FIDELITY INVESTMENT TRUST, N-30D, 1998-02-19

FIDELITY INVESTMENT TRUST
N-30D, 1998-02-19

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(2_FIDELITY_LOGOS)FIDELITY

NEW MARKETS INCOME
FUND
ANNUAL REPORT
DECEMBER 31, 1997
CONTENTS

PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.

PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.

FUND TALK 7 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.

INVESTMENT CHANGES 10 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.

INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.

FINANCIAL STATEMENTS 18 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.

NOTES 22 NOTES TO THE FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT 28 THE AUDITORS' OPINION.
ACCOUNTANTS

DISTRIBUTIONS 29

PROXY RESULTS 30

To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets throughout the fourth
quarter, the Standard & Poor's 500 Index rose more than 33% in 1997,
about three times its historical annual average. Meanwhile, bond
markets - primarily influenced by a relatively steady flow of positive
news on the inflation front - continued to post solid returns as the
year drew to a close.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain expenses, the life of fund total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1997 PAST 1 LIFE OF
YEAR FUND

FIDELITY NEW MARKETS INCOME 17.52% 107.86%

J.P. MORGAN EMERGING MARKETS BOND INDEX PLUS 13.02% N/A

EMERGING MARKETS DEBT FUNDS AVERAGE 13.80% N/A

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on May 4, 1993. For example, if you had invested $1,000 in a
fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to
those of the J.P. Morgan Emerging Markets Bond Index Plus - a market
capitalization weighted total return index of U.S. dollar- and other
external currency-denominated Brady bonds, loans, Eurobonds, and local
market debt instruments traded in emerging markets. To measure how the
fund's performance stacked up against its peers, you can compare it to
the emerging markets debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past one year average represents a peer
group of 27 mutual funds. These benchmarks reflect reinvestment of
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1997 PAST 1 LIFE OF
YEAR FUND

FIDELITY NEW MARKETS INCOME 17.52% 16.99%

J.P. MORGAN EMERGING MARKETS BOND INDEX PLUS 13.02% N/A

EMERGING MARKETS DEBT FUNDS AVERAGE 13.80% N/A

DIVIDENDS PER SHARE 40.29(CENTS) 87.48(CENTS) 131.77(CENTS)

ANNUALIZED DIVIDEND RATE 34.48% 12.06% 9.44%

30-DAY ANNUALIZED YIELD 8.11% - -
</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$13.76 over the past one month, $14.39 over the past six months and
$13.96 over the past one year, you can compare the fund's income over
these three periods.
The 30-day annualized YIELD is a standard formula for all bond funds
based on the yields of the bonds in the fund, averaged over the past
30 days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. It does not reflect the
cost of hedging and other currency gains and losses.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
The year that ended December 31,
1997, displayed the complexity and
variety of the world's financial
markets. The serenity of low interest
rates and subdued inflation that had
boosted a number of markets was
rudely interrupted in late October
when Asian markets stumbled
dramatically. Developed-market
government bonds benefited from
this crisis, as investors sought the
perceived safety of high-quality
issues. A strong U.S. dollar, however,
undermined gains for U.S.-based
investors in the Japanese and most
European markets. The Salomon
Brothers World Government Bond
Index - a measure of government
bond market performance in
developed nations - returned just
0.23% for the period. Inflation was
well-controlled throughout Europe,
and bond prices in countries such as
Spain and Italy were buoyed by
steady progress toward meeting the
requirements for membership in the
European Monetary Union (EMU).
Unlike other European currencies,
the pound sterling maintained its
strength, helping boost bond
performance in the United Kingdom.
The Asian volatility staggered
emerging bond markets in October
and left lingering concerns as the
new year began. The J.P. Morgan
Emerging Markets Bond Index
returned 16.15% for the period. Most
of these gains were posted during the
first three quarters of the year,
boosted by low interest rates and
positive government reforms. A lack
of inflation, declining interest rates
and the late-year flight to quality
boosted bonds in the U.S., with the
Lehman Brothers Aggregate Bond
Index returning 9.65% in 1997.
An interview with John Carlson, Portfolio Manager of Fidelity New
Markets Income Fund
Q. HOW DID THE FUND PERFORM, JOHN?
A. Quite well. For the 12 months that ended December 31, 1997, the
fund posted a return of 17.52%. The emerging markets debt funds
average, as tracked by Lipper Analytical Services, returned 13.80%
during this time. The J.P. Morgan Emerging Markets Bond Index Plus
returned 13.02%.
Q. HOW WOULD YOU CHARACTERIZE THE CLIMATE FOR EMERGING MARKET DEBT
SECURITIES OVER THE PAST YEAR?
A. Overall, emerging-market debt had a good run through much of 1997.
From January through late October, the market enjoyed a favorable
backdrop of low interest rates, continued economic reform and a benign
global environment, which resulted in a favorable credit spread
environment. Credit spreads measure the premium an investor pays for
global risk. The last quarter of the year, however, was a different
story altogether. Concerns about weakness in Southeast Asia and
possible contagion to Latin America, as well as the late-October
market declines in both Asian and U.S. equity markets, put pressure on
emerging-market investments.
Q. SOUTHEAST ASIA HAD A MAJOR COLLAPSE DURING THE PERIOD AS SEVERAL
CURRENCIES DECLINED. HOW BADLY WAS THE FUND AFFECTED?
A. The direct impact was minimal. The fund's exposure to Southeast
Asia historically has been limited for a number of reasons. First,
there have always been very few long-term, non-investment-grade debt
opportunities in that region. Second, the currencies of both Japan and
China depreciated by almost 50% over the past couple of years. In
comparing the other regional currencies in Asia to both Japan and
China, it was my feeling that the smaller Asian markets were becoming
less competitive as their currencies were appreciating relative to
those in Japan and China. Finally, the historically high level of
economic growth of many of the Asian "tigers" appeared unsustainable
in light of excess global capacity and competitive pressures.
Q. DID YOU PURSUE ANY PARTICULAR STRATEGIES GIVEN THIS VOLATILITY?
A. Around late August, I perceived increased risk in the marketplace
due to some initial weakness in currency and equity markets as well as
some strong words of caution from the chairman of the U.S. Federal
Reserve Board. Despite these factors, though, volatility was
decreasing and options - which give the buyer the right, but not the
obligation, to buy a security within a specified period of time at a
set price - were cheap. As a result, I bought an option position on a
Brazilian bond that worked out quite favorably. When the market
corrected dramatically in late October, the fund had at risk only the
amount that it had paid for the premium on the option. If I hadn't had
the option - and the fund owned the security itself - the fund's
losses would have been considerably higher. Owning the option gave the
fund exposure in Brazil, which I felt was important, and allowed the
fund to participate in the early-fall rally of Brazilian Brady bonds,
which are dollar-denominated and issued by foreign governments. When
the market corrected, the option provided downside protection.
Q. SIX MONTHS AGO, YOU WERE OPTIMISTIC ABOUT THE FUND'S EXPOSURE TO
RUSSIA. HOW DID RUSSIAN BONDS PERFORM DURING THE PERIOD?
A. At the beginning of the year, the fund was underweighted in Russian
bonds relative to the index. As fiscal reform in Russia appeared
promising, I began to raise the fund's Russian exposure in the late
spring and early summer and the bonds performed well. As economic
conditions weakened in Asia, however, I felt that Russia - being a
major emerging-market country with some remaining fiscal concerns -
would be vulnerable. I subsequently began decreasing the fund's
Russian exposure - and adding Russian options - to try to limit the
fund's downside risk. This strategy has paid off, as pressure on the
Russian bond market increased toward the close of the period.
Q. WHICH OTHER POSITIONS CONTRIBUTED POSITIVELY TO PERFORMANCE? WHICH
WERE DISAPPOINTMENTS?
A. The fund's positions in Bulgaria, Argentina and Brazil also turned
in strong performances. On a down note, I reduced the fund's positions
in Ecuador earlier in the year due to political uncertainty. However,
the bonds continued to rally.
Q. WHAT'S YOUR OUTLOOK?
A. With all that has gone on in recent months, I'm certainly
concerned. While global volatility has been alarming, one bright spot
may be that the dislocation - or downward re-pricing - of certain
emerging-market securities may present ample opportunities. I'll keep
a close eye on risk, credit spreads and interest rates as they relate
to the portfolio. Shareholders should expect a continuation of this
same disciplined investment approach.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
JOHN CARLSON EXPLORES THE
"CONTAGION EFFECT":
"ALONG WITH THE SOUTHEAST ASIAN
TURMOIL WE'VE WITNESSED RECENTLY, THE
PHRASE "CONTAGION" HAS BECOME PART
OF THE MARKET'S DAILY LANGUAGE.
CONTAGION REFERS TO BOTH THE REAL AND
PSYCHOLOGICAL EFFECTS THAT IMPACT
INVESTOR BEHAVIOR WITHIN OR ACROSS
MARKETS. THERE ARE A NUMBER OF CATCHY
PHRASES THAT DESCRIBE THIS LINK BETWEEN
MARKETS, SUCH AS `WHEN THE U.S.
ECONOMY SNEEZES, MEXICO CATCHES A
COLD.'
"ASIAN CONTAGION, BEGINNING LAST YEAR
AS A CURRENCY CRISIS IN THAILAND, IS AN
EXAMPLE. AS SPECULATION AGAINST THE
SUSTAINABILITY OF THAILAND'S CURRENCY
REGIME INCREASED, THAI AUTHORITIES
DEVALUED THE COUNTRY'S CURRENCY.
PRESSURE SPILLED OVER TO OTHER
SOUTHEAST ASIAN COUNTRIES, RESULTING
IN A WAVE OF COMPETITIVE DEVALUATIONS
IN COUNTRIES SUCH AS INDONESIA, THE
PHILIPPINES AND SINGAPORE. INVESTORS
WONDERED WHERE IT WOULD STOP, AND
THIS UNCERTAINTY SPREAD TO BOTH BRAZIL
AND RUSSIA.
"BUT THE CONTAGION WASN'T LIMITED TO
CURRENCY PRESSURES. INVESTORS SUFFERING
LOSSES IN SOUTHEAST ASIAN MARKETS TOOK
PROFITS BY SELLING EQUITY POSITIONS IN
OTHER REGIONS. THIS COMPOUNDED THE
DOWNWARD PRESSURE ON MANY
CURRENCIES, RESULTING IN ADDITIONAL
SELLING. STOCK MARKETS IN EMERGING
COUNTRIES SUCH AS ARGENTINA SUFFERED
MAJOR LOSSES AS DID HONG KONG. THE
EFFECTS OF SUCH DEVELOPMENTS WILL BE
SLOWER GLOBAL ECONOMIC GROWTH, WHICH
HAS LED TO CONCERNS ABOUT GROWTH RATES
IN THE U.S. AND OTHER DEVELOPED
COUNTRIES IN THE YEAR AHEAD."
FUND FACTS
GOAL: A HIGH LEVEL OF CURRENT
INCOME BY INVESTING PRIMARILY
IN DEBT SECURITIES AND OTHER
INSTRUMENTS OF ISSUERS IN
EMERGING MARKETS; AS A
SECONDARY OBJECTIVE, THE FUND
MAY SEEK CAPITAL APPRECIATION
FUND NUMBER: 331
TRADING SYMBOL: FNMIX
START DATE: MAY 4, 1993
SIZE: AS OF DECEMBER 31,
1997, MORE THAN $380 MILLION
MANAGER: JOHN CARLSON, SINCE
1995; JOINED FIDELITY IN 1995
(CHECKMARK)
INVESTMENT CHANGES

TOP FIVE COUNTRIES AS OF DECEMBER 31, 1997
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE COUNTRIES
6 MONTHS AGO

BRAZIL 19.1 13.3

ARGENTINA 15.8 14.7

MEXICO 9.9 9.0

RUSSIA 7.1 9.6

VENEZUELA 5.4 10.5

TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY,
INCLUDING WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT
RISKS.
TOP FIVE HOLDINGS AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>
<S> <C> <C>
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO

BRAZILIAN FEDERATIVE REPUBLIC 18.6 11.6

ARGENTINIAN REPUBLIC 12.5 12.8

UNITED MEXICAN STATES 5.8 9.0

BULGARIAN REPUBLIC 5.0 5.2

VENEZUELAN REPUBLIC 4.9 10.5

</TABLE>

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1997
6 MONTHS AGO

YEARS 15.9 14.4

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1997 AS OF JUNE 30, 1997

CORPORATE BONDS 8.4%
FOREIGN GOVERNMENT
OBLIGATIONS 71.4%
OTHER 9.9%
SHORT-TERM
INVESTMENTS 10.3%
CORPORATE BONDS 4.8%
FOREIGN GOVERNMENT
OBLIGATIONS 68.6%
OTHER 12.5%
SHORT-TERM
INVESTMENTS 14.1%
ROW: 1, COL: 1, VALUE: 10.3
ROW: 1, COL: 2, VALUE: 9.9
ROW: 1, COL: 3, VALUE: 71.40000000000001
ROW: 1, COL: 4, VALUE: 8.4
ROW: 1, COL: 1, VALUE: 14.1
ROW: 1, COL: 2, VALUE: 12.5
ROW: 1, COL: 3, VALUE: 68.59999999999999
ROW: 1, COL: 4, VALUE: 4.8

INVESTMENTS DECEMBER 31, 1997

SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES

NONCONVERTIBLE BONDS - 8.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
ARGENTINA - 3.3%
Compania Latinoamericana de Infraestructura &
Servicios SA:
11 5/8%, 6/1/04 (e) BB- $ 4,935,000 $ 5,033,700
11 5/8%, 6/1/04 BB- 2,670,000 2,723,400
Telefonica De Argentina 11 7/8%, 11/1/04 Ba3 3,910,000 4,545,375
12,302,475
KOREA (SOUTH) - 0.5%
Korea Development Bank:
yankee 7 1/4%, 5/15/06 Ba1 1,240,000 967,200
6 5/8%, 11/21/03 Ba1 1,100,000 858,000
1,825,200
MEXICO - 4.1%
Banco Nacional de Comercio Exte SNC
11 1/4%, 5/30/06 (Reg.) Ba2 10,290,000 11,473,350
Petroleos Mexicanos 9 1/2%, 9/15/27 BB 3,880,000 3,860,600
15,333,950
VENEZUELA - 0.5%
Bariven SA 10 5/8%, 3/17/02 Ba2 1,880,000 2,039,800
TOTAL NONCONVERTIBLE BONDS
(Cost $32,100,876) 31,501,425
FOREIGN GOVERNMENT OBLIGATIONS (H) - 71.4%
ANGOLA - 0.1%
Banco Nacional de Angola 0%,
9/10/27 (London) (f) - 1,788,368 536,510
ARGENTINA - 12.5%
Argentinian Republic:
Brady par euro 5 1/2%, 3/31/23 (g) Ba3 37,375,000 27,400,547
BOCON 3.29%, 4/1/07 (g) Ba3 ARS 84,897 59,334
global bond 9 3/4%, 9/19/27 Ba3 10,431,000 9,994,202
global bond 11 3/8%, 1/30/17 Ba3 1,810,000 1,980,140
global bond 11 3/8%, 1/30/17 Ba3 4,120,000 4,507,280
11 3/4%, 2/12/07 Ba3 ARS 2,340,000 2,200,018
11 3/4%, 2/12/07 (e) Ba3 ARS 1,000,000 940,179
47,081,700
FOREIGN GOVERNMENT OBLIGATIONS (H) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
BRAZIL - 18.6%
Brazilian Federative Republic:
Brady:
capitalization bond 8%, 4/15/14 B1 $ 53,181,727 $ 41,814,133
debt conversion bond euro
6 3/4%, 4/15/12 (g) B1 22,730,000 17,274,800
par 5 1/4%, 4/15/24 (g) B1 3,900,000 2,810,437
global bond 10 1/8%, 5/15/27 B1 8,522,000 7,989,375
69,888,745
BULGARIA - 5.0%
Bulgarian Republic Brady:
discount 6.6875%, 7/28/24 (g) B2 8,380,000 6,452,600
FLIRB A 2 1/4%, 7/28/12 (g) B2 20,225,000 12,311,970
18,764,570
IVORY COAST - 0.3%
Ivory Coast past due interest
0%, 12/29/49 (f) - 2,790,000 1,095,075
DOMINICAN REPUBLIC - 0.9%
Dominican Republic Brady 0%, 8/30/09 (d) B1 4,177,800 3,243,017
ECUADOR - 3.9%
Ecuador Republic Brady:
par euro 3 1/2%, 2/28/25 (g) B1 17,520,000 9,657,900
past due interest euro
6.6875%, 2/28/15 (bearer) (g) B1 7,622,112 4,982,956
14,640,856
JORDAN - 0.9%
Kingdom of Jordan 5%, 12/23/23 (e)(g) Ba3 5,000,000 3,400,000
KAZAKHSTAN - 1.0%
Kazakhstan Republic 9 1/4%, 12/20/99 (Reg.) Ba3 3,930,000 3,831,750
MEXICO - 5.8%
United Mexican States:
Brady discount:
par A 6 1/4%, 12/31/19 unit Ba2 11,470,000 9,563,112
par B 6 1/4%, 12/31/19 unit Ba2 6,555,000 5,465,231
global bond 11 1/2%, 5/15/26 Ba2 5,695,000 6,748,575
21,776,918
FOREIGN GOVERNMENT OBLIGATIONS (H) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
PANAMA - 1.6%
Panamanian Republic:
Brady par 3 1/4%, 7/17/26 (d) Ba1 $ 4,800,000 $ 3,072,000
euro 7 7/8%, 2/13/02 (Reg.) Ba1 2,830,000 2,734,487
5,806,487
PERU - 3.7%
Peruvian Republic Brady FLIRB:
3 1/4%, 3/7/17 (e)(g) B2 825,000 489,328
3 1/4%, 3/7/17 (g) B2 22,515,000 13,354,209
13,843,537
PHILIPPINES - 0.8%
Philippine Government Brady par 6 1/2%,
12/1/17 (d) Ba1 3,760,000 3,139,600
POLAND - 3.6%
Polish Republic:
Brady par 3%, 10/27/24 (d) Baa 17,630,000 10,820,412
7 1/8%, 7/1/04 Baa 2,810,000 2,810,000
13,630,412
RUSSIA - 3.9%
Bank for Foreign Economic Affairs of Russia
(Vnesheconombank) interest notes:
6.7188%, 12/15/15 (e) Ba2 10,912,119 7,679,404
6.7188%, 12/15/15 Ba2 2,800,000 1,970,500
Russian Government euro 10%, 6/26/07 Ba2 5,610,000 5,182,237
14,832,141
TURKEY - 3.9%
Turkish Republic Treasury Bill:
0%, 5/13/98 (i) - TRL 690,710 2,360,628
0%, 8/5/98 (i) - TRL 389,380 1,108,384
0%, 8/12/98 (i) - TRL 2,469,340 6,921,251
0%, 9/16/98 (i) - TRL 1,661,030 4,351,889
14,742,152
FOREIGN GOVERNMENT OBLIGATIONS (H) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
VENEZUELA - 4.9%
Venezuelan Republic:
Brady:
debt conversion bond
6.8125%, 12/18/07 (g) Ba2 $ 9,523,811 $ 8,517,859
par A euro 6 3/4%, 3/31/20 Ba2 9,640,000 8,362,700
par A 6 3/4%, 3/31/20 unit Ba2 1,625,000 1,409,687
Oil recovery rights 3/31/20 - 51,970 -
18,290,246
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $262,055,918) 268,543,716
SOVEREIGN LOAN PARTICIPATIONS - 8.4%
CAMEROON - 0.2%
Cameroon Republic loan participation (a):
- Societe Generale - DEM 3,120,000 485,738
- Societe Generale - FRF 6,240,000 290,064
775,802
CONGO - 0.2%
Congo Republic loan participation (a):
- Societe Generale - DEM 849,310 141,670
- Societe Generale - FRF 2,765,958 137,758
- Societe Generale - 1,528,578 458,573
738,001
IVORY COAST - 1.7%
Ivory Coast restructured loan (a):
- - Morgan Grenfeld - 2,400,000 1,038,000
- Morgan (J.P.) Securities, Inc. - 6,750,000 2,919,375
- Paribas Capital Markets - 5,350,000 2,313,875
6,271,250
MOROCCO - 4.1%
Moroccan Kingdom loan participation:
- - The Chase Manhattan Bank
6.6563%, 1/1/09 (g) - 3,720,000 3,203,850
- ING Bank NV 6.6563%, 1/1/09 (g) - 3,000,000 2,583,750
- Merrill Lynch, Pierce, Fenner & Smith, Inc.
6.6563%, 1/1/09 (g) - 1,250,000 1,076,563
SOVEREIGN LOAN PARTICIPATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
MOROCCO - CONTINUED
Moroccan Kingdom loan participation: - continued
- Morgan Guaranty Trust Company of New York
6.6563%, 1/1/09 (g) - $ 7,700,000 $ 6,631,625
- Paribas Capital Markets
6.6563%, 1/1/09 (f)(g) - 2,230,000 1,920,588
15,416,376
RUSSIA - 2.2%
Bank for Foreign Economic Affairs of Russia
(Vnesheconombank) loan participation
restructured under 1997 agreement:
- The Chase Manhattan Bank
6.7188%, 12/15/20 (f)(g) - 5,570,000 3,446,438
- ING Bank NV 6.7188%,
12/15/20 (f)(g) - 7,790,000 4,820,063
8,266,501
TOTAL SOVEREIGN LOAN PARTICIPATIONS
(Cost $28,929,821) 31,467,930
CASH EQUIVALENTS - 10.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 6.40%, dated
12/31/97 due 1/2/98 (Cost $38,774,000) $ 38,787,792 38,774,000
PURCHASED OPTIONS - 1.5%
EXPIRATION DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
BRAZIL - 0.5%
Merrill Lynch International Call Option
on $25,770,588 notional amount of
Brazilian Federative Republic
Brady capitalization bond Mar. 98/
8%, 4/15/14 72 3/4 $ 20,262,125 1,873,522
RUSSIA - 1.0%
The Chase Manhattan Bank Call Option on
$13,900,000 notional amount of Bank
for Foreign Economic Affairs of Russia
(Vnescheconombank) loan participation
restructured under 1997 agreement Mar. 98/
6.7188%, 12/15/20 55 8,600,625 1,148,140
PURCHASED OPTIONS - 1.5%
EXPIRATION DATE/ UNDERLYING FACE VALUE
STRIKE PRICE AMOUNT AT VALUE (NOTE 1)
RUSSIA - CONTINUED
Merrill Lynch International Call Option
on $28,000,000 notional amount
of Bank for Foreign Economic Affairs
of Russia (Vnescheconombank)
loan participation restructured
under 1997 agreement Mar. 98/
6.7188%, 12/15/20 54 5/8 $ 17,325,000 $ 2,492,000
3,640,140
TOTAL PURCHASED OPTIONS
(Cost $3,902,125) 5,513,662
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $365,762,740) $ 375,800,733
SECURITY TYPE ABBREVIATIONS
FLIRB - Front Loaded Interest
Reduction Bonds
CURRENCY ABBREVIATIONS
ARS - Argentine peso
FRF - French franc
DEM - German deutsche mark
TRL - Turkish lira
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless
otherwise noted.
3. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
5. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $17,542,611 or
4.6% of net assets.
6. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. For foreign government obligations not individually rated by S&P or
Moody's, the ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
9. Principal amount in millions.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 0.0% AAA, AA, A 0.0%
Baa 3.6% BBB 5.7%
Ba 36.7% BB 50.5%
B 32.0% B 6.2%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings
of the sovereign credit of the issuing government. The percentage not
rated by Moody's or S&P amounted to 8.8%. FMR has determined that
unrated debt securities that are lower quality account for 8.8% of the
total value of investment in securities.
INCOME TAX INFORMATION
At December 31, 1997, the aggregate cost of investment securities for
income tax purposes was $375,083,292. Net unrealized appreciation
aggregated $717,441, of which $12,913,593 related to appreciated
investment securities and $12,196,152 related to depreciated
investment securities.
The fund hereby designates approximately $3,011,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1997

10.ASSETS 11. 12.

13.INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE 14. $ 375,800,733
AGREEMENTS OF $38,774,000) (COST $365,762,740) -
SEE ACCOMPANYING SCHEDULE

15.CASH 16. 747

17.RECEIVABLE FOR INVESTMENTS SOLD 18. 5,651,413
REGULAR DELIVERY

19. DELAYED DELIVERY 14,051,448

20.INTEREST RECEIVABLE 21. 5,842,479

22.REDEMPTION FEES RECEIVABLE 23. 2,491

24. 25.TOTAL ASSETS 26. 401,349,311

27.LIABILITIES 28. 29.

30.PAYABLE FOR INVESTMENTS PURCHASED $ 3,609,700 31.
REGULAR DELIVERY

32. DELAYED DELIVERY 13,730,300 33.

34.PAYABLE FOR FUND SHARES REDEEMED 1,281,439 35.

36.DISTRIBUTIONS PAYABLE 1,511,638 37.

38.ACCRUED MANAGEMENT FEE 217,105 39.

40.OTHER PAYABLES AND ACCRUED EXPENSES 164,472 41.

42. 43.TOTAL LIABILITIES 44. 20,514,654

45.46.NET ASSETS 47. $ 380,834,657

48.NET ASSETS CONSIST OF: 49. 50.

51.PAID IN CAPITAL 52. $ 366,007,384

53.UNDISTRIBUTED NET INVESTMENT INCOME 54. 1,117,086

55.ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 56. 3,756,887
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS

57.NET UNREALIZED APPRECIATION (DEPRECIATION) ON 58. 9,953,300
INVESTMENTS AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES

59.60.NET ASSETS, FOR 29,372,343 SHARES OUTSTANDING 61. $ 380,834,657

62.63.NET ASSET VALUE, OFFERING PRICE AND REDEMPTION 64. $12.97
PRICE PER SHARE ($380,834,657 (DIVIDED BY) 29,372,343 SHARES)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1997

65.INVESTMENT INCOME 67. $ 33,848,024
66.INTEREST

68.LESS FOREIGN TAXES WITHHELD (458,964)

69. TOTAL INCOME 70. 33,389,060

71.EXPENSES 72. 73.

74.MANAGEMENT FEE $ 2,662,459 75.

76.TRANSFER AGENT FEES 873,203 77.

78.ACCOUNTING FEES AND EXPENSES 291,248 79.

80.NON-INTERESTED TRUSTEES' COMPENSATION 1,632 81.

82.CUSTODIAN FEES AND EXPENSES 117,710 83.

84.REGISTRATION FEES 82,622 85.

86.AUDIT 85,199 87.

88.LEGAL 3,329 89.

90.INTEREST 4,708 91.

92.REPORTS TO SHAREHOLDERS 45,720 93.

94.MISCELLANEOUS 1,456 95.

96. TOTAL EXPENSES BEFORE REDUCTIONS 4,169,286 97.

98. EXPENSE REDUCTIONS (7,053) 4,162,233

99.100.NET INVESTMENT INCOME 101. 29,226,827

102.REALIZED AND UNREALIZED GAIN (LOSS) 104. 105.
103.NET REALIZED GAIN (LOSS) ON:

106. INVESTMENT SECURITIES 36,905,710 107.

108. FOREIGN CURRENCY TRANSACTIONS 25,504 36,931,214

109.CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 110. 111.
ON:

112. INVESTMENT SECURITIES (13,405,748) 113.

114. ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (84,249) (13,489,997)

115.116.NET GAIN (LOSS) 117. 23,441,217

118.119.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 121. $ 52,668,044
120.FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996

122.INCREASE (DECREASE) IN NET ASSETS

123.OPERATIONS $ 29,226,827 $ 17,040,354
NET INVESTMENT INCOME

124. NET REALIZED GAIN (LOSS) 36,931,214 47,181,545

125. CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (13,489,997) 11,371,516

126. 52,668,044 75,593,415
127.NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS

128.DISTRIBUTIONS TO SHAREHOLDERS (36,824,907) (18,678,021)
FROM NET INVESTMENT INCOME

129. FROM NET REALIZED GAIN (23,562,318) -

130. 131.TOTAL DISTRIBUTIONS (60,387,225) (18,678,021)

132.SHARE TRANSACTIONS 279,802,013 249,711,880
NET PROCEEDS FROM SALES OF SHARES

133. REINVESTMENT OF DISTRIBUTIONS 56,096,039 16,989,502

134. COST OF SHARES REDEEMED (258,266,914) (190,785,299)

135.136. 77,631,138 75,916,083
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS

137. REDEMPTION FEES 777,898 813,848

138. 70,689,855 133,645,325
139.TOTAL INCREASE (DECREASE) IN NET ASSETS

140.NET ASSETS 141. 142.

143. BEGINNING OF PERIOD 310,144,802 176,499,477

144. $ 380,834,657 $ 310,144,802
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $1,117,086
AND $5,295,341, RESPECTIVELY)

145.OTHER INFORMATION 147. 148.
146.SHARES

149. SOLD 20,050,430 21,889,153

150. ISSUED IN REINVESTMENT OF DISTRIBUTIONS 4,190,974 1,486,315

151. REDEEMED (18,794,517) (17,185,701)

152. NET INCREASE (DECREASE) 5,446,887 6,189,767

</TABLE>

FINANCIAL HIGHLIGHTS
153. YEARS ENDED DECEMBER 31, MAY 4, 1993
(COMMENCEMENT
OF OPERATIONS) TO
DECEMBER 31,

154. 1997 1996 1995 1994 1993

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

156.NET ASSET VALUE, BEGINNING $ 12.960 $ 9.950 $ 10.190 $ 13.070 $ 10.000
OF PERIOD

157.INCOME FROM INVESTMENT 1.065 D .866 1.222 .573 .486 D
OPERATIONS
NET INVESTMENT INCOME

158. NET REALIZED AND 1.105 3.035 (.583) (2.687) 3.302
UNREALIZED
GAIN (LOSS)

159. TOTAL FROM INVESTMENT 2.170 3.901 .639 (2.114) 3.788
OPERATIONS

160.LESS DISTRIBUTIONS

161. FROM NET INVESTMENT (1.318) (.932) (.916) (.529) (.486)
INCOME

162. IN EXCESS OF NET INVESTMENT - - - (.057) (.062)
INCOME

163. FROM NET REALIZED GAIN (.870) - - (.180) (.170)

164. TOTAL DISTRIBUTIONS (2.188) (.932) (.916) (.766) (.718)

165.REDEMPTION FEES ADDED TO .028 .041 .037 - -
PAID IN CAPITAL

166.NET ASSET VALUE, END OF $ 12.970 $ 12.960 $ 9.950 $ 10.190 $ 13.070
PERIOD

167.TOTAL RETURN B, C 17.52% 41.39% 7.97% (16.55)% 38.84%

168.RATIOS AND SUPPLEMENTAL DATA

169.NET ASSETS, END OF PERIOD $ 380,835 $ 310,145 $ 176,499 $ 179,114 $ 286,593
(000 OMITTED)

170.RATIO OF EXPENSES TO 1.08% 1.09% 1.17% 1.28% E 1.24% A, E
AVERAGE
NET ASSETS

171.RATIO OF NET INVESTMENT 7.56% 7.68% 9.51% 5.87% 6.29% A
INCOME TO AVERAGE NET ASSETS

172.PORTFOLIO TURNOVER RATE 656% 405% 306% 409% 324% A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1997

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity New Markets Income Fund (the fund) is a fund of Fidelity
Investment Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. At
a special meeting of the shareholders of the fund held on September 17
, 1997, shareholders approved an Agreement and Plan of Reorganization,
providing for the reorganization of the fund into Fidelity School
Street Trust, effective on or about February 26, 1998. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price in the principal market in which such securities
are normally traded. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investmentsecurities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The fund
may be subject to foreign taxes on income and gains on investments
which are accrued based upon the fund's understanding of the tax rules
and regulations
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES - CONTINUED
that exist in the markets in which it invests. The fund accrues such
taxes as applicable. The schedule of investments includes information
regarding income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of
original issue discount, is accrued as earned. Interest income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net investment income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, market discount and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 180 days are
subject to a redemption fee equal to 1% of the proceeds of the
redeemed shares. The fee, which is retained by the fund, is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade. The cost of the foreign currency contracts is
included in the cost basis of the associated investment.
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by
the SEC, the fund, along with other registered investment companies
having management contracts with FMR, may participate in an interfund
lending program. This program provides an alternative credit facility
allowing the fund to borrow from, or lend money to, other
participating funds.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. The payables and receivables associated with the purchases
and sales of when-issued securities having the same settlement date
and broker are offset. When-issued securities that have been purchased
from and sold to different brokers are reflected as both payables and
receivables in the statement of assets and liabilities under the
caption "Delayed delivery." Losses may arise due to changes in the
market value of the underlying securities, if the counterparty does
not perform under the contract, or if the issuer does not issue the
securities due to political, economic, or other factors.
OPTIONS. The fund may use options to manage its exposure to the bond
market and to fluctuations in interest rates and currency values.
Writing puts and buying calls tend to increase the fund's exposure to
the underlying instrument. Buying puts and writing calls tend to
decrease the fund's exposure to the underlying instrument, or hedge
other fund investments. The underlying face amount at value of any
open options at period end is shown in the schedule of investments
under the caption
2. OPERATING POLICIES -
CONTINUED
OPTIONS - CONTINUED
"Purchased Options." This amount reflects each contract's exposure to
the underlying instrument at period end. Losses may arise from changes
in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not
perform under the contracts' terms. Gains and losses are realized upon
the expiration or closing of the options. Realized gains (losses) on
purchased options are included in realized gains (losses) on
investment securities .
Exchange-traded options are valued using the last sale price or, in
the absence of a sale, the last offering price. Options traded
over-the-counter are valued using dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. The fund is permitted to
invest in loans and loan participations, trade claims or other
receivables. These investments may include standby financing
commitments that obligate the fund to supply additional cash to the
borrower on demand. Loan participations involve a risk of insolvency
of the lending bank or other financial intermediary. At the end of the
period, these investments amounted to $31,476,930 or 8.3% of net
assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $2,253,805,349 and $2,216,905,192, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .55%. In the event
that these rates were lower than the contractual rates in effect
during the period, FMR voluntarily implemented the above rates, as
they resulted in the same or a lower management fee. For the period,
the management fee was equivalent to an annual rate of .69% of average
net assets.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research (Far East) Inc., Fidelity
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SUB-ADVISER FEE - CONTINUED
International Investment Advisors (FIIA), and Fidelity Investments
Japan Ltd. (FIJ) In addition, FIIA entered into a sub-advisory
agreement with its subsidiary, Fidelity International Investment
Advisors (U.K.) Limited (FIIA (U.K.) L). Under the sub-advisory
arrangements, FMR may receive investment advice and research services
and may grant the sub-advisers investment management authority to buy
and sell securities. FMR pays its sub-advisers either a portion of its
management fee or a fee based on costs incurred for these services.
FIIA pays FIIA (U.K.) L a fee based on costs incurred for either
service.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .23% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The maximum loan and the average daily loan balances during the period
for which loans were outstanding amounted to $7,763,000 and
$7,358,750, respectively. The weighted average interest rate was
5.76%.
6. EXPENSE REDUCTIONS.
The fund has entered into arrangements with its custodian and transfer
agent whereby credits realized as a result of uninvested cash balances
were used to reduce a portion of the fund's expenses. During the
period, the fund's custodian and transfer agent fees were reduced by
$6,122 and $931, respectively, under these arrangements.
7. CREDIT RISK.
The fund's relatively large investment in countries with limited or
developing capital markets may involve greater risks than investments
in more developed markets and the prices of such investments may be
volatile. The yields of emerging market debt obligations reflect,
among other things, perceived credit risk. The consequences of
political, social or economic changes in these markets may have
disruptive effects on the market prices of the fund's investments and
the income they generate, as well as the fund's ability to repatriate
such amounts.
8. LITIGATION.
The fund is engaged in litigation against the obligor on the inflation
adjusted debt of Siderurgica Brasileiras SA, contesting the
calculation of the principal adjustment. The probability of success of
this litigation cannot be predicted and the amount of recovery cannot
be estimated. Any recovery from this litigation would inure to the
benefit of the fund. As of period end, the fund no longer holds
Siderurgica Brasileiras SA debt securities.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Investment Trust and the Shareholders of
Fidelity New Markets Income Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for Moody's and Standard
& Poor's ratings), and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Fidelity New Markets
Income Fund (a fund of Fidelity Investment Trust) at December 31,
1997, the results of its operations for the year then ended, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity New Markets Income Fund's management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at December 31, 1997 by
correspondence with the custodian and the application of alternative
auditing procedures where securities purchased were not yet received
by the custodian, provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Boston, Massachusetts
February 6, 1998
DISTRIBUTIONS

The Board of Trustees of Fidelity New Markets Income Fund voted to pay
to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from
sales of portfolio securities, and dividends derived from net
investment income:

PAY DATE 1/2/98
RECORD DATE 12/26/97
DIVIDENDS $0
SHORT-TERM
CAPITAL GAINS $.80
LONG-TERM
CAPITAL GAINS $.07
LONG-TERM
CAPITAL GAIN BREAKDOWN:
28% rate 76.77%
20% rate 23.23%

The percentage of dividends distributed during the fiscal year
representing income derived from sources within, and taxes paid to,
foreign countries or possessions of the United States are 45.91% and
0.05%, respectively.
The fund will notify shareholders in January 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
PROXY VOTING RESULTS

A special meeting of the fund's shareholders was held on September 17,
1997. The results of votes taken among shareholders on proposals
before them are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
RALPH F. COX
AFFIRMATIVE 307,469,095.652 87.117

WITHHELD 45,467,029.324 12.883

TOTAL 352,936,124.976 100.00

PHYLLIS BURKE DAVIS
AFFIRMATIVE 307,387,377.836 87.094

WITHHELD 45,548,747.140 12.906

TOTAL 352,936,124.976 100.000

ROBERT M. GATES
AFFIRMATIVE 307,219,404.498 87.047

WITHHELD 45,716,720.478 12.953

TOTAL 352,936,124.976 100.000

EDWARD C. JOHNSON 3D
AFFIRMATIVE 307,304,255.082 87.071

WITHHELD 45,631,869.894 12.929

TOTAL 352,936,124.976 100.00

E. BRADLEY JONES
AFFIRMATIVE 307,163,389.202 87.031

WITHHELD 45,772,735.774 12.969

TOTAL 352,936,124.976 100.000

DONALD J. KIRK
AFFIRMATIVE 307,589,965.173 87.152

WITHHELD 45,346,159.803 12.848

TOTAL 352,936,124.976 100.000

# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 307,609,611.247 87.157

WITHHELD 45,326,513.729 12.843

TOTAL 352,936,124.976 100.000

WILLIAM O. MCCOY
AFFIRMATIVE 307,616,784.105 87.159

WITHHELD 45,319,340.871 12.841

TOTAL 352,936,124.976 100.000

GERALD C. MCDONOUGH
AFFIRMATIVE 307,384,278.082 87.093

WITHHELD 45,551,846.894 12.907

TOTAL 352,936,124.976 100.000

MARVIN L. MANN
AFFIRMATIVE 307,596,505.166 87.154

WITHHELD 45,339,619.810 12.846

TOTAL 352,936,124.976 100.000

ROBERT C. POZEN
AFFIRMATIVE 307,465,181.656 87.116

WITHHELD 45,470,943.320 12.884

TOTAL 352,936,124.976 100.000

THOMAS R. WILLIAMS
AFFIRMATIVE 307,326,062.668 87.077

WITHHELD 45,610,062.308 12.923

TOTAL 352,936,124.976 100.000

PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. and Price
Waterhouse LLP as independent accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 297,481,581.663 84.288

AGAINST 4,739,203.560 1.342

ABSTAIN 50,715,339.753 14.370

TOTAL 352,936,124.976 100.000

PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
Trust:
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 274,619,710.990 79.850

AGAINST 15,944,801.447 4.637

ABSTAIN 53,353,237.539 15.513

TOTAL 343,917,749.976 100.000

BROKER 9,018,375.000
NON-VOTES

Fund:
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 12,755,520.470 89.184

AGAINST 822,901.708 5.753

ABSTAIN 724,091.771 5.063

TOTAL 14,302,513.949 100.000

BROKER 820,890.000
NON-VOTES

PROPOSAL 4
To amend the Declaration of Trust to eliminate the requirement that
shareholders be notified in the event of an appointment of a trustee
within three months of the appointment.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 273,821,090.658 79.618

AGAINST 14,687,878.962 4.271

ABSTAIN 55,408,780.356 16.111

TOTAL 343,917,749.976 100.000

BROKER 9,018,375.000
NON-VOTES

PROPOSAL 5
To amend the Declaration of Trust to clarify that the Trustees may
authorize the investment of all of a fund's assets in another open-end
investment company.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 253,910,627.527 73.810

AGAINST 33,659,944.597 9.785

ABSTAIN 56,433,204.852 16.405

TOTAL 344,003,776.976 100.000

BROKER 8,932,348.000
NON-VOTES

PROPOSAL 6
To adopt a new fundamental investment policy for the fund that would
permit it to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 11,807,783.041 82.557

AGAINST 1,653,518.013 11.561

ABSTAIN 841,212.895 5.882

TOTAL 14,302,513.949 100.000

BROKER 820,890.000
NON-VOTES

PROPOSAL 7
To approve an amended management contract for the fund that would
reduce the management fee payable to FMR by the fund as FMR's assets
under management increase.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 13,478,969.145 89.127

AGAINST 697,743.170 4.613

ABSTAIN 946,691.634 6.260

TOTAL 15,123,403.949 100.000

PROPOSAL 8
To approve an agreement and plan providing for the reorganization of
the fund from a separate series of one Massachusetts business trust to
another Massachusetts business trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 12,522,747.019 87.556

AGAINST 824,960.047 5.768

ABSTAIN 954,806.883 6.676

TOTAL 14,302,513.949 100.000

BROKER 820,890.000
NON-VOTES

MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
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(PHONE_GRAPHIC)TOUCHTONE XPRESS
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For quotes.*

For account balances and holdings.

To review orders and mutual
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0
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WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
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(PHONE_GRAPHIC)
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at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
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AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
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(2_FIDELITY_LOGOS)FIDELITY

INTERNATIONAL BOND
FUND
(FORMERLY FIDELITY GLOBAL BOND FUND)
ANNUAL REPORT
DECEMBER 31, 1997
CONTENTS

PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.

PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.

FUND TALK 7 THE MANAGERS' REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.

INVESTMENT CHANGES 10 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.

INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.

FINANCIAL STATEMENTS 19 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.

NOTES 23 NOTES TO THE FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT 28 THE AUDITORS' OPINION.
ACCOUNTANTS

PROXY VOTING RESULTS 29

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain fund expenses, the past 10 years total return would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

FIDELITY INTERNATIONAL BOND -1.21% 11.09% 64.30%

SB WORLD GOVT. BOND, UNHEDGED 0.23% 43.32% 113.58%

GLOBAL INCOME FUNDS AVERAGE 3.00% 39.73% 99.51%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Salomon Brothers World Government Bond Index, Unhedged - a
market-capitalization weighted index of debt issues traded in 14 world
government bond markets. Issues included in the index have fixed-rate
coupons and maturities of at least one year. To measure how the fund's
performance stacked up against its peers, you can compare it to the
global income funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 139 mutual
funds. These benchmarks reflect reinvestment of dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

FIDELITY INTERNATIONAL BOND -1.21% 2.13% 5.09%

SB WORLD GOVT. BOND, UNHEDGED 0.23% 7.46% 7.88%

GLOBAL INCOME FUNDS AVERAGE 3.00% 6.83% 7.09%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971231 19980109 160728 S00000000000001
Global Bond SB World Government Bond
00451 SB006
1987/12/31 10000.00 10000.00
1988/01/31 9723.46 9945.52
1988/02/29 9794.83 10032.36
1988/03/31 10035.68 10211.45
1988/04/30 10026.76 10161.82
1988/05/31 9982.16 10066.35
1988/06/30 9875.11 9846.81
1988/07/31 9884.03 9786.94
1988/08/31 9812.67 9677.44
1988/09/30 9928.64 9927.18
1988/10/31 10231.94 10385.67
1988/11/30 10419.27 10544.80
1988/12/31 10366.49 10437.46
1989/01/31 10337.48 10284.81
1989/02/28 10250.45 10291.82
1989/03/31 10221.44 10148.88
1989/04/30 10356.82 10283.19
1989/05/31 10182.76 10066.35
1989/06/30 10395.51 10268.62
1989/07/31 10733.96 10736.29
1989/08/31 10579.24 10375.42
1989/09/30 10704.95 10572.31
1989/10/31 10850.01 10660.77
1989/11/30 10966.05 10757.32
1989/12/31 11188.46 10888.94
1990/01/31 11158.17 10744.92
1990/02/28 11016.80 10579.86
1990/03/31 11148.07 10475.21
1990/04/30 11148.07 10442.85
1990/05/31 11299.54 10789.69
1990/06/30 11541.89 10987.65
1990/07/31 11945.81 11331.79
1990/08/31 11875.12 11243.32
1990/09/30 12026.59 11369.01
1990/10/31 12309.33 11877.12
1990/11/30 12440.60 12074.01
1990/12/31 12562.03 12193.21
1991/01/31 12838.00 12497.98
1991/02/28 12959.42 12501.75
1991/03/31 12782.80 12047.58
1991/04/30 12959.42 12233.13
1991/05/31 13113.96 12217.49
1991/06/30 12959.42 12089.65
1991/07/31 13092.06 12348.02
1991/08/31 13215.35 12586.98
1991/09/30 13518.45 13079.45
1991/10/31 13701.44 13216.46
1991/11/30 13632.82 13423.05
1991/12/31 14166.40 14121.04
1992/01/31 14023.55 13870.22
1992/02/29 14083.07 13793.08
1992/03/31 14059.42 13646.91
1992/04/30 14250.55 13744.54
1992/05/31 14513.34 14166.35
1992/06/30 14693.26 14562.81
1992/07/31 14913.45 14902.10
1992/08/31 15130.40 15319.06
1992/09/30 14919.79 15472.79
1992/10/31 14822.80 15052.59
1992/11/30 14600.26 14813.64
1992/12/31 14789.30 14902.10
1993/01/31 14960.15 15162.09
1993/02/28 15190.52 15460.38
1993/03/31 15525.16 15697.72
1993/04/30 15672.80 16029.45
1993/05/31 15960.89 16190.19
1993/06/30 16281.32 16155.67
1993/07/31 16529.09 16201.52
1993/08/31 16946.64 16688.60
1993/09/30 17043.22 16886.56
1993/10/31 17484.72 16857.98
1993/11/30 17429.06 16737.15
1993/12/31 18029.11 16879.55
1994/01/31 18225.97 17015.48
1994/02/28 17233.67 16904.36
1994/03/31 15992.92 16880.09
1994/04/30 15677.98 16899.51
1994/05/31 15765.41 16751.17
1994/06/30 15086.18 16992.83
1994/07/31 15360.84 17128.22
1994/08/31 15551.64 17068.88
1994/09/30 15552.43 17192.41
1994/10/31 15623.30 17468.04
1994/11/30 15687.94 17228.01
1994/12/31 15088.30 17275.47
1995/01/31 14956.61 17637.95
1995/02/28 14914.35 18089.43
1995/03/31 15011.64 19163.92
1995/04/30 15264.79 19518.85
1995/05/31 15725.14 20067.96
1995/06/30 15872.45 20186.09
1995/07/31 15843.00 20233.56
1995/08/31 15353.65 19538.27
1995/09/30 15619.14 19974.65
1995/10/31 15810.72 20123.52
1995/11/30 15917.64 20351.15
1995/12/31 16092.59 20564.22
1996/01/31 15893.12 20310.16
1996/02/29 15900.11 20206.59
1996/03/31 15868.81 20178.54
1996/04/30 15812.06 20098.17
1996/05/31 15822.83 20102.49
1996/06/30 15913.73 20260.53
1996/07/31 16190.33 20648.90
1996/08/31 16217.62 20729.27
1996/09/30 16293.71 20813.42
1996/10/31 16536.18 21202.87
1996/11/30 16777.01 21482.28
1996/12/31 16631.43 21308.59
1997/01/31 16140.45 20738.98
1997/02/28 16034.53 20584.17
1997/03/31 15871.16 20427.21
1997/04/30 15751.59 20250.28
1997/05/31 16176.00 20798.32
1997/06/30 16336.40 21046.44
1997/07/31 16181.86 20882.46
1997/08/31 16129.50 20870.06
1997/09/30 16516.97 21314.53
1997/10/31 16766.15 21756.84
1997/11/30 16517.08 21422.95
1997/12/31 16429.82 21358.22
IMATRL PRASUN SHR__CHT 19971231 19980109 160732 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity International Bond Fund on December 31, 1987. As
the chart shows, by December 31, 1997, the value of the investment
would have grown to $16,430 - a 64.30% increase on the initial
investment. For comparison, look at how the Salomon Brothers World
Government Bond Index, Unhedged did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $21,358 - a 113.58% increase.
UNDERSTANDING
PERFORMANCE
MANY MARKETS AROUND THE GLOBE
OFFER THE POTENTIAL FOR SIGNIFICANT
GROWTH OVER TIME; HOWEVER,
INVESTING IN FOREIGN MARKETS
MEANS ASSUMING GREATER RISKS
THAN INVESTING IN THE UNITED
STATES. FACTORS LIKE CHANGES IN
A COUNTRY'S FINANCIAL MARKETS,
ITS LOCAL POLITICAL AND ECONOMIC
CLIMATE, AND THE FLUCTUATING
VALUE OF ITS CURRENCY CREATE
THESE RISKS. FOR THESE REASONS
AN INTERNATIONAL FUND'S
PERFORMANCE MAY BE MORE
VOLATILE THAN A FUND THAT INVESTS
EXCLUSIVELY IN THE UNITED
STATES.
(CHECKMARK)
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

DIVIDENDS PER SHARE A 4.15(CENTS) 24.29(CENTS) 49.61(CENTS)

ANNUALIZED DIVIDEND RATE 5.35% 5.24% 5.37%

30-DAY ANNUALIZED YIELD 3.75% - -

DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on the fund's average share price
of $9.14 over the past one month, $9.19 over the past six months and
$9.23 over the past one year, you can compare the fund's income over
these three periods.
The 30-day annualized YIELD is a standard formula for all funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. It does not reflect the
cost of hedging and other currency gains and losses.
F NON-TAXABLE DIVIDENDS: DIVIDENDS PAID ARE BASED ON THE FUND'S
INVESTMENT INCOME AND DO NOT REFLECT CURRENCY RELATED LOSSES. AS A
RESULT OF CURRENCY LOSSES, DIVIDENDS OF APPROXIMATELY 35(CENTS) PER
SHARE PAID DURING 1997 WERE A NON-TAXABLE RETURN OF CAPITAL. THE EXACT
NON-TAXABLE AMOUNT TO USE IN PREPARING YOUR INCOME TAX RETURN WILL
DEPEND ON YOUR SHARE ACTIVITY AND WAS REPORTED TO YOU IN JANUARY 1998.
FUND TALK: THE MANAGERS' OVERVIEW

MARKET RECAP
The year that ended December 31,
1997, displayed the complexity and
variety of the world's financial
markets. The serenity of low interest
rates and subdued inflation that had
boosted a number of markets was
rudely interrupted in late October
when Asian markets stumbled
dramatically. Developed-market
government bonds benefited from this
crisis, as investors sought the
perceived safety of high-quality issues.
A strong U.S. dollar, however,
undermined gains for U.S.-based
investors in the Japanese and most
European markets. The Salomon
Brothers World Government Bond
Index, Unhedged - a measure of
government bond market performance
in developed nations - returned just
0.23% for the period. Inflation was
well-controlled throughout Europe,
and bond prices in countries such as
Spain and Italy were buoyed by
steady progress toward meeting the
requirements for membership in the
European Monetary Union (EMU).
Unlike other European currencies, the
pound sterling maintained its strength,
helping boost bond performance in
the United Kingdom. The Asian
volatility staggered emerging bond
markets in October and left lingering
concerns as the new year began. The
J.P. Morgan Emerging Markets Bond
Index returned 16.15% for the period.
Most of these gains were posted
during the first three quarters of the
year, boosted by low interest rates and
positive government reforms. A lack of
inflation, declining interest rates and
the late-year flight to quality boosted
bonds in the U.S., with the Lehman
Brothers Aggregate Bond Index
returning 9.65% in 1997.
NOTE TO SHAREHOLDERS: Effective February 27, 1998, the fund's name
changed to Fidelity International Bond Fund. In addition, John Carlson
(top right) became lead manager of the fund. Ian Spreadbury (top
left), continues to manage the fund's investment-grade developed
market investments, while Luis Martins (bottom right) now manages the
fund's new emerging market sub-portfolio. The following is an
interview with Ian Spreadbury and Christine Thompson (bottom left),
who managed the fund's U.S. investments during the period covered by
this report; comments from John Carlson regarding changes to the fund
and his outlook; and Luis Martins on his investment style.
Q. HOW DID THE FUND PERFORM, IAN?
I.S. For the 12 months that ended December 31, 1997, the fund had a
total return of -1.21%. Over the same period, the Salomon Brothers
World Government Bond Index, Unhedged, returned 0.23%, and the global
income funds average tracked by Lipper Analytical Services returned
3.00%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE RELATIVE TO THE LIPPER
AVERAGE?
I.S. Unlike this fund, some of the other funds that make up the Lipper
average may have invested in lower-quality, emerging market securities
- - which performed quite well through much of the year - or engaged in
currency hedging during the period. By doing so, they were able to
offset the negative effect caused by the fact that the dollar
strengthened over the period. Finally, because we managed the fund to
closely approximate the duration - or interest-rate sensitivity - and
currency exposure of the broad world bond market as measured by the
index, the fund had significant exposure to the underperforming
Japanese market, one which many peers avoided. I should like to add,
though, that because the fund did not invest in emerging markets in
1997 it performed much better late in the year when emerging markets
were caught up in the turmoil caused by currency problems in Asia.
Q. TURNING TO YOU, CHRIS, WHAT WAS THE U.S. BOND MARKET LIKE OVER THE
PAST YEAR?
C.T. U.S. interest rates declined during the year. Despite fears of
wage pressures given historically low unemployment rates, the market
was supported by benign reported inflation trends. Bond valuation
measures across sectors were very compressed, meaning that different
issues with similar maturities or interest-rate sensitivity did not
provide much of a variation in returns. This environment makes it more
difficult to differentiate returns with sector- and issue-selection
strategies than it would be in an environment where credit quality,
cash-flow structures and characteristics of the various non-government
sectors have less compressed valuation measures. Toward the end of the
year, though, as the U.S. market rally extended, corporate issuance
increased, cheapening valuation measures in that sector. Similarly, an
increase in interest-rate volatility caused mortgage valuation
measures to increasingly diverge. These repricing trends have been
beneficial to the research-based strategies we have employed in
managing the fund.
Q. JOHN, PLEASE OUTLINE THE CHANGES TO THE FUND THAT ARE COMING IN
FEBRUARY.
J.C. The fund will be repositioned as an international fund rather
than a global fund, and will be investing primarily outside the U.S.
This change will allow investors to determine their own allocations
between foreign and domestic bonds by combining an investment in the
fund with investments in one or more of Fidelity's domestic
fixed-income funds. The fund's new policies call for it to invest at
least 65% in foreign debt securities. In addition, the fund will now
have the ability to invest up to 35% of its assets in emerging
markets, including both investment-grade and lower-quality debt
securities. Further, the fund will be able to invest in lower-quality
debt securities of companies in developed countries such as Canada or
the U.K. However, the fund will limit its overall investments in
lower-quality debt securities to 35% of its assets.
Q. WHAT'S YOUR OUTLOOK?
J.C. With all that has gone on in recent months - especially the
fallout from the Asian situation - I'm certainly concerned. While
global volatility has been alarming, one bright spot may be that the
dislocation, or repricing of certain emerging market securities
downward, may present ample opportunities in those markets. As far as
the developed markets are concerned, if interest rates remain low and
inflation benign, relative performance should largely depend on the
relative weakness or strength of each country's currency.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.

LUIS MARTINS ON HIS
INVESTMENT APPROACH:
"In choosing investments for the
fund's emerging market
sub-portfolio, I start by using a
quantitative approach. That is, I
employ computer models to help
me analyze both issuers and
securities at a number of different
levels. I use risk models to help me
research the relative
creditworthiness of government
issuers. I also utilize analytical
tools to help me discern the
relative price of securities. This
quantitative analysis is combined
with the experience of Fidelity's
analysts, whose opportunity for
personal contact with issuers
factors into my investment
decisions. I also consider
important market conditions,
especially liquidity - the strength
of investor activity and interest in
a particular market. In this case,
Fidelity's emerging market trading
desk is very important, since the
traders are well-aware of market
conditions and levels of trading
activity, which can significantly
affect a bond's relative value.
"As this research unfolds, I then
have a final set of country
weightings, which reflects my
assessment of each nation's
creditworthiness. Additionally, I
have selected the most attractively
valued securities within each
country. Once again, an important
factor for choosing investments is
liquidity: Depending on market
conditions, I intend to shy away
from bonds that are not actively
traded, instead focusing on larger
issuers whose bonds I can buy and
sell easily and quickly, if
necessary."
FUND FACTS
GOAL: high total investment return
FUND NUMBER: 451
TRADING SYMBOL: FGBDX
START DATE: December 30, 1986
SIZE: as of December 31,
1997, more than $78 million
MANAGERS: John Carlson, lead
manager, since February 1998;
Ian Spreadbury, manager,
investment-grade developed
markets, since 1996; Luis
Martins, manager, emerging
market investments, since
February 1998
(checkmark)
INVESTMENT CHANGES

THE CHARTS BELOW HIGHLIGHT THREE DIFFERENT ASPECTS OF THE FUND'S
INVESTMENTS: THE COUNTRY WHERE THEY WERE ISSUED, THEIR SENSITIVITY TO
INTEREST RATE CHANGES, AND THEIR CURRENCY EXPOSURE. THE TOP COUNTRIES
IN EACH TABLE DIFFER BECAUSE SOME SECURITIES HAVE MORE INTEREST RATE
RISK THAN OTHERS, AND BECAUSE SECURITIES ISSUED IN ONE COUNTRY MAY BE
DENOMINATED IN ANOTHER COUNTRY'S CURRENCY.
TOP FIVE COUNTRIES AS OF DECEMBER 31, 1997
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE COUNTRIES
6 MONTHS AGO

UNITED STATES 30 29

GERMANY 10 10

FRANCE 8 8

UNITED KINGDOM 8 8

ITALY 6 5

TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY,
INCLUDING WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT
RISKS.
TOP INTEREST RATE EXPOSURES AS OF DECEMBER 31, 1997
(ESTIMATED BY COUNTRY) % OF FUND'S % OF INTEREST RATE
TOTAL INTEREST EXPOSURE
RATE EXPOSURE 6 MONTHS AGO

UNITED STATES 32 32

JAPAN 21 24

GERMANY 10 9

UNITED KINGDOM 8 8

FRANCE 8 7

FIDELITY ESTIMATES INTEREST RATE EXPOSURE BASED ON THE DURATION, OR
INTEREST RATE SENSITIVITY, OF THE FUND'S HOLDINGS. AS OF DECEMBER 31,
1997 THE FUND WAS MOST SENSITIVE TO INTEREST RATE MOVEMENTS IN THE
U.S., WHICH ACCOUNTS FOR 32% OF THE FUND'S INTEREST RATE EXPOSURE.
TOP CURRENCY EXPOSURES AS OF DECEMBER 31, 1997
(ESTIMATED BY CURRENCY) % OF FUND'S % OF NET ASSETS
NET ASSETS 6 MONTHS AGO

U.S. DOLLAR 32 33

JAPANESE YEN 19 20

GERMAN DEUTSCHE MARK 11 10

FRENCH FRANC 8 7

ITALIAN LIRA 7 6

THE JAPANESE YEN, AT APPROXIMATELY 19% OF NET ASSETS, WAS THE FUND'S
LARGEST FOREIGN CURRENCY EXPOSURE AS OF DECEMBER 31, 1997.
INVESTMENTS DECEMBER 31, 1997

SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES

CORPORATE BONDS - 27.0%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
AUSTRALIA - 1.2%
Queensland Treasury Corp. 8%, 5/14/03 Aaa AUD 1,000,000 $ 710,416
St. George Bank Ltd. yankee 7.15%,
10/15/05 (d) Baa 175,000 180,288
890,704
CANADA - 3.5%
British Columbia Hydro & Power Authority
yankee 12 1/2%, 1/15/14 Aa2 140,000 154,193
Broadcast Central Trust 7.53%, 5/1/27 Aaa CAD 1,138,385 911,233
Ford Credit CDA Ltd. 8 3/4%, 3/20/00 A1 CAD 1,000,000 744,430
Methanex Corp. yankee 8 7/8%, 11/15/01 A2 480,000 505,339
Trizec Hahn Corp. 7.45%, 6/1/04 - CAD 500,000 355,916
2,671,111
FINLAND - 0.4%
Merita Bank Ltd. yankee 6 1/2%, 1/15/06 A3 350,000 344,775
FRANCE - 0.8%
Total Cie Francaise des Petroles
8 1/4%, 2/26/02 Aa3 DEM 1,000,000 616,291
GERMANY - 3.4%
Lake Baden Wuerttemberg Finance NV euro
3 3/4%, 6/21/99 (c) Aaa JPY 250,000 2,002,681
Norddeutsche Landesbank Girozentrale
5 7/8%, 9/25/07 Aa1 DEM 1,000,000 565,304
2,567,985
NETHERLANDS - 2.3%
Bank Voor Nederlandse he Gemeenten NV
6 1/2%, 8/25/99 Aaa DEM 1,000,000 573,255
Dresdner Finance BV 7 1/4%, 1/12/00 Aa1 DEM 2,000,000 1,171,877
1,745,132
PANAMA - 0.1%
Banco Latinoamericano Exportaciones SA
euro 6.90%, 12/6/99 (d) Baa 100,000 101,126
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
UNITED KINGDOM - 3.1%
Argyll Group PLC Class L 8 1/8%, 10/4/02 - GBP 250,000 $ 425,673
Bell Cablemedia PLC yankee 0%,
9/15/05 (f) Baa 100,000 88,612
Ford Credit Europe PLC 11.70%, 11/18/98 (c) A1 ITL 1,185,000 704,013
Lloyds Bank PLC 7 3/8%, 3/11/04 Aa2 GBP 500,000 838,899
Midland Bank PLC yankee 7 5/8%, 6/15/06 Aa3 270,000 286,897
2,344,094
UNITED STATES OF AMERICA - 12.2%
AT&T Capital Corp. 6.65%, 4/30/99 Baa 250,000 251,913
Aristar, Inc. 7 1/2%, 7/1/99 Baa 250,000 254,640
Banc One Corp. 6.70%, 3/24/00 Aa3 120,000 121,307
BanPonce Corp. 6.488%, 3/3/00 A3 100,000 100,440
BanPonce Financial Corp. 6.642%, 4/8/99 A3 320,000 322,358
Chrysler Financial Corp. 6 3/8%, 1/28/00 A3 180,000 180,862
Columbia Gas System, Inc. 6.61%, 11/28/02 Baa 130,000 131,108
Comdisco, Inc.:
6 1/2%, 6/15/00 Baa 600,000 602,850
5 3/4%, 2/15/01 Baa 200,000 196,684
Dayton Hudson Corp. 6.80%, 10/1/01 Baa 150,000 152,258
Edison Mission Energy Funding Corp.
6.77%, 9/15/03 (d) Baa 232,741 235,038
Federated Department Stores, Inc.:
10%, 2/15/01 Baa 150,000 164,775
6.79%, 7/15/27 Baa 100,000 102,677
First Fidelity Bancorp. 9 5/8%, 8/15/99 A2 181,000 190,358
First Hawaiian, Inc. 6 1/4%, 8/15/00 Baa 270,000 269,055
First Tennessee National Corp.
6 3/4%, 11/15/05 Baa 100,000 101,548
Firstar Corp. 7.15%, 9/1/00 A3 320,000 321,856
Fleet Financial Group, Inc. 7 5/8%, 12/1/99 A3 100,000 102,459
KFW International Finance, Inc.
10 5/8%, 9/3/01 Aaa 250,000 455,657
Kansallis-Osake-Pankki (NY Branch)
10%, 5/1/02 A3 100,000 113,639
KeyCorp 8.40%, 4/1/99 A2 250,000 256,890
Levi Strauss & Co. 6.80%, 11/1/03 (d) Baa 350,000 355,961
Long Island Savings Bank FSB
7%, 6/13/02 Baa 250,000 253,750
MCN Investment Corp.:
5.84%, 2/1/99 Baa 210,000 210,126
6.03%, 2/1/01 Baa 280,000 279,210
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
UNITED STATES OF AMERICA - CONTINUED
Manufacturers Hanover Corp. 8 1/2%, 2/15/99 A1 $ 130,000 $ 133,195
Massachusetts Electric Co. 6.78%, 11/20/06 A1 250,000 257,255
Occidental Petroleum Corp.:
5.85%, 11/9/98 Baa 90,000 89,780
5.93%, 11/9/98 Baa 130,000 129,766
6 3/4%, 9/16/99 Baa 120,000 121,237
6.09%, 11/29/99 Baa 150,000 149,876
Penney (J.C.) Co., Inc. 6.95%, 4/1/00 A2 150,000 152,418
Philip Morris Companies, Inc.
7%, 7/15/05 A2 150,000 152,904
Provident Bank (Cincinnati, Ohio)
6 1/8%, 12/15/00 A3 510,000 507,618
Raytheon Co.:
6.30%, 8/15/00 Baa 140,000 140,438
6.45%, 8/15/04 Baa 160,000 160,786
Shawmut National Corp. 8 5/8%, 12/15/99 A3 290,000 302,505
Southwest Gas Corp. 9 3/4%, 6/15/02 Baa 90,000 101,357
Star Banc Corp. 6.21%, 9/26/00 A3 150,000 150,443
TCI Communication, Inc. 7 1/4%, 6/15/99 Ba1 250,000 252,868
Time Warner, Inc. 7.95%, 2/1/00 Ba1 260,000 267,992
Union Planters Corp. 6 3/4%, 11/1/05 Baa 200,000 201,256
WorldCom, Inc. 9 3/8%, 1/15/04 Ba1 261,000 276,339
9,275,452
TOTAL CORPORATE BONDS
(Cost $21,465,740) 20,556,670
GOVERNMENT OBLIGATIONS (E) - 60.0%
AUSTRIA - 3.0%
Austrian Republic euro:
4 1/2 %, 9/28/05 (c) Aaa JPY 170,000 1,558,805
3 3/4%, 2/3/09 (c) Aaa JPY 85,000 752,843
2,311,648
BELGIUM - 2.4%
Belgian Kingdom:
7%, 4/29/99 (c) Aa1 BEF 15,000 418,924
9%, 3/28/03 (c) Aa1 BEF 25,000 796,401
7 1/2%, 7/29/08 (c) Aa1 BEF 20,000 624,127
1,839,452
GOVERNMENT OBLIGATIONS (E) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
CANADA - 0.9%
Canadian Government 10%, 5/1/02 Aa1 CAD 870,000 $ 713,442
DENMARK - 1.8%
Danish Kingdom Bullet:
6%, 12/10/99 Aaa DKK 2,000,000 299,829
8%, 5/15/03 Aaa DKK 4,500,000 742,412
8%, 3/15/06 Aaa DKK 2,000,000 338,166
1,380,407
FINLAND - 0.6%
Finnish Government 10%, 9/15/01 (Reg.) Aaa FIM 2,000,000 430,336
FRANCE - 7.4%
French Government:
4 3/4%, 4/12/99 Aaa FRF 3,500,000 586,055
6 3/4%, 10/25/04 Aaa FRF 6,800,000 1,237,852
8 1/2%, 12/26/12 Aaa FRF 5,000,000 1,074,458
OAT:
9 1/2%, 1/25/01 Aaa FRF 5,300,000 1,002,367
8 1/2%, 4/25/03 Aaa FRF 2,200,000 426,048
7 1/2%, 4/25/05 Aaa FRF 5,500,000 1,043,206
8 1/2%, 4/25/23 Aaa FRF 1,300,000 290,452
5,660,438
GERMANY - 6.2%
Germany Federal Republic:
6 1/2%, 1/2/99 Aaa DEM 500,000 284,960
8 3/8%, 5/21/01 Aaa DEM 1,800,000 1,116,230
6 1/2%, 10/14/05 Aaa DEM 2,500,000 1,498,610
6%, 6/20/16 Aaa DEM 900,000 516,530
Treuhandstalt 7 3/4%, 10/1/02 Aaa DEM 2,100,000 1,306,939
4,723,269
ITALY - 5.8%
Italian Republic:
12%, 9/1/01 (c) Aa3 ITL 1,400,000 967,785
8 1/2%, 4/1/04 (c) Aa3 ITL 1,300,000 850,818
9 1/2%, 1/1/05 (c) Aa3 ITL 3,750,000 2,601,184
4,419,787
GOVERNMENT OBLIGATIONS (E) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
NETHERLANDS - 3.0%
Dutch Government:
6 3/4%, 2/15/99 AAA NLG 800,000 $ 406,020
7%, 6/15/05 AAA NLG 1,850,000 1,012,958
8 1/4%, 2/15/07 AAA NLG 1,400,000 834,473
2,253,451
SPAIN - 5.4%
Spanish Kingdom:
11.45%, 8/30/98 (c) Aa2 ESP 120,000 820,102
10.90%, 8/30/03 (c) Aa2 ESP 140,000 1,167,669
10.15%, 1/31/06 (c) Aa2 ESP 50,000 425,160
3.10%, 9/20/06 (c) Aa2 ESP 200,000 1,676,431
4,089,362
SWEDEN - 1.8%
Swedish Kingdom 6%, 2/9/05 Aa1 SEK 4,700,000 597,000
Swedish National Housing Finance Corp.
9%, 6/15/01 A1 SEK 5,800,000 797,700
1,394,700
UNITED KINGDOM - 4.9%
United Kingdom Great Britain & Northern Ireland:
8%, 12/7/00 Aaa GBP 200,000 340,518
11 3/4%, 1/22/07 Aaa GBP 510,000 1,024,746
8 1/2%, 7/16/07 Aaa GBP 400,000 757,953
8 3/4%, 8/25/17 Aaa GBP 750,000 1,573,394
3,696,611
UNITED STATES OF AMERICA - 16.8%
Federal Farm Credit Bank 8.06%, 1/4/05 Aaa 1,000,000 1,112,810
Federal Home Loan Mortgage Corporation
7%, 6/1/01 Aaa 93,661 94,859
Government Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Defense Security Assistance Agency) :
Class 1-C, 9 1/4%, 11/15/01 Aaa 445,990 474,605
Class 2-E, 9.40%, 5/15/02 Aaa 594,771 631,808
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank):
Series 1993-C, 5.20%, 10/15/04 Aaa 58,489 56,935
Series 1993-D, 5.23%, 5/15/05 Aaa 102,128 99,275
Series 1994-A, 7.12%, 4/15/06 Aaa 118,456 123,004
Series 1994-C, 6.61%, 9/15/99 Aaa 23,623 23,756
GOVERNMENT OBLIGATIONS (E) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
UNITED STATES OF AMERICA - CONTINUED
Israel Export Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1994-1,
6.88%, 1/26/03 Aaa $ 110,000 $ 112,031
Overseas Private Investment Corp. U.S.
Government guaranteed participation
certificate Series 1994-195,
6.08%, 8/15/04 (callable) Aaa 230,000 230,246
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
8%, 11/15/01 Aaa 740,000 793,036
6 1/8%, 3/15/03 Aaa 162,000 162,886
U.S. Treasury:
6%, 8/15/99 Aaa 300,000 301,452
7 3/4%, 12/31/99 Aaa 39,000 40,517
10 3/4%, 5/15/03 Aaa 255,000 312,972
11 5/8%, 11/15/04 Aaa 1,100,000 1,460,074
12%, 8/15/13 (callable) Aaa 65,000 95,774
9 7/8%, 11/15/15 Aaa 2,140,000 3,045,819
9%, 11/15/18 Aaa 115,000 155,358
7 1/4%, 2/15/23 Aaa 3,000,000 3,424,680
12,751,897
TOTAL GOVERNMENT OBLIGATIONS
(Cost $48,073,538) 45,664,800
SUPRANATIONAL OBLIGATIONS - 11.4%
African Development Bank 7 3/4%, 12/15/01 Aa1 340,000 358,265
Asian Development Bank 5%, 2/5/03 (c) Aaa JPY 280,000 2,524,343
European Investment Bank 3%, 9/20/06 (c) Aaa JPY 265,000 2,216,604
Inter-American Development Bank
6 3/4%, 2/20/01 (c) Aaa JPY 250,000 2,260,195
International Bank Reconstruction & Development
4 3/4%, 12/20/04 (c) Aaa JPY 140,000 1,292,669
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $9,594,332) 8,652,076
COMMERCIAL MORTGAGE SECURITIES - 1.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B)
UNITED STATES OF AMERICA - 1.4%
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa $ 266,531 $ 266,365
GS Mortgage Securities Corp. II Series 1997-GL
Class A2-B, 6.86%, 7/13/30 Aaa 150,000 154,061
Green Tree Financial Corp. 6.45%, 5/15/27 Aaa 160,000 160,250
Petroleum Enhanced Trust Receivables Offering
Petroleum Trust 6.1875%, 2/5/03 (d) Baa 180,226 180,226
Structured Asset Securities Corp. sequential pay
Series 1995-C4 Class A-1A, 6.90%, 6/25/26 Aaa 5,544 5,517
WFS Financial Owner Trust 7.05%, 11/20/03 Aaa 270,000 275,935
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $874,083) 1,042,354
CASH EQUIVALENTS - 0.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 6.40%, dated
12/31/97 due 1/2/98 $ 129,046 129,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $80,136,693) $ 76,044,900
CURRENCY ABBREVIATIONS
AUD - Australian dollar
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
DKK - Danish krone
NLG - Dutch guilder
FIM - Finnish markka
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
ESP - Spanish peseta
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless
otherwise noted.
2. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
3. Principal amount in thousands.
4. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $1,052,639 or
1.3% of net assets.
5. For foreign government obligations not individually rated by S&P or
Moody's, the ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
6. Debt obligation initially issued in zero coupon form which converts
to coupon form at a specified rate and date.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 86.0% AAA, AA, A 83.4%
Baa 6.9% BBB 11.1%
Ba 1.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings
of the sovereign credit of the issuing government. The percentage not
rated by Moody's or S&P amounted to 1.0%.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities
Aerospace & Defense 0.4%
Basic Industries 0.6
Cash Equivalents 0.2
Commercial Mortgage Securities 1.4
Construction & Real Estate 0.5
Durables 0.5
Energy 1.5
Finance 18.1
Government Obligations 60.0
Media & Leisure 0.8
Nondurables 0.2
Retail & Wholesale 1.3
Services 0.9
Supranational Obligations 11.4
Technology 1.0
Utilities 1.2
100.0%
INCOME TAX INFORMATION
At December 31, 1997, the aggregate cost of investment securities for
income tax purposes was $80,136,734. Net unrealized depreciation
aggregated $4,091,834, of which $1,311,114 related to appreciated
investment securities and $5,402,948 related to depreciated investment
securities.
At December 31, 1997, the fund had a capital loss carryforward of
approximately $94,000,000 of which $81,000,000 and $13,000,000 will
expire on December 31, 2002 and 2003, respectively.
The percentage of dividends distributed during the fiscal year
representing income derived from sources within, and taxes paid to
foreign countries or possessions of the United States are 103.38% and
3.38%, respectively (unaudited).
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1997

7.ASSETS 8. 9.

10.INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE 11. $ 76,044,900
AGREEMENTS OF $129,000) (COST $80,136,693) -
SEE ACCOMPANYING SCHEDULE

12.CASH 13. 507

14.RECEIVABLE FOR INVESTMENTS SOLD 15. 1,567,983

16.INTEREST RECEIVABLE 17. 2,008,342

18. 19.TOTAL ASSETS 20. 79,621,732

21.LIABILITIES 22. 23.

24.PAYABLE FOR INVESTMENTS PURCHASED $ 875,919 25.

26.PAYABLE FOR FUND SHARES REDEEMED 233,179 27.

28.ACCRUED MANAGEMENT FEE 45,917 29.

30.OTHER PAYABLES AND ACCRUED EXPENSES 84,378 31.

32. 33.TOTAL LIABILITIES 34. 1,239,393

35.36.NET ASSETS 37. $ 78,382,339

38.NET ASSETS CONSIST OF: 39. 40.

41.PAID IN CAPITAL 42. $ 177,087,402

43.DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME 44. (361,431)

45.ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 46. (94,171,675)
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS

47.NET UNREALIZED APPRECIATION (DEPRECIATION) ON 48. (4,171,957)
INVESTMENTS AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES

49.50.NET ASSETS, FOR 8,619,985 SHARES OUTSTANDING 51. $ 78,382,339

52.53.NET ASSET VALUE, OFFERING PRICE AND REDEMPTION 54. $9.09
PRICE PER SHARE ($78,382,339 (DIVIDED BY) 8,619,985 SHARES)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1997

55.INVESTMENT INCOME 57. $ 6,132,503
56.INTEREST

58.EXPENSES 59. 60.

61.MANAGEMENT FEE $ 638,301 62.

63.TRANSFER AGENT FEES 318,200 64.

65.ACCOUNTING FEES AND EXPENSES 70,104 66.

67.NON-INTERESTED TRUSTEES' COMPENSATION 406 68.

69.CUSTODIAN FEES AND EXPENSES 22,052 70.

71.REGISTRATION FEES 24,712 72.

73.AUDIT 68,283 74.

75.LEGAL 934 76.

77.INTEREST 7,283 78.

79.REPORTS TO SHAREHOLDERS 23,855 80.

81.MISCELLANEOUS 797 82.

83. TOTAL EXPENSES BEFORE REDUCTIONS 1,174,927 84.

85. EXPENSE REDUCTIONS (1,398) 1,173,529

86.87.NET INVESTMENT INCOME 88. 4,958,974

89.REALIZED AND UNREALIZED GAIN (LOSS) 91. 92.
90.NET REALIZED GAIN (LOSS) ON:

93. INVESTMENT SECURITIES (2,839,911) 94.

95. FOREIGN CURRENCY TRANSACTIONS (215,320) (3,055,231)

96.CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 97. 98.
ON:

99. INVESTMENT SECURITIES (3,642,784) 100.

101. ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (56,864) (3,699,648)

102.103.NET GAIN (LOSS) 104. (6,754,879)

105.106.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 107. $ (1,795,905)
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996

108.INCREASE (DECREASE) IN NET ASSETS

109.OPERATIONS $ 4,958,974 $ 8,916,006
NET INVESTMENT INCOME

110. NET REALIZED GAIN (LOSS) (3,055,231) (7,015,348)

111. CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (3,699,648) 1,182,260

112. (1,795,905) 3,082,918
113.NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS

114.DISTRIBUTIONS TO SHAREHOLDERS (1,504,944) (1,498,070)
FROM NET INVESTMENT INCOME

115. RETURN OF CAPITAL (3,461,039) (6,776,101)

116. 117.TOTAL DISTRIBUTIONS (4,965,983) (8,274,171)

118.SHARE TRANSACTIONS 38,795,875 84,390,375
NET PROCEEDS FROM SALES OF SHARES

119. REINVESTMENT OF DISTRIBUTIONS 4,325,909 7,117,696

120. COST OF SHARES REDEEMED (71,608,454) (169,547,782)

121.122. (28,486,670) (78,039,711)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS

123. (35,248,558) (83,230,964)
124.TOTAL INCREASE (DECREASE) IN NET ASSETS

125.NET ASSETS 126. 127.

128. BEGINNING OF PERIOD 113,630,897 196,861,861

129. $ 78,382,339 $ 113,630,897
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS
OF NET INVESTMENT INCOME OF $361,431 AND
$573,011, RESPECTIVELY)

130.OTHER INFORMATION 132. 133.
131.SHARES

134. SOLD 4,190,363 8,703,025

135. ISSUED IN REINVESTMENT OF DISTRIBUTIONS 469,964 735,927

136. REDEEMED (7,737,241) (17,554,058)

137. NET INCREASE (DECREASE) (3,076,914) (8,115,106)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
138. YEARS ENDED DECEMBER 31,

139. 1997 1996 1995 1994 1993

140.SELECTED PER-SHARE DATA

141.NET ASSET VALUE, $ 9.710 $ 9.940 $ 9.880 $ 12.610 $ 11.340
BEGINNING OF PERIOD

142.INCOME FROM INVESTMENT .497 A .550 .745 B .569 B .731
OPERATIONS
NET INVESTMENT INCOME

143. NET REALIZED AND (.621) (.234) (.109) B (2.589) B 1.648
UNREALIZED
GAIN (LOSS)

144. TOTAL FROM INVESTMENT (.124) .316 .636 (2.020) 2.379
OPERATIONS

145.LESS DISTRIBUTIONS

146. FROM NET INVESTMENT (.150) (.096) (.516) (.225) (.629)
INCOME

147. IN EXCESS OF NET - - - (.054) -
INVESTMENT INCOME

148. FROM NET REALIZED GAIN - - - - (.280)

149. IN EXCESS OF NET REALIZED - - - (.020) (.200)
GAIN

150. RETURN OF CAPITAL (.346) (.450) (.060) (.411) -

151. TOTAL DISTRIBUTIONS (.496) (.546) (.576) (.710) (1.109)

152.NET ASSET VALUE, END OF $ 9.090 $ 9.710 $ 9.940 $ 9.880 $ 12.610
PERIOD

153.TOTAL RETURN (1.21)% 3.35% 6.66% (16.31)% 21.91%

154.RATIOS AND SUPPLEMENTAL
DATA

155.NET ASSETS, END OF PERIOD $ 78,382 $ 113,631 $ 196,862 $ 382,803 $ 686,252
(000 OMITTED)

156.RATIO OF EXPENSES TO 1.27% 1.22% 1.16% 1.14% 1.17%
AVERAGE
NET ASSETS

157.RATIO OF NET INVESTMENT 5.36% 6.09% 6.19% 6.50% 6.79%
INCOME TO AVERAGE NET ASSETS

158.PORTFOLIO TURNOVER RATE 74% 91% 322% 367% 198%

</TABLE>

A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
B CERTAIN PER-SHARE AMOUNTS HAVE BEEN RECLASSIFIED TO PERMIT
COMPARISON WITH CURRENT YEAR PRESENTATION.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1997

7. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Global Bond Fund (the fund), is a fund of Fidelity Investment
Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. At
a special meeting of the shareholders of the fund, held on September
17, 1997, shareholders approved an Agreement and Plan of
Reorganization providing for the reorganization of the fund into
Fidelity School Street Trust, effective on or about February 26, 1998.
Effective February 27, 1998, Fidelity Global Bond Fund will change its
name to Fidelity International Bond Fund. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price in the principal market in which such securities
are normally traded. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The fund
may be subject to foreign taxes on income and gains on investments
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INCOME TAXES - CONTINUED
which are accrued based upon the fund's understanding of the tax rules
and regulations that exist in the markets in which it invests. The
fund accrues such taxes as applicable. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of
original issue discount, is accrued as earned. Interest income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net investment income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for paydown gains/losses on certain securities, foreign
currency transactions, market discount, capital loss carryforwards and
losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
For the periods ended December 31, 1996 and 1997, the fund's
distributions exceeded the aggregate amount of taxable income and net
realized gains resulting in a return of capital. This was due to
certain foreign currency losses which decreased taxable income
available for distribution after certain distributions had been made.
(The tax treatment of distributions for the 1997 calendar year was
reported to shareholders prior to February 1, 1998.)
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
8. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of
2. OPERATING POLICIES -
CONTINUED
FOREIGN CURRENCY CONTRACTS -
CONTINUED
foreign currency contracts is determined using contractual currency
exchange rates established at the time of each trade. The cost of the
foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
9. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $66,711,762 and $103,029,630, respectively, of which U.S.
government and government agency obligations aggregated $18,016,186
and $30,436,484, respectively.
10. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .55%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
equivalent to an annual rate of .69% of average net assets.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research (Far East) Inc., Fidelity International
Investment Advisors (FIIA) and Fidelity Investments Japan Limited
(FIJ). In addition, FIIA entered into a sub-advisory agreement with
its subsidiary, Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L). Under the sub-advisory arrangements, FMR may
receive investment advice and research services and may grant the
sub-advisers investment management authority to buy and sell
securities. FMR pays its sub-advisers either a portion of its
management fee or a fee based on costs incurred for these services.
FIIA pays FIIA(U.K.)L a fee based on costs incurred for either
service.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .34% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
11. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balances during the period for which loans were outstanding amounted
to $6,232,000 and $3,495,846, respectively. The weighted average
interest rate was 5.77%.
12. EXPENSE REDUCTIONS.
The fund has entered into arrangements with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the period, the fund's custodian and transfer agent fees were reduced
by $981 and $417, respectively, under these arrangements.
13. LITIGATION.
The fund is engaged in litigation against the obligor on the inflation
adjusted debt of Siderurgica Brasileiras SA, contesting the
calculation of the principal adjustment. The probability of success of
this litigation cannot be predicted and the amount of recovery cannot
be estimated. Any recovery from this litigation would inure to the
benefit of the fund. As of period end, the fund no longer holds
Siderurgica Brasileiras SA debt securities.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Investment Trust and the Shareholders of
Fidelity Global Bond Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Investment Trust: Fidelity Global Bond Fund, including the
schedule of portfolio investments, as of December 31, 1997, and the
related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Investment Trust: Fidelity Fidelity
Global Bond Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 13, 1998
PROXY VOTING RESULTS

WITHHELD 45,467,029.324 12.883

TOTAL 352,936,124.976 100.00

PHYLLIS BURKE DAVIS
AFFIRMATIVE 307,387,377.836 87.094

WITHHELD 45,548,747.140 12.906

TOTAL 352,936,124.976 100.000

ROBERT M. GATES
AFFIRMATIVE 307,219,404.498 87.047

WITHHELD 45,716,720.478 12.953

TOTAL 352,936,124.976 100.000

EDWARD C. JOHNSON 3D
AFFIRMATIVE 307,304,255.082 87.071

WITHHELD 45,631,869.894 12.929

TOTAL 352,936,124.976 100.00

E. BRADLEY JONES
AFFIRMATIVE 307,163,389.202 87.031

WITHHELD 45,772,735.774 12.969

TOTAL 352,936,124.976 100.000

DONALD J. KIRK
AFFIRMATIVE 307,589,965.173 87.152

WITHHELD 45,346,159.803 12.848

TOTAL 352,936,124.976 100.000

# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 307,609,611.247 87.157

WITHHELD 45,326,513.729 12.843

TOTAL 352,936,124.976 100.000

WILLIAM O. MCCOY
AFFIRMATIVE 307,616,784.105 87.159

WITHHELD 45,319,340.871 12.841

TOTAL 352,936,124.976 100.000

GERALD C. MCDONOUGH
AFFIRMATIVE 307,384,278.082 87.093

WITHHELD 45,551,846.894 12.907

TOTAL 352,936,124.976 100.000

MARVIN L. MANN
AFFIRMATIVE 307,596,505.166 87.154

WITHHELD 45,339,619.810 12.846

TOTAL 352,936,124.976 100.000

ROBERT C. POZEN
AFFIRMATIVE 307,465,181.656 87.116

WITHHELD 45,470,943.320 12.884

TOTAL 352,936,124.976 100.000

THOMAS R. WILLIAMS
AFFIRMATIVE 307,326,062.668 87.077

WITHHELD 45,610,062.308 12.923

TOTAL 352,936,124.976 100.000

PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. and Price
Waterhouse LLP as independent accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 297,481,581.663 84.288

AGAINST 4,739,203.560 1.342

ABSTAIN 50,715,339.753 14.370

TOTAL 352,936,124.976 100.000

AGAINST 15,944,801.447 4.637

ABSTAIN 53,353,237.539 15.513

TOTAL 343,917,749.976 100.000

BROKER 9,018,375.000
NON-VOTES

Fund:
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 3,771,105.904 78.026

AGAINST 293,814.441 6.079

ABSTAIN 768,239.099 15.895

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

AGAINST 14,687,878.962 4.271

ABSTAIN 55,408,780.356 16.111

TOTAL 343,917,749.976 100.000

BROKER 9,018,375.000
NON-VOTES

AGAINST 33,659,944.597 9.785

ABSTAIN 56,433,204.852 16.405

TOTAL 344,003,776.976 100.000

BROKER 8,932,348.000
NON-VOTES

AGAINST 576,895.526 11.936

ABSTAIN 807,850.642 16.715

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

AGAINST 212,930.174 4.089

ABSTAIN 800,467.831 15.373

TOTAL 5,206,984.444 100.000

PROPOSAL 8
To approve a new sub-advisory agreement with Fidelity Investments
Japan Limited to provide investment advice and research ser- vices or
investment management services.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 3,721,551.812 77.000

AGAINST 266,051.649 5.505

ABSTAIN 845,555.983 17.495

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

PROPOSAL 9
To approve an agreement and plan providing for the reorganization of
the fund from a separate series of one Massachusetts business trust to
another Massachusetts business trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 3,823,993.214 79.120

AGAINST 200,578.095 4.150

ABSTAIN 808,588.135 16.730

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

PROPOSAL 10
To amend the fund's fundamental investment limitation concerning real
estate.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 3,536,086.144 73.163

AGAINST 452,631.685 9.365

ABSTAIN 844,441.615 17.472

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

PROPOSAL 11
To amend the fund's fundamental investment limitation concerning
borrowing.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 3,644,371.021 75.403

AGAINST 351,045.669 7.264

ABSTAIN 837,742.754 17.333

TOTAL 4,833,159.444 100.000

BROKER 373,825.000
NON-VOTES

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
Fidelity Investments Japan Limited
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
John H. Carlson, Vice President
Fred L. Henning, Jr., Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
Ginnie Mae
Government Securities
Intermediate Bond
International Bond
Investment Grade Bond
New Markets Income
Short-Intermediate Government
Short-Term Bond
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Short-Intermediate Government
Spartan Short-Term Bond
Target Timeline 1999, 2001 & 2003
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
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