SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-90649)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 70 [X]
and
REGISTRATION STATEMENT (No. 811-4008)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [X]
Fidelity Investment Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
(x) on (December 30, 1996) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule before December 30, 1996.
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY DIVERSIFIED
INTERNATIONAL FUND, FIDELITY INTERNATIONAL VALUE FUND, FIDELITY
OVERSEAS FUND, AND FIDELITY WORLDWIDE FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c,d................................. Performance
..
4a Charter
i.................................
The Funds at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page: The Funds at a Glance; Doing Business
with Fidelity; Charter
Charter
(ii)..............................
(iii)........................... Expenses; Breakdown of Expenses
c................................ Charter
c, Charter; Breakdown of Expenses
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii...............................
*
b...................................
.
Exchange Restrictions; Transaction Details
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
*
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY INTERNATIONAL VALUE
FUND, FIDELITY DIVERSIFIED INTERNATIONAL FUND, FIDELITY OVERSEAS FUND, AND
FIDELITY WORLDWIDE FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. Description of the Trust
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a.............................. *
*
b..................................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with FMR Affiliates
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with FMR Affiliates
i.................................
17a - Portfolio Transactions
d............................
e.............................. *
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with FMR Affiliates
b..............................
*
c.................................
22a.............................. *
b.............................. Performance
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
each fund's most recent financial report and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated December 30,
1996. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is available along with other related materials on the SEC's
Internet Web site (http://www.sec.gov). The SAI is incorporated herein
by reference (legally forms a part of the prospectus). For a free copy of
either document, call Fidelity at 1-800-544-8888.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
IBD-pro-1296
Each of these international funds is an equity fund. Each seeks to increase
the value of your investment over the long-term by investing in securities
around the world.
FIDELITY'S
BROADLY DIVERSIFIED
INTERNATIONAL EQUITY
FUNDS
Fund Trading
Number Symbol
Fidelity International Growth &
Income Fund 305 FIGRX
Fidelity Diversified International
Fund 325 FDIVX
Fidelity International Value
Fund 335 FIVFX
Fidelity Overseas Fund 094 F OS FX
Fidelity Worldwide Fund 318 FWWFX
PROSPECTUS
DECEMBER 30, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly operating
expenses.
FINANCIAL HIGHLIGHTS A summary of each
fund's financial data.
PERFORMANCE How each fund has done over
time.
THE FUNDS CHARTER How each fund is organized.
IN DETAIL
INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
BREAKDOWN OF EXPENSES How operating
costs are calculated and what they include.
YOUR DOING BUSINESS WITH FIDELITY
ACCOUNT
TYPES OF ACCOUNTS Different ways to set up
your account, including tax-sheltered
retirement plans.
HOW TO BUY SHARES Opening an account
and making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER DIVIDENDS, CAPITAL GAINS, AND TAXES
AND
ACCOUNT
POLICIES
TRANSACTION DETAILS Share price
calculations and the timing of purchases and
redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
These broadly diversified funds do not focus on any one region or country.
Instead, they span the globe looking for investments that fit their
criteria.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
INTERNATIONAL GROWTH & INCOME FUND
GOAL: Growth of capital and current income.
STRATEGY: Invests mainly in foreign securities. While the fund
focuses on equity securities, it also invests a significant portion of its
assets in debt securities.
SIZE: As of October 31, 1996, the fund had over $ 1.0 billion
in assets.
DIVERSIFIED INTERNATIONAL FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in foreign equity securities that are determined,
through both technical and fundamental analysis, to be undervalued compared
to others in their industries and countries.
SIZE: As of October 31, 1996, the fund had over $ 665
m illion in assets.
INTERNATIONAL VALUE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of foreign issuers with
valuable assets or that FMR believes are undervalued in the marketplace.
SIZE: As of October 31, 1996, the fund had over $ 270
m illion in assets.
OVERSEAS FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities outside the U.S.
SIZE: As of October 31, 1996, the fund had over $ 3.1 billion
in assets.
WORLDWIDE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities issued by companies of all
sizes anywhere in the world, including the U.S.
SIZE: As of October 31, 1996, the fund had over $877 m illion
in assets.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who want to pursue their
investment goals in markets outside the United States. By including
international investments in your portfolio, you can achieve additional
diversification and participate in growth opportunities around the world.
However, it is important to note that investments in foreign securities
involve risks in addition to those of U.S. investments.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other company,
political, or economic news both here and abroad. In the short-term, stock
prices can fluctuate dramatically in response to these factors. Over
time, however, stocks have shown greater growth potential than other types
of securities. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations. Bond values
fluctuate based on changes in interest rates and in the credit quality of
the issuer.
In addition to those general risks, international investing involves
different or increased risks. The performance of international funds
depends upon currency values, the political and regulatory environment, and
overall economic factors in the countries in which a fund invests. These
risks are particularly significant for funds that invest in emerging
markets. See "INVESTMENT PRINCIPLES AND RISKS" on page .
Broadly diversified funds could be appropriate for investors first entering
the international markets or those who are interested in broad
participation in multiple markets around the world. When you sell your
shares, they may be worth more or less than what you paid for them. By
themselves, the funds do not constitute a balanced investment
plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of a fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500. See
"Transaction Details" page , for an explanation of how and when
these charges apply.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee that, for Diversified International,
International Value, and Overseas , varies based on its performance.
Each fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and financial
reports. A fund's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see page ).
The following figures are based on historical expenses, and are calculated
as a percentage of average net assets. A portion of the brokerage
commissions that the funds pay is used to reduce fund expenses. In
addition, each fun d has entered into arrangements with its custodian
and transfer agent whereby interest earned on uninvested cash balances is
used to reduce custodian and transfer agent expenses. Including these
reductions, the total operating expenses presented in the table would have
been as follows:
Fund
International 1.14
Growth & %
Income
Diversified 1.27
International %
International 1.26
Value %
Overseas 1.12
%
Worldwide 1.18
%
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, the table below indicates how much you would
pay in total expenses if you close your account after the number of years
indicated .
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
Transaction expenses Operating expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
INTERNATI Maximum None Managem .76% After 1 $ 12
ONAL sales charge ent fee year
GROWTH on
& purchases
INCOME and
FUND reinvested
distributions
Deferred None 12b-1 fee None After 3 $ 37
sales charge years
on
redemptions
Exchange None Other .40% After 5 $ 64
fee expenses years
Annual $12.0 Total fund 1.16 After 10 $ 141
account 0 operating % years
maintenance expenses
fee
(for
accounts
under
$2,500)
DIVERSIFI Maximum None Managem .85 % After 1 $ 13
ED sales charge ent fee year
INTERNATI on
ONAL purchases
FUND and
reinvested
distributions
Deferred None 12b-1 fee None After 3 $ 41
sales charge years
on
redemptions
Exchange None Other .44 % After 5 $ 71
fee expenses years
Annual $12.0 Total fund 1.29 After 10 $ 156
account 0 operating % years
maintenance expenses
fee
(for
accounts
under
$2,500)
INTERNATI Maximum None Managem .79 % After 1 $ 13
ONAL sales charge ent fee year
VALUE on
FUND purchases
and
reinvested
distributions
Deferred None 12b-1 fee None After 3 $ 41
sales charge year s
on
redemptions
Exchange None Other .49 % After 5 $ 70
fee expenses years
Annual $12.0 Total fund 1.28 After 10 $ 155
account 0 operating % years
maintenance expenses
fee
(for
accounts
under
$2,500)
OVERSEA Maximum None Managem .76 % After 1 $ 12
S FUND sales charge ent fee year
on
purchases
and
reinvested
distributions
Deferred None 12b-1 fee None After 3 $ 36
sales charge years
on
redemptions
Exchange None Other .38 % After 5 $ 63
fee expenses years
Annual $12.0 Total fund 1.14 After 10 $ 139
account 0 operating % years
maintenance expenses
fee
(for
accounts
under
$2,500)
WORLDWI Maximum None Managem .76 % After 1 $ 12
DE FUND sales charge ent fee year
on
purchases
and
reinvested
distributions
Deferred None 12b-1 fee None After 3 $ 38
sales charge years
on
redemptions
Exchange None Other .43 % After 5 $ 65
fee expenses years
Annual $12.0 Total fund 1.19 After 10 $ 144
account 0 operating % years
maintenance expenses
fee
(for
accounts
under
$2,500)
</TABLE>
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds' Annual Report and have
been audited b y Coopers & Lybrand L.L.P. , independent accountants.
Their reports on the financial statements and financial highlights are
included in the Annual Report. The financial statements and financial
highlights are incorporated by reference into (are legally a part of) the
funds' Statement of Additional Information.
INTERNATIONAL GROWTH & INCOME
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Selected
Per-Share Data and
Ratios
2.Years 1996 1995 1994I 1993 1992 1991 1990 1989 1988 1987L
ended
October
31
3.Net $ 17.83 $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81 $ 10.42 $ 10.00
asset
value,
beginning
of period
4.Income
from
Investme
nt
Operation
s
5. Net .54 .54 .38D .14D .31 .30B .25 .30 .16 .09
investme
nt income
6. Net 1.32 .28H .02 4.14 (.84) .41 .75 .96 1.26 .39
realized
and
unrealize
d gain
(loss)
7. Total 1.86 .82 .40 4.28 (.53) .71 1.00 1.26 1.42 .48
from
investme
nt
operation
s
8.Less
Distributio
ns
9. From (.60) (.21) (.03) (.31) (.16) (.38) (.16) (.13) -- (.06)
net
investme
nt income
10. From -- (.32) (.05) (.01)C (.01)C (.05)C -- (.07)C (.03)C --
net
realized
gain
11. In -- -- (.03) -- -- -- -- -- -- --
excess of
net
realized
gain
12. Total (.60) (.53) (.11) (.32) (.17) (.43) (.16) (.20) (.03) (.06)
distributio
ns
13.Net $ 19.09 $ 17.83 $ 17.54 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81 $ 10.42
asset
value,
end of
period
14.Total 10.66% 4.95% 2.33% 32.94%N (3.81)%N 5.43%N 7.79%N 10.85%N 13.68%N 4.69%N
return F,G
15.Net $ 1,007,0 $ 903,235 $ 1,367,9 $ 1,002,8 $ 60,007 $ 49,738 $ 35,380 $ 26,333 $ 31,662 $ 40,822
assets, 76 38 47
end of
period
(000
omitted)
16.Ratio 1.16% 1.18% 1.21% 1.52% 1.62% 1.89% 1.98% 1.92%E 2.58%M 2.72%A
of
expenses
to
average
net
assets
17.Ratio 1.14%J 1.18% 1.21% 1.52% 1.62% 1.89% 1.98% 1.92% 2.58% 2.72%A
of
expenses
to
average
net
assets
after
expense
reduction
s
18.Ratio 2.76% 2.98% 2.16% .87% 2.78% 2.86% 2.31% 1.98% 1.08% 1.23%A
of net
investme
nt income
to
average
net
assets
19.Portfoli 95% 141% 173% 24% 76% 117% 102% 147% 112% 158%A
o turnover
rate
Average $ .0065
commissi
on rateK
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A ANNUALIZED
B INCLUDES $.02 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND AND
INTEREST PAYMENTS.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING
DURING THE PERIOD.
E FMR AND FSC AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT
THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE
PERIODS SHOWN.
G TOTAL RETURNS DO NOT INCLUDE THE DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES AND
REPURCHASES OF FUND SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
I EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2 "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR
REDUCED A PORTION OF THE FUND'S EXPENSES.
K FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING
ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
L FROM DECEMBER 31, 1986 (COMMENCEMENT OF OPERATIONS) TO OCTOBER
31, 1987.
M LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
N TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
</TABLE>
DIVERSIFIED INTERNATIONAL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
20.Selected
Per-Share
Data and
Ratios
21.Years 1996 1995 1994 1993 1992E
ended
October 31
22.Net asset $ 12.73 $ 12.46 $ 11.32 $ 8.46 $ 10.00
value,
beginning of
period
23.Income
from
Investment
Operations
24. Net .15 .22 .05 .07 .07
investment
income
25. Net 2.13 .47 1.20 2.89 (1.61)
realized and
unrealized
gain (loss)
26. Total 2.28 .69 1.25 2.96 (1.54)
from
investment
operations
27.Less
Distributions
28. From (.22) (.03) (.01) (.10) --
net
investment
income
29. From (.41) (.39) (.10) -- --
net realized
gain
30. Total (.63) (.42) (.11) (.10) --
distributions
31.Net asset $ 14.38 $ 12.73 $ 12.46 $ 11.32 $ 8.46
value, end of
period
32.Total 18.66 6.02 11.14 35.38 (15.40)%
returnB,C % % % %
33.Net $ 665,49 $ 295,01 $ 351,15 $ 255,02 $ 36,439
assets, end 2 7 2 9
of period
(000
omitted)
34.Ratio of 1.29 1.13 1.25 1.47 2.00%A,
expenses to % % % %
average net
assets
35.Ratio of 1.27 1.12 1.25 1.47 2.00%A
expenses to %G %G % %
average net
assets after
expense
reductions
36.Ratio of 1.53 1.55 .96 .84 1.38%A
net % % % %
investment
income to
average net
assets
37.Portfolio 94 101 89 56 56%A
turnover rate % % % %
Average $ .0121
commission
rateH
</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 FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
E FROM DECEMBER 27, 1991 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1992.
F EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2
"DETERMINATION, DISCLOSURE AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
INTERNATIONAL VALUE
38.Selected
Per-Share
Data and
Ratios
39.Years 1996 1995D
ended
October 31
40.Net asset $ 10.63 $ 10.00
value,
beginning of
period
41.Income
from
Investment
Operations
42. Net .16F .11B
investment
income
43. Net .85 .52
realized and
unrealized
gain (loss)
44. Total 1.01 .63
from
investment
operations
45.Less
Distributions
46. From $ (.01) $ --
net
investment
income
47. From $ (.30) $ --
net realized
gain
48. Total $ (.31) $ --
distributions
49.Net asset $ 11.33 $ 10.63
value, end of
period
50.Total 9.64% 6.30%
returnA
51.Net $ 270,865 $ 56,828
assets, end
of period
(000
omitted)
52.Ratio of 1.28% 1.72%
expenses to
average net
assets
53.Ratio of 1.26% 1.72%
expenses to C
average net
assets after
expense
reductions
54.Ratio of 1.74% 1.08%
net
investment
income to
average net
assets
55.Portfolio 71% 109%
turnover rate
Average $ .0264
commission
rateE
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
D FROM NOVEMBER 1, 1994 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1995.
E FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
F INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB
WHICH AMOUNTED TO $.04 PER SHARE.
OVERSEAS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
56.Sel
ected
Per-Sh
are
Data
and
Ratios
57.Yea 1996 1995 1994F 1993 1992 1991 1990 1989 1988 1987
rs
ended
Octobe
r 31
58.Net $ 28.57 $ 29.17 $ 27.16 $ 21.96 $ 26.92 $ 27.4 $ 26.30 $ 25.3 $ 30.90 $ 26.91
asset 7 0
value,
beginni
ng of
period
59.Inco
me
from
Invest
ment
Operati
ons
60. N .48I .31 .18 .27 .46 .54 .35 .30 .30 (.19)
et
invest
ment
income
61. N 2.72 (.44) 2.26 7.40 (3.82) .45 2.16 1.28 2.34 7.49
et
realize
d and
unreali
zed
gain
(loss)
62. To 3.20 (.13) 2.44 7.67 (3.36) .99 2.51 1.58 2.64 7.30
tal
from
invest
ment
operati
ons
63.Les
s
Distrib
utions
64. Fr (.34) (.02) (.15) (.37) (.44) (.46) (.21) (.24) -- --
om net
invest
ment
income
65. In -- -- (.17) -- -- -- -- -- -- --
excess
of net
invest
ment
income
66. Fr (.35) (.45) (.11) (2.10) (1.16) (1.08) (1.13) (.34) (8.24) (3.31)
om net
realize
d gain
67. To (.69) (.47) (.43) (2.47) (1.60) (1.54) (1.34) (.58) (8.24) (3.31)
tal
distribu
tions
68.Net $ 31.08 $ 28.57 $ 29.17 $ 27.16 $ 21.96 $ 26.9 $ 27.47 $ 26.3 $ 25.30 $ 30.90
asset 2 0
value,
end of
period
69.Tota 11.41% (.34%) 9.13%E 39.01% (13.05) 4.12% 9.58%E 6.40% 11.62% 28.74%E
l E %E E E E
returnD
70.Net $ 3,114, $ 2,276, $ 2,283, $ 1,490, $ 801,8 $ 969,4 $ 1,011, $ 876,5 $ 1,149, $ 1,393,4
assets, 625 306 211 666 45 36 152 67 763 42
end of
period
(000
omitted
)
71.Rati 1.14% 1.05% 1.24% 1.27% 1.52% 1.53% 1.26% 1.06% 1.38% 1.71%
o of
expens
es to
averag
e net
assets
72.Rati 1.12%G 1.05% 1.24% 1.27% 1.52% 1.53% 1.26% 1.06% 1.38% 1.71%
o of
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
73.Rati 1.74% 1.78% .90% 1.00% 1.78% 2.19% 1.34% 1.06% 1.21% (.53)%
o of net
investm
ent
income
to
averag
e net
assets
74.Port 82% 49% 49% 64% 122% 132% 96% 100% 115% 122%
folio
turnov
er rate
Averag $ .0134
e
commi
ssion
rateH
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
B INCLUDES $.08 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY
WITHHELD ON DIVIDEND AND
INTEREST PAYMENTS.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
D THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE
PERIODS SHOWN.
E TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
F EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2 "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF
CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR
REDUCED A PORTION OF THE FUND'S EXPENSES.
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT
MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX
OF TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO
AB WHICH AMOUNTED TO $.08
PER SHARE.
</TABLE>
WORLDWIDE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
75.Sel
ected
Per-Sh
are
Data
and
Ratios
76.Yea 1996 1995 1994 1993 1992 1991 1990F
rs
ended
Octobe
r 31
77.Net $ 13.32 $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95 $ 10.00
asset
value,
beginni
ng of
period
78.Inco
me
from
Invest
ment
Operati
ons
79. N .22 .17 .08 .11 .20 .21 .05
et
invest
ment
income
80. N 1.79 (.08) 1.37 3.28 (.08) .53 (1.10)
et
realize
d and
unreali
zed
gain
(loss)
81. To 2.01 .09 1.45 3.39 .12 .74 (1.05)
tal
from
invest
ment
operati
ons
82.Les
s
Distrib
utions
83. Fr (.15) (.16) (.10) (.24) (.10) (.08) --
om net
invest
ment
income
84. Fr -- (.57) (.15) (.02) -- -- --
om net B
realize
d gain
85. To (.15) (.73) (.25) (.26) (.10) (.08) --
tal
distribu
tions
86.Net $ 15.18 $ 13.32 $ 13.96 $ 12.76 $ 9.63 $ 9.61 $ 8.95
asset
value,
end of
period
87.Tota 15.25% .95 11.55 36.10 1.32 8.33 (10.50)%J
l % % %J %J %J
returnC
,D
88.Net $ 877,218 $ 659,045 $ 748,738 $ 287,278 $ 103,627 $ 105,029 $ 94,851
assets,
end of
period
(000
omitted
)
89.Rati 1.19% 1.17 1.32 1.40 1.51 1.69 2.00%A,
o of % % % % % E
expens
es to
averag
e net
assets
90.Rati 1.18% 1.16 1.32 1.40 1.51 1.69 2.00%A
o of H %H % % % %
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
91.Rati 1.71% 2.05 1.40 1.99 2.02 2.19 2.09%A
o of % % % % %
net
invest
ment
income
to
averag
e net
assets
92.Port 49% 70 69 57 130 129 123%A
folio % % % % %
turnov
er rate
Averag $ .0003
e
commi
ssion
rateI
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
A ANNUALIZED
B INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE PERIOD. WITHOUT
THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOLD HAVE BEEN HIGHER.
F FROM MAY 30, 1990 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1990.
G EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS
A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX DIFFERENCES.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE
ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
J TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
</TABLE>
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Each fund's fiscal year runs from November 1 through October 31. The tables
below show each fund's performance over past fiscal years compared to
different measures, including a comparative index and a competitive funds
average. The charts on and present calendar year performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal periods ended October 31 Average Annual Total Return Cumulative Total Return
Past 1 year Past 5 years Past 10 Past 1 year Past 5 years Past 10
Years/ Years/
Life of fund Life of fund
INTERNATION 10.66% 8.73%E 8.72%A 10.66% 51.96%E 127.83%A
AL GROWTH ,E,G ,E,G
& INCOME
FUND F
Morgan 10.47% 7.65% 8.30%A 10.47% 44.54% 119.26%A
Stanley
Capital
Internationa
l EAFE
Index
Lipper 10.73% 9.36% n/a 10.73% 57.53% n/a
Internationa
l Funds
Average
DIVERSIFIED 18.66% n/a 10.19%B 18.66% n/a 60.15%B
INTERNATION ,G ,G
AL FUND
Morgan 10.69% n/a 9.38%B 10.69% n/a 54.47%B
Stanley
Capital
Internationa
l
GDP-Weigh
ted EAFE
Index
Lipper 10.73% n/a n/a 10.73% n/a n/a
Internationa
l Funds
Average
INTERNATION 9.64% n/a 7.95%C 9.64% n/a 16.55%C
AL VALUE
FUND
Morgan 10.47% n/a 4.90%C 10.47% n/a 10.06%C
Stanley
Capital
Internationa
l EAFE
Index
Lipper 10.73% n/a n/a 10.73% n/a n/a
Internationa
l Funds
Average
OVERSEAS 11.41% 7.93%E 9.83%E 11.41% 46.46%E 155.47%E
FUND
Morgan 10.47% 7.65% 9.31% 10.47% 44.54% 143.55%
Stanley
Capital
Internationa
l EAFE
Index
Lipper 10.73% 9.36% 9.98% 10.73% 57.53% 166.32%
Internationa
l Funds
Average
WORLDWIDE 15.25% 12.35%E 8.95%D 15.25% 78.98%E 73.52%D
FUND ,E,G ,E,G
Morgan 16.30% 10.53% 8.60%D 16.30% 64.98% 69.99%D
Stanley
Capital
Internationa
l World
Index
Lipper 15.52% 11.00% n/a 15.52% 69.58% n/a
Global
Funds
Average
</TABLE>
A FROM DECEMBER 31, 1986
B FROM DECEMBER 27, 1991
C FROM NOVEMBER 1, 1994
D FROM MAY 30, 1990
E PREVIOUSLY, THE FUND IMPOSED A SALES CHARGE. IF THIS SALES CHARGE WERE
TAKEN INTO ACCOUNT, TOTAL RETURNS WOULD HAVE BEEN LOWER.
F TOTAL RETURNS DO NOT INCLUDE THE DEFERRED SALES CHARGE OF 1% UPON
REDEMPTION ON SHARES PURCHASED PRIOR TO OCTOBER 12, 1990.
G IF FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THESE PERIODS,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
1. EXAMPLE: Mountain charts illustrate the growth of a hypothetical
investment over time. For International Growth & Income, Diversified
International, International Value, and Worldwide Funds, the charts
below show the growth in value of a $10,000 investment made in each fund on
its start date through October 31, 1996. For Overseas Fund, the chart below
shows the growth in value of a $10,000 investment over the past ten fiscal
years.
INTERNATIONAL GROWTH & INCOME FUND
ASSET MANAGER: GROWTH
Fiscal years 1987 1990 1996
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10670.0
Row: 3, Col: 1, Value: 11140.0
Row: 4, Col: 1, Value: 11620.0
Row: 5, Col: 1, Value: 12070.0
Row: 6, Col: 1, Value: 12150.0
Row: 7, Col: 1, Value: 12269.85
Row: 8, Col: 1, Value: 12780.68
Row: 9, Col: 1, Value: 13131.25
Row: 10, Col: 1, Value: 13241.61
Row: 11, Col: 1, Value: 10468.71
Row: 12, Col: 1, Value: 10197.45
Row: 13, Col: 1, Value: 10832.65
Row: 14, Col: 1, Value: 10449.73
Row: 15, Col: 1, Value: 10923.34
Row: 16, Col: 1, Value: 11396.96
Row: 17, Col: 1, Value: 11699.26
Row: 18, Col: 1, Value: 11548.11
Row: 19, Col: 1, Value: 11417.11
Row: 20, Col: 1, Value: 11417.11
Row: 21, Col: 1, Value: 10852.81
Row: 22, Col: 1, Value: 11245.8
Row: 23, Col: 1, Value: 11900.8
Row: 24, Col: 1, Value: 12112.42
Row: 25, Col: 1, Value: 12085.31
Row: 26, Col: 1, Value: 12310.82
Row: 27, Col: 1, Value: 12351.82
Row: 28, Col: 1, Value: 12351.82
Row: 29, Col: 1, Value: 12659.34
Row: 30, Col: 1, Value: 12300.57
Row: 31, Col: 1, Value: 12341.57
Row: 32, Col: 1, Value: 13510.13
Row: 33, Col: 1, Value: 13325.62
Row: 34, Col: 1, Value: 13858.64
Row: 35, Col: 1, Value: 13192.36
Row: 36, Col: 1, Value: 13684.38
Row: 37, Col: 1, Value: 14396.16
Row: 38, Col: 1, Value: 14147.23
Row: 39, Col: 1, Value: 13649.38
Row: 40, Col: 1, Value: 13639.01
Row: 41, Col: 1, Value: 13607.9
Row: 42, Col: 1, Value: 14489.5
Row: 43, Col: 1, Value: 14945.87
Row: 44, Col: 1, Value: 15640.78
Row: 45, Col: 1, Value: 14302.81
Row: 46, Col: 1, Value: 12923.35
Row: 47, Col: 1, Value: 14219.84
Row: 48, Col: 1, Value: 13898.31
Row: 49, Col: 1, Value: 13931.49
Row: 50, Col: 1, Value: 14424.45
Row: 51, Col: 1, Value: 15238.91
Row: 52, Col: 1, Value: 14692.37
Row: 53, Col: 1, Value: 14917.41
Row: 54, Col: 1, Value: 14895.98
Row: 55, Col: 1, Value: 14177.97
Row: 56, Col: 1, Value: 14670.93
Row: 57, Col: 1, Value: 14617.35
Row: 58, Col: 1, Value: 15088.88
Row: 59, Col: 1, Value: 14992.43
Row: 60, Col: 1, Value: 14574.48
Row: 61, Col: 1, Value: 15051.28
Row: 62, Col: 1, Value: 15029.58
Row: 63, Col: 1, Value: 15051.28
Row: 64, Col: 1, Value: 14562.96
Row: 65, Col: 1, Value: 15203.21
Row: 66, Col: 1, Value: 15886.86
Row: 67, Col: 1, Value: 15734.94
Row: 68, Col: 1, Value: 15224.91
Row: 69, Col: 1, Value: 15496.2
Row: 70, Col: 1, Value: 15235.76
Row: 71, Col: 1, Value: 14421.88
Row: 72, Col: 1, Value: 14389.33
Row: 73, Col: 1, Value: 14548.43
Row: 74, Col: 1, Value: 14681.8
Row: 75, Col: 1, Value: 15081.91
Row: 76, Col: 1, Value: 16204.44
Row: 77, Col: 1, Value: 17104.69
Row: 78, Col: 1, Value: 17504.8
Row: 79, Col: 1, Value: 17271.4
Row: 80, Col: 1, Value: 17849.33
Row: 81, Col: 1, Value: 18782.92
Row: 82, Col: 1, Value: 18660.67
Row: 83, Col: 1, Value: 19171.92
Row: 84, Col: 1, Value: 18516.18
Row: 85, Col: 1, Value: 19652.02
Row: 86, Col: 1, Value: 20681.04
Row: 87, Col: 1, Value: 20311.94
Row: 88, Col: 1, Value: 19226.99
Row: 89, Col: 1, Value: 19484.25
Row: 90, Col: 1, Value: 19842.17
Row: 91, Col: 1, Value: 19361.21
Row: 92, Col: 1, Value: 19685.58
Row: 93, Col: 1, Value: 19875.72
Row: 94, Col: 1, Value: 19417.14
Row: 95, Col: 1, Value: 19618.47
Row: 96, Col: 1, Value: 19014.48
Row: 97, Col: 1, Value: 19087.75
Row: 98, Col: 1, Value: 18441.1
Row: 99, Col: 1, Value: 18568.12
Row: 100, Col: 1, Value: 19630.47
Row: 101, Col: 1, Value: 19988.44
Row: 102, Col: 1, Value: 19734.4
Row: 103, Col: 1, Value: 19780.59
Row: 104, Col: 1, Value: 20946.87
Row: 105, Col: 1, Value: 20704.38
Row: 106, Col: 1, Value: 20854.49
Row: 107, Col: 1, Value: 20588.9
Row: 108, Col: 1, Value: 20900.68
Row: 109, Col: 1, Value: 21422.63
Row: 110, Col: 1, Value: 21482.31
Row: 111, Col: 1, Value: 21434.57
Row: 112, Col: 1, Value: 21792.61
Row: 113, Col: 1, Value: 22341.6
Row: 114, Col: 1, Value: 22365.47
Row: 115, Col: 1, Value: 22520.62
Row: 116, Col: 1, Value: 21995.5
Row: 117, Col: 1, Value: 22269.99
Row: 118, Col: 1, Value: 22807.05
Row: 119, Col: 1, Value: 22783.18
$
$22,783
DIVERSIFIED INTERNATIONAL FUND
ASSET MANAGER: GROWTH
Fiscal years 1992 1994 1996
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10060.0
Row: 3, Col: 1, Value: 9860.0
Row: 4, Col: 1, Value: 9680.0
Row: 5, Col: 1, Value: 9140.0
Row: 6, Col: 1, Value: 9240.0
Row: 7, Col: 1, Value: 9750.0
Row: 8, Col: 1, Value: 9540.0
Row: 9, Col: 1, Value: 9190.0
Row: 10, Col: 1, Value: 9350.0
Row: 11, Col: 1, Value: 9140.0
Row: 12, Col: 1, Value: 8460.0
Row: 13, Col: 1, Value: 8460.0
Row: 14, Col: 1, Value: 8671.059999999999
Row: 15, Col: 1, Value: 8873.42
Row: 16, Col: 1, Value: 9176.959999999999
Row: 17, Col: 1, Value: 9915.57
Row: 18, Col: 1, Value: 10522.64
Row: 19, Col: 1, Value: 10785.71
Row: 20, Col: 1, Value: 10482.17
Row: 21, Col: 1, Value: 10805.94
Row: 22, Col: 1, Value: 11362.43
Row: 23, Col: 1, Value: 11210.66
Row: 24, Col: 1, Value: 11453.49
Row: 25, Col: 1, Value: 11028.54
Row: 26, Col: 1, Value: 11850.64
Row: 27, Col: 1, Value: 12739.44
Row: 28, Col: 1, Value: 12484.04
Row: 29, Col: 1, Value: 12085.61
Row: 30, Col: 1, Value: 12320.58
Row: 31, Col: 1, Value: 12300.15
Row: 32, Col: 1, Value: 12136.69
Row: 33, Col: 1, Value: 12555.55
Row: 34, Col: 1, Value: 12872.25
Row: 35, Col: 1, Value: 12504.47
Row: 36, Col: 1, Value: 12729.22
Row: 37, Col: 1, Value: 12044.75
Row: 38, Col: 1, Value: 11979.79
Row: 39, Col: 1, Value: 11428.51
Row: 40, Col: 1, Value: 11566.33
Row: 41, Col: 1, Value: 12128.21
Row: 42, Col: 1, Value: 12509.87
Row: 43, Col: 1, Value: 12615.88
Row: 44, Col: 1, Value: 12806.71
Row: 45, Col: 1, Value: 13633.63
Row: 46, Col: 1, Value: 13421.6
Row: 47, Col: 1, Value: 13676.04
Row: 48, Col: 1, Value: 13495.81
Row: 49, Col: 1, Value: 13633.63
Row: 50, Col: 1, Value: 14132.55
Row: 51, Col: 1, Value: 14555.74
Row: 52, Col: 1, Value: 14566.88
Row: 53, Col: 1, Value: 14856.44
Row: 54, Col: 1, Value: 15391.0
Row: 55, Col: 1, Value: 15546.91
Row: 56, Col: 1, Value: 15691.69
Row: 57, Col: 1, Value: 15190.54
Row: 58, Col: 1, Value: 15446.68
Row: 59, Col: 1, Value: 15914.43
Row: 60, Col: 1, Value: 16003.52
$
$16,015
INTERNATIONAL VALUE FUND
ASSET MANAGER: GROWTH
Fiscal years 1994 1995 1996
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9700.0
Row: 3, Col: 1, Value: 9790.0
Row: 4, Col: 1, Value: 9440.0
Row: 5, Col: 1, Value: 9530.0
Row: 6, Col: 1, Value: 10000.0
Row: 7, Col: 1, Value: 10170.0
Row: 8, Col: 1, Value: 10030.0
Row: 9, Col: 1, Value: 10040.0
Row: 10, Col: 1, Value: 10830.0
Row: 11, Col: 1, Value: 10800.0
Row: 12, Col: 1, Value: 10860.0
Row: 13, Col: 1, Value: 10630.0
Row: 14, Col: 1, Value: 10820.0
Row: 15, Col: 1, Value: 11150.86
Row: 16, Col: 1, Value: 11253.73
Row: 17, Col: 1, Value: 11294.88
Row: 18, Col: 1, Value: 11521.18
Row: 19, Col: 1, Value: 11912.08
Row: 20, Col: 1, Value: 11840.07
Row: 21, Col: 1, Value: 11973.8
Row: 22, Col: 1, Value: 11562.33
Row: 23, Col: 1, Value: 11562.33
Row: 24, Col: 1, Value: 11870.93
Row: 25, Col: 1, Value: 11654.91
$
$11,655
OVERSEAS FUND
ASSET MANAGER: GROWTH
Fiscal years 1986 1990 1996
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10936.45
Row: 3, Col: 1, Value: 11478.16
Row: 4, Col: 1, Value: 13244.59
Row: 5, Col: 1, Value: 13669.55
Row: 6, Col: 1, Value: 15215.24
Row: 7, Col: 1, Value: 16352.63
Row: 8, Col: 1, Value: 16290.14
Row: 9, Col: 1, Value: 15144.41
Row: 10, Col: 1, Value: 15369.39
Row: 11, Col: 1, Value: 16648.44
Row: 12, Col: 1, Value: 16444.29
Row: 13, Col: 1, Value: 12873.79
Row: 14, Col: 1, Value: 12769.63
Row: 15, Col: 1, Value: 13586.44
Row: 16, Col: 1, Value: 13058.2
Row: 17, Col: 1, Value: 13472.84
Row: 18, Col: 1, Value: 14290.75
Row: 19, Col: 1, Value: 14665.63
Row: 20, Col: 1, Value: 14370.27
Row: 21, Col: 1, Value: 13961.31
Row: 22, Col: 1, Value: 13779.56
Row: 23, Col: 1, Value: 13364.92
Row: 24, Col: 1, Value: 13864.75
Row: 25, Col: 1, Value: 14370.27
Row: 26, Col: 1, Value: 14745.15
Row: 27, Col: 1, Value: 14708.26
Row: 28, Col: 1, Value: 14888.48
Row: 29, Col: 1, Value: 15277.98
Row: 30, Col: 1, Value: 15144.27
Row: 31, Col: 1, Value: 15469.83
Row: 32, Col: 1, Value: 14725.7
Row: 33, Col: 1, Value: 14295.5
Row: 34, Col: 1, Value: 15714.0
Row: 35, Col: 1, Value: 15347.75
Row: 36, Col: 1, Value: 16167.46
Row: 37, Col: 1, Value: 15289.61
Row: 38, Col: 1, Value: 16155.83
Row: 39, Col: 1, Value: 17198.88
Row: 40, Col: 1, Value: 16808.55
Row: 41, Col: 1, Value: 16460.91
Row: 42, Col: 1, Value: 17003.72
Row: 43, Col: 1, Value: 16961.02
Row: 44, Col: 1, Value: 18113.71
Row: 45, Col: 1, Value: 18436.96
Row: 46, Col: 1, Value: 19345.69
Row: 47, Col: 1, Value: 17204.98
Row: 48, Col: 1, Value: 15296.03
Row: 49, Col: 1, Value: 16753.66
Row: 50, Col: 1, Value: 16198.66
Row: 51, Col: 1, Value: 16063.34
Row: 52, Col: 1, Value: 16419.73
Row: 53, Col: 1, Value: 17015.86
Row: 54, Col: 1, Value: 16458.6
Row: 55, Col: 1, Value: 16691.88
Row: 56, Col: 1, Value: 16724.27
Row: 57, Col: 1, Value: 15674.55
Row: 58, Col: 1, Value: 16529.88
Row: 59, Col: 1, Value: 16653.0
Row: 60, Col: 1, Value: 17385.21
Row: 61, Col: 1, Value: 17443.53
Row: 62, Col: 1, Value: 16814.99
Row: 63, Col: 1, Value: 17446.94
Row: 64, Col: 1, Value: 17647.24
Row: 65, Col: 1, Value: 17281.17
Row: 66, Col: 1, Value: 16922.01
Row: 67, Col: 1, Value: 17951.15
Row: 68, Col: 1, Value: 18724.73
Row: 69, Col: 1, Value: 18282.68
Row: 70, Col: 1, Value: 17122.31
Row: 71, Col: 1, Value: 16977.27
Row: 72, Col: 1, Value: 16272.76
Row: 73, Col: 1, Value: 15167.65
Row: 74, Col: 1, Value: 15091.67
Row: 75, Col: 1, Value: 15448.27
Row: 76, Col: 1, Value: 15898.52
Row: 77, Col: 1, Value: 16224.56
Row: 78, Col: 1, Value: 17326.9
Row: 79, Col: 1, Value: 18530.16
Row: 80, Col: 1, Value: 18957.12
Row: 81, Col: 1, Value: 18506.87
Row: 82, Col: 1, Value: 19353.03
Row: 83, Col: 1, Value: 20447.6
Row: 84, Col: 1, Value: 20269.06
Row: 85, Col: 1, Value: 21084.17
Row: 86, Col: 1, Value: 20121.56
Row: 87, Col: 1, Value: 21635.93
Row: 88, Col: 1, Value: 23174.03
Row: 89, Col: 1, Value: 22740.21
Row: 90, Col: 1, Value: 22085.53
Row: 91, Col: 1, Value: 22826.97
Row: 92, Col: 1, Value: 22535.13
Row: 93, Col: 1, Value: 22235.39
Row: 94, Col: 1, Value: 22858.52
Row: 95, Col: 1, Value: 23189.8
Row: 96, Col: 1, Value: 22550.9
Row: 97, Col: 1, Value: 23008.39
Row: 98, Col: 1, Value: 22061.86
Row: 99, Col: 1, Value: 21910.89
Row: 100, Col: 1, Value: 20971.85
Row: 101, Col: 1, Value: 20987.9
Row: 102, Col: 1, Value: 21613.93
Row: 103, Col: 1, Value: 22231.93
Row: 104, Col: 1, Value: 22544.94
Row: 105, Col: 1, Value: 22713.48
Row: 106, Col: 1, Value: 23732.78
Row: 107, Col: 1, Value: 23074.65
Row: 108, Col: 1, Value: 23395.69
Row: 109, Col: 1, Value: 22930.18
Row: 110, Col: 1, Value: 23187.02
Row: 111, Col: 1, Value: 23894.97
Row: 112, Col: 1, Value: 24347.06
Row: 113, Col: 1, Value: 24396.37
Row: 114, Col: 1, Value: 24758.05
Row: 115, Col: 1, Value: 25432.07
Row: 116, Col: 1, Value: 25440.29
Row: 117, Col: 1, Value: 25629.34
Row: 118, Col: 1, Value: 24914.22
Row: 119, Col: 1, Value: 25095.06
Row: 120, Col: 1, Value: 25818.4
Row: 121, Col: 1, Value: 25547.15
$
$25,547
WORLDWIDE FUND
ASSET MANAGER: GROWTH
Fiscal years 1990 1993 1996
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10030.0
Row: 3, Col: 1, Value: 10290.0
Row: 4, Col: 1, Value: 10570.0
Row: 5, Col: 1, Value: 9380.0
Row: 6, Col: 1, Value: 8450.0
Row: 7, Col: 1, Value: 8950.0
Row: 8, Col: 1, Value: 8950.0
Row: 9, Col: 1, Value: 8898.230000000001
Row: 10, Col: 1, Value: 9150.440000000001
Row: 11, Col: 1, Value: 9654.879999999999
Row: 12, Col: 1, Value: 9321.949999999999
Row: 13, Col: 1, Value: 9412.75
Row: 14, Col: 1, Value: 9483.369999999999
Row: 15, Col: 1, Value: 8807.43
Row: 16, Col: 1, Value: 9352.220000000001
Row: 17, Col: 1, Value: 9493.459999999999
Row: 18, Col: 1, Value: 9654.879999999999
Row: 19, Col: 1, Value: 9695.230000000001
Row: 20, Col: 1, Value: 9180.710000000001
Row: 21, Col: 1, Value: 9599.059999999999
Row: 22, Col: 1, Value: 9701.07
Row: 23, Col: 1, Value: 9996.889999999999
Row: 24, Col: 1, Value: 9762.27
Row: 25, Col: 1, Value: 10190.71
Row: 26, Col: 1, Value: 10619.15
Row: 27, Col: 1, Value: 10251.92
Row: 28, Col: 1, Value: 10149.91
Row: 29, Col: 1, Value: 10007.1
Row: 30, Col: 1, Value: 10007.1
Row: 31, Col: 1, Value: 9823.48
Row: 32, Col: 1, Value: 9976.49
Row: 33, Col: 1, Value: 10194.86
Row: 34, Col: 1, Value: 10530.15
Row: 35, Col: 1, Value: 10781.62
Row: 36, Col: 1, Value: 11399.81
Row: 37, Col: 1, Value: 11682.71
Row: 38, Col: 1, Value: 12049.43
Row: 39, Col: 1, Value: 11923.7
Row: 40, Col: 1, Value: 12185.64
Row: 41, Col: 1, Value: 12950.52
Row: 42, Col: 1, Value: 12814.31
Row: 43, Col: 1, Value: 13369.63
Row: 44, Col: 1, Value: 13128.64
Row: 45, Col: 1, Value: 13920.64
Row: 46, Col: 1, Value: 14914.21
Row: 47, Col: 1, Value: 14689.86
Row: 48, Col: 1, Value: 14134.32
Row: 49, Col: 1, Value: 14625.76
Row: 50, Col: 1, Value: 14604.39
Row: 51, Col: 1, Value: 14305.25
Row: 52, Col: 1, Value: 14743.28
Row: 53, Col: 1, Value: 14989.0
Row: 54, Col: 1, Value: 14700.54
Row: 55, Col: 1, Value: 14914.21
Row: 56, Col: 1, Value: 14401.4
Row: 57, Col: 1, Value: 14332.82
Row: 58, Col: 1, Value: 14253.69
Row: 59, Col: 1, Value: 14423.25
Row: 60, Col: 1, Value: 14502.37
Row: 61, Col: 1, Value: 14864.08
Row: 62, Col: 1, Value: 15011.03
Row: 63, Col: 1, Value: 15214.49
Row: 64, Col: 1, Value: 15836.18
Row: 65, Col: 1, Value: 15440.56
Row: 66, Col: 1, Value: 15587.5
Row: 67, Col: 1, Value: 15056.24
Row: 68, Col: 1, Value: 15101.46
Row: 69, Col: 1, Value: 15363.09
Row: 70, Col: 1, Value: 15786.03
Row: 71, Col: 1, Value: 15991.79
Row: 72, Col: 1, Value: 16266.13
Row: 73, Col: 1, Value: 16746.23
Row: 74, Col: 1, Value: 17043.43
Row: 75, Col: 1, Value: 17032.0
Row: 76, Col: 1, Value: 16414.73
Row: 77, Col: 1, Value: 16849.1
Row: 78, Col: 1, Value: 17169.17
Row: 79, Col: 1, Value: 17352.06
$
$17,352
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political and
economic climate, and the value of its currency
create these risks. Because these funds invest
in stocks, their performance is also related to
foreign stock markets. For these reasons an
international fund's performance may be more
volatile than that of a fund that invests
exclusively in the United States.
(checkmark)
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
94.Cal 1987 1988 1989 1990 1991 1992 1993 1994 1995
endar
years
INTERN 8.33% 11.56% 19.12% (3.23)% 8.04% (3.34)% 35.08% (2.87)% 12.23%
ATIONA
L
GROWT
H &
INCOM
E
FUND
Morgan
Stanley
Capital 24.63% 28.27% 10.53% (23.45)% 12.13% (12.17)% 32.56% 7.78% 11.21%
International
EAFE
Index
Lipper 7.89% 16.24% 21.75% (11.74)% 12.76% (4.77)% 39.40% (0.71)% 9.41%
Interna
tional
Funds
Avera
ge
Consu 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%
mer
Price
Index
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: 8.33
Row: 5, Col: 1, Value: 11.56
Row: 6, Col: 1, Value: 19.12
Row: 7, Col: 1, Value: -3.23
Row: 8, Col: 1, Value: 8.039999999999999
Row: 9, Col: 1, Value: -3.34
Row: 10, Col: 1, Value: 35.08
Row: 11, Col: 1, Value: -2.87
Row: 12, Col: 1, Value: 12.23
(LARGE SOLID BOX) INTERNATIONAL GROWTH &
INCOME FUND
YEAR-BY-YEAR TOTAL RETURNS
Calend 1992 1993 1994 1995
ar
year s
DIVERS (13.81) % 36.67 % 1.09 % 17.97 %
IFIED
INTERN
ATIONA
L FUND
Morgan
Stanley
Capital
International
GDP-Weighted
EAFE (9.65) % 33.56 % 7.81 % 11.16 %
Index
Lipper (4.77) % 39.40 % (0.71) % 9.41 %
Interna
tional
Funds
Avera
ge
Consu 2.90 % 2.75 % 2.67 % 2.54 %
mer
Price
Index
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: -13.81
Row: 10, Col: 1, Value: 36.67
Row: 11, Col: 1, Value: 1.09
Row: 12, Col: 1, Value: 17.97
(LARGE SOLID BOX) DIVERSIFIED INTERNATIONAL FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar 1995
years
INTERNATIONA 13.90%
L VALUE
FUND
Morgan
Stanley
Capital
International
EAFE Index 11.21%
Lipper 9.41%
International
Funds
Average
Consumer 2.54%
Price Index
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
Row: 11, Col: 1, Value: 13.9
(LARGE SOLID BOX) INTERNATIONAL VALUE FUND
YEAR-BY-YEAR TOTAL RETURN S
Calendar 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
years
OVERSEAS 69.25% 18.37% 8.26% 16.93% (6.60)% 8.61% (11.46)% 40.05% 1.27 % 9.06%
FUND
Morgan 69.44% 24.63% 28.27% 10.53% (23.45)% 12.13% (12.17)% 32.56% 7.78 % 11.21%
Stanley
Cap ital
International
E AFE Index
Lipper 47.03% 7.89% 16.24% 21.75% (11.74)% 12.76% (4.77)% 39.40% (0.71) % 9.41%
International
Funds
Average
Consumer 1.10% 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67 % 2.54%
Price Index
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: 69.55
Row: 3, Col: 1, Value: 18.37
Row: 4, Col: 1, Value: 8.26
Row: 5, Col: 1, Value: 16.93
Row: 6, Col: 1, Value: -6.6
Row: 7, Col: 1, Value: 8.609999999999999
Row: 8, Col: 1, Value: -11.46
Row: 9, Col: 1, Value: 40.05
Row: 10, Col: 1, Value: 1.27
Row: 11, Col: 1, Value: 9.06
(LARGE SOLID BOX) OVERSEAS FUND
YEAR-BY-YEAR TOTAL RETURNS
95. Calendar 1991 1992 1993 1994 1995
years
WORLDWIDE 7.88 6.21 % 36.55 2.96 7.19
FUND % % % %
Morgan Stanley Cap
ital International
World Index 18.28 (5.23) % 22.50 5.08 20.72
% % % %
Lipper 18.44 0.01 % 31.04 (3.03 16.05
Global % % ) % %
Funds
Average
Consumer 3.06 2.90 % 2.75 % 2.67 2.54
Price Index % % %
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: 7.88
Row: 8, Col: 1, Value: 6.21
Row: 9, Col: 1, Value: 36.55
Row: 10, Col: 1, Value: 2.96
Row: 11, Col: 1, Value: 7.19
(LARGE SOLID BOX) WORLDWIDE FUND
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders. This difference may
be significant for funds whose investments are denominated in foreign
currencies.
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST INDEX is
an unmanaged index of over 1,000 foreign stocks. The i ndex may be
compiled in two ways: a market capitalization weighted (cap-weighted)
version and a gross domestic product weighted (GDP-weighted)
version.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX is a market capitalization
weighted index of over 1,500 stocks traded in 22 world markets.
Unlike each fund's return, the total returns of each comparative index
do not include the effect of any brokerage commissions, transactions fees,
or costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. G ov e rnment.
THE COMPETITIVE FUNDS AVERAGES ARE the Lipper International Funds
Average for International Growth & Income, Diversified International,
Overseas, and International Value and the Lipper Global Funds Average for
Worldwide , which currently reflect the performance of over 376 and 177
mutual funds with similar investment objectives, respectively. These
averages, published by Lipper Analytical Services, Inc., exclude the effect
of sales charges.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Fidelity Investment Trust, an open-end management investment company
organized as a Massachusetts business trust on April 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own .
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs and,
with the assistance of foreign affiliates, chooses their investments.
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR U.K.),
in London, England,
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR Far
East), in Tokyo, Japan,
(small solid bullet) Fidelity International Investment Advisors (FIIA), in
Pembroke, Bermuda,
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIAL U.K.), in Kent, England, and
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan , serves as a sub-adviser for International Value only.
Richard Mace, Jr. is Vice President and manager of International Value Fund
and Overseas Fund, which he has managed since November 1994 and March 1996,
respectively. He also manages several other Fidelity funds. Since joining
Fidelity in 1987, Mr. Mace has worked as an analyst and manager.
John R. Hickling is Vice President and manager of International Growth &
Income Fund, which he has managed since March 1996. Since joining Fidelity
in 1982, Mr. Hickling has worked as an analyst and manager.
Greg Fraser is Vice President and manager of Diversified International
Fund, which he has managed since December 1991. Previously, he managed
other Fidelity funds. Since joining Fidelity in 1986 , Mr. Fraser has
worked as an analyst and manager.
Penelope A. Dobkin is Vice President and manager of Worldwide Fund, which
she has managed since May 1990. Previously, she managed other Fidelity
funds. Since joining Fidelity in 1980, Ms. Dobkin has worked as an
analyst and manager.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corp. (FDC) distributes and markets Fidelity's funds
and services. Fidelity Service Co. (FSC) performs transfer agent servicing
functions for each fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
Fidelity International Limited (FIL), is the parent company of FIIA, FIJ,
and FIIAL U.K. The Johnson family group also owns, directly or indirectly,
more than 25% of the voting common stock of FIL.
A broker-dealer may use a portion of the commissions paid by each fund to
reduce custodian or transfer agent fees for those funds. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
a fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
These broadly diversified funds increase diversification by spreading
investments among securities of both developed and emerging markets,
different countries and geographic regions.
The funds may invest in the securities of any issuer, including companies
and other business organizations as well as governments and government
agencies. The funds, however, will tend to focus on the equity securities
of both large and small companies. The funds may invest in short-term debt
securities and money market instruments for cash management purposes. FMR
may also use various investment techniques to hedge a portion of the funds'
risks, but there is no guarantee that these strategies will work as FMR
intends.
The value of the funds' domestic and foreign investments varies in response
to many factors. Stock values fluctuate in response to the activities of
individual companies, and general market and economic conditions.
Investments in foreign securities may involve risks in addition to those of
U.S. investments, including increased political and economic risk, as well
as exposure to currency fluctuations. Bond values fluctuate based on
changes in interest rates and in the credit quality of the issuer.
The funds' focus on international investing involves increased or
additional risks from those above. International funds have increased
economic and political risks as they are exposed to events and factors in
the various world markets. This is especially true for emerging markets.
Also, because many of the funds' investments are denominated in foreign
currencies, changes in the value of foreign currencies can significantly
affect a fund's share price. FMR may use a variety of techniques to either
increase or decrease a fund's exposure to any currency.
As a mutual fund, each fund seeks to spread investment risk by diversifying
its holdings among many companies and industries. Of course, when you sell
your shares of a fund, they may be worth more or less than what you paid
for them. No one mutual fund, however, can provide an appropriate balanced
investment plan for all investors.
FMR determines where an issuer or its principal business are located by
looking at such factors as its country of organization, the primary trading
market for its securities, and the location of its assets, personnel,
sales, and earnings. When allocating the funds' investments among countries
and regions, FMR considers such factors as the potential for economic
growth, expected levels of inflation, governmental policies, and the
outlook for currency relationships.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
INTERNATIONAL GROWTH & INCOME FUND seeks capital growth and current income
by investing principally in foreign securities. FMR normally invests at
least 65% of the fund's total assets in securities of issuers whose
principal activities are outside of the U.S. The fund may invest in
equity and debt securities of U.S. issuers. FMR expects that the fund will
normally invest in at least six different countries, although it may invest
all of its assets in a single country.
FMR normally invests a majority of the fund's assets in equity securities,
selected generally for growth potential. In pursuit of income, FMR normally
invests at least 25% of the fund's total assets in debt securities of any
quality , money market securities, repurchase agreements, or pooled
accounts of repurchase agreements, and money market funds managed by FMR or
its affiliates.
DIVERSIFIED INTERNATIONAL FUND seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S. The
fund normally invests in equity securities of companies from at least three
countries outside of the U.S. The fund expects to invest most of its assets
in equity securities, but may also invest in debt securities of any
quality.
The fund invests in securities that FMR determines are undervalued compared
to industry norms within their countries. Using a highly disciplined
approach to help identify these instruments and focusing on companies with
market capitalizations of $100 million or more, FMR hopes to generate more
capital growth than that of the EAFE Index (GDP-weighted).
The disciplined approach involves computer-aided, quantitative analysis
supported by fundamental research. FMR's computer model systematically
reviews thousands of stocks, using historical earnings, dividend yield,
earnings per share, and many other factors. Then, potential investments are
analyzed further using fundamental criteria, such as the company's growth
potential and estimates of current earnings.
INTERNATIONAL VALUE FUND seeks long-term growth of capital by investing
mainly in securities of foreign companies that FMR believes are undervalued
in the marketplace or that possess valuable assets. FMR normally expects to
invest 65% of the fund's total assets in securities of foreign issuers.
FMR normally invests in securities of issuers from at least three different
countries, excluding the U.S. The fund may invest in securities of U.S.
issuers. The fund expects to invest a majority of its assets in equity
securities of large and small companies, but it may invest in debt
securities of any quality as well.
OVERSEAS FUND seeks long-term growth of capital by investing primarily in
securities of issuers whose principal activities are outside of the U.S.
FMR normally invests at least 65% of the fund's total assets in securities
of issuers from at least three different countries outside of North America
(the U.S., Canada, Mexico, and Central America). The fund expects to invest
a majority of its assets in equity securities, but may also invest in debt
securities of any quality.
WORLDWIDE FUND seeks growth of capital by investing in securities issued
anywhere in the world. The fund will normally invest in at least three
different countries, one of which will be the U.S. The fund expects its
equity investments to include established companies as well as newer or
smaller capitalization companies. The fund expects to invest a majority of
its assets in equity securities, but may also invest in debt securities of
any quality.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings and recent investment strategies are detailed in the funds'
financial reports, which are sent to shareholders twice a year. For a free
SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of total assets, each fund may not
purchase more than 10% of the outstanding voting securities of a single
issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics, and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness,
or they may already be in default. The market prices of these securities
may fluctuate more than higher-quality securities and may decline
significantly in periods of general economic difficulty.
The tables on the following page provide a summary of ratings assigned to
debt holdings (not including money market instruments) in the funds'
portfolios. These figures are dollar-weighted averages of month-end
portfolio holdings during the fiscal year ended October 1996,
and are presented as a percentage of total security investments. These
percentages are historical and do not necessarily indicate a fund's current
or future debt holdings.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's or
rated in the equivalent categories by S&P, or is unrated but judged to be
of equivalent quality by FMR. Each fund currently intends to limit its
investments in lower than Baa-quality debt securities to less than 35% of
its assets.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to pay
interest and repay principal when due and may require that the conditions
for payment be renegotiated. All of these factors can make foreign
investments, especially those in developing countries, more volatile than
U.S. investments.
EXPOSURE TO EMERGING MARKETS. Investing in emerging markets involves risks
over and above those generally associated with foreign investing. The
extent of economic development, political stability, and market depth
varies widely in comparison to more developed markets. Emerging market
economies may be subject to greater social, economic, and political
uncertainties or may be based on only a few industries. All of these
factors can make emerging market securities more volatile and potentially
less liquid than domestic securities.
FISCAL YEAR ENDED OCTOBER 1996 DEBT HOLDINGS, BY STANDARD & POORS
S&PS International Diversified International
RATING Growth & Income International Value Overseas Worldwide
INVESTMENT GRADE *
Highest quality AA A
High quality AA 22.0% -- 1.4% 0.2% --
Upper-medium grade A
Medium grade BBB -- -- -- -- --
LOWER QUALITY *
Moderately speculative BB 0.2% -- -- 0.1% --
Speculative B 0.1% -- 0.1% -- 0.5%
Highly speculative CCC -- -- -- -- --
Poor quality CC
Lowest quality, no interest C -- -- -- -- --
In default, in arrears D -- -- -- -- --
22.3% -- 1.5% 0.3% 0.5%
FISCAL YEAR ENDED OCTOBER 1996 DEBT HOLDINGS, BY MOODY'S INVESTORS
SERVICE
MOODY'S International Diversified International
RATING Growth & Income International Value Overseas Worldwide
INVESTMENT GRADE*
Highest quality Aaa
High quality Aa 23.1% -- 1.4% 0.2% --
Upper-medium grade A
Medium grade Baa 0.1% -- -- -- --
LOWER QUALITY *
Moderately speculative Ba -- -- -- -- --
Speculative B 0.3% -- 0.1% 0.2% 0.5%
Highly speculative Caa -- -- -- -- --
Poor quality Ca
Lowest quality, no interest C -- -- -- -- --
In default, in arrears -- -- -- -- -- --
23.5% -- 1.5% 0.4% 0.5%
International Diversified International
Growth & Income International Value Overseas Worldwide
SECURITIES NOT RATED BY MOODY'S OR S&P(dagger)
(AS A % OF INVESTMENTS)
Investment Grade (double dagger) 0.0% 0.0% 0.0% 0.0% 0.0%
Lower Quality (double dagger) 0.5% 0.0% 0.4% 0.0% 0.1%
Total 0.5% 0.0% 0.4% 0.0% 0.1%
* FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
(dagger) THE DOLLAR-WEIGHTED AVERAGE PERCENTAGES REFLECTED IN THE TABLE MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES.
(double dagger) AS DETERMINED BY FMR
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also may
involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities, and for International Growth & Income
selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with a
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of a fund and may involve a small investment of
cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that the fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
15% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include securities of closed-end investment companies
and real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in a
pooled account of repurchase agreements, and in a money market fund
available only to funds and accounts managed by FMR or its affiliates,
whose goal is to seek a high level of current income while maintaining a
stable $1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. These limitations do not apply to U.S. Government
securities.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities. A fund may also lend money to other funds advised by
FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
INTERNATIONAL GROWTH & INCOME FUND seeks capital growth and current income,
consistent with reasonable investment risk, by investing principally in
foreign securities. Under normal conditions, the fund will have at least
25% of its total assets invested in debt securities.
DIVERSIFIED INTERNATIONAL FUND seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S.
INTERNATIONAL VALUE FUND seeks long-term growth of capital.
OVERSEAS FUND seeks long-term growth of capital primarily through
investments in foreign securities. The fund defines foreign securities as
securities of issuers whose principal activities are located outside of the
U.S. Normally, at least 65% of the fund's total assets will be invested in
securities of issuers from at least three different countries outside of
North America. When market conditions warrant, FMR can make substantial
temporary defensive investments in U.S. government obligations or
investment-grade debt obligations of companies incorporated in and having
principal business activities in the U.S.
WORLDWIDE FUND seeks growth of capital by investing in securities issued
anywhere in the world.
W ith respect to 75% of its total assets, each fund may
not purchase a security if, as a result, more than 5% would be invested in
the securities of any one issuer and may not purchase more than 10% of the
outstanding voting securities of a single issuer.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. Each fund also pays OTHER
EXPENSES, which are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
INTERNATIONAL GROWTH & INCOME FUND AND WORLDWIDE FUND. The
management fee for each fund is calculated by adding a group fee rate to an
individual fund fee rate, and multiplying the result by the respective
fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52 %, and it drops
as total assets under management increase.
For October 1996, the group fee rate was .3037 %. The individual fund
fee rate is .45 % for each fund. The total management fee for the
fiscal year ended October 1996 was .76 % for each fund.
The management fee rate for the funds is higher than that of most domestic
mutual funds but not necessarily higher than that of a typical
international fund.
DIVERSIFIED INTERNATIONAL FUND, INTERNATIONAL VALUE FUND, AND OVERSEAS
FUND. The amount of the management fee is determined by taking a BASIC FEE
and then applying a PERFORMANCE ADJUSTMENT.
Management = Basic +/- Performance
fee fee adjustment
The performance adjustment either increases or decreases the management
fee, depending on how well the fund has performed relative to its benchmark
index.
FUND BENCHMARK INDEX
Diversified International EAFE Index/GDP Weighted
International Value EAFE Index/Cap Weighted
Overseas EAFE Index/Cap Weighted
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above
.52 %, and it drops as total assets under management increase.
For October 1996, the group fee rate was .3037 %. The individual fund
fee rate is .45 % for each fund . The basic fee for
the fiscal year ended 1996 was .75 % for Diversified
International, .75 % for International Value, and .76 % for
Overseas.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing a fund's
performance to that of its benchmark index over the most recent 36-month
period. The difference is translated into a dollar amount that is added to
or subtracted from the basic fee. (The performance period for
International Value began December 1, 1994 and will eventually span 36
months, but the performance adjustment did not take effect until November
1995). The maximum annualized performance adjustment rate is ".20%.
The total management fee rate for the fiscal year ended 1996 is outlined
in the following chart.
Fund Manage
ment
Fee
Diversified International .85%
International Value .79%
Overseas .76%
FMR HAS SUB-ADVISORY AGREEMENTS with four affiliates: FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA in turn has a sub-advisory agreement with FIIAL
U.K. FMR U.K. focuses on issuers based in Europe. FMR Far East focuses on
issuers based in Asia and the Pacific Basin. FIJ focuses on issuers based
in Japan and elsewhere around the world. FIIA focuses on issuers based in
Hong Kong, Australia, New Zealand, and Southeast Asia (other than Japan).
FIIAL U.K. focuses on issuers based in the United Kingdom and Europe.
The sub-advisers are compensated for providing investment research and
advice. FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services. FMR pays FIJ and
FIIA 30% of its management fee associated with investments for which the
sub-adviser provided investment advice. FIIA pays FIIAL U.K. a fee equal to
110% of the cost of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50%
of its management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis. FIIA pays FIIAL U.K. a fee
equal to 110% of the cost of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In the
fiscal year ended 1996, the funds paid FSC a percentage of
average net assets . T he fees are show n in the
following chart.
Fund Fee to
FSC
International Growth & Income .34%
Diversified International .34%
International Value .34%
Overseas .31 %
Worldwide .37 %
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce the fund's custodian or transfer agent
fees.
For the fiscal year ended 1996 , each fund's portfolio rate is
outlined in the table below. These rates vary from year to year.
Fund Turnover
International Growth & Income 95%
Diversified International 94 %
International Value 71 %
Overseas 82 %
Worldwide 49 %
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee for
this service. If you invest through FBSI, another financial institution, or
an investment professional, read their program materials for any special
provisions, additional service features or fees that may apply to your
investment in a fund. Certain transfers of the fund, such as minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
or Fidelity directly, as appropriate.
FIDELITY FACTS
Fidelity offers the broadest selection of mutual
funds in the world.
(solid bullet) Number of Fidelity mutual funds: over 225
(solid bullet) Assets in Fidelity mutual funds: over
$415 billion
(solid bullet) Number of shareholder accounts: over
27 million
(solid bullet) Number of investment analysts and portfolio
managers: over 215
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
ASSET MANAGER: GROWTH
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and capital
gains from current taxes. In addition, contributions to these accounts may
be tax deductible. Retirement accounts require special applications and
typically have lower minimums.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under
70 with earned income to save up to $2,000 per tax year. Individuals can
also invest in a spouse's IRA if the spouse has earned income of less than
$250.
ROLLOVER IRAS retain special tax advantages for certain distributions from
employer-sponsored retirement plans.
KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners (and their employees) to
make tax deductible contributions for themselves and any eligible employees
up to $30,000 per year.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners
or those with self-employed income (and their eligible employees) with many
of the same advantages as a Keogh, but with fewer administrative
requirements.
403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt
institutions, including schools, hospitals, and other charitable
organizations.
401(K) PROGRAMS allow employees of corporations of all sizes to contribute
a percentage of their wages on a tax-deferred basis. These accounts need to
be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
INSTITUTIONS, OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
Each fund's share price, called net asset value (NAV), is calculated every
business day. The funds' shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described at right. If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
ASSET MANAGER: GROWTH
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
YOUR ACCOUNT
(null)Key Information
Phone 1#800#544#7777
S
To open an account, exchange from another Fidelity fund account with the
same
registration, including name, address, and taxpayer ID number.
S
To add to an account, exchange from another Fidelity fund account with the
same registration, including name, address, and taxpayer ID number. You can
also use Fidelity Money Line to transfer from your bank account. Call
before
your first use to verify that this service is in place on your account.
Maximum
Money Line: $50,000.
Mail
S
To open an account, complete and sign the application. Make your check
payable
to the complete name of the fund of your choice. Mail to the address
indicated
on the application.
S
To add to an account, make your check payable to the complete name of the
fund.
Indicate your fund account number on your check. Mail to the address
printed
on your account statement.
S
Exchange by mail: Call 1#800#544#6666 for instructions.
In Person
S
To open an account, bring your application and check to a Fidelity Investor
Center. Call 1#800#544#9797 for the center nearest you.
S
To add to an account, bring your check to a Fidelity Investor Center. Call
1#800#544#9797 for the center nearest you.
(null)(null)Wire
Not available for retirement accounts.
S
To open an account, call 1#800#544#7777 to set up your account and to
arrange
a wire transaction. Wire within 24 hours to the wire address below. Specify
the complete name of the fund and include your new account number and your
name.
S
To add to an account, wire to the wire address below. Specify the complete
name of the fund and include your account number and your name.
S
Wire address: Bankers Trust Company, Bank Routing #021001033, Account #
00163053.
Automatically
New accounts cannot be opened with these services.
S
Use Fidelity Automatic Account Builder or Direct Deposit to automatically
purchase
more shares. Sign up for these services when opening your account, or call
1#800#544#6666.
S
Use Directed Dividends or Fidelity Automatic Exchange Service to
automatically
send money from one Fidelity fund into another. Call 1#800#544#6666 for
instructions.
(tdd_graphic)
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
(null)
How to Sell Shares
You can arrange to take money out of your fund account at any time by
selling
(redeeming) some or all of your shares. Your shares will be sold at the
next
share price calculated after your order is received and accepted. Share
price
is normally calculated at 4 p.m. Eastern time.
To sell shares in a non#retirement account,
you may use any of the methods described on these two pages.
To sell shares in a Fidelity retirement account,
your request must be made in writing, except for exchanges to other
Fidelity
funds, which can be requested by phone or in writing. Call 1#800#544#6666
for
a retirement distribution form.
If you are selling some but not all of your shares,
leave at least $1,000 worth of shares in the account to keep it open ($500
for retirement accounts).
To sell shares by bank wire or Fidelity Money Line,
you will need to sign up for these services in advance.
Certain requests must include a signature guarantee.
It is designed to protect you and Fidelity from fraud. Your request must
be
made in writing and include a signature guarantee if any of the following
situations
apply:
S
You wish to redeem more than $100,000 worth of shares,
S
Your account registration has changed within the last 30 days,
S
The check is being mailed to a different address than the one on your
account
(record address),
S
The check is being made payable to someone other than the account owner, or
S
The redemption proceeds are being transferred to a Fidelity account with a
different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including
Fidelity Investor Centers), dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency, or savings
association.
A notary public cannot provide a signature guarantee.
Selling Shares in Writing
Write a "letter of instruction" with:
S
Your name,
S
The fund's name,
S
Your fund account number,
S
The dollar amount or number of shares to be redeemed, and
S
Any other applicable requirements listed in the table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address.
Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266#0602
Fees and Key Information
PHONE 1-800-544-7777
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(small solid bullet) Maximum check request: $100,000.
(small solid bullet) For Money Line transfers to your bank account;
minimum:
$10; maximum: $100,000.
ALL ACCOUNT TYPES
(small solid bullet) You may exchange to other Fidelity funds if both
accounts are registered with the same name(s),
address, and taxpayer ID number.
MAIL OR IN PERSON
INDIVIDUAL, JOINT TENANTS, SOLE PROPRIETORSHIPS, UGMA, UTMA
(small solid bullet) The letter of instruction must be signed by all
persons required to sign for transactions, exactly as their
names appear on the account.
RETIREMENT ACCOUNTS
(small solid bullet) The account owner should complete a retirement
distribution
form. Call 1-800-544-6666 to request one.
TRUSTS
(small solid bullet) The trustee must sign the letter indicating
capacity
as trustee. If the trustee's name is not in the account
registration, provide a copy of the trust document certified within
the
last 60 days.
BUSINESSES OR ORGANIZATIONS
(small solid bullet) At least one person authorized by corporate
resolution
to act on the account must sign the letter.
(small solid bullet) Include a corporate resolution with corporate
seal
or a signature guarantee.
EXECUTORS, ADMINISTRATORS, CONSERVATORS, GUARDIANS
(small solid bullet) Call 1-800-544-6666 for instructions.
WIRE
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(small solid bullet) You must sign up for the wire feature before
using
it. To verify that it is in place, call 1-800-544-6666.
Minimum wire: $5,000.
(small solid bullet) Your wire redemption request must be received by
Fidelity before 4 p.m. Eastern time for money to be
wired on the next business day.
(tdd_graphic)
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more than
one account in the fund. Call 1-800-544-6666 if you need copies of
financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange will
carry credit for any sales charge you previously paid in connection with
their purchase.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM 1-800-544-5555
AUTOMATED SERVICE
(checkmark)
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTOR PLANS
ASSET MANAGER: GROWTH
FIDELITY AUTOMATIC ACCOUNT BUILDER SM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account,
quarterly complete the
appropriate section
on the fund
application.
(small solid bullet) For existing
accounts, call
1-800-544-6666 for
an application.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800- 544-6666
at least three
business days prior
to your next
scheduled
investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the
period appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization
form.
(small solid bullet) Changes require a
new authorization
form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call
bimonthly, 1-800-544-6666
quarterly, or after both accounts
annually are opened.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800-544-6666.
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but not yet
distributed income or capital gains, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
the funds may adjust their dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes these earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. A fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These are
passed along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and
its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. Short-term securities
with remaining maturities of sixty days or less for which quotations are
not readily available are valued on the basis of amortized cost. This
method minimizes the effect of changes in a security's market value. In
addition, if quotations are not readily available, or if the values
have been materially affected by events occurring after the closing of a
foreign market, assets may be valued by a method that the Board of
Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) REDEMPTION PRICE (price
to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500 (including any amount paid
as a sales charge), subject to an annual maximum charge of $60.00 per
shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30 will
not be subject to the fee for that year. The fee, which is payable to the
transfer agent, is designed to offset in part the relatively higher costs
of servicing smaller accounts. The fee will not be deducted from retirement
accounts (except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets in Fidelity funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity
mutual fund accounts maintained by FSC or FBSI which are registered under
the same social security number or which list the same social security
number for the custodian of a Uniform Gifts/Transfers to Minors Act
account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. In some instances, these incentives may be
offered only to certain institutions whose representatives provide services
in connection with the sale or expected sale of significant amounts of
shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be available for
sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS
FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY DIVERSIFIED
INTERNATIONAL FUND,
FIDELITY INTERNATIONAL VALUE FUND, Fidelity Overseas Fund, A ND
FIDELITY WORLDWIDE FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1996
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated December 30, 1996 ). Please
retain this document for future reference. The funds' financial statements
and financial highlights, included in the Annual Report for the fiscal year
ended October 31, 1996 are incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual Report, please call
Fidelity Distributors Corporation at 1-800-544-8888.
<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Affecting Europe
Special Considerations Affecting Japan, The Pacific Basin, and Southeast Asia
Special Considerations Affecting Canada
Special Considerations Affecting Latin America
Special Considerations Affecting Africa
Portfolio Transactions
Valuation
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.)
Fidelity Investments Japan Ltd. (FIJ) (International Value only)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
IBD -ptb- 1296
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The funds' fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF INTERNATIONAL GROWTH & INCOME FUND
(INTERNATIONAL GROWTH & INCOME)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 5% of the value of its total
assets would be invested in the securities of any single issuer, or it
would hold more than 10% of the voting securities of such issuer, except
that up to 25% of the fund's assets may be invested without regard to these
limitations;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities, or by foreign governments or their political
subdivisions, or by supranational organizations) if, as a result, more than
25% of the fund's total assets (taken at current value) would be invested
in the securities of issuers having their principal business activities in
the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation,
or merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT POLICIES AND LIMITATIONS OF DIVERSIFIED INTERNATIONAL FUND
(DIVERSIFIED INTERNATIONAL)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments to
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation,
or merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF INTERNATIONAL VALUE FUND
(INTERNATIONAL VALUE)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, not withstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation,
or merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the fund.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF OVERSEAS FUND
(OVERSEAS)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (a) more than 5% of the fund's total assets (taken at
current value) would be invested in the securities of such issuer, or (b)
the fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed), less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation,
or merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF WORLDWIDE FUND
(WORLDWIDE)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three business days to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this
limitation does not apply to purchases of debt securities or to repurchase
agreements).
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940, and, accordingly, "three business days" means three
days, exclusive of Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to purchase or sell futures
contracts on physical commodities.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation,
or merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(ix) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(x) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (ix), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
ASSET-BACKED SECURITIES. Asset-backed securities represent interest in
pools of consumer loans (generally unrelated to mortgage loans) and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend upon payment of the underlying loans by
individuals, although the securities may be supported by letters of credit
or other credit enhancements. The value of asset-backed securities may also
depend on the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing the
credit enhancement.
CLOSED-END INVESTMENT COMPANIES . Each fund may purchase the shares
of closed-end investment companies to facilitate investment in certain
countries. Shares of closed-end investment companies may trade at a premium
or a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depositary Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depositary banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depositary bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Purchasing Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract.
Futures can be held until their delivery dates, or can be closed out before
then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SAI, are not fundamental policies and may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 15% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
ISSUER LOCATION. FMR determines where an issuer is located by looking at
such factors as its country of organization, the primary trading market for
its securities, and the location of its assets, personnel, sales, and
earnings. The issuer of a security is considered to be located in a
particular country if (1) the security is issued or guaranteed by the
government of the country or any of its agencies, political subdivisions,
or instrumentalities; (2) the security has its primary trading market in
that country; or (3) the issuer is organized under the laws of that
country, derives at least 50% of its revenues or profits from goods sold,
investments made, or services performed in the country, or has at least 50%
of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and (5).
For purposes of these limitations, each fund generally will treat the
borrower as the "issuer" of indebtedness held by the fund. In the case of
loan participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the fund, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SECURITIES OF SMALL CAPITALIZATION COMPANIES. Smaller capitalization
companies may have limited product lines, markets, or financial resources.
These conditions may make them more susceptible to setbacks and reversals.
Therefore, their securities may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of
larger companies.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with opening,
maintaining, and closing short sales against the box.
SHORT SALES - INTERNATIONAL GROWTH & INCOME FUND. The fund may enter into
short sales with respect to stocks underlying its convertible security
holdings. For example, if FMR anticipates a decline in the price of the
stock underlying a convertible security the fund holds, it may sell the
stock short. If the stock price subsequently declines, the proceeds of the
short sale could be expected to offset all or a portion of the effect of
the stock's decline on the value of the convertible security. The fund
currently intends to hedge no more than 15% of its total assets with short
sales on equity securities underlying its convertible security holdings
under normal circumstances.
When the fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities) and will be required to
hold them aside while the short sale is outstanding. The fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales.
SOVEREIGN DEBT OBLIGATIONS. Each fund may purchase sovereign debt
instruments issued or guaranteed by foreign governments or their agencies,
including debt of Latin American nations or other developing countries.
Sovereign debt may be in the form of conventional securities or other types
of debt instruments such as loans or loan participations. sovereign debt of
developing countries may involve a high degree of risk, and may be in
default or present the risk of default. Governmental entities responsible
for repayment of the debt may be unable or unwilling to repay principal and
interest when due, and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest
may depend on political as well as economic factors.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate,currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
WARRANTS. Warrants are securities that give a fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
if the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
SPECIAL CONSIDERATIONS AFFECTING EUROPE
New developments surrounding the creation of a unified common market in
Europe have helped to reduce physical and economic barriers, promoting the
free flow of goods and services throughout western Europe. These new
developments could make this new unified market one of the largest in the
world. However, growth slowed more markedly than expected during 1995 in
the region, leading to further increases in unemployment in some countries
from already high levels and also to fears of a new economic downturn. The
most pronounced deterioration in cyclical conditions since early 1995 has
been in Germany, France, several other countries closely linked to the
deutsche mark, and Switzerland. In response, short-term interest rates have
been reduced significantly and several countries have taken various fiscal
and structural measures to revive confidence and stimulate job creation.
The timing and strength of the expected pickup in activity in these
countries is somewhat uncertain, but the conditions appear to be in place
for a quickening in the pace of economic growth during 1997. A
strengthening of activity in these countries is essential to put
unemployment securely on a downward path and to facilitate fiscal
consolidation in accordance with the agreed timetable for Economic and
Monetary Union (EMU). Conversely, a prolonged period of lackluster growth
could exacerbate doubts about the EMU timetable and might lead to tensions
in financial markets.
The eastern European countries, after several years of declining output,
have generally shown dramatic growth in 1994 and 1995. Despite formidable
obstacles and major differences among countries and regions, many nations
are making substantial progress in their efforts to become market-oriented
economies. Poland, the Czech and Slovak Republics, and Slovenia, have
achieved some of the most impressive results. Disciplined financial
policies, structural reforms, trade liberalization, and rapid growth of
trade, especially with western Europe, are important factors contributing
to the rapid transformation that is taking place in these economies. Many
of the countries that are less advanced in the transition, including some
of the former Soviet republics, have made significant progress with
structural reform, including price liberalization, privatization, and the
dismantling of trade barriers. There has been progress toward macroeconomic
stability, although the sustainability of recent reductions in inflation is
in doubt in some cases. Output appears to have bottomed out during 1995 in
Russia, but political instability in 1996 dampened prospects for a quick
economic recovery. Economic prospects have also improved in Kazakstan, the
Kyrgyz Republic, Moldova, Armenia, Georgia, and Uzbekistan. Ukraine made
considerable progress with stabilization and systemic reform in 1995; in
the absence of policy slippage, the decline in output should bottom out in
1996. In Belarus, Tajikistan, and Turkmenistan, where reform and
stabilization efforts have been inadequate thus far, the contraction of
output may well continue. Armed conflicts continue to delay the necessary
reforms in several other countries, but throughout the former Yugoslavia
prospects for recovery have now improved following the cessation of
hostilities in Bosnia and Herzegovina.
Notwithstanding the continued economic difficulties in many countries,
recent positive developments offer hope for a cooperative growth strategy
in the near term, which could also permit a strengthening of global
economic performance over the medium term. Efforts to enhance assistance to
countries affected by the transition to market-based trading systems
occurring in central Europe and the former Soviet Union, and to low-income
countries to support strengthened stabilization and restructuring efforts,
are moving forward. Many of the transition countries have achieved
considerable progress with macroeconomic stabilization and reform, and
fruits of their efforts to transform their economies are increasingly
visible.
The European Union (EU) consists of 15 member states including Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, the United Kingdom, Austria, Finland and Sweden. In 1986,
the member states of the EU signed the "Single European Act", an agreement
committing these countries to the establishment of a market among
themselves, unimpeded by internal barriers or hindrances to the free
movement of goods, persons, services, or capital. To meet this goal, a
series of directives have been issued to the member states. Compliance with
these directives is designed to eliminate three principal categories of
barriers: (1) physical frontiers, such as customs posts and border
controls; (2) technical barriers (which include restrictions operating
within national territories) such as regulations and norms for goods and
services (product standards); discrimination against foreign bids (bids by
other EU members) on public purchases; or restrictions on foreign requests
to establish subsidiaries; and (3) fiscal frontiers, notably value-added
taxes, tariffs, or excises on goods or services imported from other EU
states.
The ultimate goal of this project is to achieve a large unified domestic
European market in which available resources would be more efficiently
allocated through the elimination of the above-mentioned barriers and the
added costs associated with those barriers. Elimination of these barriers
would simplify product distribution networks, allow economies of scale to
be more readily achieved, and free the flow of capital and other resources.
The Maastricht Treaty on economic and monetary union (EMU) attempts to
provide its members with a stable monetary framework consistent with the
EU's broad economic goals. But until the EMU takes effect, which is
intended to occur before 1999, the community will face the need to
reinforce monetary cooperation in order to reduce the risk of a recurrence
of tensions between domestic and external policy objectives.
The total European market, as represented by EU countries, consists of over
370 million consumers, making it larger currently than either the U.S. or
Japanese markets. European businesses compete nationally and
internationally in a wide range of industries including: telecommunications
and information services, roads and transportation, building materials,
food and beverages, broadcast and media, financial services, electronics,
and textiles. Actual and anticipated actions on the part of member states
to conform to the unified Europe directives have prompted interest and
activity not only by European firms, but also by foreign entities anxious
to establish a presence in Europe that will result from these changes.
Indications of the effect of this response to a unified Europe can be seen
in the areas of mergers and acquisitions, corporate expansion and
development, GDP growth, and national stock market activity. In the
long-term, economic unification of Europe could prove to be an engine for
domestic and international growth.
REAL GDP ANNUAL RATE OF GROWTH
1995
Denmark 2.9%
France 2.4
Germany 1.9
Italy 3.2
Netherlands 2.4
Spain 3.0
Switzerland 0. 7
United Kingdom 2.4
Source: World Economic Outlook, May 1996
(Figures are quoted based on each country's domestic currency.)
For national stock market performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING JAPAN, THE PACIFIC BASIN, AND SOUTHEAST
ASIA
Many Asian countries may be subject to a greater degree of social,
political and economic instability than is the case in the United States
and Western European countries. Such instability may result from (i)
authoritarian governments or military involvement in political and economic
decision-making; (ii) popular unrest associated with demands for improved
political, economic, and social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and (v) ethnic,
religious, and racial disaffection.
The success of market reforms, and surge in infrastructure spending have
fueled rapid growth in many developing countries in Asia. Rapidly rising
household incomes have fostered large middle classes and new waves of
consumer spending. Increases in infrastructure spending and consumer
spending have made domestic demand the growth engine for these countries.
Thus, their growth now depends less upon exports to OECD countries. While
exports may no longer be the sole source of growth for developing
economies, improved competitiveness in export markets has contributed to
growth in many of these nations. The increased productivity of many Asian
countries has enabled them to achieve, or continue, their status as top
exporters while improving their national living standards.
The emerging market economies of Asia are likely to remain particularly
buoyant, although growth may likely moderate in several of them. This
should help to alleviate inflationary pressures and reduce current account
imbalances associated in part with large private capital inflows.
Nevertheless, actions already taken in Indonesia, Malaysia, and Thailand to
dampen domestic demand may need to be followed up by additional measures of
restraint.
Thailand has one of the fastest-growing economies in the region, with over
8% average growth in recent years. The economy has until now been run on a
strictly centralist principle, with five-year targets for most product
sectors, but policies have now been relaxed to allow foreign companies into
the market. Most of the Thai population rely on agriculture, largely in a
subsistence capacity: rice, sugar, maize and vegetables are grown for the
home market, while palm oil, fishing and (until the recent ban) timber
extraction have been the main export crops. Industry is moderately
developed but revolves around primary commodity processing for the local
market. The major exception is the minerals sector, which contributes over
half of the country's wealth: tin, lead, iron, tungsten, antimony and
lignite are extracted for export. There is a small and growing tourist
industry, but the sector was adversely affected by political uncertainties
in recent years. In mid-1995, the ruling Democrat Party lost the support of
one of the four coalition partners, it resigned and was replaced in a full
election by the opposition Chart Thai Party. However, King Bhumibol
Adulyadej has been forthright in his condemnation of the new government,
sparking fears of a constitutional challenge.
Hong Kong's impending return to Chinese dominion on July 1, 1997 has not
initially had a positive effect on its economic growth which was vigorous
in the 1980s. Although China has committed by treaty to preserve the
economic and social freedoms enjoyed in Hong Kong for 50 years after
regaining control of Hong Kong, the continuation of the current form of the
economic system in Hong Kong after the reversion will depend on the actions
of the government of China. Business confidence in Hong Kong, therefore,
can be significantly affected by such developments, which in turn can
affect markets and business performance. In preparation for 1997, Hong Kong
has continued to develop trade with China, where it is the largest foreign
investor, while also maintaining its long-standing export relationship with
the United States (U.S.). Spending on infrastructure improvements is a
significant priority of the colonial government while the private sector
continues to diversify abroad based on its position as an established
international trade center in the Far East. It is important to note that a
substantial portion of the companies listed on the Hong Kong Stock Exchange
are involved in real estate related business.
China's economy has grown at the extraordinary rate of 10% per year on
average over the past decade with the industrial segment leading the way.
China's economic growth itself has been characterized by spurts of almost
uncontrolled growth alternating with periods of harsh austerity measures,
causing inefficiencies and dislocations within China, including troublesome
inflation rates of over 16% per year over the past five years. Foreign
trading is limited to a special class of shares (Class B) which were
created for that purpose, and the government must approve sales of Class B
shares among foreign investors.
China is greatly dependent on foreign trade, particularly with Japan, the
United States, and Germany. If political events become severe in China,
there is always the danger that the United States or other nations could
alter their trade stance towards China, which could hurt its economy by
reducing exports. In addition, the strength of the economy and the weakness
of the government could lead to substantially higher inflation incoming
years, which would erode investor's earnings through the mechanism of
changing rates of currency exchange. A tightening in the money supply as
well as some supply-side constraints on the very rapid growth of exports in
1995 served to discourage foreign investment and has contributed to lower
prices for Class B shares. However, due to lax enforcement of regulatory
policies, Class B shares have been opened to local investors and their
prices roughly doubled in November 1996.
In terms of GDP, industrial standards and level of education, South Korea
is second only to Japan in Asia. It enjoys the benefits of a diversified
economy with well-developed sectors in electronics, automobiles, textiles
and shoe manufacture, steel and shipbuilding among others. The driving
force behind the economy's dynamic growth has been the planned development
of an export-oriented economy in a vigorously entrepreneurial society. Real
GDP grew about 9.5% in 1995. Recent volatility of the political scene is
unlikely to deflect continued economic growth. Both Koreas joined the
United Nations separately in late 1991, creating another forum for
negotiation and joint cooperation. Reunification of North Korea and South
Korea could have a detrimental effect on the economy of South Korea.
Indonesia is a mixed economy with many socialist institutions and central
planning but with a recent emphasis on deregulation and private enterprise.
Like Thailand, Indonesia has extensive natural wealth yet with a large and
rapidly increasing population. Dependent on oil exports during the 1980s,
crude oil alone contributes 80% of all foreign exchange revenues.
Indonesia's economy is growing very rapidly and the Suharto regime is
attempting to a move away from dependence on oil. However, the country
remains generally very poor and has only a limited potential domestic
market for consumer goods. Foreign investment regulations were relaxed in
1994 and 1995, in an effort to stimulate growth.
Malaysia has one of the fastest-growing economies in the Asian-Pacific
region. Rapid industrialization is transforming the economy away from its
traditional agricultural base, and in the process it is creating major new
opportunities for providers of consumer goods and services. Malaysia has
become the world's top producer and exporter of semiconductor devices.
Meanwhile, the high import content of newly established, fast-growing
manufacturing industries and Malaysian consumers' high marginal propensity
to import, has resulted in a high current-account deficit (10% of GDP),
which may have a negative impact on equity performance.
Singapore has an open entrepreneurial economy with strong service and
manufacturing sectors and excellent international trading links derived
from its history. Singapore's economy has boomed since the 1960s, thanks to
the government's policy of encouraging highly skilled and hence high
value-added manufacturing facilities. Per capita GDP is among the highest
in Asia. However, the country keeps a tight rein on imports and engages in
extensive regulation of the economy, in manufacturing in particular.
Although financial services now contribute almost as much to the economy as
manufacturing, Singapore holds a position as a major oil refining and
services center.
Japan currently has the second-largest GDP in the world. The Japanese
economy has grown substantially over the last three decades. Its growth
rate averaged over 5% in the 1970s and 1980s. However in 1994, the growth
rate in Japan slowed to 0.6% and its budget showed a deficit of 7.8% of
GDP. The boom in Japan's equity and property markets during the expansion
of the late 1980s supported high rates of investment and consumer spending
on durable goods, but both of these components of demand have now retreated
sharply following the decline in asset prices. This led to major
bankruptcies in the financial sector which continued through the end of
1996. Economic activity now appears to be picking up in Japan after
protracted sluggishness that has left the economy with considerable margins
of unused resources. The supportive stance of both monetary and fiscal
policies and the correction of the yen's excessive appreciation in early
1995 helped the recovery to continue. Confidence in the financial system
has begun to improve somewhat with the announcement of a strategy for
resolving the financial problems of Japanese banks, steps to deal more
effectively with failed institutions, and plans to strengthen banking
supervision. Nevertheless, extricating financial institutions from their
bad loans problem could act as a drag on the pace of recovery. Fiscal
policy is appropriately aimed at providing continuing support in 1996 but
budgetary consolidation will need to resume when the recovery gathers
enough momentum to permit a withdrawal of stimulus.
In addition to a cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration in
their competitiveness due to high wages, a strong currency and structural
rigidities. Japan has also become a mature industrial economy and, as a
result, will see its long-term growth rate slow down over the next ten
years. Finally, Japan is reforming its political process and deregulating
its economy. This has brought about turmoil, uncertainty and a crisis of
confidence.
Japan is heavily dependent upon international trade and, accordingly, has
been and may continue to be adversely affected by trade barriers and other
protectionist or retaliatory measures of, as well as economic conditions
in, the United States and other countries with which it trades. Industry,
the most important sector of the economy, is heavily dependent on imported
raw materials and fuels. Japan's major industries are in the engineering,
electrical, textile, chemical, automobile, fishing, and telecommunication
fields. Japan imports iron ore, copper, and many forest products. Only 19%
of its land is suitable for cultivation. Japan's agricultural economy is
subsidized and protected. It is about 50% self-sufficient in food
production. Even though Japan produces a minute rice surplus, it is
dependent upon large imports of wheat, sorghum and soybeans from other
countries.
Australia has a prosperous Western-style capitalist economy, with a per
capita GDP comparable to levels in industrialized Western European
countries. Economic growth accelerated markedly in 1994 as robust domestic
spending boosted activity. However, business investment remains weak. The
many setbacks since the 1970s have resulted primarily from the loss of
Australia's almost guaranteed export markets in Britain, after the latter's
accession to the European Union, but also from the slump in world mineral
prices and from the government's failure to reduce public spending.
Unemployment remains uncompromisingly high, and there are few signs of a
change at present. Much of the most dominant activity in Australia is
farming, especially of wheat, and sheep rearing: together, the two
contribute more than half of the country's export revenues. Minerals
provide the next most significant source of foreign exchange, although the
industry will remain vulnerable to fluctuations in the state of the world
minerals markets. Most recently, oil and gas development has been
proceeding at a particularly rapid pace. Manufacturing has moved away from
the processing of agricultural and mineral raw materials: there is a wide
range of often sophisticated engineering activity, and Australia is a very
large producer of motor vehicles.
EMERGING MARKETS: ASIA
MARKET CAPITALIZATION IN U.S. DOLLARS
DECEMBER 1995
Billions:
India $ 183
Indonesia 66
Korea 182
Malaysia 223
Pakistan 10
Philippines 59
Sri Lanka 2
Taiwan 187
Thailand 143
Source: The LGT Guide to World Equity Markets, 1996
For national stock market performance, please see the section of
Performance beginning on page .
REAL GDP ANNUAL RATE OF
GROWTH 1995
China 10.2%
Hong Kong 5.0
India 6.2
Indonesia 8.1
Japan 0.9
Korea 9.0
Malaysia 9.6
Philippines 4.8
Singapore 8.9
Taiwan 6.4
Thailand 8.6
Source: World Economic Outlook, May 1996
SPECIAL CONSIDERATIONS AFFECTING CANADA
Canada occupies the northern part of North America and is the second
largest country in the world (3.97 million square miles in area) extending
from the Atlantic Ocean to the Pacific Ocean. The companies in which a fund
may invest may include those involved in the energy industry, industrial
materials (chemicals, base metals, timber, and paper), and agricultural
materials (grain cereals). The securities of companies in the energy
industry are subject to changes in value and dividend yield which depend,
to a large extent, on the price and supply of energy fuels. Rapid price and
supply fluctuations may be caused by events relating to international
politics, energy conservation, and the success of exploration projects.
Canada is one of the world's leading industrial countries, as well as a
major exporter of agricultural products. Canada is rich in natural
resources such as zinc, uranium, nickel, gold, silver, aluminum, iron, and
copper. Forest covers over 44% of its land area, making Canada a leading
world producer of newsprint. The economy of Canada is strongly influenced
by the activities of companies and industries involved in the production
and processing of natural resources. Canada is a major producer of
hydroelectricity, oil, and gas. The business activities of companies in the
energy field may include the production, generation, transmission,
marketing, control, or measurement of energy or energy fuels. Economic
prospects are changing due to recent government attempts to reduce
restrictions against foreign investment.
Canadian securities are not considered by FMR to have the same level of
risk as other nations' securities. Canadian and U.S. companies are
generally subject to similar auditing and accounting procedures, and
similar government supervision and regulation. Canadian markets are more
liquid than many other foreign markets and share similar characteristics
with U.S. markets. The political system is more stable than in some other
foreign countries, and the Canadian dollar is generally less volatile
relative to the U.S. dollar.
Many factors affect and could have an adverse impact on the financial
condition of Canada, including social, environmental, and economic
conditions, factors which are not within the control of Canada. In Canada,
the pace of economic recovery slowed markedly in 1995 owing to the
tightening of monetary conditions early in the year and the risk premiums
in interest rates that resulted from political and economic uncertainties,
as well as the economic slowdown in the United States. Following the
referendum on Quebec sovereignty in October 1995, confidence improved and
interest rates fell significantly, which should permit the pace of economic
activity to pick up during 1996. Fiscal imbalances have diminished
considerably in recent years but the federal and provincial governments
will need to ensure that further consolidation is achieved in 1996 and over
the medium term. Inflation has remained low, which provides some
flexibility for further easing of monetary policy if warranted by cyclical
considerations and by further progress on the fiscal front. Overall,
conditions are good for Canada's expansion to proceed at a healthy rate.
The U.S. - Canada Free Trade Agreement which became effective in January
1989, will be phased in over a period of 10 years. This agreement will
remove tariffs on U.S. technology and Canadian agricultural products in
addition to removing trade barriers affecting other important sectors of
each country's economy. Relations with the U.S. are likely to be further
strengthened by the implementation of the North American Free Trade
Agreement, which came into effect in January 1994.
The majority of new equity issues or initial public offerings in Canada are
through underwritten offerings. The funds may elect to participate in these
issues.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICA
Latin America is a region rich in natural resources such as oil, copper,
tin, silver, iron ore, forestry, fishing, livestock, and agriculture. The
region has a large population (over 350 million) representing a large
domestic market. The region has been transitional over the last five years
from the stagnant 1980s, which were characterized by poor economic
policies, higher international interest rates, and limited access to new
foreign capital.
High inflation and low economic growth have given way to stable, manageable
inflation rates and higher economic growth. Changes in political
leadership, the implementation of market-oriented economic policies, such
as privatization, trade reform and monetary reform have been among the
recent steps taken to modernize the Latin American economies and to
regenerate growth in the region. Various trade agreements have also been
formed within the region such as the Andean Pact, Mercosur and the North
America Free Trade Agreement (NAFTA). The largest of these is NAFTA, which
was implemented on January 1, 1994.
Latin American equity markets can be extremely volatile and in the past
have shown little correlation with the U.S. market. Currencies are
typically weak, but most are now relatively free floating, and it is not
unusual for the currencies to undergo wide fluctuations in value over short
periods of time due to changes in the market.
Mexico's economy has been transformed significantly over the last 6-7
years. In the past few years the government has sold the telephone company,
the major steel companies, the banks and many other state-owned
enterprises. The major state ownership remaining is in the oil sector and
the electricity sector. The United States is Mexico's major trading
partner, accounting for two-thirds of its exports and imports. The
government, in consultation with international economic agencies, is
implementing programs to stabilize the economy and foster growth.
In the early 1980s Mexico experienced a foreign debt crisis. By 1987,
foreign debt had reached prohibitive levels, accounting for 90 to 95
percent of GDP, thus draining Mexico of all its resources. By the end of
1994, a large current account deficit, fueled in part by expansionary
policy, and the burden of its large national debt forced the Mexican
government to devalue the peso, triggering a severe crisis of confidence.
Both the crisis and the measures taken to stabilize the economy since, have
led to severely reduced domestic demand, which has been only partially
offset by positive trade-related activity. Following a difficult year that
saw real output contract by almost 7 percent, the recovery had begun
gathering strength by late 1996. There are still risks arising from
fragility in the banking sector, and continuing fiscal discipline will be
needed to maintain market confidence.
Brazil entered the 1990s with declining real growth, runaway inflation, an
unserviceable foreign debt of $122 billion, and a lack of policy direction.
Over the past few years, Brazil has been able to stabilize its domestic
economy through a relentless process of balancing the government budget,
the privatization of state enterprises, deregulation and reduction of red
tape and introducing greater competition into the domestic business
environment. Monthly inflation was brought down from 43 percent in the
first half of 1994 to 1.5 percent in 1995. This reduction reflects the
success of the Real Plan, which included the elimination of most forms of
backward-looking indexation, the introduction of a new currency, and tight
credit policy, which subsequently led to a nominal appreciation of the
exchange rate. A major long-run strength is Brazil's natural resources.
Iron ore, bauxite, tin, gold, and forestry products make up some of
Brazil's basic natural resource base, which includes some of the largest
mineral reserves in the world. In terms of population, Brazil is the
fifth-largest in the world with about 154+ million people and represents a
huge domestic market.
Chile, like Brazil, is endowed with considerable mineral resources, in
particular copper. Economic reform has been ongoing in Chile for at least
15 years, but political democracy has only recently returned to Chile.
Privatization of the public sector beginning in the early 1980s has
bolstered the equity market and given Chile the most competitive and
successful economy in Latin America. A well organized pension system has
created a long-term domestic investor base. Chile tightened its monetary
policy late in 1995 amid signs of overheating and 1996 GDP growth slowed
while inflation moderated.
Argentina is strong in wheat production and other foodstuffs and livestock
ranching. A well-educated and skilled population boasts one of the highest
literacy rates in the region. The country has been ravaged by decades of
extremely high inflation and political instability. Privatization is
ongoing and should reduce the amount of external debt outstanding. The
markets for labor, capital and goods and services have been deregulated.
Nearly all non-tariff barriers and export taxes have been eliminated, the
tariff structure simplified and tariffs sharply reduced. In the first
months of 1995 the government had to struggle to prevent a Mexican-style
collapse of the economy. A significant adjustment of the fiscal stance,
together with a restructuring of the banking system, particularly the
provincial banks, helped contain the spillover effects of the crisis in
Mexico. The government vowed to maintain a restrictive fiscal policy and
the pesos convertibility to the U.S. dollar after the recent resignation of
Domingo Cavallo, the Economy Minister who masterminded the most successful
reform program in Argentina's post-world war II history, and this
commitment is seen as the key to the country's economic stability.
Venezuela has substantial oil reserves. External debt is being
renegotiated, and the government is implementing economic reform in order
to reduce the size of the public sector. Internal gasoline prices, which
are one-third those of international prices, were increased in order to
reduce subsidies. However, economic conditions worsened in 1995, as the
government failed to reduce the fiscal deficit, and investment stagnated.
Prospects for an improvement in economic situation in 1997 depend on the
adoption of a credible exchange rate policy, the removal of controls, and
to strengthening of the fiscal position through measures such as
privatization and addressing with the problems of the banking sector.
EMERGING MARKETS: LATIN AMERICA
MARKET CAPITALIZATION IN U.S. DOLLARS
DECEMBER 1995
Billions:
Argentina $38
Brazil 148
Chile 73
Colombia 17
Mexico 91
Peru 12
Venezuela 4
Source: The LGT Guide to World Equity Markets, 1996
For national stock market performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING AFRICA
Africa is a continent of roughly 50 countries with a total population of
over 700 million people. The primary industries include crude oil, natural
gas, manganese ore, phosphate, bauxite, copper, iron, diamond, cotton,
coffee, cocoa, timber, tobacco, sugar, tourism, and cattle.
Many of the countries are fraught with political instability. However,
there has been a trend over the past five years toward democratization.
Still, there remain many countries that do not have a stable political
process. Other countries have been enmeshed in civil wars and border
clashes.
Economically, the Northern Rim countries (including Morocco, Egypt, and
Algeria) and Nigeria, Zimbabwe, and South Africa are the wealthier
countries on the continent due to their strong ties with the European
nations. The market capitalization of these countries has been growing
recently as more international companies invest in Africa and as local
companies start to list on the exchanges. However, religious strife has
been a significant source of instability.
On the other end of the economic spectrum are countries, such as Burkina
Faso, Madagascar, and Malawi, that are considered to be among the poorest
or least developed in the world. These countries are generally landlocked
or have poor natural resources. The economies of many African countries are
heavily dependent on international oil prices. Of all the African
industries, oil has been the most lucrative, accounting for 40% to 60% of
many countries' GDP. However, the general decline in oil prices has had an
adverse impact on many economies.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contract"), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges and
may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) in accordance with a
ranking of broker-dealers determined periodically by FMR's investment staff
based upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
Each fund's turnover rates for the fiscal periods ended October 31 are
indicated in the table below. Because a high turnover rate increases
transaction costs an d may increase taxable gains, FMR carefully weighs
the anticipated benefits of short-term investing against these
consequences. An increased turnover rate is due to a greater volume of
shareholder purchase orders, short-term interest rate volatility and other
special market conditions.
TURNOVER RATES 1996 1995
International Growth & 95% 141%
Income
Diversified International 94% 101%
International Value 71% 109%
Overseas 82% 49%
Worldwide 49% 70%
BROKERAGE COMMISSIONS. The table below lists the total brokerage
commissions and the dollar amount of commissions paid to FBSI and
FBS/FBSL for the fiscal periods ended October 31, 1996, 1995, and 1994.
<TABLE>
<CAPTION>
<S> <C> <C> <C.
Fiscal Total To FBSI To FBS/FBSL
Periods Ended
October 31
International
Growth &
Income
1996 $ 3,004,001 $ 5,530 $ 124,031
1995 $ 2,887,378 $ 19,397 $ 216,219
1994 $ 5,999,970 $ 60,703 $ 0
Diversified
International
1996 $ 2,192,851 $ 75,564 $ 80,532
1995 $ 1,413,822 $ 66,332 $ 61,995
1994 $ 1,369,819 $ 23,550 $ 0
International
Value
1996 $ 927,266 $ 7,878 $ 45,758
1995 $ 273,209 $ 2,231 $ 14,110
Overseas
1996 $ 8,266,411 $ 45,887 $ 500,320
1995 $ 4,412,811 $ 12,927 $ 486,380
1994 $ 4,197,237 $ 4,808 $ 0
Worldwide
1996 $ 1,736,992 $ 36,270 $ 69,922
1995 $ 1,705,701 $ 55,908 $ 57,267
1994 $ 1,750,893 $ 46,548 $ 0
</TABLE>
The table below lists for fiscal 1996, the percentage of aggregate
brokerage commissions paid to FBSI, FBS and FBSL and the percentage of the
aggregate dollar amount of transactions for which each fund paid brokerage
commissions to FBSI, FBS, and FBSL. The difference in the percentage of the
brokerage commissions paid to and the percentage of the dollar amount of
transactions effected through FBSI and FBSL is a result of the low
commission rates charged by FBSI and FBSL. The table also includes the
amount of brokerage commissions paid to brokerage firms that provided
research services; and the approximate amount of transactions effected
through brokerage firms that provided research services.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal % of % of % of % of Commissions Transactions with
Periods Ended Commissions Commissions Transactions Transactions Paid To Brokerage Firms
October 31, Paid to FBSI Paid Effected Effected Firms Providing
1996 To FBS/FBSL through through Providing Research
FBSI FBS/FBSL Research Services
Services
International .18% 4.13% .72% 5.55% $ 2,709,685 $ 1,154,782,519
Growth
& Income
Diversified 3.45% 3.67% 5.28% 5.21% $ 1,990,255 $ 743,365,705
International
International .85% 4.93% 2.72% 7.13% $ 839,266 $ 327,873,989
Value
Overseas .55% 6.05% 1.97% 7.95% $ 7,101,138 $ 2,996,261,605
Worldwide 2.09% 4.03% 5.27% 5.94% $ 1,570,717 $ 571,777,297
</TABLE>
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
FSC normally determines each fund's NAV as of the close of the New York
Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of this time for the purpose of
computing each fund's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the United States are valued at last sale price or,
if no sale has occurred, at the closing bid price. Most equity securities
for which the primary market is outside the U.S. are valued using the
official closing price or the last sale price in the principal market where
they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid price normally is used.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets. Fixed-income
securities and convertible securities may also be valued on the basis of
information furnished by a pricing service that uses a valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. use of pricing services has been approved by the
Board of Trustees. A number of pricing services are available and the fund
may use various pricing services or discontinue the use of any pricing
service.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value are valued in good faith
by a committee appointed by the Board of Trustees. The procedures set forth
above need not be used to determine the value of the securities owned by a
fund if, in the opinion of a committee appointed by the Board of Trustees,
some other method would more accurately reflect the fair market value of
such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing the fund's
interes and dividend income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive distributions
during the period, dividing this figure by the fund's net asset value (NAV)
at the end of the period, and annualizing the result (assuming compounding
of income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. Dividends from equity
investments are treated as if they were accrued on a daily basis, solely
for the purposes of yield calculations. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income For a fund's investments denominated in
foreign currencies, income and expenses are calculated first in their
respective currencies, and are then converted to U.S. dollars, either when
they are actually converted or at the end of the 30-day or one month
period, whichever is earlier. Capital gains and losses generally are
excluded from the calculation as are gains and losses from currency
exchange rate fluctuations.
Income calculated for the purposes of calculating a fund's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
In calculating the fund's yield, a fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in order
to reflect the risk premium on that security. This practice will have the
effect of reducing the fund's yield.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's net asset
value (NAV) over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then calculating
the annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. For example, a cumulative total return of 100% over ten years would
produce an average annual total return of 7.18%, which is the steady annual
rate of return that would equal 100% growth on a compounded basis in ten
years. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that a fund's
performance is not constant over time, but changes from year to year, and
that average annual total returns represent averaged figures as opposed to
the actual year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
Total return figures do not include the effects of each fund's sales charge
which was eliminated as of July 1, 1995. Sales charges for Diversified
International, International Value, Overseas, and Worldwide were waived
through June 30, 1995 and International Growth & Income's sales charge was
in effect November 1, 1993 through May 31, 1994. Total returns for
International Growth & Income and Overseas also do not include the effect
of paying the fund's $25.00 exchange fee, which was in effect from December
1, 1987 through October 1, 1989. Additionally, the total return figures
for International Growth & Income do not include the 1% deferred sales
charge on shares purchased prior to October 12, 1990.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On October 25, 1996, the 13-week and 39-week long-term moving
averages for each fund are outlined in the chart below.
FUND NAME 13 WEEK LONG-TERM 39 WEEK LONG-TERM
MOVING AVERAGE MOVING AVERAGE
International $ 18.90 $ 18.57
Growth & Income
Diversified 14.12 13.76
International
International Value 11.41 11.34
Overseas 31.02 30.61
Worldwide 14.91 14.61
HISTORICAL FUND RESULTS. The following table shows the funds' total returns
for periods ended October 31, 1996. Previously, the funds imposed a sales
charge. If this sales charge were taken into account, total returns would
have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
International
Growth & 10.66% 8.73% 8.72% 10.66% 51.96% 127.83%
Income
* From December 31, 1986 (commencement of operations).
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
Diversified 18.66% N/A 10.19% 18.66% N/A 60.15%
International
* From December 27, 1991 (commencement of operations).
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
International Value 9.64% N/A 7.95% 9.64% N/A 16.55%
* From November 1, 1994 (commencement of operations).
Average Annual Total Returns Cumulative Total Returns
One Five Ten One Five Ten
Year Years Years Year Years Years
Overseas 11.41% 7.93% 9.83% 11.41% 46.46% 155.47%
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of
Year Years Fund* Year Years Fund*
Worldwide 15.25% 12.35% 8.95% 15.25% 78.98% 73.52%
</TABLE>
* From May 30, 1990 (commencement of operations)
The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the S&P 500, the Dow Jones Industrial Average (DJIA), and the
cost of living, as measured by the Consumer Price Index (CPI), over the
same period. The CPI information is as of the month end closest to the
initial investment date for each fund. The S&P 500 and DJIA comparisons are
provided to show how each fund's total return compared to the record of a
broad unmanaged index of common stocks and a narrower set of stocks of
major industrial companies, respectively, over the same period. Common
stocks generally offer greater growth potential than the funds, but
generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than fixed-income investments such as the funds. Each fund has the
ability to invest in securities not included in either index, and its
investment portfolio may or may not be similar in composition to the
indexes. The S&P 500 and DJIA returns are based on the prices of unmanaged
groups of stocks and, unlike each fund's returns, do not include the effect
of brokerage commissions or other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the past 10 fiscal years ended 1996 or life
of fund, as applicable, assuming all distributions were reinvested. The
figures below reflect the fluctuating interest rates, bond prices, and
stock prices of the specified periods and should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in a fund today. Tax consequences of different
investments (with the exception of foreign tax withholdings) have not been
factored into the figures below.
During the period from December 31, 1986 (commencement of operations) to
October 31, 1996, a hypothetical $10,000 investment in Fidelity
International Growth & Income Fund would have grown to $22,783.
<TABLE>
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FIDELITY INTERNATIONAL GROWTH AND INCOME FUND INDICES
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
October 31 $10,000 Dividend Capital
Investment Distributio Gain
ns Distributio
ns
1996 $ 19,090 $ 2,940 $ 733 $ 22,783 $ 39,172 $ 42,758 $ 14,326
1995 $ 17,830 $ 2,055 $ 704 $ 20,589 $ 31,566 $ 33,003 $ 13,910
1994 $ 17,540 $ 2,022 $ 56 $ 19,618 $ 24,965 $ 26,452 $ 13,529
1993 $ 17,250 $ 1,922 $ 0 $ 19,172 $ 24,036 $ 24,244 $ 13,186
1992 $ 13,290 $ 1,132 $ 0 $ 14,422 $ 20,910 $ 20,643 $ 12,833
1991 $ 13,990 $ 1,002 $ 0 $ 14,992 $ 19,014 $ 19,069 $ 12,434
1990 $ 13,710 $ 510 $ 0 $ 14,220 $ 14,241 $ 14,660 $ 12,081
1989 $ 12,870 $ 322 $ 0 $ 13,192 $ 15,395 $ 15,276 $ 11,367
1988 $ 11,810 $ 91 $ 0 $ 11,901 $ 12,179 $ 11,958 $ 10,878
1987* $ 10,420 $ 49 $ 0 $ 10,469 $ 10,609 $ 10,704 $ 10,434
</TABLE>
* From December 31, 1986 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
International Growth & Income Fund on December 31, 1986, the net
amount invested in Fidelity International Growth & Income Fund was
$10,00 0 . The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were reinvested)
amount to $1 2 ,83 9 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to $2,030 for
dividends and $580 for capital gain distributions. The figures in the table
do not include the effect of the fund's 2% sales charge, which was in
effect from January 1, 1991 through June 1, 1994, its 1% deferred
sales charge on shares purchased prior to October 12 , 1990, and
the $25 exchange fee in effect from December 1, 1987 through October 1,
1989. Prior to April 1991, the fund imposed a 2% sales charge which is no
longer in effect and is not reflected in the figures above.
During the period from December 27, 1991 (commencement of operations) to
October 31, 1996, a hypothetical $10,000 investment in Fidelity Diversified
International Fund would have grown to $16, 0 15.
<TABLE>
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FIDELITY DIVERSIFIED INTERNATIONAL FUND INDICES
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
October 31 $10,000 Dividend Capital
Investment Distributio Gain
ns Distributio
ns
1996 $ 14,380 $ 491 $ 1,144 $ 16,015 $ 19,854 $ 22,221 $ 11,479
1995 $ 12,730 $ 197 $ 569 $ 13,496 $ 15,999 $ 17,151 $ 11,146
1994 $ 12,460 $ 158 $ 111 $ 12,729 $ 12,654 $ 13,747 $ 10,841
1993 $ 11,320 $ 133 $ 0 $ 11,453 $ 12,183 $ 12,599 $ 10,566
1992* $ 8,460 $ 0 $ 0 $ 8,460 $ 10,598 $ 10,728 $ 10,283
</TABLE>
* From December 27, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Diversified International Fund in December 27, 1991, the net amount
invested in fund shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $11,30 8 . If distributions had
not been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would have
amounted to $36 0 for dividends and $90 0 for capital gain
distributions.
During the period from November 1, 1994 (commencement of operations) to
October 31, 1996, a hypothetical $10,000 investment in Fidelity
International Value Fund would have grown to $11,6 5 5.
<TABLE>
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FIDELITY INTERNATIONAL VALUE FUND INDICES
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living **
October 31 $10,000 Dividend Capital
Investment Distributio Gain
ns Distributio
ns
1996 $ 11,330 $ 10 $ 315 $ 11,655 $ 15,690 $ 16,164 $ 10,589
1995* $ 10,630 $ 0 $ 0 $ 10,630 $ 12,644 $ 12,477 $ 10,281
</TABLE>
* From November 1, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
International Value Fund on November 1, 1994, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested) amounted to $ 10,310 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 10 for dividends and $ 300 for capital gain
distributions.
During the 10 year period ending October 31, 1996, a hypothetical $10,000
investment in Fidelity Overseas Fund would have grown to $ 25,547 .
<TABLE>
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FIDELITY OVERSEAS FUND INDICES
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
October
31 $10,000 Dividend Capital
Investment Distributio Gain
ns Distributio
ns
1996 $ 11,550 $ 2,571 $ 11,426 $ 25,547 $ 39,291 $ 43,713 $ 14,352
1995 $ 10,617 $ 2,091 $ 10,222 $ 22,930 $ 31,622 $ 33,740 $ 13,935
1994 $ 10,840 $ 2,135 $ 10,033 $ 23,008 $ 25,041 $ 27,043 $ 13,554
1993 $ 10,093 $ 1,649 $ 9,342 $ 21,084 $ 24,109 $ 24,786 $ 13,209
1992 $ 8,161 $ 1,052 $ 5,955 $ 15,168 $ 20,974 $ 21,104 $ 12,856
1991 $ 10,004 $ 973 $ 6,467 $ 17,444 $ 19,071 $ 19,495 $ 12,457
1990 $ 10,208 $ 531 $ 6,015 $ 16,754 $ 14,284 $ 14,987 $ 12,103
1989 $ 9,773 $ 351 $ 5,166 $ 15,290 $ 15,441 $ 15,617 $ 11,387
1988 $ 9,402 $ 0 $ 4,968 $ 14,370 $ 12,216 $ 12,225 $ 10,898
1987 $ 11,483 $ 0 $ 1,391 $ 12,874 $ 10,641 $ 10,943 $ 10,453
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Overseas Fund in October 31, 1985, the net amount invested in fund shares
was $10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $ 20,745 . If distributions had not bee reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 1,159 for dividends and $ 6,522 for capital gain
distributions. The figures in the table do not include the effect of the
fund's 3% sales charge which was waived through June 30, 1995 and
eliminated as of July 1, 1995 and the fund's $25 exchange fee, which was in
effect from December 1, 1987 through October 1, 1989 . Prior to May 1994,
the fund imposed a 3% sales charge which is no longer in effect and is not
included in the figures above.
During the period from May 30, 1990 (commencement of operations) to
October 31, 1996, a hypothetical $10,000 investment in Fidelity Worldwide
Fund would have grown to $ 17,352 .
<TABLE>
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FIDELITY WORLDWIDE FUND INDICES
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living **
October
31 $10,000 Dividend Capital
Investment Distributio Gain
ns Distributio
ns
1996 $ 15,180 $ 1,134 $ 1,038 $ 17,352 $ 23,507 $ 25,236 $ 12,252
1995 $ 13,320 $ 825 $ 911 $ 15,056 $ 18,943 $ 19,478 $ 11,896
1994 $ 13,960 $ 782 $ 172 $ 14,914 $ 14,982 $ 15,612 $ 11,571
1993 $ 12,760 $ 610 $ 0 $ 13,370 $ 14,424 $ 14,309 $ 11,277
1992 $ 9,630 $ 193 $ 0 $ 9,823 $ 12,548 $ 12,183 $ 10,975
1991 $ 9,610 $ 85 $ 0 $ 9,695 $ 11,410 $ 11,255 $ 10,635
1990* $ 8,950 $ 0 $ 0 $ 8,950 $ 8,546 $ 8,652 $ 10,333
</TABLE>
* From May 30, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Worldwide Fund o n May 30, 199 0 , the net amount
invested in fund shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,658 . If distributions had
not been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would have
amounted to $ 760 for dividends and $ 810 for capital gain
distributions.
INTERNATIONAL INDICES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database, the total market capitalization of Latin American countries
according to the International Finance Corporation Emerging Markets
database, and the performance of national stock markets as measured in U.S.
dollars by the Morgan Stanley Capital International stock market indices
for the twelve months ended October 31, 1996. Of course, these results are
not indicative of future stock market performance or the funds'
performance. Market conditions during the periods measured fluctuated
widely. Brokerage commissions and other fees are not factored into the
values of the indices.
MARKET CAPITALIZATION. Companies outside the U.S. now make up nearly
two-thirds of the world's stock market capitalization. According to Morgan
Stanley Capital International, the size of the markets as measured in U.S.
dollars grew from $ 5080.3 (8621.7 including the U.S.) billion in
1995 to $ 5,749.4 (10,078.9 including the U.S.) billion in 1996.
The following table measures the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database. The value of the markets are measured in billions of U.S. dollars
as of October 31, 1996.
TOTAL MARKET CAPITALIZATION
Australia $ 163.6 Japan $ 1,944.0
Austria 22.9 Netherlands 248.1
Belgium 66.2 Norway 26.1
Canada 250.8 Singapore/Mal 213.6
aysia
Denmark 47.2 Spain 108.4
France 372.2 Sweden 134.0
Germany 401.6 Switzerland 325.4
Hong Kong 200.6 United 1002.8
Kingdom
Italy 147.0 United States 4329.4
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of the markets is measured in billions
of U.S. dollars as of October 3 1 , 1996.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 24,980.3
Brazil 89,501.4
Chile 38,528.7
Colombia 9,227.4
Mexico 72,037.8
Venezuela 5,384.5
Total Latin America $ 239,710.10
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents the
performance of national stock markets as measured in U.S. dollars by the
Morgan Stanley Capital International stock market indices for the twelve
months ended October 31, 1996. The second table shows the same performance
as measured in local currency. Each table measures total return based on
the period's change in price, dividends paid on stocks in the index, and
the effect of reinvesting dividends net of any applicable foreign taxes.
These are unmanaged indices composed of a sampling of selected companies
representing an approximation of the market structure of the designated
country.
STOCK MARKET PERFORMANCE (CUMULATIVE TOTAL RETURNS)
MEASURED IN U.S. DOLLARS
Australia 16.9% Japan -0.8%
Austria -0.5 Netherlands 26.2
Belgium 16.3 Norway 15.4
Canada 29.9 Singapore/Mal -3.1/26.8
aysia
Denmark 16.8 Spain 32.1
France 18.2 Sweden 28.9
Germany 12.5 Switzerland 8.9
Hong Kong 28.0 United 20.3
Kingdom
Italy 7.8 United States 23.8
STOCK MARKET PERFORMANCE (CUMULATIVE TOTAL RETURNS)
MEASURED IN LOCAL CURRENCY
Australia 12.1% Japan 10.3%
Austria 6.9 Netherlands 35.5
Belgium 25.2 Norway 18.1
Canada 29.6 Singapore/Mal -3.5/26.0
aysia
Denmark 24.2 Spain 37.8
France 23.4 Sweden 27.4
Germany 20.8 Switzerland 20.6
Hong Kong 28.8 United 16.6
Kingdom
Italy 2.5 United States 23.8
The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1996.
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
October 31, 1996 October 31, 1996
Germany 11.98% 8.73%
Hong Kong 26.94% 22.25%
Japan 0.58% 5.35%
Spain 8.15% 11.16%
United 11.50% 15.03%
Kingdom
United States 14.98% 13.73%
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. In addition to the mutual fund rankings, a fund's performance
may be compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing these
indices, it is important to remember the risk and return characteristics of
each type of investment. For example, while stock mutual funds may offer
higher potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike a fund's
returns, however, the index returns do not reflect brokerage commissions,
transaction fees, or other costs of investing directly in the securities
included in the index.
Diversified International may compare its performance to the Morgan Stanley
Capital international GDP-Weighted Europe, Australasia, Far East Index, a
gross domestic product weighted, unmanaged index of over 1,000 foreign
stocks.
Each of International Value, Overseas and International Growth & Income may
compare its performance to that of the Morgan Stanley Capital International
Europe, Australasia, Far East Index, a market capitalization weighted,
unmanaged index of over 1,000 foreign stocks.
Worldwide may compare its performance to that of the Morgan Stanley Capital
International World Index, a market capitalization weighted equity index of
over 1,500 stocks traded in 22 world markets.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of October 31, 1996, FMR advised over $ 28 billion in tax-free
fund assets, $ 93 billion in money market fund assets, $ 289
billion in equity fund assets, $ 59 billion in international fund
assets, and $ 24 billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1997: New Year's
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed),
Independence Day (observed), Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time. In addition,
the funds will not process wire purchases and redemptions on days when the
Federal Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
On October 12 , 1990, International Growth & Income changed its sales
charge policy from a 1% sales charge upon purchase and 1% deferred sales
charge upon redemption to a 2% sales charge upon purchase. The sales charge
was eliminated on June 1, 1994. If your shares were purchased prior to
December 30, 1990 and you did not qualify for a front-end sales charge
reduction then, when you redeem those shares, a deferred sales charge
amounting to 1% of the net asset value of shares redeemed will be withheld
from your redemption proceeds and paid to FDC.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund invests significantly in foreign securities,
corporate shareholders should not expect fund dividends to qualify for the
dividends-received deduction. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received deduction.
Each fund will notify corporate shareholders annually of the percentage of
fund dividends that qualify for the dividends-received deduction. Gains
(losses) attributable to foreign currency fluctuations are generally
taxable as ordinary income, and therefore will increase (decrease) dividend
distributions. Each fund will send each shareholder a notice in January
describing the tax status of dividend and capital gain distributions for
the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
The following table displays each fund's capital gain dividend for the
purpose of the dividend paid deduction as of October 31, 1996.
International $ 24,225,000
Growth &
Income
Diversified $ 11,767,000
International
International $ 1,767,000
Value
Overseas $ 56,455,000
Worldwide $ 9,935,000
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some:forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Investment Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of the
trust are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years.
All persons named as Trustees and Members of the Advisory Board also serve
in similar capacities for other funds advised by FMR. The business address
of each Trustee and officer who is an "interested person" (as defined in
the Investment Company Act of 1940) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address
of all the other Trustees and Members of the Advisory Board is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation with
either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee and Chairman of the non-interested Trustees,
is a financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Trustee of College of the Holy Cross and Old
Sturbridge Village, Inc., and he previously served as a Director of
Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (53), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of the Naples
Philharmonic Center for the Arts and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (63), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications) and
President of BellSouth Enterprises. He is currently a Director of Liberty
Corporation (holding company), Weeks Corporation of Atlanta (real estate,
1994), and Carolina Power and Light Company (electric utility, 1996).
Previously, he was a Director of First American Corporation (bank holding
company, 1979-1996). In addition, Mr. McCoy serves as a member of the Board
of Visitors for the University of North Carolina at Chapel Hill (1994) and
for the Kenan Flager Business School (University of North Carolina at
Chapel Hill).
WILLIAM J. HAYES (62), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
RICHARD MACE, JR. (35), is Vice President and manager of International
Value Fund and Overseas Fund, which he has managed since November 1994 and
March 1996, respectively. He also manages several other Fidelity funds.
Since joining Fidelity in 1987, Mr. Mace has worked as an analyst and
manager.
JOHN R. HICKLING (37) is Vice President and manager of International Growth
and Income Fund, which he has managed since March 1996. Since joining
Fidelity in 1982, Mr. Hickling has worked as an analyst and manager.
GREGORY FRASER (36) is Vice President and manager of Diversified
International Fund, which he has managed since December 1991.
Previously, he managed other Fidelity funds. Since joining Fidelity in
1986, Mr. Fraser has been an analyst and manager.
PENELOPE A. DOBKIN (42) is Vice President and manager of Worldwide Fund,
which she has managed since May 1990. Previously, she managed other
Fidelity funds. Since joining Fidelity in 1980, Ms. Dobkin has been
an analyst and manager.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (56), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each current T rustee or Member of the Advisory Board of each
fund for his or her services as trustee for the fiscal year ended October
31, 1996.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas William
Burkhead* Cox Burke J. Flynn Bradley J. Kirk Lynch** McDonou H. Mann R. O.
* Davis Johnson Jones gh Malone Williams McCoy
3d**
Internati $ 0 $ 335 $ 324 $ 427 $ 0 $ 328 $ 331 $ 0 $ 327 $ 327 $ 327 $ 331 $ 157
onal
Growth
&
Income
Diversif $ 0 $ 151 $ 142 $ 190 $ 0 $ 143 $ 145 $ 0 $ 144 $ 148 $ 148 $ 146 $ 83
ied
Internati
onal
Internati $ 0 $ 66 $ 57 $ 78 $ 0 $ 58 $ 59 $ 0 $ 59 $ 64 $ 64 $ 59 $ 42
onal
Value
Oversea $ 0 $ 979 $ 888 $ 1,176 $ 0 $ 897 $ 908 $ 0 $ 900 $ 954 $ 952 $ 909 $ 461
s
Worldwi $ 0 $ 255 $ 246 $ 326 $ 0 $ 249 $ 252 $ 0 $ 249 $ 249 $ 249 $ 252 $ 127
de
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from the Fund
as Part of Fund from the Complex*
Expenses from the Fund Complex*
Fund Complex*
J. Gary $ 0 $ 0 $ 0
Burkhead**
Ralph F. 5,200 52,000 128,000
Cox ***
Phyllis Burke 5,200 52,000 125,000
Davis
Richard J. 0 52,000 160,500
Flynn
Edward C. 0 0 0
Johnson 3d**
E. Bradley 5,200 49,400 128,000
Jones
Donald J. Kirk 5,200 52,000 129,500
Peter S. 0 0 0
Lynch**
Gerald C. 5,200 52,000 128,000
McDonough
Edward H. 5,200 44,200 128,000
Malone ***
Marvin L. 5,200 52,000 128,000
Mann ***
Thomas R. 5,200 52,000 125,000
Williams
William O. N/A N/A 0
McCoy
</TABLE>
* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
*** For the fiscal year ended October 31 , 1996, certain of the
non-interested trustees' aggregate compensation from a fund includes
accrued deferred compensation as follows: Cox, $903, Overseas; Malone,
$878, Overseas; and Mann, $876, Overseas.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity fund
during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calender year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee for at least five years. Currently, Messrs. Ralph S.
Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
As of October 31, 1996 , The Trustees , Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than
1 % of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is Diversified International, International Growth & Income, Overseas,
and Worldwide's manager pursuant to management contracts dated March 1,
1992, which were approved by shareholders on February 19, 1992. FMR is
International Value Fund's manager pursuant to a management contract dated
September 16, 1994, which was approved by FMR, then the sole shareholder of
the fund on September 23, 1994.
COMPUTING THE MANAGEMENT FEE. For the services of FMR under the
contract, International Growth & Income and Worldwide pay FMR a monthly
management fee composed of the sum of two elements: a group fee rate
and an individual fund fee rate.
For the services of FMR under the contract, Diversified International,
Overseas, and International Value pa y FMR a monthly management fee
composed of the sum of two elements: a basic fee and a performance
adjustment based on a comparison of each fund's performance to that of the
Morgan Stanley Capital International Europe, Austral as ia, Far East
Index (the EAFE Index).
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 434 billion of group net
assets - the approximate level for October 1996 - was .3037 %, which
is the weighted average of the respective fee rates for each level of group
net assets up to $ 434 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under each fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .3000% for average group
assets in excess of $174 billion. Prior to March 1992, the group fee rate
breakpoints shown above for average group assets in excess of $138 billion
and under $228 billion were voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $210 billion and under $390 billion as shown in the schedule
below. The revised group fee rate schedule, for all funds except
International Value, was identical to the above schedule for average group
assets under $210 billion. International Value's current management
contract reflects these extensions of the group fee rate schedule.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
174 - $210 billion .3000% $ 150 billion .3371%
210 - 246 .2950 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
Each fund's individual fund fee rate is .45 %. Based on the average
group net assets of the funds advised by FMR for October 1996, the annual
management fee rate for International Growth & Income and Worldwide and the
annual basic fee rate for Diversified International, International Value,
and Overseas would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
. 3037 % + . 45 % = .7 537 %
</TABLE>
One-twelfth of this annual basic fee/management fee rate is applied to each
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT FOR DIVERSIFIED INTERNATIONAL,
INTERNATIONAL VALUE, AND OVERSEAS. The basic fee is subject to upward or
downward adjustment, depending upon whether, and to what extent, each
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the EAFE Index (the Index) over the same period.
Starting with the twelfth month, the performance adjustment takes effect.
Each month subsequent to the twelfth month, a new month is added to the
performance period until the performance period equals 36 months.
Thereafter, the performance period consists of the most recent month plus
the previous 35 months. Each percentage point of difference, calculated to
the nearest 1.0% (up to a maximum difference of (plus/minus)10.00 ) is
multiplied by a performance adjustment rate of .02%. Thus, the maximum
annualized adjustment rate is (plus/minus).20%. This performance comparison
is made at the end of each month. One twelfth (1/12) of this rate is then
applied to each fund's average net assets for the entire performance
period, giving a dollar amount which will be added to (or subtracted from)
the basic fee.
Each fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested
in fund shares at the net asset value as of the record date for payment.
The record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on each fund's performance
compared to the investment record of the Index, the controlling factor is
not whether each fund's performance is up or down per se, but whether it is
up or down more or less than the record of the Index. Moreover, the
comparative investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
INTERNATIONAL GROWTH & INCOME AND WORLDWIDE. The tables below show the
management fee paid to FMR; and the management fee as a percentage of each
fund's average net assets for the fiscal years ended October 31,
1996, 1995, and 1994.
MANAGEMENT FEE MANAGEMENT FEE AS A
% OF AVERAGE
NET ASSETS
INTERNATIONAL GROWTH & INCOME
1996 $7,427,387 .76%
1995 $7,967,320 .77%
1994 $10,246,289 .77%
WORLDWIDE
1996 $5,758,962 .76%
1995 $5,378,156 .77%
1994 $4,088,335 .77%
DIVERSIFIED INTERNATIONAL, INTERNATIONAL VALUE, AND OVERSEAS. The
tables below show the management fee paid to FMR (including the effect of
the performance adjustment); the dollar amount of negative or positive
performance adjustments; and the net management fee as a percentage of the
funds' average net assets for the periods ended October 31, 1996, 1995, and
1994.
DIVERSIFIED INTERNATIONAL
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE PERFORMANCE MANAGEMENT FEE AS A
INCLUDING ADJUSTMENT % OF AVERAGE
PERFORMANCE NET ASSETS
ADJUSTMENT
1996 $ 4,050,659 $ 445,161 .85%
1995 $ 2,058,906 $ (211,273) .69%
1994 $ 2,271,534 $ (169,790) .72%
INTERNATIONAL VALUE
1996 $ 1,722,862 $ 86,631 .79%
1995 $ 361,109 N/A .77%
OVERSEAS
1996 $ 21,073,542 $ 123,101 .76%
1995 $ 15,598,603 $ (1,750,190) .69%
1994 $ 15,137,411 $ 516,209 .80%
</TABLE>
FMR may, from time to time, voluntarily reimburse all or a portion of
each fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On behalf of each fund, FMR has entered into sub-advisory
agreements with FMR U.K., FMR Far East, and FIIA. FIIA, in turn, has
entered into a sub-advisory agreement with FIIAL U.K. On behalf of
International Value, FMR has also entered into a sub-advisory agreement
with FIJ. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from the
sub-advisers. On behalf of the funds, FMR may also grant the sub-advisers
investment management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the funds.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIAL U.K. each focus on
issuers in countries other than the United States such as those in Europe,
Asia, and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of Fidelity
International Limited (FIL), a Bermuda company formed in 1968 which
primarily provides investment advisory services to non-U.S. investment
companies and institutional investors investing in securities throughout
the world. Edward C. Johnson 3d, Johnson family members, and various trusts
for the benefit of the Johnson family owns, directly or indirectly, more
than 25% of the voting common stock of FIL. FIJ was organized in Japan in
1986. FIIA was organized in Bermuda in 1983. FIIAL U.K. was organized in
the United Kingdom in 1984, and is a wholly owned subsidiary of Fidelity
International Management Holdings Limited, an indirect wholly owned
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIAL U.K. For
providing non-discretionary investment advice and research services the
sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to 110%
and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by the
fund for which the sub-adviser has provided FMR with investment advice and
research services.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing investment advice and
research services.
For providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee
equal to 50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL
U.K.'s costs incurred in connection with providing discretionary investment
management services.
FMR U.K., FMR Far East, FIIA and FIIAL U.K. each serve as a sub-advisor for
all the funds. FIJ serves as a sub-advisor for International Value.
FMR entered into the sub-advisory agreements described above with respect
to Diversified International on September 16, 1992; with respect to
International Growth & Income, Overseas, and Worldwide on March 1, 1992
following shareholder approval of the agreements on February 19, 1992; and
with respect to International Value on September 7, 1994.
For providing investment advice and research services, the fees paid to the
sub-advisers for fiscal 1996, 1995, and 1994 were as follows:
FEES PAID TO FOREIGN SUB-ADVISERS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FMR U.K. FMR FAR EAST FIIA FIJ
International
Growth & Income
1996 $ 568,043 $ 581,491 $ 0 N/A
1995 $ 565,989 $ 508,935 $ 0 N/A
1994 $ 358,767 $ 426,768 $ 0 N/A
Diversified
International
1996 $ 261,591 $ 263,574 $ 0 N/A
1995 $ 163,681 $ 148,965 $ 0 N/A
1994 $ 106,564 $ 124,103 $ 0 N/A
International Value
1996 $ 132,491 $ 130,310 $ 0 N/A
1995 $ 25,758 $ 24,224 $ 0 N/A
Overseas
1996 $ 1,624,527 $ 1,648,516 $ 0 N/A
1995 $ 1,303,012 $ 1,193,082 $ 0 N/A
1994 $ 643,371 $ 749,224 $ 0 N/A
Worldwide
1996 $ 321,179 $ 324,985 $ 0 N/A
1995 $ 249,660 $ 231,114 $ 0 N/A
1994 $ 120,642 $ 140,039 $ 0 N/A
</TABLE>
The funds' have not incurred discretionary investment management fees
for the fiscal years ended October 31, 1996, 1995, and 1994.
CONTRACTS WITH FMR AFFILIATES
FSC, an affiliate of FMR, is transfer, dividend disbursing, and shareholder
servicing agent for each fund. FSC receives an annual account fee and an
asset-based fee each based on account size and fund type for each retail
account and certain institutional accounts. With respect to certain
institutional retirement accounts, FSC receives an annual account fee and
an asset-based fee based on account type or fund type. These annual account
fees are subject to increase based on postal rate changes. The asset-based
fees are subject to adjustment if the year-to-date total return of the S&P
500 exceeds a positive or negative 15%. FSC also collects small account
fees from certain accounts with balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's NAV
and dividends, and maintains each fund's accounting records. The annual fee
rates for these pricing and bookkeeping services are based on each fund's
average net assets, specifically, .0750% of the first $500 million of
average net assets and .0375% of average net assets in excess of $500
million. The fee is limited to a minimum of $60,000 and a maximum of
$800,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
PRICING AND BOOKKEEPING FEES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
International $ 541,422 $ 462,071 $ 548,580
Growth &
Income
Diversified $ 339,831 $ 177,924 $ 191,050
International
International $ 163,645 $ 43,939 N/A
Value
Overseas $ 800,990 $ 750,000 $ 715,901
Worldwide $ 461,271 $ 360,752 $ 296,919
</TABLE>
FSC also receives fees for administering each fund's securities lending
program. For fiscal 1996, 1995, and 1994, there were no securities lending
fees incurred by the funds.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR. The table
below shows the sales charge revenue paid to FDC for the following fiscal
periods:
SALES CHARGE REVENUE PAID TO FDC
1996 1995 1994
International N/A N/A N/A
Growth & Income
Overseas N/A N/A $1,120,737
Worldwide N/A N/A N/A
For the fiscal years ended 1996, 1995 and 1994, FDC received $0,
$12,868, and $6,314, respectively in deferred sales charge revenue on
behalf of International Growth & Income.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity International Growth & Income, Fidelity
Diversified International Fund, Fidelity International Value Fund, Fidelity
Overseas Fund , and Fidelity Worldwide Fund are funds of Fidelity
Investment Trust, an open-end management investment company originally
organized as a Massachusetts business trust on April 20, 1984. On November
3, 1986, the trust's name was changed from Fidelity Overseas Fund to
Fidelity Investment Trust. Currently, there are twenty-one funds of
the trust: Fidelity Overseas Fund, Fidelity Europe Fund, Fidelity Europe
Capital Appreciation Fund, Fidelity Pacific Basin Fund, Fidelity New
Markets Income Fund, Fidelity International Growth & Income Fund, Fidelity
Global Bond Fund, Fidelity Canada Fund, Fidelity Worldwide Fund, Fidelity
Diversified International Fund, Fidelity International Value Fund, Fidelity
Japan Fund, Fidelity Emerging Markets Fund, Fidelity Latin America Fund,
Fidelity Southeast Asia Fund, Fidelity France Fund, Fidelity Germany Fund,
Fidelity Japan Small Companies Fund, Fidelity Hong Kong Fund, Fidelity
Nordic Fund, and Fidelity United Kingdom Fund. The Declaration of trust
permits the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of
each of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trust, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declarations of trust protect Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of a trust or fund may, as set
forth in the Declarations of trust, call meetings of a trust or fund for
any purpose related to the trust or fund, as the case may be, including, in
the case of a meeting of an entire trust, the purpose of voting on removal
of one or more Trustees. The trust or any fund may be terminated upon the
sale of its assets to another open-end management investment company, or
upon liquidation and distribution of its assets, if approved by vote of the
holders of a majority of the outstanding shares of the trust or the fund.
If not so terminated, each trust or fund will continue indefinitely
CUSTODIAN. The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn,
New York, is custodian of the assets of the funds. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
any subcustodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. The Bank of New York and The Chase Manhattan
Bank, each headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. Cooper's & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as the funds' independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended October 31, 1996 are included in the fund's Annual Report, which
is a separate report supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND, FIDELITY
GERMANY FUND, FIDELITY HONG KONG & CHINA FUND, FIDELITY JAPAN FUND,
FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA FUND, FIDELITY
NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND,
FIDELITY UNITED KINGDOM FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c,d................................. Performance
..
4a Charter
i.................................
The Funds at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page: The Funds at a Glance; Doing Business
with Fidelity; Charter
Charter
(ii)..............................
(iii)........................... Expenses; Breakdown of Expenses
c................................ Charter
c, Charter; Breakdown of Expenses
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii...............................
*
b...................................
.
Exchange Restrictions; Transaction Details
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
Sales Charge Reductions and Waivers
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND, FIDELITY
GERMANY FUND, FIDELITY HONG KONG & CHINA FUND, FIDELITY JAPAN FUND,
FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA FUND, FIDELITY
NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND,
FIDELITY UNITED KINGDOM FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. Description of the Trust
..
13a - Investment Policies and Limitations
c............................
Portfolio Transactions
d..................................
14a - Trustees and Officers
c............................
15a.............................. *
*
b..................................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with FMR Affiliates
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with FMR Affiliates
i.................................
17a - Portfolio Transactions
d............................
e.............................. *
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with FMR Affiliates
b..............................
*
c.................................
22a.............................. *
b.............................. Performance
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
each fund's most recent financial report and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated December 30,
1996. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is available along with other related materials on the SEC's
Internet Web site (http://www.sec.gov). The SAI is incorporated herein
by reference (legally forms a part of the prospectus). For a free copy of
either document, call Fidelity at 1-800-544-8888.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
TIF-pro-1296
Each of these international funds is a growth fund and seeks to increase
the value of your investment over the long-term by investing mainly in
equity securities.
FIDELITY'S
TARGETED
INTERNATIONAL
EQUITY
FUNDS
FUND TRADING
NUMBER SYMBOL
FIDELITY CANADA FUND 309 F ICDX
FIDELITY EMERGING MARKETS FUND 3 22 F EMKX
FIDELITY EUROPE FUND 30 1 F IEUX
FIDELITY EUROPE CAPITAL 3 41 F ECAX
APPRECIATION FUND
FIDELITY FRANCE FUND 3 45 F FRAF
FIDELITY GERMANY FUND 3 46 F GERF
FIDELITY HONG KONG AND 3 52 F HKCX
CHINA FUND
FIDELITY JAPAN FUND 3 50 F JAPX
FIDELITY JAPAN SMALL 3 60 F JSCX
COMPANIES FUND
FIDELITY LATIN AMERICA FUND 3 49 F LATX
FIDELITY NORDIC FUND 3 42 F NORX
FIDELITY PACIFIC BASIN FUND 30 2 F PBFX
FIDELITY SOUTHEAST ASIA FUND 3 51 F SEAX
FIDELITY UNITED KINGDOM FUND 3 44 FU TYF
PROSPECTUS
DECEMBER 30, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales charge (load) and its
yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's overall
approach to investing.
BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and making
additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage your
account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS,AND TAXES
TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
</TABLE>
KEY FACTS
THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
CANADA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Canadian issuers.
SIZE: As of October 31, 1996, the fund had over $ 129 million in
assets.
EMERGING MARKETS FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of emerging market issuers.
These countries can be found in regions such as Southeast Asia, Latin
America, and Eastern Europe.
SIZE: As of October 31, 1996, the fund had over $1.2 billion in assets.
EUROPE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Western European issuers.
SIZE: As of October 31, 1996, the fund had over $691 million in assets.
EUROPE CAPITAL APPRECIATION FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Eastern and Western
European issuers.
SIZE: As of October 31, 1996, the fund had over $170 million in assets.
FRANCE FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of French issuers.
SIZE: As of October 31, 1996, the fund had over $5 million in assets.
GERMANY FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of German issuers.
SIZE: As of October 31, 1996, the fund had over $7 million in assets.
HONG KONG AND CHINA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Hong Kong and Chinese
issuers.
SIZE: As of October 31, 1996, the fund had over $109 million in assets.
JAPAN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Japanese issuers.
SIZE: As of October 31, 1996, the fund had over $290 million in assets.
JAPAN SMALL COMPANIES FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Japanese issuers with
small market capitalizations.
SIZE: As of October 31, 1996, the fund had over $105 million in
assets.
LATIN AMERICA FUND
GOAL: High total investment return.
STRATEGY: Invests mainly in equity and debt securities of Latin American
issuers.
SIZE: As of October 31, 1996, the fund had over $ 557 million
in assets.
NORDIC FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of issuers in Denmark,
Finland, Norway, and Sweden.
SIZE: As of October 31, 1996, the fund had over $ 30 million
in assets.
PACIFIC BASIN FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Pacific Basin issuers.
SIZE: As of October 31, 1996, the fund had over $ 572 million
in assets.
SOUTHEAST ASIA FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of Southeast Asian issuers.
The fund does not anticipate investing in Japan.
SIZE: As of October 31, 1996, the fund had over $ 755 million
in assets.
UNITED KINGDOM FUND
GOAL: Long-term growth of capital.
STRATEGY: Invests mainly in equity securities of British issuers.
SIZE: As of October 31, 1996, the fund had over $ 2 million in
assets.
WHO MAY WANT TO INVEST
The funds are designed for investors looking to target a particular region,
country, or emerging market. By including international investments in your
portfolio, you can achieve additional diversification and participate in
growth opportunities around the world. However, it is important to note
that investments in foreign securities involve risks in addition to those
of U.S. investments.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other company,
political, or economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks have
shown greater growth potential than other types of securities. Bond values
fluctuate based on changes in interest rates and in the credit quality of
the issuer.
In addition to those general risks, international investing involves
different or increased risks. The performance of international funds
depends upon currency values, the political and regulatory environment, and
overall economic factors in the countries in which a fund invests. These
risks are particularly significant for funds that focus on a single
country, group of countries or emerging markets. France Fund, Germany Fund,
Hong Kong and China Fund, Japan Small Companies Fund, Nordic Fund, and
United Kingdom Fund are non-diversified funds. Non-diversified funds may
invest a greater portion of their assets in securities of individual
issuers than diversified funds. As a result, changes in the market value of
a single issuer could cause greater fluctuations in share value than would
occur in a more diversified fund. See "INVESTMENT PRINCIPLES AND RISKS" on
page .
When you sell your shares, they may be worth more or less than what you
paid for them. By themselves, the funds do not constitute a balanced
investment plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell shares of a fund. In addition, you may be charged an annual account
maintenance fee if your account balance falls below $2,500. Lower sales
charges may be available for accounts over $250,000. See "Transaction
Details," pages and , for an explanation of how and when these charges
apply.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee that, for Canada Fund, Europe Fund, Europe
Capital Appreciation Fund, Japan Fund, Pacific Basin Fund, and Southeast
Asia Fund, varies based on its performance. Each fund also incurs other
expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports. A fund's expenses
are factored into its share price or dividends and are not charged directly
to shareholder accounts (see page ).
The following figures are based on historical expenses, and are
calculated as a percentage of average net assets. A portion of the
brokerage commissions that the funds pay is used to reduce fund expenses.
In addition, each fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances is used
to reduce custodian and transfer agent expenses. Including these
reductions, the total operating expenses for the affected funds presented
in the table would have been as follows:
Fund %
Canada Fund .98%
Emerging Markets Fund 1.29
%
Europe Capital Appreciation Fund 1.30
%
Japan Fund 1.14
%
Pacific Basin Fund 1.24
%
Southeast Asia Fund 1.12
%
United Kingdom Fund 1.97
%
EXAMPLES. Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as described. For every $1,000
you invested, here's how much you would pay in total expenses if you close
your account after the number of years indicated.
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Transaction expenses Operating expenses Examples
CANADA Maximum 3.00 Manageme .45% After 1 $ 40
FUND sales charge % nt fee year
on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 61
sales charge years
on reinvested
distributions
Deferred None Other .56% After 5 $ 84
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.01 After 10 $ 150
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
EMERGING Maximum 3.00 Manageme .76% After 1 $ 43
MARKETS sales charge % nt fee year
FUND on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 70
sales charge years
on reinvested
distributions
Deferred None Other .54% After 5 $ 99
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.30 After 10 $ 182
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Transaction expenses Operating expenses Examples
EUROPE Maximum 3.00 Manageme .84% After 1 $ 43
FUND sales charge % nt fee year
on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 69
sales charge years
on reinvested
distributions
Deferred None Other .43% After 5 $ 98
sales charge expenses years
on
redemptions
Redemption 1.00 Total fund 1.27 After 10 $ 179
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
EUROPE Maximum 3.00 Manageme .80% After 1 $ 43
CAPITAL sales charge % nt fee year
APPRECIATIO on
N FUND purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 71
sales charge years
on reinvested
distributions
Deferred None Other .53% After 5 $ 101
sales charge expenses years
on
redemptions
Redemption 1.00 Total fund 1.33 After 10 $ 185
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
FRANCE Maximum 3.00 Manageme .00% After 1 $ 50
FUND sales charge % nt fee year
on (after
purchases reimbursem
(as a % of ent)
offering
price)
Maximum None 12b-1 fee None After 3 $ 91
sales charge years
on reinvested
distributions
Deferred None Other 2.00 After 5 $ 135
sales charge expenses % years
on (after
redemptions reimburse
ment)
Redemption 1.50 Total fund 2.00 After 10 $ 256
fee (as a % % operating % years
of amount expenses
redeemed on (after
shares held reimburse
less than ment)
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
GERMANY Maximum 3.00 Manageme .00% After 1 $ 50
FUND sales charge % nt fee year
on (after
purchases reimbursem
(as a % of ent)
offering
price)
Maximum None 12b-1 fee None After 3 $ 91
sales charge years
on reinvested
distributions
Deferred None Other 2.00 After 5 $ 135
sales charge expenses % years
on (after
redemptions reimburse
ment)
Redemption 1.50 Total fund 2.00 After 10 $ 256
fee (as a % % operating % years
of amount expenses
redeemed on (after
shares held reimburse
less than ment)
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Transaction expenses Operating expenses Examples
HONG KONG Maximum 3.00 Manageme .75% After 1 $ 46
AND sales charge % nt fee year
CHINA FUND on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 80
sales charge years
on reinvested
distributions
Deferred None Other .87% After 5 $ 115
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.62 After 10 $ 216
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
JAPAN FUND Maximum 3.00 Manageme .68% After 1 $ 41
sales charge % nt fee year
on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 65
sales charge years
on reinvested
distributions
Deferred None Other .47% After 5 $ 91
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.15 After 10 $ 166
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
JAPAN Maximum 3.00 Manageme .75% After 1 $ 43
SMALL sales charge % nt fee year
COMPANIES on
FUND purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 71
sales charge years
on reinvested
distributions
Deferred None Other .59% After 5 $ 101
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.34 After 10 $ 186
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
LATIN Maximum 3.00 Manageme .76% After 1 $ 43
AMERICA sales charge % nt fee year
FUND on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 71
sales charge years
on reinvested
distributions
Deferred None Other .56% After 5 $ 100
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.32 After 10 $ 184
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Transaction expenses Operating expenses Examples
NORDIC Maximum 3.00 Manageme .00% After 1 $ 50
FUND sales charge % nt fee year
on (after
purchases reimburse
(as a % of ment)
offering
price)
Maximum None 12b-1 fee None After 3 $ 91
sales charge years
on reinvested
distributions
Deferred None Other 2.00 After 5 $ 135
sales charge expenses % years
on (after
redemptions reimburse
ment)
Redemption 1.50 Total fund 2.00 After 10 $ 256
fee (as a % % operating % years
of amount expenses
redeemed on (after
shares held reimburse
less than ment)
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PACIFIC Maximum 3.00 Manageme .75% After 1 $ 42
BASIN FUND sales charge % nt fee year
on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 69
sales charge years
on reinvested
distributions
Deferred None Other .51% After 5 $ 97
sales charge expenses years
on
redemptions
Redemption 1.00 Total fund 1.26 After 10 $ 178
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
SOUTHEAST Maximum 3.00 Manageme .65% After 1 $ 41
ASIA sales charge % nt fee year
FUND on
purchases
(as a % of
offering
price)
Maximum None 12b-1 fee None After 3 $ 65
sales charge years
on reinvested
distributions
Deferred None Other .48% After 5 $ 90
sales charge expenses years
on
redemptions
Redemption 1.50 Total fund 1.13 After 10 $ 163
fee (as a % % operating % years
of amount expenses
redeemed on
shares held
less than
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
UNITED Maximum 3.00 Manageme .00% After 1 $ 50
KINGDOM sales charge % nt fee year
FUND on (after
purchases reimbursem
(as a % of ent)
offering
price)
Maximum None 12b-1 fee None After 3 $ 91
sales charge years
on reinvested
distributions
Deferred None Other 2.00 After 5 $ 135
sales charge expenses % years
on (after
redemptions reimburse
ment)
Redemption 1.50 Total fund 2.00 After 10 $ 256
fee (as a % % operating % years
of amount expenses
redeemed on (after
shares held reimburse
less than ment)
90 days)
Exchange None
fee
Annual $12.0
account 0
maintenance
fee
(for accounts
under
$2,500)
</TABLE>
FMR has voluntarily agreed to reimburse France Fund, Germany Fund,
Nordic Fund, and United Kingdom Fund to the extent that total
operating expenses exceed 2.00% of each fund's average net assets.
If these agreements were not in effect, the management fee, other expenses,
and total operating expenses would have been .75%, 3.95%, and 4.70%,
respectively, for France Fund; .75%, 3.20%, and 3.95%, respectively, for
Germany Fund; .75%, 2.47%, and 3.22%, respectively, for Nordic Fund; and
.75%, 8.07%, and 8.82%, respectively, for United Kingdom Fund. Expenses
eligible for reimbursement do not include interest, taxes, brokerage
commissions, or extraordinary expenses.
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds' Annual Report and have
been audited by either Coopers & Lybrand L.L.P. (Canada Fund, Emerging
Markets Fund, Europe Fund, Japan Fund, and Pacific Basin Fund) or Price
Waterhouse LLP (Europe Capital Appreciation Fund, France Fund, Germany
Fund, Hong Kong and China Fund, Japan Small Companies Fund, Latin America
Fund, Nordic Fund, Southeast Asia Fund, and United Kingdom Fund) ,
independent accountants. Their reports on the financial statements and
financial highlights are included in the Annual Report. The financial
statements and financial highlights are incorporated by reference into (are
legally a part of) the funds' SAI.
CANADA FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Selected
Per-Share
Data and
Ratios
2.Years 1996 1995 1994 1993 1992 1991 1990 1989 1988F
ended
October 31
3.Net asset $ 17.55 $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74 $ 10.00
value,
beginning of
period
4.Income
from
Investment
Operations
5. Net .08 .05 -- (.15) (.02)B .03B .05B .02B .32
investment
income
(loss)
6. Net 4.27 .33 (.60) 3.76 (1.11) 3.59 (1.24) 2.96 2.42
realized and
unrealized
gain (loss)
7. Total from 4.35 .38 (.60) 3.61 (1.13) 3.62 (1.19) 2.98 2.74
investment
operations
8.Less
Distributions
9. From net (.08) (.01) -- (.02) -- (.06) (.01) (.12) --
investment
income
10. From -- -- -- -- (.92) (.85) (.68) (.15)C --
net realized
gain
11. In -- -- (.04) -- -- -- -- -- --
excess of
net realized
gain
12. Total (.08) (.01) (.04) (.02) (.92) (.91) (.69) (.27) --
distributions
13.Redempti .02 .00 -- -- -- -- -- -- --
on fees
added to
paid in
capital
14.Net asset $ 21.84 $ 17.55 $ 17.18 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74
value, end of
period
15.Total 24.99% 2.22% (3.37) 25.40% (7.09) 28.13% (8.16) 23.94% 27.40%
returnE,G % % %
16.Net $ 129,671 $ 326,763 $ 368,33 $ 95,977 $ 21,701 $ 23,327 $ 17,736 $ 24,331 $ 10,802
assets, end 0
of period
(000
omitted)
17.Ratio of 1.01% 1.09% 1.57% 2.00% 2.00% 2.01% 2.05% 2.06% 2.02%A
expenses to ,
average net
assets
18.Ratio of .98%I 1.08% 1.57% 2.00% 2.00% 2.01% 2.05% 2.06% 2.02%A
expenses to
average net
assets
after
expense
reductions
19.Ratio of .40% .26% (.14) (.66) (.11) .17% .34% .16% 4.24%A
net % % %
investment
income
(loss)
to average
net assets
20.Portfolio 139% 75% 59% 131% 55% 68% 164% 152% 401%A
turnover rate
Average $ .0276
commission
rateJ
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A ANNUALIZED
B NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER.
E THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
F FROM NOVEMBER 17, 1987 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1988.
G TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO NOT INCLUDE
THE ONE TIME SALES CHARGE.
H EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER
PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
J FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
</TABLE>
EMERGING MARKETS FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
21.Sel
ected
Per-Sh
are
Data
and
Ratios
22.Year 1996 1995 1994E 1993 1992 1991D
s
ended
Octobe
r 31
23.Net $ 15.14 $ 19.25 $ 16.18 $ 11.05 $ 10.40 $ 10.00
asset
value,
beginni
ng of
period
24.Inco
me
from
Invest
ment
Operati
ons
25. N .12 .05 .06 .06C .08 .12
et
invest
ment
income
26. N 1.60 (4.13) 2.97 5.28 .76 .30
et
realize
d and
unreali
zed
gain
(loss)
27. To 1.72 (4.08) 3.03 5.34 .84 .42
tal
from
invest
ment
operati
ons
28.Les
s
Distrib
utions
29. Fr (.18) (.04) (.04) (.08) (.08) (.04)
om net
invest
ment
income
30. In (.09) -- (.01) -- -- --
excess
of net
invest
ment
income
31. Fr -- -- -- (.15) (.14) --
om net
realize
d gain
32. To (.27) (.04) (.05) (.23) (.22) (.04)
tal
distribu
tions
33.Red .02 .01 .09 .02 .03 .02
emptio
n fees
added
to paid
in
capital
34.Net $ 16.61 $ 15.14 $ 19.25 $ 16.18 $ 11.05 $ 10.40
asset
value,
end of
period
35.Tota 11.69% (21.17)% 19.32% 49.58% 8.56% 4.41%
l
return
,
36.Net $ 1,263,164 $ 1,095,583 $ 1,976,371 $ 757,737 $ 13,732 $ 6,450
assets,
end of
period
(000
omitted
)
37.Rati 1.30% 1.28% 1.52% 1.91% 2.60% 2.60%B
o of B
expens
es to
averag
e net
assets
38.Rati 1.29%G 1.28% 1.52% 1.91% 2.60% 2.60%
o of
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
39.Rati .74% .46% .39% .44% .90% 1.34%
o of
net
invest
ment
income
to
averag
e net
assets
40.Port 77% 78% 107% 57% 159% 45%
folio
turnov
er rate
Averag $ .0017
e
commi
ssion
rateH
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D FROM NOVEMBER 1, 1990 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1991.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN
OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A
FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS
WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
</TABLE>
EUROPE FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
41.Sel
ected
Per-Sh
are
Data
and
Ratios
42.Year 1996 1995 1994 1993 1992D 1991 1990 1989 1988 1987
s
ended
Octobe
r 31
43.Net $ 23.51 $ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04 $ 12.96 $ 12.09 $ 9.99
asset
value,
beginni
ng of
period
44.Inco
me
from
Invest
ment
Operati
ons
45. N .30 .27 .18 .25 .27 .43F .46 .25 .12 .08
et
invest
ment
income
46. Ne 4.23 2.37 2.65 3.35 (.57) (.40) .97 2.11 .75 2.03
t
realize
d and
unreali
zed
gain
(loss)
47. To 4.53 2.64 2.83 3.60 (.30) .03 1.43 2.36 .87 2.11
tal
from
invest
ment
operati
ons
48.Les
s
Distrib
utions
49. Fr (.12) (.20) (.08) (.29) (.48) (.35) (.19) (.24) -- (.01)
om net
invest
ment
income
50. Fr (.81) (.11) -- -- (.03)B (.03) -- (.04)B -- --
om net B
realize
d gain
51. To (.93) (.31) (.08) (.29) (.51) (.38) (.19) (.28) -- (.01)
tal
distribu
tions
52.Red .01 .00 -- -- -- -- -- -- -- --
emptio
n fees
added
to paid
in
capital
53.Net $ 27.12 $ 23.51 $ 21.18 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04 $ 12.96 $ 12.09
asset
value,
end of
period
54.Tota 20.14 12.76% 15.41% 24.24% (1.89) .15 9.50 18.62% 7.20 21.13
l % % % % % %
return
,
55.Net $ 691,76 $ 492,86 $ 507,46 $ 528,92 $ 431,22 $ 297,83 $ 389,27 $ 97,288 $ 102,02 $ 131,43
assets, 2 7 0 9 3 1 3 9 1
end of
period
(000
omitted
)
56.Rati 1.27 1.18% 1.35% 1.25% 1.22% 1.31 1.45 1.89% 2.66 1.91
o of % % % % %
expens
es to
averag
e net
assets
57.Rati 1.20 1.12% .85% 1.44% 2.38% 2.83 2.87 1.67% .97 .48
o of net % % % % %
investm
ent
income
to
averag
e net
assets
58.Port 45 38% 49% 76% 95% 80 148 160% 180 241
folio % % % % %
turnov
er rate
Averag $ .0299
e
commi
ssion
rateA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
B INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
D AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
E THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
F INCLUDES $.05 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY WITHHELD ON DIVIDEND
AND INTEREST PAYMENTS.
G EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
H FMR OR FSC 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.
I NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
</TABLE>
EUROPE CAPITAL APPRECIATION FUND
59.Sel
ected
Per-Sh
are
Data
and
Ratios
60.Year 1996 1995 1994B
s
ended
Octobe
r 31
61.Net $ 12.08 $ 11.35 $ 10.00
asset
value,
beginni
ng of
period
62.Inco
me
from
Invest
ment
Operati
ons
63. N .22 .23 .08E
et
invest
ment
income
64. N 2.00 .50 1.27
et
realize
d and
unreali
zed
gain
(loss)
65. To 2.22 .73 1.35
tal
from
invest
ment
operati
ons
66.Les (.23) -- --
s
distribu
tions
from
net
invest
ment
income
67.Net $ 14.07 $ 12.08 $ 11.35
asset
value,
end of
period
68.Tota 18.74% 6.43% 13.50%
l
returnC,
69.Net $ 170,192 $ 194,43 $ 352,85
assets, 3 5
end of
period
(000
omitted
)
70.Rati 1.33% 1.36% 1.54%
o of A
expens
es to
averag
e net
assets
71.Rati 1.30% 1.36% 1.54%
o of G
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
72.Rati 1.66% 1.45% .79%
o of A
net
invest
ment
income
to
averag
e net
assets
73.Port 155% 176% 317%
folio A
turnov
er rate
Averag $ .0245
e
commi
ssion
rate
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A ANNUALIZED
B DECEMBER 21, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1994.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO NOT INCLUDE THE
ONE TIME SALES CHARGE.
D FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
F THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID
OR REDUCED A PORTION OF THE FUND'S EXPENSES.
H INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB WHICH AMOUNTED
TO $.04 PER SHARE.
</TABLE>
FRANCE FUND
74.Sel
ected
Per-Sh
are
Data
and
Ratios
75.Year 1996E
ended
Octobe
r 31
76.Net $ 10.00
asset
value,
beginni
ng of
period
77.Inco
me
from
Invest
ment
Operati
ons
78. N .23
et
invest
ment
income
79. N 1.98
et
realize
d and
unreali
zed
gain
(loss)
80. To 2.21
tal
from
invest
ment
operati
ons
81.Les (.04)
s
distribu
tions
from
net
invest
ment
income
82.Red .07
emptio
n fees
added
to paid
in
capital
83.Net $ 12.24
asset
value,
end of
period
84.Tota 22.89%
l
returnA,
B
85.Net $ 5,542
assets,
end of
period
(000
omitted
)
86.Rati 2.00%
o of C
expens
es to
averag
e net
assets
87.Rati 1.74%
o of
net
invest
ment
income
to
averag
e net
assets
88.Port 129%
folio
turnov
er rate
89.Ave $ .1932
rage
commi
ssion
rateD
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C FMR 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.
D A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
E FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
GERMANY FUND
90.Sel
ected
Per-Sh
are
Data
and
Ratios
91.Year 1996E
ended
Octobe
r 31
92.Net $ 10.00
asset
value,
beginni
ng of
period
93.Inco
me
from
Invest
ment
Operati
ons
94. N .01
et
invest
ment
income
95. N 1.31
et
realize
d and
unreali
zed
gain
(loss)
96. To 1.32
tal
from
invest
ment
operati
ons
97.Red .02
emptio
n fees
added
to paid
in
capital
98.Net $ 11.34
asset
value,
end of
period
99.Tota 13.40%
l
returnA,
B
100.Ne $ 7,178
t
assets,
end of
period
(000
omitted
)
101.Ra 2.00%
tio of C
expens
es to
averag
e net
assets
102.Ra .12%
tio of
net
invest
ment
income
to
averag
e net
assets
103.Po 133%
rtfolio
turnov
er rate
104.Av $ .1714
erage
commi
ssion
rateD
A THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C FMR 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.
D A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
E FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
HONG KONG AND CHINA FUND
105.Se
lected
Per-Sh
are
Data
and
Ratios
106.Ye 1996
ar
ended
Octobe
r 31
107.Ne $ 10.00
t asset
value,
beginni
ng of
period
108.Inc
ome
from
Invest
ment
Operati
ons
109. N .29
et
invest
ment
income
110. N 2.64
et
realize
d and
unreali
zed
gain
(loss)
111. To 2.93
tal
from
invest
ment
operati
ons
112.Le (.01)
ss
distribu
tions
from
net
invest
ment
income
113.Re .05
dempti
on fees
added
to paid
in
capital
114.Ne $ 12.97
t asset
value,
end of
period
115.Tot 29.83%
al
return
116.Ne $ 109,88
t 0
assets,
end of
period
(000
omitted
)
117.Ra 1.62%
tio of
expens
es to
averag
e net
assets
118.Ra 2.53%
tio of
net
invest
ment
income
to
averag
e net
assets
119.Po 118%
rtfolio
turnov
er rate
120.Av $ .0049
erage
commi
ssion
rate
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
C FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
JAPAN FUND
121.Se
lected
Per-Sh
are
Data
and
Ratios
122.Ye 1996 1995 1994G 1993 1992D
ars
ended
Octobe
r 31
123.Ne $ 12.08 $ 14.27 $ 13.35 $ 9.84 $ 10.00
t asset
value,
beginni
ng of
period
124.Inc
ome
from
Invest
ment
Operati
ons
125. N (.02) (.02) (.04)E (.09) --
et
invest
ment
income
(loss)
126. N (.40) (1.89) 1.31 3.60 (.16)
et
realize
d and
unreali
zed
gain
(loss)
on
invest
ments
127. To (.42) (1.91) 1.27 3.51 (.16)
tal
from
invest
ment
operati
ons
128.Le -- (.36) (.39) -- --
ss
distribu
tions
from
net
realize
d gain
129.Re .02 .08 .04 -- --
dempti
on fees
added
to paid
in
capital
130.Ne $ 11.68 $ 12.08 $ 14.27 $ 13.35 $ 9.84
t asset
value,
end of
period
131.Tot (3.31) (12.96) 10.45% 35.67% (1.60)%
al % %
returnC,
F
132.Ne $ 290,495 $ 343,981 $ 469,639 $ 118,195 $ 2,953
t
assets,
end of
period
(000
omitted
)
133.Ra 1.15% 1.15% 1.42% 1.71% 2.00%A,
tio of B
expens
es to
averag
e net
assets
134.Ra 1.14% 1.15% 1.42% 1.71% 2.00%
tio of H
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
135.Ra (.12) (.06) (.32) (.77) .03%A
tio of % % % %
net
invest
ment
income
(loss)
to
averag
e net
assets
136.Po 83% 86% 153% 257% --
rtfolio
turnov
er rate
Averag $ .0364
e
commi
ssion
rateI
A ANNUALIZED
B FMR AGREED TO REIMBURSE A PORTION OF THE
FUND'S EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED AND DO NOT INCLUDE THE ONE
TIME SALES CHARGE.
D FROM SEPTEMBER 15, 1992 (COMMENCEMENT
OF OPERATIONS) TO OCTOBER 31, 1992.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS
BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
F THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD
CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIOD SHOWN.
G EFFECTIVE NOVEMBER 1, 1993, THE FUND
ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
H FMR OR THE FUND HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID
OR REDUCED A PORTION OF THE FUND'S EXPENSES.
I FOR FISCAL YEARS BEGINNING ON OR AFTER
SEPTEMBER 1, 1995, A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE
TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
JAPAN SMALL COMPANIES FUND
137.Se
lected
Per-Sh
are
Data
and
Ratios
138.Ye 1996D
ar
ended
Octobe
r 31
139.Ne $ 10.00
t asset
value,
beginni
ng of
period
140.Inc
ome
from
Invest
ment
Operati
ons
141. N (.03)
et
invest
ment
income
(loss)
142. N (.87)
et
realize
d and
unreali
zed
gain
(loss)
143. To (.90)
tal
from
invest
ment
operati
ons
144.Re .03
dempti
on fees
added
to paid
in
capital
145.Ne $ 9.13
t asset
value,
end of
period
146.Tot (8.70)
al %
returnB
147.Ne $ 105,66
t 4
assets,
end of
period
(000
omitted
)
148.Ra 1.34%
tio of
expens
es to
averag
e net
assets
149.Ra (.32)
tio of %
net
invest
ment
income
(loss)
to
averag
e net
assets
150.Po 66%
rtfolio
turnov
er rate
151.Av $ .0578
erage
commi
ssion
rateC
A NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
D FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
LATIN AMERICA FUND
152.Se
lected
Per-Sh
are
Data
and
Ratios
153.Ye 1996 1995 1994D 1993C
ars
ended
Octobe
r 31
154.Ne $ 9.75 $ 16.21 $ 13.28 $ 10.00
t asset
value,
beginni
ng of
period
155.Inc
ome
from
Invest
ment
Operati
ons
156. N .22 .04 .07 .03
et
invest
ment
income
157. N 2.72 (6.52) 2.82 3.23
et
realize
d and
unreali
zed
gain
(loss)
158. To 2.94 (6.48) 2.89 3.26
tal
from
invest
ment
operati
ons
159.Le
ss
distribu
tions
160. Fr (.12) -- (.05) --
om net
invest
ment
income
161. Fr -- -- (.05) --
om net
realize
d gain
162. To (.12) -- (.10) --
tal
distribu
tions
163.Re .02 .02 .14 .02
dempti
on fees
added
to paid
in
capital
164.Ne $ 12.59 $ 9.75 $ 16.21 $ 13.28
t asset
value,
end of
period
165.Tot 30.69% (39.85)% 22.89% 32.80%
al
returnB
166.Ne $ 557,889 $ 466,289 $ 888,530 $ 342,934
t
assets,
end of
period
(000
omitted
)
167.Ra 1.32% 1.41% 1.48% 1.94%A
tio of
expens
es to
averag
e net
assets
168.Ra 1.48% .97% .47% 1.21%A
tio of
net
invest
ment
income
to
averag
e net
assets
169.Po 70% 57% 77% 72%A
rtfolio
turnov
er rate
Averag $ .0004
e
commi
ssion
rateE
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
LESS THAN ONE YEAR ARE NOT
ANNUALIZED AND DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C FROM APRIL 19, 1993
(COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1993.
D EFFECTIVE NOVEMBER 1,
1993, THE FUND ADOPTED
STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE,
AND FINANCIAL STATEMENT
PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF
CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS
A RESULT, NET INVESTMENT
INCOME PER SHARE MAY
REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO
BOOK TO TAX DIFFERENCES.
E FOR FISCAL YEARS BEGINNING
ON OR AFTER SEPTEMBER 1,
1995, A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING
PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NORDIC FUND
170.Se
lected
Per-Sh
are
Data
and
Ratios
171.Ye 1996E
ar
ended
Octobe
r 31
172.Ne $ 10.00
t asset
value,
beginni
ng of
period
173.Inc
ome
from
Invest
ment
Operati
ons
174. N .17,
et
invest
ment
income
175. N 2.57
et
realize
d and
unreali
zed
gain
(loss)
176. To 2.74
tal
from
invest
ment
operati
ons
177.Re .03
dempti
on fees
added
to paid
in
capital
178.Ne $ 12.77
t asset
value,
end of
period
179.Tot 27.70%
al
returnA,
B
180.Ne $ 30,871
t
assets,
end of
period
(000
omitted
)
181.Ra 2.00%
tio of C
expens
es to
averag
e net
assets
182.Ra 1.52%
tio of
net
invest
ment
income
to
averag
e net
assets
183.Po 35%
rtfolio
turnov
er rate
184.Av $ .0523
erage
commi
ssion
rateD
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C FMR 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.
D A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
E FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
F INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS FROM VOLVO AB AND
STEEN & STROEM INVEST AS WHICH AMOUNTED TO $.06 AND $.10 PER SHARE,
RESPECTIVELY.
G NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
PACIFIC BASIN FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
185.Se
lected
Per-Sh
are
Data
and
Ratios
186.Ye 1996 1995 1994 1993 1992B 1991 1990 1989 1988 1987
ars
ended
Octobe
r 31
187.Ne $ 14.88 $ 19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78 $ 13.99 $ 12.42 $ 9.90
t asset
value,
beginni
ng of
period
188.Inc
ome
from
Invest
ment
Operati
ons
189. N .05 .07D .10 .20 .08D .02D .12 (.027)D --D (.11)
et
invest
ment
income
(loss)
190. Ne (.29) (3.12) 2.78 5.39 (1.23) .40 (2.37) 1.927 1.71 2.64
t
realize
d and
unreali
zed
gain
(loss)
191. To (.24) (3.05) 2.88 5.59 (1.15) .42 (2.25) 1.900 1.71 2.53
tal
from
invest
ment
operati
ons
192.Le
ss
Distrib
utions
193. Fr -- -- (.01) (.11) -- (.16) (.01) (.003) -- (.01)
om net
invest
ment
income
194. In -- (.02) (.11) -- -- -- -- -- -- --
excess
of net
invest
ment
income
195. Fr -- (2.02) (.28) -- -- -- (.63) (.107)C (.14) --
om net C
realize
d gain
196. To -- (2.04) (.40) (.11) -- (.16) (.64) (.110) (.14) (.01)
tal
distribu
tions
197.Re .01 .01 -- -- -- -- -- -- -- --
dempti
on fee
added
to paid
in
capital
198.Ne $ 14.65 $ 14.88 $ 19.96 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78 $ 13.99 $ 12.42
t asset
value,
end of
period
199.Tot (1.55) (15.87) 16.88 47.06 (8.75) 3.37 (14.99) 13.65% 13.82 25.57%
al % % % % % % % %
returnE,
H
200.Ne $ 572,15 $ 317,63 $ 553,53 $ 493,53 $ 116,27 $ 95,051 $ 86,354 $ 111,811 $ 136,06 $ 159,91
t 0 5 2 3 7 0 7
assets,
end of
period
(000
omitted
)
201.Ra 1.26% 1.32% 1.54 1.59 1.84% 1.88 1.59% 1.40% 1.80 2.10%
tio of I % % % %
expens
es to
averag
e net
assets
202.Ra 1.24% 1.32% 1.54 1.59 1.84% 1.88 1.59% 1.40% 1.80 2.10%
tio of F % % % %
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
203.Ra .30% .44% .04 .15 .65% .12 .88% (.18) .04 (.83)
tio of % % % % % %
net
invest
ment
income
(loss)
to
averag
e net
assets
204.Po 85% 65% 88 77 105% 143 118% 133% 228 324%
rtfolio % % % %
turnov
er rate
Averag $ .0151
e
commi
ssion
rateG
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
A EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
B AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
C INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID
OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
H THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIOD SHOWN.
I FMR 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.
</TABLE>
SOUTHEAST ASIA FUND
205.Se
lected
Per-Sh
are
Data
and
Ratios
206.Ye 1996 1995 1994F 1993D
ars
ended
Octobe
r 31
207.Ne $ 13.88 $ 14.61 $ 13.24 $ 10.00
t asset
value,
beginni
ng of
period
208.Inc
ome
from
Invest
ment
Operati
ons
209. N .14 .15 .04 .01
et
invest
ment
income
210. N .87 (.91) 1.23 3.22
et
realize
d and
unreali
zed
gain
(loss)
211. To 1.01 (.76) 1.27 3.23
tal
from
invest
ment
operati
ons
212.Le
ss
Distrib
utions
213. Fr (.23) -- (.04) --
om net
invest
ment
income
214. In -- -- (.03) --
excess
of net
invest
ment
income
215. To (.23) -- (.07) --
tal
distribu
tions
216.Re .03 .03 .17 .01
dempti
on fees
added
to paid
in
capital
217.Ne $ 14.69 $ 13.88 $ 14.61 $ 13.24
t asset
value,
end of
period
218.Tot 7.59% (5.00)% 10.87% 32.40%
al
returnB
,C
219.Ne $ 755,346 $ 649,868 $ 825,734 $ 499,669
t
assets,
end of
period
(000
omitted
)
220.Ra 1.13% 1.10% 1.47% 2.00%A,
tio of E
expens
es to
averag
e net
assets
221.Ra 1.12%G 1.10% 1.47% 2.00%A
tio of
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
222.Ra .95% .90% .22% .45%A
tio of
net
invest
ment
income
to
averag
e net
assets
223.Po 102% 94% 157% 14%A
rtfolio
turnov
er rate
Averag $ .0129
e
commi
ssion
rateH
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS LESS
THAN ONE YEAR ARE NOT ANNUALIZED
AND DO NOT INCLUDE THE ONE TIME
SALES CHARGE.
C THE TOTAL RETURN WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE
PERIOD SHOWN.
D FROM APRIL 19, 1993
(COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1993.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S
EXPENSE RATIO WOULD HAVE BEEN
HIGHER.
F EFFECTIVE NOVEMBER 1, 1993,
THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF
INCOME, CAPITAL GAIN, AND RETURN
OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER
SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR
REDUCED A PORTION OF THE FUND'S
EXPENSES.
H FOR FISCAL YEARS BEGINNING ON OR
AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS
WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY
DIFFER.
I NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD.
UNITED KINGDOM FUND
224.Se
lected
Per-Sh
are
Data
and
Ratios
225.Ye 1996F
ar ended
October
31
226.Ne $ 10.00
t asset
value,
beginni
ng of
period
227.Inc
ome
from
Invest
ment
Operati
ons
228. N .16
et
invest
ment
income
229. N 1.75
et
realize
d and
unreali
zed
gain
(loss)
230. To 1.91
tal
from
invest
ment
operati
ons
231.Le (.04)
ss
distribu
tions
from
net
invest
ment
income
232.Re .02
dempti
on fees
added
to paid
in
capital
233.Ne $ 11.89
t asset
value,
end of
period
234.Tot 19.38%
al
returnA,
B
235.Ne $ 2,656
t
assets,
end of
period
(000
omitted
)
236.Ra 2.00%
tio of C
expens
es to
averag
e net
assets
237.Ra 1.97%
tio of D
expens
es to
averag
e net
assets
after
expens
e
reducti
ons
238.Ra 1.62%
tio of
net
invest
ment
income
to
averag
e net
assets
239.Po 50%
rtfolio
turnov
er rate
240.Av $ .0086
erage
commi
ssion
rateE
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C FMR 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.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
E A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
F FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Each fund's fiscal year runs from November 1 through October 31. The
table s below show each fund's performance over past fiscal years
compared to different measures, including a comparative index and a
competitive funds average. The charts on present calendar year
performance.
Fiscal Average Annual Total Returns Cumulative Total Returns
years
ended
Octob
er 31
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
CANA 24.99% 7.54%H 11.59%H 24.99% 43.82%H 167.23%H
DA
FUND
B
CANA 21.24% 6.89%H 11.21%H 21.24% 39.51%H 159.22%H
DA
FUND
(LOAD
ADJ.A)
Toront 28.96% 8.78% 10.55% 28.96% 52.35% 145.70%
o
Stock
Exch
ange
Index
EMER 11.69% 11.27% 10.09% 11.69% 70.60% 78.12%
GING
MARK
ETS
FUND
C
EMER 8.34% 10.60% 9.53% 8.34% 65.48% 72.78%
GING
MARK
ETS
FUND
(LOAD
ADJ.A)
MSCI 6.48% 14.07% 18.62% 6.48% 93.14% 178.88%
Emer
ging
Marke
ts
Free
Index
Lipper 9.11% 10.27% N/A 9.11% 63.31% N/A
Emer
ging
Marke
ts
Fund
s
Avera
ge
EURO 20.14% 13.77%H 12.40%H 20.14% 90.59%H 221.91%H
PE ,I ,I
FUND
EURO 16.54% 13.08%H 12.06%H 16.54% 84.87%H 212.25%H
PE ,I ,I
FUND
(LOAD
ADJ.A)
MSCI 17.47% 12.77% 12.12%I 17.47% 82.41% 214.00%I
Europ
e
Index
Lipper 17.03% 12.03% 10.23%I 17.03% 77.62% 167.39%I
Europ
ean
Regio
n
Fund
s
Avera
ge
EURO 18.74% N/A 13.41% 18.74% N/A 43.44%
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
D
EURO 15.18% N/A 12.21% 15.18% N/A 39.14%
PE
CAPIT
AL
APPR
ECIATI
ON
FUND
(LOAD
ADJ.A)
MSCI 17.47% N/A 13.15% 17.47% N/A 42.50%
Europ
e
Index
Lipper 17.03% N/A N/A 17.03% N/A N/A
Europ
ean
Regio
n
Fund
s
Avera
ge
FRANC 22.89%H N/A 22.89%H 22.89%H N/A 22.89%H
E
FUND
G
FRANC 19.20%H N/A 19.20%H 19.20%H N/A 19.20%H
E
FUND
(LOAD
ADJ.A)
SBF 18.36% N/A 18.36% 18.36% N/A 18.36%
250
Index
Lipper 17.03% N/A N/A 17.03% N/A N/A
Europ
ean
Regio
n
Fund
s
Avera
ge
GERM 13.40%H N/A 13.40%H 13.40%H N/A 13.40%H
ANY
FUND
G
GERM 10.00%H N/A 10.00%H 10.00%H N/A 10.00%H
ANY
FUND
(LOAD
ADJ.A)
DAX 12.88% N/A 12.88% 12.88% N/A 12.88%
100
Index
Lipper 17.03% N/A N/A 17.03% N/A N/A
Europ
ean
Regio
n
Fund
s
Avera
ge
HONG 29.83% N/A 29.83% 29.83% N/A 29.83%
KONG
AND
CHIN
A
FUND
G
HONG 25.93% N/A 25.93% 25.93% N/A 25.93%
KONG
AND
CHIN
A
FUND
(LOAD
ADJ.A)
Hang 31.55% N/A 31.55% 31.55% N/A 31.55%
Seng
Index
Lipper 5.45% N/A N/A 5.45% N/A N/A
Pacifi
c
ex-Ja
pan
Fund
s
Avera
ge
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal years ended October 31 Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
</TABLE>
JAPA -3.31% N/A 5.36%H -3.31% N/A 24.10%H
N
FUND
E
JAPA -6.21% N/A 4.59%H -6.21% N/A 20.38%H
N
FUND
(LOAD
ADJ.A)
TOPI -0.52% N/A 5.85% -0.52% N/A 26.50%
X
Index
Lipper -0.93% N/A N/A -0.93% N/A N/A
Japan
ese
Fund
s
Avera
ge
JAPA -8.70% N/A -8.70% -8.70% N/A -8.70%
N
SMALL
COM
PANIE
S
FUND
G
JAPA -11.44% N/A -11.44% -11.44% N/A -11.44%
N
SMALL
COM
PANIE
S
FUND
(LOAD
ADJ.A)
TOPI -0.52% N/A -0.52% -0.52% N/A -0.52%
X
Index
Lipper -0.93% N/A N/A -0.93% N/A N/A
Japan
ese
Fund
s
Avera
ge
LATIN 30.69% N/A 7.29% 30.69% N/A 28.28%
AMER
ICA
FUND
F
LATIN 26.77% N/A 6.37% 26.77% N/A 24.43%
AMER
ICA
FUND
(LOAD
ADJ.A)
MSCI 23.34% N/A 12.66% 23.34% N/A 52.50%
Latin
Ameri
ca
Free
Index
Lipper 26.06% N/A N/A 26.06% N/A N/A
Latin
Ameri
can
Regio
n
Fund
s
Avera
ge
NORDI 27.70%H N/A 27.70%H 27.70%H N/A 27.70%H
C
FUND
G
NORDI 23.87%H N/A 23.87%H 23.87%H N/A 23.87%H
C
FUND
(LOAD
ADJ.A)
FT-A- 21.20% N/A 21.20% 21.20% N/A 21.20%
Nordi
c
Index
Lipper 17.03% N/A N/A 17.03% N/A N/A
Europ
ean
Regio
n
Fund
s
Avera
ge
PACIFI -1.55% 5.37%H 6.37%H -1.55% 29.92%H 85.45%H
C ,I ,I
BASIN
FUND
PACIFI -4.50% 4.74%H 6.05%H -4.50% 26.03%H 79.89%H
C ,I ,I
BASIN
FUND
(LOAD
ADJ.A)
MSCI 3.31% 3.06% 6.83%I 3.31% 16.26% 93.63%I
Pacific
Index
Lipper 5.10% 8.21% 8.81%I 5.10% 49.49% 136.62%I
Pacific
Regio
n
Funds
Avera
ge
SOUT 7.59% N/A 12.14%H 7.59% N/A 50.04%H
HEAST
ASIA
FUND
F
SOUT 4.36% N/A 11.18%H 4.36% N/A 45.53%H
HEAST
ASIA
FUND
(LOAD
ADJ.A)
MSCI 9.89% N/A 15.60% 9.89% N/A 67.05%
Far
East
ex-Ja
pan
Free
Index
Lipper 5.45% N/A N/A 5.45% N/A N/A
Pacifi
c
ex-Ja
pan
Fund
s
Avera
ge
UNITE 19.38%H N/A 19.38%H 19.38%H N/A 19.38%H
D
KING
DOM
FUND
G
UNITE 15.80%H N/A 15.80%H 15.80%H N/A 15.80%H
D
KING
DOM
FUND
(LOAD
ADJ.A)
FT-All- 21.94% N/A 21.94% 21.94% N/A 21.94%
Share
s
Index
Lipper 17.03% N/A N/A 17.03% N/A N/A
Europ
ean
Regio
n
Funds
Avera
ge
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING A FUND'S SALES CHARGE
B FROM NOVEMBER 17, 1987
C FROM NOVEMBER 1, 1990
D FROM DECEMBER 21, 1993
E FROM SEPTEMBER 15, 1992
F FROM APRIL 19, 1993
G FROM NOVEMBER 1, 1995
H IF FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THESE PERIODS,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
I 10 YEAR RETURN
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1988 1989 1990 1991 1992 1993 1994 1995
CANADA FUND 19.47 26.99 -5.49 17.68 -2.87 25.47 -11.9 19.39
% % % % % % 8% %
Toronto Stock Exchange (TSE) 300 21.04 24.92 -14.9 12.44 -10.3 27.45 -5.88 17.70
% % 0% % 8% % % %
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: 19.47
Row: 6, Col: 1, Value: 26.99
Row: 7, Col: 1, Value: -5.49
Row: 8, Col: 1, Value: 17.68
Row: 9, Col: 1, Value: -2.87
Row: 10, Col: 1, Value: 25.47
Row: 11, Col: 1, Value: -11.98
Row: 12, Col: 1, Value: 19.39
(LARGE SOLID BOX) CANADA FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1991 1992 1993 1994 1995
EMERGING MARKETS FUND 6.76% 5.85% 81.76 -17.9 -3.18
% 3% %
MSCI Emerging Markets Free Index 60.16 11.56 73.21 -7.32 -5.21
% % % % %
Lipper Emerging Markets Funds Avg. 15.06 0.18% 72.17 -9.62 -4.59
% % % %
Consumer Price Index 3.06% 2.90% 2.75% 2.67% 2.54%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 8, Col: 1, Value: 6.76
Row: 9, Col: 1, Value: 5.85
Row: 10, Col: 1, Value: 81.76000000000001
Row: 11, Col: 1, Value: -17.93
Row: 12, Col: 1, Value: -3.18
(LARGE SOLID BOX) EMERGING MARKETS FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995
EUROPE FUND 14.90 5.84% 32.33 -4.59 4.16% -2.52 27.16 6.26% 18.84
% % % % % %
MSCI Europe Index 3.67% 15.82 28.50 -3.84 13.11 -4.71 29.28 2.28% 21.62
% % % % % % %
Lipper European Region Funds Avg. 17.12 7.23% 25.22 -3.51 6.60% -7.93 25.76 1.22% 16.85
% % % % % %
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 14.9
Row: 5, Col: 1, Value: 5.84
Row: 6, Col: 1, Value: 32.33
Row: 7, Col: 1, Value: -4.59
Row: 8, Col: 1, Value: 4.159999999999999
Row: 9, Col: 1, Value: -2.52
Row: 10, Col: 1, Value: 27.16
Row: 11, Col: 1, Value: 6.26
Row: 12, Col: 1, Value: 18.84
(LARGE SOLID BOX) EUROPE FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1994 1995
EUROPE CAPITAL APPRECIATION FUND 6.88% 14.69
%
MSCI Europe Index 2.28% 21.62
%
Lipper European Region Funds Avg. 1.22% 16.85
%
Consumer Price Index 2.67% 2.54%
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1993 1994 1995
JAPAN FUND 20.45 16.46 -2.13
% % %
Tokyo Stock Exchange Index (TOPIX) 24.14 22.06 -1.62
% % %
Lipper Japanese Funds Avg. 22.94 15.39 -1.85
% % %
Consumer Price Index 2.75% 2.67% 2.54%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 8, Col: 1, Value: 0.0
Row: 9, Col: 1, Value: 0.0
Row: 10, Col: 1, Value: 20.45
Row: 11, Col: 1, Value: 16.46
Row: 12, Col: 1, Value: -2.13
(LARGE SOLID BOX) JAPAN FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1994 1995
LATIN AMERICA FUND -23.1 -16.4
7% 6%
MSCI Emg. Mkts. Free-Latin America .64% -12.8
Index 3%
Lipper Latin America Region Funds -14.2 -20.5
Avg. 4% 6%
Consumer Price Index 2.67% 2.54%
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995
PACIFIC BASIN FUND 24.99 10.45 11.44 -27.2 12.54 -7.62 63.91 -2.81 -6.11
% % % 1% % % % % %
MSCI Pacific Index 39.66 34.99 2.53% -34.4 11.30 -18.4 35.69 12.83 2.78%
% % 2% % 0% % %
Lipper Pacific Region Funds Avg. 17.54 21.34 24.47 -16.0 17.04 1.14% 63.81 -12.4 1.97%
% % % 5% % % 5%
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 24.99
Row: 5, Col: 1, Value: 10.45
Row: 6, Col: 1, Value: 11.44
Row: 7, Col: 1, Value: -27.21
Row: 8, Col: 1, Value: 12.54
Row: 9, Col: 1, Value: -7.619999999999999
Row: 10, Col: 1, Value: 63.91
Row: 11, Col: 1, Value: -2.81
Row: 12, Col: 1, Value: -6.109999999999999
(LARGE SOLID BOX) PACIFIC BASIN FUND
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1994 1995
SOUTHEAST ASIA FUND -21.7 12.18
6% %
MSCI Far East ex-Japan Free Index -17.4 8.84%
8%
Lipper Pacific ex-Japan Funds Avg. -19.1 1.95%
4%
Consumer Price Index 2.67% 2.54%
</TABLE>
EXPLANATION OF TERMS
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political and
economic climate, and the value of its currency
create these risks. Because these funds invest
in stocks, their performance is also related to
foreign stock markets. For these reasons an
international fund's performance may be more
volatile than that of a fund that invests
exclusively in the United States.
(checkmark)
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results. Average annual total returns covering periods
of less than one year assume that performance will remain constant for the
rest of the year.
(small solid bullet) TORONTO STOCK EXCHANGE (TSE) 300 is a market
capitalization weighted index of 300 stocks traded in the Canadian market.
(small solid bullet) MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING
MARKETS FREE INDEX is a market capitalization weighted index of over
850 stocks traded in 22 world markets.
(small solid bullet) MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE
INDEX is a market capitalization weighted index of over 550 stocks
traded in 14 European markets.
(small solid bullet) SOCIETE DES BOURSES FRANCAISES (SBF) 250 is a
market capitalization weighted index of the stocks of the 250 largest
companies in the French market.
(small solid bullet) DEUTSCHER AKTIENINDEX (DAX) 100 is a market
capitalization weighted index of the 100 most heavily traded stocks in the
German market.
(small solid bullet) HANG SENG INDEX is a market capitalization weighted
index of the stocks of the 33 largest companies in the Hong Kong
market.
(small solid bullet) TOKYO STOCK EXCHANGE INDEX (TOPIX) is a market
capitalization weighted index of over 1,100 stocks traded in the Japanese
market.
(small solid bullet) MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING
MARKETS FREE-LATIN AMERICA INDEX is a market capitalization weighted
index of approximately 170 stocks traded in seven Latin American markets.
(small solid bullet) FT - ACTUARIES WORLD NORDIC INDEX is a market
capitalization weighted index of over 90 stocks traded in four Scandinavian
markets.
(small solid bullet) MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC
INDEX is a market capitalization weighted index of over 400 stocks
traded in six Pacific region markets.
(small solid bullet) MORGAN STANLEY CAPITAL INTERNATIONAL COMBINED FAR
EAST EX-JAPAN FREE INDEX is a market capitalization weighted index of
over 450 stocks traded in eight Asian markets, excluding Japan.
(small solid bullet) FT - ALL-SHARES INDEX is a market capitalization
weighted index of over 750 stocks traded in the U.K. market.
Unlike each fund's returns, the total returns of each comparative index do
not include the effect of any brokerage commissions, transaction fees, or
other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
COMPETITIVE FUNDS AVERAGES reflect the performance of mutual funds with
similar investment objectives. These averages, published by Lipper
Analytical Services, Inc., exclude the effect of sales charges.
(small solid bullet) Emerging Markets Fund is compared to the Lipper
Emerging Markets Funds Average, which reflects the performance of 80
funds investing in emerging markets.
(small solid bullet) Europe Fund, Europe Capital Appreciation
Fund, France Fund, Germany Fund, Nordic Fund and United Kingdom Fund
are compared to the Lipper European Region Funds A verage, which
reflects the performance of 43 funds investing in Europe.
(small solid bullet) Hong Kong and China Fund and Southeast Asia Fund
are compared to the Lipper Pacific ex-Japan Funds Average, which reflects
the performance of 52 funds investing in the Pacific region excluding
Japan.
(small solid bullet) Japan Fund and Japan Small Companies Fund are
compared to the Lipper Japanese Funds A verage, which reflects the
performance of 15 funds investing in Japan.
(small solid bullet) Latin America Fund is compared to the Lipper Latin
America n Region Funds Average, which reflects the performance of 23
funds investing in Latin America.
(small solid bullet) Pacific Basin Fund is compared to the Lipper Pacific
Region Funds Average, which reflects the performance of 38 funds
investing in the Pacific region.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. France Fund, Germany Fund, Hong
Kong and China Fund, Japan Small Companies Fund, Nordic Fund, and United
Kingdom Fund are currently non-diversified funds of Fidelity Investment
Trust and Canada Fund, Emerging Markets Fund, Europe Fund, Europe Capital
Appreciation Fund, Japan Fund, Latin America Fund, Pacific Basin Fund, and
Southeast Asia Fund are currently diversified funds of Fidelity Investment
Trust, an open-end management investment company organized as a
Massachusetts business trust on April 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs and,
with the assistance of foreign affiliates, chooses their investments.
Affiliates assist FMR with foreign securities:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR U.K.),
in London, England, serves as a sub-adviser for all the funds.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR Far
East), in Tokyo, Japan, serves as a sub-adviser for all the funds.
(small solid bullet) Fidelity International Investment Advisors (FIIA), in
Pembroke, Bermuda, serves as a sub-adviser for all the funds. Currently,
FIIA exercises discretionary management authority over Southeast Asia Fund,
Hong Kong and China Fund, Japan Fund, and Pacific Basin Fund in its
capacity as sub-adviser.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIAL U.K.), in Kent, England, serves as a sub-adviser for all the
funds. Currently, FIIAL U.K. exercises discretionary management authority
over Europe Fund, France Fund, Germany Fund, Nordic Fund, and United
Kingdom Fund in its capacity as sub-adviser.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo, Japan
serves as a sub-adviser for Hong Kong and China Fund, Japan Fund, Japan
Small Companies Fund, and Southeast Asia Fund. Currently, FIJ exercises
discretionary management authority over Japan Small Companies Fund.
Thomas Sweeney is Vice President and manager of Fidelity Canada Fund, which
he has managed since March 1996. Previously, he managed other Fidelity
funds. Since joining Fidelity in 1985, Mr. Sweeney has worked as an analyst
and manager.
Richard Hazlewood is Vice President and manager of Fidelity Emerging
Markets Fund, which he has managed since July 1993. Since joining Fidelity
in 1991, Mr. Hazlewood has worked as an analyst and manager.
Sally Walden is Vice President and manager of Fidelity Europe Fund, which
she has managed since July 1992. Since joining Fidelity in 1984, Ms. Walden
has worked as an analyst, manager and investment director.
Kevin McCarey is Vice President and manager of Fidelity Europe Capital
Appreciation Fund, which he has managed since December 1993. Previously, he
managed other Fidelity funds. Since joining Fidelity in 1985, Mr. McCarey
has worked as an analyst and manager.
Renaud Saleur is manager of Fidelity France Fund, which he has managed
since November 1995. Previously, he managed other Fidelity funds. Since
joining Fidelity in 1986, Mr. Saleur has worked as an analyst and manager.
Alexandra Edzard is manager of Fidelity Germany Fund, which she has managed
since September 1996. Ms. Edzard joined Fidelity Investments Limited as an
analyst in 1994. Previously, she was an investment officer for Deutsche
Bank AG in London, from 1991 to 1994.
Joseph Tse is manager of Fidelity Hong Kong and China Fund, which he has
managed since November 1995. Since joining Fidelity in 1990, Mr. Tse has
worked as an analyst and manager.
Shigeki Makino is Vice President and manager of Fidelity Japan Fund and
Fidelity Pacific Basin Fund, which he has managed since October 1994 and
May 1996, respectively. Since joining Fidelity in 1990, Mr. Makino has
worked as an analyst, manager, and interim research director.
Patricia Satterthwaite is Vice President and manager of Fidelity Latin
America Fund, which she has managed since April 1993. She also manages
another Fidelity fund. Since joining Fidelity in 1986, Ms. Satterthwaite
has worked as an analyst and manager.
Alexander Colin Stone is manager of Fidelity Nordic Fund, which he has
managed since November 1995. Previously, he managed other Fidelity funds.
Since joining Fidelity in 1987, Mr. Stone has worked as an analyst and
manager.
Kenichi Mizushita is manager of Fidelity Japan Small Companies Fund, which
he has managed since December 1996. Previously, he managed other Fidelity
funds. Since joining Fidelity in 1985, Mr. Mizushita has worked as an
analyst and manager.
FIDELITY FACTS
Fidelity offers the broadest selection of mutual
funds in the world.
(solid bullet) Number of Fidelity mutual funds: over 225
(solid bullet) Assets in Fidelity mutual funds: over
$415 billion
(solid bullet) Number of shareholder accounts: over
27 million
(solid bullet) Number of investment analysts and portfolio
managers: over 215
(checkmark)
Allan Liu is Vice President and manager of Fidelity Southeast Asia Fund,
which he has managed since April 1993. Since joining Fidelity in 1986, Mr.
Liu has worked as an analyst, manager, and associate director of Fidelity
Investments Management Ltd.
Samuel Morse is manager of Fidelity United Kingdom Fund, which he has
managed since November 1995. Previously, he managed other Fidelity funds.
Mr. Morse joined Fidelity as an analyst in 1990.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
Fidelity International Limited (FIL), is the parent company of FIIA,
FIJ, and FIIAL U.K. The Johnson family group also owns, directly or
indirectly, more than 25% of the voting common stock of FIL.
As of October 31, 1996, approximately 45.04% of the United Kingdom Fund's
total outstanding shares was held by an FMR affiliate. FMR Corp. is the
ultimate parent company of this FMR affiliate. By virtue of his ownership
interest in FMR Corp., Mr. Edward C. Johnson 3d, President and Trustee of
the fund, may be deemed to be a beneficial owner of these shares.
A broker dealer may use a portion of the commissions paid by a fund to
reduce custodian or transfer agent fees for that fund. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
a fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
The funds offer investors the ability to concentrate an investment in a
particular country or group of countries that they believe to offer strong
long-term growth potential. The country or group of countries in which each
fund focuses is the fund's "focal area." Each fund's performance is
expected to be closely tied to economic and political conditions within its
focal area. Because each fund invests in one country or group of related
countries, each fund's performance is expected to be more volatile than
more geographically diversified funds. Changes in regulatory, tax, or
economic policy in a country could significantly affect the market in that
country, and therefore a fund's performance. Many foreign stock markets are
more concentrated than the U.S. market, with a small number of companies
making up a large percentage of the local market. As a result, the
performance of one company or a small number of companies could have a
relatively large effect on a fund's performance.
The funds may invest in the securities of any issuer, including companies
and other business organizations as well as governments and government
agencies. The funds, however, will tend to focus on equity securities, but
may also invest in debt securities of any quality. The funds may invest in
short-term debt securities and money market instruments for cash management
purposes.
FMR determines where an issuer or its principal business is located by
looking at such factors as its country of organization, the primary trading
market for its securities, and the location of its assets, personnel,
sales, and earnings. When allocating the funds' investments among countries
and regions, FMR considers such factors as the potential for economic
growth, expected levels of inflation, governmental policies, and the
outlook for currency relationships.
The value of the funds' domestic and foreign investments varies in
response to many factors. Stock values fluctuate in response to the
activities of individual companies, and general market and economic
conditions. Investments in foreign securities may involve risks in addition
to those of U.S. investments, including increased political and economic
risk, as well as exposure to currency fluctuations.
International funds have increased economic and political risks as they are
exposed to events and factors in the various world markets. This is
especially true for emerging markets. Also, because a substantial portion
of the funds' investments are denominated in foreign currencies, changes in
the value of foreign currencies can significantly affect a fund's share
price. FMR may use a variety of techniques to either increase or decrease a
fund's exposure to any currency.
FMR may use various investment techniques to hedge a portion of a fund's
risks, but there is no guarantee that these strategies will work as FMR
intends. Of course, when you sell your shares of a fund, they may be worth
more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
CANADA FUND seeks growth of capital over the long term by investing in
securities of issuers that have their principal activities in Canada or are
registered in Canadian markets. FMR normally invests at least 65% of the
fund's total assets in these securities. FMR expects that most of the
fund's investments will be Canadian securities listed on the Toronto Stock
Exchange, but it may also invest in U.S. securities.
Canadian securities are sensitive to conditions within Canada, but also
tend to follow the U.S. market. The country's economy relies strongly on
the production and processing of natural resources. Also, the government
has attempted to reduce restrictions against foreign investment, and its
recent trade agreements with the U.S. and Mexico are expected to increase
trade. Demand by many citizens in the Province of Quebec for
s e cession from Canada may significantly impact the Canadian economy.
EMERGING MARKETS FUND seeks capital appreciation aggressively by investing
in the world's emerging markets. In pursuit of its goal, the fund
emphasizes countries with relatively low gross national product per capita
compared to the world's major economies, and with the potential for rapid
economic growth. FMR normally invests at least 65% of the fund's total
assets in securities of emerging markets issuers.
Countries with emerging markets include those that have an emerging stock
market as defined by the International Finance Corporation, those with low-
to middle-income economies according to the World Bank, and those listed in
World Bank publications as developing. FMR expects that the fund will
normally invest in at least six different countries, although it may invest
all of its assets in a single country.
EUROPE FUND seeks growth of capital over the long term by investing in
securities of issuers that have their principal activities in Western
Europe. FMR normally invests at least 65% of the fund's total assets in
these securities. Western European countries include Austria, Belgium,
Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United
Kingdom. The fund may also invest in Eastern Europe. FMR expects that the
fund will normally invest in at least three different countries, although
it may invest all of its assets in a single country.
The fund's performance is closely tied to economic and political
conditions within Europe and the European Economic Area (formerly the
Common Market). Some European countries, particularly those in Eastern
Europe, have less stable economies than those in Western Europe. A majority
of the European economies continue to be weak, and business and consumer
confidence remains low. The movement of many Eastern European countries
toward market economies, and the movement toward a unified common market
may significantly affect European economies and markets. Eastern European
countries are considered emerging markets.
EUROPE CAPITAL APPRECIATION FUND seeks capital appreciation over the long
term by investing in securities of issuers that have their principal
activities in Eastern and Western Europe. In addition to Western European
countries listed above, European countries also include Belarus, Bulgaria,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Russia,
Slovakia, Slovenia, and Turkey. These additional countries are considered
emerging markets. FMR normally invests at least 65% of the fund's total
assets in the securities of Eastern and Western European issuers. In
addition, the fund's investments are subject to the same risks as Europe
Fund.
FRANCE FUND seeks long-term growth of capital by investing in securities of
French issuers. FMR normally invests at least 65% of the fund's total
assets in securities of French issuers. The balance, however, may be
invested in securities of other European issuers.
Commercial, corporate, and securities laws govern the sale and resale of
securities, while contractual and corporate restrictions may also apply.
Planned privatizations and possible government incentives may result in
major changes in the market and increased investments by private
individuals. However, a future change in government, market, or economic
factors could result in an unfavorable change in the policy on
privatization.
GERMANY FUND seeks long-term growth of capital by investing in securities
of German issuers. FMR normally invests at least 65% of the fund's total
assets in securities of German issuers. The balance, however, may be
invested in securities of other European issuers.
The German economy is still relatively weak, with year on year growth at
a little over 1% and inflation at historically low levels. German key
interest rates have been kept at historically low levels to stimulate
growth. Also, a small number of companies represent a large percentage of
the market.
HONG KONG AND CHINA FUND seeks long-term growth of capital by investing in
securities of Hong Kong and Chinese issuers. FMR normally invests at least
65% of the fund's total assets in securities of these issuers. The balance,
however, may be invested in securities of other Southeast Asian issuers.
Currently, the fund anticipates that most of its investments will be in
Hong Kong issuers. In the future, more of its investments may be in shares
of companies listed on mainland Chinese exchanges.
Although China has committed by treaty to preserve the economic and social
freedoms enjoyed in Hong Kong for 50 years after regaining control of Hong
Kong in 1997, the continuation of the current form of the economic system
in Hong Kong after the reversion will depend on the actions of the
government of China. Business confidence in Hong Kong, therefore, can be
significantly affected by such developments, which in turn can affect
markets and business performance. In addition, a small number of companies
represent a large percentage of the market. Also, it is important to note
that a substantial portion of the companies listed on the Hong Kong Stock
Exchange are involved in real estate related business. The securities
market in China is relatively new and China has yet to develop
comprehensive securities, corporate or commercial laws; or to adhere to
internationally accepted accounting principles. There is greater risk of
expropriation, naturalization, freezes, or confiscation in China than in
many other countries. Foreign ownership limits exist on all securities.
JAPAN FUND seeks long - term growth of capital by investing in
securities of Japanese issuers. FMR normally invests at least 65% of the
fund's total assets in these securities. The balance, however, may be
invested in securities of other Southeast Asian issuers.
Japan's economic growth has declined significantly since 1990. The general
government position has deteriorated as a result of weakening economic
growth and stimulative measures taken to support economic activity and to
restore financial stability. Although the decline in interest rates and
fiscal stimulus packages have helped to contain recessionary forces,
uncertainties remain. Japan is also heavily dependent upon international
trade, so its economy is especially sensitive to trade barriers. In
addition, Japan's banking industry is undergoing problems related to bad
loans and declining values of real estate.
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital by investing
in securities of Japanese issuers with small market capitalizations. FMR
normally invests at least 65% of the fund's total assets in securities of
these issuers. The balance, however, may be invested in securities of other
Southeast Asian issuers or Japanese issuers with larger market
capitalizations.
FMR defines Japanese small market capitalization companies as those with
market capitalizations of 100 billion Yen (approximately US $962 million
as of October 31, 1996) or less at the time of the fund's investment.
Companies whose capitalization exceeds 100 billion Yen after purchase will
continue to be considered small-capitalized for purposes of the 65% policy.
In addition to the risks associated with investing in Japan, investing in
small capitalization stocks may involve greater risk than investing in
medium and large capitalization stocks, since they can be subject to more
abrupt or erratic movements. Small capitalization companies may have more
limited product lines, markets, or financial resources.
LATIN AMERICA FUND seeks high total investment return, which is the
combination of income and changes in the fund's value per share. FMR
normally invests at least 65% of the fund's total assets in securities of
Latin American issuers. Latin America includes Argentina, Brazil, Chile,
Colombia, Ecuador, Mexico, Peru, Panama, and Venezuela.
In pursuit of its goal, the fund tends to focus on equity securities, but
may invest in any combination of equity and debt securities of any quality.
Although there has been significant improvement in some Latin American
economies, others continue to struggle with high interest and inflation
rates. Recovery will depend on stability of the Mexican Peso, economic
conditions in other countries and on world commodity prices. This region is
vulnerable to political instability. The North American Free Trade
Agreement will also continue to have a significant impact on the region.
NORDIC FUND seeks long-term growth of capital by investing in securities of
Danish, Finnish, Norwegian, and Swedish issuers. FMR normally invests at
least 65% of the fund's total assets in securities of these issuers. The
balance, however, may be invested in securities of other European issuers.
The Nordic region is differentiated from the rest of Europe by its high
exposure to cyclical industries such as oil, shipping, and pulp and paper.
In addition, a small number of companies represent a large percentage of
the market.
PACIFIC BASIN FUND seeks growth of capital over the long term by investing
in securities of issuers that have their principal activities in the
Pacific Basin. FMR normally invests at least 65% of the fund's total assets
in these securities. The balance, however, may be invested in securities of
issuers in other Asian countries. The Pacific Basin includes Australia,
Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the People's
Republic of China, the Philippines, Singapore, Taiwan, and Thailand. FMR
expects that the fund will normally invest in at least three different
countries, although it may invest all of its assets in a single country.
Because the fund normally invests a significant percentage of its assets in
Japanese issuers, the Japanese market will significantly impact the
performance of the fund.
Countries in the Pacific Basin are in various stages of economic
development - some are considered emerging markets - but each has unique
risks. Most countries in the Pacific Basin are heavily dependent on
international trade. Some have prosperous economies, but are sensitive to
world commodity prices. Others are especially vulnerable to recession in
other countries. Some countries in the Pacific Basin have experienced rapid
growth, although many suffer with obsolete financial systems, economic
problems, or archaic legal systems. The return of Hong Kong to Chinese
dominion will affect the entire Pacific Basin.
SOUTHEAST ASIA FUND seeks capital appreciation by investing in securities
of Southeast Asian issuers. FMR normally invests at least 65% of the fund's
total assets in these securities. Southeast Asia includes Hong Kong,
Indonesia, South Korea, Malaysia, the Philippines, the People's Republic of
China, Singapore, Taiwan, and Thailand, but the fund does not anticipate
investing in Japan. The balance, however, may be invested in securities of
other Asian and South Pacific issuers.
In pursuit of its goal, the fund focuses on equity securities, but it may
also invest in other types of instruments, including debt securities of any
quality. In addition, the fund's investments are subject to the same types
of risks as Pacific Basin Fund.
UNITED KINGDOM FUND seeks long-term growth of capital by investing in
securities of British issuers. FMR normally invests at least 65% of the
fund's total assets in securities of these issuers. The balance, however,
may be invested in securities of other European issuers.
The United Kingdom economy has shown signs of improvement, fueled by
consumer spending. Inflation may rise slightly as growth picks up over the
coming year.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in a fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its
goal. Fund holdings and recent investment strategies are detailed in
each fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of total assets, each fund may not
purchase more than 10% of the outstanding voting securities of a single
issuer.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to pay
interest and repay principal when due and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in developing countries, more
volatile than U.S. investments.
EXPOSURE TO EMERGING MARKETS. Investing in emerging markets involves risks
over and above those generally associated with foreign investing. The
extent of economic development, political stability, and market depth
varies widely in comparison to more developed markets. Emerging market
economies may be subject to greater social, economic, and political
uncertainties or may be based on only a few industries. All of these
factors can make emerging market securities more volatile and potentially
less liquid than domestic securities.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics, and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness,
or they may already be in default. The market prices of these securities
may fluctuate more than higher-quality securities and may decline
significantly in periods of general economic difficulty.
The table on page provides a summary of ratings assigned to debt holdings
(not including money market instruments) in the funds' portfolios. These
figures are dollar-weighted averages of month-end portfolio holdings during
the fiscal year ended October 1996, and are presented as a percentage
of total security investments. These percentages are historical and do not
necessarily indicate a fund's current or future debt holdings.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's or
rated in the equivalent categories by S&P, or is unrated but judged to be
of equivalent quality by FMR. Each fund currently intends to limit its
investments in lower than Baa-quality debt securities to less than 35% of
its assets.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also may
involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with a
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of a fund and may involve a small investment of
cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that the fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: Each fund may not purchase a security if, as a result, more
than 15% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include securities of closed-end investment companies
and real estate-related instruments.
FISCAL YEAR ENDED OCTOBER 1996 DEBT HOLDINGS, BY STANDARD & POOR'S
G Emerging Europe Hong Kong Japan Small Latin Pacific Southeast
United
S&P Canada Markets Europe Capital Appre- France Germany and China Japan
Companies America Nordic Basin Asia Kingdom
RATING Fund Fund Fund ciation Fund Fund Fund Fund Fund Fund Fund Fund Fund
Fund Fund
INVESTMENT GRADE*
Highest quality AAA
High quality AA -- -- -- -- -- -- -- 1.06% -- -- -- .84% -- --
Upper-medium grade A
Medium grade BBB -- -- -- -- -- -- -- -- -- -- -- -- -- --
LOWER QUALITY*
Moderately speculative BB -- -- -- -- -- -- -- -- -- .06% -- -- --
- --
Speculative B .05% -- -- -- -- -- -- -- -- -- -- -- -- --
Highly speculative CCC -- -- -- -- -- -- -- -- -- -- -- -- -- --
Poor quality CC
Lowest quality, no interest C -- -- -- -- -- -- -- -- -- -- -- -- --
- --
In default, in arrears D -- -- -- -- -- -- -- -- -- -- -- -- --
- --
.05% -- -- -- -- -- -- 1.06% -- .06% -- .84% -- --
FISCAL YEAR ENDED OCTOBER 1996 DEBT HOLDINGS, BY MOODY'S INVESTORS
SERVICE
H Emerging Europe Hong Kong Japan Small Latin Pacific Southeast
United
MOODY'S Canada Markets Europe Capital Appre- France Germany and China
Japan Companies America Nordic Basin Asia Kingdom
RATING Fund Fund Fund ciation Fund Fund Fund Fund Fund Fund Fund Fund Fund
Fund Fund
INVESTMENT GRADE*
Highest quality Aaa
High quality Aa -- -- -- .35% -- -- -- 1.06% -- -- -- .84% -- --
Upper-medium grade A
Medium grade Baa .70% -- -- -- -- -- -- -- -- -- -- -- -- --
LOWER QUALITY*
Moderately speculative Ba -- -- -- -- -- -- -- -- -- -- -- -- --
- --
Speculative B .05% -- -- -- -- -- -- -- -- .06% -- -- -- --
Highly speculative Caa -- -- -- -- -- -- -- -- -- -- -- -- -- --
Poor quality Ca
Lowest quality, no interest C -- -- -- -- -- -- -- -- -- -- -- -- --
- --
In default, in arrears --- -- -- -- -- -- -- -- -- -- -- -- -- --
- --
.75% -- -- .35% -- -- -- 1.06% -- .06% -- .84% -- --
I Emerging Europe Hong Kong Japan Small Latin Pacific Southeast
United
Canada Markets Europe Capital Appre- France Germany and China Japan
Companies America Nordic Basin Asia Kingdom
Fund Fund Fund ciation Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
Fund
SECURITIES NOT RATED BY MOODY'S OR S&P(dagger)
(AS A % OF INVESTMENTS)
Investment Grade (double dagger) -- -- -- .-- -- -- -- -- -- .20% -- -- --
- --
Lower Quality (double dagger) -- .58% .14% -- .82% -- -- .11% .58% .23% --
.19% .03% --
Total -- .58% .14% -- .82% -- -- .11% .58% .43% -- .19% .03% --
* FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
(dagger) THE DOLLAR-WEIGHTED AVERAGE PERCENTAGES REFLECTED IN THE TABLE MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES.
(double dagger) AS DETERMINED BY FMR
CASH MANAGEMENT. A fund may invest in money market securities, in
a pooled account of repurchase agreements, and in a money market fund
available only to funds and accounts managed by FMR or its affiliates,
whose goal is to seek a high level of current income while maintaining a
stable $1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. A fund that
is not diversified may be more sensitive to changes in the market value of
a single issuer or industry.
RESTRICTIONS: France Fund, Germany Fund, Hong Kong and China Fund, Japan
Small Companies Fund, Nordic Fund, and United Kingdom Fund are considered
non-diversified. Generally, to meet federal tax requirements at the close
of each quarter, each fund does not invest more than 25% of its
total assets in any issuer and, with respect to 50% of total assets, does
not invest more than 5% of its total assets in any issuer. Each fund
may not invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. Government securities.
With respect to 75% of its total assets, each of Canada Fund, Emerging
Markets Fund, Europe Fund, Europe Capital Appreciation Fund, Japan Fund,
Latin America Fund, Pacific Basin Fund, and Southeast Asia Fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. Each fund may not invest more than 25% of its
total assets in any one industry. These limitations do not apply to U.S.
Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities. A fund may also lend money to other funds advised by
FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
CANADA FUND seeks growth of capital over the long term through investments
in securities of issuers that have their principal activities in Canada or
are registered in Canadian markets.
EMERGING MARKETS FUND seeks capital appreciation.
EUROPE FUND seeks growth of capital over the long-term through investments
in securities of issuers that have their principal activities in Western
Europe. Normally, at least 65% of the fund's total assets will be invested
in such securities. In determining whether an issuer's principal activities
are in Western Europe, FMR will look at such factors as the location of its
assets, personnel, sales, and earnings. When allocating investments among
geographic regions and individual countries, FMR will consider various
criteria, such as the relative economic growth potential of the various
economies and securities markets, expected levels of inflation, government
policies influencing business conditions, and the outlook for currency
relationships. When market conditions warrant, FMR can make substantial
temporary defensive investments in U.S. government obligations or
investment-grade debt obligations of companies incorporated in and having
principal business activities in the U.S.
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
FRANCE FUND seeks long-term growth of capital.
GERMANY FUND seeks long-term growth of capital.
HONG KONG AND CHINA FUND seeks long-term growth of capital.
JAPAN FUND seeks long-term growth of capital.
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital.
LATIN AMERICA FUND seeks high total investment return.
NORDIC FUND seeks long-term growth of capital.
PACIFIC BASIN FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal activities
in the Pacific Basin Fund. Normally, at least 65% of the fund's total
assets will be invested in such securities. In determining whether an
issuer's principal activities are in the Pacific Basin, FMR will look at
such factors as the location of its assets, personnel, sales, and earnings.
When allocating investments among geographic regions and individual
countries, FMR will consider various criteria, such as the relative
economic growth potential of the various economies and securities markets,
expected levels of inflation, government policies influencing business
conditions, and the outlook for currency relationships. When market
conditions warrant, FMR can make substantial temporary defensive
investments in U.S. government obligations or investment-grade debt
obligations of companies incorporated in, and having principal business
activities in, the U.S.
SOUTHEAST ASIA FUND seeks capital appreciation.
UNITED KINGDOM FUND seeks long-term growth of capital.
With respect to 75% of it s total assets, each of Canada Fund,
Emerging Markets Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Latin America Fund, Pacific Basin Fund, and Southeast Asia Fund
may not purchase a security if, as a result, more than 5% would be
invested in the securities of any issuer, and may not purchase more than
10% of the outstanding voting securities of a single issuer.
Each fund may not invest more than 25% of its total assets in any one
industry.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
EMERGING MARKETS FUND, FRANCE FUND, GERMANY FUND, HONG KONG AND CHINA FUND,
JAPAN SMALL COMPANIES FUND, LATIN AMERICA FUND, NORDIC FUND, AND UNITED
KINGDOM FUND. The management fee is calculated and paid to FMR every month.
The fee for each fund is calculated by adding a group fee rate to an
individual fund fee rate, and multiplying the result by the fund's average
net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase.
For October 1996, the group fee rate was .3037%. The individual fund fee
rate is .45% for each fund. The total management fee rate for the fiscal
year ended October 1996 was .76% for Emerging Markets Fund and Latin
America Fund. The total management fee rate for the fiscal year ended
October 1996 was .75% for France Fund, Germany Fund, Hong Kong and China
Fund, Japan Small Companies Fund, Nordic Fund, and United Kingdom Fund. The
total management fee rate for the fiscal year ended October 1996, after
reimbursement, was .00% for France Fund, Germany Fund, Nordic Fund, and
United Kingdom Fund.
CANADA FUND, EUROPE FUND, EUROPE CAPITAL APPRECIATION FUND, JAPAN FUND,
PACIFIC BASIN FUND, AND SOUTHEAST ASIA FUND. The management fee is
calculated and paid to FMR every month. The amount of the fee is determined
by taking a BASIC FEE and then applying a PERFORMANCE ADJUSTMENT. The
performance adjustment either increases or decreases the management fee,
depending on how well a fund has performed relative to its benchmark index.
Management = Basic +/- Performance
fee fee adjustment
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management increase.
For October 1996, the group fee rate was .3037 %. The individual fund
fee rate for each fund is .45%. The basic fee rate for the fiscal
year ended October 1996 was .76% for Canada Fund, Europe Fund,
Europe Capital Appreciation Fund, Japan Fund, Pacific Basin Fund, and
Southeast Asia Fund.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing each
fund's performance to that of its benchmark index over the most recent
36-month period. The difference is translated into a dollar amount that is
added to or subtracted from the basic fee. The maximum annualized
performance adjustment rate is ".20%.
FUND BENCHMARK
Canada Fund TSE 300 Index
Europe Fund MSCI Europe Index
Europe Capital Appreciation Fund MSCI Europe Index
Japan Fund TOPIX Index
Pacific Basin Fund MSCI Pacific Index
Southeast Asia Fund MSCI Far East ex-Japan Free Index
Manage
Fund ment
Fee
Canada Fund .45 %
Europe Fund .84%
Europe Capital Appreciation Fund .80%
Japan Fund .68%
Pacific Basin Fund .75%
Southeast Asia Fund .65%
FMR HAS SUB-ADVISORY AGREEMENTS with four affiliates: FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA in turn has a sub-advisory agreement with
FIIAL U.K. FMR U.K. focuses on issuers based in Europe. FMR Far East
focuses on issuers based in Asia and the Pacific Basin. FIJ focuses on
issuers based in Japan and elsewhere around the world. FIIA focuses on
issuers based in Hong Kong, Australia, New Zealand, and Southeast Asia
(other than Japan). FIIAL U.K. focuses on issuers based in the United
Kingdom and Europe.
The sub-advisers are compensated for providing investment research and
advice. FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services. FMR pays FIJ and
FIIA 30% of its management fee associated with investments for which the
sub-adviser provided investment advice. FIIA pays FIIAL U.K. a fee equal to
110% of the cost of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50%
of its management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis. FIIA pays FIIAL U.K. a fee
equal to 110% of the cost of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In the
fiscal year ended October 1996, the funds paid FSC the fees, before
reimbursement, outlined in the following chart.
Fund Fee to
FSC
Canada Fund 0.45
%
Emerging Markets Fund 0.36
%
Europe Fund 0.36
%
Europe Capital Appreciation Fund 0.40
%
France Fund 1.38
%
Germany Fund 1.40
%
Hong Kong and China Fund 0.44
%
Japan Fund 0.39
%
Japan Small Companies Fund 0.38
%
Latin America Fund 0.40
%
Nordic Fund 0.93
%
Pacific Basin Fund 0.40
%
Southeast Asia Fund 0.34
%
United Kingdom Fund 3.08
%
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer
agent fees.
For the fiscal year ended October 1996, the p ortfolio turnover rates
are outlined in the table below. These rates vary from year to year. High
turnover rates increase transaction costs, and may increase taxable capital
gains. FMR considers these effects when evaluating the anticipated benefits
of short-term investing.
Fund Turnove
r %
Canada Fund 139%
Emerging Markets Fund 77%
Europe Fund 45%
Europe Capital Appreciation Fund 155%
France Fund 129%
Germany Fund 133%
Hong Kong and China Fund 118%
Japan Fund 83%
Japan Small Companies Fund 66%
Latin America Fund 70%
Nordic Fund 35%
Pacific Basin Fund 85%
Southeast Asia Fund 102%
United Kingdom Fund 50%
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program materials
for any special provisions, additional service features or fees that may
apply to your investment in a fund. Certain features of the fund, such as
the minimum initial or subsequent investment amounts, may be
modified .
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
or Fidelity directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and capital
gains from current taxes. In addition, contributions to these accounts may
be tax deductible. Retirement accounts require special applications and
typically have lower minimums.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under
70 with earned income to save up to $2,000 per tax year. Individuals can
also invest in a spouse's IRA if the spouse has earned income of less than
$250.
ROLLOVER IRAS retain special tax advantages for certain distributions from
employer-sponsored retirement plans.
KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners (and their employees) to
make tax deductible contributions for themselves and any eligible employees
up to $30,000 per year.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners
or those with self-employed income (and their eligible employees) with many
of the same advantages as a Keogh, but with fewer administrative
requirements.
403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt
institutions, including schools, hospitals, and other charitable
organizations.
401(K) PROGRAMS allow employees of corporations of all sizes to contribute
a percentage of their wages on a tax-deferred basis. These accounts need to
be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
INSTITUTIONS, OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR EACH FUND: the
offering price and the net asset value (NAV). If you qualify for a sales
charge waiver as described on page , your share price will be the NAV. If
you pay a sales charge as described on page , your share price will be the
offering price. When you buy shares at the offering price, Fidelity deducts
the appropriate sales charge and invests the rest in the fund.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES , " PAGE .
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
YOUR ACCOUNT
Key Information
Phone 1#800#544#7777
S
To open an account, exchange from another Fidelity fund account with the
same
registration, including name, address, and taxpayer ID number.
S
To add to an account, exchange from another Fidelity fund account with the
same registration, including name, address, and taxpayer ID number. You can
also use Fidelity Money Line to transfer from your bank account. Call
before
your first use to verify that this service is in place on your account.
Maximum
Money Line: $50,000.
Mail
S
To open an account, complete and sign the application. Make your check
payable
to the complete name of the fund of your choice. Mail to the address
indicated
on the application.
S
To add to an account, make your check payable to the complete name of the
fund.
Indicate your fund account number on your check. Mail to the address
printed
on your account statement.
S
Exchange by mail: Call 1#800#544#6666 for instructions.
In Person
S
To open an account, bring your application and check to a Fidelity Investor
Center. Call 1#800#544#9797 for the center nearest you.
S
To add to an account, bring your check to a Fidelity Investor Center. Call
1#800#544#9797 for the center nearest you.
(null)(null)Wire
Not available for retirement accounts.
S
To open an account, call 1#800#544#7777 to set up your account and to
arrange
a wire transaction. Wire within 24 hours to the wire address below. Specify
the complete name of the fund and include your new account number and your
name.
S
To add to an account, wire to the wire address below. Specify the complete
name of the fund and include your account number and your name.
S
Wire address: Bankers Trust Company, Bank Routing #021001033, Account #
00163053.
Automatically
New accounts cannot be opened with these services.
S
Use Fidelity Automatic Account Builder or Direct Deposit to automatically
purchase
more shares. Sign up for these services when opening your account, or call
1#800#544#6666.
S
Use Directed Dividends or Fidelity Automatic Exchange Service to
automatically
send money from one Fidelity fund into another. Call 1#800#544#6666 for
instructions.
(tdd_graphic)(tdd_graphic)
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
(null)
How to Sell Shares
You can arrange to take money out of your fund account at any time by
selling
(redeeming) some or all of your shares. Your shares will be sold at the
next
share price calculated after your order is received and accepted. Share
price
is normally calculated at 4 p.m. Eastern time.
To sell shares in a non#retirement account,
you may use any of the methods described on these two pages.
To sell shares in a Fidelity retirement account,
your request must be made in writing, except for exchanges to other
Fidelity
funds, which can be requested by phone or in writing. Call 1#800#544#6666
for
a retirement distribution form.
If you are selling some but not all of your shares,
leave at least $1,000 worth of shares in the account to keep it open ($500
for retirement accounts).
To sell shares by bank wire or Fidelity Money Line,
you will need to sign up for these services in advance.
Certain requests must include a signature guarantee.
It is designed to protect you and Fidelity from fraud. Your request must
be
made in writing and include a signature guarantee if any of the following
situations
apply:
S
You wish to redeem more than $100,000 worth of shares,
S
Your account registration has changed within the last 30 days,
S
The check is being mailed to a different address than the one on your
account
(record address),
S
The check is being made payable to someone other than the account owner, or
S
The redemption proceeds are being transferred to a Fidelity account with a
different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including
Fidelity Investor Centers), dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency, or savings
association.
A notary public cannot provide a signature guarantee.
Selling Shares in Writing
Write a "letter of instruction" with:
S
Your name,
S
The fund's name,
S
Your fund account number,
S
The dollar amount or number of shares to be redeemed, and
S
Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address.
Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266#0602
Fees and Key Information
If you sell shares of Canada Fund, Emerging Markets Fund, France Fund,
Germany
Fund, Hong Kong and China Fund, Japan Fund, Japan Small Companies Fund,
Latin
America Fund, Nordic Fund, Southeast Asia Fund, and United Kingdom Fund
after
holding them less than 90 days, the fund will deduct a redemption fee equal
to 1.50% of the value of those shares. If you sell shares of Europe Fund,
Europe
Capital Appreciation Fund, and Pacific Basin Fund after holding them less
than
90 days, the fund will deduct a redemption fee equal to 1.00% of the value
of the shares.
PHONE 1-800-544-7777
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(small solid bullet) Maximum check request: $100,000.
(small solid bullet) For Money Line transfers to your bank account;
minimum:
$10; maximum: $100,000.
ALL ACCOUNT TYPES
(small solid bullet) You may exchange to other Fidelity funds if both
accounts are registered with the same name(s),
address, and taxpayer ID number.
MAIL OR IN PERSON
INDIVIDUAL, JOINT TENANTS, SOLE PROPRIETORSHIPS, UGMA, UTMA
(small solid bullet) The letter of instruction must be signed by all
persons required to sign for transactions, exactly as their
names appear on the account.
RETIREMENT ACCOUNTS
(small solid bullet) The account owner should complete a retirement
distribution
form. Call 1-800-544-6666 to request one.
TRUSTS
(small solid bullet) The trustee must sign the letter indicating
capacity
as trustee. If the trustee's name is not in the account
registration, provide a copy of the trust document certified within
the
last 60 days.
BUSINESSES OR ORGANIZATIONS
(small solid bullet) At least one person authorized by corporate
resolution
to act on the account must sign the letter.
(small solid bullet) Include a corporate resolution with corporate
seal
or a signature guarantee.
EXECUTORS, ADMINISTRATORS, CONSERVATORS, GUARDIANS
(small solid bullet) Call 1-800-544-6666 for instructions.
WIRE
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(small solid bullet) You must sign up for the wire feature before
using
it. To verify that it is in place, call 1-800-544-6666.
Minimum wire: $5,000.
(small solid bullet) Your wire redemption request must be received by
Fidelity before 4 p.m. Eastern time for money to be
wired on the next business day.
(tdd_graphic)(tdd_graphic)
TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies of
financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange will
carry credit for any sales charge you previously paid in connection with
their purchase.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account. Because of the funds' sales charge, you may not want to set up a
systematic withdrawal plan during a period when you are buying shares on a
regular basis.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM 1-800-544-5555
AUTOMATED SERVICE
(checkmark)
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTOR PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDER SM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account,
quarterly complete the
appropriate section
on the fund
application.
(small solid bullet) For existing
accounts, call
1-800-544-6666 for
an application.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800- 544-6666
at least three
business days prior
to your next
scheduled
investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the
period appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization
form.
(small solid bullet) Changes require a
new authorization
form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call
bimonthly, 1-800-544-6666
quarterly, or after both accounts
annually are opened.
(small solid bullet) To change the
amount or frequency
of your investment,
call 1-800-544-6666.
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to the funds' 3% sales charge. Likewise, if
you direct distributions to a fund with a 3% sales charge, you will not pay
a sales charge on those purchases.
UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes these earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. A fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These are
passed along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but not
yet distributed income or capital gains, you will pay the full price
for the shares and then receive a portion of the price back in the form of
a taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
the funds may adjust their dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and
its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. Short-term securities
with remaining maturities of sixty days or less for which quotations are
not readily available are valued on the basis of amortized cost. This
method minimizes the effect of changes in a security's market value. In
addition, if quotations are not readily available, or if the values
have been materially affected by events occurring after the closing of a
foreign market, assets may be valued by a method that the Board of
Trustees believes accurately reflects fair value.
THE OFFERING PRICE (price to buy one share) is the fund's NAV divided by
the sum of one minus the applicable sales charge percentage. The
maximum sales charge is 3% of the offering price. The REDEMPTION PRICE
(price to sell one share) is the fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
THE REDEMPTION FEE, if applicable, will be deducted from the amount of your
redemption. This fee is paid to the fund rather than FMR, and it does not
apply to shares that were acquired through reinvestment of distributions.
If shares you are redeeming were not all held for the same length of time,
those shares you held longest will be redeemed first for purposes of
determining whether the fee applies.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500 (including any amount paid
as a sales charge), subject to an annual maximum charge of $60.00 per
shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30 will
not be subject to the fee for that year. The fee, which is payable to the
transfer agent, is designed to offset in part the relatively higher costs
of servicing smaller accounts. The fee will not be deducted from retirement
accounts (except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets in Fidelity funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity
mutual fund accounts maintained by FSC or FBSI which are registered under
the same social security number or which list the same social security
number for the custodian of a Uniform Gifts/Transfers to Minors Act
account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from each fund's 3% sales charge and may pay a
portion of them to securities dealers who have sold the fund's shares, or
to others, including banks and other financial institutions (qualified
recipients), under special arrangements in connection with FDC's sales
activities. The sales charge paid to qualified recipients is 1.50% of a
fund's offering price.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. In some instances, these incentives may be
offered only to certain institutions whose representatives provide services
in connection with the sale or expected sale of significant amounts of
shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. A fund's sales charge may be reduced if you invest directly
with Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of your
account, must fall within the ranges shown below. However, purchases made
with assistance or intervention from a financial intermediary are not
eligible. Call Fidelity to see if your purchase qualifies.
<TABLE>
<CAPTION>
<S> <C> <C>
Sales Charge
Ranges As a % of Offering Price As an approximate % of net amount invested
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
</TABLE>
The sales charge will also be reduced by the percentage of any sales charge
you previously paid on investments in other Fidelity funds (not including
Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for
any sales charge you would have paid if the reductions in the table above
had not existed. These sales charge credits only apply to purchases made in
one of the ways listed below, and only if you continuously owned Fidelity
fund shares or a Fidelity brokerage core account, or participated in The
CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a Fidelity brokerage core account,
including any free credit balance, core money market fund, or margin
availability, to the extent such proceeds were derived from redemption
proceeds from another Fidelity fund.
3. With redemption proceeds from one of Fidelity's Foreign Currency Funds,
if the Foreign Currency Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page ).
5. By participants in The CORPORATEplan for Retirement Program when shares
are purchased through plan-qualified loan repayments, and for exchanges
into and out of the Managed Income Portfolio.
WAIVERS. A fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more than
200 eligible employees or a minimum of $3 million in plan assets invested
in Fidelity mutual funds.
2. To shares in a Fidelity account purchased with the proceeds of a
distribution from an employee benefit plan, provided that at the time of
the distribution, the employer or its affiliate maintained a plan that both
qualified for waiver (1) above and had at least some of its assets invested
in Fidelity-managed products. (Distributions transferred to an IRA
account must be transferred within 60 days from the date of the
distribution. All other distributions must be transferred directly into a
Fidelity account).
3. If you are a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more.
4. If you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
f or purposes of S ection 501(c)(3) of the Internal Revenue Code).
5. If you are an investor participating in the Fidelity Trust Portfolios
program.
6. To shares purchased by a mutual fund for which FMR or an affiliate
serves as investment manager.
7. To shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services.
8. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or regular employee of FMR Corp.
or Fidelity International Limited or their direct or indirect
subsidiaries (a Fidelity trustee or employee), the spouse of a Fidelity
trustee or employee, a Fidelity trustee or employee acting as custodian for
a minor child, or a person acting as trustee of a trust for the sole
benefit of the minor child of a Fidelity trustee or employee.
9. If you are a bank trust officer, registered representative, or other
employee of a qualified recipient, as defined on page .
10. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed and
distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
11. If you invest through a non-prototype pension or profit-sharing plan
that maintains all of its mutual fund assets in Fidelity mutual funds,
provided the plan executes a Fidelity non-prototype sales charge waiver
agreement confirming its qualification.
12. If you are a registered investment adviser (RIA) purchasing for your
discretionary accounts, provided you execute a Fidelity RIA load waiver
agreement which specifies certain aggregate minimum and operating
provisions. Except for correspondents of National Financial Services
Corporation, this waiver is available only for shares purchased directly
from Fidelity, and is unavailable if the RIA is part of an organization
principally engaged in the brokerage business.
13. If you are a trust institution or bank trust department purchasing for
your non-discretionary, non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), (5), (10), and (12) is contained in the
Statement of Additional Information. A representative of your plan or
organization should call Fidelity for more information.
FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE FUND,
FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND, FIDELITY
GERMANY FUND, FIDELITY HONG KONG AND CHINA FUND, FIDELITY JAPAN FUND,
FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA FUND, FIDELITY
NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY SOUTHEAST ASIA FUND, AND
FIDELITY UNITED KINGDOM FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1996
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated December 30, 1996). Please
retain this document for future reference. The funds' financial statements
and financial highlights, included in the Annual Report for the fiscal year
ended October 31, 1996, are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Affecting Europe
Special Considerations Affecting Japan, The Pacific Basin, and Southeast Asia
Special Considerations Affecting Canada
Special Considerations Affecting Latin America
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.)
Fidelity Investments Japan Ltd. (FIJ)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
TIF- pt b-1296
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
Each fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF CANADA FUND
(CANADA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three business days to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EMERGING MARKETS FUND
(EMERGING MARKETS FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, and
provided that transactions in futures contracts and options are not deemed
to constitute short sales;
(4) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts and
options on futures contracts shall not constitute purchasing securities on
margin;
(5) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed 33
1/3% of the fund's total assets by reason of a decline in net assets will
be reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
(6) underwrite securities issued by others except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in companies whose principal business activities
are in the same industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing or selling options and futures contracts or instruments backed
by physical commodities); or
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (for this purpose,
purchasing debt securities and engaging in repurchase agreements do not
constitute lending).
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (5)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(vii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For purposes of limitation (vii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EUROPE FUND
(EUROPE FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (i) more than 5% of the fund's total assets would be
invested in the securities of such issuer or (ii) the fund would hold more
than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of a fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of the fund's total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF EUROPE CAPITAL APPRECIATION FUND
(EUROPE CAPITAL APPRECIATION FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF FRANCE FUND
(FRANCE FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii i ) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF GERMANY FUND
(GERMANY FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii i ) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF HONG KONG AND CHINA FUND
(HONG KONG AND CHINA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xiii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF JAPAN FUND
(JAPAN FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) With respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF JAPAN SMALL COMPANIES FUND
(JAPAN SMALL COMPANIES FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii i ) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF LATIN AMERICA FUND
(LATIN AMERICA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U. S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF NORDIC FUND
(NORDIC FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii i ) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF PACIFIC BASIN FUND
(PACIFIC BASIN FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed by the
government of the United States, its agencies or instrumentalities) if, as
a result thereof: (i) more than 5% of the fund's total assets would be
invested in the securities of such issuer or (ii) the fund would hold more
than 10% of the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of a fund's total assets by reason of a decline in
net assets will be reduced within three business days to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite any issue of securities (except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value) would be invested in the securities
of issuers having their principal business activities in the same industry;
(6) purchase or sell real estate (but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of the fund's total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
Investment limitation (3) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days, exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF SOUTHEAST ASIA FUND
(SOUTHEAST ASIA FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable, or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 15% as appropriate of the funds net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements).
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 10% of the fund's net assets.
Included in that amount, but not to exceed 2% of net assets, are warrants
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants acquired by the fund in units or attached to securities
are not subject to these restrictions.
(xii) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xiii) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of those
securities of such issuers together own more than 5% of such issuer's
securities.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT LIMITATIONS OF UNITED KINGDOM FUND
(UNITED KINGDOM FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by Fidelity Management &
Research Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the fund
currently intends to comply with certain diversification limits imposed by
Subchapter M.
(ii) With respect to 75% of its total assets, the fund does not currently
intend to purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies ) if,
as a result, the fund would hold more than 10% of the outstanding voting
securities of that issuer.
(iii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iv) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(v) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(vi) would exceed 15% of the fund's net assets.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(ix) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations
(a) and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC.
(x) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(x i ii) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the fund
to invest no more than 25% of its total assets in securities of any one
issuer and to invest at least 50% of its total assets so that no more than
5% of the fund's total assets are invested in securities of any one issuer.
However, Subchapter M allows unlimited investments in cash, cash items,
government securities (as defined in Subchapter M) and securities of other
investment companies. These tax requirements are generally applied at the
end of each quarter of the fund's taxable year.
For purposes of limitation (x), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
INVESTMENT POLICIES FOR FIDELITY EMERGING MARKETS FUND
COUNTRIES NOT CONSIDERED TO HAVE EMERGING MARKETS. Countries currently not
considered to have an emerging market economy are as follows: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland,
Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland, the United Kingdom, and the United States.
INVESTMENT POLICIES SHARED BY THE FUNDS
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES. Each fund may purchase the shares of
closed-end investment companies to facilitate investment in certain
countries. Shares of closed-end investment companies may trade at a premium
or a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depositary Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depositary banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depositary bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Purchasing Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract.
Futures can be held until their delivery dates, or can be closed out before
then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed
a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets, before engaging in any purchases or sales of futures
contracts or options on futures contracts. The funds intend to comply with
Rule 4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SA I, are not fundamental policies and
may be changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 15% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the cost
of bank loans. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment
to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
ISSUER LOCATION. FMR determines where an issuer or its principal
business activities are located by looking at such factors as its country
of organization, the primary trading market for its securities, and the
location of its assets, personnel, sales, and earnings. The issuer of a
security is considered to be located in a particular country if (1) the
security is issued or guaranteed by the government of the country or any of
its agencies, political subdivisions, or instrumentalities; (2) the
security has its primary trading market in that country; or (3) the issuer
is organized under the laws of that country, derives at least 50% of its
revenues or profits from goods sold, investments made, or services
performed in the country, or has at least 50% of its assets located in the
country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and (5)
for Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan Fund,
Latin America Fund, Pacific Basin Fund, and Southeast Asia Fund;
limitations (1) and (7) for Emerging Markets Fund; and limitations (4) and
(i) for France Fund, Germany Fund, Hong Kong and China Fund, Japan Small
Companies Fund, Nordic Fund, and United Kingdom Fund). For purposes of
these limitations, each fund generally will treat the borrower as the
"issuer" of indebtedness held by the fund. In the case of loan
participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the fund, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SECURITIES OF SMALL CAPITALIZATION COMPANIES. Smaller capitalization
companies may have limited product lines, markets, or financial resources.
These conditions may make them more susceptible to setbacks and reversals.
Therefore, their securities may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of
larger companies.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with opening,
maintaining, and closing short sales against the box.
SOVEREIGN DEBT OBLIGATIONS. Each fund may purchase sovereign debt
instruments issued or guaranteed by foreign governments or their agencies,
including debt of Latin American nations or other developing countries.
Sovereign debt may be in the form of conventional securities or other types
of debt instruments such as loans or loan participations. sovereign debt of
developing countries may involve a high degree of risk, and may be in
default or present the risk of default. Governmental entities responsible
for repayment of the debt may be unable or unwilling to repay principal and
interest when due, and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest
may depend on political as well as economic factors.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
WARRANTS. Warrants are securities that give a fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
if the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
SPECIAL CONSIDERATIONS AFFECTING EUROPE
New developments surrounding the creation of a unified common market in
Europe have helped to reduce physical and economic barriers, promoting the
free flow of goods and services throughout western Europe. These new
developments could make this new unified market one of the largest in the
world. However, growth slowed more markedly than expected during 1995 in
the region, leading to further increases in unemployment in some countries
from already high levels and also to fears of a new economic downturn. The
most pronounced deterioration in cyclical conditions since early 1995 has
been in Germany, France, several other countries closely linked to the
deutsche mark, and Switzerland. In response, short-term interest rates have
been reduced significantly and several countries have taken various fiscal
and structural measures to revive confidence and stimulate job creation.
The timing and strength of the expected pickup in activity in these
countries is somewhat uncertain, but the conditions appear to be in place
for a quickening in the pace of economic growth during 1997. A
strengthening of activity in these countries is essential to put
unemployment securely on a downward path and to facilitate fiscal
consolidation in accordance with the agreed timetable for Economic and
Monetary Union (EMU). Conversely, a prolonged period of lackluster growth
could exacerbate doubts about the EMU timetable and might lead to tensions
in financial markets.
The eastern European countries, after several years of declining output,
have generally shown dramatic growth in 1994 and 1995. Despite formidable
obstacles and major differences among countries and regions, many nations
are making substantial progress in their efforts to become market-oriented
economies. Poland, the Czech and Slovak Republics, and Slovenia, have
achieved some of the most impressive results. Disciplined financial
policies, structural reforms, trade liberalization, and rapid growth of
trade, especially with western Europe, are important factors contributing
to the rapid transformation that is taking place in these economies. Many
of the countries that are less advanced in the transition, including some
of the former Soviet republics, have made significant progress with
structural reform, including price liberalization, privatization, and the
dismantling of trade barriers. There has been progress toward macroeconomic
stability, although the sustainability of recent reductions in inflation is
in doubt in some cases. Output appears to have bottomed out during 1995 in
Russia, but political instability in 1996 dampened prospects for a quick
economic recovery. Economic prospects have also improved in Kazakstan, the
Kyrgyz Republic, Moldova, Armenia, Georgia, and Uzbekistan. Ukraine made
considerable progress with stabilization and systemic reform in 1995; in
the absence of policy slippage, the decline in output should bottom out in
1996. In Belarus, Tajikistan, and Turkmenistan, where reform and
stabilization efforts have been inadequate thus far, the contraction of
output may well continue. Armed conflicts continue to delay the necessary
reforms in several other countries, but throughout the former Yugoslavia
prospects for recovery have now improved following the cessation of
hostilities in Bosnia and Herzegovina.
Notwithstanding the continued economic difficulties in many countries,
recent positive developments offer hope for a cooperative growth strategy
in the near term, which could also permit a strengthening of global
economic performance over the medium term. Efforts to enhance assistance to
countries affected by the transition to market-based trading systems
occurring in central Europe and the former Soviet Union, and to low-income
countries to support strengthened stabilization and restructuring efforts,
are moving forward. Many of the transition countries have achieved
considerable progress with macroeconomic stabilization and reform, and
fruits of their efforts to transform their economies are increasingly
visible.
The European Union (EU) consists of 15 member states including Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, the United Kingdom, Austria, Finland and Sweden. In 1986,
the member states of the EU signed the "Single European Act", an agreement
committing these countries to the establishment of a market among
themselves, unimpeded by internal barriers or hindrances to the free
movement of goods, persons, services, or capital. To meet this goal, a
series of directives have been issued to the member states. Compliance with
these directives is designed to eliminate three principal categories of
barriers: (1) physical frontiers, such as customs posts and border
controls; (2) technical barriers (which include restrictions operating
within national territories) such as regulations and norms for goods and
services (product standards); discrimination against foreign bids (bids by
other EU members) on public purchases; or restrictions on foreign requests
to establish subsidiaries; and (3) fiscal frontiers, notably value-added
taxes, tariffs, or excises on goods or services imported from other EU
states.
The ultimate goal of this project is to achieve a large unified domestic
European market in which available resources would be more efficiently
allocated through the elimination of the above-mentioned barriers and the
added costs associated with those barriers. Elimination of these barriers
would simplify product distribution networks, allow economies of scale to
be more readily achieved, and free the flow of capital and other resources.
The Maastricht Treaty on economic and monetary union (EMU) attempts to
provide its members with a stable monetary framework consistent with the
EU's broad economic goals. But until the EMU takes effect, which is
intended to occur before 1999, the community will face the need to
reinforce monetary cooperation in order to reduce the risk of a recurrence
of tensions between domestic and external policy objectives.
The total European market, as represented by EU countries, consists of over
370 million consumers, making it larger currently than either the U.S. or
Japanese markets. European businesses compete nationally and
internationally in a wide range of industries including: telecommunications
and information services, roads and transportation, building materials,
food and beverages, broadcast and media, financial services, electronics,
and textiles. Actual and anticipated actions on the part of member states
to conform to the unified Europe directives have prompted interest and
activity not only by European firms, but also by foreign entities anxious
to establish a presence in Europe that will result from these changes.
Indications of the effect of this response to a unified Europe can be seen
in the areas of mergers and acquisitions, corporate expansion and
development, GDP growth, and national stock market activity. In the
long-term, economic unification of Europe could prove to be an engine for
domestic and international growth.
FRANCE has welcomed foreign trade and foreign investment and, along with
Germany, has emerged as a driving force within the Union. The country ranks
high in manufacturing productivity, while its unionization rate is the
lowest in the Union. The workforce is well-educated, yet labor is cheaper
than in Germany. Both national and local officials have been actively
soliciting international companies, particularly those with technological
businesses encouraging them to build factories and subsidiaries in France.
Recognizing the need for decentralization, the country has taken steps to
build up industrial and technological areas away from Paris, in cities such
as Marseilles. The government of prime minister Edouard Balladur
drastically cut the corporate tax rate from one-half to one-third, and
pledged to keep inflation at its current very low levels. Its successor
under Alain Juppe has so far continued with these policies. However, France
faces two problems that are not uncommon in Europe: persistent high
unemployment (currently around 12.5%) and a high budget deficit of about
3.65% of GDP. These problems, although apparently not out of control, serve
to hamper prosperity and will probably not be solved anytime soon.
At the end of 1995, France had the 4th largest GDP in the world and was the
fifth largest market, with a market capitalization equal to 36% of nominal
GDP. There are over 900 listed companies in the equity markets, and trading
is on a par with capitalization by world standards.
The French equity securities market is relatively small compared to the
United States' market. Trading practices are regulated by the French
securities exchange authorities and the sale and resale of securities are
generally less regulated than in the United States. Issuers of securities
in France are not subject to the same degree of regulation as are U.S.
issuers with respect to such matters as insider trading rules, tender offer
regulation, shareholder proxy requirements, and the timely disclosure of
information. In addition, accounting, auditing, and financial reporting
standards are not comparable to United States standards and, therefore,
less information may be available to investors investing in French
securities than would be available in respect of investments in the
securities of U.S. issuers in the United States. The French securities
market may be more volatile and is less liquid than the major U.S. markets.
As in the case of all foreign investments, the fund's investments may be
adversely affected by any increase in applicable foreign taxes or by
political, economic, or diplomatic developments.
A significant number of French enterprises are owned, directly or
indirectly, in whole or in part, by the French state. In 1986, the French
government announced an extensive privatization program, which was
discontinued following the parliamentary elections of June 1988, after 31
state-controlled enterprises had been sold to the public. The previous
French government had announced a new program of privatization which has so
far been continued under the current government. However, investors should
be aware that a future change of government, market, or economic factors in
France could result in a change in policy on privatization.
GERMANY is generally regarded as the chief player in the Union. Germany is
highly integrated into the world's economy and capital markets, and should
continue to benefit from an ongoing world recovery from recession. From
1988 through 1992, real Gross National Product in Germany grew at a healthy
average of 3.5%. But 1993, which saw GNP down 2.1%, was the worst year
since the beginning of the postwar Wirtschaftswunder. In 1994, Germany
began to recover from recession, but rising interest rates kept the lid on
market advances. Growth was slow through much of 1995. As of the end of
1995, Germany was the fourth largest market in the world, with market
capitalization equal to about $670 billion. (the U.S. market was number
one, with over $5 trillion in capitalization) and had 1,622 listed
companies (by comparison, the U.S. has well over 8,000 listed companies).
Exports, a key part of the German economy, may be poised to increase,
although the weak U.S. dollar means that German goods should be more
expensive in the important U.S. market, thus reducing demand.
While Germany's equity market appears to be highly valued by some measures,
the market as a whole is small compared to the economy. European investors
have lagged their U.S. counterparts in making equity investments, although
this has been changing. At the same time, new issues are not abundant in
Germany, meaning that any increasing market demand should be focused
largely on existing issues. However, Germany is currently privatizing its
telecommunications utility Deutsche Telekom, a landmark privatization for
the country. The high valuations of German stocks may also prove
supportable by the country's central role in the Union and its success in
developing the eastern part of the country and the former Eastern bloc
countries for its manufacturing purposes.
In Germany the progress of the European Union continues to be slow but
steady and the costs of assimilating the former east German state continue
to pose the greatest financial pressure. Costs for this project were
greatly underestimated: since unification in 1990, the government has had
to transfer money to the east in the amount of 4% - 5% of Gross Domestic
Product. To raise this money, the government has had to levy extra taxes.
These taxes have effectively offset advances in consumer income, and have
led to the political necessity of down sizing government and maintaining a
tight monetary policy. In order to comply with the terms of Maastricht,
Germany must simultaneously reduce its government debt. The failure, either
political or economic, of Germany's ability to cut spending while also
finding the money to restore the east to fiscal health could have
repercussions for the stock market.
Germany is also facing pressures to reform its welfare and social security
programs, and must also comply with a court order to reform its tax system.
While the country does not appear to be in any risk of governmental crisis,
all of the factors mentioned above could lead to a shift in domestic
policies, with a potential shift in the political landscape not out of the
question.
Much of Germany's fiscal health and prosperity over the next few years
depends on the continued growth of capitalism in the former Eastern bloc
states. If this growth does not materialize, or if political events
intercede, there could be negative financial repercussions for Germany.
Growth, which was weak in 1995, may remain weak beyond 1996 as Germany must
restructure its economy and social welfare system, overcoming resistance
from organized labor and opposition parties, or risk continued slow growth
and decreased competitiveness.
NORDIC COUNTRIES. Denmark, Sweden, and Finland are member of the Union
while Norway has rejected membership. These Nordic countries have a
combined total population of only 23 million, roughly equal to that of the
state of California. Productivity, as measured by Gross Domestic Product
per capita, is well above the European average in all countries except
Finland, where it stands at about the average. The Nordic countries appear
poised for stable growth. In 1997, real GDP is expected to increase by
between 1.5% and 2.0% in Sweden and Denmark, and between 2.5 and 3.1% in
Finland and Norway. At the end of 1995, all four Nordic countries ranked in
the top 30 worldwide in terms of market capitalization. The chief
industries in the region are machinery, textiles, furniture, electronics,
dairy, metals, ship building, clothing, engineering, chemicals, food
processing, fishing, paper, oil and gas, autos, and shipping. The number of
listed companies is small; at the end of 1995, Denmark had just over 250;
Sweden, 220; Norway, 165; and Finland, 73.
Foreign ownership of Nordic stocks has grown dramatically, increasing more
than twenty-fold since 1992. One reason for the appeal of Nordic stocks is
that the companies in these countries tend to be widely diversified in the
geographic areas in which they do business; thus the performance of a
company may not be as closely linked to the state of the local economy as
it is in many countries. There are, however, potential disincentives to
foreign investors such as significant non-refundable dividend withholding
tax rates.
The establishment of stronger links with their neighbors to the south will
likely be accompanied by substantial change in several aspects of the
Nordic countries' economies, particularly in the area of government
spending. The extensive social welfare system that was the envy of much of
the world in the 1960s and 1970s has proved to be extremely costly during
the subsequent decades of more modest prosperity. In Norway, these benefits
were financed through oil and gas exports, but in other Nordic countries
they have tended to result in growing government debts and deficits.
The populations of the Nordic countries have become accustomed to generous
benefits for unemployment, sick leave, child care, elder care, and general
public welfare, along with state-provided medical care. With the exception
of Denmark, each country also has a history of supporting an inefficient
agricultural sector with a level of subsidies doubling the European
average. Public spending in the Nordic countries accounts for 40% or more
of GDP.
Unemployment remains fairly high, ranging in 1995 from 5% in Norway to 17%
in Finland, but is projected to improve gradually. The income scale in the
Nordic countries tends to be comparatively flat, both with regard to age
and skill; thus there is little income advantage to be gained by career
advancement. Almost half of personal disposable income received by Swedes
was the result of transfer payments, or redistributions of wealth. In
Norway, the number of industrial jobs has fallen by about 100,000 since
1972, while government employment has doubled.
Once the full terms of the Maastricht Treaty and other Union agreements are
implemented, there will be strong pressures on the Nordic countries to
bring their government spending more closely into line with those of
Europe. Farms, particularly those closest to the European continent, will
either be forced to improve efficiency or close down, while exports of
Norwegian oil and gas and Finnish timber and mineral resources will need to
find a place in the Union's trade policies if the Nordic countries are to
prosper. National debts, which are high in Finland and Sweden, will need to
be reduced. How well these goals can be accomplished without reversing the
long-awaited growth trends that are now emerging in the Nordic countries
remains to be seen.
The Nordic countries will also be challenged to keep their most skilled
workers. Such workers are essential to the region's significant
manufacturing and engineering businesses, but the implementation of the
Union will make it easier for Nordic workers to seek employment in other
member states. And while a favorable corporate tax structure has aided the
largest Nordic companies in amassing the capital to make investments, many
of them have been investing outside the region rather than domestically.
While these problems are not insurmountable, a failure to address them
could impair the prosperity of the Nordic countries, and with it the
performance of their markets.
UNITED KINGDOM. Occupying most of the land area of the British Isles, the
U.K. includes England, Wales, Scotland, and Northern Ireland. As of the end
of 1995, the U.K. was the third largest market in the world, with market
capitalization equal to U.S. $1.6 trillion (the U.S. market for that year
was the world's largest market, with over $5 trillion in capitalization).
There are about 1,600 listed companies in the U.K. equity markets, and
trading volume is on a par with capitalization by world standards. The
relatively high number of listings and the relatively low average company
size mean that the behavior of the U.K. stock market is less likely to be
dominated by the trading actions of a few large stocks.
The U.K. did not escape the effects of worldwide recession in 1993 and
1994; however, unlike most of its European neighbors, it managed a positive
growth rate of 2% in 1993. Slower manufacturing output growth due to
weakening exports and a fall in construction are expected to lead to real
GDP growth of 2.7% in 1995. Large inventory build-ups in 1995, continued
vulnerable consumer confidence, and the slow-down in world trade do not
bode well for 1996, when growth is projected to be around 2.4%.
While foreign investment has been high, there are signs that it may not
continue to grow at the same rate. Other Union members are actively
recruiting investors, advertising their increased level of participation in
the Union as a key to important trade benefits. Even some major British
corporations, such as British Petroleum and Pilkington, have moved their
headquarters onto the European continent. The U.K. lags in the percentage
of its population that goes on to higher education, an important factor for
technology-based businesses. Despite the opening of the new English Channel
tunnel rail link to the continent, the government's spending on railways
and other parts of the transportation infrastructure is well behind that of
France and Germany.
Going forward, the U.K. appears poised for continued growth. Business
investment has risen since 1992, and as asset utilization approaches
current capacity, investment should continue to rise, with businesses
needing to expand beyond their current size in order to meet increasing
demand. Growth moderated in 1995 and was among the first European economies
to recover in 1996.
While the U.K. is a member of the Union, domestic sentiment has not been
wholly favorable towards Union involvement. A failed bid to tie the pound
to the European Currency Unit (ECU), the proposed single currency for the
Union, resulted in higher inflation. This event did not discourage negative
sentiments. As a result, the U.K. has not been as actively involved in
working with the architects of Union policies as it might have been, and
has thus been less successful in ensuring that its needs and viewpoints
were reflected in these policies. So far, the U.K. has allowed Germany and
France to play the major roles in shaping the Union framework.
The Conservative government, which was strongly entrenched during the 1980s
under Margaret Thatcher, has not been as powerful since that time and
currently faces the possibility that it may lose control of the government.
A continuing shift of sentiment towards the Labour Party, or a weakening of
the Conservative's power, could produce a government that lacks the focus
or the political will to address domestic issues and to play a strong role
in the Union.
Though falling, the U.K. budget deficit is about 4% of GDP. Compounding a
rising current account deficit, export growth has been hurt by world demand
and the decreasing competitiveness of U.K. firms. In addition, increasing
rates of capacity utilization will require the private sector to invest
more in plant and equipment. All of these factors are likely to loom over
prospects for economic growth in the future.
The conditions that have given rise to these developments are changeable,
and there is no assurance that reforms will continue or that their goals
will be achieved.
REAL GDP ANNUAL RATE OF GROWTH (ANNUAL % CHANGE)
1995
Denmark 2.9%
France 2.4%
Germany 1.9%
Italy 3.2%
Netherlands 2.4%
Spain 3.0%
Switzerland 0.7%
United Kingdom 2.4%
Source: World Economic Outlook, May 1996 (International Monetary Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING JAPAN, THE PACIFIC BASIN, AND SOUTHEAST
ASIA
Many Asian countries may be subject to a greater degree of social,
political and economic instability than is the case in the United States
and Western European countries. Such instability may result from (i)
authoritarian governments or military involvement in political and economic
decision-making; (ii) popular unrest associated with demands for improved
political, economic, and social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and (v) ethnic,
religious, and racial disaffection.
The success of market reforms, and surge in infrastructure spending have
fueled rapid growth in many developing countries in Asia. Rapidly rising
household incomes have fostered large middle classes and new waves of
consumer spending. Increases in infrastructure spending and consumer
spending have made domestic demand the growth engine for these countries.
Thus, their growth now depends less upon export to OECD countries. While
exports may no longer be the sole source of growth for developing
economies, improved competitiveness in export markets has contributed to
growth in many of these nations. The increased productivity of many Asian
countries has enabled them to achieve, or continue, their status as top
exporters while improving their national living standards.
The emerging market economies of Asia are likely to remain particularly
buoyant, although growth may likely moderate in several of them. This
should help to alleviate inflationary pressures and reduce current account
imbalances associated in part with large private capital inflows.
Nevertheless, actions already taken in Indonesia, Malaysia, and Thailand to
dampen domestic demand may need to be followed up by additional measures of
restraint.
Thailand has one of the fastest-growing economies in the region, with over
8% average growth in recent years. The economy has until now been run on a
strictly centralist principle, with five-year targets for most product
sectors, but policies have now been relaxed to allow foreign companies into
the market. Most of the Thai population rely on agriculture, largely in a
subsistence capacity: rice, sugar, maize and vegetables are grown for the
home market, while palm oil, fishing and (until the recent ban) timber
extraction have been the main export crops. Industry is moderately
developed but revolves around primary commodity processing for the local
market. The major exception is the minerals sector, which contributes over
half of the country's wealth: tin, lead, iron, tungsten, antimony and
lignite are extracted for export. There is a small and growing tourist
industry, but the sector was adversely affected by political uncertainties
in recent years. In mid-1995, the ruling Democrat Party lost the support of
one of the four coalition partners, it resigned and was replaced in a full
election by the opposition Chart Thai Party. However, King Bhumibol
Adulyadej has been forthright in his condemnation of the new government,
sparking fears of a constitutional challenge.
In terms of GDP, industrial standards and level of education, South Korea
is second only to Japan in Asia. It enjoys the benefits of a diversified
economy with well-developed sectors in electronics, automobiles, textiles
and shoe manufacture, steel and shipbuilding among others. The driving
force behind the economy's dynamic growth has been the planned development
of an export-oriented economy in a vigorously entrepreneurial society. Real
GDP grew about 9.5% in 1995. Recent volatility of the political scene is
unlikely to deflect continued economic growth. Both Koreas joined the
United Nations separately in late 1991, creating another forum for
negotiation and joint cooperation. Reunification of North Korea and South
Korea could have a detrimental effect on the economy of South Korea.
Indonesia is a mixed economy with many socialist institutions and central
planning but with a recent emphasis on deregulation and private enterprise.
Like Thailand, Indonesia has extensive natural wealth yet with a large and
rapidly increasing population. Dependent on oil exports during the 1980s,
crude oil alone contributes 80% of all foreign exchange revenues.
Indonesia's economy is growing very rapidly and the Suharto regime is
attempting to move away from dependence on oil. However, the country
remains generally very poor and has only a limited potential domestic
market for consumer goods. Foreign investment regulations were relaxed in
1994 and 1995, in an effort to stimulate growth.
Malaysia has one of the fastest-growing economies in the Asian-Pacific
region. Rapid industrialization is transforming the economy away from its
traditional agricultural base, and in the process it is creating major new
opportunities for providers of consumer goods and services. Malaysia has
become the world's top producer and exporter of semiconductor devices.
Meanwhile, the high import content of newly established, fast-growing
manufacturing industries and Malaysian consumers' high marginal propensity
to import, has resulted in a high current-account deficit (10% of GDP),
which may have a negative impact on equity performance.
Singapore has an open entrepreneurial economy with strong service and
manufacturing sectors and excellent international trading links derived
from its history. Singapore's economy has boomed since the 1960s, thanks to
the government's policy of encouraging highly skilled and hence high
value-added manufacturing facilities. Per capita GDP is among the highest
in Asia. However, the country keeps a tight rein on imports and engages in
extensive regulation of the economy, in manufacturing in particular.
Although financial services now contribute almost as much to the economy as
manufacturing, Singapore holds a position as a major oil refining and
services center.
Australia has a prosperous Western-style capitalist economy, with a per
capita GDP comparable to levels in industrialized Western European
countries. Economic growth accelerated markedly in 1994 as robust domestic
spending boosted activity. However, business investment remains weak. The
many setbacks since the 1970s have resulted primarily from the loss of
Australia's almost guaranteed export markets in Britain, after the latter's
accession to the European Union, but also from the slump in world mineral
prices and from the government's failure to reduce public spending.
Unemployment remains uncompromisingly high, and there are few signs of a
change at present. Much of the most dominant activity in Australia is
farming, especially of wheat, and sheep rearing: together, the two
contribute more than half of the country's export revenues. Minerals
provide the next most significant source of foreign exchange, although the
industry will remain vulnerable to fluctuations in the state of the world
minerals markets. Most recently, oil and gas development has been
proceeding at a particularly rapid pace. Manufacturing has moved away from
the processing of agricultural and mineral raw materials: there is a wide
range of often sophisticated engineering activity, and Australia is a very
large producer of motor vehicles.
JAPAN. Japan currently has the second-largest GDP in the world. The
Japanese economy has grown substantially over the last three decades. Its
growth rate averaged over 5% in the 1970s and 1980s. However in 1994, the
growth rate in Japan slowed to 0.6% and its budget showed a deficit of 7.8%
of high rates of investment and consumer spending on durable goods, but
both of these components of demand have now retreated sharply following
GDP. The boom in Japan's equity and property markets during the expansion
of the late 1980s supported the decline in asset prices. This led to major
bankruptcies in the financial sector which have continued through the end
of 1996. Economic activity now appears to be picking up in Japan after
protracted sluggishness that has left the economy with considerable margins
of unused resources. The supportive stance of both monetary and fiscal
policies and the correction of the yen's excessive appreciation in early
1995 helped the recovery to continue. Confidence in the financial system
has begun to improve with the announcement of a strategy for resolving the
financial problems of Japanese banks, steps to deal more effectively with
failed institutions, and plans to strengthen banking supervision.
Nevertheless, extricating financial institutions from their bad loans
problem could act as a drag on the pace of recovery. Fiscal policy is
appropriately aimed at providing continuing support in 1996 but budgetary
consolidation will need to resume when the recovery gathers enough momentum
to permit a withdrawal of stimulus.
In addition to a cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration in
their competitiveness due to high wages, a strong currency and structural
rigidities. Japan has also become a mature industrial economy and, as a
result, will see its long-term growth rate slow down over the next ten
years. Finally, Japan is reforming its political process and deregulating
its economy. This has brought about turmoil, uncertainty and a crisis of
confidence.
Japan is heavily dependent upon international trade and, accordingly, has
been and may continue to be adversely affected by trade barriers and other
protectionist or retaliatory measures of, as well as economic conditions
in, the United States and other countries with which it trades. Industry,
the most important sector of the economy, is heavily dependent on imported
raw materials and fuels. Japan's major industries are in the engineering,
electrical, textile, chemical, automobile, fishing, and telecommunication
fields. Japan imports iron ore, copper, and many forest products. Only 19%
of its land is suitable for cultivation. Japan's agricultural economy is
subsidized and protected. It is about 50% self-sufficient in food
production. Even though Japan produces a minute rice surplus, it is
dependent upon large imports of wheat, sorghum and soybeans from other
countries.
The relaxing of official and de facto barriers to imports, or hardships
created by any pressures brought by trading partners, could adversely
affect Japan's economy. A substantial rise in world oil or commodity prices
could also have a negative affect. Alternatively, the recent weakness of
the yen has benefited exports, because it has resulted in low prices for
Japanese goods sold in other countries. Because the Japanese economy is so
dependent on exports, an appreciation in the yen and any subsequent
fall-off in exports may be seen as a sign of economic weakness, which may
adversely affect the market and the fund.
The Tokyo Stock Exchange is the largest of eight exchanges in Japan which
has very well developed primary and secondary equity markets. The Tokyo
Stock Exchange is followed by the Osaka Stock Exchange and the Nagoya Stock
Exchange. These three exchanges divide the market for domestic stocks into
two sections, with newly listed companies and smaller companies assigned to
the second section and larger companies assigned to the first section.
However, the growth of the Japanese securities market has not been without
its setbacks. In 1990, the Japanese stock market, as measured by the Tokyo
Stock Price Index (TOPIX), began a spectacular decline which lasted through
the middle of 1992. During this period the TOPIX lost over 55% of its
value. Since then, the market has failed to rebound substantially, and the
TOPIX remains far closer today to its bottom in 1992 than to its peak in
1989 and 1990.
The decline in the Japanese securities markets has contributed to a
weakness in the Japanese economy, and the impact of a further decline
cannot be ascertained. The common stocks of many Japanese companies
continue to trade at high price-earnings ratios in comparison with those in
the United States, even after recent market decline. Differences in
accounting methods make it difficult to compare the earnings of Japanese
companies with those of companies in other countries, especially the United
States.
While the Japanese governmental system itself seems stable, the dynamics of
the country's politics have been unpredictable in recent years. The
economic crisis of 1990-92 brought the downfall of the conservative Liberal
Democratic Party, which had ruled since 1955. Since then, the country has
seen a series of unstable multi-party coalitions and several prime
ministers come and go, because of politics as well as personal scandals.
While there appears to be no reason for anticipating civic unrest, it is
impossible to know when the political instability will end and what trade
and fiscal policies might be pursued by the government that emerges.
With the general economic sluggishness of the past few years, banks have
seen an increase in non-performing assets. This strain has resulted in
several bankruptcies in the banking sector. Any continued or intensified
decline in the Japanese economy could throw additional strain onto the
country's banking institutions.
Geologically, Japan is located in a volatile area of the world, and has
historically been vulnerable to earthquakes, volcanoes and other natural
disasters. As demonstrated by the Kobe earthquake in January of 1995, in
which 5,000 people were killed and billions of dollars of damage was
sustained, these natural disasters can be significant enough to affect the
country's economy.
As in the U.S. and other markets, small company stocks are typically more
volatile than large company stocks, reacting more extremely to good or bad
news. Since Japan's market is dominated by large stocks (the average
company size in Japan is the largest anywhere in the world), the behavior
of the Japanese stock market in general and of the small-stock segment in
particular also may be affected by the trading activity on a relatively
small number of large-company stocks to a much greater degree than is
typically seen in the U.S. Further, during periods of economic difficulty,
small companies can find it harder to compete or survive. Since August
1990, the shares of smaller Japanese companies have underperformed those of
larger companies, as they tend to do in periods of declining industrial
production. However, the reverse tends to apply in periods of economic
recovery.
There are two factors that may influence the future corporate structure of
Japan, to the benefit of smaller Japanese companies. First, Japan is likely
to follow the pattern set by the economies of the United Kingdom and
Germany in reducing its dependence on manufacturing and increasing the
contribution of service industries to the economy. This should benefit
small companies, many of which are less capital intensive and often more
entrepreneurial. Also, many sectors of the Japanese economy, such as food,
retail, distribution, and financial services, are subject to regulations
which are in the process of being released or removed. Deregulation should
provide opportunities for smaller, more flexible companies. In addition,
the removal of artificial price restrictions and reductions in personal
taxes could lead to an upturn in Japanese domestic consumption as a
percentage of Gross Domestic Product, which is currently significantly
lower than in the United States. This increase in spending could also
benefit smaller Japanese firms. However, the continuation of economic
weakness could make it difficult for small companies to prosper, or could
make their stocks appear unattractive to investors.
The influence of the factors mentioned above, against a background of
potential recovery in the Japanese economy, may result in an attractive
long-term opportunity for selective investment in smaller Japanese
companies, and that such companies may outperform larger Japanese companies
over the longer term if economic recovery is realized.
HONG KONG AND CHINA. Hong Kong's impending return to Chinese dominion on
July 1, 1997 has not initially had a positive effect on its economic growth
which was vigorous in the 1980s. Although China has committed by treaty to
preserve the economic and social freedoms enjoyed in Hong Kong for 50 years
after regaining control of Hong Kong, the continuation of the current form
of the economic system in Hong Kong after the reversion will depend on the
actions of the government of China. Business confidence in Hong Kong,
therefore, can be significantly affected by such developments, which in
turn can affect markets and business performance. In preparation for 1997,
Hong Kong has continued to develop trade with China, where it is the
largest foreign investor, while also maintaining its long-standing export
relationship with the United States (U.S.). Spending on infrastructure
improvements is a significant priority of the colonial government while the
private sector continues to diversify abroad based on its position as an
established international trade center in the Far East. It is important to
note that a substantial portion of the companies listed on the Hong Kong
Stock Exchange are involved in real estate-related business.
China's economy may be described as transitional. While the government
still controls the production and pricing in a major portion of the
country's economy, the country has also seen a sharp rise in capitalist
activities. The opening of China to U.S. trade by President Nixon in 1972
marked an important step towards capitalism, but the most significant step
was the liberalization brought about by Deng Xiaoping, who assumed power in
the late 1970s. Deng believed that the advancement of the economy was
essential to the advancement of socialism an argument which effectively
neutralized the traditional Party objections to capitalism and foreign
investment. Under Deng's rule, China has prospered. At the time he came to
power, more than a quarter of the population was living in absolute
poverty; today, less than 10% of the population is in that category. The
real incomes of many workers have doubled and tripled, and some 80 million
urban dwellers are able to afford middle-class luxuries such as cosmetics
and Western-style fast food.
China's economy has grown at the extraordinary rate of 10% per year on
average over the past decade, with the industrial segment leading the way:
industrial growth in China exceeded 16% a year in 1994 and 1995. China's
economic growth itself has not been smooth, however, being characterized by
spurts of almost uncontrolled growth alternating with periods of harsh
austerity measures. Both the speed and the erratic nature of the growth
have caused inefficiencies and dislocations within China, including
troublesome inflation rates of over 16% per year over the past five years.
Most of China's trading activity is funnelled through Hong Kong. The value
of the Hong Kong market has grown from U.S. $54 million in 1986 to more
than $380 million in 1993, but has since fallen somewhat in local currency
terms. China is estimated to be the largest investor in the market. Among
Asian markets, only the Japanese market is larger than Hong Kong.
China itself has two stock exchanges that are set up to accommodate foreign
investment, in Shenzhen and in Shanghai. In both cases, foreign trading is
limited to a special class of shares (Class B) which was created for that
purpose. Only foreign investors may own Class B shares, but the government
must approve sales of Class B shares among foreign investors. As of
December 1995, there were 70 companies with Class B shares on the two
exchanges, for a total Class B market capitalization of U.S. $2.1 billion.
In Shanghai, all "B" shares are denominated in Chinese renminbi but all
transactions in "B" shares must be settled in US dollars, and all
distributions made on "B" shares are payable in U.S. dollars, the exchange
rate being the weighted average exchange rate for the U.S. dollar as
published by the Shanghai Foreign Exchange Adjustment Center. In Shenzhen,
the purchase and sale prices for "B" shares are quoted in Hong Kong
dollars. Dividends and other lawful revenue derived from "B" shares are
calculated in renminbi but payable in Hong Kong dollars, the rate of
exchange being the average rate published by the Shenzhen Foreign Exchange
Adjustment Center. There are no foreign exchange restrictions on the
repatriation of gains made on or income derived from "B" shares, subject to
the repayment of taxes imposed by China thereon.
Since 1978, China has designated certain areas of the country where
overseas investors can receive special investment incentives and tax
concessions in order to attract foreign investment. There are five Special
Economic Zones (Shenzhen, Shanton, and Zhuhai in Guangdong Province, Xiamen
in Fujiam Province, and Hainan Island, which itself is a province).
Fourteen coastal cities have been designated as "open cities" and certain
Open Economic Zones have been established in coastal areas. Shanghai has
established the Pudong New Area. Twenty seven High and New Technology
Industrial Development Zones have been approved where preferential
treatment is given to enterprises which are confirmed as technology
intensive.
Economically and financially, China is categorized as an emerging nation,
and thus presents the investor with many of the general risks that are
typical of such markets. However, in the case of China, there are two main
risk factors than eclipse all others: the political uncertainty surrounding
the succession to Deng and the 1997 relinquishment of Hong Kong to China by
Great Britain.
If economic growth and market liberalization have been the major positive
results of Deng's tenure, the drawbacks include a significant potential for
political instability. Deng's policies have had the effect of making the
Communist Party, and indeed much of the government, obsolete, however, both
the Party and the government remain firmly entrenched. There is little
possibility of predicting what type of government will eventually stabilize
itself in post-Deng China, but the possibilities range from old-line
conservative to ambitiously pro-growth. Even if the latter type should
prevail, there is no assurance that such a government would succeed in
controlling growth or inflation even to the fairly crude degree that Deng's
government has managed.
In the meantime, the economic weight of government entities is one of the
significant factors driving inflation in China and acting to impede
commerce and economic efficiency. The Party does not govern directly, but
only by controlling access to official government positions and by
monitoring government and private activities. Thus each governmental body
has its own corresponding body within the Party, leading to a double
bureaucracy which is both inefficient and highly prone to corruption.
While the fact of economic growth has been the result of planning, the
nature, speed, and extent of that growth have not been tightly controlled
or carefully planned. The combination of a burgeoning economy, a weakened
central government, and a power vacuum left by the demise of Deng may prove
volatile in the coming years, however bright China's long-term future may
be. Nor does China have a unified legal system or a set of national laws
governing business and securities trading practices on which to fall back.
There is still no free press, no viable opposition party, and no right to
freedom of expression. The massacre in Tienanmen Square in June of 1989 is
only the most recent reminder of this.
Much speculation centers around what China will do when it comes back into
possession of Hong Kong. The Hong Kong market's spectacular growth over the
past decade has not come without much volatility, and there is no reason to
doubt that volatility will continue to characterize the market, not only
because of political uncertainties but because the market has traditionally
been dominated by the actions of a few large trading blocs.
China is greatly dependent on foreign trade, particularly with Japan, the
U.S., and Germany. If political events become severe in China, there is
always the danger that the U.S. or other nations could alter their trade
stance towards China, which could hurt its economy by reducing exports.
However, China's exports continue to rise strongly while imports are also
expected to rise and may outstrip exports in terms of growth rates.
The strength of the economy and the weakness of the government could lead
to substantially higher inflation in coming years, which would erode
investors' earnings through the mechanism of changing rates of currency
exchange. Even under the most favorable circumstances, inflation is likely
to remain very high by Western standards. At the other extreme, a
tightening of government-imposed austerity measures has begun to slow the
economy; GDP growth is expected to fall back from 9.8% in 1995 to 8.6% in
1996 as there has been a tightening in the money supply as well as some
supply-side constraints on the very rapid growth of exports seen in 1995.
This is serving to discourage foreign investment and has contributed to
lower prices for Class B shares.
A particularly significant factor within the region over the last 13 years
has been the increasing influence which China has had in the determination
of the economic development of certain countries. This influence has been
principally in providing manufacturing facilities, in providing a market
for goods and services, and in creating a demand for export outlets, both
directly and indirectly, through Hong Kong.
The effect of China's economic development has been an increase in economic
integration among the countries in the China region. The links between
China and Hong Kong and China and other countries within the region, where
there is a significant Chinese element of the population, have by now been
strengthened to a degree which makes a reversal unlikely. Moreover,
although these links have been developed to a stage where economic
co-operation in trade operates smoothly, the full potential of the market,
both in terms of domestic consumption and of export growth, has hardly
begun to be realized.
EMERGING MARKETS: ASIA
MARKET CAPITALIZATION IN U.S. DOLLARS
DECEMBER 1995
$ Billions
India 183
Indonesia 66
Korea 182
Malaysia 223
Pakistan 10
Philippines 59
Sri Lanka 2
Taiwan 187
Thailand 143
Source: The LGT Guide to World Equity Markets, 1996
REAL GDP ANNUAL RATE OF GROWTH
(ANNUAL % CHANGE)
1995
China 10.2%
Hong Kong 5.0%
India 6.2%
Indonesia 8.1%
Japan 0.9%
Korea 9.0%
Malaysia 9.6%
Philippines 4.8%
Singapore 8.9%
Taiwan 6.4%
Thailand 8.6%
Source: World Economic Outlook, May 1996 (International Marketing Fund)
For national stock market index performance, please see the section on
Performance beginning on page .
SPECIAL CONSIDERATIONS AFFECTING CANADA
Canada occupies the northern part of North America and is the second
largest country in the world (3.97 million square miles in area) extending
from the Atlantic Ocean to the Pacific Ocean. The companies in which a fund
may invest may include those involved in the energy industry, industrial
materials (chemicals, base metals, timber, and paper), and agricultural
materials (grain cereals). The securities of companies in the energy
industry are subject to changes in value and dividend yield which depend,
to a large extent, on the price and supply of energy fuels. Rapid price and
supply fluctuations may be caused by events relating to international
politics, energy conservation, and the success of exploration projects.
Canada is one of the world's leading industrial countries, as well as a
major exporter of agricultural products. Canada is rich in natural
resources such as zinc, uranium, nickel, gold, silver, aluminum, iron, and
copper. Forest covers over 44% of its land area, making Canada a leading
world producer of newsprint. The economy of Canada is strongly influenced
by the activities of companies and industries involved in the production
and processing of natural resources. Canada is a major producer of
hydroelectricity, oil, and gas. The business activities of companies in the
energy field may include the production, generation, transmission,
marketing, control, or measurement of energy or energy fuels. Economic
prospects are changing due to recent government attempts to reduce
restrictions against foreign investment.
Canadian securities are not considered by FMR to have the same level of
risk as other nations' securities. Canadian and U.S. companies are
generally subject to similar auditing and accounting procedures, and
similar government supervision and regulation. Canadian markets are more
liquid than many other foreign markets and share similar characteristics
with U.S. markets. The political system is more stable than in some other
foreign countries, and the Canadian dollar is generally less volatile
relative to the U.S. dollar.
Many factors affect and could have an adverse impact on the financial
condition of Canada, including social, environmental, and economic
conditions, factors which are not within the control of Canada. In Canada,
the pace of economic recovery slowed markedly in 1995 owing to the
tightening of monetary conditions early in the year and the risk premiums
in interest rates that resulted from political and economic uncertainties,
as well as the economic slowdown in the United States. Following the
referendum on Quebec sovereignty in October 1995, confidence improved and
interest rates fell significantly, which should permit the pace of economic
activity to pick up during 1996. Fiscal imbalances have diminished
considerably in recent years but the federal and provincial governments
will need to ensure that further consolidation is achieved in 1996 and over
the medium term. Inflation has remained low, which provides some
flexibility for further easing of monetary policy if warranted by cyclical
considerations and by further progress on the fiscal front. Overall,
conditions are good for Canada's expansion to proceed at a healthy rate.
The U.S. - Canada Free Trade Agreement which became effective in January
1989, will be phased in over a period of 10 years. This agreement will
remove tariffs on U.S. technology and Canadian agricultural products in
addition to removing trade barriers affecting other important sectors of
each country's economy. Relations with the U.S. are likely to be further
strengthened by the implementation of the North American Free Trade
Agreement, which came into effect in January 1994.
The majority of new equity issues or initial public offerings in Canada are
through underwritten offerings. The funds may elect to participate in these
issues.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICA
Latin America is a region rich in natural resources such as oil, copper,
tin, silver, iron ore, forestry, fishing, livestock, and agriculture. The
region has a large population (over 350 million) representing a large
domestic market. The region has been transitional over the last five years
from the stagnant 1980s, which were characterized by poor economic
policies, higher international interest rates, and limited access to new
foreign capital.
High inflation and low economic growth have given way to stable, manageable
inflation rates and higher economic growth. Changes in political
leadership, the implementation of market-oriented economic policies, such
as privatization, trade reform and monetary reform have been among the
recent steps taken to modernize the Latin American economies and to
regenerate growth in the region. Various trade agreements have also been
formed within the region such as the Andean Pact, Mercosur and the North
America Free Trade Agreement (NAFTA). The largest of these is NAFTA, which
was implemented on January 1, 1994.
Latin American equity markets can be extremely volatile and in the past
have shown little correlation with the U.S. market. Currencies are
typically weak, but most are now relatively free floating, and it is not
unusual for the currencies to undergo wide fluctuations in value over short
periods of time due to changes in the market.
Mexico's economy has been transformed significantly over the last 6-7
years. In the past few years the government has sold the telephone company,
the major steel companies, the banks and many other state-owned
enterprises. The major state ownership remaining is in the oil sector and
the electricity sector. The United States is Mexico's major trading
partner, accounting for two-thirds of its exports and imports. The
government, in consultation with international economic agencies, is
implementing programs to stabilize the economy and foster growth.
In the early 1980s Mexico experienced a foreign debt crisis. By 1987,
foreign debt had reached prohibitive levels, accounting for 90 to 95
percent of GDP, thus draining Mexico of all its resources. By the end of
1994, a large current account deficit, fueled in part by expansionary
policy, and the burden of its large national debt forced the Mexican
government to devalue the peso, triggering a severe crisis of confidence.
Both the crisis and the measures taken to stabilize the economy since, have
led to severely reduced domestic demand, which has been only partially
offset by positive trade-related activity. Following a difficult year that
saw real output contract by almost 7 percent, the recovery that had begun
gathered strength by late 1996. There are still risks arising from
fragility in the banking sector, and continuing fiscal discipline will be
needed to maintain market confidence.
Brazil entered the 1990s with declining real growth, runaway inflation, an
unserviceable foreign debt of $122 billion, and a lack of policy direction.
Over the past few years, Brazil has been able to stabilize its domestic
economy through a relentless process of balancing the government budget,
the privatization of state enterprises, deregulation and reduction of red
tape and introducing greater competition into the domestic business
environment. Monthly inflation was brought down from 43 percent in the
first half of 1994 to 1.5 percent in 1995. This reduction reflects the
success of the Real Plan, which included the elimination of most forms of
backward-looking indexation, the introduction of a new currency, and tight
credit policy, which subsequently led to a nominal appreciation of the
exchange rate. A major long-run strength is Brazil's natural resources.
Iron ore, bauxite, tin, gold, and forestry products make up some of
Brazil's basic natural resource base, which includes some of the largest
mineral reserves in the world. In terms of population, Brazil is the
fifth-largest in the world with about 154+ million people and represents a
huge domestic market.
Chile, like Brazil, is endowed with considerable mineral resources, in
particular copper. Economic reform has been ongoing in Chile for at least
15 years, but political democracy has only recently returned to Chile.
Privatization of the public sector beginning in the early 1980s has
bolstered the equity market and given Chile the most competitive and
successful economy in Latin America. A well organized pension system has
created a long-term domestic investor base. Chile tightened its monetary
policy late in 1995 amid signs of overheating and 1996 GDP growth slowed
while inflation moderated.
Argentina is strong in wheat production and other foodstuffs and livestock
ranching. A well-educated and skilled population boasts one of the highest
literacy rates in the region. The country has been ravaged by decades of
extremely high inflation and political instability. Privatization is
ongoing and should reduce the amount of external debt outstanding. The
markets for labor, capital and goods and services have been deregulated.
Nearly all non-tariff barriers and export taxes have been eliminated, the
tariff structure simplified and tariffs sharply reduced. In the first
months of 1995 the government had to struggle to prevent a Mexican-style
collapse of the economy. A significant adjustment of the fiscal stance,
together with a restructuring of the banking system, particularly the
provincial banks, helps contain the spillover effects of the crisis in
Mexico. The government vowed to maintain a restrictive fiscal policy and
the peso's convertibility to the U.S. dollar after the recent resignation
of Domingo Cavallo, the Economy Minister who masterminded the most
successful reform program in Argentina's post-world war II history.
Venezuela has substantial oil reserves. External debt is being
renegotiated, and the government is implementing economic reform in order
to reduce the size of the public sector. Internal gasoline prices, which
are one-third those of international prices, were increased in order to
reduce subsidies. However, economic conditions worsened in 1995, as the
government failed to reduce the fiscal deficit, and investment stagnated.
Prospects for an improvement in economic situation in 1997 depend on the
adoption of a credible exchange rate policy, the removal of controls, and
strengthening of the fiscal position through measures such as
privatization, and addressing the problems of the banking sector.
EMERGING MARKETS: LATIN AMERICA
MARKET CAPITALIZATION IN U.S. DOLLARS
DECEMBER 1995
$ Billions:
Argentina 38
Brazil 148
Chile 73
Colombia 17
Mexico 91
Peru 12
Venezuela 4
Source: The LGT Guide to World Equity Markets, 1996
For national stock market performance, please see the section of
Performance beginning on page .
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contracts"), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges and
may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) in accordance with a
ranking of broker-dealers determined periodically by FMR's investment staff
based upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
Each fund's turnover rates for the fiscal years ended October 31, 1996 and
1995 are presented in the table below. Because a high turnover rate
increases transaction costs and may increase taxable gains, FMR carefully
weighs the anticipated benefits of short-term investing against these
consequences. An increased turnover rate is due to a greater volume of
shareholder purchase orders, short-term interest rate volatility and other
special market conditions.
Turnover Rates 1996 1995
Canada Fund 139% 75%
Emerging Markets Fund 77% 78%
Europe Fund 45% 38%
Europe Capital Appreciation Fund 155% 176%
France Fund 129% N/A
Germany Fund 133% N/A
Hong Kong and China Fund 118% N/A
Japan Fund 83% 86%
Japan Small Companies Fund 66% N/A
Latin America Fund 70% 57%
Nordic Fund 35% N/A
Pacific Basin Fund 85% 65%
Southeast Asia Fund 102% 94%
United Kingdom Fund 50% N/A
BROKERAGE COMMISSIONS. The table below lists the total brokerage
commissions; and the dollar amount of commissions paid to FBS, FBSI and
FBSL for the fiscal periods ended October 31, 1996, 1995, and 1994. Each
fund pays both commissions and spreads in connection with the placement of
portfolio transactions.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fiscal
Period Ended
October 31 Total To FBSI To FBS/FBSL
Canada Fund
1996 $ 1,231,212 $ 42,312 $ 0
1995 $ 941,962 $ 120,137 $ 0
1994 $ 950,009 $ 76,201 $ 0
Emerging Markets Fund
1996 $ 8,100,767 $ 29,103 $ 0
1995 $ 11,637,63 $ 86,207 $ 0
8
1994 $ 20,130,99 $ 52,584 $ 0
4
Europe Fund
1996 $ 1,026,293 $ 0 $ 34,043
1995 $ 1,033,151 $ 36 $ 3,490
1994 $ 856,517 $ 182 $ 0
Europe Capital Appreciation Fund
1996 $ 1,087,777 $ 0 $ 19,477
1995 $ 2,336,212 $ 3,628 $ 70,372
19941 $ 3,052,874 $ 7,959 $ 0
France Fund
19962 $ 43,305 $ 0 $ 1,234
Germany Fund
19962 $ 32,333 $ 0 $ 8,857
Hong Kong and
China Fund
19962 $ 554,367 $ 0 $ 0
Japan Fund
1996 $ 1,626,469 $ 0 $ 0
1995 $ 2,422,928 $ 0 $ 0
1994 $ 4,816,464 $ 0 $ 0
Japan Small
Companies Fund
19962 $ 939,743 $ 0 $ 0
Latin America Fund
1996 $ 2,141,519 $ 29,528 $ 0
1995 $ 2,102,089 $ 53,346 $ 0
1994 $ 1,918,285 $ 57,533 $ 0
Nordic Fund
19962 $ 81,759 $ 0 $ 3,427
Pacific Basin Fund
1996 $ 3,943,996 $ 0 $ 180
1995 $ 2,937,153 $ 0 $ 0
1994 $ 3,629,075 $ 0 $ 0
Southeast Asia Fund
1996 $ 7,130,181 $ 0 $ 0
1995 $ 6,876,440 $ 0 $ 0
1994 $ 13,659,60 $ 0 $ 0
6
United Kingdom
Fund
19962 $ 5,284 $ 0 $ 124
</TABLE>
_____
1 From December 21, 1993 (commencement of operations).
2 From November 1, 1995 (commencement of operations).
The table below lists for the fiscal period ended October 1996,
the percentage of aggregate brokerage commissions paid to FBSI and FBS
and the percentage of the aggregate dollar amount of transactions for which
each fund paid brokerage commissions to FBSI, and FBS. The difference in
the percentage of the brokerage commissions paid to and the percentage of
the dollar amount of transactions effected through FBSI and FBS is a result
of the low commission rates charged by FBSI and FBS . The table also
includes the amount of brokerage commissions paid to brokerage firms that
provided research services; and the approximate amount of transactions
effected through brokerage firms that provided research services.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
% of % of Commissions Transactions with
% of % of Transactions Transactions Paid To Firms Brokerage Firms
Fiscal Commissions Commissions Effected Effected Providing Providing
Period Paid Paid To through through Research Research Services
Ended to FBSI FBS FBSI FBS Services
October 31,
1996
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Canada Fund 3.44% 0% 6.65% 0% $ 1,195,658 $ 486,623,691
Emerging .36% 0% 2.81% 0% $ 7,662,605 $ 1,591,798,42
Markets 1
Fund
Europe Fund 0% 3.32% 0% 3.99% $ 917,611 $ 398,256,336
Europe 0% 1.79% 0% 2.34% $ 1,013,449 $ 440,506,400
Capital
Appreciation
Fund
France Fund 0% 2.85% 0% 4.44% $ 40,917 $ 13,739,311
Germany 0% 27.39% 0% 35.80% $ 21,590 $ 8,094,517
Fund
Hong Kong 0% 0% 0% 0% $ 494,575 $ 185,892,043
and China
Fund
Japan Fund 0% 0% 0% 0% $ 1,515,167 $ 510,449,593
Japan Small 0% 0% 0% 0% $ 863,372 $ 210,753,220
Companies
Fund
Latin 1.38% 0% 4.78% 0% $ 1,694,406 $ 565,009,535
America
Fund
Nordic Fund 0% 4.19% 0% 6.38% $ 76,351 $ 26,691,811
Pacific Basin 0% 0% 0% .01% $ 3,679,608 $ 1,006,670,21
Fund 1
Southeast 0% 0% 0% 0% $ 6,510,230 $ 1,465,351,90
Asia Fund 9
United 0% 2.35% 0% 3.15% $ 4,805 $ 2,895,219
Kingdom
Fund
</TABLE>
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
FSC normally determines each fund's net asset value per share (NAV) as
of the close of the New York Stock Exchange (NYSE) (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as of
this time for the purpose of computing each fund's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the United States are valued at last sale price or,
if no sale has occurred, at the closing bid price. Most equity securities
for which the primary market is outside the United States are valued using
the official closing price or the last sale price in the principal market
in which they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid price normally is used.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets. Fixed-income
securities and convertible securities may also be valued on the basis of
information furnished by a pricing service that uses a valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. Use of pricing services has been approved by the
Board of Trustees. A number of pricing services are available, and the fund
may use various pricing services or discontinue the use of any pricing
service.
Futures contracts and options are valued on the basis of market quotations,
if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be valued in good
faith by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities owned
by a fund if, in the opinion of a committee appointed by the Board of
Trustees, some other method would more accurately reflect the fair market
value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis and may be quoted with or without taking each
fund's 3% maximum sales charge into account and may or may not include the
effect of Europe Fund's , Europe Capital Appreciation Fund's ,
and Pacific Basin Fund's 1.00% redemption fee or Canada Fund's,
Emerging Markets Fund's, France Fund's , Germany Fund's,
Hong Kong and China Fund's , Japan Fund's, Japan Small Companies
Fund's , Latin America Fund's, Nordic Fund's , Southeast
Asia Fund's, and United Kingdom Fund 's 1.5% redemption fee on
shares held less than 90 days days. Excluding a fund's sales charge or
redemption fee from a total return calculation produces a higher total
return figure. Total returns, yields, and other performance information may
be quoted numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On October 25, 1996 , the 13-week and 39-week long-term
moving averages for the funds are outlined in the chart below.
13 Week Long-Term 39 Week Long-Term
Fund Name Moving Average Moving Average
Canada Fund $ 20.56 $20.16
Emerging Markets Fund 16.95 17.12
Europe Fund 26.28 25.15
Europe Capital Appreciation Fund 13.76 13.15
France Fund 11.88 11.65
Germany Fund 11.10 10.88
Hong Kong and China Fund 12.04 11.49
Japan Fund 12.32 12.72
Japan Small Companies Fund 9.92 10.44
Latin America Fund 12.92 12.30
Nordic Fund 12.19 11.32
Pacific Basin Fund 15.14 15.45
Southeast Asia Fund 14.84 15.30
United Kingdom Fund 11.31 10.82
HISTORICAL FUND RESULTS. The following table shows the funds' total returns
for the periods ended October 31, 199 6 . Total return figures include
the effect of the funds' 3% sales charge. Total returns do not
include the effect of paying a fund's $25 exchange fee, which was in effect
from December 1, 1987 through October 23, 1989, or other charges for
special transactions or services, such as Europe Fund's, Europe Capital
Appreciation Fund's, and Pacific Basin Fund's 1.00% redemption fee for
shares held less than 90 days, or Canada Fund's, Emerging Market s
Fund 's, France Fund's, Germany Fund's, Hong Kong and China Fund's,
Japan Fund's, Japan Small Companies Fund's, Latin America Fund 's,
Nordic Fund's, Southeast Asia Fund 's, and United Kingdom
Fund's redemption fee of 1.5% for shares held less th a n 90 days.
Average Annual Total Returns* * Cumulative Total Returns* *
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Five Life of One Five Life of
Year Years Fund Year Years Fund
Canada 21.24% 6.89 % 11.21 % 21.24% 39.51 % 159.22 %
Fund
(11/17/87)
*
Emerging 8.34 % 10.60 % 9.53 % 8.34% 65.48 % 72.78%
Markets
Fund
(11/1/90)*
Europe 16.54 % 13.08 % 12.06 % + 16.54% 84.87 % 212.25 % +
Fund
Europe 15.18% N/A 12.21 % 15.18% N/A 39.14 %
Capital
Appreciati
on Fund
(12/21/93)
*
France 19.20 % N/A 19.20 % 19.20% N/A 19.20 %
Fund
(11/1/95) *
Germany 10.00 % N/A 10.00 % 10.00% N/A 10.00 %
Fund
(11/1/95) *
Hong 25.93 % N/A 25.93 % 25.93% N/A 25.93 %
Kong and
China
Fund
(11/1/95) *
Japan -6.21 % N/A 4.59 % -6.21% N/A 20.38 %
Fund
(9/15/92) *
Japan -11.44 % N/A -11.44 % -11.44% N/A -11.44 %
Small
Companies
Fund
(11/1/95) *
Latin 26.77 % N/A 6.37 % 26.77% N/A 24.43%
America
Fund
(4/19/93)*
Nordic 23.87 % N/A 23.87 % 23.87% N/A 23.87%
Fund
(11/1/95)*
Pacific -4.50 % 4.74 % 6.05 % + -4.50% 26.03 % 79.89 % +
Basin
Fund
Southeast 4.36 % N/A 11.18 % 4.36% N/A 45.53 %
Asia Fund
(4/19/93) *
United 15.80 % N/A 15.80 % 15.80% N/A 15.80 %
Kingdom
Fund
(11/1/95) *
</TABLE>
* Commencement of Operations
* * Load Adjusted
+ 10 year return
Note: If FMR had not reimbursed certain fund expenses during these periods,
Canada Fund's, Europe Fund's, France Fund's, Germany Fund's, Japan Fund's,
Nordic Fund's, Pacific Basin Fund's, Southeast Asia Fund's, and United
Kingdom Fund's total returns would have been lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500(registered trademark)),
the Dow Jones Industrial Average (DJIA), and the cost of living, as
measured by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month end closest to the initial investment date
for each fund. The S&P 500 and DJIA comparisons are provided to show how
each fund's total return compared to the record of a broad unmanaged index
of common stocks and a narrower set of stocks of major industrial
companies, respectively, over the same period. Each fund has the ability to
invest in securities not included in either index, and its investment
portfolio may or may not be similar in composition to the indexes. The S&P
500 and DJIA returns are based on the prices of unmanaged groups of stocks
and, unlike each fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the 10-year period ended October 31, 1996 or
life of each fund, as applicable, assuming all distributions were
reinvested. The figures below reflect the fluctuating stock prices of the
specified periods and should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in a fund today. Tax consequences of different investments (with
the exception of foreign tax withholdings) have not been factored into the
figures below.
CANADA FUND: During the period from November 17, 1987 (commencement of
operations) to October 31, 1996, a hypothetical $10,000 investment in
Fidelity Canada Fund would have grown to $25,922, including the effect of
the fund's 3% sales charge.
FIDELITY CANADA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 $ 21,185 $ 487 $ 4,250 $ 25,922 $ 37,612 $ 40,791 $ 13,718
1995 17,024 301 3,415 20,740 30,309 31,485 13,319
1994 16,665 282 3,343 20,290 23,971 25,235 12,955
1993 17,285 292 3,421 20,998 23,079 23,129 12,626
1992 13,803 21 0 2,73 2 16,745 20,078 19,693 12,288
1991 15,792 24 1 1,99 0 18,023 18,257 18,192 11,906
1990 13,163 13 8 76 5 14,066 13,674 13,986 11,568
1989 14,987 146 183 15,316 14,782 14,573 10,884
1988* 12,358 0 0 12,358 11,694 11,408 10,416
</TABLE>
* From November 17, 1987 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Canada Fund
on November 17, 1987, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $13,085. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $291 for dividends and $2,561 for capital
gains distributions. The figures in the table do not include the effect of
the fund's 1.5% redemption fee applicable to shares held less than 90 days.
EMERGING MARKETS FUND: During the period from November 1, 1990
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in the Fidelity Emerging Markets Fund would have grown to
$ 17,278 , including the effect of the fund's 3% sales charge.
FIDELITY EMERGING MARKETS FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year
Ended $10,000 Dividend Capital Gain Total
October
31 Investment Distributions Distributions Value S&P 500 DJIA CPI**
1996 $ 16,112 $ 710 $ 456 $ 17,278 $ 27,506 $ 29,166 $ 11,858
1995 14,686 368 415 15,469 22,165 22,512 11,513
1994 18,673 422 529 19,624 17,530 18,044 11,199
1993 15,695 307 444 16,446 16,878 16,538 10,914
1992 10,719 128 148 10,995 14,683 14,081 10,622
1991* 10,088 40 0 10,128 13,351 13,008 10,292
</TABLE>
* From November 1, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Emerging
Markets Fund on November 1, 1990, assuming the 3% sales charge had been in
effect, the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $10,849 If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $543 for dividends and $281 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
EUROPE FUND: During the 10-year period ended October 31, 1996, a
hypothetical $10,000 investment in Fidelity Europe Fund would have grown to
$31,225, including the effect of the fund's 3% sales charge.
FIDELITY EUROPE FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 $ 26,333 $ 3,643 $ 1,249 $ 31,225 $ 39,291 $ 43,713 $ 14,352
1995 22,828 3,019 143 25,990 31,662 33,740 13,935
1994 20,565 2,485 0 23,050 25,041 27,043 13,554
1993 17,895 2,077 0 19,972 24,109 24,786 13,209
1992 14,681 1,393 0 16,074 20,974 21,104 12,856
1991 15,468 916 0 16,384 19,071 19,495 12,457
1990 15,807 552 0 16,359 14,284 14,987 12,103
1989 14,603 337 0 14,940 15,441 15,617 11,387
1988 12,584 11 0 12,595 12,216 12,225 10,898
1987 11,739 11 0 11,750 10,641 10,943 10,453
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Europe Fund
on October 31, 1986, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $13,137 If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $2,000 for dividends and $893 for capital
gains distributions. The figures in the table do not include the effect of
the fund's 1.0% redemption fee applicable to shares held less than 90
days.
EUROPE CAPITAL APPRECIATION FUND: During the period from December 21, 1993
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity Europe Capital Appreciation Fund would have grown to
$ 13,914, including the effect of the fund's 3% sales charge.
FIDELITY EUROPE CAPITAL APPRECIATION FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996 $ 13,648 $ 266 $ 0 $ 13,914 $ 16,289 $ 17,224 $ 10,857
1995 11,718 0 0 11,718 13,127 13,294 10,542
1994* 11,010 0 0 11, 010 10,382 10,655 10,254
</TABLE>
* From December 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Europe
Capital Appreciation Fund on December 21, 1993, assuming the 3% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000), together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested),
amounted to $10,223 If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $223 for dividends and
$0 for capital gains distributions. The figures in the table do not include
the effect of the fund's 1.0% redemption fee applicable to shares held less
than 90 days.
FRANCE FUND: During the period from November 1, 1995 (commencement
of operations) to October 31, 1996, a hypothetical $10,000 investment in
Fidelity France Fund would have grown to $11,920, including the effect of
the fund's 3% sales charge.
FIDELITY FRANCE FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 11,873 $ 47 $ 0 $ 11,920 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in France Fund
on November 1, 1995, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $10,039 If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $39 for dividends and $0 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
GERMANY FUND: During the period from November 1, 1995 (commencement
of operations) to October 31, 1996, a hypothetical $10,000 investment in
Fidelity Germany Fund would have grown to $11,000, including the effect of
the fund's 3% sales charge.
FIDELITY GERMANY FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 11,000 $ 0 $ 0 $ 11,000 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Germany Fund
on November 1, 1995, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $11,000. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $0 for dividends and $0 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
HONG KONG AND CHINA FUND: During the period from November 1, 1995
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity Hong Kong and China Fund would have grown to
$12,593, including the effect of the fund's 3% sales charge.
FIDELITY HONG KONG AND CHINA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 12,581 $ 12 $ 0 $ 12,593 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Hong Kong
and China Fund on November 1, 1995, assuming the 3% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $10,010.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments
for the period would have amounted to $10 for dividends and $0 for capital
gains distributions. The figures in the table do not include the effect of
the fund's 1.5% redemption fee applicable to shares held less than 90 days.
JAPAN FUND: During the period from September 15, 1992 (commencement of
operations) to October 31, 1996, a hypothetical $10,000 investment in
Fidelity Japan Fund would have grown to $ 12,038 , including
the effect of the fund's 3% sales charge.
FIDELITY JAPAN FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI**
1996 $ 11,330 $ 0 $ 708 $ 12,038 $ 18,495 $ 19,869 $ 11,203
1995 11,718 0 732 12,450 14,904 15,336 10,878
1994 13,842 0 461 14,303 11,787 12,292 10,580
1993 12,950 0 0 12,950 11,349 11,266 10,311
1992* 9,545 0 0 9,545 9,873 9,593 10,035
</TABLE>
* From September 15, 1992 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Japan Fund
on September 15, 1992, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $10,739. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $0 for dividends and $728 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
JAPAN SMALL COMPANIES FUND: During the period from November 1, 1995
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity Japan Small Companies Fund would have grown to
$8,856, including the effect of the fund's 3% sales charge.
FIDELITY JAPAN SMALL COMPANIES FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 8,856 $ 0 $ 0 $ 8,856 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Japan Small
Companies Fund on November 1, 1995, assuming the 3% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $8,856. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $0 for dividends and $0 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
LATIN AMERICA FUND: During the period from April 19, 1993
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity Latin America Fund would have grown to $12,443,
including the effect of the fund's 3% sales charge.
FIDELITY LATIN AMERICA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 $ 12,212 $ 190 $ 41 $ 12,443 $ 17,238 $ 18,943 $ 10,993
1995 9,458 31 32 9,521 13,891 14,622 10,674
1994 15,724 53 53 15,830 10,986 11,719 10,382
1993* 12,882 0 0 12,882 10,577 10,741 10,118
</TABLE>
* From April 19, 1993 (commencement of operations) through October 31,
1993.
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Latin
America Fund on April 19, 1993, assuming the 3% sales charge had been in
effect, the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $10,214.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments
for the period would have amounted to $165 for dividends and $49 for
capital gains distributions. The figures in the table do not include the
effect of the fund's 1.5% redemption fee applicable to shares held less
than 90 days.
NORDIC FUND: During the period from November 1, 1995 (commencement
of operations) to October 31, 1996, a hypothetical $10,000 investment in
Fidelity Nordic Fund would have grown to $12,387, including the effect of
the fund's 3% sales charge.
FIDELITY NORDIC FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 12,387 $ 0 $ 0 $ 12,387 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Nordic Fund
on November 1, 1995, assuming the 3% sales charge had been in effect, the
net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $10,000. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $0 for dividends and $0 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
PACIFIC BASIN FUND: During the 10-year period ended October 31, 1996, a
hypothetical $10,000 investment in Fidelity Pacific Basin Fund would have
grown to $ 17,989 , including the effect of the fund's 3% sales
charge.
FIDELITY PACIFIC BASIN FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI**
1996 $ 14,354 $ 753 $ 2,882 $ 17,989 $ 39,291 $ 43,713 $ 14,352
1995 14,579 764 2,928 18,271 31,662 33,740 13,935
1994 19,557 997 1,163 21,717 25,041 27,043 13,554
1993 17,127 731 723 18,581 24,109 24,786 13,209
1992 11,758 381 496 12,635 20,974 21,104 12,856
1991 12,884 417 544 13,845 19,071 19,495 12,457
1990 12,630 231 533 13,394 14,284 14,987 12,103
1989 15,461 273 22 15,756 15,441 15,617 11,387
1988 13,707 157 0 13,864 12,216 12,225 10,898
1987 12,169 11 0 12,180 10,641 10,943 10,453
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Pacific
Basin Fund on October 31, 1986, assuming the 3% sales charge had been in
effect, the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $13,822.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments
for the period would have amounted to $656 for dividends and $2,881 for
capital gains distributions. The figures in the table do not include the
effect of the fund's 1.0% redemption fee applicable to shares held less
than 90 days.
SOUTHEAST ASIA FUND: During the period from April 19, 1993
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity Southeast Asia Fund would have grown to $14,553,
including the effect of the fund's 3% sales charge.
FIDELITY SOUTHEAST ASIA FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 $ 14,249 $ 304 $ 0 $ 14,553 $ 17,238 $ 18,943 $ 10,993
1995 13,464 63 0 13,527 13,891 14,622 10,674
1994 14,172 67 0 14,239 10,986 11,719 10,382
1993* 12,843 0 0 12,843 10,577 10,741 10,118
</TABLE>
* From April 19, 1993 (commencement of operations) through October 31,
1993.
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Southeast
Asia Fund on April 19, 1993, assuming the 3% sales charge had been in
effect, the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $10,292.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments
for the period would have amounted to $291 for dividends and $0 for capital
gains distributions. The figures in the table do not include the effect of
the fund's 1.5% redemption fee applicable to shares held less than 90 days.
UNITED KINGDOM FUND: During the period from November 1, 1995
(commencement of operations) to October 31, 1996, a hypothetical $10,000
investment in Fidelity United Kingdom Fund would have grown to $11,580,
including the effect of the fund's 3% sales charge.
FIDELITY UNITED KINGDOM FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Year Ended $10,000 Dividend Capital Gain Total
October 31 Investment Distributions Distributions Value S&P 500 DJIA CPI **
1996* $ 11,533 $ 47 $ 0 $ 11,580 $ 12,409 $ 12,956 $ 10,299
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in United Kingdom
Fund on November 1, 1995, assuming the 3% sales charge had been in effect,
the net amount invested in fund shares was $9,700. The cost of the initial
investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $10,039. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $39 for dividends and $0 for capital gains
distributions. The figures in the table do not include the effect of the
fund's 1.5% redemption fee applicable to shares held less than 90 days.
INTERNATIONAL INDICES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database, the total market capitalization of Latin American countries
according to the International Finance Corporation Emerging Markets
database, and the performance of national stock markets as measured in U.S.
dollars by the Morgan Stanley Capital International stock market indices
for the twelve months ended October 31, 1996. Of course, these results are
not indicative of future stock market performance or the funds'
performance. Market conditions during the periods measured fluctuated
widely. Brokerage commissions and other fees are not factored into the
values of the indices.
MARKET CAPITALIZATION. Companies outside the U.S. now make up nearly
two-thirds of the world's stock market capitalization. According to Morgan
Stanley Capital International, the size of the markets as measured in U.S.
dollars grew from $ 5,080.3 ($8,621.7 including the U.S.) billion in 1995
to $5,749.4 ($10,078.9 including the U.S.) billion in 1996.
The following table measures the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database. The value of the markets are measured in billions of U.S. dollars
as of October 31, 1996.
TOTAL MARKET CAPITALIZATION
Australia $ 163.6 Japan $ 1,944.0
Austria 22.9 Netherland 248.1
s
Belgium 66.2 Norway 26.2
Canada 250.8 Singapore/ 213.6
Malaysia
Denmark 47.2 Spain 108.4
France 372.2 Sweden 134.0
Germany 401.6 Switzerlan 325.4
d
Hong 200.6 United 1,002.8
Kong Kingdom
Italy 147.0 United 4,329.4
States
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of the markets is measured in billions
of U.S. dollars as of October 31, 1996.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 24,980.3
Brazil 89,501.4
Chile 38,528.7
Colombia 9,277.4
Mexico 72,037.8
Venezuela 5,384.5
Total Latin $ 239,710.1
America
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents the
performance of national stock markets as measured in U.S. dollars by the
Morgan Stanley Capital International stock market indices for the twelve
months ended October 31, 1996. The second table shows the same performance
as measured in local currency. Each table measures total return based on
the period's change in price, dividends paid on stocks in the index, and
the effect of reinvesting dividends net of any applicable foreign taxes.
These are unmanaged indices composed of a sampling of selected companies
representing an approximation of the market structure of the designated
country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia 16.9% Japan -0.8%
Austria -0.5 Netherland 26.2
s
Belgium 16.3 Norway 15.4
Canada 29.9 Singapore/ -3.1/26.8
Malaysia
Denmark 16.8 Spain 32.1
France 18.2 Sweden 28.9
Germany 12.5 Switzerlan 8.9
d
Hong 28.0 United 20.3
Kong Kingdom
Italy 7.8 United 23.8
States
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 12.1% Japan 10.3%
Austria 6.9 Netherland 35.5
s
Belgium 25.2 Norway 18.1
Canada 29.6 Singapore/ -3.5/26.0
Malaysia
Denmark 24.2 Spain 37.8
France 23.4 Sweden 27.4
Germany 20.8 Switzerlan 20.6
d
Hong 28.0 United 16.6
Kong Kingdom
Italy 2.5 United 23.8
States
The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1996.
STOCK MARKET PERFORMANCE
Five Years Ended
Ten Years Ended
October 31, 1996 October 31, 1996
Germany 11.98% 8.73%
Hong Kong 26.94 22.25
Japan 0.58 5.35
Spain 8.15 11.16
United Kingdom 11.50 15.03
United States 14.98 13.73
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
total return, assume reinvestment of distributions, do not take sales
charges or redemption fees into consideration, and are prepared without
regard to tax consequences. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market mutual
fund performance indices prepared by Lipper or other organizations. When
comparing these indices, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock mutual
funds may offer higher potential returns, they also carry the highest
degree of share price volatility. Likewise, money market funds may offer
greater stability of principal, but generally do not offer the higher
potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike a fund's
returns, however, the index returns do not reflect brokerage commissions,
transaction fees, or other costs of investing directly in the securities
included in the index.
Canada Fund may compare its performance to that of the Toronto Stock
Exchange (TSE) 300, a market capitalization weighted index of 300 stocks
traded in the Canadian market.
Emerging Markets Fund may compare its performance to that of the Morgan
Stanley Capital International Emerging Markets Free Index, a market
capitalization weighted index of over 850 stocks traded in 22 world
markets.
Each of Europe Fund and Europe Capital Appreciation Fund may compare its
performance to that of the Morgan Stanley Capital International Europe
Index, a market capitalization weighted index of over 550 stocks traded in
14 European markets.
France Fund may compare its performance to that of the Societe des Bourses
Francaises (SBF) 250, a market capitalization weighted index of the stocks
of the 250 largest companies in the French market.
Germany Fund may compare its performance to that of the Deutscher
Akteinindex (DAX) 100, a market capitalization weighted index of the 100
most heavily traded stocks in the German market.
Hong Kong and China Fund may compare its performance to that of the Hang
Seng Index, a market capitalization weighted index of the stocks of the 33
largest companies in the Hong Kong market.
Each of Japan Fund and Japan Small Companies Fund may compare its
performance to that of the Tokyo Stock Exchange Index (TOPIX), a market
capitalization weighted index of over 1100 stocks traded in the Japanese
market.
Latin America Fund may compare its performance to that of the Morgan
Stanley Capital International Emerging Markets Free-Latin America Index, a
market capitalization weighted index of approximately 170 stocks traded in
seven Latin American markets.
Nordic Fund may compare its performance to that of the FT - Actuaries World
Nordic Index, a market capitalization weighted index of over 90 stocks
traded in four Scandinavian markets.
Pacific Basin Fund may compare its performance to that of the Morgan
Stanley Capital International Pacific Index, a market capitalization
weighted index of over 400 stocks traded in six Pacific-region markets.
Southeast Asia Fund may compare its performance to that of the Morgan
Stanley Capital International Combined Far East ex-Japan Free Index, a
market capitalization weighted index of over 450 stocks traded in eight
Asian markets, excluding Japan.
United Kingdom Fund may compare its performance to that of the FT - All
Shares Index, a market capitalization weighted index of over 750 stocks
traded in the U.K. market.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of October 31, 1996 , FMR advised over $ 28 billion in
tax-free fund assets, $ 93 billion in money market fund assets,
$ 289 billion in equity fund assets, $ 59 billion in
international fund assets, a nd $24 bil lion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940
Act), FDC exercises its right to waive each fund's front-end sales charge
on shares acquired through reinvestment of dividends and capital gain
distributions or in connection with the fund's merger with or acquisition
of any investment company or trust. In addition, FDC has chosen to waive
each fund's sales charge in certain instances because of efficiencies
involved in those sales of shares. The sales charge will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs but
otherwise as defined in the Employee Retirement Income Security Act)
maintained by a U.S. employer and having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a U.S. employer
that is a member of a parent-subsidiary group of corporations (within the
meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%"
substituted for "80%") any member of which maintains an employee benefit
plan having more than 200 eligible employees, or a minimum of $3,000,000 in
plan assets invested in Fidelity mutual funds, or as part of an employee
benefit plan maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual
funds, the assets of which are held in a bona fide trust for the exclusive
benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used to
fund annuity contracts purchased by employee benefit plans (including
403(b) programs, but otherwise as defined in the Employee Retirement Income
Security Act), which, in the aggregate, have either more than 200 eligible
employees or a minimum of $3,000,000 in assets invested in Fidelity funds;
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit plan
provided that: (i) at the time of the distribution, the employer, or an
affiliate (as described in exemption 1 above) of such employer, maintained
at least one employee benefit plan that qualified for exemption 1 and that
had at least some portion of its assets invested in one or more mutual
funds advised by FMR, or in one or more accounts or pools advised by
Fidelity Management Trust Company; and (ii) either (a) the distribution is
transferred from the plan to a Fidelity IRA account within 60 days from the
date of the distribution, or (b) the distribution is transferred directly
from the plan into another Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life
income pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial investments of
$100,000 or more in the Trust Portfolios funds and must, during the initial
six-month period, reach and maintain an aggregate balance of at least
$500,000 in all accounts and subaccounts purchased through the Trust
Portfolios program);
7. to shares purchased through Portfolio Advisory Services or
Fidelity Charitable Advisory Services;
8. to shares purchased by a mutual fund for which FMR or an affiliate
serves as investment manager;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or FIL or their direct or indirect
subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity
Trustee or employee, a Fidelity Trustee or employee acting as custodian for
a minor child, or a person acting as trustee of a trust for the sole
benefit of the minor child of a Fidelity Trustee or employee;
10. to shares purchased by a bank trust officer, registered representative,
or other employee of a qualified recipient. Qualified recipients are
securities dealers or other entities, including banks and other financial
institutions, who have sold the fund's shares under special arrangements in
connection with FDC's sales activities ;
11. to shares purchased by contributions and exchanges to the following
prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR
and that are marketed and distributed directly to plan sponsors or
participants without any intervention or assistance from any intermediary
distribution channel: The Fidelity IRA, the Fidelity Rollover IRA, The
Fidelity SEP-IRA and SARSEP, The Fidelity SIMPLE IRA, The Fidelity
Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The
Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype Plan for
Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit Sharing
and Money Purchase Plan);
12. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains all
of its mutual fund assets in Fidelity mutual funds, provided the plan
executes a Fidelity non-prototype sales charge waiver request form
confirming its qualification;
13. to shares purchased by a registered investment adviser (RIA) for his or
her discretionary accounts, provided he or she executes a Fidelity RIA load
waiver agreement which specifies certain aggregate minimum and operating
provisions. This waiver is available only for shares purchased directly
from Fidelity, without a broker, unless purchased through a brokerage firm
which is a correspondent of National Financial Services Corporation (NFSC).
The waiver is unavailable, however, if the RIA is part of an organization
principally engaged in the brokerage business, unless the brokerage firm in
the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution or bank trust department for
its non-discretionary, non-retirement fiduciary accounts, provided it
executes a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
Each fund's sales charge may be reduced to reflect sales charges previously
paid, or that would have been paid absent a reduction for some purchases
made directly with Fidelity as noted in the prospectus, in connection with
investments in other Fidelity funds. This includes reductions for
investments in prototype-like retirement plans sponsored by FMR or FMR
Corp., which are listed above.
On October 12 , 1990, Europe, Pacific Basin, and Canada changed their
sales charge policy from a 2% sales charge upon purchase and 1% deferred
sales charge upon redemption, to a 3% sales charge upon purchase. If your
shares were purchased prior to that date and you do not qualify for a
front-end sales charge reduction under applicable conditions noted above,
then, when you redeem those shares, a deferred sales charge amounting to 1%
of the net asset value of shares redeemed will be withheld from your
redemption proceeds and paid to FDC.
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1997: New Year's
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
NYSE may modify its holiday schedule at any time. In addition, the funds
will not process wire purchases and redemptions on days when the Federal
Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund invests significantly in foreign securities,
corporate shareholders should not expect fund dividends to qualify for the
dividends-received deduction. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received deduction.
Each fund will notify corporate shareholders annually of the percentage of
fund dividends that qualify for the dividends-received deduction. Gains
(losses) attributable to foreign currency fluctuations are generally
taxable as ordinary income, and therefore will increase (decrease) dividend
distributions. Each fund will send each shareholder a notice in January
describing the tax status of dividend and capital gain distributions for
the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
As of October 31, 1996, Canada Fund hereby designates $7,949,000 as a
capital gain dividend for the purpose of the dividend-paid deduction.
As of October 31, 1996, Emerging Markets Fund had a capital loss
carryforward aggregating approximately $116,433,000. This loss
carryforward, which will expire on September 30, 2002, is available to
offset future capital gains.
As of October 31, 1996, Europe Fund hereby designates $6,012,000 as a
capital gain dividend for the purpose of the dividend-paid deduction.
As of October 31, 1996, Europe Capital Appreciation Fund hereby designates
$2,970,000 as a capital gain dividend for the purpose of the dividend-paid
deduction.
As of October 31, 1996, Japan Fund had a capital loss carryforward
aggregating approximately $31,995,000. This loss carryforward which will
expire on October 31, 2003, is available to offset future capital gains.
As of October 31, 1996, Latin America Fund had a capital loss carryforward
aggregating approximately $185,031,000. This loss carryforward, of which
$147,415,000 and $37,616,000 will expire on October 31, 2003, and 2004,
respectively, is available to offset future capital gains.
As of October 31, 1996, Pacific Basin Fund had a capital loss carryforward
aggregating approximately $27,666,000. This loss carryforward, of which
$10,407,000 and $17,259,000 will expire on October 31, 2003, and 2004,
respectively, is available to offset future capital gains.
As of October 31, 1996, Southeast Asia Fund hereby designates $4,254,000 as
a capital gain dividend for the purpose of the dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Investment Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. Except as indicated, each individual has held
the office shown or other offices in the same company for the last five
years. All persons named as Trustees and Members of the Advisory Board also
serve in similar capacities for other funds advised by FMR. The business
address of each Trustee and officer who is an "interested person" (as
defined in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees and Members of the Advisory Board is
Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235.
Those Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant
(1994). Prior to February 1994, he was President of Greenhill Petroleum
Corporation (petroleum exploration and production). Until March 1990, Mr.
Cox was President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of Sanifill
Corporation (non-haz ardous waste, 1993), CH2M Hill Companies
(engineering), Rio Grande, Inc. (oil and gas production), and Daniel
Industries (petroleum measurement equipment manufacturer). In addition, he
is a member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee and Chairman of the non-interested Trustees,
is a financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Trustee of College of the Holy Cross and Old
Sturbridge Village, Inc., and he previously served as a Director of
Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of
Securities Dealers, Inc. (1996).
*PETER S. LYNCH (53), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group (strategic
advisory services). Prior to his retirement in July 1988, he was Chairman
and Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of Brush-Wellman Inc.
(metal refining), York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. ( hydraulic systems, building
systems, and metal products , 1992), CUNO, Inc. (liquid and gas
filtration products, 1996), and Associated Estates Realty Corporation
(a real estate investment trust, 1993). Mr. McDonough served as a
Director of ACME - Cleveland Corp. (metal working, telecommunications and
electronic products) from 1987-1996.
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of the Naples
Philharmonic Center for the Arts and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (63), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications) and
President of BellSouth Enterprises. He is currently a Director of Liberty
Corporation (holding company), Weeks Corporation of Atlanta (real estate,
1994), and Carolina Power and Light Company (electric utility, 1996).
Previously, he was a Director of First American Corporation (bank holding
company, 1979-1996). In addition, Mr. McCoy serves as a member of the Board
of Visitors for the University of North Carolina at Chapel Hill (1994) and
for the Kenan Flager Business School (University of North Carolina at
Chapel Hill).
WILLIAM J. HAYES (62), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
RICHARD HAZLEWOOD (36), Vice President, Emerging Markets Fund (1993) is an
employee of FMR.
PATRICIA SATTERTHWAITE (37), Vice President, Latin America Fund (1993), is
a vice president of FMR.
SALLY WALDEN (37), Vice President, Europe Fund (1992), is an employee of
FMR.
KEVIN McCAREY (36), Vice President, Europe Capital Appreciation Fund
(1993), is an employee of FMR.
ALLAN LIU (35), Vice President, Southeast Asia fund (1993), is an employee
of FMR.
THOMAS SWEENEY (40), Vice President, Canada Fund (1996), is an employee of
FMR.
SHIGEKI MAKINO (30), Vice President, Japan Fund (1994), and Pacific Basin
Fund (1996), is an employee of FMR.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (56), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each current trustee or Member of the Advisory Board of each fund
for his or her services as trustee for the fiscal year ended October 31,
1996.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas William
Burkhead** F. Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R. O. McCoy
Davis Jones Malone Williams
Cana $ 0 $ 58 $ 58 $ 75 $ 0 $ 59 $ 59 $ 0 $ 58 $ 57 $ 57 $ 59 $ 20
da
Fund
Emerg $ 0 $ 451 $ 424 $ 560 $ 0 $ 428 $ 433 $ 0 $ 429 $ 440 $ 440 $ 434 $ 222
ing
Marke
ts
Fund
Europ $ 0 $ 186 $ 180 $ 239 $ 0 $ 182 $ 185 $ 0 $ 183 $ 182 $ 182 $ 185 $ 91
e
Fund
Europ $ 0 $ 59 $ 58 $ 77 $ 0 $ 59 $ 60 $ 0 $ 59 $ 58 $ 58 $ 60 $ 25
e
Capit
al
Appr
eciati
on
Fund
France $ 0 $ 2 $ 2 $ 2 $ 0 $ 2 $ 2 $ 0 $ 2 $ 2 $ 2 $ 2
$ 1
Fund
Germ $ 0 $ 2 $ 2 $ 2 $ 0 $ 2 $ 2 $ 0 $ 2 $ 2 $ 2 $ 2
$ 1
any
Fund
Hong $ 0 $ 18 $ 16 $ 23 $ 0 $ 16 $ 17 $ 0 $ 17 $ 18 $ 18 $ 17
$ 14
Kong
and
China
Fund
Japan $ 0 $ 131 $ 124 $ 163 $ 0 $ 126 $ 127 $ 0 $ 125 $ 128 $ 128 $ 127
$ 60
Fund
Japan $ 0 $ 35 $ 30 $ 43 $ 0 $ 30 $ 31 $ 0 $ 32 $ 33 $ 33 $ 32
$ 24
Small
Com
panie
s
Fund
Latin $ 0 $ 203 $ 162 $ 219 $ 0 $ 164 $ 166 $ 0 $ 167 $ 198 $ 198 $ 167
$ 104
Amer
ica
Fund
Nordi $ 0 $ 3 $ 3 $ 4 $ 0 $ 3 $ 3 $ 0 $ 3 $ 3 $ 3 $ 3
$ 2
c
Fund
Pacifi $ 0 $ 198 $ 185 $ 245 $ 0 $ 186 $ 189 $ 0 $ 188 $ 193 $ 193 $ 190
$ 105
c
Basin
Fund
South $ 0 $ 288 $ 265 $ 350 $ 0 $ 268 $ 271 $ 0 $ 269 $ 281 $ 281 $ 271 $
141
east
Asia
Fund
United $ 0 $ 1 $ 1 $ 1 $ 0 $ 1 $ 1 $ 0 $ 1 $ 1 $ 1 $ 1
$ 1
Kingd
om
Fund
</TABLE>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from the Fund
as Part of Fund from the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary $ 0 $ 0 $ 0
Burkhead**
Ralph F. Cox 5,200 52,000 128,000
Phyllis Burke 5,200 52,000 125,000
Davis
Richard J. Flynn 0 52,000 160,500
Edward C. 0 0 0
Johnson 3d**
E. Bradley Jones 5,200 49,400 128,000
Donald J. Kirk 5,200 52,000 129,500
Peter S. Lynch** 0 0 0
Gerald C. 5,200 52,000 128,000
McDonough
Edward H. 5,200 44,200 128,000
Malone
Marvin L. Mann 5,200 52,000 128,000
Thomas R. 5,200 52,000 125,000
Williams
William O. N/A N/A 0
McCoy
* Information is as of December 31, 1995 for 219 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity fund
during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calender year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee for at least five years. Currently, Messrs. Ralph S.
Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
As of October 31, 1996, approximately 22.17%, 15.88%, 8.40%, and 45.04% of
the France Fund, Germany Fund, Japan Fund, and United Kingdom Fund's total
outstanding shares were held by an FMR affiliate. FMR Corp. is the ultimate
parent company of this FMR affiliate. By virtue of his ownership interest
in FMR Corp., as described in the "FMR" section on page , Mr. Edward C.
Johnson 3d, President and Trustee of the funds, may be deemed to be a
beneficial owner of these shares. As of the above date, with the exception
of Mr. Johnson 3d's deemed ownership of France Fund's, Germany Fund's,
Japan Fund's, and United Kingdom Fund's shares, the Trustees, Members of
the Advisory Board, and officers of the funds owned, in the aggregate, less
than 1% of each fund's total outstanding shares.
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is Canada Fund's, Europe Fund's, and Pacific Basin Fund's manager
pursuant to management contracts dated March 1, 1992, which were approved
by shareholders on February 19, 1992. FMR is Japan's manager pursuant to a
management contract dated July 16, 1992, which was approved by FMR, then
the sole shareholder of Japan Fund, on September 10, 1992. FMR is Emerging
Markets Fund's manager pursuant to a management contract dated March 1,
1992, which was approved by shareholders on February 19, 1992. FMR is Latin
America Fund's and Southeast Asia Fund's manager pursuant to management
contracts dated March 18, 1993, which were approved by FMR, then the sole
shareholder of Latin America Fund and Southeast Asia Fund, on March 24,
1993. FMR is Europe Capital Appreciation Fund's manager pursuant to a
management contract dated November 22, 1993, which was approved by FMR,
then the sole shareholder of the fund on November 18, 1993. FMR is France
Fund's, Germany Fund's, Hong Kong and China Fund's, Japan Small Companies
Fund's, Nordic Fund's, and United Kingdom Fund's manager pursuant to
management contracts dated September 14, 1995 which were approved by FMR as
the then sole shareholder of the fund on October 17, 1995.
For the services of FMR under the contracts, Emerging Markets Fund, France
Fund, Germany Fund, Hong Kong and China Fund, Japan Small Companies Fund,
Latin America Fund, Nordic Fund, and United Kingdom Fund pay FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate. For the services of FMR under the contracts
Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan Fund,
Pacific Basin Fund, and Southeast Asia Fund pay FMR a monthly management
fee composed of the sum of two elements: a basic fee and a performance
adjustment based on a comparison of each fund's performance to that of its
comparative index.
COMPUTING THE BASIC FEE. Each fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 435 billion of group net
assets - the approximate level for October 1996 - was .3037 %, which
is the weighted average of the respective fee rates for each level of group
net assets up to $ 435 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under Canada Fund's, Emerging Market Fund's, Europe Fund's, Japan
Fund's, Latin America Fund's, Pacific Basin Fund's, and Southeast Asia
Fund's current management contract with FMR, the group fee rate is based on
a schedule with breakpoints ending at .3000% for average group assets in
excess of $174 billion. For Canada Fund, Emerging Markets Fund, Europe
Fund, and Pacific Basin Fund, prior to March 1, 1992, the group fee rate
breakpoints shown above for average group assets in excess of $138 billion
and under $228 billion were voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993. Europe
Capital Appreciation Fund's current management contract reflects the above
table.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $210 billion and under $390 billion as shown in the schedule
below. The revised group fee rate schedule was identical to the above
schedule for average group assets under $210 billion. France Fund's,
Germany Fund's, Hong Kong and China Fund's, Japan Small Company Fund's,
Nordic Fund's, and United Kingdom Fund's current management contract
reflects the group fee rate schedule above for average group assets under
$210 billion and the group fee rate schedule below for average group assets
in excess of $210 billion and under $390 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
174 - $210 billion .3000% $ 150 billion .3371%
210 - 246 .2950 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
Each fund's individual fund fee rate is .45%. Based on the average group
net assets of the funds advised by FMR for October 1996, the annual
management fee rate and the annual basic fee rate would be calculated as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
.3037 % + .45 % = .7537 %
</TABLE>
One-twelfth of this annual management/basic fee rate is applied to each
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward
or downward adjustment, depending upon whether, and to what extent Canada
Fund's, Europe Fund's, Europe Capital Appreciation Fund's, Japan Fund's,
Pacific Basin Fund's, and Southeast Asia Fund's investment performance for
the performance period exceeds, or is exceeded by, the record of the
Toronto Stock Exchange (TSE) 300, Morgan Stanley Capital International
Europe Index, Morgan Stanley Capital International Europe Index, Tokyo
Stock Exchange Index, Morgan Stanley Capital International Pacific Index,
and Morgan Stanley Capital International Combined Far East ex-Japan Free
Index, respectively, over the same period. Europe Capital Appreciation
Fund's performance period commenced on January 1, 1994. Starting with the
twelfth month, the performance adjustment takes effect. Each month
subsequent to the twelfth month, a new month is added to the performance
period until the performance period equals 36 months. Thereafter, the
performance period consists of the most recent month plus the previous 35
months. Each percentage point of difference, calculated to the nearest 1.0%
(up to a maximum difference of (plus/minus)10.00 ) is multiplied by a
performance adjustment rate of .02%. Thus, the maximum annualized
adjustment rate is (plus/minus).20%. This performance comparison is made at
the end of each month. One twelfth (1/12) of this rate is then applied to
each fund's average net assets for the entire performance period, giving a
dollar amount which will be added to (or subtracted from) the basic
fee.
Each fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested
in fund shares at the net asset value as of the record date for payment.
The record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on each fund's performance
compared to the investment record of the Index, the controlling factor is
not whether each fund's performance is up or down per se, but whether it is
up or down more or less than the record of the Index. Moreover, the
comparative investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
EMERGING MARKETS FUND, FRANCE FUND, GERMANY FUND, HONG KONG AND
CHINA FUND, JAPAN SMALL COMPANIES FUND, LATIN AMERICA FUND, NORDIC
FUND, AND UNITED KINGDOM FUND. The table below shows the management fees
paid to FMR; and the management fee as a percentage of each fund's average
net assets for the fiscal periods ended October 31, 1996, 1995, and
1994.
Management Fee as a
% of Average
Management Fee Net Assets
EMERGING MARKETS FUND
1996 $ 10,054,929 .76%
1995 $ 10,483,318 .77%
1994 $ 12,659,735 .77%
FRANCE FUND
19961 $ 0 0%
GERMANY FUND
19961 $ 0 0%
HONG KONG AND CHINA FUND
19961 $ 439,689 .75%
JAPAN SMALL COMPANIES FUND
19961 $ 789,872 .75%
LATIN AMERICA FUND
1996 $ 4,580,255 .76%
1995 $ 4,473,579 .77%
1994 $ 6,050,004 .77%
NORDIC FUND
19961 $ 0 0%
UNITED KINGDOM FUND
19961 $ 0 0%
1 From November 1, 1995 (commencement of operations)
CANADA FUND, EUROPE FUND, EUROPE CAPITAL APPRECIATION FUND, JAPAN FUND,
PACIFIC BASIN FUND, AND SOUTHEAST ASIA FUNDS. The table below show s
the management fee s paid to FMR (including the effect of the
performance adjustment); the dollar amount of negative or positive
performance adjustments; and the net management fee as a percentage of the
funds' average net assets for the periods ended October 31, 1996, 1995,
and 1994.
Management Fee Management Fee as a
Including Performance Performance % of Average
Adjustment Adjustment Net Assets
CANADA FUND
1996 $ 657,546 $ (447,517) .45%
1995 2,498,644 (167,417) .72%
1994 1,714,068 60,175 .80%
EUROPE FUND
1996 $ 4,702,643 $ 484,945 .84%
1995 3,767,736 145,908 .80%
1994 3,565,039 243,702 .72%
EUROPE CAPITAL APPRECIATION FUND
1996 $ 1,338,990 $ 67,995 .80%
1995 2,171,262 208,549 .85%
1994* 1,908,662 0 .7 7 %**
JAPAN FUND
1996 $ 2,553,329 $ (283,515) .68%
1995 2,258,147 (362,948) .66%
1994 2,699,594 (76,576) .7 5 %
PACIFIC BASIN FUND
1996 $ 4,570,390 $ (8,198) .75%
1995 3,184,306 86,567 .79%
1994 4,375,724 443,566 .8 6 %
SOUTHEAST ASIA FUND
1996 $ 5,541,725 $ (882,709) .65%
1995 3,949,976 (1,128,697) .59%
1994 5,598,064 (633,730) .69%
* From December 21, 1993 (commencement of operations).
** Annualized
The figures shown above reflect FMR's voluntary implementation of group fee
rate schedule changes for the funds as described on page . If FMR
had not voluntarily implemented these group fee rate changes, the funds'
management fees would have been higher.
FMR may, from time to time, voluntarily reimburse all or a portion of
each fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and repayment of the
reimbursement by each fund will lower its total returns.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table below
identifies the funds in reimbursement; the levels of and periods for such
reimbursement; the amount of management fees incurred under each contract
before reimbursement; and the dollar amount reimbursed by FMR, if any, for
each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME OF FUND FROM TO EXPENSE LIMITATION
France November 1, 1995 October 31, 1996 2.0%
Germany November 1, 1995 October 31, 1996 2.0%
Nordic November 1, 1995 October 31, 1996 2.0%
United Kingdom November 1, 1995 October 31, 1996 2.0%
NAME OF FUND MANAGEMENT FEE
FISCAL YEAR ENDED BEFORE REIMBURSEMENT AMOUNT OF REIMBURSEMENT
France October 31, 1996 $ 41,011 $146,759
Germany October 31, 1996 $41,319 $107,004
Nordic October 31, 1996 $71,158 $116,779
United Kingdom October 31, 1996 $15,497 $140,043
</TABLE>
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On behalf of the funds, FMR has entered into sub-advisory
agreements with FMR U.K., FMR Far East, and FIIA. FIIA, in turn, has
entered into a sub-advisory agreement with FIIAL U.K. On behalf of Hong
Kong and China Fund, Japan Fund, Japan Small Companies Fund, and Southeast
Asia Fund, FMR also entered into a sub-advisory agreement with FIJ.
Pursuant to the sub-advisory agreements, FMR may receive investment advice
and research services outside the United States from the sub-advisers. On
behalf of the funds, FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell securities if
FMR believes it would be beneficial to the funds.
FMR entered into the sub-advisory agreements described above with respect
to Canada Fund, Emerging Markets Fund, Europe Fund, Pacific Basin Fund, and
on March 1, 1992 following shareholder approval of the agreements on
February 19, 1992. FMR entered into the sub-advisory agreements described
above with respect to Japan Fund on July 16, 1992, which was approved by
FMR, then the sole shareholder of Japan Fund, on September 10, 1992; with
respect to Latin America Fund and Southeast Asia Fund on March 18, 1993,
which were approved by FMR, then the sole shareholder of Latin America Fund
and Southeast Asia Fund, on March 24, 1993; with respect to Europe Capital
Appreciation Fund on November 18, 1993, which was approved by FMR, then the
sole shareholder of the fund on November 18, 1993; and with respect to
France Fund, Germany Fund, Hong Kong and China Fund, Japan Small Companies
Fund, Nordic Fund, and United Kingdom Fund on September 14, 1995, which
were approved by FMR as the then sole shareholder of each fund on October
17, 1995.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIAL U.K. each focus
on issuers in countries other than the United States such as those in
Europe, Asia, and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of Fidelity
International Limited (FIL), a Bermuda company formed in 1968 which
primarily provides investment advisory services to non-U.S. investment
companies and institutional investors investing in securities throughout
the world. Edward C. Johnson 3d, Johnson family members, and various trusts
for the benefit of the Johnson family owns, directly or indirectly, more
than 25% of the voting common stock of FIL. FIJ was organized in Japan in
1986. FIIA was organized in Bermuda in 1983. FIIAL U.K. was organized in
the United Kingdom in 1984, and is a wholly owned subsidiary of Fidelity
International Management Holdings Limited, an indirect wholly owned
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIAL U.K. For
providing non-discretionary investment advice and research services the
sub-advisers are compensated as follows:
(solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
(solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's monthly
management fee with respect to the average net assets held by the fund for
which the sub-adviser has provided FMR with investment advice and research
services.
(solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s
costs incurred in connection with providing investment advice and research
services.
For providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
(solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee
equal to 50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
(solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s
costs incurred in connection with providing discretionary investment
management services.
Currently, FIIA exercises discretionary management authority over Southeast
Asia Fund, Hong Kong and China Fund, Japan Fund, and Pacific Basin Fund in
its capacity as sub-adviser. Currently, FIIAL U.K. exercises discretionary
management authority over Europe Fund, France Fund, Germany Fund, Nordic
Fund, and United Kingdom Fund in its capacity as sub-adviser. Currently,
FIJ exercises discretionary management authority over Japan Small Companies
Fund in its capacity as sub-adviser.
For providing investment advice and research services, on behalf of
Emerging Markets Fund and Europe Capital Appreciation Fund, the Fees paid
to FMR U.K. and FMR Far East for the fiscal year ended October 1996 were as
follows:
Fund Name FMR U.K. FMR Far East
Emerging Markets Fund $ 658,192 $ 674,758
Europe Capital Appreciation Fund $ 108,871 $ 0
For providing discretionary investment management and executing portfolio
transactions on behalf of the funds , the fees paid to FIIA
for the fiscal years ended October 199 6 , 199 5 ,
and 199 4 are listed in the table below. There were no fees paid to FMR
U.K., FMR Far East, and FIJ for the fiscal years ended October 1996, 1995,
and 1994.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Name Fiscal Year Ended FIIA
October
Canada Fund 1996 $ 0
1995 0
1994 0
Emerging Markets Fund 1996 $ 0
1995 0
1994 0
Europe Fund 1996 $ 2,171,652
1995 1,812,402
1994 1,756,433
Europe Capital Appreciation Fund 1996 $ 0
1995 0
1994 0
France Fund 1996 $ 20,506
1995 0
1994 0
Germany Fund 1996 $ 20,660
1995 0
1994 0
Hong Kong and China Fund 1996 $ 219,845
1995 0
1994 0
Japan Fund 1996 $ 1,264,381
1995 1,311,538
1994 305,758
Japan Small Companies Fund 1996 $ 394,936
1995 0
1994 0
Latin America Fund 1996 $ 0
1995 0
1994 0
Nordic Fund 1996 $ 35,579
1995 0
1994 0
Pacific Basin Fund 1996 $ 2,317,762
1995 1,550,062
1994 2,190,484
Southeast Asia Fund 1996 $ 2,773,021
1995 2,541,446
1994 2,844,499
United Kingdom Fund 1996 $ 7,749
1995 0
1994 0
</TABLE>
CONTRACTS WITH FMR AFFILIATES
FSC, an affiliate of FMR, is transfer, dividend disbursing, and
shareholder servicing agent for each fund. FSC receives an annual account
fee and an asset-based fee each based on account size and fund type for
each retail account and certain institutional accounts. With respect to
certain institutional retirement accounts, FSC receives an annual account
fee and an asset-based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes. The
asset-based fees are subject to adjustment if the year-to-date total return
of the S&P 500 exceeds a positive or negative 15%. FSC also collects small
account fees from certain accounts with balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's
NAV and dividends, and maintains each fund's accounting records. The annual
fee rates for these pricing and bookkeeping services are based on each
fund's average net assets, specifically, .0750% of the first $500 million
of average net assets and .0375% of average net assets in excess of $500
million. The fee is limited to a minimum of $60,000 and a maximum of
$800,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1996 1995 1994
Canada Fund $ 105,266 $ 209,805 $ 129,038
Emerging Markets Fund $ 671,062 $ 560,714 $ 641,914
Europe Fund $ 385,848 $ 283,887 $ 294,804
Europe Capital Appreciation Fund $ 122,201 $ 153,762 $ 151,780 1
France Fund $ 57,3812 N/A N/A
Germany Fund $ 57,3812 N/A N/A
Hong Kong and China Fund $ 57,7512 N/A N/A
Japan Fund $ 273,877 $ 205,394 $ 208,003
Japan Small Companies Fund $ 82,4442 N/A N/A
Latin America Fund $ 402,734 $ 323,090 $ 382,374
Nordic Fund $ 57,3872 N/A N/A
Pacific Basin Fund $ 400,980 $ 242,212 $ 299,541
Southeast Asia Fund $ 510,752 $ 349,043 $ 395,097
United Kingdom Fund $ 57,3742 N/A N/A
</TABLE>
1 From December 21, 1993 (commencement of operations).
2 From November 1, 1995 (commencement of operations).
FSC also receives fees for administering each fund's securities lending
program. For the fiscal years ended October 19 96 ,
19 95 , and 19 94 , there were no securities lending fees
incurred by the funds.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by F MR. The table below shows the
sales charge revenue paid to FDC for the following fiscal periods:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PAID TO FDC
Sales Charge Revenue Deferred Sales Charge Revenue
1996 1995 1994 1996 1995 1994
Canada
Fund $ 96,367 $ 872,526 N/A $ 5,748 $ 3,075 $ 5,130
Emerging Markets
Fund $ 2,179,378 $ 2,207,409 $2,416,374 N/A N/A N/A
Europe
Fund $ 434,089 $ 389,484 $ 814,169 $ 43,501 $ 66,854 $ 85,678
Europe Capital Appreciation
Fund $ 90,306 $ 155,891 N/A N/A N/A N/A
France
Fund $ 29,370 N/A N/A N/A N/A N/A
Germany
Fund $ 53,774 N/A N/A N/A N/A N/A
Hong Kong and China
Fund $ 575,460 N/A N/A N/A N/A N/A
Japan
Fund $ 821,892 375,382 N/A N/A N/A N/A
Japan Small Companies
Fund $ 694,227 N/A N/A N/A N/A N/A
Latin America
Fund $ 968,514 $ 1,673,435 $ 1,245,357 N/A N/A N/A
Nordic
Fund $ 71,880 N/A N/A N/A N/A N/A
Pacific Basin
Fund $ 2,123,204 $ 94,810 $ 1,709,242 $ 23,652 $ 10,008 $ 24,748
Southeast Asia
Fund $ 1,880,183 $ 805,224 $ 763,269 N/A N/A N/A
United Kingdom
Fund $ 13,869 N/A N/A N/A N/A N/A
</TABLE>
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Canada Fund, Fidelity Emerging Markets Fund,
Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity
France Fund, Fidelity Germany Fund, Fidelity Hong Kong and China Fund,
Fidelity Japan Fund, Fidelity Japan Small Companies Fund, Fidelity Latin
America Fund, Fidelity Nordic Fund, Fidelity Pacific Basin Fund, Fidelity
Southeast Asia Fund, and Fidelity United Kingdom Fund are funds of Fidelity
Investment Trust (the trust), an open-end management investment company
originally organized as a Massachusetts business trust on April 20, 1984.
On November 3, 1986, the trust's name was changed from Fidelity Overseas
Fund to Fidelity Investment Trust. Currently, there are 21 funds of
the trust: Fidelity Canada Fund, Fidelity Diversified International Fund,
Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe
Capital Appreciation Fund, Fidelity France Fund, Fidelity Germany Fund,
Fidelity Global Bond Fund, Fidelity Hong Kong and China Fund, Fidelity
International Growth & Income Fund, Fidelity International Value Fund,
Fidelity Japan Fund, Fidelity Japan Small Companies Fund, Fidelity Latin
America Fund, Fidelity New Markets Income Fund, Fidelity Nordic Fund,
Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast
Asia Fund, Fidelity United Kingdom Fund, and Fidelity Worldwide Fund. The
Declaration of Trust permits the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of trust protect Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of a trust or fund may, as set
forth in the Declarations of trust, call meetings of a trust or fund for
any purpose related to the trust or fund, as the case may be, including, in
the case of a meeting of an entire trust, the purpose of voting on removal
of one or more Trustees. The trust or fund may be terminated upon the sale
of its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by vote of the
holders of a majority of the outstanding shares of the trust or the fund.
If not so terminated, the trust or fund will continue indefinitely.
CUSTODIAN. The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn,
New York is custodian of the assets of Emerging Markets Fund, Europe Fund,
Europe Capital Appreciation Fund, Japan Fund, Pacific Basin Fund, and
Southeast Asia Fund. Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts is custodian of the assets of Canada Fund, France
Fund, Germany Fund, Hong Kong and China Fund, Japan Small Companies Fund,
Latin America Fund, Nordic Fund, and United Kingdom Fund. Each custodian is
responsible for the safekeeping of a fund's assets and the appointment of
any subcustodian banks and clearing agencies. A custodian takes no part in
determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of its custodian and may purchase securities from or sell
securities to the custodian. The Bank of New York and The Chase Manhattan
Bank, each headquartered in New York, also may serve as special purpose
custodians of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR. The
Boston branch of Brown Brothers Harriman & Co. leases its office space from
an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred to
date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as Canada Fund's, Emerging Markets Fund's, Europe
Fund's, Japan Fund's and Pacific Basin Fund's independent accountant. Price
Waterhouse LLP, 160 Federal Street, Boston, Massachusetts serves as Europe
Capital Appreciation Fund's, France Fund's, Germany Fund's, Hong Kong and
China Fund's, Japan Small Companies Fund's, Latin America Fund's, Nordic
Fund's, Southeast Asia Fund's and United Kingdom Fund's independent
accountant. The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements, financial highlights for the
fiscal year ended October 31, 1996, and the report of the auditors thereon
are included in the funds' Annual Report, which is a separate report
supplied with this Statement of Additional Information. Each fund's
financial statements, financial highlights, and the report of the auditors
thereon are incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements for Fidelity Canada Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(2) Financial Statements for Fidelity Diversified International Fund
for the fiscal year ended October 31, 1996 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 24, 1996 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(3) Financial Statements for Fidelity Emerging Markets Fund for the
fiscal year ended October 31, 1996 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(4) Financial Statements for Fidelity Europe Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(5) Financial Statements for Fidelity Europe Capital Appreciation Fund
for the fiscal year ended October 31, 1996 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 24, 1996 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(6) Financial Statements for Fidelity France Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(7) Financial Statements for Fidelity Germany Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(8) Financial Statements for Fidelity Hong Kong and China Fund for the
fiscal year ended October 31, 1996 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(9) Financial Statements for Fidelity International Growth & Income
Fund for the fiscal year ended October 31, 1996 are incorporated herein by
reference to the fund's Statement of Additional Information and were filed
on December 24, 1996 for Fidelity Investment Trust (File No. 2-90649)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(10) Financial Statements for Fidelity International Value Fund for the
fiscal year ended October 31, 1996 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(11) Financial Statements for Fidelity Japan Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(12) Financial Statements for Fidelity Japan Small Companies Fund for
the fiscal year ended October 31, 1996 are incorporated herein by reference
to the fund's Statement of Additional Information and were filed on
December 24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant
to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
(a)(13) Financial Statements for Fidelity Latin America Fund for the fiscal
year ended October 31, 1996 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 24,
1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(14) Financial Statements for Fidelity Nordic Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(15) Financial Statements for Fidelity Overseas Fund for the fiscal year
ended October 31, 1996 are incorporated herein by reference to the fund's
Statement of Additional Information and were filed on December 24, 1996 for
Fidelity Investment Trust (File No. 2-90649) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(16) Financial Statements for Fidelity Pacific Basin Fund for the fiscal
year ended October 31, 1996 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 24,
1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(17) Financial Statements for Fidelity Southeast Asia Fund for the
fiscal year ended October 31, 1996 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(18) Financial Statements for Fidelity United Kingdom Fund for the
fiscal year ended October 31, 1996 are incorporated herein by reference to
the fund's Statement of Additional Information and were filed on December
24, 1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(19) Financial Statements for Fidelity Worldwide Fund for the fiscal
year ended October 31, 1996 are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on December 24,
1996 for Fidelity Investment Trust (File No. 2-90649) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(b) Exhibits:
(1) Restated Declaration of Trust, dated February 16, 1995, is incorporated
herein by reference to Exhibit 1 of Post-Effective Amendment No. 58.
(2) By-Laws of the Trust are incorporated herein by reference to Exhibit 2
of Fidelity Union Street Trust Post-Effective Amendment No. 87 (File No.
2-50318).
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract, dated October 1, 1992, between Fidelity
Diversified International Fund and Fidelity Management & Research Company
is incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 58.
(b) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Diversified International Fund dated October 1, 1992, is incorporated
herein by reference to Exhibit 5(p) of Post-Effective Amendment No. 51.
(c) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity
Diversified International Fund dated October 1, 1992 is incorporated herein
by reference to Exhibit 5(nn) of Post-Effective Amendment No. 51.
(d) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Diversified International Fund dated October 1, 1992 is
incorporated herein by reference to Exhibit 5(yyy) of Post-Effective
Amendment No. 51.
(e) Management Contract dated March 1, 1992, between Fidelity
International Growth & Income Fund and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(e) of
Post-Effective Amendment No. 57.
(f) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity International Growth & Income Fund is incorporated
herein by reference to Exhibit 5(f) of Post-Effective Amendment No. 57.
(g) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity International Growth & Income Fund is incorporated herein by
reference to Exhibit 5(g) of Post-Effective Amendment No. 57.
(h) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity International Growth & Income
Fund is incorporated herein by reference to Exhibit 5(h) of Post-Effective
Amendment No. 57.
(i) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Growth & Income Fund is
incorporated herein by reference to Exhibit 5(i) of Post-Effective
Amendment No. 57.
(j) Management Contract dated September 16, 1994, between Fidelity
International Value Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(j) of Post-Effective
Amendment No. 57.
(k) Sub-Advisory Agreement dated September 16, 1994 between Fidelity
Management & Research Company and Fidelity Management & Research (Far East)
Inc. on behalf of Fidelity International Value Fund is incorporated herein
by reference to Exhibit 5(k) of Post-Effective Amendment No. 57.
(l) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Fidelity International Value Fund is incorporated herein
by reference to Exhibit 5(l) of Post-Effective Amendment No. 57.
(m) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity International Value Fund is incorporated herein by
reference to Exhibit 5(m) of Post-Effective Amendment No. 64
(n) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Value Fund is incorporated
herein by reference to Exhibit 5(n) of Post-Effective Amendment No. 57.
(o) Sub-Advisory Agreement dated September 16, 1994, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited on
behalf of Fidelity International Value Fund is incorporated herein by
reference to Exhibit 5(o) of Post-Effective Amendment No. 57.
(p) Management Contract dated March 1, 1992, between Fidelity Overseas
Fund and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit No. 5(p) of Post-Effective Amendment No. 57.
(q) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Overseas Fund is incorporated herein by reference to
Exhibit 5(q) of Post-Effective Amendment No. 57.
(r) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) on behalf of
Fidelity Overseas Fund is incorporated herein by reference to Exhibit 5(r)
of Post-Effective Amendment No. 57.
(s) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Overseas Fund is incorporated
herein by reference to Exhibit 5(s) of Post-Effective Amendment No. 57.
(t) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Overseas Fund is incorporated herein by
reference to Exhibit 5(t) of Post-Effective Amendment No. 57.
(u) Management Contract dated March 1, 1992, between Fidelity Worldwide
Fund, and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(u) of Post-Effective Amendment No. 57.
(v) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Worldwide Fund is incorporated herein by reference to
Exhibit 5(v) of Post-Effective Amendment No. 57.
(w) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
5(w) of Post-Effective Amendment No. 57.
(x) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Worldwide Fund is
incorporated herein by reference to Exhibit 5(x) of Post-Effective
Amendment No. 57.
(y) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 5(y) of Post-Effective Amendment No. 57.
(z) Management Contract dated March 1, 1992, between Fidelity Canada Fund
and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(z) of Post-Effective Amendment No. 57.
(aa) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Canada Fund is incorporated herein by reference to
Exhibit 5(aa) of Post-Effective Amendment No. 57.
(bb) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Canada Fund is incorporated herein by reference to Exhibit
5(bb) of Post-Effective Amendment No. 57.
(cc) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Canada Fund is incorporated
herein by reference to Exhibit 5(cc) of Post-Effective Amendment No. 57.
(dd) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Canada Fund is incorporated herein by
reference to Exhibit 5(dd) of Post-Effective Amendment No. 57.
(ee) Management Contract dated March 1, 1992, between Fidelity Europe Fund
and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(ee) of Post-Effective Amendment No. 57.
(ff) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Europe Fund is incorporated herein by reference to
Exhibit 5(ff) of Post-Effective Amendment No. 57.
(gg) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Europe Fund is incorporated herein by reference to Exhibit
5(gg) of Post-Effective Amendment No. 57.
(hh) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Europe Fund is incorporated
herein by reference to Exhibit 5(hh) of Post-Effective Amendment No. 57.
(ii) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Fund is incorporated herein by
reference to Exhibit 5(ii) of Post-Effective Amendment No. 57.
(jj) Management Contract between Fidelity Europe Capital Appreciation Fund
and Fidelity Management & Research Company dated November 18, 1993 is
incorporated herein by reference to Exhibit 5(o) of Post-Effective
Amendment No. 51.
(kk) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Europe Capital Appreciation Fund dated November 18, 1993 is incorporated
herein by reference to Exhibit 5(dd) of Post- Effective Amendment No. 53.
(ll) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Europe
Capital Appreciation Fund dated November 18, 1993 is incorporated herein by
reference to Exhibit 5(ss) of Post- Effective Amendment No. 53.
(mm) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Europe Capital Appreciation Fund, dated November 18,
1993, is incorporated herein by reference to Exhibit 5(ggg) of
Post-Effective Amendment No. 55.
(nn) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Europe
Capital Appreciation Fund dated November 18, 1993, is incorporated herein
by reference to Exhibit 5(uuu) of Post-Effective Amendment No. 55.
(oo) Management Contract between Fidelity Japan Fund and Fidelity
Management & Research Company dated July 16, 1992 is incorporated herein by
reference to Exhibit 5(k) of Post-Effective Amendment No. 51.
(pp) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Japan Fund dated July 16, 1992 is incorporated herein by reference to
Exhibit 5(z) of Post-Effective Amendment No. 53.
(qq) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Japan
Fund dated July 16, 1992 is incorporated herein by reference to Exhibit
5(oo) of Post Effective Amendment No. 53.
(rr) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Japan Fund dated July 16, 1992, is incorporated herein
by reference to Exhibit 5(ccc) of Post-Effective Amendment No. 55.
(ss) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Japan
Fund dated July 16, 1992, is incorporated herein by reference to Exhibit
5(qqq) of Post-Effective Amendment No. 55.
(tt) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Investments Japan Limited on behalf of Fidelity Japan Fund
dated April 12, 1994 is incorporated herein by reference to Exhibit No.
5(ss)(i) of Post-Effective Amendment No. 57.
(uu) Management Contract dated March 1, 1992, between Fidelity Pacific
Basin Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(tt) of Post-Effective Amendment No. 57.
(vv) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Pacific Basin Fund is incorporated herein by reference
to Exhibit 5(uu) of Post-Effective Amendment No. 57.
(ww) Sub-Advisory Agreement dated April 1, 1992 between Fidelity Management
& Research Company and Fidelity Management & Research (U.K.) Inc. on behalf
of Fidelity Pacific Basin Fund is incorporated herein by reference to
Exhibit 5(vv) of Post-Effective Amendment No. 57.
(xx) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Pacific Basin Fund is
incorporated herein by reference to Exhibit 5(ww) of Post-Effective
Amendment No. 57.
(yy) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Pacific Basin Fund is incorporated herein by
reference to Exhibit 5(xx) of Post-Effective Amendment No. 57.
(zz) Management Contract dated March 1, 1992, between Fidelity Emerging
Markets Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(yy) of Post-Effective Amendment No. 57.
(aaa) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
Management & Research Company and Fidelity Management & Research (Far East)
Inc. on behalf of Fidelity Emerging Markets Fund is incorporated herein by
reference to Exhibit 5(zz) of Post-Effective Amendment No. 57.
(bbb) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
Management & Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Fidelity Emerging Markets Fund is incorporated herein by
reference to Exhibit 5(aaa) of Post-Effective Amendment No. 57.
(ccc) Sub-Advisory Agreement dated April 1, 1992 between Fidelity
International Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Fidelity Emerging Markets Fund is
incorporated herein by reference to Exhibit 5(bbb) of Post-Effective
Amendment No. 57.
(ddd) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Emerging Markets Fund is incorporated herein
by reference to Exhibit 5(ccc) of Post-Effective Amendment No. 57.
(eee) Management Contract between Fidelity Latin America Fund and Fidelity
Management & Research Company dated March 18, 1993 is incorporated herein
by reference to Exhibit 5(l) of Post-Effective Amendment No. 48.
(fff) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Latin America Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(z) of Post-Effective Amendment No. 48.
(ggg) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Latin
America Fund is incorporated herein by reference to Exhibit 5(nn) of
Post-Effective Amendment No. 48.
(hhh) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Latin America Fund dated March 18, 1993, is incorporated
herein by reference to Exhibit 5(ddd) of Post-Effective Amendment No. 55.
(iii) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Latin
America Fund dated March 18, 1993 is incorporated herein by reference to
Exhibit 5(rrr) of Post-Effective Amendment No. 51.
(jjj) Management Contract between Fidelity Southeast Asia Fund and Fidelity
Management & Research Company dated March 18, 1993 is incorporated herein
by reference to Exhibit 5(m) of Post-Effective Amendment No. 48.
(kkk) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Southeast Asia Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(aa) of Post-Effective Amendment No. 48.
(lll) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity
Southeast Asia Fund dated March 18, 1993 is incorporated herein by
reference to Exhibit 5(oo) of Post-Effective Amendment No. 48.
(mmm)Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Southeast Asia Fund dated March 18, 1993, is
incorporated herein by reference to Exhibit 5(eee) of Post-Effective
Amendment No. 55.
(nnn) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity
International Investment Advisors on behalf of Fidelity Southeast Asia
Fund dated March
18, 1993 is incorporated herein by reference to Exhibit 5(sss) of
Post-Effective Amendment
No. 51.
(ooo) Sub-Advisory Agreement dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Southeast Asia Fund dated March 18, 1993
is incorporated herein by reference to Exhibit 5(nnn) of Post-Effective
Amendment No. 57.
(ppp) Management Contract between Fidelity Global Bond Fund and Fidelity
Management & Research Company, dated March 1, 1992, is incorporated herein
by reference to Exhibit 5(ooo) of Post-Effective Amendment No. 58.
(qqq) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
Global Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(ppp) of Post-Effective Amendment No. 58.
(rrr) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity Global
Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(qqq) of Post-Effective Amendment No. 58.
(sss) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Global Bond Fund dated April 1, 1992, is incorporated
herein by reference to Exhibit 5(rrr) of Post-Effective Amendment No. 58.
(ttt) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity Global
Bond Fund dated April 1, 1992 is incorporated herein by reference to
Exhibit 5(sss) of Post-Effective Amendment No. 58.
(uuu) Management Contract between Fidelity New Markets Income Fund and
Fidelity Management & Research Company dated April 15, 1993 is incorporated
herein by reference to Exhibit 5(n) of Post-Effective Amendment No. 48.
(vvv) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (Far East) Inc. on behalf of Fidelity
New Markets Income Fund dated April 15, 1993 is incorporated herein by
reference to Exhibit 5(bb) of Post-Effective Amendment No. 48.
(www) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. dated April 15, 1993
on behalf of Fidelity New Markets Income Fund is incorporated herein by
reference to Exhibit 5(pp) of Post-Effective Amendment No. 48.
(xxx) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity New Markets Income Fund is incorporated herein by
reference to Exhibit 5(fff) of Post-Effective Amendment No. 50.
(yyy) Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity International Investment Advisors on behalf of Fidelity New
Markets Income Fund is incorporated herein by reference to Exhibit 5(ttt)
of Post-Effective Amendment No. 50.
(zzz) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Investments Japan Limited on behalf of Fidelity New
Markets Income Fund dated April 15, 1993, is incorporated herein by
reference to Exhibit 5(dddd) of Post-Effective Amendment No. 58.
(aaaa) Management Contract between Fidelity France Fund and Fidelity
Management & Research Company dated November 1, 1995 is incorporated herein
by reference to Exhibit 5(ffff) of Post-Effective Amendment No. 66.
(bbbb) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity France Fund is incorporated herein by reference to Exhibit 5(gggg)
of Post-Effective Amendment No. 62.
(cccc) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity France Fund is incorporated herein by reference to Exhibit 5(hhhh)
of Post-Effective Amendment No. 62.
(dddd) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity France Fund is incorporated herein by
reference to Exhibit 5(iiii) of Post-Effective Amendment No. 62.
(eeee) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity France Fund is incorporated herein by reference to Exhibit
5(jjjj) of Post-Effective Amendment No. 62.
(ffff) Management Contract between Fidelity Germany Fund and Fidelity
Management & Research Company dated November 1, 1995 is incorporated
herein by reference to Exhibit 5(kkkk) of Post-Effective Amendment No. 66.
(gggg) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Germany Fund is incorporated herein by reference to Exhibit
5(llll) of Post-Effective Amendment No. 62.
(hhhh) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Germany Fund is incorporated herein by reference to Exhibit
5(mmmm) of Post-Effective Amendment No. 62.
(iiii) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity Germany Fund is incorporated herein by
reference to Exhibit 5(nnnn) of Post-Effective Amendment No. 62.
(jjjj) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Germany Fund is incorporated herein by reference to Exhibit
5(ffff) of Post-Effective Amendment No. 62.
(kkkk)Management Contract between Fidelity United Kingdom Fund and
Fidelity Management & Research Company dated November 1, 1995 is
incorporated herein by reference to Exhibit 5(pppp) of Post-Effective
Amendment No. 66.
(llll) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity United Kingdom Fund is incorporated herein by reference to Exhibit
5(qqqq) of Post-Effective Amendment No. 62.
(mmmm)Sub-Advisory Agreement between Fidelity Management & Research Company
and Fidelity Management & Research (U.K.) Inc. on behalf of Fidelity United
Kingdom Fund is incorporated herein by reference to Exhibit 5(rrrr) of
Post-Effective Amendment No. 62.
(nnnn) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity United Kingdom Fund is incorporated herein by reference
to Exhibit 5(ssss) of Post-Effective Amendment No. 62.
(oooo) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity United Kingdom Fund is incorporated herein by reference to Exhibit
5(ffff) of Post-Effective Amendment No. 62.
(pppp) Management Contract between Fidelity Japan Small Companies Fund
and Fidelity Management & Research Company dated November 1, 1995 is
incorporated herein by reference to Exhibit 5(uuuu) of Post-Effective
Amendment No. 66.
(qqqq) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Japan Small Companies Fund is incorporated herein by reference to
Exhibit 5(vvvv) of Post-Effective Amendment No. 62.
(rrrr) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Japan Small Companies Fund is incorporated herein by reference to
Exhibit 5(wwww) of Post-Effective Amendment No. 62.
(ssss) Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors (U.K.)
Limited on behalf of Fidelity Japan Small Companies Fund is incorporated
herein by reference to Exhibit 5(xxxx) of Post-Effective Amendment No. 62.
(tttt) Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment Advisors on behalf
of Fidelity Japan Small Companies Fund is incorporated herein by reference
to Exhibit 5(yyyy) of Post-Effective Amendment No. 62.
(uuuu) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Investments Japan Limited on behalf of Fidelity Japan
Small Companies Fund is incorporated herein by reference to Exhibit 5(zzzz)
of Post-Effective Amendment No. 66.
(vvvv) Management Contract between Fidelity Hong Kong and China Fund
and Fidelity Management & Research Company dated November 1, 1995 is
incorporated herein by reference to Exhibit 5(aaaaa) of Post-Effective
Amendment No. 66.
(wwww)Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference to
Exhibit 5(bbbbb) of Post-Effective Amendment No. 62.
(xxxx)Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference to
Exhibit 5(ccccc) of Post-Effective Amendment No. 62.
(yyyy) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Hong Kong and China Fund is incorporated herein by
reference to Exhibit 5(ddddd) of Post-Effective Amendment No. 62.
(zzzz) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity International Investment Advisors on behalf of
Fidelity Hong Kong and China Fund is incorporated herein by reference to
Exhibit 5(eeeee) of Post-Effective Amendment No. 62.
(aaaaa) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Investments Japan Limited on behalf of Fidelity Hong
Kong and China Fund is incorporated herein by reference to Exhibit 5(fffff)
of Post-Effective Amendment No. 66.
(bbbbb) Management Contract between Fidelity Nordic Fund and Fidelity
Management & Research Company dated November 1, 1995 is incorporated herein
by reference to Exhibit 5(ggggg) of Post-Effective Amendment No. 66.
(ccccc) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Nordic Fund is incorporated herein by reference to Exhibit
5(hhhhh) of Post-Effective Amendment No. 62.
(ddddd) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on behalf of
Fidelity Nordic Fund is incorporated herein by reference to Exhibit
5(iiiii) of Post-Effective Amendment No. 62.
(eeeee) Sub-Advisory Agreement between Fidelity International Investment
Advisors and Fidelity International Investment Advisors (U.K.) Limited on
behalf of Fidelity Nordic Fund is incorporated herein by reference to
Exhibit 5(jjjjj) of Post-Effective Amendment No. 62.
(fffff) Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment Advisors on behalf
of Fidelity Nordic Fund is incorporated herein by reference to Exhibit
5(kkkkk) of Post-Effective Amendment No. 62.
(6) (a) General Distribution Agreement dated April 1, 1987 between Fidelity
Overseas Fund, Fidelity Europe Fund, Fidelity Pacific Basin Fund, Fidelity
International Growth & Income Fund, Fidelity Canada Fund, dated May 19,
1990, between Fidelity Worldwide Fund, dated September 30, 1990, between
Fidelity Emerging Markets Fund (formerly "Fidelity International
Opportunities Fund", dated December 12, and between Fidelity Diversified
International Fund and Fidelity Distributors Corporation are incorporated
herein by reference to Exhibit Nos. 6(a)(1-8) of Post-Effective Amendment
No. 57.
(b) General Distribution Agreement between Fidelity Global Bond Fund and
Fidelity Distributors Corporation dated April 1, 1987, is incorporated
herein by reference to Exhibit 6(b) of Post-Effective Amendment No. 58.
(c) Amendment, dated January 1, 1988, to General Distribution Agreement
between Fidelity Global Bond Fund and Fidelity Distributors Corporation,
dated April 1, 1987, is incorporated herein by reference to Exhibit 6(c) of
Post-Effective Amendment No. 58.
(d) General Distribution Agreement between Fidelity Diversified
International Fund and Fidelity Distributors Corporation dated December 12,
1991 is incorporated herein by reference to Exhibit 6(k) of Post-Effective
Amendment No. 38.
(e) General Distribution Agreement between Fidelity Japan Fund and Fidelity
Distributors Corporation dated July 16, 1992, is incorporated herein by
reference to Exhibit 6(l) of Post-Effective Amendment No. 55.
(f) General Distribution Agreement between Fidelity Latin America Fund and
Fidelity Distributors Corporation dated March 18, 1993, is incorporated
herein by reference to Exhibit 6(m) of Post-Effective Amendment No. 55.
(g) General Distribution Agreement between Fidelity Southeast Asia Fund and
Fidelity Distributors Corporation dated March 18, 1993, is incorporated
herein by reference to Exhibit 6(n) of Post-Effective Amendment No. 55.
(h) General Distribution Agreement between Fidelity New Markets Income Fund
and Fidelity Distributors Corporation is incorporated herein by reference
to Exhibit 6(o) of Post-Effective Amendment No. 50.
(i) General Distribution Agreement between Fidelity Europe Capital
Appreciation Fund and Fidelity Distributors Corporation dated November 18,
1993, is incorporated herein by reference to Exhibit 6(p) of Post-Effective
Amendment No. 55.
(j) General Distribution Agreement between Fidelity International Value
Fund and Fidelity Distributors Corporation, dated September 16, 1994, is
incorporated herein by reference to Exhibit 6(j) of Post-Effective
Amendment No. 58.
(k) General Distribution Agreement between Fidelity France Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(m) of Post-Effective
Amendment No. 66.
(l) General Distribution Agreement between Fidelity Germany Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(n) of Post-Effective
Amendment No. 66.
(m) General Distribution Agreement between Fidelity United Kingdom Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(o) of Post-Effective
Amendment No. 66.
(n) General Distribution Agreement between Fidelity Japan Small Companies
Fund and Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(p) of Post-Effective
Amendment No. 66.
(o) General Distribution Agreement between Fidelity Hong Kong and China
Fund and Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(q) of Post-Effective
Amendment No. 66.
(p) General Distribution Agreement between Fidelity Nordic Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(r) of Post-Effective
Amendment No. 66.
(q) Amendments to the General Distribution Agreement between Fidelity
Investment Trust on behalf of Fidelity France Fund, Fidelity Germany Fund,
Fidelity Hong Kong and China Fund, Fidelity International Value Fund,
Fidelity Japan Small Companies Fund, Fidelity Nordic Fund, and Fidelity
United Kingdom Fund and Fidelity Distributors Corporation, dated March 14,
1996 and July 15, 1996, are incorporated herein by reference to Exhibit
6(k) of Fidelity Select Portfolios' Post-Effective Amendment No. 57 (File
No. 2-69972).
(r) Amendments to the General Distribution Agreement between Fidelity
Investment Trust on behalf of Fidelity Canada Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund,
Fidelity Europe Capital Appreciation Fund, Fidelity International Growth &
Income Fund, Fidelity Japan Fund, Fidelity Latin America Fund, Fidelity
Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund,
and Fidelity Worldwide Fund and Fidelity Distributors Corporation, dated
March 14, 1996 and July 15, 1996, are incorporated herein by reference to
Exhibit 6(l) of Fidelity Select Portfolios' Post-Effective Amendment No. 57
(File No. 2-69972).
(s) Amendments to the General Distribution Agreement between Fidelity
Investment Trust on behalf of Fidelity Global Bond Fund and Fidelity New
Markets Income Fund and Fidelity Distributors Corporation, dated March 14,
1996 and July 15, 1996, are incorporated herein by reference to Exhibit
6(a) of Fidelity Court Street Trust's Post-Effective Amendment No. 61 (File
No. 2-58774).
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferrral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995, is
incorporated herein by reference to Exhibit 7(b) of Fidelity School Street
Trust's (File No. 2-57167) Post-Effective Amendment No. 47.
(8)(a) Custodian Agreement and Appendix C, dated August 1, 1994, between
The Chase Manhattan Bank, N.A. and Fidelity Investment Trust on behalf of
Fidelity Diversified Global Fund, Fidelity Diversified International Fund,
Fidelity Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity Europe Fund, Fidelity Global Bond Fund, Fidelity International
Growth & Income Fund, Fidelity International Value Fund, Fidelity Japan
Fund, Fidelity New Markets Income Fund, Fidelity Overseas Fund, Fidelity
Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide
Fund is incorporated herein by reference to Exhibit 8(a) of Post-Effective
Amendment No. 59.
(8)(b) Appendix A, dated October 17, 1996, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and Fidelity
Investment Trust on behalf of Fidelity Diversified Global Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity
Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global
Bond Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity New Markets Income
Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity
Southeast Asia Fund, and Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 8(c) of Fidelity Charles Street Trust's Post-Effective
Amendment No. 57 (File No. 2-73133).
(8)(c) Appendix B, dated July 18, 1996, to the Custodian Agreement, dated
August 1, 1994, between The Chase Manhattan Bank, N.A. and Fidelity
Investment Trust on behalf of Fidelity Diversified Global Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity
Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global
Bond Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity New Markets Income
Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity
Southeast Asia Fund, and Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 8(b) of Fidelity Securities Fund's Post-Effective
Amendment No. 35 (File No. 2-93601).
(8)(d) Custodian Agreement and Appendix C, dated September 1, 1994, between
Brown Brothers Harriman & Company and Fidelity Investment Trust on behalf
of Fidelity France Fund, Fidelity Germany Fund, Fidelity Japan Small
Companies Fund, Fidelity United Kingdom Fund, Fidelity Hong Kong and China
Fund, Fidelity Nordic Fund, Fidelity Canada Fund, and Fidelity Latin
America Fund is incorporated herein by reference to Exhibit 8(a) of
Fidelity Commonwealth Trust's Post-Effective Amendment No. 56 (File No.
2-52322).
(8)(e) Appendix A, dated January 18, 1996, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity France Fund, Fidelity
Germany Fund, Fidelity Japan Small Companies Fund, Fidelity United Kingdom
Fund, Fidelity Hong Kong and China Fund, Fidelity Nordic Fund, Fidelity
Canada Fund, and Fidelity Latin America Fund is incorporated herein by
reference to Exhibit 8(d) of Post-Effective Amendment No. 65.
(8)(f) Appendix B, dated May 16, 1996, to the Custodian Agreement, dated
September 1, 1994, between Brown Brothers Harriman & Company and Fidelity
Investment Trust on behalf of Fidelity France Fund, Fidelity Germany Fund,
Fidelity Japan Small Companies Fund, Fidelity United Kingdom Fund, Fidelity
Hong Kong and China Fund, Fidelity Nordic Fund, Fidelity Canada Fund, and
Fidelity Latin America Fund is incorporated herein by reference to Exhibit
8(e) of Fidelity Securities Fund's Post-Effective Amendment No. 35 (File
No. 2-93601).
(8)(g) Fidelity Group Repo Custodian Agreement among The Bank of New York,
J. P. Morgan Securities, Inc., and the Registrant, dated February 12, 1996,
is incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(8)(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Bank of New York and the Registrant, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(8)(i) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November 13,
1995, is incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(8)(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
Chemical Bank and the Registrant, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(8)(k) Joint Trading Account Custody Agreement between The Bank of New York
and Fidelity Investment Trust on behalf of Fidelity Canada Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity
Europe Fund, Fidleity Europe Capital Appreciation Fund, Fidelity Global
Bond Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Latin America Fund,
Fidelity New Markets Income Fund, Fidelity Overseas Fund, Fidelity Pacific
Basin Fund, Fidelity Southeast Asia Fund and Fidelity Worldwide Fund, dated
May 11, 1995, is incorporated herein by reference to Exhibit 8(h) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(8)(l) First Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and Fidelity Investment Trust on behalf of Fidelity
Canada Fund, Fidelity Diversified International Fund, Fidelity Emerging
Markets Fund, Fidelity Europe Fund, Fidleity Europe Capital Appreciation
Fund, Fidelity Global Bond Fund, Fidelity International Growth & Income
Fund, Fidelity International Value Fund, Fidelity Japan Fund, Fidelity
Latin America Fund, Fidelity New Markets Income Fund, Fidelity Overseas
Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund and
Fidelity Worldwide Fund, dated July 14, 1995, is incorporated herein by
reference to Exhibit 8(i) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(9) Not applicable.
(10) Not applicable.
(11) Consents of Coopers & Lybrand L.L.P. and Price Waterhouse LLP are
filed herein as Exhibit 11.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) of Fidelity Commonwealth Trust's (File
No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) of Fidelity Commonwealth Trust's (File No. 2-52322) Post
Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
of Fidelity Securities Fund's (File No. 2-93601) Post Effective Amendment
No. 33.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Global Bond Fund is incorporated herein by reference to Exhibit 15(a) of
Post-Effective Amendment No. 58.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity New
Markets Income Fund is incorporated herein by reference to Exhibit 15(c) of
Post-Effective Amendment No. 58.
(16) (a) Schedule for computation of total return calculations for Fidelity
Canada Fund is incorporated herein by reference to Exhibit 16(a) of
Post-Effective Amendment No. 66.
(b) Schedule for computation of moving averages is incorporated herein by
reference to Exhibit 16(c) of Post-Effective Amendment No. 53.
(17) Financial Data Schedules are filed herein as Exhibit 27.
(18) Not applicable.
Item 25. Persons Controlled by or Under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities: October 31, 1996
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Canada Fund 15,861
Fidelity Diversified International Fund 79,890
Fidelity Emerging Markets Fund
132,670
Fidelity Europe Capital Appreciation Fund 15,914
Fidelity Europe Fund
82,561
Fidelity France Fund
670
Fidelity Germany Fund
1,007
Fidelity Global Bond Fund
17,846
Fidelity Hong Kong and China Fund 10,887
Fidelity International Growth & Income Fund
178,589
Fidelity International Value Fund 21,427
Fidelity Japan Fund 31,913
Fidelity Japan Small Companies Fund 11,758
Fidelity Latin America Fund 62,138
Fidelity New Markets Income Fund
17,924
Fidelity Nordic Fund
2,722
Fidelity Overseas Fund
674,474
Fidelity Pacific Basin Fund 88,572
Fidelity Southeast Asia Fund 70,768
Fidelity United Kingdom Fund
276
Fidelity Worldwide Fund
152,783
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit, or
proceeding in which he is involved by virtue of his service as a Trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Service Co. ("Service") is
appointed transfer agent, the Registrant agrees to indemnify and hold
Service harmless against any losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names the Service and/or the
Registrant as a party and is not based on and does not result from
Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with Service's
performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from Service's acting upon any instruction(s) reasonably believed by it
to have been executed or communicated by any person duly authorized by the
Registrant, or as a result of Service's acting in reliance upon advice
reasonably believed by Service to have been given by counsel for the
Registrant, or as a result of Service's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.
J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
Dwight D. Churchill Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.
William Danoff Vice President of FMR and of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Larry A. Domash Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Vice President of FMR.
Bart Grenier Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.
Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.
Alan Leifer Vice President of FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Andrew S. Offit Vice President of FMR and of a fund advised by FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of a fund advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
Pembroke Hall, 42 Crow Lane, Pembroke, Bermuda
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FMR Texas Inc., and FMR (Far
East) Inc.; Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of FMR
Corp.; Chairman of the Board and Representative
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR U.K., FMR, FMR (Far
East) Inc., and FMR Texas Inc.; Managing Director of
FMR Corp.; Senior Vice President and Trustee of
funds advised by FMR.
Richard Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K.; Vice President of FMR.
Stephen P. Jonas Treasurer of FMR U.K., FMR, FMR (Far East) Inc.,
and FMR Texas Inc.; Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR U.K., FMR, FMR (Far
East) Inc., and FMR Texas Inc.; Vice President and
Treasurer of FMR Corp.
Francis V. Knox Compliance Officer of FMR U.K.; Vice President of
FMR.
Jay Freedman Clerk of FMR U.K., FMR (Far East) Inc., and FMR
Corp.; Assistant Clerk of FMR; Secretary of FMR
Texas Inc.
(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC. (FMR FAR EAST)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The directors
and officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR Far
East, FMR, FMR Corp., FMR Texas Inc., and
FMR (U.K.) Inc.; Chairman of the Executive
Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of
the Board and Representative Director of
Fidelity Investments Japan Limited; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East, FMR
Texas Inc., FMR, and FMR (U.K.) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.
William R. Ebsworth Vice President of FMR Far East; Director of
FIIA.
Bill Wilder Vice President of FMR Far East; President and
Representative Director of Fidelity Investments
Japan Limited.
Stephen P. Jonas Treasurer of FMR Far East, FMR, FMR (U.K.)
Inc., and FMR Texas Inc.; Vice President of
FMR.
John D. Crumrine Assistant Treasurer of FMR Far East, FMR,
FMR (U.K.) Inc., and FMR Texas Inc.; Vice
President and Treasurer of FMR Corp.
Jay Freedman Clerk of FMR Far East, FMR (U.K.) Inc., and
FMR Corp.; Assistant Clerk of FMR; Secretary
of FMR Texas Inc.
(4) FIDELITY INTERNATIONAL INVESTMENT ADVISORS
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda
The directors and officers of Fidelity International Investment Advisors
(FIIA) have held, during the past two fiscal years, the following positions
of a substantial nature.
Anthony J. Bolton Director of FIIA, FIIA (U.K.) L, and Fidelity
Investments International.
Charles T. Collis Director of FIIA; Partner in Conyers, Dill &
Pearman, Hamilton, Bermuda.
William R. Ebsworth Director of FIIA; Vice President of FMR (Far
East) Inc.
Brett P. Goodin Director, Vice President, and Secretary of many
Fidelity International Group of Companies.
Simon Haslam Director of FIIA and FII; Chief Financial
Officer and Company Secretary of Fidelity
International Group of Companies (U.K.).
Terrence V. Richards Assistant Secretary of FIIA.
David J. Saul President and Director of FIIA; Director of
Fidelity International Limited.
(5) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
26 Lovat Lane, London, England
The directors and officers of Fidelity International Investment Advisors
(U.K.) Limited (FIIA (U.K.) L) have held, during the past two fiscal years,
the following positions of a substantial nature.
Anthony J. Bolton Director of FIIA (U.K.) L, FIIA, and Fidelity
Investments International.
Sally Walden Director of FIIA (U.K.) L.
Simon Haslam Director of FIIA and FII; Chief Financial Offi
cer and Company Secretary of Fidelity Interna
tional Group of Companies (U.K.).
Emma Barratt Assistant Company Secretary of Fidelity
International Group of Companies (U.K.).
Pamela Edwards Director of FIIA (U.K.) L, and FII; Chief Legal
Counsel for Europe.
(6) FIDELITY INVESTMENTS JAPAN LIMITED
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
The directors and officers of Fidelity Investments Japan Limited (FIJ)
have held, during the past two fiscal years, the following positions of a
substantial nature.
Edward C. Johnson 3d Chairman of the Board and Representative
Director of FIJ; Chairman of the Board and
Director of FMR (Far East) Inc., FMR, FMR
Corp., FMR (U.K.) Inc., and FMR Texas Inc.;
Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of
FMR Corp.; President and Trustee of funds
advised by FMR.
Yasuo Kuramoto Vice Chairman, Representative Director and
Portfolio Manager of FIJ.
Billy Wilder President and Representative Director of FIJ;
Vice President of FMR (Far East) Inc.
Hiroshi Yamashita Managing Director and Portfolio Manager of
FIJ.
Nobuhide Kamiyama Director and General Manager of Planning and
Marketing of FIJ.
Arthur M. Jesson Director and General Manager of Information
Systems and Trading of FIJ.
Martin P. Cambridge Director of FIJ, and Fidelity Investments
(Taiwan) Limited.
Noboru Kawai Director and General Manager of
Administration of FIJ.
Stuart Leckie Director of FIJ and Fidelity International
Limited.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Neal Litvack President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective
custodians: The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn,
N.Y. and Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant on behalf of Fidelity Canada Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund,
Fidelity Europe Capital Appreciation Fund, Fidelity France Fund, Fidelity
Germany Fund, Fidelity Global Bond Fund, Fidelity Hong Kong and China Fund,
Fidelity International Growth & Income Fund, Fidelity International Value
Fund, Fidleity Japan Fund, Fidelity Japan Small Companies Fund, Fidelity
Latin America Fund, Fidelity New Markets Income Fund, Fidelity Nordic Fund,
Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast
Asia Fund, Fidelity United Kingdom Fund, and Fidelity Worldwide Fund,
provided the information required by Item 5A is contained in the annual
report, undertakes to furnish each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the
Registrant's latest annual report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 70 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 26th day
of December 1996.
FIDELITY INVESTMENT TRUST
By /s/Edward C. Johnson 3d
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d President and Trustee December 26, 1996
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber *** Treasurer December 26, 1996
Kenneth A. Rathgeber
/s/J. Gary Burkhead * Trustee December 26, 1996
J. Gary Burkhead
/s/Ralph F. Cox * Trustee December 26, 1996
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee December 26, 1996
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee December 26, 1996
Richard J. Flynn
/s/E. Bradley Jones ** Trustee December 26, 1996
E. Bradley Jones
/s/Donald J. Kirk * Trustee December 26, 1996
Donald J. Kirk
/s/Peter S. Lynch ** Trustee December 26, 1996
Peter S. Lynch
/s/Edward H. Malone * Trustee December 26, 1996
Edward H. Malone
/s/Marvin L. Mann * Trustee December 26, 1996
Marvin L. Mann
/s/Gerald C. McDonough * Trustee December 26, 1996
Gerald C. McDonough
/s/Thomas R. Williams * Trustee December 26, 1996
Thomas R. Williams
</TABLE>
* Signatures affixed by Robert C. Hacker pursuant to a power of attorney
dated October 17, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
*** Signature affixed by John H. Costello pursuant to a power of attorney
dated October 17, 1996 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series V Fidelity Municipal Trust
Fidelity Advisor Series VI Fidelity New York Municipal Trust
Fidelity Advisor Series VII Fidelity Puritan Trust
Fidelity Advisor Series VIII Fidelity School Street Trust
Fidelity Boston Street Trust Fidelity Securities Fund
Fidelity California Municipal Trust Fidelity Select Portfolios
Fidelity Capital Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Charles Street Trust Fidelity Summer Street Trust
Fidelity Commonwealth Trust Fidelity Trend Fund
Fidelity Congress Street Fund Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Corporate Trust Fund, L.P.
Fidelity Court Street Trust Fidelity Union Street Trust
Fidelity Covington Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Destiny Portfolios Variable Insurance Products Fund
Fidelity Deutsche Mark Performance Variable Insurance Products Fund II
Portfolio, L.P.
Fidelity Devonshire Trust
Fidelity Exchange Fund
Fidelity Financial Trust
Fidelity Fixed-Income Trust
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individuals serve as Treasurer and principal financial and
accounting officer (collectively, the "Funds"), hereby severally constitute
and appoint John H. Costello and John E. Ferris each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them to sign for me and in my name in the
appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber October 17, 1996
Kenneth A. Rathgeber
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity Boston Street Trust Fidelity School Street Trust
Fidelity California Municipal Trust Fidelity Securities Fund
Fidelity Capital Trust Fidelity Select Portfolios
Fidelity Charles Street Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Commonwealth Trust Fidelity Summer Street Trust
Fidelity Congress Street Fund Fidelity Trend Fund
Fidelity Contrafund Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Corporate Trust Fidelity U.S. Investments-Government Securities
Fidelity Court Street Trust Fund, L.P.
Fidelity Covington Trust Fidelity Union Street Trust
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Variable Insurance Products Fund
Fidelity Devonshire Trust Variable Insurance Products Fund II
Fidelity Exchange Fund
Fidelity Financial Trust
Fidelity Fixed-Income Trust
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individuals serve as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby severally constitute and appoint Arthur
J. Brown, Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas
M. Leahey, Richard M. Phillips and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this seventeenth day of October, 1996.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead ____________________
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Gerald C. McDonough
Ralph F. Cox Gerald C. McDonough
___________________ /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Marvin L. Mann
Richard J. Flynn Marvin L. Mann
___________________ /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
Exhibit 11a
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 70 to the Registration Statement on Form N-1A of Fidelity
Investment Trust: Fidelity Diversified International Fund; Fidelity
International Growth & Income Fund; Fidelity International Value Fund;
Fidelity Overseas Fund; Fidelity Worldwide Fund; Fidelity Canada Fund;
Fidelity Europe Fund; Fidelity Japan Fund; Fidelity Pacific Basin Fund; and
Fidelity Emerging Markets Fund, of our reports dated December 16, 1996 on
the financial statements and financial highlights included in the October
31, 1996 Annual Reports to Shareholders of the aforementioned funds.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P
Boston, Massachusetts
December 20, 1996
Exhibit 11b
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 70 to the Registration Statement on Form N-1A of Fidelity
Investment Trust: Fidelity Europe Capital Appreciation Fund, Fidelity
France Fund, Fidelity Germany Fund, Fidelity Hong Kong and China Fund,
Fidelity Japan Small Companies Fund, Fidelity Latin America Fund, Fidelity
Nordic Fund, Fidelity Southeast Asia Fund and Fidelity United Kingdom Fund
of our report dated December 16, 1996 on the financial statements and
financial highlights included in the October 31, 1996 Annual Report to
Shareholders of Fidelity Investment Trust: Fidelity Europe Capital
Appreciation Fund, Fidelity France Fund, Fidelity Germany Fund, Fidelity
Hong Kong and China Fund, Fidelity Japan Small Companies Fund, Fidelity
Latin America Fund, Fidelity Nordic Fund, Fidelity Southeast Asia Fund and
Fidelity United Kingdom Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUS LLP
Boston, Massachusetts
December 20, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
<NUMBER> 11
<NAME> Fidelity Overseas Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> oct-31-1996
<PERIOD-END> oct-31-1996
<INVESTMENTS-AT-COST> 2,825,384
<INVESTMENTS-AT-VALUE> 3,080,439
<RECEIVABLES> 60,967
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,141,406
<PAYABLE-FOR-SECURITIES> 13,198
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,583
<TOTAL-LIABILITIES> 26,781
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,619,133
<SHARES-COMMON-STOCK> 100,205
<SHARES-COMMON-PRIOR> 79,664
<ACCUMULATED-NII-CURRENT> 35,462
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 205,444
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 254,586
<NET-ASSETS> 3,114,625
<DIVIDEND-INCOME> 67,361
<INTEREST-INCOME> 20,342
<OTHER-INCOME> (8,543)
<EXPENSES-NET> 30,961
<NET-INVESTMENT-INCOME> 48,199
<REALIZED-GAINS-CURRENT> 208,828
<APPREC-INCREASE-CURRENT> 20,312
<NET-CHANGE-FROM-OPS> 277,339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 27,337
<DISTRIBUTIONS-OF-GAINS> 28,141
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 75,174
<NUMBER-OF-SHARES-REDEEMED> 56,502
<SHARES-REINVESTED> 1,869
<NET-CHANGE-IN-ASSETS> 838,319
<ACCUMULATED-NII-PRIOR> 17,367
<ACCUMULATED-GAINS-PRIOR> 34,224
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21,074
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 31,479
<AVERAGE-NET-ASSETS> 2,773,514
<PER-SHARE-NAV-BEGIN> 28.570
<PER-SHARE-NII> .480
<PER-SHARE-GAIN-APPREC> 2.720
<PER-SHARE-DIVIDEND> .340
<PER-SHARE-DISTRIBUTIONS> .350
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 31.080
<EXPENSE-RATIO> 114
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
<NUMBER> 21
<NAME> Fidelity Europe Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> oct-31-1996
<PERIOD-END> oct-31-1996
<INVESTMENTS-AT-COST> 530,246
<INVESTMENTS-AT-VALUE> 688,005
<RECEIVABLES> 10,110
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 698,117
<PAYABLE-FOR-SECURITIES> 4,597
<SENIOR-LONG-TERM-DEBT> 0
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Worldwide Fund
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Emerging Markets Fund
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
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<NAME> Fidelity Diversified International Fund
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
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<NAME> Fidelity International Value Fund
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<S>
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
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<NAME> Fidelity Europe Capital Appreciation Fund
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<S>
<C>
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
<SERIES>
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<NAME> Fidelity Nordic Fund
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<S>
<C>
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Investment Trust
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<NAME> Fidelity Southeast Asia Fund
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
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<NAME> Fidelity Hong Kong and China Fund
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<C>
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<CIK> 0000744822
<NAME> Fidelity Investment Trust
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<NAME> Fidelity Japan Small Companies Fund
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