FIDELITY INVESTMENT TRUST, N-30D, 1996-02-20

FIDELITY INVESTMENT TRUST
N-30D, 1996-02-20

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(2_FIDELITY_LOGOS)FIDELITY

GLOBAL BOND
FUND
ANNUAL REPORT
DECEMBER 31, 1995
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 25 Notes to the financial statements.

REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 31

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, as well as reinvestment of
any dividends (or income) and capital gains (the profits the fund earns
when it sells bonds that have grown in value). You can also look at the
fund's dividends and yields.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Global Bond 6.66% 28.11% 92.68%

Salomon Brothers World Government
Bond Index 19.04% 68.65% n/a

Average General World Income Fund 18.05% 47.85% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on December 30, 1986. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Salomon Brothers World Government Bond Index - a widely used world
government bond indicator. To measure how the fund's performance stacked up
against its peers, you can compare it to the average general world income
fund, which reflects the performance of 135 funds with similar objectives
tracked by Lipper Analytical Services over the past 12 months. Both
benchmarks include reinvested dividends and capital gains, if any, and
exclude sales charges. Recent U.S. Consumer Price Index (CPI) information
is not available from the U.S. Department of Labor. Therefore, the CPI
comparison has not been included in this report.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Global Bond 6.66% 5.08% 7.55%

Salomon Brothers World Government
Bond Index 19.04% 11.02% n/a

Average General World Income Fund 18.05% 8.09% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Global Bond FundSB World Governme
12/31/86 10000.00 10000.00
01/31/87 10311.24 10300.19
02/28/87 10451.57 10461.77
03/31/87 10698.66 10703.84
04/30/87 10786.19 10826.47
05/31/87 10625.67 10719.17
06/30/87 10585.27 10632.94
07/31/87 10339.13 10420.90
08/31/87 10556.94 10578.02
09/30/87 10392.69 10280.39
10/31/87 10975.54 10972.73
11/30/87 11449.59 11354.03
12/31/87 11913.69 11840.71
01/31/88 11584.23 11776.20
02/29/88 11669.26 11879.03
03/31/88 11956.20 12091.08
04/30/88 11945.58 12032.32
05/31/88 11892.44 11919.27
06/30/88 11764.91 11659.32
07/31/88 11775.53 11588.43
08/31/88 11690.51 11458.77
09/30/88 11828.67 11754.49
10/31/88 12190.02 12297.37
11/30/88 12413.20 12485.79
12/31/88 12350.32 12358.69
01/31/89 12315.76 12177.94
02/28/89 12212.07 12186.24
03/31/89 12177.51 12016.99
04/30/89 12338.80 12176.02
05/31/89 12131.43 11919.27
06/30/89 12384.89 12158.78
07/31/89 12788.12 12712.52
08/31/89 12603.78 12285.24
09/30/89 12753.55 12518.36
10/31/89 12926.37 12623.11
11/30/89 13064.62 12737.43
12/31/89 13329.59 12893.27
01/31/90 13293.50 12722.74
02/28/90 13125.08 12527.30
03/31/90 13281.47 12403.40
04/30/90 13281.47 12365.08
05/31/90 13461.93 12775.76
06/30/90 13750.66 13010.16
07/31/90 14231.87 13417.64
08/31/90 14147.66 13312.90
09/30/90 14328.11 13461.71
10/31/90 14664.96 14063.36
11/30/90 14821.35 14296.48
12/31/90 14966.02 14437.63
01/31/91 15294.80 14798.49
02/28/91 15439.46 14802.96
03/31/91 15229.04 14265.18
04/30/91 15439.46 14484.89
05/31/91 15623.57 14466.37
06/30/91 15439.46 14315.00
07/31/91 15597.48 14620.94
08/31/91 15744.37 14903.88
09/30/91 16105.47 15487.00
10/31/91 16323.48 15649.23
11/30/91 16241.73 15893.85
12/31/91 16877.42 16720.32
01/31/92 16707.23 16423.33
02/29/92 16778.14 16331.99
03/31/92 16749.97 16158.91
04/30/92 16977.66 16274.51
05/31/92 17290.75 16773.97
06/30/92 17505.10 17243.41
07/31/92 17767.43 17645.14
08/31/92 18025.90 18138.85
09/30/92 17774.98 18320.88
10/31/92 17659.43 17823.34
11/30/92 17394.30 17540.40
12/31/92 17619.52 17645.14
01/31/93 17823.07 17952.99
02/28/93 18097.52 18306.19
03/31/93 18496.21 18587.21
04/30/93 18672.10 18980.01
05/31/93 19015.32 19170.34
06/30/93 19397.07 19129.46
07/31/93 19692.25 19183.75
08/31/93 20189.71 19760.49
09/30/93 20304.78 19994.89
10/31/93 20830.76 19961.04
11/30/93 20764.44 19817.97
12/31/93 21479.33 19986.59
01/31/94 21713.86 20147.54
02/28/94 20531.66 20015.97
03/31/94 19053.47 19987.23
04/30/94 18678.26 20010.22
05/31/94 18782.43 19834.58
06/30/94 17973.21 20120.71
07/31/94 18300.43 20281.02
08/31/94 18527.75 20210.77
09/30/94 18528.69 20357.03
10/31/94 18613.12 20683.40
11/30/94 18690.13 20399.18
12/31/94 17975.74 20455.39
01/31/95 17818.85 20884.59
02/28/95 17768.50 21419.17
03/31/95 17884.41 22691.45
04/30/95 18186.00 23111.71
05/31/95 18734.45 23761.90
06/30/95 18909.95 23901.77
07/31/95 18874.86 23957.97
08/31/95 18291.87 23134.70
09/30/95 18608.17 23651.40
10/31/95 18836.41 23827.68
11/30/95 18963.79 24093.38
12/29/95 19172.22 24349.49

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Global Bond Fund on December 31, 1986, shortly after the fund started. As
the chart shows, by December 31, 1995, the value of your investment would
have grown to $19,172 - a 91.72% increase on your initial investment. For
comparison, look at how the Salomon Brothers World Government Bond Index
did over the same period. With dividends reinvested, the same $10,000 would
have grown to $24,349 - a 143.49% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the
globe offer the potential for
significant growth over time;
however, investing in foreign
markets means assuming
greater risks than investing in
the United States. Factors like
changes in a country's financial
markets, its local political and
economic climate, and the
fluctuating value of its currency
create these risks. For these
reasons an international fund's
performance may be more
volatile than a fund that invests
exclusively in the United
States.
(checkmark)
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR A

Dividends per share 4.86(cents) 29.40(cents) 57.63(cents)

Annualized dividend rate 5.76% 5.92% 5.87%

30-day annualized yield 4.56% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on the fund's average share price of $9.93
over the past month, $9.86 over the past six months and $9.82 over the past
year, you can compare the fund's income over these three periods.
The 30-day annualized YIELD is a standard formula for all funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. It does not reflect the cost of hedging and other
currency gains and losses.
A DIVIDENDS PAID ARE BASED ON THE FUND'S INVESTMENT INCOME AND DO NOT
REFLECT CURRENCY-RELATED LOSSES. AS A RESULT OF CURRENCY LOSSES, DIVIDENDS
PAID DURING 1995 OF APPROXIMATELY 6(CENTS) PER SHARE WERE A NON-TAXABLE
RETURN OF CAPITAL.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Both developed and emerging
fixed-income markets recorded
strong returns in 1995. For the
12 months ended December 31,
1995, the Salomon Brothers World
Government Bond Index - a
proxy of government bond market
performance in developed nations
including the U.S. - rose
19.04%. Emerging markets
shrugged off the fallout from
December 1994's Mexican peso
devaluation to record strong
returns. The J.P. Morgan Emerging
Markets Bond Index posted a
27.54% return for the year. To
compare, the Lehman Brothers
Aggregate Bond Index - a broad
measure of taxable bonds in the
U.S. market - had a total return of
18.47%. Bond markets in
developed countries benefited
from slow economic growth and
relatively low inflation pressures.
This led to a more favorable interest
rate environment, as the central
banks of the U.S., Germany and
Great Britain all lowered their
respective short-term interest
rates. Record low interest rates
in Japan and a strengthening
dollar pushed a significant amount
of money into the U.S., as overseas
investors in 1995 purchased a
record net $99.4 billion in U.S.
Treasury securities - helping fuel
the U.S. rally. The bulk of emerging
markets' total return came from a
springtime rally following the
announcement of a $50 billion
bailout package for Mexico by the
U.S. Treasury and the International
Monetary Fund.
An interview with Jonathan Kelly, Portfolio Manager of Fidelity Global Bond
Fund
Q. HOW DID THE FUND PERFORM, JONATHAN?
A. For the 12 months ended December 31, 1995, the fund had a total return
of 6.66%. During the same period, the average general world income fund
tracked by Lipper Analytical Services returned 18.05% and the Salomon
Brothers World Government Bond Index had a return of 19.04%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. The fund had a disappointing year. Its 12-month return suffered most on
a relative basis in the first quarter. During that period, the fund's
structure was characterized by hedging most of its foreign currency
exposure and investing in emerging market debt. Both hurt the fund, as the
dollar depreciated rapidly and emerging market debt suffered a market
sell-off. In March, the fund changed its focus, removing its foreign
currency hedges and deciding, for the time being, not to invest in emerging
markets. Subsequently, the fund has done much better, delivering returns
that are essentially in line with the world government bond market, as
represented by the Salomon Brothers World Government Bond Index.
Q. IN THE FUND'S SEMIANNUAL REPORT YOU DESCRIBE HOW THE FUND'S DURATION -
OR INTEREST RATE SENSITIVITY - AND CURRENCY EXPOSURE WILL MIRROR THAT OF
THE MARKET AS REPRESENTED BY THE SALOMON BROTHERS WORLD GOVERNMENT INDEX.
HOW DOES THIS INVESTMENT APPROACH WORK?
A. The idea is that while I keep the fund's interest rate and currency
sensitivity relatively neutral to the market - as represented by the index
- - I attempt to find undervalued securities that have the potential for
outperforming it. There are three ways I do that: credit research,
quantitative research and opportunistic trading.
Q. CAN YOU GIVE SOME EXAMPLES?
A. Sure. In terms of credit research, I've tried to take advantage of
Fidelity's extensive research teams in Boston and London to find
credit-worthy issuers with bonds offering attractive yield advantages
relative to government issues. Recently, I've targeted both corporate and
government agency bonds in the U.S., United Kingdom and Canada. In
addition, our quantitative analysts have worked to identify price
inefficiencies that are specific to certain countries. For example, in the
United Kingdom, the fund emphasized high-coupon government bonds that
traded at a discount to low-coupon bonds because of both withholding tax
considerations and market structure. Finally, in terms of trading, we have
sought to capitalize on wide disparities in bid and ask prices in various
foreign markets.
Q. WHAT FACTORS DO YOU CONSIDER WHEN DETERMINING THE FUND'S COUNTRY
ALLOCATION?
A. The investment approach I outlined above is more of a bottom-up,
issuer-by-issuer approach. From time to time, however, I will notice a
close correlation between two countries and try to use it to the fund's
advantage. For example, Germany and the Netherlands have very closely
related currencies and interest rate fluctuations. Earlier this year,
shorter-term Dutch bonds appeared undervalued relative to shorter-term
German bonds, while longer-term German bonds appeared undervalued relative
to longer-term Dutch bonds. As a result, I concentrated the fund's exposure
in shorter-term Dutch bonds and longer-term German bonds.
Q. DID CURRENCIES HAVE AN EFFECT ON THE FUND'S DIVIDENDS THIS YEAR?
A. Yes, currency-related losses caused part of this year's dividend to be
non-taxable. Most of this resulted from losses carried over from 1994,
however. But dividends are only part of the story. Overall, currencies
helped the fund slightly in terms of total return, because foreign
currencies generally strengthened versus the dollar over the course of the
year.
NOTE TO SHAREHOLDERS: EFFECTIVE FEBRUARY 26, 1996, CHRISTINE THOMPSON AND
IAN SPREADBURY BECAME CO-MANAGERS OF THE FUND. MS. THOMPSON JOINED FIDELITY
IN 1985 AND ALSO MANAGES FIDELITY U.S. BOND INDEX FUND AND FIDELITY
INTERMEDIATE BOND FUND. SHE WILL MANAGE THE U.S. PORTION OF THE FUND. MR.
SPREADBURY, WHO WILL MANAGE THE INTERNATIONAL PORTION OF THE FUND, JOINED
FIDELITY INTERNATIONAL, LIMITED, A SISTER COMPANY OF FIDELITY INVESTMENTS,
IN 1995, AND IS AN INVESTMENT DIRECTOR OF FIXED-INCOME. THE FOLLOWING IS
THEIR COMMENT ON THE OUTLOOK FOR THE FUND.
Q. WHAT'S YOUR OUTLOOK?
A. We are cautiously optimistic. Economic fundamentals for fixed-income
investments are generally positive, as economic growth is slowing and
inflation is falling in most areas of the world. However, valuation levels
are not as attractive as they were in early 1995 as interest rates have
fallen quite sharply in much of the world. Additionally, foreign markets
appear undervalued when compared to the U.S. As with any global portfolio,
political and economic factors can affect the fund, and the performance of
the dollar versus other currencies also will affect performance.
FUND FACTS
GOAL: high total return by
investing in debt securities
from around the world
START DATE: December 30,
1986
SIZE: as of December 31,
1995, more than $196 million
MANAGERS: Jonathan Kelly,
from1993 to February 1996;
Christine Thompson and Ian
Spreadbury, since February
1996
(checkmark)
IAN SPREADBURY ON CURRENCY AS
A DIVERSIFICATION TOOL IN A
GLOBAL PORTFOLIO:
"Although currencies can be
both volatile and
unpredictable, when used
properly they can be a good
way to diversify a global bond
portfolio. Typically, when the
U.S. bond market goes down,
the dollar also weakens.
Therefore, when this happens,
non-dollar denominated
securities can provide
diversification. Although the
fund is managed in a more
bottom-up style, I always try to
be aware of these
relationships."
"Another way I value global
bonds is by real yield. In other
words, I take the yield of a
bond and subtract the inflation
rate to get its real return. For
example, real yields are one
reason why European
fixed-income securities are
currently an attractive
investment relative to
opportunities elsewhere in the
world. In Europe, economic
growth is slow, inflation is not
a threat and many European
bonds are trading at higher
than average yields."
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
INVESTMENT CHANGES

TOP COUNTRIES AS OF DECEMBER 31, 1995
(BY LOCATION OF ISSUER) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
SIX MONTHS AGO

United States 33 34

Germany 17 13

France 7 7

United Kingdom 6 5

Austria 5 5

TOP COUNTRIES ARE BASED ON THE LOCATION OF THE ISSUER OF EACH SECURITY,
INDICATING WHERE THE FUND IS EXPOSED TO POLITICAL AND CREDIT RISKS. THE
FUND'S LARGEST POSITION AS OF DECEMBER 31, 1995 WAS IN SECURITIES OF UNITED
STATES ISSUERS.
TOP INTEREST RATE EXPOSURES AS OF DECEMBER 31, 1995
(ESTIMATED, BY COUNTRY) % OF FUND'S TOTAL % OF INTEREST RATE
INTEREST RATE EXPOSURE EXPOSURE SIX MONTHS
AGO

United States 34 33

Japan 18 23

Germany 9 11

France 7 7

United Kingdom 6 6

FIDELITY ESTIMATES INTEREST RATE EXPOSURES BASED ON THE DURATION, OR
INTEREST RATE SENSITIVITY, OF THE FUND'S HOLDINGS. AS OF DECEMBER 31, 1995,
THE FUND WAS MOST SENSITIVE TO INTEREST RATE MOVEMENTS IN THE U.S., WHICH
ACCOUNTED FOR APPROXIMATELY 34% OF THE FUND'S INTEREST RATE EXPOSURE.
ASSET ALLOCATION
AS OF DECEMBER 31, 1995 AS OF JUNE 30, 1995
37
Row: 1, Col: 1, Value: 11.3
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 22.0
Row: 1, Col: 4, Value: 43.6
Row: 1, Col: 5, Value: 21.1
Row: 1, Col: 1, Value: 15.4
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 24.2
Row: 1, Col: 4, Value: 40.3
Row: 1, Col: 5, Value: 18.1
Corporate bonds 22.1%
Foreign
government
obligations 43.6%
U.S. government
obligations 22.0%
Short-term
investments 1.0%
Other 11.3%
Corporate bonds 18.1%
Foreign
government
obligations 40.6%
U.S. government
obligations 24.2%
Short-term
investments 1.7%
Other 15.4%
INVESTMENTS DECEMBER 31, 1995

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 22.1%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
ARGENTINA - 1.8%
Alto Parana:
euro 12%, 3/4/05 (g) - $ 1,610,000 $ 1,207,500
12%, 3/4/05 (g)(h) - 3,000,000 2,250,000
3,457,500
AUSTRALIA - 0.9%
Queensland Treasury Corp.:
8%, 7/14/99 Aaa AUD 965,000 725,892
8%, 8/14/01 Aaa AUD 1,390,000 1,033,889
1,759,781
CANADA - 1.8%
British Columbia Hydro & Power Authority
yankee 12 1/2%, 1/15/14 A2 140,000 170,932
Canada Mortgage & Housing Corp.
8.80%, 3/1/00 Aa1 CAD 2,400,000 1,900,685
Ford Credit CDA Ltd. 8 3/4%, 3/20/00 A1 CAD 1,000,000 775,017
Methanex Corp. 8 7/8%, 11/15/01 A3 480,000 532,003
3,378,637
GERMANY - 5.4%
Deutsche Bank Finance NV
4 1/8%, 11/15/99 (b) Aaa JPY 600,000 6,324,952
Lake Baden Wuerttemberg Finance NV euro
3 3/4%, 6/21/99 (b) Aaa JPY 400,000 4,158,608
10,483,560
KOREA (SOUTH) - 0.3%
Korea Development Bank:
9.29%, 3/13/98 A1 120,000 128,795
9.25%, 6/15/98 A1 150,000 160,800
9.48%, 4/2/01 A1 60,000 69,136
yankee, 7%, 7/15/99 A1 150,000 154,973
513,704
NETHERLANDS - 0.2%
Ford Capital BV:
yankee 9 3/8%, 1/1/98 A1 100,000 107,096
gtd. 9%, 8/15/98 A1 250,000 269,813
376,909
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
NETHERLANDS ANTILLES - 0.3%
Deutsche Bank Finance NV 10 1/4%, 2/24/97 Aaa SEK 3,600,000 $ 551,233
UNITED KINGDOM - 1.8%
ASDA Group PLC 10 7/8%, 4/20/10 A3 GBP 200,000 364,426
Ford Credit Europe PLC:
euro 8 5/8%, 11/21/97 A1 GBP 200,000 319,455
11.70%, 11/18/98 (b) A1 ITL 1,185,000 768,609
Lloyds Bank PLC 7 3/8%, 3/11/04 Aa3 GBP 250,000 369,854
Rolls-Royce PLC 11 5/8, 7/30/98 A3 GBP 250,000 428,879
Royal Insurance Holdings PLC
9 5/8%, 3/25/03 A2 GBP 200,000 331,240
Severn Trent PLC 11 1/2%, 7/12/99 A1 GBP 235,000 413,396
Tesco PLC 8 3/4%, 2/20/03 Aa3 GBP 250,000 409,010
3,404,869
UNITED STATES OF AMERICA - 9.6%
AMR Corp. 7 3/4%, 12/1/97 Baa 120,000 123,238
Bank of Boston Corp. 9 1/2%, 8/15/97 Baa 320,000 339,389
Banponce Corp. 6 3/4%, 12/15/05 Baa 160,000 162,016
Chrysler Financial Corp.:
euro 9 1/2%, 4/12/96 BBB 150,000 151,515
10.34%, 5/15/08 A3 1,000,000 1,015,510
Citicorp 8.80%, 2/1/00 A1 180,000 185,823
Comdisco, Inc. 6 1/2%, 6/15/00 Baa 600,000 610,770
Continental Bank Mortgage Corp.
9 7/8%, 6/15/96 A2 190,000 193,268
Discover Card Trust 6 1/8%, 5/15/98 A2 170,000 169,946
Enron Corp:
10%, 6/1/98 Baa 100,000 109,376
8 1/2%, 2/1/00 Baa 90,000 92,511
First Bank Systems, Inc. 9.89%, 3/6/96 A3 140,000 141,268
First Fidelity Bancorporation:
8 1/2%, 4/1/98 A3 240,000 253,968
9 5/8%, 8/15/99 A3 40,000 44,946
First Tennessee National Corp.
6 3/4%, 11/15/05 Baa 100,000 102,046
Firstar Corp. 7.15%, 9/1/00 A3 320,000 331,949
Fleet Financial Group, Inc. 7 5/8%, 12/1/99 A3 40,000 42,236
Ford Credit Auto Loan Master Trust
7 3/8%, 4/15/99 Aaa 230,000 234,761
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa 739,249 742,599
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
UNITED STATES OF AMERICA - CONTINUED
Ford Motor Credit Co. 9 1/2%, 4/15/00 A1 $ 250,000 $ 283,025
General Electric Capital Corp.:
6 1/2%, 2/8/99 Aaa SEK 6,250,000 898,774
7 3/8%, 2/8/99 (b) Aaa ITL 2,950,000 1,704,424
Georgia-Pacific Corp. 9.85%, 6/15/97 Baa 270,000 284,664
Golden West Financial Corp. 9.15%, 5/23/98 A3 150,000 161,460
Green Tree Securitized Net Interest Margin Trust
6.90%, 2/15/04 Baa 147,396 148,409
Gulf States Utilities Co. 9.72%, 7/1/98 Ba1 262,000 273,248
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa 290,000 293,564
7.30%, 7/15/99 Ba1 175,000 176,533
MBNA Master Credit Card Trust 7 1/4%, 6/15/99 Aaa 390,000 399,017
Manufacturers Hanover Corp.
8 1/2%, 2/15/99 A2 130,000 140,005
Meridian Bancorp, Inc. 6%, 12/1/96 (e) Baa 445,000 444,226
Morgan Guaranty Trust Co. NY
11 3/8%, 10/6/97 (b) Aa1 ITL 4,000,000 2,544,080
Occidental Petroleum Corp.:
9.20%, 8/15/97 Baa 190,000 200,264
5.85%, 11/9/98 Baa 90,000 90,221
5.93%, 11/9/98 Baa 130,000 130,589
6 3/4%, 9/16/99 Baa 120,000 123,643
Premier Auto Trust 4.90%, 12/15/98 Aaa 240,525 239,209
Provident Bank 6 1/8%, 12/15/00 A3 270,000 271,142
Public Service Co. of New Hampshire 1st mtg.
8 7/8%, 5/15/96 Ba1 430,000 433,900
Quaker Oats Co.:
6.91%, 5/15/03 A3 80,000 83,738
9 1/8%, 7/15/04 A3 30,000 35,759
7.51%, 5/2/05 A3 80,000 86,900
7.30%, 8/29/05 A3 80,000 85,268
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 155,000 174,375
Shawmut Corp. 8 1/8%, 2/1/97 A2 370,000 379,398
Shawmut National Corp. 8 5/8%, 12/15/99 A3 290,000 317,269
Southwest Gas Co. 9 3/4%, 6/15/02 Baa 90,000 105,742
Standard Credit Card Master Trust I:
9%, 8/7/97 A2 360,000 366,638
5 1/2%, 9/7/98 A2 85,000 84,708
6 1/4%, 9/7/98 A2 650,000 655,891
Tenneco Credit Corp. 10.05%, 8/17/98 Baa 330,000 362,848
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
UNITED STATES OF AMERICA - CONTINUED
Texas Gas Transmission Corp. 8 5/8%, 4/1/04 Baa $ 110,000 $ 124,359
Transcontinental Gas Pipe Line Corp.:
9%, 11/15/96 Baa 750,000 769,868
8 7/8%, 9/15/02 Baa 90,000 101,861
Union Planters Corp. 6 3/4%, 11/1/05 Baa 200,000 203,504
Valassis Inserts, Inc. 9 3/8%, 3/15/99 Ba2 290,000 292,674
18,518,332
TOTAL NONCONVERTIBLE BONDS
(Cost $44,408,962) 42,444,525
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 1.2%
Federal National Mortgage Association
7%, 11/1/25 to 12/1/25 (Cost $2,259,924) Aaa 2,277,002 2,292,584
COMMERCIAL MORTGAGE SECURITIES - 0.2%
Resolution Trust Corp. commercial Series 1995-C2
Class A-1B, 6 1/4%, 5/25/27 Aaa 190,000 190,356
Structured Asset Securities Corp. commercial
Series 1995-C4 Class A1A, 6.90%, 6/25/26 AAA 200,000 202,500
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $390,469) 392,856
GOVERNMENT OBLIGATIONS (D) - 64.4%
ARGENTINA - 1.9%
Province of Chaco, Argentina 11 7/8%,
9/10/97 (f) - 3,600,000 3,737,160
AUSTRALIA - 0.2%
Commonwealth of Australia 9 3/4%, 3/15/02 A2 AUD 475,000 383,504
AUSTRIA - 4.6%
Republic of Austria euro (b):
11%, 12/16/97 Aaa ITL 3,800,000 2,413,289
4 1/2%, 9/28/05 Aaa JPY 600,000 6,493,230
8,906,519
GOVERNMENT OBLIGATIONS (D) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
BELGIUM - 2.8%
Kingdom of Belgium:
8 3/4%, 6/25/02 Aa1 BEF 20,000,000 $ 772,310
5.10%, 11/21/04 (e) Aa1 BEF 74,000,000 2,506,181
7 1/2%, 7/29/08 Aaa BEF 60,000,000 2,087,920
5,366,411
CANADA - 1.7%
Canadian Government:
8 1/2%, 4/1/02 Aa1 CAD 1,540,000 1,226,379
7 1/2%, 12/1/03 Aa1 CAD 1,410,000 1,064,256
9%, 12/1/04 Aaa CAD 1,120,000 924,338
3,214,973
DENMARK - 1.7%
Kingdom of Denmark:
9%, 11/15/98 Aaa DKK 7,500,000 1,467,980
8%, 3/15/06 Aaa DKK 4,000,000 757,911
Bullet:
9%, 11/15/00 Aaa DKK 2,000,000 399,799
8%, 5/15/03 Aaa DKK 3,500,000 668,580
3,294,270
FRANCE - 6.8%
French Government:
OAT:
9.70%, 12/13/97 Aaa FRF 16,500,000 3,636,625
9 1/2%, 1/25/01 Aaa FRF 17,500,000 4,102,059
5 1/2%, 4/25/04 Aaa FRF 4,000,000 759,727
8 1/2%, 12/26/12 Aaa FRF 20,000,000 4,635,891
13,134,302
GERMANY - 11.1%
Federal Republic of Germany:
6 1/8%, 3/20/98 Aaa DEM 8,000,000 5,808,067
8 3/8%, 5/21/01 Aaa DEM 6,000,000 4,775,382
8%, 1/21/02 Aaa DEM 11,000,000 8,627,121
6%, 6/20/16 Aaa DEM 3,500,000 2,242,142
21,452,712
ITALY - 2.2%
Republic of Italy (b):
9%, 10/1/03 A1 ITL 2,500,000 1,448,363
8 1/2%, 4/1/04 A1 ITL 5,000,000 2,790,930
4,239,293
GOVERNMENT OBLIGATIONS (D) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
NETHERLANDS - 3.3%
Netherland Government:
6 1/4%, 7/15/98 Aaa NLG 3,750,000 $ 2,443,563
7%, 6/15/05 Aaa NLG 2,500,000 1,662,935
8 1/4%, 2/15/07 Aaa NLG 3,100,000 2,236,126
6,342,624
SPAIN - 2.4%
Kingdom of Spain:
11.45%, 8/30/98 A2 ESP 300,000,000 2,589,704
10.90%, 8/30/03 A2 ESP 200,000,000 1,747,504
10 1/2%, 10/30/03 A2 ESP 35,000,000 300,202
4,637,410
SWEDEN - 1.0%
Kingdom of Sweden 10 1/4%, 5/5/03 Aa1 SEK 11,000,000 1,823,498
UNITED KINGDOM - 3.9%
United Kingdom, Great Britain & Northern Ireland:
13 1/4%, 1/22/97 Aaa GBP 350,000 581,943
9 3/4%, 8/27/02 Aaa GBP 1,500,000 2,640,879
13 1/2, 3/26/08 Aaa GBP 850,000 1,808,732
9%, 10/13/08 Aaa GBP 500,000 865,028
8 3/4%, 8/25/17 Aaa GBP 900,000 1,542,657
7,439,239
UNITED STATES OF AMERICA - 20.8%
Federal Farm Credit Bank:
6.56%, 8/05/02 Aaa 140,000 146,300
6.20%, 9/23/02 Aaa 210,000 215,420
Federal Home Loan Bank 5.40%, 8/3/98 (callable) Aaa 220,000 218,658
Federal National Mortgage Association:
5.45%, 10/10/03 Aaa 170,000 166,255
7.40%, 7/1/04 Aaa 340,000 374,296
Financing Corp. 8.60%, 9/26/19 Aaa 240,000 307,313
Government Trust Certificates:
(assets of Trust guaranteed by U.S. Government
through Export-Import Bank):
Series 1993-C 5.20%, 10/15/04 Aaa 75,200 73,720
Series 1993-D 5.23%, 5/15/05 Aaa 129,362 126,289
Series 1994-A 7.39%, 6/26/06 Aaa 35,000 37,455
Series 1994-C 6.61%, 9/15/99 Aaa 51,623 52,556
Series 1994-F 8.178%, 12/15/04 Aaa 424,106 461,288
GOVERNMENT OBLIGATIONS (D) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
UNITED STATES OF AMERICA - CONTINUED
Government Trust Certificates: - continued
(assets of Trust guaranteed by U.S. government
through Defense Security Assistance Agency):
Class 1-C 9 1/4%, 11/15/01 Aaa $ 708,000 $ 786,517
Class 2-E 9.40%, 5/15/02 Aaa 280,000 312,388
Israel Export Trust Certificate Series 1994-1
(assets of Trust guaranteed by U.S. Government
through Export-Import Bank) 6.88%, 1/26/03 Aaa 150,000 155,250
Overseas Private Investment Corp. (U.S. Government
guarantee Ovd participation certificate) Series
1994-195, 6.08%, 8/15/04 Aaa 230,000 232,939
Private Export Funding Corp. secured:
9 1/2%, 3/31/99 Aaa 100,000 111,834
6.90%, 1/31/03 Aaa 100,000 106,290
8 3/4%, 6/30/03 Aaa 200,000 234,781
5.80%, 2/1/04 Aaa 40,000 40,028
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
6%, 2/15/99 Aaa 170,000 172,656
8%, 11/15/01 Aaa 240,000 266,172
6 1/4%, 8/15/02 Aaa 660,000 680,380
6 1/8%, 3/15/03 Aaa 100,000 102,063
U.S. Treasury:
5 5/8%, 1/31/98 Aaa 1,340,000 1,351,095
9 1/4%, 8/15/98 Aaa 500,000 548,435
9 1/8%, 5/15/99 Aaa 2,139,000 2,386,996
7 3/4%, 12/31/99 Aaa 270,000 292,993
6 1/4%, 2/15/03 Aaa 4,710,000 4,913,849
10 3/4%, 5/15/03 Aaa 370,000 485,222
11 1/4%, 8/15/03 Aaa 210,000 281,793
5 7/8%, 11/15/05 Aaa 70,000 71,575
11 3/4%, 2/15/10 Aaa 7,170,000 10,223,990
12 3/4%, 11/15/10 Aaa 240,000 365,549
13 7/8%, 5/15/11 Aaa 430,000 699,894
8 1/8%, 8/15/19 Aaa 690,000 867,565
8 3/4%, 5/15/20 Aaa 9,100,000 12,188,267
40,058,071
TOTAL GOVERNMENT OBLIGATIONS
(Cost $120,266,579) 124,029,986

SUPRANATIONAL OBLIGATIONS - 11.1%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (A) (NOTE 1)
European Investment Bank
5 7/8%, 11/26/99 (b) Aaa JPY 145,000 $ 1,628,095
InterAmerica Development Bank euro
6%, 10/30/01 (b) Aaa JPY 775,000 8,956,722
International Bank for Reconstruction
& Development (b):
4 1/2%, 12/22/97 Aaa JPY 30,000 311,460
euro 6%, 10/30/01 Aaa JPY 800,000 9,292,070
4 3/4%, 1/15/04 Aaa JPY 100,000 1,111,702
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $24,732,739) 21,300,049
REPURCHASE AGREEMENTS - 1.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.88%
dated 12/29/95 due 1/2/96 $ 2,043,334 2,042,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $194,100,673) $ 192,502,000
CURRENCY ABBREVIATIONS
AUD - Australian dollar
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
DKK - Danish krone
NLG - Dutch guilder
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
ESP - Spanish peseta
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Principal amount in thousands.
3. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
4. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:

ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco,
Argentina 11 7/8%,
9/10/97 3/9/94 $3,844,189
7. Non-income producing - Issuer in default of principal and interest
payments.
8. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,250,000 or 1.1% of net
assets.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 85.6% AAA, AA, A 85.0%
Baa 2.6% BBB 3.5%
Ba 0.7% BB 0.7%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 3.7% including long-term debt categorized
as other securities.
INCOME TAX INFORMATION
At December 31, 1995, the aggregate cost of investment securities for
income tax purposes was $194,170,557. Net unrealized depreciation
aggregated $1,668,557, of which $6,606,035 related to appreciated
investment securities and $8,274,592 related to depreciated investment
securities.
At December 31, 1995, the fund had a capital loss carryforward of
approximately $94,602,000 of which $81,883,000 and $12,719,000 will expire
on December 31, 2002 and 2003, respectively.
The fund intends to elect to defer to its fiscal year ending December
31,1996 approximately $76,000 of losses recognized during the period
November 1, 1995 to December 31, 1995.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities (Unaudited)
Aerospace & Defense 0.2%
Basic Industries 2.2
Commercial Mortgage Securities 0.2
Energy 0.3
Finance 14.7
Government Obligations 65.6
Nondurables 0.2
Repurchase Agreements 1.0
Retail & Wholesale 0.4
Services 2.1
Supranational Obligations 11.1
Technology 0.3
Transportation 0.1
Utilities 1.6
100.0%
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1995

ASSETS

Investment in securities, at value (including repurchase $ 192,502,000
agreements of $2,042,000) (cost $194,100,673) -
See accompanying schedule

Cash 513

Interest receivable 5,162,071

TOTAL ASSETS 197,664,584

LIABILITIES

Payable for fund shares redeemed $ 478,189

Distributions payable 46,963

Accrued management fee 116,744

Other payables and accrued expenses 160,827

TOTAL LIABILITIES 802,723

NET ASSETS $ 196,861,861

Net Assets consist of:

Paid in capital $ 294,002,138

Distributions in excess of net investment income (1,052,357)

Accumulated undistributed net realized gain (loss) on (94,843,710)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (1,244,210)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 19,812,005 shares outstanding $ 196,861,861

NET ASSET VALUE, offering price and redemption price per $9.94
share ($196,861,861 (divided by) 19,812,005 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1995

INVESTMENT INCOME $ 18,696,831
Interest

Less foreign taxes withheld (46,842)

TOTAL INCOME 18,649,989

EXPENSES

Management fee $ 1,785,715

Transfer agent fees 770,394

Accounting fees and expenses 155,301

Non-interested trustees' compensation 1,480

Custodian fees and expenses 99,271

Registration fees 29,051

Audit 87,254

Legal 2,417

Interest 719

Miscellaneous 6,984

TOTAL EXPENSES 2,938,586

NET INVESTMENT INCOME 15,711,403

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (2,651,732)

Foreign currency transactions (1,567,962) (4,219,694)

Change in net unrealized appreciation (depreciation) on:

Investment securities 4,801,386

Assets and liabilities in foreign currencies (2,874,544) 1,926,842

NET GAIN (LOSS) (2,292,852)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 13,418,551
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994

INCREASE (DECREASE) IN NET ASSETS

Operations $ 15,711,403 $ 36,075,353
Net investment income

Net realized gain (loss) (4,219,694) (109,647,947)

Change in net unrealized appreciation (depreciation) 1,926,842 (39,772,490)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 13,418,551 (113,345,084)
FROM OPERATIONS

Distributions to shareholders (13,319,937) (11,242,839)
From net investment income

In excess of net investment income - (2,708,940)

In excess of net realized gain - (1,579,995)

Return of capital (1,562,828) (20,501,873)

TOTAL DISTRIBUTIONS (14,882,765) (36,033,647)

Share transactions 156,242,005 657,341,508
Net proceeds from sales of shares

Reinvestment of distributions 13,157,522 32,369,334

Cost of shares redeemed (353,875,967) (843,781,261)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (184,476,440) (154,070,419)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (185,940,654) (303,449,150)

NET ASSETS

Beginning of period 382,802,515 686,251,665

End of period (including distributions in excess of net $ 196,861,861 $ 382,802,515
investment income of $1,052,357 and $8,617,556,
respectively)

OTHER INFORMATION
Shares

Sold 15,810,366 58,056,699

Issued in reinvestment of distributions 1,337,071 2,994,322

Redeemed (36,076,255) (76,721,130)

Net increase (decrease) (18,928,818) (15,670,109)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEARS ENDED DECEMBER TWO MONTH YEARS ENDED
PERIOD ENDED OCTOBER 31,
DECEMBER 31,

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1995 1994 F 1993 E 1992 1992 D 1991

SELECTED PER-SHARE
DATA

Net asset value, $ 9.880 $ 12.610 $ 11.340 $ 11.830 $ 11.980 $ 12.190
beginning of period

Income from .685 .158 .731 .145 .839 .740
Investment
Operations
Net investment
income

Net realized and (.049) (2.178) 1.648 (.173) .110 .520
unrealized gain
(loss)

Total from investment .636 (2.020) 2.379 (.028) .949 1.260
operations

Less Distributions (.516) (.225) (.629) (.332) (1.099) (1.030)
From net investment
income

In excess of net - (.054) - - - -
investment income

From net realized - - (.280) (.130) C - (.440)
gain C

In excess of net - (.020) (.200) - - -
realized gain

Return of capital (.060) (.411) - - - -

Total distributions (.576) (.710) (1.109) (.462) (1.099) (1.470)

Net asset value, end $ 9.940 $ 9.880 $ 12.610 $ 11.340 $ 11.830 $ 11.980
of period

TOTAL RETURN B 6.66% (16.31) 21.91% (.23)% 8.18% 11.31%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 196,862 $ 382,803 $ 686,252 $ 279,204 $ 332,333 $ 160,083
period (000 omitted)

Ratio of expenses to 1.16% 1.14% 1.17% 1.37% 1.23% 1.35%
average net assets A

Ratio of net investment 6.19% 6.50% 6.79% 6.92% 8.02% 7.92%
income to average A
net assets

Portfolio turnover rate 322% 367% 198% 142% 81% 228%
A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D EFFECTIVE JULY 1, 1992, DIVIDENDS FROM NET INVESTMENT INCOME WERE
DECLARED DAILY AND PAID MONTHLY.
E EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F AMOUNTS HAVE BEEN ADJUSTED TO CONFORM WITH PRESENT PERIOD ACCOUNTING
POLICIES.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1995

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Global Bond Fund (the fund) is a fund of Fidelity Investment Trust
(the trust) and is authorized to issue an unlimited number of shares. The
trust is registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to U.S. federal
income taxes to the extent that it distributes substantially all of its
taxable income for its fiscal year. The fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. The fund
accrues such taxes as applicable. The schedule of investments includes
information regarding income taxes under the caption "Income Tax
Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned. Interest income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, foreign currency transactions, market discount,
capital loss carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions may include temporary book
and tax basis differences which will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in the
following year.
For the period ended December 31, 1995, the fund's distributions exceeded
the aggregate amount of taxable income and net realized gains resulting in
a return of capital. This was due to certain foreign currency losses which
decreased taxable income available for distribution after certain
distributions had been made. (The tax treatment of distributions for the
1995 calendar year will be reported to shareholders prior to February 1,
1996.)
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
of offset; otherwise, gain (loss) is recognized on settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
INDEXED SECURITIES. The fund may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
fund uses these securities to increase or decrease its exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $3,737,160 or
1.9% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $744,683,274 and $872,218,426, respectively, of which U.S.
government and government agency obligations aggregated $195,937,316 and
$255,232,245, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
assets of the fund. The group fee rate is the weighted average of a series
of rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1200% to .3700% for the
period. In the event that these rates were lower than the contractual rates
in effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .55%. For the period, the management fee was
equivalent to an annual rate of .70% of average net assets. The Board of
Trustees has approved a new group fee rate schedule with rates ranging from
.1100% to .3700%. Effective January 1, 1996, FMR voluntarily agreed to
implement this new group fee rate schedule as it results in the same or a
lower management fee.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisors,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the sub-advisory
arrangements, FMR may receive investment advice and research services and
may grant the sub-advisers investment management authority to buy and sell
securities. FMR pays its sub-advisers either a portion of its management
fee or a fee based on costs incurred for these services. FIIA pays FIIAL
U.K. a fee based on costs incurred for either service.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $19,211 for the
period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
Effective January 1, 1995, the Board of Trustees approved a revised
transfer agent contract pursuant to which FSC receives account fees and
asset-based fees that vary according to account size and type of account.
FSC pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .30% of average net assets.
ACCOUNTING FEES. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the period for
which loans were outstanding amounted to $1,881,000 and $1,417,333,
respectively. The weighted average interest rate was 6.0865%.
6. LITIGATION.
The fund is engaged in litigation against the obligor on the inflation
adjusted debt of Siderurgica Brasileiras SA, contesting the calculation of
the principal adjustment. The probability of success cannot be predicted
and the amount of recovery cannot be estimated. Any recovery from this
litigation would inure to the benefit of the fund.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Investment Trust and the Shareholders of
Fidelity Global Bond Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Investment Trust: Fidelity Global Bond Fund, including the
schedule of portfolio investments, as of December 31, 1995, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended,
for the two month period ended December 31, 1992 and for each of the two
years in the period ended October 31, 1992. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Investment Trust: Fidelity Global Bond Fund as of December 31,
1995, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended,
for the two month period ended December 31, 1992 and for each of the two
years in the period ended October 31, 1992, in conformity with generally
accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 9, 1996
DISTRIBUTIONS

A total of 24.54% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in February 1996 of the applicable
percentage for use in preparing 1995 income tax returns.

INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income Fund
Ginnie Mae Fund
Global Bond Fund
Government Securities Fund
Intermediate Bond Fund
Investment Grade Bond Fund
Mortgage Securities Fund
New Markets Income Fund
Short-Intermediate Government Fund
Short-Term Bond Fund
Short-Term World Bond Fund
Spartan(registered trademark) Ginnie Mae Fund
Spartan Government Income Fund
Spartan High Income Fund
Spartan Investment Grade Bond Fund
Spartan Limited Maturity
Government Fund
Spartan Long-Term Government
Bond Fund
Spartan Short-Intermediate
Government Fund
Spartan Short-Term Bond Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)FIDELITY

SHORT-TERM WORLD BOND
FUND
(FORMERLY FIDELITY SHORT-TERM WORLD INCOME FUND)
ANNUAL REPORT
DECEMBER 31, 1995
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 17 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 21 Notes to the financial statements.

REPORT OF INDEPENDENT 26 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, as well as reinvestment of
any dividends (or income) and capital gains (the profits the fund earns
when it sells bonds that have grown in value). You can also look at the
fund's dividends and yield. If Fidelity had not reimbursed certain fund
expenses, life of fund figures would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 LIFE OF
YEAR FUND

Short-Term World Bond 7.79% 21.18%

Lehman Brothers 1-3 Year Government Bond Index 10.84% n/a

Salomon Brothers 1-3 Year World Government Bond 11.17% n/a
Index

Average Short World Multi-Market Income Fund 7.80% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
October 4, 1991. For example, if you invested $1,000 in a fund that had a
5% return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to the performance of the Lehman
Brothers 1-3 Year Government Bond Index - a broad gauge of the performance
of short-term U.S. government bonds or to the Salomon Brothers 1-3 Year
World Government Bond Index which includes both U.S. and foreign government
bonds (with foreign currency exposure hedged into U.S. dollars). To measure
how the fund's performance stacked up against its peers, you can compare it
to the average short world multi-market income fund, which reflects the
performance of 43 funds with similar objectives tracked by Lipper
Analytical Services over the past 12 months. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude sales charges.
Recent U.S. Consumer Price Index information is not available from the U.S.
Department of Labor. Therefore, the CPI comparison has not been included in
this report.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 LIFE OF
YEAR FUND

Short-Term World Bond 7.79% 4.63%

Lehman Brothers 1-3 Year Government Bond Index 10.84% n/a

Salomon Brothers 1-3 Year World Government Bond 11.17% n/a
Index

Average Short World Multi-Market Income Fund 7.80% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Short-Term WorldSalomon Brothers
10/31/91 10000.00 10000.00
11/30/91 9953.55 10076.49
12/31/91 10013.89 10199.32
01/31/92 10073.94 10218.30
02/29/92 10167.77 10248.45
03/31/92 10203.63 10241.75
04/30/92 10340.52 10322.15
05/31/92 10393.30 10394.73
06/30/92 10450.55 10475.69
07/31/92 10563.77 10567.25
08/31/92 10594.04 10623.64
09/30/92 10348.11 10729.72
10/31/92 10510.46 10755.96
11/30/92 10442.45 10753.73
12/31/92 10497.71 10827.98
01/31/93 10595.46 10916.76
02/28/93 10718.75 10997.71
03/31/93 10825.83 11027.86
04/30/93 10901.95 11086.48
05/31/93 11019.75 11100.44
06/30/93 11203.34 11198.70
07/31/93 11348.48 11238.35
08/31/93 11487.08 11319.30
09/30/93 11471.74 11355.59
10/31/93 11633.27 11410.31
11/30/93 11676.59 11431.52
12/31/93 11819.14 11497.40
01/31/94 11890.79 11532.58
02/28/94 11700.76 11463.35
03/31/94 11369.94 11436.55
04/30/94 11247.98 11423.15
05/31/94 11417.32 11437.11
06/30/94 11157.58 11431.52
07/31/94 11239.08 11505.22
08/31/94 11320.82 11505.22
09/30/94 11380.60 11523.09
10/31/94 11421.99 11567.75
11/30/94 11462.67 11590.08
12/31/94 11134.20 11612.42
01/31/95 11064.33 11748.65
02/28/95 11083.40 11867.01
03/31/95 11111.02 11960.81
04/30/95 11246.96 12077.49
05/31/95 11436.96 12273.46
06/30/95 11496.19 12319.25
07/31/95 11569.38 12414.72
08/31/95 11640.73 12504.61
09/30/95 11724.49 12588.91
10/31/95 11798.75 12688.29
11/30/95 11911.99 12813.91
12/29/95 12001.21 12908.83

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Short-Term World Bond Fund on October 31, 1991, shortly after the fund
started. As the chart shows, by December 31, 1995, the value of your
investment would have grown to $12,001 - a 20.01% increase on your initial
investment. For comparison, look at how the Salomon Brothers 1-3 Year World
Government Bond Index did over the same period. With dividends reinvested,
the same $10,000 investment would have grown to $12,909 - a 29.09%
increase. Henceforth, the fund will compare its performance to the Salomon
Brothers 1-3 Year World Government Bond Index rather than the Lehman
Brothers 1-3 Year Government Bond Index. The Salomon Brothers Index
includes both U.S. and foreign government bonds (with foreign currency
exposure hedged into U.S. dollars), which is more reflective of the fund's
range of permitted investments. For comparison purposes, both indexes are
shown on Page 4.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1995 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.73(cents) 27.56(cents) 56.84(cents)

Annualized dividend rate 6.19% 6.12% 6.40%

30-day annualized yield 4.86% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on the fund's average share price of $8.99
over the past month, $8.94 over the past six months and $8.88 over the past
year, you can compare the fund's income distributions over these three
periods.
The 30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30 days.
This figure shows you the yield characteristics of the fund's investments
at the end of the period. It also helps you compare funds from different
companies on an equal basis. It does not reflect the cost of hedging and
other currency gains and losses.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Both developed and emerging
fixed-income markets recorded
strong returns in 1995. For the
12 months ended December 31,
1995, the Salomon Brothers World
Government Bond Index - a
proxy of government bond market
performance in developed nations
including the U.S. - rose
19.04%. Emerging markets
shrugged off the fallout from
December 1994's Mexican peso
devaluation to record strong
returns. The J.P. Morgan Emerging
Markets Bond Index posted a
27.54% return for the year. To
compare, the Lehman Brothers
Aggregate Bond Index - a broad
measure of taxable bonds in the
U.S. market - had a total return of
18.47%. Bond markets in
developed countries benefited
from slow economic growth and
relatively low inflation pressures.
This led to a more favorable interest
rate environment, as the central
banks of the U.S., Germany and
Great Britain all lowered their
respective short-term interest
rates. Record low interest rates
in Japan and a strengthening
dollar pushed a significant amount
of money into the U.S., as overseas
investors in 1995 purchased a
record net $99.4 billion in U.S.
Treasury securities - helping fuel
the U.S. rally. The bulk of emerging
markets' total return came from a
springtime rally following the
announcement of a $50 billion
bailout package for Mexico by the
U.S. Treasury and the International
Monetary Fund.
An interview with Scott Kuldell, Portfolio Manager of Fidelity Short-Term
World Bond Fund
Q. SCOTT, HOW HAS THE FUND PERFORMED?
A. For the 12 months ended December 31, 1995, the fund's total return was
7.79%. The average short world multi-market income fund tracked by Lipper
Analytical Services returned 7.80% during the same period. And the Salomon
Brothers 1-3 Year World Government Bond Index posted an 11.17% return
during the 12-month period.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF THE INDEX?
A. The fund held emerging markets investments in the first three months of
the period. At that time, those markets saw sharp sell-offs, largely as a
result of the Mexican peso devaluation in late 1994. Since then, the fund's
stategy has changed in a number of ways, including no longer actively
investing in emerging markets. My main strategy now is to outperform the
return of the global short-term government bond market - which includes
only developed countries with consistent records of paying debt - by
exploiting anomalies and inefficiencies in the market, and by using
Fidelity's worldwide credit research.
Q. WHAT HAS THE INVESTING ENVIRONMENT BEEN LIKE OVER THE PAST SIX MONTHS?
A. Short-term fixed-income investments overseas have provided better
opportunities than similar investments in the U.S. That's because of the
difference between the shapes of the yield curve - the graphical
representation of the yields of various bond maturities - in the U.S. and
abroad. In most countries, the yield curve has remained upward sloping.
That is, the longer-term the bond, the higher the yield. In the U.S., we've
had an inverted yield curve in the short end. That is, yields on
three-month bank deposits have been higher than yields on two-year Treasury
issues.
Q. WHY HAS THAT PROVIDED AN OPPORTUNITY?
A. In a normally shaped, upward-sloping yield curve, the yield on two-year
bonds goes down - and the price goes up - as their maturities get shorter.
That's because the bonds are priced off of the lower end of the yield curve
as they age. In the U.S., the inverted yield curve has created the opposite
effect for two-year bonds that are in the process of aging. As a result,
foreign bonds on the short end of the curve generally have performed better
than comparable U.S. bonds with similar maturities.
Q. WHERE HAVE YOU FOUND INVESTMENT OPPORTUNITIES?
A. One of the advantages of investing in foreign bond markets is that there
are more price inefficiencies to take advantage of than in the U.S. The U.S
market is the most highly analyzed market in the world. While the flow of
information in foreign markets is less efficient, Fidelity uses its strong
research base to try to find hidden opportunities. Let me give you an
example of one such opportunity that the fund took advantage of over the
period. The Kingdom of Belgium issues two different types of bonds: Olos
are issued to institutional investors, and Philippe bonds are issued to
individual retail investors. In the fall, the government issued a new
Philippe bond with a nine-year maturity. The bond came with a reset feature
which, every three years, provides the holder with the option to reset the
coupon rate at either the then-prevailing three-year interest rate or
6.75%, whichever is higher. In addition to this valuable option, the bonds
were priced cheaper than three-year Olos without the option. At the end of
the period, the bonds still were trading cheaply, but at some point,
investors will realize the value of the coupon reset option and they should
outperform comparable bonds. The Belgian government was surprised at how
much interest these bonds generated. In fact, they canceled an Olo auction
because they sold so many of these Philippe bonds.
NOTE TO SHAREHOLDERS: EFFECTIVE FEBRUARY 26, 1996, CHARLES MORRISON AND LUC
HUYGHEBAERT BECAME CO-MANAGERS OF THE FUND. MR. MORRISON JOINED FIDELITY IN
1987 AND ALSO MANAGES FIDELITY ADVISOR SHORT FIXEDINCOME FUND, FIDELITY
SHORT-TERM BOND PORTFOLIO AND FIDELITY SPARTAN SHORT-TERM INCOME FUND. HE
WILL MANAGE THE U.S. PORTION OF THE FUND. MR. HUYGHEBAERT, WHO IS BASED IN
LONDON AND WILL MANAGE THE INTERNATIONAL PORTION OF THE FUND, JOINED
FIDELITY INTERNATIONAL, LIMITED, A SISTER COMPANY OF FIDELITY INVESTMENTS,
IN 1994. HE MANAGES SEVERAL FUNDS FOR FIL, INCLUDING INTERNATIONAL BOND
FUND, EUROPEAN BOND FUND, YEN BOND FUND AND DM SHORT TERM BOND FUND. THE
FOLLOWING IS THEIR COMMENT ON THE OUTLOOK FOR THE FUND.
Q. WHAT'S YOUR OUTLOOK GOING FORWARD?
A. In addition to looking for opportunities such as the Belgian bonds, the
fund probably will increase its investments in U.S. corporate securities.
The fundamentals and technicals of the domestic corporate market are
strong, and compensate for the high valuations within that market. In
general, the world-wide government bond market environment also is
favorable relative to money markets although yields are lower than they
were a year ago. Short rates have continued to fall, as economic growth has
slowed and inflation has not posed any significant problems. This should
provide a good backdrop for short-term bond investing.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current income
and preservation of capital
by investing mainly in
short-term debt securities
around the world
START DATE: October 4, 1991
SIZE: as of December 31,
1995, more than $121 million
MANAGERS: Scott Kuldell,
from April 1994 to February
1996; Charles Morrison and
Luc Huyghebaert, since
February 1996
(checkmark)
LUC HUYGHEBAERT ON
DIVERSIFICATION AND HEDGED BOND
FUNDS:
"While economic and political
factors can affect the fund, in
one sense it has less volatility
than a fund that invests in a
single country. That's because
it is invested in several
countries that don't have
perfect correlations between
them. Diversification of interest
rate risk helps lower the overall
volatility of the fund. And
keeping the overall credit
quality of the portfolio high
helps to keep event risk to a
minimum.
"In addition, in this fund, every
country's returns are hedged
into dollars. We use
techniques to limit the fund's
exposure to currency risk,
or the risk that movements in
the currency of the country in
which an investment is made
will reduce the returns from
the investment. Therefore, we
can translate the excess
returns from one country into
another. Excess returns are
the returns generated from
the bonds you own -
generally two- or three-year
bonds - in excess of the
money market rate. If we can
translate excess returns in
Germany, for example, into
excess returns in the U.S., then
the degree to which we
outperform money market funds
in Germany directly translates
into the fund's outperformance
of a U.S. money market fund.
This has been especially
beneficial this year, when
short-term bonds have
yielded less than money
market instruments in the
U.S."
INVESTMENT CHANGES

TOP COUNTRIES AS OF DECEMBER 31, 1995
(BY LOCATION OF ISSUER) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

United States 41 51

Italy 12 9

Canada 7 7

Germany 6 5

France 5 2

TOP COUNTRIES ARE BASED ON THE LOCATION OF THE ISSUER OF EACH SECURITY,
INDICATING WHERE THE FUND IS EXPOSED TO POLITICAL AND CREDIT RISKS. THE
FUND'S LARGEST POSITION AS OF DECEMBER 31 WAS IN SECURITIES OF UNITED
STATES ISSUERS.
TOP INTEREST RATE EXPOSURES AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
(ESTIMATED, BY COUNTRY) % OF FUND'S TOTAL INTEREST % OF FUND'S TOTAL
RATE EXPOSURE INTEREST RATE EXPOSURE
6 MONTHS AGO

United States 40 44

Japan 16 17

Italy 10 9

Germany 6 6

France 6 5
</TABLE>
FIDELITY ESTIMATES INTEREST-RATE EXPOSURES BASED ON THE DURATION, OR
INTEREST RATE SENSITIVITY, OF THE FUND'S HOLDINGS. AS OF DECEMBER 31, THE
FUND WAS MOST SENSITIVE TO INTEREST RATE MOVEMENTS IN THE U.S., WHICH
ACCOUNT FOR APPROXIMATELY 40% OF THE FUND'S INTEREST RATE EXPOSURE.
ASSET ALLOCATION
AS OF DECEMBER 31, 1995 AS OF JUNE 30, 1995
1
Corporate bonds 16.9%
Foreign
Government
obligations 42.1%
U.S. Government
obligations 24.2%
Other 13.3%
Short-term
investments 3.5%
Corporate bonds 10.3%
Foreign
Government
obligations 32.8%
U.S. Government
obligations 33.9%
Other 12.3%
Short-term
investments 10.7%
Row: 1, Col: 1, Value: 3.5
Row: 1, Col: 2, Value: 13.3
Row: 1, Col: 3, Value: 24.2
Row: 1, Col: 4, Value: 42.1
Row: 1, Col: 5, Value: 16.9
Row: 1, Col: 1, Value: 10.7
Row: 1, Col: 2, Value: 12.3
Row: 1, Col: 3, Value: 33.9
Row: 1, Col: 4, Value: 32.8
Row: 1, Col: 5, Value: 10.3
INVESTMENTS DECEMBER 31, 1995

Showing Percentage of Total Value of Investments in Securities

NONCONVERTIBLE BONDS - 16.9%
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (A)
AUSTRALIA - 0.7%
New South Wales Treasury Corp.
7 1/2%, 2/1/98 Aa2 AUD 1,200,000 $ 893,412
CANADA - 6.5%
Ford Motor Credit Co. of Canada Ltd.:
10 1/2%, 5/17/96 Aa3 CAD 4,300,000 3,198,014
8.90%, 2/23/98 A1 CAD 1,676,000 1,287,388
General Motors Acceptance Corp. of Canada Ltd.:
8.30%, 4/12/98 A3 CAD 1,000,000 759,043
8 1/2%, 5/27/99 A3 CAD 1,350,000 1,036,483
Household Financial Ltd. 7 1/4%, 9/17/98 A2 CAD 2,000,000 1,489,940
TOTAL CANADA 7,770,868
NETHERLANDS - 0.1%
Ford Capital BV yankee 9 3/8%, 1/1/98 A1 150,000 160,644
UNITED STATES OF AMERICA - 9.6%
Associates Corp. North America
8 3/8%, 6/1/96 Aa3 1,310,000 1,324,030
Beneficial Corp.:
8.26%, 8/20/96 A2 1,000,000 1,015,340
8.22%, 6/15/98 A2 225,000 237,994
8.80%, 6/15/98 A2 1,600,000 1,713,328
Discover Card Trust 7 1/2%, 6/16/00 A2 210,000 217,875
Finova Capital Corp. 5.98%, 10/31/97 Baa 480,000 480,778
General Motors Acceptance Corp.:
8.80%, 3/20/96 A3 1,000,000 1,006,140
7%, 5/27/97 A3 1,003,000 1,022,288
5 3/4%, 12/10/97 A3 720,000 722,275
6.40%, 6/8/98 A3 1,000,000 1,017,040
Household Finance Corp. 7.55%, 3/16/98 A2 560,000 581,375
Northwest Financial, Inc. 6%, 8/15/97 Aa3 1,100,000 1,109,705
Wells Fargo & Co. 8.20%, 11/1/96 A2 1,000,000 1,020,580
TOTAL UNITED STATES OF AMERICA 11,468,748
TOTAL NONCONVERTIBLE BONDS
(Cost $20,517,594) 20,293,672
GOVERNMENT OBLIGATIONS (G) - 66.3%
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (A)
ARGENTINA - 1.8%
Province of Chaco 11 7/8%,
9/10/97 (d) - $ 2,066,666 $ 2,145,406
BELGIUM - 4.3%
Kingdom of Belgium (c):
6 1/4%, 11/25/96 AAA BEF 100,000 3,453,788
5.10%, 11/21/04 (e) AAA BEF 50,000 1,693,365
TOTAL BELGIUM 5,147,153
DENMARK - 1.3%
Kingdom of Denmark:
6 1/4%, 2/10/97 Aaa DKK 4,000,000 728,802
9%, 11/15/98 Aaa DKK 4,000,000 782,923
TOTAL DENMARK 1,511,725
FRANCE - 5.3%
French Government OAT:
8 1/2%, 11/12/97 Aaa FRF 24,150,000 5,209,982
8 1/8%, 5/25/99 Aaa FRF 5,000,000 1,096,199
TOTAL FRANCE 6,306,181
GERMANY - 6.1%
Federal Republic of Germany:
6 1/8%, 7/21/97 Aaa DEM 6,000,000 4,318,081
6 3/8%, 8/14/98 Aaa DEM 4,100,000 3,005,146
TOTAL GERMANY 7,323,227
ITALY - 11.8%
Republic of Italy (c):
8 1/2%, 1/1/97 A1 ITL 7,000,000 4,356,044
8 1/2%, 8/01/97 A1 ITL 9,000,000 5,542,821
8 1/2%, 1/1/99 A1 ITL 7,000,000 4,243,638
TOTAL ITALY 14,142,503
GOVERNMENT OBLIGATIONS (G) - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (A)
NETHERLANDS - 3.1%
Netherland Government 6 1/4%, 7/15/98 Aaa NLG 5,700,000 $ 3,714,216
SPAIN - 2.8%
Kingdom of Spain (c):
11.85%, 8/30/96 AAA ESP 100,000 830,122
11.60%, 1/15/97 Aa2 ESP 100,000 841,379
11.45%, 8/30/98 AAA ESP 200,000 1,726,470
TOTAL SPAIN 3,397,971
SWEDEN - 2.0%
Kingdom of Sweden 10 3/4%, 1/23/97 Aa1 SEK 16,000,000 2,463,869
UNITED KINGDOM - 3.6%
United Kingdom, Great Britian &
Northern Ireland:
10 1/2%, 2/21/97 Aaa GBP 1,000,000 1,622,957
14%, 5/22/01 Aaa GBP 1,500,000 2,711,389
TOTAL UNITED KINGDOM 4,334,346
UNITED STATES OF AMERICA - 24.2%
Federal Home Loan Bank
4.83%, 9/21/98 (callable) Aaa 275,000 270,789
Federal Home Loan Mortgage Corp.
4.78%, 2/10/97 (callable) Aaa 210,000 208,368
Federal National Mortgage Association
3%, 7/13/98 (h) Aaa 300,000 309,891
Government Trust Certificates (assets of trust
guaranteed by U.S. Government through
Defense Security Assistance Agency):
Class T-2 9.40%, 11/15/96 Aaa 448,480 457,198
Class 3-B 8.55%, 11/15/97 Aaa 283,912 290,490
Class 1-C 9 1/4%, 11/15/01 Aaa 176,000 195,518
State of Israel (guaranteed by U.S. Government
through Agency for International Development)
5 1/4%, 3/15/98 Aaa 220,000 219,519
Private Export Funding Corp. secured:
9.10%, 10/30/98 Aaa 60,000 65,588
9 1/2%, 3/31/99 Aaa 230,000 257,218
Tennessee Valley Authority 4.60%, 12/15/96 Aaa 260,000 258,014
GOVERNMENT OBLIGATIONS (G) - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (A)
UNITED STATES OF AMERICA - CONTINUED
U.S. Treasury Notes:
4 3/8%, 11/15/96 Aaa $ 4,940,000 $ 4,903,740
8 1/2%, 5/15/97 Aaa 370,000 385,840
5 1/8%, 3/31/98 Aaa 4,045,000 4,038,043
9%, 5/15/98 Aaa 310,000 335,671
9 1/4%, 8/15/98 Aaa 6,240,000 6,844,469
9 1/8%, 5/15/99 Aaa 1,538,000 1,716,316
7 3/4%, 12/31/99 Aaa 7,630,000 8,279,771
TOTAL UNITED STATES OF AMERICA 29,036,443
TOTAL GOVERNMENT OBLIGATIONS
(Cost $77,768,424) 79,523,040
SUPRANATIONAL OBLIGATIONS - 9.8%
Eurofima euro 11 3/8%, 11/30/99 Aaa GBP 200,000 355,509
International Bank for Reconstruction & Development
Worldbank 4 1/2%, 12/22/97 (c) Aaa JPY 1,100,000 11,420,213
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $13,470,852) 11,775,722
INTEREST INDEXED SECURITIES - 3.5%
UNITED STATES OF AMERICA - 3.5%
Citibank Nassau 8.5625%, 3/13/96
(coupon inversely indexed to JPY LIBOR and
principal indexed to value of 3-year
Japanese securities) (Cost $4,000,000) (f) 4,000,000 4,217,600
REPURCHASE AGREEMENTS - 3.5%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.88%,
dated 12/29/95 due 1/2/96 $ 4,152,711 4,150,000
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $119,906,870) $ 119,960,034
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE VALUE GAIN/(LOSS)
CONTRACTS TO BUY
1,614,426 FRF 1/8/96 $ 329,104 $ (896)
144,120 DEM 2/1/96 100,398 398
30,273,000 JPY 2/1/96 294,248 (5,752)
655,830 SEK 1/17/96 98,387 (1,613)
TOTAL CONTRACTS TO BUY
(Payable amount $830,000) $ 822,137 $ (7,863)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.7%
CONTRACTS TO SELL
1,182,389 AUD 2/1/96 $ 876,702 $ 20,731
151,404,945 BEF 3/27/96 5,150,054 7,142
3,064,550 GBP 2/1/96 4,748,531 78,136
10,374,095 CAD 1/29/96 7,603,942 (51,730)
8,258,017 DKK 1/17/96 1,484,525 997
5,791,609 NLG 2/12/96 3,611,381 42,630
31,991,286 FRF 1/8/96 6,521,480 (76,950)
10,776,540 DEM 2/1/96 7,507,264 192,155
22,866,360,000 ITL 3/27/96 14,233,178 (78,824)
1,219,160,000 JPY 2/1/96 11,850,004 314,856
414,185,207 ESP 2/12/96 to
3/27/96 3,379,574 (24,559)
18,320,016 SEK 1/17/96 2,748,354 (122,095)
TOTAL CONTRACTS TO SELL
(Receivable amount $70,017,478) $ 69,714,989 $ 302,489
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 58.1%
CURRENCY ABBREVIATIONS
AUD - Australian dollar
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
DKK - Danish krone
NLG - Dutch guilder
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
ESP - Spanish peseta
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
3. Principal amount in thousands.
4. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco
11 7/8%, 9/10/97 3/9/94 $2,207,850
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Coupon is inversely indexed to a floating interest rate multiplied by a
specified factor. If the floating rate is high enough, the coupon rate may
be zero or be a negative amount that is carried forward to reduce future
interest and/or principal payments. The price may be considerably more
volatile than the price of a comparable fixed rate security. The rate shown
is the rate at period end.
7. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
8. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 84.4% AAA, AA, A 84.5%
Baa 0.4% BBB 2.8%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government.The percentage not rated by
either S&P or Moody's amounted to 1.8% including long-term debt categorized
as other securities.
INCOME TAX INFORMATION
At December 31, 1995, the aggregate cost of investment securities for
income tax purposes was $119,906,870. Net unrealized appreciation
aggregated $53,164, of which $2,698,618 related to appreciated investment
securities and $2,645,454 related to depreciated investment securities.
At December 31, 1995, the fund had a capital loss carryforward of
approximately $32,196,000 of which $349,000, $2,324,000, $13,718,000 and
$15,805,000 will expire on December 31, 1999, 2000, 2002 and 2003,
respectively.
MARKET SECTOR DIVERSIFICATION
(Unaudited)
As a Percentage of Total Value of Investments
Finance 16.2%
Foreign Government Obligations 42.1
Indexed Securities 3.5
Repurchase Agreements 3.5
Supranational Obligations 9.8
Services 0.7
U.S. Government Obligations 24.2
100.0%
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1995

ASSETS

Investment in securities, at value (including repurchase $ 119,960,034
agreements of $4,150,000) (cost $119,906,870) -
See accompanying schedule

Unrealized appreciation on foreign currency contracts 660,776

Interest receivable 2,811,292

TOTAL ASSETS 123,432,102

LIABILITIES

Payable to custodian bank $ 83,541

Unrealized depreciation on foreign currency contracts 366,150

Payable for fund shares redeemed 766,018

Distributions payable 116,358

Accrued management fee 62,695

Other payables and accrued expenses 103,677

TOTAL LIABILITIES 1,498,439

NET ASSETS $ 121,933,663

Net Assets consist of:

Paid in capital $ 154,796,573

Distributions in excess of net investment income (1,222,475)

Accumulated undistributed net realized gain (loss) on (32,195,911)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 555,476
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 13,537,905 shares outstanding $ 121,933,663

NET ASSET VALUE, offering price and redemption price per $9.01
share ($121,933,663 (divided by) 13,537,905 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1995

INVESTMENT INCOME $ 12,495,833
Interest

Less foreign taxes withheld (70,743)

TOTAL INCOME 12,425,090

EXPENSES

Management fee $ 1,001,348

Transfer agent fees 435,424

Accounting fees and expenses 101,506

Non-interested trustees' compensation 1,000

Custodian fees and expenses 66,354

Registration fees 25,568

Audit 116,650

Legal 1,699

Interest 14,106

Miscellaneous 2,167

TOTAL EXPENSES 1,765,822

NET INVESTMENT INCOME 10,659,268

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (12,488,210)

Foreign currency transactions 2,547,981 (9,940,229)

Change in net unrealized appreciation (depreciation) on:

Investment securities 14,548,595

Assets and liabilities in foreign currencies (4,518,240) 10,030,355

NET GAIN (LOSS) 90,126

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,749,394
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994

INCREASE (DECREASE) IN NET ASSETS

Operations $ 10,659,268 $ 24,839,382
Net investment income

Net realized gain (loss) (9,940,229) (33,931,861)

Change in net unrealized appreciation (depreciation) 10,030,355 (13,418,051)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,749,394 (22,510,530)
FROM OPERATIONS

Distributions to shareholders (10,715,310) (6,841,239)
From net investment income

In excess of net investment income - (1,710,314)

Return of capital - (15,696,807)

TOTAL DISTRIBUTIONS (10,715,310) (24,248,360)

Share transactions 27,319,850 192,214,787
Net proceeds from sales of shares

Reinvestment of distributions 8,969,845 20,522,507

Cost of shares redeemed (179,797,316) (323,172,774)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (143,507,621) (110,435,480)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (143,473,537) (157,194,370)

NET ASSETS

Beginning of period 265,407,200 422,601,570

End of period (including distributions in excess of $ 121,933,663 $ 265,407,200
net investment income of $1,222,475 and
$4,188,209, respectively)

OTHER INFORMATION
Shares

Sold 3,087,868 20,004,614

Issued in reinvestment of distributions 1,012,063 2,165,313

Redeemed (20,354,972) (33,838,814)

Net increase (decrease) (16,255,041) (11,668,887)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31, TWO MONTH YEAR OCTOBER 4, 1991
PERIOD ENDED (COMMENCEME
ENDED OCTOBER NT OF
DECEMBER 31, OPERATIONS) TO
31, OCTOBER 31,

1995 1994 1993 D 1992 1992 1991

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, $ 8.910 $ 10.190 $ 9.680 $ 9.800 $ 10.040 $ 10.000
beginning of period

Income from .619 .644 .564 .191 .835 .061
Investment
Operations
Net investment
income

Net realized and .049 (1.218) .621 (.203) (.338) .037
unrealized gain
(loss)

Total from .668 (.574) 1.185 (.012) .497 .098
investment
operations

Less Distributions (.568) (.199) (.543) (.108) (.737) (.058)
From net
investment
income

In excess of net - (.050) (.132) - - -
investment
income

Return of capital - (.457) - - - -

Total distributions (.568) (.706) (.675) (.108) (.737) (.058)

Net asset value, end $ 9.010 $ 8.910 $ 10.190 $ 9.680 $ 9.800 $ 10.040
of period

TOTAL RETURN B, C 7.79% (5.80) 12.59% (.12)% 5.10% .98%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 121,934 $ 265,407 $ 422,602 $ 458,846 $ 648,448 $ 44,318
period (000 omitted)

Ratio of expenses to 1.06% 1.01% 1.00% 1.20% A, 1.09% 1.00% A,
average net assets E E

Ratio of net 6.42% 7.54% 8.00% 8.63% A 9.04% 9.07% A
investment income
to average net
assets

Portfolio turnover rate 284% 134% 160% 117% A 154% 62% A

</TABLE>

A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D EFFECTIVE JANUARY 1,1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF
INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1995

1. SIGNIFICANT ACCOUNTING POLICIES.
On December 14, 1995, the Board of Trustees approved a change in the fund's
name from Fidelity Short-Term World Income Fund to Fidelity Short-Term
World Bond Fund. The fund's name change will be effective in 1996 with the
next prospectus revision.
Fidelity Short-Term World Bond Fund (the fund) is a fund of Fidelity
Investment Trust (the trust) and is authorized to issue an unlimited number
of shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign
currency are translated into U.S. dollars at the prevailing rates of
exchange at period end. Purchases and sales of securities, income receipts,
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts and foreign currency options, disposition of foreign currencies,
currency gains and losses realized between the trade and settlement dates
on securities transactions, and the difference between the amount of net
investment income accrued and the U.S. dollar amount actually received. The
effects of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or loss
on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Dividends are declared daily and paid monthly from net interest income.
Distributions to shareholders from realized capital gains on investments,
if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, foreign currency transactions, market discount,
capital loss carryforwards and losses deferred due to wash sales, futures
and options, and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions may include temporary book
and tax basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the fund's Statement of Assets and Liabilities. The U.S. dollar value of
the currencies the fund has committed to buy or sell is shown in the
schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
the fund has acquired or hedged through currency contracts at period end.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date. Contracts that have been offset with
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
different counterparties are reflected as both a contract to buy and a
contract to sell in the schedule of investments under the caption "Forward
Foreign Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
FUTURES CONTRACTS AND OPTIONS.
The fund may use futures and options contracts to manage its exposure to
the bond market and to fluctuations in interest rates and currency values.
Buying futures, writing puts, and buying calls tend to increase the fund's
exposure to the underlying instrument. Selling futures, buying puts, and
writing calls tend to decrease the fund's exposure to the underlying
instrument, or hedge other fund investments. Losses may arise from changes
in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
INDEXED SECURITIES. The fund may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
fund uses these securities to increase or decrease its exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES - CONTINUED
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and
prompt sale at an acceptable price may be difficult. At the end of the
period, restricted securities (excluding 144A issues) amounted to
$2,145,406 or 1.8% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $455,371,759 and $379,028,862, respectively, of which U.S.
government and government agency obligations aggregated $124,807,391 and
$108,185,595, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1200% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .45%. For
the period, the management fee was equivalent to an annual rate of .60% of
average net assets.
The Board of Trustees has approved a new group fee rate schedule with rates
ranging from .1100% to .3700%. Effective January 1, 1996, FMR voluntarily
agreed to implement this new group fee rate schedule as it results in the
same or a lower management fee.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisers,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the sub-advisory
arrangements, FMR may receive investment advice and research services and
may grant the sub-advisers investment management authority to buy and sell
securities. FMR pays its sub-advisers either a portion of its management
fee or a fee based on costs incurred for these services. FIIA pays FIIAL
U.K. a fee based on costs incurred for either service.
DISTRIBUTION AND SERVICE PLAN.
Pursuant to the Distribution and Service Plan (the Plan), and in accordance
with Rule 12b-1 of the 1940 Act, FMR or the fund's distributor, Fidelity
Distributors Corporation (FDC), an affiliate of FMR, may use their
resources to pay administrative and promotional expenses related to the
sale of the fund's shares. Subject to the approval of the Board of
Trustees, the Plan also authorizes
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
payments to third parties that assist in the sale of the fund's shares or
render shareholder support services. No payments were made to third parties
under the Plan during the period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the period for
which loans were outstanding amounted to $7,546,000 and $2,449,438,
respectively. The weighted average interest rate was 6.48%.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Investment Trust and the Shareholders of
Fidelity Short-Term World Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Investment Trust: Fidelity Short-Term World Income Fund, including
the schedule of portfolio investments, as of December 31, 1995, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period
ended December 31, 1995, for the two month period ended December 31, 1992,
for the year ended October 31, 1992 and for the period October 4,
1991(commencement of operations) to October 31, 1991. These financial
statements and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Investment Trust: Fidelity Short-Term World Income Fund, as of
December 31, 1995, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the
period ended December 31, 1995, for the two month period ended December 31,
1992, for the year ended October 31, 1992 and for the period October 4,
1991(commencement of operations) to October 31, 1991, in conformity with
generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 8, 1996
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you would ever like to change your PIN, just choose the "Change your
Personal
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you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.

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2.
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ASSURANCE THAT
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INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
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For directions and hours,
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ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

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If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
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OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

INVESTMENT ADVISER
Fidelity Management & Research
Company, Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
Fidelity International Investment Advisors
Fidelity International Investment Advisors (U.K.) Limited
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
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Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Long-Term Government Bond
Spartan Short-Intermediate Government
Spartan Short-Term Bond
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MUTUAL FUND 24-HOUR SERVICE
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for the deaf and hearing impaired
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(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

NEW MARKETS INCOME
FUND
ANNUAL REPORT
DECEMBER 31, 1995
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 20 Notes to the financial statements.

REPORT OF INDEPENDENT 25 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value). You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 LIFE OF
YEAR FUND

New Markets Income 7.97% 25.10%

J.P. Morgan Emerging Markets Bond Index 27.54% n/a

J.P. Morgan Emerging Markets Bond Index Plus 26.78% n/a

Average Emerging Markets Debt Fund 20.12% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
May 4, 1993. For example, if you invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to those of the J.P. Morgan Emerging
Markets Bond Index - a broad measure of bond performance in developing
countries available at month end. You also can compare the fund's returns
to those of the J.P. Morgan Emerging Markets Bond Index Plus, which
includes corporate bonds and local currency bonds, and is more
representative of the fund's investable universe. To measure how the fund's
performance stacked up against its peers, you can compare it to the average
emerging markets debt fund, which reflects the performance of 12 funds with
similar objectives tracked by Lipper Analytical Services over the past 12
months. Both benchmarks include reinvested dividends and capital gains, if
any. Recent U.S. Consumer Price Index information is not available from the
U.S. Department of Labor. Therefore, the CPI comparison has not been
included in this report.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1995 PAST 1 LIFE OF
YEAR FUND

New Markets Income 7.97% 8.77%

J.P. Morgan Emerging Markets Bond Index 27.54% n/a

J.P. Morgan Emerging Markets Bond Index Plus 26.78% n/a

Average Emerging Markets Debt Fund 20.12% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity New MarkJP Morgan Emerging M
05/31/93 10000.00 10000.00
06/30/93 10397.82 10349.75
07/31/93 10924.43 10781.31
08/31/93 11248.31 10997.69
09/30/93 11606.78 11141.74
10/31/93 12523.77 12080.74
11/30/93 12661.08 11959.81
12/31/93 13478.16 12690.14
01/31/94 13983.39 12724.52
02/28/94 12575.86 11665.78
03/31/94 10685.31 10331.38
04/30/94 10235.00 10336.12
05/31/94 10771.77 11049.85
06/30/94 10158.89 10160.06
07/31/94 10438.23 10409.63
08/31/94 11589.51 11153.60
09/30/94 12162.19 11263.26
10/31/94 11932.04 10944.34
11/30/94 11881.46 11055.78
12/31/94 11247.49 10319.52
01/31/95 9945.27 9962.65
02/28/95 9236.93 9443.36
03/31/95 8944.32 9176.60
04/30/95 9574.00 10161.84
05/31/95 10210.80 11056.97
06/30/95 10348.34 11271.56
07/31/95 10366.53 11279.86
08/31/95 10704.15 11546.03
09/30/95 11120.78 11943.80
10/31/95 11045.33 11821.09
11/30/95 11400.18 12234.87
12/29/95 12144.14 13162.01

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity New
Markets Income Fund on May 31, 1993, shortly after the fund started. As the
chart shows, by December 31, 1995, the value of your investment would have
grown to $12,144 - a 21.44% increase on your initial investment. For
comparison, look at how the J.P. Morgan Emerging Markets Bond Index did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $13,162 - a 31.62% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the
globe offer the potential for
significant growth over time;
however, investing in foreign
markets means assuming
greater risks than investing in
the United States. Factors like
changes in a country's financial
markets, its local political and
economic climate, and the
fluctuating value of its currency
create these risks. For these
reasons an international fund's
performance may be more
volatile than a fund that invests
exclusively in the United
States.
(checkmark)
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 20.19(cents) 52.78(cents) 91.62(cents)

Annualized dividend rate 24.38% 11.26% 10.28%

30-day annualized yield 10.76% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.75 over
the past month, $9.30 over the past six months and $8.91 over the past
year, you can compare the fund's income over these three periods.
The 30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30 days.
This figure shows you the yield characteristics of the fund's investments
at the end of the period. It also helps you compare funds from different
companies on an equal basis. It does not reflect the cost of hedging and
other currency gains and losses.
FUND TALK: THE MANAGER'S OVERVIEW

FUND FACTS
GOAL: high current income,
followed by capital
appreciation, by investing in
debt securities and other
instruments of issuers in
emerging markets around
the world
START DATE: May 4, 1993
SIZE: as of December 31, 1995,
more than $176 million
MANAGER: John Carlson,
since June 1995; manager,
Fidelity Advisor Strategic
Income since October
1995; manager, Fidelity
Advisor Emerging Markets
Income since June 1995;
joined Fidelity in June 1995
(checkmark)
JOHN CARLSON ON BRADY BONDS:
"Brady bonds - which are
named after former Bush
administration Treasury
Secretary Nicholas Brady -
are U.S. dollar-denominated
bonds of developing
countries. The Brady bond is
a unique security in that it has
an extremely long duration -
or price sensitivity to changes
in interest rates - and
significant credit exposure. Of
course, one is compensated
for its higher risks with a
higher potential return.
"In general, being successful
in emerging markets means
doing your homework. First,
you need to consider a
country's monetary policy,
fiscal policy and economic
reform programs. You also
have to look at the
demographics of the
country. What's the strength
of its local capital markets?
How good is a country's
savings rate or education
level? What are the country's
infrastructure needs? How
fast can it create jobs?"
INVESTMENT CHANGES

TOP COUNTRIES AS OF DECEMBER 31, 1995
(EXCLUDING REPURCHASE AGREEMENTS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

Argentina 25.1 17.3

Brazil 19.8 32.8

Mexico 9.6 6.4

Panama 4.9 1.1

Venezuela 4.8 0.0

TOP COUNTRIES ARE BASED ON THE LOCATION OF THE ISSUER OF EACH SECURITY,
INDICATING WHERE THE FUND IS EXPOSED TO POLITICAL AND CREDIT RISKS. THE
FUND'S LARGEST POSITION AS OF DECEMBER 31, 1995, WAS IN SECURITIES OF
ARGENTINEAN ISSUERS.
TOP FIVE FIXED-INCOME SECURITIES AS OF DECEMBER 31, 1995
(BY ISSUER, WITH MATURITIES % OF FUND'S % OF FUND'S
OF MORE THAN ONE YEAR) INVESTMENTS INVESTMENTS IN
THESE SECURITIES
6 MONTHS AGO

Argentina Republic (various issues) 22.7 17.3

Brazil Federative Republic (various issues) 18.3 22.6

Mexican Government (various issues) 7.7 4.4

Republic of Panama (various issues) 4.9 1.2

Republic of Venezuela (various issues) 4.8 0.0

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1995
6 MONTHS AGO

Years 13.5 12.8

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM
EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR AMOUNT.
ASSET ALLOCATION
AS OF DECEMBER 31, 1995 AS OF JUNE 30, 1995
Row: 1, Col: 1, Value: 11.9
Row: 1, Col: 2, Value: 13.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 67.2
Row: 1, Col: 5, Value: 7.9
Row: 1, Col: 1, Value: 22.8
Row: 1, Col: 2, Value: 5.6
Row: 1, Col: 3, Value: 2.1
Row: 1, Col: 4, Value: 65.5
Row: 1, Col: 5, Value: 4.0
Corporate bonds 7.9%
Foreign
government
obligations 67.2%
Stocks 0.0%
Other 13.0%
Short-term
investments 11.9%
Corporate bonds 4.1%
Foreign
government
obligations 67.4%
Stocks 0.1%
Other 5.6%
Short-term
investments 22.8%
INVESTMENTS DECEMBER 31, 1995

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 7.9%
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (J) (NOTE 1)
ARGENTINA - 2.4%
Invergas SA 12 1/2%, 12/16/99 - $ 1,750,000 $ 1,732,500
Sodigas Pampeana SA 10 1/2%, 7/6/99 - 1,500,000 1,470,000
Telecom Argentina Stet-France Telecom SA 12%,
11/15/02 (e) B1 1,070,000 1,139,550
4,342,050
BRAZIL - 0.3%
Abril SA 12%, 10/25/03 (e) - 600,000 603,750
COLOMBIA - 0.6%
Comunicaciones Celulares SA Unit 0%,
11/15/03 (e)(k) B3 2,090,000 1,186,075
CZECH REPUBLIC - 1.8%
BV Finance of Prague 11%, 6/23/97 AAA CZK 45,000,000 1,698,511
Coca-Cola Amatil Ltd. 12%,
10/25/03 A2 CZK 40,800,000 1,530,038
3,228,549
INDONESIA - 1.2%
Tjiwi Kimia International Finance Co.
13 1/4%, 8/1/01 Ba3 2,050,000 2,214,000
MEXICO - 0.8%
Empaques Ponderosa SA euro
8 3/4%, 12/6/96 - 420,000 411,075
Grupo Condumex SA de CV:
6 1/4%, 7/27/96 (e) - 500,000 490,000
euro 6 1/4%, 7/27/96 - 620,000 607,600
1,508,675
SOUTH AFRICA - 0.8%
ESKOM (Electricity Supply Commission)
12%, 5/1/96 Baa3 ZAR 5,400,000 1,468,984
TOTAL NONCONVERTIBLE BONDS
(Cost $14,303,454) 14,552,083
FOREIGN GOVERNMENT OBLIGATIONS (I) - 67.2%
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (J) (NOTE 1)
ARGENTINA - 22.7%
Argentina Republic:
BOCON (g):
5.8359%, 4/1/01 B1 $ 8,753,499 $ 6,864,730
3.5916%, 9/1/02 - ARS 3,023,680 1,627,744
Brady euro:
floating rate bond 6.8125%, 3/31/05 (g) B2 20,100,000 14,321,250
par 5%, 3/31/23 (d) B2 33,325,000 19,016,078
41,829,802
BRAZIL - 19.5%
Brazil Federative Republic Brady:
eligible interest 6 7/8%, 4/15/06 (g) B1 15,500,000 10,675,625
debt conversion bond euro 6 7/8%,
4/15/12 (g) B1 15,750,000 8,977,500
capitalization bond 8%, 4/15/14 B1 20,693,595 11,834,150
par 4 1/4%, 4/15/24 (d) B1 4,250,000 2,255,156
Siderurgica Brasileiras SA inflation indexed
6%, 8/15/99 (h) - BRL 15,026,000 2,170,488
35,912,919
BULGARIA - 3.4%
Republic of Bulgaria Brady discount 6 3/4%,
7/28/24 (g) - 11,850,000 6,295,313
ECUADOR - 1.9%
Republic of Ecuador Brady par euro 3%,
2/28/25 (d) - 9,750,000 3,510,000
MEXICO - 8.8%
Mexican Government Brady:
discount 6.54688%, 12/31/19 (g) Ba3 2,200,000 1,588,125
par 6 1/4%, 12/31/19 Ba2 19,300,000 12,569,332
Mexico Value oil recovery rights (a) - 20,686,000 -
United Mexican States 0%, 11/27/96
(return indexed to higher of 28-day Cetes rate
or 1-year LIBOR) (e) - 2,000,000 2,037,500
16,194,957
PANAMA - 1.2%
Republic of Panama interest reduction bond (e)(f) - 4,650,000 2,104,125
FOREIGN GOVERNMENT OBLIGATIONS (I) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (J) (NOTE 1)
PHILIPPINES - 2.8%
Philippine Government Brady par 6 1/4%,
12/1/17 (d) Ba2 $ 7,000,000 $ 5,232,500
POLAND - 1.3%
Polish Government Treasury Bills:
0%, 9/4/96 - PLN 3,500,000 1,216,731
0%, 10/30/96 - PLN 3,350,000 1,126,540
2,343,271
SOUTH AFRICA - 0.8%
Republic of South Africa 12%, 2/28/05 Baa ZAR 6,000,000 1,462,891
VENEZUELA - 4.8%
Republic of Venezuela oil recovery rights (a) - 31,750 -
Republic of Venezuela Brady:
debt conversion bond 7 3/8%, 12/18/07 (g) Ba2 9,500,000 5,189,375
par A euro 6 3/4%, 3/31/20 Ba2 6,350,000 3,627,438
8,816,813
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $116,789,416) 123,702,591
PURCHASED BANK DEBT - 13.0%
MOROCCO - 3.4%
Kingdom of Morocco, Series A loan participation
6.59375%, 1/1/09 (f)(g) 9,300,000 6,231,000
PANAMA - 3.7%
Republic of Panama loan participation refinanced
under credit agreement (a)(f) 9,250,000 6,845,000
PERU - 1.4%
Republic of Peru loan participation under
1983 agreement (a)(f) 3,390,000 2,461,988
RUSSIA - 4.5%
Bank for Foreign Economic Affairs of the
USSR (Vnesheconombank) loan
participation (a)(f) 24,550,000 8,347,000
TOTAL PURCHASED BANK DEBT
(Cost $18,951,798) 23,884,988
COMMERCIAL PAPER - 0.5%
PRINCIPAL VALUE
AMOUNT (J) (NOTE 1)
INDONESIA - 0.5%
Tjiwi Kimia International Finance Co.
BV 0%, 1/24/96 (b)
(Cost $885,794) IDR 2,000,000 $ 865,472
REPURCHASE AGREEMENTS - 11.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.88%
dated 12/29/95 due 1/2/96 $ 20,972,693 20,959,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $171,889,462) $ 183,964,134
CURRENCY ABBREVIATIONS
ARS - Argentine peso
BRL - Brazilian real
CZK - Czech koruna
IDR - Indonesian rupiah
PLN - Polish zloty
ZAR - South African rand
LEGEND
1. Non-income producing
2. Principal amount in thousands.
3. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
4. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $7,561,000 or 4.3% of net
assets.
6. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. Principal amount shown is original face amount and does not reflect the
inflation adjustments.
9. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
10. Principal amount is stated in United States dollars unless otherwise
noted.
11. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 0.8% AAA, AA, A 1.7%
Baa 1.6% BBB 0.8%
Ba 16.3% BB 33.7%
B 40.9% B 20.7%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 25.5% including long-term debt
categorized as other securities. FMR has determined that unrated debt
securities that are lower quality account for 23.4% of the total value of
investment in securities.
INCOME TAX INFORMATION
At December 31, 1995, the aggregate cost of investment securities for
income tax purposes was $172,440,068. Net unrealized appreciation
aggregated $11,524,066, of which $11,634,469 related to appreciated
investment securities and $110,403 related to depreciated investment
securities.
At December 31, 1995, the fund had a capital loss carryforward of
approximately $51,234,000 of which $6,130,000, and $45,104,000 will expire
on December 31, 2002, and 2003, respectively.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment in Securities (Unaudited)
Basic Industries 1.5%
Commercial Paper 0.5
Finance 0.9
Government Obligations 67.2
Media & Leisure 0.3
Nondurables 0.8
Purchased Bank Debt 13.0
Repurchase Agreements 11.4
Technology 0.6
Utilities 3.8
100.0%
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1995

ASSETS

Investment in securities, at value (including repurchase $ 183,964,134
agreements of $20,959,000) (cost $171,889,462) -
See accompanying schedule

Cash 910

Receivable for investments sold 551,015
Regular delivery

Delayed delivery 228,750

Interest receivable 2,980,501

Redemption fees receivable 127

TOTAL ASSETS 187,725,437

LIABILITIES

Payable for investments purchased $ 1,980,452
Regular delivery

Delayed delivery 8,424,375

Payable for fund shares redeemed 339,096

Distributions payable 319,699

Accrued management fee 97,288

Other payables and accrued expenses 65,050

TOTAL LIABILITIES 11,225,960

NET ASSETS $ 176,499,477

Net Assets consist of:

Paid in capital $ 210,868,414

Undistributed net investment income 5,102,448

Accumulated undistributed net realized gain (loss) on (51,543,166)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 12,071,781
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 17,735,689 shares outstanding $ 176,499,477

NET ASSET VALUE, offering price and redemption price per $9.95
share ($176,499,477 (divided by) 17,735,689 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1995

INVESTMENT INCOME $ 17,640,398
Interest

Less foreign taxes withheld (131,315)

TOTAL INCOME 17,509,083

EXPENSES

Management fee $ 1,149,541

Transfer agent 432,480
Fees

Redemption fees (19,917)

Accounting fees and expenses 98,972

Non-interested trustees' compensation 824

Custodian fees and expenses 141,087

Registration fees 53,134

Audit 60,305

Legal 1,142

Interest 704

Miscellaneous 6,899

TOTAL EXPENSES 1,925,171

NET INVESTMENT INCOME 15,583,912

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (29,536,984)

Foreign currency transactions (1,574,837) (31,111,821)

Change in net unrealized appreciation (depreciation) on:

Investment securities 27,966,972

Assets and liabilities in foreign currencies (129,993) 27,836,979

NET GAIN (LOSS) (3,274,842)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 12,309,070
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994

INCREASE (DECREASE) IN NET ASSETS

Operations $ 15,583,912 $ 13,936,916
Net investment income

Net realized gain (loss) (31,111,821) (14,958,712)

Change in net unrealized appreciation (depreciation) 27,836,979 (36,994,200)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,309,070 (38,015,996)
FROM OPERATIONS

Distributions to shareholders (16,705,028) (11,818,195)
From net investment income

In excess of net investment income - (1,279,408)

From net realized gain - (4,749,230)

TOTAL DISTRIBUTIONS (16,705,028) (17,846,833)

Share transactions 196,063,449 898,437,029
Net proceeds from sales of shares

Reinvestment of distributions 15,014,270 15,556,080

Cost of shares redeemed (209,771,056) (965,609,596)

Redemption fees 474,977 -

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,781,640 (51,616,487)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (2,614,318) (107,479,316)

NET ASSETS

Beginning of period 179,113,795 286,593,111

End of period (including under (over) distribution of net $ 176,499,477 $ 179,113,795
investment income of $5,102,448 and ($323,538),
respectively)

OTHER INFORMATION
Shares

Sold 22,179,711 81,572,692

Issued in reinvestment of distributions 1,656,239 1,354,349

Redeemed (23,674,517) (87,272,908)

Net increase (decrease) 161,433 (4,345,867)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED DECEMBER 31, MAY 4, 1993
(COMMENCEMENT

OF OPERATIONS) TO
DECEMBER 31,

1995 1994 1993

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.190 $ 13.070 $ 10.000

Income from Investment Operations 1.222 .573 E .486 D
Net investment income

Net realized and unrealized gain (loss) (.583) (2.687) 3.302

Total from investment operations .639 (2.114) 3.788

Less Distributions (.916) (.529) (.486)
From net investment income

In excess of net investment income - (.057) (.062)

From net realized gain - (.180) (.170)

Total distributions (.916) (.766) (.718)

Redemption fees added to paid in capital .037 - -

Net asset value, end of period $ 9.950 $ 10.190 $ 13.070

TOTAL RETURN B, C 7.97% (16.55)% 38.84%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 176,499 $ 179,114 $ 286,593

Ratio of expenses to average net assets 1.17% 1.28% 1.24%
F, G A, G

Ratio of net investment income to average 9.51% 5.87% 6.29% A
net assets

Portfolio turnover rate 306% 409% 324% A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E INCLUDES INTEREST EXPENSE OF $.008 PER SHARE.
F INCLUDES INTEREST EXPENSE OF .08% OF AVERAGE NET ASSETS
G FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1995

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity New Markets Income Fund (the fund) is a fund of Fidelity
Investment Trust (the trust) and is authorized to issue an unlimited number
of shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to U.S. federal
income taxes to the extent that it distributes substantially all of its
taxable income for its fiscal year. The fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. The fund
accrues such taxes as applicable. The schedule of investments includes
information regarding income taxes under the caption "Income Tax
Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, foreign currency transactions, market
discount, capital loss carryforwards, and losses deferred due to wash sales
and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable income or
gain remaining at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to 1.00% of the proceeds of the redeemed shares. A
portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS.
The fund may purchase or sell securities on a when-issued or forward
commitment basis. Payment and delivery may take place a month or more after
the date of the transaction. The price of the underlying securities and the
date when the securities will be delivered and paid for are fixed at the
time the transaction is negotiated. The market value of the securities
purchased or sold on a when-issued or forward commitment basis are
identified as such in the fund's schedule of investments. Losses may arise
due to changes in the market value of the underlying securities or if the
counterparty does not perform under the contract.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. The fund is permitted to invest in
loans and loan participations, trade claims or other receivables. These
investments may include standby financing commitments that obligate the
fund to supply additional cash to the borrower on demand. Loan
participations involve a risk of insolvency of the lending bank or other
financial intermediary. At the end of the period, these investments
amounted to $23,884,988 or 13.5% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $411,890,832 and $411,332,603, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1200% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .55%. For the period, the management
fee was equivalent to an annual rate of .70% of average net assets.
The Board of Trustees has approved a new group fee rate schedule with rates
ranging from .1100% to .3700%. Effective January 1, 1996, FMR voluntarily
agreed to implement this new group fee rate schedule as it results in the
same or a lower management fee.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research (Far East) Inc., Fidelity International Investment
Advisors (FIIA), and Fidelity Investments Japan Ltd. In addition, FIIA
entered into a sub-advisory agreement with its subsidiary, Fidelity
International Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the
sub-advisory arrangements, FMR may receive investment advice and research
services and may grant the sub-advisers investment management authority to
buy and sell securities. FMR pays its sub-advisers either a portion of its
management fee or a fee based on costs incurred for these services. FIIA
pays FIIAL U.K. a fee based on costs incurred for either service.
DISTRIBUTION AND SERVICE PLAN.
Pursuant to the Distribution and Service Plan (the Plan), and in accordance
with Rule 12b-1 of the 1940 Act, FMR or the fund's distributor, Fidelity
Distributors Corporation (FDC), an affiliate of FMR, may use their
resources to pay administrative and promotional expenses related to the
sale of the fund's shares. Subject to the approval of the Board of
Trustees, the Plan also authorizes payments to third parties that assist in
the sale of the fund's shares or render shareholder support services. No
payments were made to third parties under the Plan during the period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fee was equivalent to an annual rate of .25% of
average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base
5. BANK BORROWINGS - CONTINUED
rate, as revised from time to time. The maximum loan and the average daily
loan balance during the period for which loans were outstanding amounted to
$2,653,000 and $1,992,000, respectively. The weighted average interest rate
was 6.37%.
6. CONCENTRATION OF RISK
The fund's relatively large investment in countries with limited or
developing capital markets may involve greater risks than investments in
more developed markets and the prices of such investments may be volatile.
The yields of emerging market debt obligations reflect, among other things,
perceived credit risk. The consequences of political, social or economic
changes in these markets may have disruptive effects on the market prices
of the fund's investments and the income they generate, as well as the
fund's ability to repatriate such amounts.
7. LITIGATION.
The fund is engaged in litigation against the obligor on the inflation
adjusted debt of Siderurgica Brasileiras SA, contesting the calculation of
the principal adjustment. The probability of success cannot be predicted
and the amount of recovery cannot be estimated. Any recovery from this
litigation would inure to the benefit of the fund.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Investment Trust and the Shareholders of
Fidelity New Markets Income Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for Moody's and Standard &
Poor's ratings), and the related statements of operations and of changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Fidelity New Markets Income Fund (a
fund of Fidelity Investment Trust) at December 31, 1995, the results of its
operations for the year then ended, and the changes in its net assets and
the financial highlights for the periods indicated in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fidelity New Markets Income Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1995
by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
/s/PRICE WATERHOUSE LLP
Boston, Massachusetts
February 9, 1996
TO CALL FIDELITY

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
Fidelity Investments Japan Limited
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert A. Lawrence, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income Fund
Ginnie Mae Fund
Global Bond Fund
Government Securities Fund
Intermediate Bond Fund
Investment Grade Bond Fund
Mortgage Securities Fund
New Markets Income Fund
Short-Intermediate Government Fund
Short-Term Bond Fund
Short-Term World Bond Fund
Spartan(registered trademark) Ginnie Mae Fund
Spartan Government Bond Fund
Spartan High Income Fund
Spartan Investment Grade Bond Fund
Spartan Limited Maturity
Government Fund
Spartan Long-Term Government
Bond Fund
Spartan Short-Intermediate
Government Fund
Spartan Short-Term Bond Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE