUROPE CAPITAL APPRECIATION 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 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
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 a fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
Note that exchanges out of funds 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 monthly or quarterly redemptions
from your account. Because a sales charge may apply to your purchase, 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.
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 each dividend and capital gain
distribution.
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 a fund's sales charge. Likewise, if you
direct distributions from one of the funds to a fund with a sales charge,
you will not pay a sales charge on those purchases.
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.
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)
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. A tax credit or deduction may be available to you. If so,
your tax statement will show more taxable income or capital gains than
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 at
the close of business of the NYSE, usually 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 plus a
sales charge if any. The sales charge is 3% of the offering price, or 3.09%
of the net amount invested for the funds. 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 are of
a size that 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 OR SELL 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 on days 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 (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, 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.
THE REDEMPTION FEE for Japan, Pacific Basin, Emerging Markets, Latin
America, and Southeast Asia, if applicable, will be deducted from the
amount of your redemption. As of September 1, 1995, the redemption fee for
Europe, Europe Capital Appreciation and Canada Fund 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 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.
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 sales charge (where applicable)
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 2.25% 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) Each 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 also 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 the
funds receive or anticipate simultaneous orders affecting significant
portions of the funds' assets. In particular, a pattern of exchanges that
coincide 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.
Net amount
Ranges Sales charge 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
The sales charge for any of the funds 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.
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.
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), 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 INTERNATIONAL EQUITY FUNDS
FIDELITY DIVERSIFIED INTERNATIONAL FUND, FIDELITY INTERNATIONAL GROWTH &
INCOME FUND, FIDELITY INTERNATIONAL
VALUE FUND, FIDELITY OVERSEAS FUND, FIDELITY WORLDWIDE FUND, FIDELITY
CANADA FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY JAPAN FUND, FIDELITY
PACIFIC BASIN FUND, FIDELITY EMERGING
MARKETS FUND, FIDELITY LATIN AMERICA FUND, AND FIDELITY SOUTHEAST ASIA FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 29, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated June 29, 1995). Please retain this
document for future reference. Each fund's financial statements and
financial highlights included in the Annual Report (except International
Value) for the fiscal year ended October 31, 1994 are incorporated herein
by reference. The unaudited financial statements and financial highlights
included in the Semi-Annual Report for the fiscal period ended April 30,
1995 for International Value are incorporated herein by reference. To
obtain a copy of the Prospectus, 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 Companies Affiliated With FMR
Description of the Trust
Financial Statements
Appendix
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISORS
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)
INT-ptb-695
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 each 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 funds' 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 a fund.
However, for Diversified International Fund, International Growth & Income
Fund, International Value Fund, Worldwide Fund, Canada Fund, Europe Capital
Appreciation Fund, Japan Fund, Emerging Markets Fund, Latin America Fund,
and Southeast Asia Fund - except for the fundamental investment limitations
set forth below - the investment policies and limitations described in this
Statement of Additional Information are not fundamental and may be changed
without shareholder approval.
INVESTMENT POLICIES AND LIMITATIONS OF DIVERSIFIED INTERNATIONAL FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) 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% 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 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 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 GROWTH & INCOME FUND
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% 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 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
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% 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 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.
(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 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 OVERSEAS FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than 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% 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.
(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 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
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% as appropriate 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 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 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% 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 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 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 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% 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 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 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
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 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
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 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 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
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 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
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 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 - EMERGING MARKETS FUND.
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 FOR REGIONAL AND SINGLE COUNTRY FUNDS
PRIMARY BUSINESS ACTIVITIES - REGIONAL AND SINGLE COUNTRY FUNDS. FMR
determines where an issuer or its principal activities 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. 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 any of its agencies, political subdivisions or
instrumentalities, or has its primary trading market in that 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.
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 BANKS 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, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
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 a fund's investment in the company.
The activities that the funds 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 one or more of the funds
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities incurred.
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 a fund's rights and
obligations relating to the investment).
Investments currently considered by a fund 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.
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 the fund 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.
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 may be in
default or present the risk of default. Governmental entities responsible
for repayment of the debt may be unable or unwilling to repay principal and
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.
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
future performance of the high yield bond market, especially during periods
of economic recession. In fact, from 1989 to 1991, the percentage of
lower-quality securities that defaulted rose significantly above prior
levels, though the default rate decreased in 1992 and 1993.
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 exercise its rights as 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.
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, a 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 can 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 will also involve
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 the 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 funds.
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. 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 all funds except for Emerging Markets see (1) and (7)). For purposes of
these limitations, a fund generally will treat the borrower as the "issuer"
of indebtedness held by the fund. In the case of loan participations where
a bank or other lending institution serves as financial intermediary
between a fund and the borrower, if the participation does not shift to the
fund the direct debtor-creditor relationship with the borrower, SEC
interpretations require the fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for the purposes of determining whether the fund has invested
more than 5% of its total assets in a single issuer. 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.
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 U.S. 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 a
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 a 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 investment and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. 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 a 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.
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
U.S. 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 their underlying instruments.
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.
CLOSED-END INVESTMENT COMPANIES. Each 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.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the 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. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon resale price, which
obligation is in effect secured by the value (at least equal to the amount
of the agreed-upon resale price and marked to market daily) of the
underlying security. A fund may engage in repurchase agreements with
respect to any type of security in which it is authorized to invest. While
it does not presently appear possible to eliminate all risks from these
transactions (particularly the possibility of a decline in the market value
of the underlying securities, as well as delays and costs to the funds in
connection with bankruptcy proceedings), it is each fund's current policy
to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
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, a fund will maintain appropriate liquid assets in a segregated
custodial account to cover its obligation under the agreement. The funds
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 a fund's assets and may be
viewed as a form of leverage.
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 the
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 a
default by the counterparty, a 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 market securities may involve
issuers or counterparties with lower credit ratings than typical U.S.
repurchase agreements.
SHORT SALES "AGAINST THE BOX." If one of the funds enter 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 expense, in connection with opening,
maintaining, and closing short sales against the box.
INTERFUND BORROWING PROGRAM. The funds have received permission from the
SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. The funds will lend through the program only
when the returns are higher than those available at the same time 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. The funds 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.
SECURITIES LENDING. The funds 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).
FOREIGN INVESTMENTS. Investing in securities issued by companies or other
issuers whose principal activities are outside the United States 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. In addition,
there is generally less publicly available information about foreign
issuers financial condition and operations, particularly those not subject
to the disclosure and reporting requirements of the U.S. securities laws.
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. Further, economies of particular
countries or areas of the world may differ favorably or unfavorably from
the economy of the United States.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including 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
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects. The considerations noted above generally are
intensified for investments in developing countries. Developing countries
may have relatively unstable governments, economies based on only a few
industries, and securities markets that trade a small number of securities.
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 exchanges, 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 expose a fund to 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.
Each fund may invest in foreign securities that impose restrictions on
transfer within the U.S. 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.
A fund may invest in American Depository Receipts and European Depository
Receipts (ADRs and EDRs), which are certificates evidencing ownership of
shares of a foreign-based issuer held in trust by a bank or similar
financial institution. Designed for use in the U.S. and European securities
markets, respectively, ADRs and EDRs are alternatives to the purchase of
the underlying securities in their national markets and currencies.
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 a 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 some,
but not all, of the possible currency management strategies involving
forward contracts that could be used by the funds. The funds may also use
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, the fund 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 will 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 currency that is expected to perform better
relative to the U.S. dollar. 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 they will hedge at an appropriate
time.
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 changes in 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.
1.LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Japan has filed and each
of the remaining funds intends 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 options 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 a 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, a 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 a 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, and are
not fundamental policies and may be changed as regulatory agencies permit.
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 contracts 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 the funds' 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.
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. A 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, a 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.
COMBINED POSITIONS. The funds 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. A fund may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
2.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.
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 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 a fund
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.
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. The funds 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 a fund's investments exactly over time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the SEC 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.
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.
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
of 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 the 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.
The economic situation also remains difficult for Eastern European
countries in transition from central planning, following what has already
been a sizable decline in output. The contraction now appears to be
bottoming out in parts of central Europe, where some countries are
projected to register positive growth in 1995. But key aspects of the
reform and stabilization efforts have not yet been fully implemented, and
there remain risks of policy slippages. 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, and interest rates have been falling
and should 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 328 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 has
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. 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 the 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
implementations of stronger stabilization programs. Economic conditions
appear to have improved for some of the transition economies of central
Europe. Following three successive years of output declines, there are
preliminary indications of 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, however,
are expected to achieve positive real growth in 1995 as market reforms
deepen. 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.
Economic conditions in the former Soviet Union have continued to
deteriorate. Real GDP in Russia is estimated to have fallen 19 percent in
1992, after a 9 percent decline in 1991. 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. 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 a developed stock market, but
Poland, Hungary and the Czech Republic have small securities markets in
operation. Ethnic and civil conflict currently rage 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. There is also an urgent need for positive steps to resist
protectionist pressures, especially by bringing the multilateral trade
negotiations under the Uruguay Round of the General Agreement on Trade and
Tariffs (GATT) to a successful conclusion. Determined action to alleviate
short-term difficulties and to achieve key medium-term objectives would
unquestionably strengthen consumer and business confidence. Interest rates
generally have declined somewhat with the easing of tensions in the
Exchange Rate Mechanism (ERM), but for most countries tight monetary
conditions remain an obstacle to stronger growth and a threat to exchange
market stability. However, in the long-term, reunification 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
1993
Denmark 1.2
France -1.0
Germany -1.1
Italy -0.7
Netherlands -1.0
Spain -0.6
Switzerland 2.0
United Kingdom
Source: World Economic Outlook October 1994
(Figures are quoted based on each country's domestic currency.)
NATIONAL INDICES (WITHOUT DIVIDENDS) OCTOBER 1994
GROWTH IN U.S. DOLLARS
EUROPE
6 months 12 months 5 years
Greece -10.22 5.56 2.71
Portugal .65 7.68 -5.53
Turkey 48.77 -45.261 -7.386
Source: Morgan Stanley
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,
religious and racial disaffection.
The economies of most of the Asian countries are heavily dependent 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
protectionist trade legislation, reduction of foreign investment in the
local economies and general declines in the international securities
markets could have a significant adverse effect upon the securities markets
of the Asian countries.
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.
Nonetheless, political unrest coupled with the shooting of antigovernment
demonstrators in May 1992 has caused many international businesses to
question Thailand's political stability.
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. 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.
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. 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.
India is one of the world's top fifteen industrial nations and has
considerable natural resources. The government exercises significant
influence over many aspects of the the economy. Accordingly, future
government actions could have a significant effect on private sector
companies, market conditions, and prices and yields of securities of Indian
issuers held by a fund. Policymakers in India actively encourage foreign
direct investment, particularly in labor intensive industries. In addition,
Indian stock exchanges rely entirely on delivery of physical share
certificates and have experienced operational difficulties. These problems
have included the existence of fraudulent shares in the market, failed
trades, and delays in the settlement and registration of securities
transactions. Indian stock exchanges have in the past been forced to close
for political reasons; for example, a brokers' strike closed the exchange
for ten days in December 1993, and there is no assurance that the exchanges
will not be forced to close again.
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, it remains a poor country. Indonesia's
dependence on commodity exports makes it vulnerable to a fall in world
commodity prices.
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 (2%
inflation over the past five years) 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. Despite small rallies and
market gains, Japan has been plagued with economic sluggishness. 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. Profits have fallen sharply, the
previously tight labor market conditions have eased considerably, and
consumer confidence is low. The banking sector experienced a sharp rise in
non-performing loans, and strains in the financial system are likely to
continue. The decline in interest rates and the fiscal stimulus packages
have helped 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.
Although Japan's economic growth has declined significantly since 1990,
many Japanese companies seem capable of rebounding due to increased
investments, cost cutting measures, smaller borrowings, increased product
development and continued government support. Growth is expected to recover
in 1995. Japan's economic growth in the early 1980's was due in part to
government borrowings. 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. Trade agreements
between the countries may reduce the friction caused by the current trade
imbalance.
Australia has a prosperous Western-style capitalist economy, with a per
capita GDP comparable to levels in industrialized Western European
countries. It is rich in natural resources and is the world's largest
exporter of beef and wool, second-largest for mutton, and is among the top
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 (ESTIMATES) IN U.S. DOLLARS
OCTOBER 1994
Billions:
India 131,801
Indonesia 44,193
Korea 195,268
Malaysia --
Pakistan 12,853
Philippines 42,937
Sri Lanka 3,044
Taiwan 209,348
Thailand 141,406
Source: Morgan Stanley
NATIONAL INDICES (WITHOUT DIVIDENDS) OCTOBER 1994
GROWTH IN U.S. DOLLARS
ASIA
6 months 12 months 5 years
India 9.94 53.208 N/A
Indonesia 12.81 6.031 -1.806
Israel -11.64 -21.985 N/A
Jordan -7.51 -9.584 9.038
Korea 25.01 65.250 0.959
Malaysia 10.54 7.939 18.965
Pakistan -3.30 44.542 N/A
Philippines 13.80 55.044 18.066
Sri Lanka 5.50 29.685 N/A
Taiwan 16.52 74.328 -6.961
Thailand 28.93 32.855 21.874
Source: Morgan Stanley
ASIAN STOCK MARKET RETURNS (OCTOBER 1994)
Stock market returns
(Local currency %)
10 months to October 31, 1994
China N/A
Hong Kong -18.48
India 18.93
Indonesia -11.75
Japan 9.28
Korea 34.67
Malaysia -13.65
Philippines -4.39
Singapore 1.37
Taiwan 6.88
Thailand -2.85
Source: Morgan Stanley
REAL GDP ANNUAL RATE OF GROWTH 1993
China 13.4
Hong Kong 5.5
India 4.0
Indonesia 6.5
Japan --
Korea --
Malaysia 8.5
Philippines 1.7
Singapore 9.9
Taiwan 6.1
Thailand 7.8
Source: World Economic Outlook
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 funds 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
products. Canada is one 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 land area, making Canada a leading world
producer of newsprint. Canada's economy 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. dollar.
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 a fund's portfolio.
Beginning in January 1989, the U.S. - Canada Free Trade Agreement 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 will implement the North American Free Trade
Agreement, beginning in 1994. This cooperation is expected to lend to
increased trade and to reduce barriers.
The majority of new equity issues or initial public offerings in Canada are
through underwritten offerings. A 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,
silver, iron ore, forestry, fishing, livestock and agriculture. The region
has a large population (over 300 million) which creates 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 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
balanced budgets. Privatization trade reform and monetary reform have been
among the 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 have been
typically weak, given high inflation rates, but have stabilized more
recently. Most currencies are not free floating, but wide fluctuations in
value over relatively short periods can still occur due to changes in the
market.
Mexico's economy has been transformed significantly over the last 6-7
years. Large budget deficits and a high level of state ownership in many
productive and service areas have given way to balanced budgets and
privatization. In the last 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.
Economic policy transformation has led to much reduced inflation and more
stable economic growth in the last few years. The recently implemented
North American Free Trade Agreement will further cement the economic ties
between Mexico, Canada and the U.S.
Brazil's economy has been subject to very high rates of inflation and low
levels of economic growth over the last few years due mostly to a lack of
policy direction. The private sector has remained efficient, mainly through
export promotion. The government has recently embarked on an ambitious
reform program by stabilizing prices, deregulating the economy and opening
it to increased competition. Brazil is the sixth largest country in the
world over 155 million people with a very rich natural resource base. Iron
ore, bauzite. tin, gold and forestry products make up some of Brazil's
natural resource base which includes some of the largest mineral reserves
in the world.
Chile, like Brazil, is rich in mineral resources, in particular copper
which accounts for roughly 40% of total exports. Economic reform has been
ongoing in Chile for many years, but political democracy has returned
recently to chile. Privatization of the public sector beginning in the
early 80s has bolstered the equity market and a well organized pension
system has created a long term investor base.
Argentina is strong in agriculture and livestock. Major products are wheat
and other foodstuffs. Like Mexico, Argentina has had a dramatic
transformation in its economy in the last several years. Extremely high
inflation rates and stagnant economic growth have been replaced by low
inflation and strong economic growth. Massive privatization has taken place
and continues.
Venezuela has substantiated oil reserves. Reform attempts in Venezuela have
been met with political opposition recently and the Venezuelan economic
situation counties to worsen. It is not clear when the economic situation
will improve and the country remains quite dependent on oil.
EMERGING MARKETS: LATIN AMERICA
MARKET CAPITALIZATION IN U.S. DOLLARS
(ESTIMATED) OCTOBER 1994
Billions:
Argentina 43,835
Brazil 179,804
Chile 67,656
Colombia 14,427
Mexico 195,790
Peru 8,223
Venezuela 5,835
Source: Morgan Stanley
NATIONAL INDICES (WITHOUT DIVIDENDS) OCTOBER 1994
GROWTH IN U.S. DOLLARS
LATIN AMERICA
6 months 12 months 5 years
Argentina .23 3.44 23.617
Brazil 62.32 99.39 24.04
Chile 39.75 76.73 45.96
Colombia -9.34 46.88 N/A
Mexico 3.16 11.19 39.96
Peru 30.84 57.31 N/A
Venezuela -15.44 -25.32 N/A
Source: Morgan Stanley
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.
Many countries are moving from a military style, Marxist, or single party
government to a multi-party system. 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,
Madagascar, and Malawi, 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, general decline in oil
prices has had an adverse impact on many economies.
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 rendered on a continuing basis, the
reasonableness of any commissions, and arrangements for payment of fund
expenses. Generally, commissions for foreign investments traded will be
higher than for U.S. investments 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; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing 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 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, Ltd. (FBSL), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services. Prior to
September 4, 1992, FBSL operated under the name Fidelity Portfolio
Services, Ltd. (FPSL) as a 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.
The 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, 1994 and
1993 are presented in the table below. 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 1993 1994
Diversified International 56% 89%
International Growth & Income 24 173
Overseas 64 49
Worldwide 57 69
Canada 131 59
Europe 76 49
Europe Capital Appreciation Fund n/a 317*
Japan 257 153
Pacific Basin 77 88
Emerging Markets 57 107
Latin America 72* 77
Southeast Asia 14* 157
____
* Annualized
Brokerage Commissions. The table below lists the total brokerage
commissions; the percentage of brokerage commissions paid to brokerage
firms that provided research services; and the dollar amount of commissions
paid to FBSI and FBSL for the fiscal periods ended October 31, 1994, 1993,
and 1992. The tables also list the percentage of each fund's aggregate
brokerage commissions paid to FBSI and FBSL during the 1994, 1993, and 1992
fiscal periods, as well as the percentage of each fund's aggregate dollar
amount of transactions executed through FBSI and FBSL during the same
periods. However, during fiscal 1994, the funds did not pay any commissions
to 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 and
FBSL.
% of % of
% of % of Transactions Transactions
Fiscal Commissions Commissions Effected Effected
Period Ended Paid Paid through through
October 31 Total To FBSI To FBSL To FBSI FBSL To FBSI FBSL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
DIVERSIFIED
INTERNATIONAL
1994 $ 1,369,819 $ 23,550 $ 0 1.72% 0 4.75% 0
1993 $ 826,386 $ 4,142 $ 0 .50% 0 1.77% 0
19921 $ 160,423 $ 217 $ 182 .10% .10% .10% .10%
INTERNATIONAL
GROWTH &
INCOME
1994 $ 5,999,970 $ 60,703 $ 0 1.01% 0 2.65% 0
1993 $ 1,928,776 $ 2,625 $ 0 .14% 0 .64% 0
1992 $ 245,327 0 $ 5,458 0 2.22% 0 5.12%
OVERSEAS
1994 $ 4,197,237 $ 4,808 $ 0 .10% 0 .37% 0
1993 $ 3,401,287 $ 3,290 $ 0 .10% 0 .40% 0
1992 $ 4,770,619 0 $ 54,470 0 1.14% 0 1.83%
WORLDWIDE
1994 $ 1,750,893 $ 46,548 $ 0 2.27% 0 5.15% 0
1993 $ 708,837 $ 22,678 $ 0 3.20% 0 9.39% 0
1992 $ 555,712 $ 28,469 $ 2,492 5.12% .45% 13.91% .96%
CANADA
1994 $ 950,009 $ 76,201 $ 0 6.81% 0 14.28% 0
1993 $ 559,269 $ 6,234 $ 0 1.11% 0 2.36% 0
1992 $ 56,775 $ 1,190 $ 0 2.10% 0 7.11% 0
EUROPE
1994 $ 856,517 $ 182 $ 0 .02% 0 .03% 0
1993 $ 1,377,988 $ 0 $ 0 0 0 0 0
1992 $ 1,266,800 0 $ 26,013 0 2.05% 0 3.32%
EUROPE
CAPITAL
APPRECIATION
19942 $ 3,052,874 $ 7,959 $ 0 .21% 0 .68% 0
JAPAN
1994 $ 4,816,464 $ 0 $ 0 0 0 0 0
1993 $ 1,680,833 $ 0 $ 0 0 0 0 0
19923 $ 11,099 0 0 0 0 0 0
PACIFIC
BASIN
1994 $ 3,629,075 $ 0 $ 0 0 0 0 0
1993 $ 3,067,285 $ 0 $ 0 0 0 0 0
1992 $ 1,152,821 0 0 0 0 0 0
EMERGING
MARKETS
1994 $ 20,130,994 $ 52,584 $ 0 .26% 0 2.49% 0
1993 $ 4,396,375 $ 12,982 $ 0 .30% 0 2.13% 0
1992 $ 157,678 0 $ 0 0 0 0 0
LATIN
AMERICA
1994 $ 1,918,285 $ 57,533 $ 0 1.62% 0 8.19% 0
19934 $ 902,099 $ 15,080 $ 0 1.67% 0 7.79% 0
SOUTHEAST
ASIA
1994 $ 13,659,606 $ 0 $ 0 0 0 0 0
19934 $ 2,709,357 $ 0 $ 0 0 0 0 0
</TABLE>
_____
1 From December 27, 1991 (commencement of operations).
2 From December 21, 1993 (commencement of operations).
3 From September 15, 1992 (commencement of operations).
4 From April 19, 1993 (commencement of operations).
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. The funds seek 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 the funds 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 twofold 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 their 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 and total
returns (and International Growth & Income fund's yield) 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.
INTERNATIONAL GROWTH & INCOME FUND ONLY:
YIELD CALCULATIONS. Yields for the fund 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 per
share 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 a fund's net asset value
per share (NAV) over a stated period. Average annual 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 return of 100% over ten years would
produce an average annual return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a compounded basis in ten years.
Average annual returns covering periods of less than one year are
calculated by determining a fund's total return for the period, extending
that return for a full year (assuming performance remains contract over the
year), and quoting the result as an annual return. While average annual
returns are a convenient means of comparing investment alternatives,
investors should realize that a fund's performance is not constant over
time, but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of the funds.
In addition to average annual 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 a
fund's maximum sales charge into account if applicable and may or may not
include the effect of the fund's redemption fee on shares held less than 90
days, if applicable numerically or in a table, graph, or similar
illustration. Total returns may be quoted with or without taking a fund's
sales charge into account. All of the funds have a 3% sales charge with the
exception of International Growth & Income which has no sales charge.
Certain of the funds' sales charges (Diversified International Fund,
International Value Fund, Overseas, Worldwide Fund, Canada Fund, Europe
Capital Appreciation Fund, Japan Fund, and Pacific Basin) have been waived
until June 30, 1995. Excluding a fund's sales charge from a total return
calculation produces a higher total return figure. Currently, Emerging
Markets Fund, Latin America Fund and Southeast Asia Fund have a 1.5%
redemption fee on shares held less than 90 days.. Japan Fund has a 1%
redemption fee on shares held less than 90 days. As of September 1, 1995
Europe, Europe Capital Appreciation and Canada Fund will have a 1.0%
redemption fee on shares held less than 90 days
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 the fund
and reflects all elements of its return. Unless otherwise indicated, the
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 28, 1994, the funds' 13- and 39-week long-term moving
averages are outlined in the chart below.
FUND 13 WEEK LONG-TERM 39 WEEK LONG-TERM
NAME MOVING AVERAGE MOVING AVERAGE
Diversified International 12.40 12.18
International Growth & Income 17.57 17.63
Overseas 29.05 28.73
Worldwide 13.93 13.70
Canada 17.22 17.38
Europe 20.51 19.93
Europe Capital Appreciation 11.50 11.30
Japan 14.23 14.00
Pacific Basin 19.79 19.17
Emerging Markets 19.32 17.83
Latin America 16.48 15.25
Southeast Asia 14.41 13.66
HISTORICAL FUND RESULTS. The following table shows the funds' total returns
for the periods ended October 31, 1994. Total return figures include the
effect of the funds' sales charges. (Diversified International, Overseas,
Worldwide, Canada, Europe Capital Appreciation, Japan, and Pacific Basin
have waived their sales charges through June 30, 1995.) 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 Emerging Market's, Latin
America's, and Southeast Asia's redemption fee of 1.5% for shares held less
then 90 days or Japan's redemption fee of 1.00% for shares held less than
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
(Commencement of Operations)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Diversified International (12/27/91)* 11.14% n/a 8.84% 11.14% n/a 27.29%
International Growth & Income Fund (12/31/86) .28% 7.82% 8.69% .28% 45.74% 92.26%
Overseas Fund (12/4/93) 5.85% 7.86% 19.91% 5.85% 45.97% 505.04%
Worldwide Fund (5/30/90) 8.21% n/a 8.70% 8.21% n/a 44.67%
Canada (11/17/87) (6.27%) 5.14% 10.70% (6.27%) 28.50% 102.90%
Europe (10/1/86) 11.95% 8.40% 10.86% 11.95% 49.65% 130.27%
Europe Capital Appreciation (12/21/93)* n/a n/a n/a n/a n/a 13.50%
Japan (9/15/92)* 10.45% n/a 20.01% 10.45% n/a 47.46%
Pacific Basin (10/1/96) 13.37% 5.98% 9.92% 13.37% 33.70% 115.00%
Emerging Markets (11/1/90) 15.74% n/a 18.34% 15.74% n/a 96.24%
Latin America (4/19/93) 19.20% n/a 34.83% 19.20% n/a 58.30%
Southeast Asia (4/19/93) 7.54% n/a 25.85% 7.54% n/a 42.39%
</TABLE>
* The fund's sales charge has been waived since inception, therefore, it
is not reflected in total return.
** 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,
1994. 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
Diversified International, Morgan Stanley Capital International An unmanaged index of 900 foreign common stocks
Overseas, and Emerging Europe, Australia, Far East Index
Markets (EAFE)
Europe, Europe Capital Morgan Stanley Capital International An unmanaged index of more than 500 companies throughout
Europe
Appreciation Europe Index (Europe Index)
Pacific Basin Morgan Stanley Capital International An unmanaged index of more than 350 companies from
Australia, Hong Kong, Japan, Singapore, and Malaysia
Pacific Index (Pacific Index)
Canada Toronto Stock Exchange 300 An unmanaged index of 300 companies in Canada published
by the Toronto Stock Exchange
Composite Index (TSE 300 Index)
Japan Tokyo Price Index (TOPIX) Includes over 1,200 companies representing over 90% of
the total market capitalization in Japan
Southeast Asia Morgan Stanley Capital International Includes performance of over 462 companies in over 8
countries
Combined Far East Ex-Japan Index
Latin America Morgan Stanley Latin America Free Includes performance of over 185 companies in over 7
countries
Index
</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, 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.
FIDELITY DIVERSIFIED INTERNATIONAL FUND: During the period from December
27, 1991 (commencement of operations) to October 31, 1994, a hypothetical
$10,000 investment in Fidelity Diversified International Fund would have
grown to $12,729 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>
1992* $8,460 $ 0 $ 0 $ 8,460 $ 9,240 $ 10,598 $ 10,728 $ 10,283
1993 11,320 133 0 11,453 12,587 12,183 12,599 10,566
</TABLE>
1994 12,460 158 111 12,729 13,886 12,654 13,747 10,841
* From December 27, 1991 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on December
27, 1991, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $10,211.
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 $110 for dividends and $100 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 GROWTH & INCOME FUND: During the period from December 31,
1986 (commencement of operations) through October 31, 1994, a hypothetical
$10,000 investment in Fidelity International Growth & Income Fund would
have grown to $19,226 after deducting the fund's 2% sales charge and
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>
1987* $10,212 $ 48 $0 $10,260 $11,956 $10,60 $10,704 $10,434
9
1988 11,574 89 0 11,663 15,044 12,179 11,958 10,878
1989 12,613 316 0 12,929 16,269 15,395 15,276 11,367
1990 13,436 500 0 13,936 14,183 14,241 14,660 12,081
1991 13,710 982 0 14,692 15,169 19,014 19,069 12,434
1992 13,024 1,109 0 14,133 13,164 20,910 20,643 12,833
1993 16,905 1,884 0 18,789 18,095 24,036 24,244 13,186
1994 17,189 1,982 55 19,226 19,922 24,965 26,452 13,529
</TABLE>
* From December 31, 1986 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on December
31, 1986, assuming the 2% sales load had been in effect, the net amount
invested in fund shares was $9,800. 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 $11,522. 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 $1,401 for dividends and $49 for capital gains distributions.
Tax consequences of different investments (with the exception of foreign
tax withholding) have not been factored into the above figures. During the
period November 1, 1993 through May 31, 1994, the fund imposed a 2% sales
charge which is no longer in effect and is not reflected in the figures
above.
OVERSEAS FUND: During the period from December 4, 1984 (commencement of
operations) through October 31, 1994, a hypothetical $10,000 investment in
Fidelity Overseas Fund would have grown to $60,504 after deducting the
fund's 3% sales charge and 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>
1985* $15,442 $ 0 $ 0 $15,442 $14,599 $12,12 $12,125 $10,323
2
1986 26,103 0 194 26,297 24,218 16,147 17,182 10,475
1987 29,973 0 3,880 33,853 32,165 17,182 18,801 10,950
1988 24,541 0 13,248 37,789 40,471 19,726 21,005 11,415
1989 25,511 924 13,771 40,206 43,767 24,933 26,832 11,928
1990 26,646 1,396 16,014 44,056 38,155 23,065 25,751 12,678
1991 26,112 2,558 17,199 45,869 40,808 30,795 33,496 13,048
1992 21,301 2,765 15,819 39,885 35,414 33,866 36,261 13,466
1993 26,345 4,336 24,763 55,444 48,679 38,929 42,586 13,837
1994 28,295 5,614 26,595 60,504 53,593 40,434 46,464 14,198
</TABLE>
* From December 4, 1984 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on December
4, 1984, assuming the 3% sales 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 $35,951. 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 $2,697 for dividends and $16,354 for capital gain
distributions. Tax consequences of different investments (with the
exception of foreign tax withholding) have not been factored into the above
figures.
WORLDWIDE FUND: During the period from May 30, 1990 (commencement of
operations) through October 31, 1994, a hypothetical $10,000 investment in
Fidelity Worldwide Fund would have grown to $14,467, after deducting the 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 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 S&P 500 DJIA CPI Index
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1990* $ 8,682 $ 0 $0 $ 8,682 $ 8,546 $ 8,652 $10,333 $ 8,902
1991 9,322 83 0 9,405 11,410 11,255 10,635 10,304
1992 9,341 188 0 9,529 12,548 12,183 10,975 9,765
1993 12,377 591 0 12,968 14,424 14,309 11,277 12,402
1994 13,541 758 167 14,466 14,982 15,612 11,571 13,351
</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 $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 $10,687. 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 $524 for dividends and $146 for capital gains distributions.
Worldwide did not distribute any capital gains during the period. Tax
consequences of different investments (with the exception of foreign tax
withholdings) have not been factored into the above figures.
CANADA FUND: During the period from November 17, 1987 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Canada Fund would have grown to $20,290 after deducting the fund's
3% sales charge and assuming all distributions were reinvested. This was a
period of 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 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>
1988* $12,358 $ 0 $ 0 $12,358 $12,753 $11,694 $11,408 $10,416
1989 14,987 146 183 15,316 15,950 14,782 14,573 10,884
1990 13,163 138 766 14,067 13,074 13,674 13,986 11,568
1991 15,792 241 1,991 1 8,024 16,117 18,257 18,192 11,906
1992 13,803 210 2,731 16,744 14,331 20,078 19,693 12,288
1993 17,285 292 3,421 20,998 17,655 23,079 23,129 12,626
1994 16,665 282 3,343 20,290 17,783 23,971 25,235 12,955
</TABLE>
* From November 17, 1987 (commencement of operations).
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 $12,978. 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 $204 for income 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.
EUROPE FUND: During the period from October 1, 1986 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Europe Fund would have grown to $23,027 after deducting the 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
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
1986* $ 9,690 $ 0 $0 $ 9,690 $10,061 $10,577 $10,655 $10,009
1987 11,727 11 0 11,738 11,136 11,255 11,659 10,463
1988 12,571 11 0 12,582 12,819 12,921 13,026 10,907
1989 14,589 336 0 14,925 14,339 16,332 16,640 11,397
1990 15,792 551 0 16,343 16,194 15,109 15,969 12,114
1991 15,452 915 0 16,367 17,319 20,172 20,772 12,468
1992 14,666 1,392 0 16,058 16,994 22,184 22,486 12,868
1993 17,877 2,075 0 19,952 21,355 25,500 26,409 13,221
1994 20,545 2,482 0 23,027 23,756 26,486 28,814 13,566
</TABLE>
* From October 1, 1986 (commencement of operations).
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 $11,770. 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 $1,688 for dividends. The fund did not distribute any capital
gains during the period. Tax consequences of different investments (with
the exception of foreign tax withholding on dividends and capital gain
distributions) have not been factored into the above figures.
EUROPE CAPITAL APPRECIATION FUND: During the period from December 21, 1993
(commencement of operations) to October 31, 1994, a hypothetical $10,000
investment in Fidelity Europe Capital Appreciation Fund would have grown to
$11,350 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>
1994* $11,350 $0 $0 $11,350 $10,716 10,382 10,655 10,254
* From December 21, 1993 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on December
21, 1993 the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $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 on dividends and capital gain distributions) have
not been factored into the above figures.
PACIFIC BASIN FUND: During the period from October 1, 1986 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Pacific Basin Fund would have grown to $21,500 after deducting the
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 Pacifi
c
October 31 Investment Distributions Distributions Value Index S&P 500 DJIA CPI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1986* $ 9,603 $ 0 $ 0 $ 9,603 $ 8,862 $10,577 $10,655 $10,009
1987 12,047 11 0 12,058 13,346 11,255 11,659 10,463
1988 13,570 155 0 13,725 17,470 12,921 13,026 10,907
1989 15,307 271 21 15,599 18,594 16,332 16,640 11,397
1990 12,503 229 528 13,260 13,796 15,109 15,969 12,114
1991 12,756 413 538 13,707 14,760 20,172 20,772 12,468
1992 11,640 377 491 12,508 11,532 22,184 22,486 12,868
1993 16,956 724 716 18,396 17,154 25,500 26,409 13,221
1994 19,361 987 1,151 21,499 18,707 26,486 28,814 13,566
</TABLE>
* From October 1, 1986 (commencement of operations).
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 $11,586. 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 $631 for income dividends and $892 for capital gain
distributions. Tax consequences of different investments (with the
exception of foreign tax withholdings) have not been factored into the
above figures.
JAPAN FUND: During the period from September 15, 1992 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Japan Fund would have grown to $14,746 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>
1992* $ 9,840 $0 $ 0 $9,840 $9,332 $9,873 $9,593 $10,035
1993 13,350 0 0 13,350 13,631 11,349 11,266 10,311
1994 14,270 0 476 14,746 14,931 11,787 12,292 10,580
* From September 15, 1992 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on September
15, 1992, 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 $10,390. 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 $390 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.
EMERGING MARKETS FUND: During the period from November 1, 1990
(commencement of operations) to October 31, 1993, a hypothetical $10,000
investment in the fund would have grown to $19,624 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
Initial Reinvested Reinvested Emergind
Year Ended $10,000 Dividend Capital Gain Total Markets
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI Free
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1991* $10,088 $ 40 $ 0 $10,128 $13,351 $13,008 10,292 $ 14,939
1992 10,719 128 149 10,996 14,683 14,081 10,622 17,333
1993 15,695 307 444 16,446 16,878 16,538 10,914 25,128
1994 18,673 422 529 19,624 17,530 18,044 11,199 32,505
</TABLE>
* From November 1, 1990 (commencement of operations).
Explanatory Notes: With an initial $10,000 investment 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 $10,533. 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 $243 for income 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.
LATIN AMERICA FUND: During the period from April 19, 1993 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Latin America Fund would have grown to $15,830 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>
1993* $12,882 $ 0 $ 0 $12,882 $12,314 $10,577 $10,741 $10,118
1994 15,724 53 53 15,830 18,006 10,986 11,719 10,382
* From April 19, 1993 (commencement of operations) through October 31,
1993.
Explanatory Notes: With an initial investment of $10,000 made on April 19,
1993, 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.
SOUTHEAST ASIA FUND: During the period from April 19, 1993 (commencement of
operations) to October 31, 1994, a hypothetical $10,000 investment in
Fidelity Southeast Asia Fund would have grown to $14,239 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>
1993* $12,843 $ 0 $0 $12,843 $14,239 $10,577 $10,74 $10,118
1
1994 14,172 67 0 14,239 16,441 10,986 11,719 10,382
* From April 19, 1993 (commencement of operations) through October 31,
1993.
Explanatory Notes: With an initial investment of $10,000 made on April 19,
1993, 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.
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, 1994. 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 $2,886 billion in 1984 to $13,182 billion in 1994.
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, 1994.
TOTAL MARKET CAPITALIZATION
Australia $220 Japan $3,782
Austria 29 Netherlands 221
Belgium 85 Norway 34
Canada 301 Singapore/Malaysia 204
Denmark 48 Spain 162
France 462 Sweden 123
Germany 484 Switzerland 283
Hong Kong 281 United Kingdom 1,201
Italy 185 United States 4,802
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, 1994.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 3.44
Brazil 99.39
Chile 76.73
Colombia 46.82
Mexico 11.19
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, 1994. 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, 1994
Australia 11.51 Japan 8.78
Austria -5.11 Malaysia 8.97
Belgium -17.01 Netherlands 17.00
Canada 3.09 New Zealand 20.09
Denmark 8.34 Norway 16.48
Finland 64.15 Singapore 29.16
France 4.15 Spain 1.30
Germany 10.15 Sweden 20.22
Hong Kong 4.97 Switzerland 12.33
Ireland 23.72 United Kingdom 10.89
Italy 18.64 United States 3.72
The following table shows the compound annual growth rate (including net
dividends) measured in U.S. dollars for the periods shown.
FIVE YEARS TEN YEARS
ENDED ENDED
OCTOBER 31, 1994 OCTOBER 31, 1994
Australia 7.92 13.95
Austria 3.99 22.95
Belgium 8.53 22.85
Canada .75 7.94
Denmark 5.93 16.65
France 8.29 20.30
Germany 11.01 18.19
Hong Kong 31.97 30.81
Italy 1.07 17.63
Japan -1.87 17.67
Malaysia 20.90 n/a
Netherlands 15.88 20.79
Norway 5.92 13.93
Singapore 20.21 16.57
Spain 1.51 19.61
Sweden 7.76 20.05
United Kingdom 12.81 18.63
United States 9.50 13.59
These results are not indicative of future stock market performance or 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.
A fund's performance may be compared in advertising 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.
From time to time, a fund's performance also may 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 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 or
services, which may include: other Fidelity funds; retirement investing;
brokerage products and services; the effects of periodic investment plans
and dollar-cost averaging, saving for college or other goals; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to current economic and political
conditionals, 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 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 a 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 deferred earnings at the end of the ten-year period.
As of October 31, 1994, FMR advised over $25 billion in tax-free fund
assets, $35 billion in money market fund assets, $170 billion in equity
fund assets, $40 billion in international fund assets, and $20 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
(ERISA)) 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 ERISA), 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 above) of such employer, maintained
at least one employee benefit plan that qualified for exemption 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;
(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)
purchasing 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
purchasing 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, the Europe, Pacific Basin and Canada Funds 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.
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. 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 1995: New Year's
Day (observed) Washington's Birthday (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.
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 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 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
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 dividends 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.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities, typically at a rate
between 10% and 35%. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. If, at the close if
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 taxable 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 each 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 the funds'
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 address 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 the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family 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 certain institutional customers; 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,
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
*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. (1989), 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. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX (63), 200 Rivercrest Drive, Fort Worth, TX, 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), P.O. Box 264, Bridgehampton, NY, 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 The University of Vermont School of Business
Administration.
RICHARD J. FLYNN (71), 77 Fiske Hill, Sturbridge, MA, 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 Director of Mechanics Bank and a Trustee of College of
the Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES (67), 3881-2 Lander Road, Chagrin Falls, OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. Prior to May 1990, he was Director
of National City Corporation (a bank holding company) and National City
Bank of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). 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), 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*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 (1989) 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, 1989) and Morrison Knudsen Corporation
(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), 135 Aspenwood Drive, Cleveland, OH, Trustee
(1989), 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,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE (70), 5601 Turtle Bay Drive #2104, Naples, FL, 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), 55 Railroad Avenue, Greenwich, CT, 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 (66), 21st Floor, 191 Peachtree Street, N.E., Atlanta,
GA, 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. (1989), and AppleSouth, Inc. (restaurants,
1992).
STEPHEN P. JONAS (42), Treasurer (1995). is Treasurer and Vice President of
FMR (1993). Mr. Jonas is also Treasurer of FMR Texas Inc. (1994), Fidelity
Management & Research (U.K.) Inc. (1994), and Fidelity Management &
Research (Far East) Inc. (1994). Prior to becoming Treasurer of FMR, Mr.
Jonas was Senior Vice President, Finance - Fidelity Brokerage Services Inc.
(1991-1992) and Senior Vice President, Strategic Business Systems -
Fidelity Investments Retail Marketing Company (1989-1991).
JOHN H. COSTELLO (48), 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).
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
RICHARD HAZLEWOOD (35), Vice President, Emerging Markets Fund (1993) is an
employee of FMR.
PENELOPE DOBKIN (41), Vice President, Worldwide Fund (1990), is a vice
president of FMR.
GEORGE DOMOLKY (64), Vice President, Canada Fund (1989), is a vice
president of FMR.
GREGORY FRASER (34), Vice President, Diversified International, is an
employee of FMR.
SIMON FRASER (36), Vice President, Pacific Basin Fund (1993), is an
employee of FMR.
JOHN HICKLING (36), Vice President, Overseas (1993), and another fund
advised by FMR, is a vice president 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.
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 a Vice President of FMR.
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ralph F. Cox Phyllis Burke Richard J. Flynn E. Donald Gerald C. McDonough Edward H. Marvin L. Mann Thomas R.
Davis Bradley Jones J. Kirk Malone Williams
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Diversified
$ 154.01 $ 151.90 $ 185.42 $ 150.32 $ 152.24 $ 155.94 $ 157.93 $ 151.90 $ 152.57
International
International Growth & Income
648.16 639.77 780.87 633.11 641.37 656.43 664.99 640.42 643.35
International Value*
25.00 25.00 30.00 25.00 25.00 25.00 25.00 25.00 25.00
Overseas
905.90 893.76 1,090.23 884.09 893.73 915.45 927.26 894.07 895.87
Worldwide
237.73 234.31 286.91 232.25 235.06 240.20 243.71 234.68 236.40
Canada
90.10 88.34 108.72 87.65 88.79 90.43 91.44 88.48 89.08
Europe
248.95 246.06 299.25 242.92 246.27 252.74 255.46 246.17 245.84
Europe Capital
101.79 99.83 123.19 99.83 100.34 102.71 104.76 100.12 102.71
Appreciation
Japan
173.21 169.10 209.01 168.47 169.07 172.52 175.89 169.26 170.85
Pacific Basin
249.06 245.78 299.44 242.75 245.93 251.74 254.80 245.99 245.37
Emerging Markets
726.51 721.04 880.96 712.08 724.76 737.38 746.24 724.30 727.54
Latin America
345.57 343.14 420.91 339.10 346.05 351.90 356.00 344.90 347.32
Southeast Asia
375.89 373.29 453.87 367.43 372.76 379.24 383.50 374.20 372.54
</TABLE>
* Aggregate compensation for International Value Fund is estimated from
November 1, 1994 (commencement of operations) through April 30, 1995.
Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
from the Fund the Fund Complex*
Complex* Complex*
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
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
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
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their basic trustee fees and length of
service. Currently, Messrs. William R. Spaulding, Bertram H. Witham, and
David L. Yunich participate in the program.
As of October 31, 1994, FMR was the sole shareholder of International Value
Fund. Mr. Edward C. Johnson 3d, President and Trustee of the trust, by
virtue of his controlling interest in FMR Corp., may be considered a
beneficial owner of this share. With the exception of Mr. Johnson 3d's
beneficial interest in the aforementioned fund, the Trustees and officers
of the funds owned, in the aggregate, less than 1% of each fund's total
outstanding shares as of that date.
As of October 31, 1994, Charles Schwab & Co., Inc./Mutual Funds Department,
San Francisco, CA, was known to own of record or beneficially approximately
5.9% and 5% of the total outstanding shares of Japan Fund and Latin America
Fund, respectively.
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 a fund's investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the trust 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 the funds; 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 law; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Board of 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 typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, pursuant to the trusts
transfer agent agreement with FSC, FSC bears the cost of providing these
services to existing shareholders. Other expenses paid by each fund include
interest, taxes, brokerage commissions, each fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the costs of
registering shares under federal and state securities laws. Each fund is
also liable for such nonrecurring expenses as may arise, including costs of
any litigation to which the fund may be a party and any obligation it may
have to indemnify the trust's officers and Trustees with respect to
litigation.
FMR is Diversified International, International Growth & Income, Overseas,
Worldwide, Europe, Pacific Basin, and Canada'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, on September 10, 1992. FMR is Emerging
Markets manager pursuant to a management contract dated March 1, 1992,
which was approved by shareholders on February 19, 1992. FMR is Latin
America and Southeast Asia's manager pursuant to management contracts dated
March 18, 1993, which were approved by FMR, then the sole shareholder of
Latin America and Southeast Asia, 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 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.
For the services of FMR under the contracts INTERNATIONAL GROWTH & INCOME,
WORLDWIDE, EMERGING MARKETS, AND LATIN AMERICA pay FMR a monthly management
fee composed of the sum 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 on the
left. On the right, the effective fee rate schedule shows the results of
cumulatively applying the annualized rates at varying asset levels. For
example, the effective annual group fee rate at $223 billion of group net
assets - their approximate level for October 1994 was .3191%, which is the
weighted average of the respective fee rates for each level of group net
assets up to $225 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets 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 the current management contract with FMR, the group fee rate for all
funds except 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 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. The revised group fee rate schedule provides for
lower management fee rates as FMR's assets under management increase. The
revised group fee rate schedule for all funds except International Value is
identical to the above schedule for average group assets under $210
billion. International Value's group fee rate schedule is identical to the
newly adopted schedule for all other funds. For average group assets in
excess of $210 billion, the group fee rate schedule voluntarily adopted by
FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets Assets Fee Rate
$ 138 - 174 .3050% $150 billion .3371%
billion
174 - 210 .3000% 175 .3325%
210 - 246 .3950% 200 .3284%
246 - 282 .2900% 225 .3249%
282 - 318 .2850% 250 .3219%
318 - 354 .2750% 275 .3190%
Over 390 .2700% 300 .3163%
325 .3137%
350 .3113%
375 .3090%
400 .3067%
Each fund's individual fund fee rate is .45%. Based on the average net
assets of funds advised by FMR for October 1994, the annual management fee
rate for International Growth & Income, Worldwide, Emerging Markets, and
Latin America and the annual basic fee rate for Diversified International,
International Value, Overseas, Canada, Europe, Europe Capital Appreciation,
Japan, Pacific Basin, and Southeast Asia would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
.3191% + .45% = .7691%
</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.
For the services of FMR under the contracts DIVERSIFIED INTERNATIONAL,
OVERSEAS, CANADA, EUROPE, EUROPE CAPITAL APPRECIATION, INTERNATIONAL VALUE,
JAPAN, PACIFIC BASIN, AND SOUTHEAST ASIA pay FMR a monthly management fee
composed of the sum of two elements: a basic fee and a performance
adjustment.
THE FUNDS' BENCHMARK INDICES. Diversified International, International
Value, and Overseas compare their performance to 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 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. Canada compares its performance to the Toronto Stock
Exchange 300 Composite Index (TSE 300 Index). Europe and Europe Capital
Appreciation compare their performance to the Morgan Stanley Capital
International Europe Index (Europe Index); Pacific Basin compares its
performance to the Morgan Stanley Capital International Pacific Index
(Pacific Index). Japan compares its performance to the Tokyo 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 BASIC FEE. The annual basic fee rate is calculated by adding
the group fee rate based on the schedule above to the individual fund fee
rate. The individual fund fee rate is .45%. Based on the average net assets
of the funds advised by FMR for October 1994, the annual basic fee rate
would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
.3191% + .45% = .7691%
One-twelfth (1/12) of these annual basic fee rate is then applied to the
fund's average net assets for the current month, giving a dollar amount
which is the monthly fee.
COMPUTING THE PERFORMANCE ADJUSTMENT The basic fee is subject to an 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 its comparative index over the same period. The
performance period consists of the most recent month plus the previous 35
months. Diversified International, Europe Capital Appreciation, Japan, and
Southeast Asia's performance periods commenced the first day of the first
full month of operation following commencement of operations (January 1,
1992, January 1, 1994, October 1, 1992, and May 1, 1993, respectively).
International Value's performance period will commence on November 1, 1994
and will span 36 months. The performance adjustment will not take effect
until November 1995. 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 index.
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 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
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, WORLDWIDE, EMERGING MARKETS, AND LATIN
AMERICA. The tables below show the management fee paid to FMR; the dollar
amount reimbursed by FMR (as explained below); and the net management fee
as a percentage of each fund's average net assets for the fiscal periods
ended October 31, 1994, 1993, and 1992.
MANAGEMENT FEE MANAGEMENT FEE AS A
BEFORE AMOUNT OF % OF AVERAGE
REIMBURSEMENT REIMBURSEMENT NET ASSETS
INTERNATIONAL
GROWTH & INCOME
1994 $10,246,289 $0 .7717%
1993 2,323,230 0 .7706
1992 476,948 0 .7854
WORLDWIDE
1994 $4,088,335 $0 .7704%
1993 1,155,519 0 .7760
1992 831,818 0 .7852
EMERGING MARKETS
1994 $12,659,735 $0 .7723%
1993 1,111,793 0 .7701
1992 84,800 52,597 .7816
LATIN AMERICA
1994 $6,050,004 $0 .7732%
1993* 479,545 0 .7697**
* From April 19, 1993 (commencement of operations).
** Annualized
DIVERSIFIED INTERNATIONAL, OVERSEAS, CANADA, EUROPE, EUROPE CAPITAL
APPRECIATION, JAPAN, PACIFIC BASIN 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, 1994, 1993, and
1992.
MANAGEMENT FEE MANAGEMENT FEE AS A
INCLUDING PERFORMANCE PERFORMANCE % OF AVERAGE
ADJUSTMENT ADJUSTMENT NET ASSETS
DIVERSIFIED INTERNATIONAL
1994 $ 2,271,534 $ (169,790) .7178%
1993 875,321 (27,280) . 7346
1992* 101,938 0 .3700**
* From December 27, 1991 (commencement of operations).
** Annualized
OVERSEAS
1994 $ 15,137,411 $ 516,209 .7985%
1993 7,925,648 (58,499) .7731
1992 9,212,187 1,956,702 .9990
CANADA
1994 $ 1,714,068 $ 60,175 .7978%
1993 522,566 50,721 .8552
1992 219,636 43,991 .9800
EUROPE
1994 $ 3,565,039 $ 243,702 .7226%
1993 3,100,828 (703,601) .6350
1992 2,163,531 (540,073) .6300
EUROPE CAPITAL APPRECIATION
1994* $ 1,908,662 $ 0 .7678%**
* From December 21, 1993 (commencement of operations).
** Annualized
JAPAN
1994 $ 2,699,594 $ (76,576) .7450%
1993 754,644 (4,307) .7666%
1992* 2,175 0 .9500**
* From September 15, 1992 (commencement of operations).
** Annualized
PACIFIC BASIN
1994 $ 4,375,724 $ 443,566 .8583%
1993 2,003,886 58,458 .7976
1992 993,713 197,605 .9800
SOUTHEAST ASIA
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.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table below
identifies the funds in reimbursement; the level at which reimbursement
began; and the dollar amount reimbursed for each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND: LEVEL AT WHICH DOLLAR AMOUNT REIMBURSED
REIMBURSEMENT
BEGAN
1994 1993 1992
Canada 2.00% $0 $0 $ 15,923
Emerging Markets 2.60% 0 0 52,597
Japan 2.00% 0 0 13,797**
Southeast Asia 2.00% 0 43,332*** N/A
</TABLE>
** From September 15, 1992 (commencement of operations).
*** From April 19, 1993 (commencement of operations).
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, FIJ, and FIIA. FIIA, in turn, has entered into a sub-advisory
agreement with its wholly owned subsidiary FIIAL U.K. 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.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIAL U.K. each focus on
companies in countries other than the United States such as those in
Europe, Asia, and the Pacific Basin.
FMR U.K. and FMR Far East are wholly owned subsidiaries of FMR. FIJ and
FIIA are a 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 of issuers throughout the world. Edward
C. Johnson 3d, Johnson family members, and various trusts for the benefit
of the Johnson family owns, together with various trusts for the benefit of
Johnson family members owns, directly or indirectly, more than 25% of the
voting 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.
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 investment advice and research services the sub-advisors are
compensated as follows:
(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.
(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.
(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 investment management and executing portfolio transactions,
the sub-advisors are compensated as follows:
(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-advisor on
a discretionary basis.
(solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s
costs incurred with providing investment management services.
FMR U.K., FMR Far East, and FIIA each serve as a sub-advisor for all the
funds. FIIAL U.K. serves as a sub-advisor for Diversified International,
International Value, Europe Capital Appreciation, Latin America, and
Southeast Asia. FIJ serves as a sub-advisor for Japan, Southeast Asia, and
International Value.
FMR entered into the sub-advisory agreements described above with respect
to Diversified International on September 16, 1992, and with respect to
International Growth & Income, Overseas, Worldwide, Emerging Markets,
Europe, Pacific Basin, and Canada 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 on July 16,
1992, with respect to Latin America and Southeast Asia on March 18, 1993,
with respect to Europe Capital Appreciation on November 18, 1993, and with
respect to International Value on September 7, 1994.
Prior to March 1, 1992, FMR had sub-advisory agreements with FMR Far East
on behalf of the funds and FMR U.K. on behalf of the funds pursuant to
which FMR Far East and FMR U.K. provided FMR with investment advice and
research services. Under those agreements, FMR Far East and FMR U.K. were
compensated for their services according to the same formulas as they are
compensated currently for providing investment advice and research
services.
For providing investment advice and research services, the fees paid to the
sub-advisers for fiscal 1994, 1993 and 1992 were as follows:
FEES PAID TO FOREIGN SUB-ADVISERS
FEES PAID TO FMR U.K. FEES PAID TO FMR FAR EAST
1994 1993 1992 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Diversified International $106,564 $25,908 $ 6,0541 $ 124,103 $ 39,692 $ 4,9281
International Growth & Income 358,767 58,672 16,110 426,768 91,684 14,428
Overseas 643,371 281,303 324,410 749,224 53,000 288,806
Worldwide 120,642 22,728 17,586 140,039 34,227 15,709
Canada 0 0 0 0 0 0
Europe 176,224 62,586 113,716 0 0 0
Europe Capital Appreciation Fund 102,1072 N/A N/A 0 N/A N/A
Japan 0 0 0 0 35,955 0
Pacific Basin 0 67,972 0 161,365 102,379 31,155
Emerging Markets 348,048 32,294 N/A 224,947 51,641 N/A
Latin America 0 0 N/A 430,030 0 N/A
Southeast Asia 0 0 N/A 356,090 30,4033 N/A
</TABLE>
1 From December 27, 1991 (commencement of operations).
2 From December 21, 1993 (commencement of operations).
3 From April 19, 1993 (commencement of operations).
FUND NAME FISCAL YEAR FIIA
Overseas 1994 $ 0
1993 0
1992 2,091,261
Europe 1994 $ 1,756,433
1993 2,335,345
1992 569,566
Japan1 1994 $ 305,758
Pacific Basin 1994 $ 2,190,484
1993 687,196
Southeast Asia 1994 $ 2,844,499
1993 291,0082
1 From September 15, 1992 (commencement of operations).
2 From April 19, 1993 (commencement of operations).
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent for
the funds. Under the trust's contract with FSC, each fund pays an annual
fee of $26.03 per basic retail account with a balance of $5,000 or more;
$15.31 per basic retail account with a balance of less than $5,000, and a
supplemental activity charge of $2.25 for standing order transactions and
$6.11 for other monetary transactions. These fees and charges are subject
to annual cost escalation based on changes in postal rate and changes in
wage and price levels as measured by the National Consumer Price Index for
Urban Areas. With respect to certain institutional client master accounts,
the funds pay FSC a per account fee of $95, and monetary transaction
charges of $20 or $17.50, depending on the nature of services provided.
With respect to certain broker-dealer master accounts, the funds pay FSC a
per-account fee of $30, and a charge of $6 for monetary transactions. Fees
for certain institutional retirement plan accounts are based on the net
assets of all such accounts in the funds.
Under the contract, 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.
The table below shows the transfer agent fees paid to FSC during each
fund's last three fiscal years ended October 31, 1994, 1993, and 1992.
TRANSFER AGENT FEES PAID TO FSC
FISCAL FISCAL FISCAL
1994 1993 1992
Diversified International $1,075,053 $ 486,053 $ 124,2681
International Growth & Income 4,042,671 1,303,282 242,518
Overseas 5,826,092 3,518,007 3,066,851
Worldwide 1,903,267 580,272 421,749
Canada 1,267,509 466,176 102,105
Europe 2,242,731 2,017,635 1,319,523
Europe Capital Appreciation 1,211,4763 N/A N/A
Japan 1,703,508 546,438 6282
Pacific Basin 2,151,218 1,064,457 477,691
Emerging Markets 6,361,568 776,620 45,901
Latin America 3,012,116 338,2094 N/A
Southeast Asia 3,280,512 459,7164 N/A
1 From December 27, 1991 (commencement of operations).
2 From September 15, 1992 (commencement of operations).
3 From December 21, 1993 (commencement of operations).
4 From April 19, 1993 (commencement of operations).
The trust's contract with FSC also provides that FSC will perform the
calculations necessary to determine each fund's net asset value per share
and dividends, and maintain each fund's accounting records. The fee rates
for 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.
Fees paid to FSC for pricing and bookkeeping services fiscal 1994, 1993,
and 1992 are shown in the table below.
PRICING AND BOOKKEEPING FEES PAID TO FSC
FISCAL FISCAL FISCAL
1994 1993 1992
Diversified International $191,050 $ 79,778 $ 38,2961
International Growth & Income 548,580 158,558 45,503
Overseas 715,901 458,583 426,747
Worldwide 296,919 89,027 64,800
Canada 129,038 50,881 45,206
Europe 294,804 286,229 207,346
Europe Capital Appreciation 151,7804 N/A N/A
Japan 208,003 76,445 4,3002
Pacific Basin 299,541 150,276 62,422
Emerging Markets 641,914 100,767 45,611
Latin America 382,374 44,4673 N/A
Southeast Asia 395,097 49,4863 N/A
1 From December 27, 1991 (commencement of operations).
2 From September 15, 1992 (commencement of operations).
3 From April 19, 1992 (commencement of operations).
4 From December 21, 1993 (commencement of operations).
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 agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the funds, which are continuously
offered. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FDC. During fiscal 1994, 1993, and
1992, FDC received sales charge revenue and deferred sales charge revenue
(for International Growth & Income, Canada, Europe, and Pacific Basin) as
indicated in the table below.
PAID TO FDC
SALES CHARGE REVENUE DEFERRED SALES CHARGE REVENUE
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL
1994 1993 1992 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Diversified International N/A N/A N/A N/A N/A N/A
International Growth & Income N/A $87,704 $158,552 6,314 $29,135 $37,682
Overseas 1,120,737 1,367,026 1,127,543 N/A N/A N/A
Worldwide N/A 109,770 68,687* N/A N/A N/A
Canada N/A 50,670 95,727 5,130 12,252 14,661
Europe 814,169 2,116,938 2,834,705 85,678 213,896 313,139
Europe Capital Appreciation N/A N/A N/A N/A N/A N/A
Japan N/A N/A N/A N/A N/A N/A
Pacific Basin 1,709,242 2,239,532 716,574 24,748 56,119 103,024
Emerging Markets 2,416,374 103,572 137,405 N/A N/A N/A
Latin America 1,245,357 N/A N/A N/A N/A N/A
Southeast Asia 763,269 N/A N/A N/A N/A N/A
</TABLE>
* During the period July 1, 1992 through October 31, 1993.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Diversified International, Fidelity
International Value Fund, Fidelity International Growth & Income Fund,
Fidelity Overseas Fund, Fidelity Worldwide Fund, Fidelity Canada Fund,
Fidelity Europe Fund, Fidelity Europe Capital Appreciation, Fidelity Japan
Fund, Fidelity Pacific Basin Fund, Fidelity Emerging Markets Fund, Fidelity
Latin America Fund, and Fidelity Southeast Asia 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 eighteen 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, and Fidelity Southeast Asia 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 a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust 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 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 shareholder 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 a fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
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 its 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 Diversified International,
International Growth & Income, International Value, Overseas, Worldwide,
Europe, Europe Capital Appreciation, Japan, Pacific Basin, Emerging Markets
and Southeast Asia. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of the Canada and Latin America.
The custodian is responsible for the safekeeping of each fund's assets and
the appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of the funds or in
deciding which securities are purchased or sold by the funds. The funds
may, however, invest in obligations of the custodian and may purchase
securities from or sell securities to the custodian. Investors should
understand that the expense ratios of the funds may be higher than those of
investment companies that invest exclusively in U.S. securities since the
cost of maintaining the custody of foreign securities is higher.
FMR, its officers and directors, its affiliated companies, and the fund's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the 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.
Portfolio securities (including ADRs) purchased in the United States are
maintained in the custody of the funds' custodian and may be deposited into
the Federal Reserve Treasury Department Book Entry System or the Security
Depository System of the Depository Trust Company. The custodian has
entered into sub-custodian agreements with several foreign banks or
clearing agencies, pursuant to which portfolio securities purchased outside
of the United States are maintained in the custody of these entities.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as independent accountant to Diversified
International, International Growth & Income, International Value,
Overseas, Worldwide, Canada, Europe, Japan, Pacific Basin, and Emerging
Markets. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as independent accountant to Europe Capital Appreciation, Latin
America and Southeast Asia. The auditors examine financial statements for
the funds and provide other audit, tax, and related services.
FINANCIAL STATEMENTS
Each funds' financial statements and financial highlights (except
International Value) for the fiscal period ended October 31, 1994 are
included in each fund's Annual Report, which is a separate report supplied
with this Statement of Additional Information. The funds' financial
statements and financial highlights are incorporated herein by reference.
The financial statement and financial highlights for the fiscal period
ended April 30, 1995 for International Value are incorporated herein by
reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds 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
edge." 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 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
in Aaa securities.
A - Bonds 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 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 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 rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds 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 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 rated C are the lowest rated class of bonds and issued 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 highest-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.
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.
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- 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.
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.
