FIDELITY INVESTMENT TRUST, 485APOS, 1998-10-23

FIDELITY INVESTMENT TRUST
485APOS, 1998-10-23

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT (No. 2-90649)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post-Effective Amendment No. 75 [X]

and

REGISTRATION STATEMENT (No. 811-4008)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 75 [X]

Fidelity Investment Trust
(Exact Name of Registrant as Specified in Charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number: 617-563-7000

Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)

It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( X ) on (December 30, 1998) pursuant to paragraph (a)(1) of Rule
485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS

FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY DIVERSIFIED
INTERNATIONAL FUND, FIDELITY INTERNATIONAL VALUE FUND, FIDELITY
OVERSEAS FUND, AND FIDELITY WORLDWIDE FUND
CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

1 A 1-3.... FRONT COVER PAGE

B 1-4.... BACK COVER PAGE

2 A ......... INVESTMENT SUMMARY; INVESTMENT DETAILS

B ......... INVESTMENT SUMMARY; INVESTMENT DETAILS

C 1....... INVESTMENT SUMMARY; INVESTMENT DETAILS

2....... PERFORMANCE

3 ......... FEE TABLE

4 A ......... INVESTMENT DETAILS

B ......... INVESTMENT SUMMARY; INVESTMENT DETAILS

C ......... INVESTMENT SUMMARY; INVESTMENT DETAILS

5 A-C ......... *

6 A 1....... FRONT COVER PAGE; FEE TABLE; FUND MANAGEMENT

2....... FUND MANAGEMENT

3....... *

B ......... BUYING AND SELLING SHARES

7 A 1-3.... VALUING SHARES; BUYING AND SELLING SHARES

B ......... BUYING AND SELLING SHARES; ACCOUNT FEATURES AND
POLICIES

C 1-7.... BUYING AND SELLING SHARES; EXCHANGING SHARES;
ACCOUNT FEATURES AND POLICIES

D ......... DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

E 1....... INVESTMENT SUMMARY; INVESTMENT DETAILS; TAX
CONSEQUENCES

2....... *

3....... *

F 1-4.... *

8 A 1....... *

2....... *

B 1-2.... FUND DISTRIBUTION

C 1-4.... *

9 A ......... **

B ......... *

* Not Applicable
**To be filed by amendment

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER SAI SECTION

10 A 1-3.... FRONT COVER PAGE

B ......... FRONT COVER PAGE

11 A ......... DESCRIPTION OF THE TRUST

B ......... DESCRIPTION OF THE TRUST

12 A ......... INVESTMENT POLICIES AND LIMITATIONS; DESCRIPTION OF
THE TRUST

B ......... INVESTMENT POLICIES AND LIMITATIONS

C 1....... INVESTMENT POLICIES AND LIMITATIONS

2....... INVESTMENT POLICIES AND LIMITATIONS

D ......... INVESTMENT POLICIES AND LIMITATIONS

E ......... PORTFOLIO TRANSACTIONS

13 A ......... TRUSTEES AND OFFICERS

B-D ......... TRUSTEES AND OFFICERS

E ......... *

14 A ......... **

B ......... TRUSTEES AND OFFICERS

C ......... TRUSTEES AND OFFICERS

15 A 1....... **

2....... TRUSTEES AND OFFICERS

3....... MANAGEMENT CONTRACTS

B ......... DISTRIBUTION SERVICES

C 1....... MANAGEMENT CONTRACTS

2....... MANAGEMENT CONTRACTS

D ......... TRANSFER AND SERVICE AGENT AGREEMENTS

E 1-3.... *

F ......... *

G 1....... DISTRIBUTION SERVICES

2....... DISTRIBUTION SERVICES

3....... **

4....... DISTRIBUTION SERVICES

5....... DISTRIBUTION SERVICES

6....... DISTRIBUTION SERVICES

H 1....... *

2....... TRANSFER AND SERVICE AGENT AGREEMENTS

3....... DESCRIPTION OF THE TRUST

4....... TRANSFER AND SERVICE AGENT AGREEMENTS

16 A ......... PORTFOLIO TRANSACTIONS

B 1....... PORTFOLIO TRANSACTIONS

2....... PORTFOLIO TRANSACTIONS

C ......... PORTFOLIO TRANSACTIONS

D ......... **

E ......... **

17 A 1-2.... DESCRIPTION OF THE TRUST

B ......... *

18 A ......... ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION
INFORMATION

B ......... *

C ......... VALUATION

D ......... *

19 A ......... DISTRIBUTIONS AND TAXES

B ......... **

20 A 1-3.... DISTRIBUTION SERVICES

B ......... DISTRIBUTION SERVICES

C 1-4.... **

21 A 1-5.... *

B 1-5.... PERFORMANCE

22 A-C ......... FINANCIAL STATEMENTS

* Not Applicable
**To be filed by amendment

LIKE SECURITIES OF ALL MUTUAL
FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND EXCHANGE
COMMISSION, AND THE
SECURITIES AND EXCHANGE
COMMISSION HAS NOT
DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR
COMPLETE. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.

FIDELITY'S
BROADLY DIVERSIFIED
INTERNATIONAL EQUITY
FUNDS

FUND NUMBER TRADING SYMBOL

FIDELITY INTERNATIONAL GROWTH & INCOME FUND 305 FIGRX

FIDELITY DIVERSIFIED INTERNATIONAL FUND 325 FDIVX

FIDELITY INTERNATIONAL VALUE FUND 335 FIVFX

FIDELITY OVERSEAS FUND 094 FOSFX

FIDELITY WORLDWIDE FUND 318 FWWFX

PROSPECTUS
DECEMBER 30, 1998

(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 5 INVESTMENT SUMMARY

6 PERFORMANCE

9 FEE TABLE

FUND BASICS 12 INVESTMENT DETAILS

14 VALUING SHARES

SHAREHOLDER INFORMATION 14 BUYING AND SELLING SHARES

19 EXCHANGING SHARES

19 ACCOUNT FEATURES AND POLICIES

22 DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

22 TAX CONSEQUENCES

FUND SERVICES 23 FUND MANAGEMENT

P-20 FUND DISTRIBUTION

APPENDIX 24 FINANCIAL HIGHLIGHTS

FUND SUMMARY

INVESTMENT SUMMARY
INVESTMENT OBJECTIVE. International Growth & Income seeks capital
growth and current income, consistent with reasonable investment risk.
PRINCIPAL INVESTMENT STRATEGIES. Fidelity Management & Research
Company (FMR)'s principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Focusing on common stocks that pay current
dividends and show potential for capital appreciation.
(small solid bullet) Potentially investing in debt securities,
including lower-quality debt securities.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole. Lower-quality debt securities
(those of less than investment-grade quality) can be more volatile due
to increased sensitivity to adverse issuer, political, regulatory,
market or economic developments.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Diversified International seeks capital growth.

PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment strategies
include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using computer-aided, quantitative analysis of
historical earnings, dividend yield, earnings per share and other
factors supported by fundamental research to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently than the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. International Value seeks long-term growth of
capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment strategies
include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks issued by
companies that FMR believes are undervalued in the market place or
possess valuable assets.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently than the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Overseas seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment strategies
include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Worldwide seeks growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment strategies
include:
(small solid bullet) Investing in securities issued anywhere in the
world.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the world market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.

YEAR-BY-YEAR RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL GROWTH & INCOME

CALENDAR YEARS 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

% % % % % % % % % %

</TABLE>

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR INTERNATIONAL GROWTH &
INCOME, THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING
[CALENDAR QUARTER], [YEAR]) AND THE LOWEST RETURN FOR A QUARTER WAS
__% (QUARTER ENDING [CALENDAR QUARTER], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF [DATE OF MOST RECENT CALENDAR QUARTER]
FOR INTERNATIONAL GROWTH & INCOME WAS __%.

DIVERSIFIED INTERNATIONAL

CALENDAR YEARS 1992 1993 1994 1995 1996 1997

% % % % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR DIVERSIFIED INTERNATIONAL,
THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING [CALENDAR
QUARTER], [YEAR]) AND THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER
ENDING [CALENDAR QUARTER], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF [DATE OF MOST RECENT CALENDAR QUARTER]
FOR DIVERSIFIED INTERNATIONAL WAS __%.

INTERNATIONAL VALUE

CALENDAR YEARS 1995 1996 1997

% % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR INTERNATIONAL VALUE, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING [CALENDAR
QUARTER], [YEAR]) AND THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER
ENDING [CALENDAR QUARTER], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF [DATE OF MOST RECENT CALENDAR QUARTER]
FOR INTERNATIONAL VALUE WAS __%.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OVERSEAS

CALENDAR YEARS 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

% % % % % % % % % %

</TABLE>

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR OVERSEAS, THE HIGHEST RETURN
FOR A QUARTER WAS __% (QUARTER ENDING [CALENDAR QUARTER], [YEAR]) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING [CALENDAR
QUARTER], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF [DATE OF MOST RECENT CALENDAR QUARTER]
FOR OVERSEAS WAS __%.

WORLDWIDE

CALENDAR YEARS 1991 1992 1993 1994 1995 1996 1997

% % % % % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR WORLDWIDE, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING [CALENDAR QUARTER],
[YEAR]) AND THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING
[CALENDAR QUARTER], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF [DATE OF MOST RECENT CALENDAR QUARTER]
FOR WORLDWIDE WAS __%.

AVERAGE ANNUAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR THE PERIODS ENDED DECEMBER 31, 1997 PAST 1 YEAR PAST 5 YEARS PAST 10
YEARS/LIFE OF FUND

INTERNATIONAL GROWTH & % %[D] %[D,E,F]
INCOME FUND

MORGAN STANLEY CAPITAL % % %
INTERNATIONAL EAFE INDEX

LIPPER INTERNATIONAL FUNDS % % %
AVERAGE

DIVERSIFIED INTERNATIONAL % % %A[F]
FUND

MORGAN STANLEY CAPITAL % % %A
INTERNATIONAL GDP-WEIGHED
EAFE INDEX

LIPPER INTERNATIONAL FUNDS % % %
AVERAGE

INTERNATIONAL VALUE FUND % % %B

MORGAN STANLEY CAPITAL % % %B
INTERNATIONAL EAFE INDEX

LIPPER INTERNATIONAL FUNDS % % %
AVERAGE

OVERSEAS FUND % %[D] %[D]

MORGAN STANLEY CAPITAL % % %
INTERNATIONAL EAFE INDEX

LIPPER INTERNATIONAL FUNDS % % %
AVERAGE

WORLDWIDE FUND % %[D] %C[D,F]

MORGAN STANLEY CAPITAL % % %C
INTERNATIONAL WORLD INDEX

LIPPER GLOBAL FUNDS % % %
AVERAGE

</TABLE>

A FROM JANUARY 1, 1992.
B FROM JANUARY 1, 1995.
C FROM JANUARY 1, 1991.
[D PREVIOUSLY, THE FUND IMPOSED A SALES CHARGE. IF THIS CHARGE WERE
TAKEN INTO ACCOUNT, TOTAL RETURNS WOULD HAVE BEEN LOWER.]
[E TOTAL RETURNS DO NOT INCLUDE THE DEFERRED SALES CHARGE OF 1% UPON
REDEMPTION ON SHARES PURCHASED PRIOR TO OCTOBER 12, 1990]
[F IF FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THESE
PERIODS, TOTAL RETURNS WOULD HAVE BEEN LOWER.]

Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE) Index is a market capitalization-weighted index that is
designed to represent the performance of developed stock markets
outside the United States and Canada. The index may be compiled in two
ways: a market capitalization-weighted (cap-weighted) and a gross
domestic product-weighted (GDP-weighted) version. As of October 31,
1998, the cap-weighted index included over ____ equity securities of
companies domiciled in ___ countries, and the GDP-weighted index
included over ____ equity securities of companies domiciled in ___
countries.
Morgan Stanley Capital International World Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets throughout the world. As of
October 31, 1998, the index included over ___ equity securities of
companies domiciled in ____ countries.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.

FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold or sell shares of a fund. The annual fund operating
expenses provided below are [based on historical expenses./higher than
the expenses actually paid by [fund] as a result of [the payment or
reduction of certain expenses]] during the period.

SHAREHOLDER FEES (PAID BY THE INVESTOR)

SALES CHARGE (LOAD) ON PURCHASES NONE
AND REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE (LOAD) ON NONE
REDEMPTIONS

ANNUAL ACCOUNT MAINTENANCE FEE (FOR $12.00
ACCOUNTS UNDER $2,500)

FUND OPERATING EXPENSES (PAID BY THE FUNDS)

INTERNATIONAL GROWTH MANAGEMENT FEE %
& INCOME

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES %

TOTAL ANNUAL FUND OPERATING %
EXPENSES

DIVERSIFIED MANAGEMENT FEE %
INTERNATIONAL

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES %

TOTAL ANNUAL FUND OPERATING %
EXPENSES

INTERNATIONAL VALUE MANAGEMENT FEE %

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES %

TOTAL ANNUAL FUND OPERATING %
EXPENSES

OVERSEAS MANAGEMENT FEE %

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES %

TOTAL ANNUAL FUND OPERATING %
EXPENSES

WORLDWIDE MANAGEMENT FEE %

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES %

TOTAL ANNUAL FUND OPERATING %
EXPENSES

[A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total fund operating expenses would have been __% [for [Fund Name]
and __% for [Fund Name].]
This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.
Let's say, hypothetically, that each fund's annual return is 5% and
that your shareholder fees and each fund's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account after the number of years
indicated:

INTERNATIONAL GROWTH 1 YEAR $
& INCOME

3 YEARS $

5 YEARS $

10 YEARS $

DIVERSIFIED 1 YEAR $
INTERNATIONAL

3 YEARS $

5 YEARS $

10 YEARS $

INTERNATIONAL VALUE 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

OVERSEAS 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

WORLDWIDE 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE:
INTERNATIONAL GROWTH & INCOME FUND seeks capital growth and current
income, consistent with reasonable investment risk.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests a majority of the fund's
assets in common stocks with a focus on those that pay current
dividends and show potential for capital appreciation. However, FMR
may invest the fund's assets in debt securities, including
lower-quality debt securities, as well as equity securities that are
not currently paying dividends, but offer prospects for future income
or capital appreciation.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
DIVERSIFIED INTERNATIONAL FUND seeks capital growth.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR uses a disciplined
approach that involves computer-aided, quantitative analysis supported
by fundamental research. FMR's computer model systematically reviews
thousands of stocks, using historical earnings, dividend yield,
earnings per share, and other factors. Then, potential investments are
analyzed further using fundamental criteria, such as the company's
growth potential and estimates of current earnings.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
INTERNATIONAL VALUE FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR focuses on securities of companies that it believes are
undervalued in the marketplace or possess valuable assets. The stocks
of these companies are often called "value" stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
OVERSEAS FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
WORLDWIDE FUND seeks growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR invests the fund's assets in securities issued anywhere in the
world, including the United States. FMR normally invests the fund's
assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the world market as a
whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve it's
objective.

PRINCIPAL INVESTMENT RISKS:
Many factors affect each fund's performance. A fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political or financial
developments. A fund's reaction to these developments will be affected
by the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. When you sell your shares of a fund,
they could be worth more or less than what you paid for them.
The following factors may significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these factors. Different parts of the market can react differently
to these factors. For example, large cap stocks can react differently
than small cap stocks, and "growth" stocks can react differently than
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently than the U.S. market
Investing in emerging markets involves risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of foreign development;
political stability; market depth, infrastructure and capitalization
and regulatory oversight are generally less than in more developed
markets. Emerging market economies can be subject to greater social,
economic, regulatory and political uncertainties. All of these factors
can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security falls when interest rates rise and rises when interest
rates fall. Securities with longer maturities and mortgage securities
can be more sensitive to interest rate changes.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of issuer, and changes in general economic or
political conditions can affect the value of an issuer's securities.
The value of securities of smaller, less well-known companies can be
more volatile than that of larger companies. Lower-quality debt
securities (those of less than investment-grade quality) tend to be
more sensitive to these changes than higher-quality debt securities.
Lower-quality debt securities involve greater risk of default or price
changes due to changes in the credit quality of the issuer. The value
of lower-quality debt securities often fluctuates in response to
company, political or economic developments and can decline
significantly over short periods of time or during periods of general
or regional economic difficulty.
QUANTITATIVE INVESTING. The value of securities selected using
quantitative analysis can react differently to issuer, political,
market and economic developments than the market as a whole or
securities selected using only fundamental analysis. The factors used
in quantitative analysis and the weight placed on those factors may
not be predictive of a security's value. In addition, factors that
affect a security's value can change over time and these changes may
not be reflected in the quantitative model.
"VALUE" INVESTING. "Value" stocks can react differently to issuer,
political, market and economic developments than the market as a whole
and other types of stocks. "Value" stocks tend to be inexpensive
relative to their earnings or assets compared to other types of
stocks. However, "value" stocks can continue to be inexpensive for
long periods of time and may not ever realize their full value.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance.

FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
DIVERSIFIED INTERNATIONAL seeks capital growth by investing primarily
in equity securities of companies located anywhere outside the U.S.
INTERNATIONAL GROWTH & INCOME seeks capital growth and current income,
consistent with reasonable investment risk, by investing principally
in foreign securities.
INTERNATIONAL VALUE seeks long-term growth of capital.
OVERSEAS seeks long-term growth of capital primarily through
investments in foreign securities.
WORLDWIDE seeks growth of capital by investing in securities issued
anywhere in the world.

VALUING SHARES
The funds are open for business each day the New York Stock Exchange
(NYSE) is open.
Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity(registered trademark) normally calculates each fund's
NAV as of the close of business of the NYSE, normally 4:00 p.m.
Eastern time. However, NAV may be calculated earlier if trading on the
NYSE is restricted or as permitted by the SEC. Each fund's assets are
valued as of this time for the purpose of computing the fund's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available for a
security or if a security's value has been materially affected by
events occurring after the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or
market), that security may be valued by another method that the Board
of Trustees believes accurately reflects fair value. In these
circumstances, the security's valuation may differ from the generally
expected valuation.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
Web site and phone numbers.
(small solid bullet) For information over the Internet, visit
Fidelity's Web site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use TouchTone Xpress(registered trademark), 1-800-544-5555.
(small solid bullet) For exchanges and redemptions, 1-800-544-7777.
(small solid bullet) For account assistance, 1-800-544-6666.
(small solid bullet) For mutual fund and retirement information,
1-800-544-8888.
(small solid bullet) For brokerage information, 1-800-544-7272.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:

BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048

SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517

You may buy or sell shares of the funds through a retirement account
or an investment professional. If you invest through a retirement
account or an investment professional, the procedures for buying,
selling, and exchanging shares of a fund and the account features and
policies may differ. Additional fees may also apply to your investment
in a fund, including a transaction fee if you buy or sell shares of
the fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restriced based on criteria established by
Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.

WAYS TO SET UP YOUR ACCOUNT

INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS

RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROTH CONVERSION IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS, and certain other 401(A)-QUALIFIED PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
(solid bullet) 403(B) CUSTODIAL ACCOUNTS
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS)

GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS

TRUST
FOR MONEY BEING INVESTED BY A TRUST

BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS

BUYING SHARES
The price to buy one share of each fund is the fund's NAV. Each fund's
shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your
investment is received in proper form.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity Funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.

MINIMUMS

TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accounts(double dagger) $500
TO ADD TO AN ACCOUNT $250
Through regular investment plans $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accounts(double dagger) $500

(double dagger)FIDELITY TRADITIONAL IRA, ROTH IRA, ROTH CONVERSION
IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.

These minimums may be lower for purchases through a Fidelity
GoalPlanner SM account in Worldwide. There is no minimum account
balance or initial or subsequent purchase minimum for purchases
through Fidelity Portfolio Advisory Services SM, a qualified state
tuition program, certain Fidelity retirement accounts funded through
salary deduction, or accounts opened with the proceeds of
distributions from such retirement accounts. In addition, each fund
may waive or lower purchase minimums in other circumstances.

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KEY INFORMATION

PHONE TO OPEN AN ACCOUNT
1-800-544-7777 (bullet) Exchange from another
Fidelity fund.
TO ADD TO AN ACCOUNT
(bullet) Exchange from another
Fidelity fund.
(bullet) Use Fidelity Money
Line(registered trademark) to transfer from your bank account.

INTERNET TO OPEN AN ACCOUNT
WWW.FIDELITY.COM (bullet) Complete and sign the
application. Make your check payable to the
complete name of the fund. Mail to the address
under "Mail" below.
TO ADD TO AN ACCOUNT
(bullet) Exchange from another
Fidelity fund.
(bullet) Use Fidelity Money Line
to transfer from your bank account.

MAIL TO OPEN AN ACCOUNT
FIDELITY INVESTMENTS (bullet) Complete and sign the
P.O. BOX 770001 application. Make your check payable to the
CINCINNATI, OH 45277-0002 complete name of the fund. Mail to the address at
left.
TO ADD TO AN ACCOUNT
(bullet) Make your check
payable to the complete name of the fund. Indicate
your fund account number on your check and mail to
the address at left.
(bullet) Exchange from another
Fidelity fund. Send a letter of instruction to the
address at left, including your name, the funds'
names, the fund account numbers, and the dollar
amount or number of shares to be exchanged.

IN PERSON TO OPEN AN ACCOUNT
(bullet) Bring your application
and check to a Fidelity Investor Center. Call
1-800-544-9797 for the center nearest you.
TO ADD TO AN ACCOUNT
(bullet) Bring your check to a
Fidelity Investor Center. Call 1-800-544-9797 for
the center nearest you.

WIRE TO OPEN AN ACCOUNT
(bullet) Call 1-800-544-7777 to
set up your account and to arrange a wire
transaction.
(bullet) Wire within 24 hours to:
Bankers Trust Company, Bank Routing #
021001033, Account # 00163053.
(bullet) Specify the complete
name of the fund and include your new fund account
number and your name.
TO ADD TO AN ACCOUNT
(bullet) Wire to: Bankers Trust
Company, Bank Routing # 021001033, Account #
00163053.
(bullet) Specify the complete
name of the fund and include your fund account
number and your name.

AUTOMATICALLY TO OPEN AN ACCOUNT
(bullet) Not available.
TO ADD TO AN ACCOUNT
(bullet) Use Fidelity Automatic
Account Builder(registered trademark) or Direct Deposit.
(bullet) Use Fidelity Automatic
Exchange Service to exchange from a Fidelity money
market fund.

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SELLING SHARES
The price to sell one share of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 30 days;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until investments credited to your account have been received
and collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other assets rather than in cash if the Board of Trustees determines
it is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.

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KEY INFORMATION

PHONE (bullet) Call the phone number at
1-800-544-7777 left to initiate a wire transaction or to request a
check for your redemption.
(bullet) Use Fidelity Money Line
to transfer to your bank account.
(bullet) Exchange to another
Fidelity fund. Call the phone number at left.

INTERNET (bullet) Exchange to another
WWW.FIDELITY.COM Fidelity fund.
(bullet) Use Fidelity Money Line
to transfer to your bank account.

MAIL INDIVIDUAL, JOINT TENANT,
FIDELITY INVESTMENTS SOLE PROPRIETORSHIP, UGMA, UTMA
P.O. BOX 660602 (bullet) Send a letter of
DALLAS, TX 75266-0602 instruction to the address at left, including your
name, the fund's name, your fund account number,
and the dollar amount or number of shares to be
sold. The letter of instruction must be signed by all
persons required to sign for transactions, exactly as
their names appear on the account.
RETIREMENT ACCOUNT
(bullet) The account owner
should complete a retirement distribution form. Call
1-800-544-6666 to request one.
TRUST
(bullet) Send a letter of
instruction to the address at left, including the trust's
name, the fund's name, the trust's fund account
number, and the dollar amount or number of shares
to be sold. The trustee must sign the letter of
instruction indicating capacity as trustee. If the trustee's
name is not in the account registration, provide a copy
of the trust document certified within the last 60 days.
BUSINESS OR ORGANIZATION
(bullet) Send a letter of
instruction to the address at left, including the firm's
name, the fund's name, the firm's fund account
number, and the dollar amount or number of shares
to be sold. At least one person authorized by
corporate resolution to act on the account must sign
the letter of instruction.
(bullet) Include a corporate
resolution with corporate seal or a signature
guarantee.
EXECUTOR, ADMINISTRATOR, CONSERVATOR,
GUARDIAN
(bullet) Call 1-800-544-6666
for instructions.

IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA, UTMA
(bullet) Bring a letter of
instruction to a Fidelity Investor Center. Call
1-800-544-9797 for the center nearest you. The
letter of instruction must be signed by all persons
required to sign for transactions, exactly as their
names appear on the account.
RETIREMENT ACCOUNT
(bullet) The account owner
should complete a retirement distribution form. Visit
a Fidelity Investor Center to request one. Call
1-800-544-9797 for the center nearest you.
TRUST
(bullet) Bring a letter of
instruction to a Fidelity Investor Center. Call
1-800-544-9797 for the center nearest you. The
trustee must sign the letter of instruction indicating
capacity as trustee. If the trustee's name is not in the
account registration, provide a copy of the trust
document certified within the last 60 days.
BUSINESS OR ORGANIZATION
(bullet) Bring a letter of
instruction to a Fidelity Investor Center. Call
1-800-544-9797 for the center nearest you. At
least one person authorized by corporate resolution
to act on the account must sign the letter of
instruction.
(bullet) Include a corporate
resolution with corporate seal or a signature
guarantee.
EXECUTOR, ADMINISTRATOR, CONSERVATOR,
GUARDIAN
(bullet) Visit a Fidelity Investor
Center for instructions. Call 1-800-544-9797 for the
center nearest you.

AUTOMATICALLY (bullet) Use Personal Withdrawal
Service to set up periodic redemptions from your
account.

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EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privilege in the
future.
Other funds may have different exchange restrictions, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.

ACCOUNT FEATURES AND POLICIES

FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.

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AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS

FIDELITY
AUTOMATIC
ACCOUNT
BUILDER
TO MOVE MONEY
FROM YOUR BANK
ACCOUNT TO A FIDELITY
FUND

MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (bullet) To set up for a new account,
complete the appropriate section on the fund
application.
(bullet) To set up for existing accounts, call
1-800-544-6666 or visit Fidelity's Web site for
an application.
(bullet) To make changes, call
1-800-544-6666 at least three business days
prior to your next scheduled investment date.

DIRECT DEPOSIT
TO SEND ALL OR A
PORTION OF YOUR
PAYCHECK OR
GOVERNMENT CHECK
TO A FIDELITY FUNDA

MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (bullet) To set up for a new account, check
the appropriate box on the fund application.
(bullet) To set up for an existing account,
call 1-800-544-6666 or visit Fidelity's Web site
for an authorization form.
(bullet) To make changes you will need a
new authorization form. Call 1-800-544-6666
or visit Fidelity's Web site to obtain one.

A BECAUSE THEIR SHARE
PRICES FLUCTUATE, THESE
FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR
DIRECT DEPOSIT OF YOUR
ENTIRE CHECK.

FIDELITY
AUTOMATIC
EXCHANGE
SERVICE
TO MOVE MONEY
FROM A FIDELITY
MONEY MARKET FUND
TO ANOTHER FIDELITY
FUND

MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, (bullet) To set up, call 1-800-544-6666
quarterly, or annually after both accounts are opened.
(bullet) To make changes, call
1-800-544-6666 at least three business days
prior to your next scheduled exchange date.

PERSONAL
WITHDRAWAL
SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM
YOUR ACCOUNT TO YOU
OR TO YOUR BANK
ACCOUNT.

FREQUENCY FREQUENCY PROCEDURES
Monthly Monthly (bullet) To set up, call 1-800-544-6666.
(bullet) To make changes, call Fidelity at
1-800-544-6666 at least three business days
prior to your next scheduled withdrawal date.

</TABLE>

OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.

OTHER FEATURES

WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(bullet) You must sign up for the Wire feature before using it.
Complete the appropriate section on the application when opening your
account, or call 1-800-544-7777 to add the feature after your account
is opened. Call 1-800-544-7777 before your first use to verify that
this feature is set up on your account.
(bullet) To sell shares by wire, you must designate the U.S.
commercial bank account(s) into which you wish the redemption proceeds
deposited.

FIDELITY MONEY LINE
TO TRANSFER MONEY BY PHONE BETWEEN YOUR BANK ACCOUNT AND YOUR FUND
ACCOUNT.
(bullet) You must sign up for the Money Line feature before using it.
Complete the appropriate section on the application and then call
1-800-544-7777 or visit Fidelity's Web site before your first use to
verify that this feature is set up on your account.
(bullet) Most transfers are complete within three business days of
your call.
(bullet) Maximum purchase: $100,000

FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.
CALL 1-800-544-7272 OR VISIT FIDELITY'S WEB SITE FOR MORE INFORMATION.
(bullet) For account balances and holdings;
(bullet) To review recent account history;
(bullet) For mutual fund and brokerage trading; and
(bullet) For access to research and analysis tools.

FIDELITY WEB XPRESS(registered trademark)
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S WEB
SITE.
(bullet) For account balances and holdings;
(bullet) To review recent account history;
(bullet) To obtain quotes;
(bullet) For mutual fund trading; and
(bullet) To access third-party research on companies, stocks, mutual
funds and the market.

TOUCHTONE XPRESS
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE.
CALL 1-800-544-5555.
(bullet) For account balances and holdings;
(bullet) For mutual fund and brokerage trading;
(bullet) To obtain quotes;
(bullet) To review orders and mutual fund activity; and
(bullet) To change your personal identification number (PIN).

POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity if you need additional
copies of financial reports, prospectuses or historical account
information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's Web
site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500, subject to an annual maximum charge
of $24.00 per shareholder. It is expected that accounts will be valued
on the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to Fidelity, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will
not be deducted from Fidelity brokerage accounts, retirement accounts
(except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating
accounts with Fidelity maintained by Fidelity Service Company, Inc. or
FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV on the day your account is closed.
Fidelity may charge a FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Each fund earns dividends, interest and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gains distributions.
Each fund normally pays dividends and capital gains distributions in
December.

DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gains distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gains distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gains distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gains distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.

TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income. Each
fund's distributions of long-term capital gains are taxable to you
generally as capital gains at a rate based on how long the securities
were held.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund is the difference between
the cost of your shares and the price you receive when you sell them.

FUND SERVICES

MANAGEMENT = BASIC +/- PERFORMANCE
FEE FEE ADJUSTMENT

The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by a fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For October 1998, the group fee rate was __%. The individual fund fee
rate is 0.45% for each fund.
The basic fee for Diversified International Fund, International Value
Fund, and Overseas Fund for the fiscal year ended October 31, 1998 was
__%, __% and __%, respectively, of the fund's average net assets.
The performance adjustment rate is calculated monthly by comparing
Diversified International Fund's, International Value Fund's, and
Overseas Fund's performance to that of the Morgan Stanley Capital
International GDP-Weighted EAFE Index or the Morgan Stanley Capital
International EAFE Index over the performance period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
the fund's average net assets over the performance period.
For Diversified International Fund, International Value Fund, and
Overseas Fund, the performance period is the most recent 36-month
period.
The total management fee for the fiscal year ended October 31, 1998
was __% of the fund's average net assets for International Growth &
Income Fund, __% of the fund's average net assets for Diversified
International Fund , __% of the fund's average net assets for
International Value Fund; __% of the fund's average net assets for
Overseas Fund, and __% of the fund's average net assets for Worldwide
Fund.
FMR pays FMR U.K., FMR Far East, FIJ and FIIA for providing assistance
with investment advisory services, and FIIA in turn pays FIIA(U.K.)L.
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated by FMR at any time , can
decrease a fund's expenses and boost its performance.
[As of October 31, 1998, approximately __% and __% OF [NAME OF FUND]'s
total outstanding shares, respectively, were held by [FMR/FMR and [an]
FMR affiliate[s]/[an] FMR affiliate[s]].]

FUND DISTRIBUTION
FDC distributes each fund's shares.
Each fund has adopted a Distribution and Service Plan pursuant to Rule
12b-1 of the Investment Company Act of 1940 that recognizes that FMR
may use its management fee revenues, as well as its past profits or
its resources from any other source, to pay FDC for expenses incurred
in connection with providing services intended to result in the sale
of fund shares and/or shareholder support services. FMR, directly or
through FDC, may pay intermediaries, such as banks, broker-dealers and
other service providers, that provide those services. Currently, the
Board of Trustees of each fund has authorized such payments.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of a fund, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related
Statement of Additional Information (SAI), in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This Prospectus and the related SAI do
not constitute an offer by the funds or by FDC to sell or to buy
shares of the funds to any person to whom it is unlawful to make such
offer.

APPENDIX

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
fund's financial history for the past 5 years. Certain information
reflects financial results for a single fund share. Total returns for
each period include the reinvestment of all dividends and
distributions. The annual information has been audited by
______________ LLP, independent accountants, whose report, along with
the funds' financial highlights and financial statements, are included
in the funds' Annual Report. A free copy of the Annual Report is
available upon request.

[Financial Highlights to be filed by subsequent amendment.]

You can obtain additional information about the funds. The funds'
Statement of Additional Information (SAI) includes more detailed
information about each fund and its investments. The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). Each fund's annual and semi-annual reports include a
discussion of recent market conditions and the fund's investment
strategies, performance and holdings.

For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8888 or visit Fidelity's Web site at www.fidelity.com.

The SAI, the funds' annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-4008

Fidelity Investments & (Pyramid) Design, Fidelity, Fidelity
Investments, TouchTone Xpress, Fidelity Money Line, Fidelity Automatic
Account Builder, Fidelity On-Line Xpress+, Fidelity Web Xpress, and
Directed Dividends are registered trademarks of FMR Corp.

Fidelity GoalPlanner and Fidelity Portfolio Advisory Services are
service marks of FMR Corp.

The third party marks appearing above are the marks of their
respective owners.

IBD-pro-1298

[Insert item code number]

FIDELITY'S BROADLY DIVERSIFIED INTERNATIONAL EQUITY FUNDS

FIDELITY INTERNATIONAL GROWTH & INCOME FUND, FIDELITY DIVERSIFIED
INTERNATIONAL FUND,
FIDELITY INTERNATIONAL VALUE FUND, FIDELITY OVERSEAS FUND, AND
FIDELITY WORLDWIDE FUND
FUNDS OF FIDELITY INVESTMENT TRUST

STATEMENT OF ADDITIONAL INFORMATION

DECEMBER 30, 1 998

This Statement of Additional Information (SAI) is not a prospectus.
Portions of the funds' Annual Report ar e incorporated herein. The
Annual Report is supplied with this SAI.
To obtain a free additional copy of the Prospectus, dated December
30, 1998, or an Annual Report, pleas e call Fidelity(registered
trademark) at 1-800-544-8888 or visit Fidelity's Web site at
www.fidelity.com.

TABLE OF CONTENTS PAGE

INVESTMENT POLICIES AND LIMITATIONS 3

SPECIAL CONSIDERATIONS REGARDING AFRICA 11

SPECIAL CONSIDERATIONS REGARDING CANADA 11

SPECIAL CONSIDERATIONS REGARDING EUROPE 12

SPECIAL CONSIDERATIONS REGARDING JAPAN, THE PACIFIC BASIN, AND 14
SOUTHEAST ASIA

SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA 18

SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION 20

PORTFOLIO TRANSACTIONS 21

VALUATION 24

PERFORMANCE 24

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION 34

DISTRIBUTIONS AND TAXES 34

TRUSTEES AND OFFICERS 34

CONTROL OF INVESTMENT ADVISERS 39

MANAGEMENT CONTRACTS 39

DISTRIBUTION SERVICES 43

TRANSFER AND SERVICE AGENT AGREEMENTS 44

DESCRIPTION OF THE TRUST 45

FINANCIAL STATEMENTS 46

APPENDIX 46

IBD-ptb-1298

[Insert item code number]

(fidelity_logo_graphic) 82 Devonshire Street, Boston, MA 02109

INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.

INVESTMENT LIMITATIONS OF INTERNATIONAL GROWTH & INCOME FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than obligations
issued or guaranteed by the government of the United States or its
agencies or instrumentalities, or by foreign governments or their
political subdivisions, or by supranational organizations) if, as a
result, more than 25% of the fund's total assets (taken at current
value) would be invested in the securities of issuers having their
principal business activities in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but
this limitation does not apply to purchases of debt securities or to
repurchase agreements).
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF DIVERSIFIED INTERNATIONAL FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF INTERNATIONAL VALUE FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, not withstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies, and limitations as
the fund.

INVESTMENT LIMITATIONS OF OVERSEAS FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but
this limitation does not apply to purchases of debt securities or to
repurchase agreements).
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF WORLDWIDE FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but
this limitation does not apply to purchases of debt securities or to
repurchase agreements).
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 11.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fun d under the 1 940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of
mortgages, loans, receivables or other assets. Payment of interest and
re payment of principal may be largely dependent upon the cash flows
generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds, or other credit
enhancements. Asset-backed security values may also be affected by
other factors including changes in interest rates, the availability of
information concerning the pool and its structure, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities providing the credit
enhancement. In addition, these securities may be subject to
prepayment risk.
BORROWING. Each fund may borrow from banks or from other funds
advised by FMR or its affiliates, or through reverse repur chase
agreements. If a fund borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. If a fun d
makes additional investments while borrowings are outstanding, this
may be considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it
in cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an
issuer. In the event an issuer is liquidated or declares bankruptcy,
owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes,
preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the
underlying common stock (or cash or securities of equivalent value) at
a stated exchange ratio. A convertible security may also be called for
redemption or conversion by the issuer after a particular date and
under certain circumstances (including a specified price) established
upon issue. If a convertible security held by a fund is called for
redemption or conversion, the fund could be required to tender it for
redemption, convert it into the underlying common stock, or sell it to
a third party.
Convertible securities generally have less potential for gain or
loss than common stocks. Convertible securities generally provide
yields higher than the underlying common stocks, but generally lower
than comparable non-convertible securities. Because of this higher
yield, convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally,
governmental issuers of foreign debt securities may be unwilling to
pay interest and repay principal when due and may require that the
conditions for payment be renegotiated. There is no assurance that FMR
will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in foreign
currencies and of dividends and interest paid with respect to such
securities will fluctuate based on the relative strength of the U.S.
dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement
and custodial practices (including those involving securities
settlement whe re fund assets may be released prior to receipt of
payment) are often less developed than those in U.S. markets, and may
result in increased risk or substantial delays in the event of a
failed trade or the insolvency of, or breach of duty by, a foreign
broker-dealer, securiti es depository or foreign subcustodian. In
addition, the costs associated with foreign investments, including
withholding taxes, brokerage commissions and custodial costs, are
generally higher than with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging m arkets may be bas ed on
only a few industries, may be highly vulnerable to changes in local or
global trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currenc y excha nge.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements
involve an agreement to purchase a foreign security and to sell that
security bac k to orig inal seller at an agreed-upon price in
either U.S. dollars or foreign currency. Unlike typical U.S.
repurchase agreements, foreign repurchase agreements may not be fully
collateralized at all times. The value of a security purchased by a
fund may be more or less than the price at which the counterparty has
agreed to repurchase the security. In the event of default by the
counterparty, the fund may suffer a loss if the value of the security
purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve
higher credit risks than repurchase agreements in U.S. markets, as
well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging
markets may involve issuers or counterparties with lower credit
ratings than typical U.S. repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The follo wing paragraphs pertai n to
futures and options: Combined Positions, Correlation of Price Changes,
Futures Contracts, Futures Margin Payments, Limitations on Futures and
Options Transactions, Liquidity of Options and Futures Contracts,
Options and Futures Relating to Foreign Currencies, OTC Options,
Purchasing Put and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purch asing and writing options in
combination with each other, or in combination with futures or forward
contracts, to a djust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, w hich involves a risk that
the options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. I n purchasing a futures contract, the buyer
agrees to purchase a specified underlying instrument at a specified
future date. In selling a futures contract, the seller agrees to sell
a specified underlying instrument at a specified future date. The
price at which the purchase and sale will take place is fixed when
the buyer and seller enter into the contract. Futures can be held
until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
Fu tures may be based on fo reign indexes such as the CAC 40
(France), DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE
100 (United Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong),
and Nikkei 225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the
United States and abroad, foreign futures exchanges may follow
trading, settlement and margin procedures that are different from
those for U.S. exchanges. Futures contracts traded outside the United
States may involve greater risk of loss than U.S.-traded contracts,
including potentially greater risk of losses due to insolvency of a
futures broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuatio n.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its t otal assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may
purchase and write currency options to increase or decrease its
exposure to different foreign currencies. Currency options may
also be purchased or written in conjunction with each other or with
currency futures or forward contracts. Currency futures and options
values can be expected to correlate with exchange rates, but may not
reflect other factors that affect the value of a fund's investments. A
currency hedge, for example, should protect a Yen-denominated security
from a decline in the Yen, but will not protect a fund against a price
decline resulting from deterioration in the issuer's creditworthiness.
Because the value of a fund's foreign-denominated investments changes
in response to many factors other than exchange rates, it may not be
possible to match the amount of currency options and futures to the
value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the o ption contract. Wh ile
this type of arrangement allows the purchaser or writer greater
flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they
are traded.
PURCHASING PUT AND CALL OPTIONS. By purchas ing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In retur n
for this right, the purchaser pays the current market price for the
option (known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may
terminate its position in a put option by allowing it to expire or by
exercising the option. If the option is allowed to expire, the
purchaser will lose the entire premium. If the option is exercised,
the purchaser completes the sale of the underlying instrument at the
strike price. A pu rchaser may also terminate a put option position
by closing it out in the secondary market at its current price, if a
liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer o f a put or call option
takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the writer assumes
the obligation to pay the strike price for the option's underlying
instrument if the other party to the option chooses to exercise it.
The writer may seek to terminate a position in a put option before
exercise by closing out the option in the secondary market at its
current price. If the secondary market is not liquid for a put option,
however, the writer must continue to be prepared to pay the strike
price while the option is outstanding, regardless of price changes.
When writing an option on a futures contract, a fund will be required
to mak e margin payments to an FCM as described above for futures
contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES canno t be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are in struments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific inst rument or statistic.
Currency-i ndexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each oth er.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate
changes in the United States and abroad. Indexed securities may be
more volatile than the und erlying instruments. Indexed securities
are also subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are e qual to or lower than
the cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration o f seven days. Loans
may be called on one day's notice. A fund may have to borrow from a
bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a
lost investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. In vestment-grade debt securities
are medium and high-quality securities. Some may possess speculative
characteristics and may be sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be
of equivalent quality by FMR.
ISSUER LOCATION. FMR determines wher e an issuer is located by
look ing at such factors as the issuer's country of organization,
the primary trading market for the issuer's securities, and the
location of the issuer's assets, personnel, sales, and earnings. The
issuer of a security is considered to be located in a particular
country if (1) the security is issued or guaranteed by the government
of the country or any of its agencies, political subdivisions, or
instrumentalities; (2) the security has its primary trading market in
that country; or (3) the issuer is organized under the laws of that
country, derives at least 50% of its revenues or profits from goods
sold, investments made, or services performed in the country, or has
at least 50% of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on dem and.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans th rough direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have
poor protection with respect to the payment of interest and repayment
of principal, or may be in default. These securities are often
considered to be speculative and involve greater risk of loss or price
changes due to changes in the issuer's capacity to pay. The market
prices of lower-quality debt securities may fluctuate more than those
of higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The mar ket for lower-quality debt securities may be thinner and
less active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt s ecurities and the ability of outside
pricing services to value lower-quality debt securities.
Because the ris k of defaul t is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MORTGAGE SECURITIES are issued b y government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage security is an obligation of the issuer backed by a mortgage
or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage securities, such as collateralized mortgage
obligations (or "CMOs"), make payments of both principal and interest
at a range of specified intervals; others make semiannual interest
payments at a predetermined rate and repay principal at maturity (like
a typical bond). Mortgage securities are based on different types of
mortgages, including those on commercial real estate or residential
properties. Stripped mortgage securities are created when the interest
and principal components of a mortgage security are separated and sold
as individual securities. In the case of a stripped mortgage security,
the holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage, while the holder
of the "interest-only" security (IO) receives interest payments
fr om the same underlying mortgage.
Fannie Maes and Freddie Macs are pass-through securities
issued by Fannie Mae and Freddie Mac, respectively. Fannie Mae and
Freddie Mac, which guarantee payment of interest and repayment of
principal on Fannie Maes and Freddie Macs, respectively, are federally
chartered corporations supervised by the U.S. Government that act as
governmental instrumentalities under authority granted by Congress.
Fannie Mae is authorized to borrow from the U.S. Treasury to meet its
obligations. Fannie Maes and Freddie Macs are not backed by the full
faith and credit of the U.S. Government.
The value of mortgage securities may change due to shifts in the
market's perception of issuers and changes in interest rates. In
addition, regulatory or tax changes may adversely affect the mortgage
securities market as a whole. Non-government mortgage securities may
offer higher yields than those issued by government entities, but also
may be subject to greater price changes than government issues.
Mortgage securities are subject to prepayment risk, which is the risk
that early principal payments made on the underlying mortgages,
usually in response to a reduction in interest rates, will result in
the return of principal to the investor, causing it to be invested
subsequently at a lower current interest rate. Alternatively, in a
rising interest rate environment, mortgage security values may be
adversely affected when prepayments on underlying mortgages do not
occur as anticipated, resulting in the extension of the security's
effective maturity and the related increase in interest rate
sensitivity of a longer-term instrument. The prices of stripped
mortgage securities tend to be more volatile in response to changes in
interest rates than those of non-stripped mortgage securities.
In order to earn additional income for a fund, FMR may use a
trading strategy that involves selling mortgage securities and
simultaneously agreeing to purchase similar securities on a later date
at a set price. This strategy may result in an increased portfolio
turnover rate which increases costs and may increase taxable
gains.
PREFERRED STOCK is a class of equity or ownership in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, owners of bonds take precedence
over the claims of those who own preferred and common stock.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are su bject to legal restrictions on their
sale. Difficulty in selling securities may result in a loss or be
costly to a fund. Restricted securities generally can be sold in
privately negotiated transactions, pursuant to an exemption from
registration under the Securities Act of 1933, or in a registered
public offering. Where registration is required, the holder of a
registered security may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the
time it decides to seek registration and the time it may be permitted
to sell a security under an effective registration statement. If,
during such a period, adverse market conditions were to develop, the
holder might obtain a less favorable price than prevailed when it
decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Because there
may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR to be of good
standing. Furthermore, they will only be made if, in FMR's judgment,
the consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a
fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of
cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, the
fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any dividends, interest, or
other distributions on the securities loaned and to any increase in
market value; (5) the fund may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able
to vote proxies on the securities loaned, either by terminating the
loan or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in other
eligible securities. Investing this cash subjects that investment,
as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX" are short sales of sec urities that a
fu nd owns or has the right to obtain (equivalent in kind or amount
to the securities sold short). If a fund enters into a short sale
against the box, it will be required to set aside securities
equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and will
be required to hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short
sales against the box.
SHORT SALES. Stocks underlying a fund's con vertible security
holdings can be sold short. For example, if FMR anticipates a decline
in the price of the stock underlying a convertible security held by a
fund, it may sell the stock short. If the stock price subsequently
declines, the proceeds of the short sale could be expected to offset
all or a portion of the effect of the stock's decline on the value of
the convertible security. Each fund currently intends to hedge no more
than 15% of its total assets with short sales on equity securities
underlying its convertible security holdings under normal
circumstances.
A fund will be required to set aside securities equivalent in kind and
amount to those sold short (or securities convertible or exchangeable
into such securities) and will be required to hold them aside while
the short sale is outstanding. A fund will incur transaction costs,
including interest expenses, in connection with opening, maintaining,
and closing short sales.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by forei gn
governm ents or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abro ad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap a greements can take
many different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price, a nd for International Growth & Income, and
yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to
invest without limitation in preferred stocks and investment-grade
debt instruments for temporary, defensive purposes.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A w arrant ce ases to have
value if it is not exercised prior to its expiration date. These
factors can make warrants more speculative than other types of
investments.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.

SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of
over 50 countries and 720 million people. Civil wars, coups and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, it is home to an abundance of natural resources,
including natural gas, aluminum, crude oil, copper, iron, bauxite,
cotton, diamonds and timber. Wealthier countries generally have strong
connections to European partners, and evidence of these relationships
is seen in the growing market capitalization and foreign investment of
these countries. Economic performance is closely tied to world
commodity markets, particularly oil, and also to weather conditions,
such as drought.
Five African countries are among the 20 fastest growing in the
world (Uganda, Ivory Coast, Botswana, Angola and Zimbabwe, confirm EIU
1995), with GDP growth rates ranging from 5.5% to 6.0%. Two countries,
Yemen and Bahrain, are experiencing growth at or below 2.0%, and one
country, Libya, is experiencing (-4.0%) negative growth.
African economic growth is projected to remain higher than in any
recent year other than 1996. The relatively small effects of the Asian
crisis are attributable to the comparatively low levels of private
capital flows to most countries in the regions. Africa can be
negatively impacted from the slowdown in global growth, and its
effects on commodity prices.
Several African countries in the north have substantial oil
reserves and accordingly their economies react strongly to world oil
prices. They share a regional and sometimes religious identification
with the oil producing nations of the Middle East and can be strongly
affected by political and economic developments in those countries. As
in the south, weather conditions also have a strong impact on many of
their natural resources, and, as was the case in 1995, severe drought
can adversely effect economic growth.
Twelve African countries have active equity markets (Bahrain,
Botswana, Egypt, Ghana, Kenya, Morocco, Nigeria, Oman, South Africa,
Tunisia, Zambia, and Zimbabwe). The oldest market, in Egypt, was
established in 1883, while the youngest, in Zambia, was established in
1994. Four additional markets have been established since 1989, and
the mean age for all equity markets is 40 years old. A total of 1,830
firms are listed on the respective exchanges. Total market
capitalization for these countries in 1996 was $290 billion, an
average increase of 54% over 1995 levels.
The South African market is the largest in Africa and has a
capitalization of more than ten times that of all the other African
markets combined. In 1997, the country's Johannesburg Stock Exchange
fell by 6.8%, due largely to weakening commodity prices and a slowdown
in the South African economy. The market decline extended into 1998 as
the South African rand declined versus the world's major currencies.

SPECIAL CONSIDERATIONS REGARDING CANADA
Canada is a confederation of ten provinces with a parliamentary
system of government. Canada is the world's second largest nation by
landmass and is inhabited by 30.2 million people, most of whom are
descendants of France, the United Kingdom and indigenous peoples. The
country has a workforce of over 15 million people in various
industries such as trade, manufacturing, mining, finance, construction
and government. While the country has many institutions which closely
parallel the United States, such as a transparent stock market and
similar accounting practices, it differs from the United States in
that it has an extensive social welfare system, much more akin to
European welfare states.
The confederated structures combined with recent financial pressure
on the federal government have pushed provinces, Quebec in particular,
to call for a revaluation of the legal and financial relationships
between the federal government in Ottawa and the provinces. Recent
referendums on Quebec sovereignty have been narrowly defeated and the
issue appears far from resolved. However, in August of 1998, the
country's Supreme Court decided that Quebec does not have the right to
secede unilaterally, removing any immediate threat that Canada will
break up. Nevertheless, the Canadian markets could continue to react
to any periodic escalations of separatist calls.
Canada is one of the richest nations in the world in terms of
natural resources. The country is a major producer of such commodities
as forest products, mining, metals, and agricultural products.
Additionally, energy related products such as oil, gas, and
hydroelectricity are important components of their economy.
Accordingly, the Canadian stock market is strongly represented by
basic material stocks, and movements in the supply and demand of
industrial materials, agriculture, and energy, both domestically and
internationally, can have a strong effect on market performance.
The United States is Canada's largest trading partner and
approximately 80% of Canadian merchandise traded in 1997 was with the
United States. Automobiles and auto parts accounted for the largest
export items followed by energy, mining and forest products. Canada is
the largest energy supplier to the United States, while the United
States is Canada's largest foreign investor. United States investment
has been largely focused on financial, energy, metals and mining
businesses. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities markets increasingly sensitive to U.S. economic and market
events.
For United States investors in Canadian markets, currency has
become an important determinant of investment return. Since Canada let
its dollar float in 1970, its value has been in a steady decline
against its United States counterpart. While the decline has enabled
Canada to stay competitive with its more efficient southern neighbor,
which buys four-fifths of its exports, United States investors have
seen their investment returns eroded by the impact of currency
conversion.

SPECIAL CONSIDERATIONS REGARDING EUROPE
Europe can be divided into two distinct categories of market
development: the developed economies of Western Europe and the
transition economies of Eastern Europe.
Any discussion of European national economies and securities
markets must be made with an eye to the impact that the European Union
(EU) and European and Economic Monetary Union (EMU) - will have upon
the future of these countries as well as the rest of the world. The
scope and magnitude of these economic and political initiatives dwarfs
anything attempted to date. If successful, the EU will change or erase
many political, economic, cultural and market distinctions that define
and differentiate each of the Continent's countries today.
The third and final stage of the European Economic and Monetary
Union is scheduled to be implemented on January 1, 1999. The European
Union (EU) consists of 15 countries of western Europe: Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United
Kingdom. The six founding countries first formed an economic community
in the 1950s to bring down trade barriers such as taxes and quotas, to
eliminate technical restrictions such as special standards and
regulations for foreigners, and to coordinate various industrial
policies, such as those pertaining to agriculture. Since that time the
group has admitted new members and, in time, may expand its membership
to other nations such as those of Eastern Europe. The EU has as its
goal, the creation of a single, unified market that would be, at over
370 million people, the largest in the developed world and through
which goods, people and capital could move freely.
A second component of the EU is the establishment of a single
currency - the Euro, to replace each member country's domestic
currencies. In preparation for the creation of the Euro, the Exchange
Rate Mechanism (ERM) was established to keep the various national
currencies at a pre-specified value relative to each other. The year
1997 is significant for membership in the EU as it is the initial
reference year for evaluating debt levels and deficits within the
criteria set forth by the Maastricht treaty. Specifically, the
Maastricht criteria include, among other indicators, an inflation rate
below 3.3%, a public debt below 60% of GDP, and a deficit of 3% or
less of GDP. Failure to meet the Maastricht levels would disqualify
any country from membership.
On May 3, 1998 the European Council of Ministers formally announced
the "first wave" of EMU participants. They are: Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands,
Portugal and Spain. On January 1, 1999, the Euro becomes a currency,
while the bank notes used by EMU's eleven members remain legal tender.
After a three year transition period, the Euro will begin circulating
on January 1, 2002. Six months later, today's currencies will cease to
exist.
Many foreign and domestic businesses are establishing or increasing
their presence in Europe in anticipation of the new unified single
market. Clear, confident visions of a diverse, multi-industrial,
unified market under a single currency have been the impetus for much
of the recent corporate restructuring initiatives as well as for the
increased mergers and acquisitions activity in the region. A
successful EMU could prove to be an engine for sustained growth
throughout Europe.
While the securities markets view the introduction of the euro as
inevitable, the success of the union is not wholly assured. Europe
must grapple with a number of challenges, any one of which could
threaten the survival of this monumental undertaking. For example,
eleven disparate economies must adjust to a unified monetary system,
the absence of exchange rate flexibility and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized and its cultures differ widely. Unemployment is
historically high and could pose a political risk that one or more
countries might exit the union placing the currency and banking system
in jeopardy.
For those countries in Western and Eastern Europe that will not be
included in the first round of the EU implementation, the prospects
for eventual membership serves as a strong political impetus for many
governments to employ tight fiscal and monetary policies. Particularly
for the Eastern European countries, aspirations to join the EU are
likely to push governments to act decisively. At the same time, there
could become an increasingly widening gap between rich and poor both
within the aspiring countries and also those countries who are close
to meeting membership criteria and those who are not. Realigning
traditional alliances could result in altering trading relationships
and potentially provoking divisive socio-economic splits.
The economies of Eastern Europe are embarking on the transition
from communism at different paces with appropriately different
characteristics. The transition countries also display sharp contrasts
in performance. Those that are most advanced in the transformation
process are now reaping the rewards of comprehensive reform and
stabilization policies pursued with determination over recent years.
These include Poland, the Baltic countries, Croatia, the Czech
Republic, Hungary, the Slovak Republic and Slovenia. Conversely, those
that are less advanced in the transition are struggling with a number
of policy challenges to strengthen their economies. Several countries
have made good progress, and in Armenia, Azerbaijan, Georgia,
Kazakhstan, and the Kyrgyz Republic, inflation has fallen considerably
in recent years. Nevertheless, the East European markets are
particularly vulnerable to weakness in the world's other emerging
countries and are particularly sensitive to events in Russia. For
example, in mid-1998 when economic and political turmoil forced the
Russian government to devalue its currency and restructure its debt
payments, the other markets in Eastern Europe suffered significant
destabilization of which the extent and duration is still unknown.
FRANCE. France is a republic of over 58 million people in
the historic if not the geographic center of Western Europe. The Fifth
French Republic, established in the early postwar period under Charles
de Gaulle, provides for a strong Presidency which can appoint its own
cabinet but must win approval of a parliamentary majority. The
government was founded upon the French cultural values of liberty,
brotherhood and egalitarianism. In France, this latter value often
translates into a government burden of providing job security. The
result is a large, vast bureaucracy in the public sector and strict
employment and labor laws in the private sector. In addition, a
significant portion of government economic policy revolves around
regulating and protecting domestic industries, particularly farming
and manufacturing. Finally, the French government frequently owns high
majority or minority interests in large companies, particularly
utility, transport and communications concerns. While privatization
has been a popular movement in many other European countries, it has
encountered a stalled stop-and-go cycle in France.
The French economy is the world's fourth-largest Western
industrialized economy, with a GDP of $1538 billion in 1996. The
nation has substantial agricultural resources, a diversified modern
industrial system, and a highly skilled labor force. France's economy
boasts a sophisticated industrial manufacturing base, which includes
not only high technology (information technology and
telecommunications, vehicles, aircraft, computer equipment, etc.) but
also a number of very large companies producing consumer goods. The
country's industrial structure is unusual for an industrialized
economy because the state still controls a large proportion of the
heavy strategic goods industries as well as institutions such as banks
and communications companies. The agricultural sector continues to be
important; however, most farms are small by European standards and
require massive government support. Exports are an economic strong
point and the nation has enjoyed trade surpluses in recent years.
Leading exports include chemicals, electronics and automotive and
aircraft machinery, while imports are dominated by petroleum,
industrial machinery and electronics. Their main trading partners are
the United States, Japan, and other EU countries.
The country is one of the largest consumers of nuclear energy,
obtaining nearly 75% of its total electricity needs from reactors.
While it has some small deposits of oil and gas, it remains heavily
dependent on imports for most of its needs.
In recent years, the country's economic growth has been hindered by
a series of general strikes. The government's efforts to reduce
spending to meet the Maastricht criteria have prompted strikes and
unrest from France's powerful trade unions. In addition, striking
workers have pushed their demands for a lower retirement age and a
reduction in the workweek. With an unemployment rate above 12%, the
country's labor markets are not functioning efficiently. France's
pay-as-you-go pension program is an additional deterrent to economic
growth as spending on pensions account for a tenth of GDP. While all
parties agree that the system must be replaced, no agreement has been
reached on an alternative.
France went to the polls in May 1997 after a surprise decision to
hold early elections by conservative President Jacques Chirac.
Chirac's calculation was to capitalize on popular support before he
was forced to undertake austere fiscal measures to meet the Maastricht
criteria. Voters responded that they were more concerned about the
country's high level of unemployment and Chirac's party lost enough
seats in the parliament that the president must now share power for
the remaining five years in office with a socialist-led government.
This change could set back the previous government's pledges to
continue its privatization initiatives, restrain spending, support the
franc, and endure fiscal austerity. It also calls into question
whether the French people have the will to adhere to the EMU
convergence criteria over the next few years.
The stock market in France has undergone both gradual and dramatic
changes in recent years, keeping pace with global trends toward
deregulation, privatization, and cross border activities, allowing
Paris to maintain its position as the world's fourth-largest financial
center. Until 1996, the Paris Bourse was the country's sole stock
exchange, providing access to all listed French securities. Since
then, foreign interest has been stimulated by the creation of new
markets, such as the Nouveau Marche, for riskier, growth oriented,
small corporations. While the listings of these combined markets are
fairly diverse financial companies that account for approximately
one-third of the total. The system underwent many regulatory changes
in the late 1980s, taking steps toward combating insider trading and
ensuring market transparency.
GERMANY. Germany is the largest economy in all of Europe and
is the third largest economy in the world behind the United States and
Japan. The country occupies a central position in Western Europe with
strong cultural and economic ties with the countries of Eastern Europe
and borders on no less than six other Western European countries. The
country's size, location and proven industrial ability have
historically thrust it to the center of European economic life, a
position it was able to re-attain in the wake of the post-war period.
More recently, Germany has used this position as a platform to
champion the cause of the European Union, and also to absorb and
transform the devastated economy of its former communist eastern half.

The German economy is heavily industrialized, with a strong
emphasis on manufacturing. The manufacturing sector is driven by small
and medium-sized companies, most of which are very efficient and
dynamic. Germany, nevertheless, has many large industries and
manufacturing is dominated by the production of motor vehicles,
precision engineering, brewing, chemicals, pharmaceuticals and heavy
metal products.
The economy has benefited from a strong export performance
throughout the decade. Exports, weighted heavily in the industrial
machinery, autos and chemicals sectors, have provided the economy with
positive trade balances. Exports are the main engine of GDP growth,
highlighting Germany's dependence on the prosperity of its trading
partners. Five out of its top six trading partners are fellow EU
members (the sixth is the United States), while very low levels of
trade are conducted with Asian and Latin American countries. Germany
stands very well poised to supply the emerging markets of central
Europe. It is already the largest European foreign investor in the
Czech Republic and the largest trading partner for Poland and Hungary.
Accordingly, any weakness in the emerging market economies might
likely dampen demand for German goods, to the detriment of the German
economy. As most of these emerging markets aspire to join the EU, it
is possible that a larger EU could alter Germany's trading
relationships due to new quotas, tax rates, exchange rates and other
factors which will come with EU membership.
The recent performance of the German economy must be evaluated
within the context of the 1990 reunification of the eastern and
western states. GDP growth dropped markedly during the early years of
reunification. Industry in Eastern Germany is still catching up.
Workers in Eastern Germany earn two-thirds of western wages but
produce only half as much. In addition, one of the byproducts of
assimilating East Germany into the state has been the need to
restructure many of the government services to accommodate the new and
substantially less affluent citizens. Significant tax and welfare
reforms have yet to be undertaken, and pressure is mounting on the
government to address these issues. Unemployment rates have begun to
cause some discontent among German citizens whose culture generally
places strong emphasis on a social compact. Any dissatisfaction could
be expressed at the polls during the 1998 elections.
Germany is faced with other significant economic challenges.
Unemployment is currently above 12% as the country experiences its
longest period of slow growth since the Second World War. The
government's ability to deal with the problem is limited by its
efforts to meet the stringent Maastricht criteria for convergence.
There are also growing concerns about the exodus of German companies
relocating abroad in order to avoid the country's high labor costs. In
the longer run, Germany's government must alter the peculiar mix of
capitalism, welfarism and consensus that sets the country apart. Those
decisions will be politically sensitive - especially if they
antagonize the powerful trade unions or the country's many family-run
firms.
Germany's stock market has enjoyed dramatic growth in volume as the
main DAX index has soared over the past two years. Much of the
market's strength has been attributed to the dollar's recovery and
rising corporate earnings. In addition, a number of changes have
occurred recently to support the share-buying explosion and to
establish a German equity culture. A number of initial public
offerings were launched as the government sought to divest itself of
ownership in such businesses as the nation's telephone utility and
post office businesses to ease budgetary pressures. The government
also created a supervisory authority which has outlawed insider
trading and established stiffer company reporting standards intended
to further increase the appeal of Germany's stock market.
Nevertheless, while there has been progress in broadening the investor
base, shares remain overwhelmingly in the hands of institutions and
companies.
The German central bank is one of the world's strongest and most
independent. Their high interest rates have contributed to a
controlled growth of the stock market and a steadily decreasing
inflation rate. Keeping the Deutsche Mark strong in leading up to EMU
has been a priority for the bank. Nevertheless, exports have thrived
despite the currency's strong position.
A founding member of the EU and the most ardent proponent of EMU,
Germany is seen as the primary player in Union economics and politics.
Seeking to consolidate this position, recent government policy has put
a strong emphasis on the maintenance of a strong currency and the
achievement of the Maastricht criteria.
NORDIC COUNTRIES. Increasing economic globalization and the
expansion of the EU have forced the Nordic Countries to scale back
their historically liberal welfare spending policies. While public
spending has dropped from average levels, the cutbacks in social
programs have sparked drops in domestic demand and increases in
unemployment. Nevertheless, the Nordic economies are experiencing
positive growth fueled largely by strong exports and low interest
rates. The approaching EMU deadline is putting pressure on each nation
to maintain their economies in line with requirements of the
Maastricht treaty criteria and the fiscal and political issues remain
central in political debates.
Of the Nordic countries, Finland, Denmark and Sweden are all
members of the EU. Only Norway has elected not to join. However, the
decision likely will not isolate the Norwegian economy from those of
its Nordic neighbors. The country maintains a "shadow membership" in
the EU, by which it seeks to stay as closely informed as possible and
to make its voice heard on the issues. This may ensure that it will
become more closely aligned with the rest of Europe as time passes.
One significant aspect of opting out of the EU is that the central
bank is free to pursue its own agenda, such as setting inflation
targets as opposed to exchange rate targets. Inflation patterns and
currency stability could prove to be issues that may separate the
policy decisions of Norway from the other Nordic countries.
Politically, the countries of this region are historically known
for their approach to policy making that emphasizes consensus. The
most common type of government among the Nordic countries is dominated
by long-standing, left-of-center parties which often align themselves
with smaller centrist parties for majority support. The landscape,
however, is so fractured that governing from a minority position is
common. The absence of a clear majority party slows and sometimes
arrests policy making. The strongest opposition comes from traditional
European conservative parties, which have gained support in recent
years with the decline of the welfare state and the need for the
libertarian policies necessary to compete and integrate with free
markets. None of the Nordic countries face any serious risk of any
anti-democratic political change. However, in Sweden, the prospects of
the present government will depend on its ability to create more jobs
and to prepare the economy for EMU. A large minority of voters are
also disappointed about the benefits which membership in the EU was
expected to bring and have been increasingly voicing anti-EU
sentiments. However, in May 1998, Sweden and its fellow applicants,
Finland and Denmark, were formally admitted in the "first wave" of the
EMU.
Industry in the region is heavily resource-oriented. Denmark's
agricultural sector remains the backbone of the economy although other
industries have been developing rapidly in recent years, with
engineering, food processing, pharmaceuticals, brewing and
shipbuilding gaining in importance. Finland's major industry is
forestry which supplies a large paper and timber products sector. It
also produces household goods and telecommunications equipment and has
an extremely important heavy goods sector producing ships, cement,
steel and machine tools. In Sweden, the manufacturing sector dominates
the economy and includes major industries which range from motor
vehicles to aerospace, chemicals, pharmaceuticals, timber, pulp and
paper. Several of the country's export-oriented industries (in
particular forestry, mining and steel) are suffering as the country's
high wages squeeze them out of foreign markets. Norway's oil-driven
economy has provided its citizens with one of the highest standards of
living in the world. However, they must prepare for the time, due to
arrive early in the next century, when their vast reserves run out.
Reliance on exports concentrated in a few sectors tie these countries
closely to one another.
Economically, the Nordic countries are strong export economies that
take advantage of their abundant natural resources. They are also very
closely tied both to each other and to the rest of Europe. Most
countries have witnessed low levels of positive growth in the last six
years. Finland is the exception. As a significant portion of its trade
is with Russia, Finland suffered in the early years of the collapse of
the Soviet Union. However, in the past two years its economy has
recorded some of the highest growth rates in Western Europe while
having the lowest rate of inflation. Similarly, after five years of
recession, the overall outlook for the Swedish economy is also vastly
improved. A stringent package of spending cuts and tax increases has
brought down the budget deficit to a level that is well within the EMU
target. Exports are recovering as other parts of Europe are coming out
of recession and its inflation is among the lowest in Western Europe.
However, the one weak spot in both country's economies is a
persistently high unemployment rate. Finland's unemployment, at 17%,
is the second highest in Europe after Spain, and Finland's rate
represents only a marginal improvement over the previous year.
Norway's oil driven economy is the envy of many and unemployment is
just a little over five percent.
A portion of the region's unemployment woes can be attributed to
the cultural ethic which was advanced during the years of the welfare
state. Subsequent cuts in public spending, particularly in those
sectors that traditionally rely on large government spending,
exacerbated the problem. Labor market reform will be a critical issue
in these countries as public spending is cut back. Pensions and
structural issues such as union regulations all need to be reformed, a
task, which brings both challenges and unpopularity to the government
that accepts it. Not only will labor market reforms give governments a
daunting challenge; they could also cause the public to regret their
participation in the EMU. One positive point is that the countries
boast very high standards of living, which create healthy and highly
educated workforces.
The stock markets in Scandinavia are of medium size, and frequently
are strongly influenced by a small number of large multinational
firms. For example, in Sweden thirty firms constituted 75% of the
market's total capitalization and market turnover in 1997. Weighing
heavily in the equity markets are the electronics, forest products,
mining and manufacturing sectors. Market capitalization is highest in
Sweden at $273 billion, while the others are between $74 and $94
billion. Sweden also leads in numbers of firms (261) listed. Other
country's listings range from 126 (Finland) to 249 (Denmark).
Performance of Nordic country indexes tend to be skewed owing to the
dominant weightings that a few large companies have in the index. For
example, the market capitalization of Finnish telecommunications
equipment manufacturer Nokia comprises about one-third of the total
market capitalization of the Finnish exchange and has a substantial
impact upon the performance of the companies in the HEX Index.
UNITED KINGDOM. The United Kingdom is the world's sixth
largest economy and is home to one of the oldest, most established,
and most active stock markets. An island nation, it built an empire of
strategically located trading posts such as Hong Kong and India. While
today the empire is largely dissolved, trade remains a very key
component of the U.K. economy. Strong domestic sectors are services,
natural energy resources, and heavy industry, including steel, autos,
and machinery. Imports generally emphasize food and manufacturing
components. The United Kingdom's trading partners are predominately
established market economies, such as the United States, Japan, and
other member countries of the European Union. The United Kingdom, via
the North Sea, also has substantial petroleum resources.
The London Stock Exchange is comprised of six offices scattered
throughout Great Britain and Northern Ireland. It lists over 2900
firms, and trades both foreign and domestic securities as well as
securities issued by the British Government. A vast majority of the
firms listed (80%) are from the United Kingdom. Total market
capitalization in 1997 was over $5,440 billion. Such size prevents the
stock market from being overly sensitive to the performance of
individual firms.
In 1997 the U.K. posted its sixth year of recovery with GDP growth
of 3.5%, the third highest in the EU. The labor market also appears to
have improved as pay settlements and wages remain under control
despite the employment rate falling from 6.5% to 5% over the year. The
strengthening economy prompted a sharp acceleration in consumer
spending and, in response, the nation's Monetary Policy Committee was
forced to raise base rates. The interest rate rise added fuel to an
already robust sterling which rose 8.6% in 1997 after appreciating by
15.6% in 1996. This proved particularly damaging to the manufacturing
sector and, although exports held up well during the year, there were
early indications that a decline was underway. Inflation is low,
making the country attractive for foreign investment. Investment is
especially attractive to the United States, with which the United
Kingdom shares many market similarities. Each country is the other's
largest foreign investment partner.
Under Conservative Party leadership in the early 1980s, the United
Kingdom privatized many state-run utilities, such as British Gas and
British Telecom. The success of these efforts is evidence both of the
strong entrepreneurial spirit of British society and also a
fundamental rejection of the welfare state policies that dominated the
scene in the early post-war period. Even today, the Labour Party has
shed much of its socialist economic platform, reflecting a strong
break away from policies that continue to be popular in other European
countries. Eager to attract foreign investment the new administration
is not expected to undo any of the major reforms put in place by the
Conservatives during their last 18 years in power. Some changes could
include an increase in spending on social programs, a slowing of
privatization, and an increase in corporate taxes. Tight monetary
policy and interest rate hikes could be used to keep inflation below
the government's self-imposed 2.5% ceiling. In addition, the
government will probably wish to rebuild ties with the rest of the EU
and has already taken steps to get the pound back into the European
system by increasing the independence of the country's central bank.

Nevertheless, there appears to be some nervousness among many
investors who see the U.K. market lagging behind the continental
European stock markets where they see more compelling prospects for
economic growth. In addition, the manufacturing industry is suffering
from the pound's lofty valuation and many fear that an economic
slowdown could spread to the services sector.
The political scene in London is largely shaped by positions
regarding EMU. Pro Europe MPs in the Tory opposition leadership were
marginalized after the 1997 election, further polarizing the positions
of the two parties. Despite this expression of support, the United
Kingdom continues to be overtly less enthusiastic about EMU than other
countries in Europe and has not committed itself to immediately
joining the new currency once it is established. While the new
government has stated that it hopes to meet the Maastricht criteria,
it is less a self-imposed pressure on the U.K. government than it is
for other countries in the Union. Signing on to the EU Social Charter
would neutralize the policies which have set the United Kingdom above
other countries in attracting investment, such as wages and employment
conditions.

SPECIAL CONSIDERATIONS REGARDING JAPAN, THE PACIFIC BASIN, AND
SOUTHEAST ASIA
Asia has undergone an impressive economic transformation in the
past decade. Many developing economies, utilizing substantial foreign
investments, established themselves as inexpensive producers of
manufactured and re-manufactured consumer goods for export. As
household incomes rose, middle classes increased, stimulating domestic
consumption. In recent years, large projects in infrastructure and
energy resource development have been undertaken, and have benefited
from cheap labor, foreign investment, and a business friendly
regulatory environment. During the course of development, democratic
governments fought to maintain the stability and control necessary to
attract investment and provide labor. Subsequently, Asian countries
today are coming under increasing, if inconsistent, pressure from
western governments regarding human rights practices.
Manufacturing exports declined significantly in 1997, due to drops
in demand, increased competition, and strong performance of the U.S.
dollar. This significant decline is particularly true of electronics,
a critical industry for several Asian economies. Declines in exports
reveal how much of the recent growth in these countries is dependent
on their trading partners. Many Asian exports are priced in U.S.
dollars, while the majority of its imports are paid for in local
currencies. A stable exchange rate between the U.S. dollar and Asian
currencies is important to Asian trade balances.
Despite the impressive economic growth experienced by Asia's
emerging economies, currency and economic concerns have recently
roiled these markets. Over the summer of 1997, a plunge in Thailand's
currency set off a wave of currency depreciations throughout South and
Southeast Asia. The Thai crisis was brought on by the country's
failure to take steps to curb its current-account deficit, reduce
short-term foreign borrowing and strengthen its troubled banking
industry, which was burdened by speculative property loans. Most of
Southeast Asia's stock markets tumbled in reaction to these events.
Investors were heavy sellers as they became increasingly concerned
that other countries in the region, faced with similar problems, would
have to allow their currencies to weaken further or take steps that
would choke off economic growth and erode company profits. For U.S.
investors, the impact of the market declines were further exacerbated
by the effect of the decline in the value of local currencies versus
the U.S. dollar.
The same kind of concerns that effected Thailand and other
Southeast Asian countries subsequently spread to North Asia. To widely
varying degrees, Taiwan, South Korea and Hong Kong all faced related
currency and/or equity market declines. Due to continued weakness in
the Japanese economy combined with the reliance of Asian economies on
intra-Asian trade and capital flows, most of the region was mired in
their worst recessions since World War II.
Investors continue to face considerable risk in Asian markets as
political, economic and currency turmoil has continued to undermine
market valuations throughout the first half of 1998. Rising
unemployment, food shortages and declining purchasing power could lead
to social unrest and threaten the orderly functioning of government.
Currency devaluations also increase pressure on both the consumers who
must pay more for imported goods and on many businesses that must deal
with the rising costs of raw materials. For U.S. investors, weakening
local currencies erode their returns in these markets upon currency
translation. Certainly, the resolve of the region's governments to
adhere to International Monetary Fund-mandated benchmarks will be
sorely tested, as their implementation could further exacerbate these
pressures on the nation's populace and businesses. In addition,
Japan's paralysis is fast becoming a problem for Asia. Worsening
Japanese banking problems could lead to a contraction of credit for
all of Asia and slow rehabilitation in the region. Similarly, a
significant portion of both domestic and foreign investors have fled
these markets in favor of safer havens outside of the region and will
not likely return until they see more evidence that these problems are
being effectively addressed. The scope and magnitude of the tasks that
these countries face in resolving their problems could mean that
investors will see a continuation of high market volatility over an
extended period.
JAPAN. A country of 126 million with a labor force of 64
million people, Japan is renowned as the preeminent economic miracle
of the post-war era. Fueled by public investment, protectionist trade
policies, and innovative management styles, the Japanese economy has
transformed itself since the World War II into the world's second
largest economy. An island nation with limited natural resources,
Japan has developed a strong heavy industrial sector and is highly
dependent on international trade. Strong domestic industries are
automotive, electronics, and metals. Needed imports revolve around raw
materials such as oil, forest products, and iron ore. Subsequently,
Japan is sensitive to fluctuations in commodity prices. With only 19%
of its land suitable for cultivation, the agricultural industry is
small and largely protected. While the United States is Japan's
largest single trading partner, close to half of Japan's trade is
conducted with developing nations, almost all of which are in
southeast Asia. Investment patterns generally mirror these trade
relationships. Japan has over $100 billion of direct investment in the
United States.
The Tokyo Stock Exchange (TSE) is the largest of eight exchanges in
Japan. The exchanges divide the market for domestic stocks into two
sections, with larger companies assigned to the first section and
newly listed or smaller companies assigned to the second. In 1997,
1,805 firms were listed on the TSE, 96% of which were domestic. Some
believe that the TSE has a tendency to be strongly influenced by the
performance of a small circle of large cap firms that dominate the
market. The two key indexes are the Tokyo Stock Price Index (TOPIX)
and the Nikkei. In 1997, TSE performance was disappointing, with the
TOPIX down 28% for the year.
Since Japan's bubble economy collapsed seven years ago, the nation
has drifted between modest growth and recession. By mid-year 1998 the
world's second largest economic power had slipped into its deepest
recession since World War II. Much of the blame can be placed on
government inaction in implementing long-neglected structural reforms
despite strong and persistent proddings from the International
Monetary Fund and the G-7 nations. Steps have been taken to institute
deregulation and liberalization of protected areas of the economy, but
the pace of change has been disappointedly slow.
Unemployment levels, already at record rates when measured by the
broader criteria used in many other countries, have been an area of
increasing concern and a major cause of recent voter dissatisfaction
with recent governments. However, the most pressing need for action is
the daunting task of overhauling the nation's financial institutions
and securing public support for taxpayer-funded bailouts. Banks, in
particular, must dispose of their huge overhang of bad loans and trim
their balance sheets in preparation for greater competition from
foreign financial institutions as more areas of the financial sector
are opened. Successful financial sector reform would allow Japan's
financial institutions to act as a catalyst for economic recovery at
home and across the troubled Asian region. Further steps toward
complete financial liberalization are in the initial stages of
implementation. Proposals under consideration could lower many
barriers allowing foreign firms greater and cheaper access to funds,
and the recent relaxation of restrictions on the insurance market also
promise greater access to foreign companies. A large factor in
determining the pace and scope of recovery is the government's
handling of deregulation programs, a delicate task given the recent
changes in Japanese politics.
Recent political initiatives in Japan have fundamentally
transformed Japanese political life, ushering in a new attitude which
is strongly reverberating in the economy. The Japanese Parliament (the
Diet) had been consistently dominated by the Liberal Democratic Party
(LDP) since 1955. The LDP dynasty, recently fraught with scandal,
corruption, accusations of maintaining a virtual monopoly, effectively
ended in 1994 as a result of electoral reform measures that brought
Diet seats to previously underrepresented areas. The first election
under this new system was held in October 1996. While the LDP remained
as the ruling party, it did so from a minority position. A key result
of the electoral reforms has been a strengthening of ideas of
opposition parties. Indeed, many of the LDP's recent reforms
originated with the leaders of the opposition New Frontier Party. The
LDP's ability to consistently produce bold innovations in a
politically competitive environment is untested. The opposition
parties suffer from structural and organizational weaknesses.
Infighting and defections are common. This inexperience with a true
multi-party system has caused the rise and fall of four coalition
governments in recent years. Between the adjusting of the monolithic
LDP to a more demanding and competitive system and the settling of the
opposition parties, Japan's political environment remains unstable.
The desire for electoral reform arose out of what many see as a basic
change in Japanese public opinion in recent years. Faced with
recurring scandal and corruption, Japanese society has come to demand
more accountability from their leaders, more transparency in their
institutions, and less interference from their intensely bureaucratic
government. This attitude was reflected in the results of the recent
election where candidates of the LDP party were heavily defeated in an
election for the upper house of parliament and prime minister
Hashimoto was forced to resign. The election results were considered
to be a repudiation of the government's failure to come to grips with
the countries economic decline, widening corruption scandals and a
lack of any discernable progress in addressing the nation's banking
problems.
Nevertheless, sustaining reforms and recovery are not guaranteed.
Drops in consumption, increased budget deficits, or halting
deregulation could exacerbate the nation's economic woes. Furthermore,
as a trade-dependent nation long used to high levels of government
protection, it is unclear how the Japanese economy will react to the
potential adoption of the trade liberalization measures which are
constantly promoted by their trading partners. In addition, as the
largest economy in a rapidly changing and often volatile region of the
world, external events such as the Korean conflict could effect Japan.
As many of the governments of Southeast Asia frequently face domestic
discontent, and as many of these countries are Japanese trading
partners and investment recipients, their internal stability and its
impact on regional security are of tremendous importance to Japan.

Also of concern are Japan's trade and current-account surpluses. If
they continue to grow, they could lead to an increase in trade
friction between Japan and the United States. Additionally, with
inflationary pressures largely absent and wholesale prices falling,
Japan may be entering a period of deflation. A deflationary
environment would both hit corporate profits and increase the debt
burden of Japan's most highly leveraged companies.
CHINA AND HONG KONG. China is one of the world's last
remaining communist systems, and the only one that appears poised to
endure due to its measured embrace of capitalist institutions. It is
the world's most populous nation, with 1.22 billion people creating a
workforce of 699 million people. Today's Chinese economy, roughly
separated between the largely agricultural interior provinces and the
more industrialized coastal and southern provinces, has its roots in
the reforms of the recently deceased communist leader Deng Xiaoping.
Originally an orthodox communist system, China undertook economic
reforms in 1978 by providing broad autonomy to certain industries and
establishing special economic zones (SEZs) to attract foreign
investment (FDI). Attracted to low labor costs and favorable
government policies, investment flowed from many sources, with Hong
Kong, Taiwan, and the United States leading the way. Most of this
investment, has been concentrated in the southern provinces,
establishing manufacturing facilities to process goods for re-export.

The result has been a steadily high level of real GDP growth,
averaging 11.35% per year so far this decade. With this growth has
come a doubling of total consumption, a tripling of real incomes for
many workers, and a reduction in the number of people living in
absolute poverty from 270 to 100 million people. Today there is a
market of more than 80 million people who are now able to afford
middle class western goods.
Such success has not come without negatives. As a communist system
in transition, there still exist high levels of subsidies to
state-owned enterprises (SOE) which are not productive. At the end of
1997, it was reported that close to half of the SOEs ran losses. In
addition, the inefficiencies endemic to communist systems, with their
parallel (thus redundant) political, economic and governmental policy
bodies, contribute to high levels of inflation. Fighting inflation and
attempting to cool runaway growth has forced the government to
repeatedly implement periods of fiscal and monetary austerity.
Periodic intervention seems to be their chosen method of guarding
against overheating.
Performance in 1997 reflects this dynamic between growth,
inflation, and the government's attempts to control them. Growth
slowed to 9.1%, largely as a result of a tightening of credits to
SOEs. Policy was a mix between a loose monetary stance and some
relatively austere fiscal positions. While growth was a priority, it
came at the cost of double-digit inflation.
China has two stock exchanges that are set up to accommodate
foreign investment, in Shenzhen and in Shanghai. In both cases,
foreign trading is limited to a special class of shares (Class B)
which was created for that purpose. Only foreign investors may own
Class B shares, but the government must approve sales of Class B
shares among foreign investors. As of December 1997, there were 51
companies with Class B shares on the two exchanges, for a total Class
B market capitalization of $2.1 billion U.S. dollars. In 1997, all of
China's stock market indices finished the year below the level at
which they began it. These markets were buoyed by strong speculative
buying in the year's second quarter. Market valuations peaked in
September and were subsequently hit by a heavy sell off from October
onwards.
In Shanghai, all "B" shares are denominated in Chinese renminbi but
all transactions in "B" shares must be settled in U.S. dollars. All
distributions made on "B" shares are also payable in U.S. dollars, the
exchange rate being the weighted average exchange rate for the U.S.
dollar as published by the Shanghai Foreign Exchange Adjustment
Center. In Shenzhen, the purchase and sale prices for "B" shares are
quoted in Hong Kong dollars. Dividends and other lawful revenue
derived from "B" shares are calculated in renminbi but payable in Hong
Kong dollars, the rate of exchange being the average rate published by
the Shenzhen Foreign Exchange Adjustment Center. There are no foreign
exchange restrictions on the repatriation of gains made on or income
derived from "B" shares, subject to the repayment of taxes imposed by
China thereon.
China's proven ability to nurture domestic consumption and expand
export markets leads many to believe that the bulk of its growth has
yet to be seen. Most sources, notably the World Bank, predict future
growth levels through the year 2000 of over 7%. This auspicious
indicator notwithstanding, there are a few special considerations
regarding China's future. While this list is not all-inclusive, it
does highlight some internal and external forces that have a strong
influence on the country's future.
To begin with the internal issues, one matter is that
infrastructure bottlenecks could prove to be a problem, as most FDI
has been concentrated in manufacturing and industry at the expense of
badly needed transportation and power improvements. Secondly, as with
all transition economies, the ability to develop and sustain a
credible legal, regulatory, and tax system could influence the course
of investments. Third, environmentalists warn of the current and
looming problems regarding pollution and resource destruction, a
common result of such industrial growth in developing economies which
can't afford effective environmental protection. This is a
particularly noteworthy issue, given the size of the country's
agricultural sector. Lastly, given China's unique method of transition
there exists the possibility that further economic liberalization
could give rise to new social issues which have heretofore been
effectively mitigated. One such issue is the possible dismantling of
inefficient state-owned enterprises, something which is potentially
socially explosive given the communist policy of providing social
welfare through the firm. Exposing what many economists feel is a high
level of open unemployment and widening the gap between the newly
empowered business class and the disenfranchised could pressure the
government to retreat on the road to reform and continue with massive
state spending.
Regarding external issues, China's position in the world economy
and its relationship with the United States also have a strong
influence on it's economic performance. The country has recently
enjoyed an almost uninterrupted positive trade balance. As the largest
country amidst the fastest growing region in the world, China and its
multi-million person ethnic diaspora have a significant role to play
in Asian growth. Should China ascend to become a member of the World
Trade Organization (WTO), as it desires, such movements of capital and
goods will become easier.
Export growth in China has recently been subject to fluctuations
caused by external political events, such as the U.S. elections and
debates over human rights issues. U.S. policy (specifically most
favored nation status) is frequently reconsidered by various elements
of the U.S. government in reaction to a variety of issues, from
nuclear proliferation to Tibetan rights. Significant changes in U.S.
policy could impact China's growth, as close to 9% of their GDP is
trade with the U.S. and the U.S. represents the third biggest investor
in China.
Perhaps the strongest influence on the Chinese economy is the
policy that is set by the political leaders in Beijing and this is
somewhat of an open question as the death of Deng has created a slight
vacuum in Chinese political society. A large part of Deng's strength
derived from a newly empowered business class endeared to him and it
is unclear if any of his successors can harness this loyalty as
effectively as he did. Sustained growth is one possible way to win
over this constituency, leading many to believe that the future
Chinese leadership will respect market forces at least as much as Deng
did. Choosing between double digit growth and reduced inflation could
continue to be a central economic question, with 1997 (Deng
influenced) decisions pointing to an acceptance of lower, albeit still
high, GDP growth.
Another key political player is the Chinese army. With provocative
situations occurring in Taiwan and the Korean peninsula, and with ever
present pressure from internal democrats, the military is in a
position of leverage regarding the shaping of the future political
scene. Finally, there is the communist party, long seen as a loser
amongst the beneficiaries of Deng's reforms. Many view the battle
between the party and the middle class as a zero sum game and as the
leadership settles, respective alliances and constituencies could
determine how much the government pursues its growth strategy.
As with almost all foreign investments, U.S. investors face the
significant risk of currency devaluation by the Chinese government.
Despite assurances from officials reemphasizing China's policy
commitment to maintain the current exchange rate of the renminbi
against the U.S. dollar, many observers believe that this policy will
be soon tested as China monitors the effect of regional devaluations
on exports. Government authorities feel that China has boosted its
international reputation by refraining from devaluing the renminbi at
a time when such a move could further destabilize the currencies of
its neighbors. Nevertheless, Chinese authorities have recently hinted
that a continued slide in the Japanese yen would make it very
difficult for them to maintain their promise not to devalue. If
efforts to prevent the slide in the yen fail, then China may be pushed
into devaluing their currency. For U.S. investors, a devaluation would
erode the investment returns on their investments.
The last significant force in the Chinese economy is the
acquisition on July 1, 1997 of Hong Kong as a Special Autonomous
Region (SAR). For the past 99 years as a British Colony, Hong Kong has
established itself as the world's freest market and more recently as
an economic gateway between China and the west.
A tiny, 814 square mile area adjacent to the coast of southern
China with a population of 6.3 million, Hong Kong has a long
established history as a global trading center. Originally a
manufacturing-based economy; most of these businesses have migrated to
southern China. In their place has emerged a developed, mature service
economy which currently accounts for approximately 80% of ITS GROSS
DOMESTIC PRODUCT. Hong Kong trades over $400 billion in goods and
services each year with countries throughout the world, notably China,
Japan, and the U.S. Its leading exports are textiles and electronics
while imports tend to revolve around foodstuffs and raw materials.
Hong Kong's currency, the HK dollar, was pegged to the US dollar at
HK7.7=$1 in 1983 and investors consider it to be a stable mechanism in
enduring confidence lapses and speculator attacks. The operation of a
currency board and accumulation of U.S. dollars in its monetary fund
is partly responsible for this stability.
The stock market (SEHK) listed 658 publicly traded companies by the
end of 1997, with total capitalization at $413 billion U.S. dollars. A
significant portion of SEHK firms are in real estate, and are
sensitive to fluctuations in the property markets. 1997 was a
tumultuous year for the Hong Kong stock market as a speculative attack
on the Hong Kong dollar in October provoked a global sell-off in
equities. Investors were shocked as the Hong Kong market, long
regarded as a safe-haven, plunged 40% in October. The stock market's
decline and the attack on the local currency sent interest rates
soaring, precipitating an erosion in local property values. This in
turn put additional pressure on the banking sector which is heavily
geared to real estate. The Hong Kong market's dramatic downturn
illustrates how vulnerable it is to the Asian region's economic
problems. The structural problems besetting Hong Kong's neighbors in
Southeast and Northeast Asia may not be quickly resolved. Exports to
the Asian region may remain depressed as the process of economic
reform in countries such as Thailand, Malaysia, Indonesia, Japan and
South Korea will likely hold back economic growth in the area.
Accordingly, Hong Kong and China will likely be more dependent upon
demand from the U.S. and Europe for some time to come.
As a trade center, Hong Kong's economy is very closely tied to that
of its trading partners, particularly China and the United States. In
the wake of Deng's reforms, Hong Kong and China have become
increasingly interdependent economically. Currently, China is Hong
Kong's largest trading partner. After Taiwan, Hong Kong is the largest
foreign investor in China, accounting for about 60 percent of overall
foreign direct investment. Hong Kong plays a particularly significant
role as an intermediary in U.S.-China trade. In 1996, it handled 56%
of China's exports to the U.S. and 49% of Chinese imports from the
U.S.
The critical question regarding the future of Hong Kong is how the
Chinese leadership will exert its influence now that it has become a
Special Autonomous Region (SAR). This new status is in accordance with
pledges made at the Joint Declaration on the Question of Hong Kong
made by the Chinese and British governments in 1984. Leading up to the
hand over of the colony, the Chinese government has pledged to uphold
the Basic Law of 1990 which states that Hong Kong's status as an
unfettered financial center will remain intact for at least 50 years
after 1997. Part of this status includes retaining the legal,
financial and monetary systems (specifically the HK$/US$ peg) which
guarantee economic freedom and foster market expansion.
Many investors and citizens are closely monitoring Chinese actions
in order to assess their actual commitment to these principles.
Already there is evidence of a clear, if slow, current of political
change coming from Beijing. Certain actions, such as the curbing of
media freedoms, indicate that there is the possibility of significant
interference from communist authorities. More significant was the
clash between the U.K. and Chinese governments over China's abolition
of the elected legislature and subsequent installation of governmental
leaders in both the executive and the legislature who are directly
appointed by Beijing. Mr. Tung Chee-hwa, appointed as the first Chief
Executive of the SAR, has surrounded himself with like-minded
Machiavellian figures who have strong ties to both market successes
and Beijing leaders. They are portrayed as believing in the powers of
capitalism and central authority, if not democracy, leading some to
speculate that the SAR could develop into a South Korean style of
corporatism which preserves the economic status quo without
incorporating further political freedoms.
In assessing the prospects for Hong Kong's future, it must be noted
that China has a very strong interest in a prosperous SAR.
Particularly if Beijing pursues a growth strategy as it has in the
past, Hong Kong can be a key agent in China's economic policy. Desire
for investment and new technologies necessary for modernization is a
strong incentive to send positive signals through the treatment of
Hong Kong. This is reinforced by the respect Hong Kong is due given
its role in China's recent dynamic performance.
To be sure, there are more adamant concerns over the effect of the
acquisition. Many are skeptical of Beijing's ability to leave the
currency alone. Some note the continuous drop in GDP as evidence that
Hong Kong has yet to mature as a service economy and that the
workforce hasn't fully adjusted to the switch out of manufacturing.
Additionally, by tying Hong Kong so closely with China, it now must
weather the ups and downs of Beijing's relationship with the U.S. Most
Favored Nation Status now means just as much, if not more, to the SAR
than it does to Beijing, with some asserting that revoking MFN could
result in substantial losses in trade, income, and jobs.
Hong Kong's competitive advantage has traditionally been a mix of
geography, market freedoms and entrepreneurial spirit. The
preservation of these advantages is now a function of the island's
independence from Beijing. Today's investors will be vigilant in
measuring how much of that independence is retained after July 1,
1997.
AUSTRALIA. Australia is a 3 million square mile continent
(about the size of the 48 continental United States) with a
predominantly European ethnic population of 18.2 million people. A
member of the British Commonwealth, its government is a democratic,
federal-state system.
The country has a western style capitalist economy with a workforce
of 9.2 million people that is concentrated in services, mining, and
agriculture. Australia's large agricultural sector specializes in
wheat and sheep rearing and together, these two activities account for
more than half of the country's export revenues. Australia also
possesses abundant natural resources such as bauxite, coal, iron ore,
copper, tin, silver, uranium, nickel, tungsten, mineral sands, lead,
zinc, diamonds, natural gas, and oil. The health of the country's
domestic economy is particularly sensitive to movements in the world
prices of these commodities. Primary trading partners are the United
States, Japan, South Korea, New Zealand, the United Kingdom and
Germany. Imports revolve around machinery and high technology
equipment.
Historically, Australia's strong points were its agricultural and
mining sectors. While this is still true to a large extent, the
government managed to boost its manufacturing sector by undertaking
protective measures in the 1970's and early 1980's. These have
subsequently been liberalized in an effort to spur growth in the
industrial sector. Today's economy is more diverse, as manufactures'
share of total exports is increasing. Part of the government's effort
to make manufacturing more competitive was a floating of the
Australian dollar in 1984, precipitating an initial depreciation, and
a campaign to reduce taxes. Such reforms have attracted foreign
investment, particularly in the transport and manufacturing sectors.
Restrictions do exist on investment in certain areas as media, mining
and some real estate.
With inflation well under control but unemployment stubbornly high
and signs of cyclical slack in the economy, Australia's monetary
policy is focused on preserving the low inflation environment while
keeping monetary conditions conducive to stronger economic growth. The
government has set a goal of achieving a government budget surplus in
fiscal year 1998/1999.
Australia is fully integrated into the world economy, participating
in GATT and also more regional trade associations such as the Asia and
the Pacific Economic Cooperation (APEC) forum. Future growth could
result from their movement towards regional economic liberalization,
but a countervailing force is the reality that some export markets in
Europe could be lost to continued European economic integration.
After suffering a significant recession in 1990-91, the Australian
economy has enjoyed six years of expansion. The medium-term outlook
appears favorable, with domestic spending supported by low interest
rates, improving consumer confidence and a strengthening labor market.
GDP growth has increased steadily throughout 1997. However, weakness
in commodity prices, particularly metal prices, coupled with an
increase in the nation's current account deficit have placed
significant pressure on the Australian dollar.
Investors should be aware that, while Australia's prospects for
strong economic growth appear favorable over the long-term, many
sectors currently face significant risks arising from the recent
turbulence in Asian countries, which account altogether for almost 60
percent of Australia's exports. While projections already embody a
more subdued outlook for growth in these countries, there is a risk of
this outlook deteriorating further, especially in Japan and Korea.
Due to the large position that the agriculture and natural resource
sectors have in the nation's export driven economy, any weakness in
commodity prices may negatively impact both the economy and stock
prices. In addition, United States investors face the risk that their
investment returns from investments in Australia could be eroded if
the Australian currency declines relative to the United States
dollar.
INDONESIA. Indonesia is a country that encompasses over
17,000 islands on which live 195 million people. It is a mixed economy
that balances free enterprise with significant government
intervention. Deregulation policies, diversification of strong
domestic sectors, and investment in infrastructure projects have all
contributed to high levels of growth since the late 1980's.
Indonesia's economy grew at 7.1% in 1996, the exact average of its
performance for the current decade. Growth in the 1990's had been
fairly steady, hovering between 6.5-7.5% for the most part, peaking at
8.1% in 1995. Moderate growth in investment, including public
investment, and also in import growth, helped to slowdown GDP growth.
Growth has been accompanied by moderately high levels of
inflation.
In recent years, Indonesia had been undergoing a diversification of
the core of its economy. No longer strictly revolving around oil and
textiles, it is now gaining strength in high technology manufactures,
such as electronics. Indonesia consistently runs a positive trade
balance. Strong export performers are oil, gas, and textiles and
apparel. Oil, once responsible for 80% of export revenues, now
accounts for only 25%, an indication of how far other (mostly
manufacturing and apparel) sectors have developed. Main imports are
raw materials and capital goods.
However, as with many of its Asian neighbors, Indonesia's bright
prospects came to a sudden halt in August of 1997 when the plunging
Thai baht began to destabilize the rupiah. By mid-year 1998 the local
currency had fallen more than 80% against the dollar, and hugely
increased the cost of servicing foreign debts; a collapse of the real
economy, and a growing number of bad loans. Various central bank
initiatives, including a doubling of interest rates, failed to halt
the currency's depreciation. The nation's banks, unable to service
their extensive short term borrowings, were suddenly in danger of
collapse. Of more than 200 local banks, a mere handful were estimated
to be solvent at mid-year 1998.
The social effects of this decline have been devastating. By the
end of 1998 the government expects 47% of the population to be living
below the poverty line and unemployment is expected to surpass 20% of
the workforce. This has led to an increase in social tensions and food
riots and large-scale strikes have broken out sporadically. Rioting
and attacks upon the countries business oriented ethnic Chinese
population have prompted as many as 80,000 to flee the country. Rising
popular opposition forced President Suharto to resign less than three
months after being appointed to his seventh consecutive five-year term
and was replaced by his vice-president, B. J. Habibie. The political
upheaval and resulting uncertainty has resulted in the further erosion
in public confidence at home and abroad.
The breakdown in public confidence in the Indonesian economy will
likely be difficult to reverse, and will prolong the period of
recovery. Resumption of lending by multilateral institutions under a
rescue package drawn up by the International Monetary Fund (IMF) may
speed up the process of restoring the faith in the government's
efforts to shore up the banking system. Nevertheless, even if the two
critical outstanding issues of restructuring the corporate sector's
external debt and shoring up the banking sector can be resolved this
year, the economy will remain weak in 1999 and recover only slowly in
the following years.
The Indonesian stock market plunged to record lows in 1997 under
the combined impact of the country's economic implosion, political
uncertainty and social unrest. The market's retreat continued into
mid-1998 as domestic and foreign investors fled the market for safer
havens overseas. While many investors believe that the market's steep
decline has brought valuations of a number of Indonesian companies to
very attractive levels, there remains considerable risk particularly
for foreign investors. As with most foreign investments, United States
investors could see their investment returns eroded if the Indonesian
currency declines in value relative to the U.S. dollar. Secondly, any
escalation of rioting and other forms of social unrest could be a
major obstacle in the path of economic recovery. Thirdly, many
question the will of the Indonesian government and its people to
accept the conditions of economic reform as mandated by the IMF.
Fourth, the Indonesian economy, currency and securities markets are
extremely sensitive to events that take place within the Asian region
and their fortunes are somewhat dependent upon how well other Asian
nations resolve their own economic and currency problems.
MALAYSIA. 1997 saw Malaysia's GDP growth slow to 7.4%, down
from over 8.2% in 1996 and 9.5% in 1995. Inflation has been kept
relatively low at 3.8%. Performance in 1996 avoided the economy's
potential overheating as export growth, investment, and consumption
all slowed. A large part of Malaysia's recent growth is due to its
manufacturing industries, particularly electronics and semiconductors.
This has led to an increased reliance on imports; thus the economy is
sensitive to shifts in foreign production and demand. This is
particularly true regarding its main trading partners: the United
States, Japan, and Singapore. Such shifts were partly responsible for
the slowdown in 1997. In addition, monetary policies to stem the
threat of overheating were evident, but the country still needs
massive public and private investment to finance several large
infrastructure projects. Government industrial policy seeks investment
to create more value added high technology manufacturing and service
sectors in order to decrease the emphasis on low skilled
manufacturing. Already U.S. investors have invested over $9 billion,
and most of this is in electronics and energy projects.
However, like its Asian neighbors, Malaysia has stumbled in its
dash to become a developed nation by 2020. The grandiose ambitions of
Malaysian Prime Minister Mahathir Mohamad have been set back by its
worst-ever currency crisis, which also brought a sharp fall in the
country's stock market. An overheated property market, a growing
current-account deficit and a highly leveraged economy, precipitated
much of the country's problems. Following the sharp decline of
Thailand's currency, the Malaysian ringgit came under severe pressure.
The Malaysian central bank attempted to defend the currency and the
resulting spikes in interbank rates marked the start of a period of
escalating interest rates. Once the central bank ceased using foreign
exchange reserves to slow the ringgit's depreciation in the
region-wide currency slide, the Malaysian currency quickly weakened
versus the United States dollar and by year end had declined by 35%.

By mid-year 1998, the outlook for the Malaysian economy remained
bleak as economists predicted that the economy would shrink by at
least 5 percent this year, the first contraction in 13 years. The
likelihood that Malaysia will be forced to seek IMF assistance is
increasing. Although Malaysia does not have the high level of foreign
debt that has overwhelmed its Asian neighbors, domestic lending, at
170 percent of GDP, was the highest in Southeast Asia when the
currency crisis struck. The nation's banks are now faced with a
growing number of unpaid loans as more businesses are struggling to
stay afloat in the sagging economic environment.
Adding to the bleak outlook is the government's seemingly confused
and erratic response to the nation's serious economic and currency
crisis. The Prime Minister is increasingly at odds with the finance
minister on what policies the country has to institute to remedy the
country's serious problems. Prime Minister Mahathir has abandoned the
tight money, financially conservative recovery policy endorsed by the
IMF and has placed the blame for the nation's troubles on foreign
currency and stock market speculators. The move risks triggering
another round of currency devaluations, inflation and, in the long
run, economic collapse.
Investors should be aware that investing in Malaysia currently
entails a number of potential risks, not the least of which is the
increasingly erratic economic policies of the Malaysian government
that are counter to the advice of the IMF and many of the developed
nations. In addition, the government appears to be escalating its
hostile attitude toward foreign investors. In September of 1998
Malaysian authorities imposed new restrictions on the foreign exchange
and securities markets. Included were limitations in repatriating the
investment proceeds of foreign investors.
While the Malaysian population has been relatively passive during
the first year of the economic meltdown, there could be mounting
social unrest if the crisis is prolonged. Should the country finally
adopt IMF remedies the Malaysian people may be reluctant to accept the
additional sacrifices that they will be called upon to endure. This
could seriously undermine the recovery of Malaysia's economy as well
as its currency and stock market. An increasingly hostile government
towards foreign investors could also lead to additional curbs on the
free access to their funds. As with other Asian markets, currency risk
remains substantial.
SINGAPORE. Since achieving independence from the British in
1965, Singapore has repeatedly elected the People's Action Party (PAP)
as their government. It is a party that is so consistent it has only
offered up two prime ministers in this 32-year period. Elections in
January 1997 returned the PAP to power, signaling satisfaction with
their policy of close coordination with the private sector to
stimulate investment. Typical policies include selective tax
incentives, subsidies for R&D, and joint ventures with private firms.
While the combination of consistent leadership and interventionist
policies is sometimes seen as impeding civil liberties and
laissez-faire economics, it has produced an attractive investment
environment.
The Singapore economy is almost devoid of agriculture and natural
resources, not surprising given the island nation's geographic size.
Its strongest sector is manufacturing, particularly of electronics,
machinery and petroleum and chemical products. They produce 45% of the
world's computer disk drives. Major trading partners are Japan,
Malaysia and the United States.
The economic situation in Singapore registered a passable year in
1996 but weakened in early 1997, dragged down by the downturn in the
global electronics industry. However, it ended the year on a firmer
footing as real GDP growth rose from 4.1% in the first quarter to 7%
by the fourth quarter. Inflation remained low and the current account
balance maintained its large surplus. Property values have declined
recently, impacted by continuing oversupply.
Although Singapore boasts one of the strongest economies in Asia,
investors in that market face a number of possible risks. Chief among
these is that the country is not immune to the region's economic
troubles, as Singapore's neighbors account for nearly one-quarter of
its trade. Any prolonged regional economic downturn could slow its
growth. In addition, Analysts believe that there is considerable
downside risk in the current Singapore dollar exchange rate and any
decline in the Singapore currency versus the U.S. dollar could erode
the investment return of United States investors in that market.
Lastly, manufacturing, a major pillar of Singapore's economy, is
unlikely to sustain growth into 1998 as recent indications point to
continued excess capacity in the computer electronics industry.
SOUTH KOREA. South Korea has been one of the more
spectacular economic stories of the post-war period. Coming out of a
civil war in the mid-1950's, the country found itself with a destroyed
economy and boundaries that excluded most of the peninsula's mineral
and industrial resources. It proceeded over the next 40 years to
create a society that includes a highly skilled and educated labor
force and an economy that exploited the large amounts of foreign aid
given to it by the United States and other countries. Exports of labor
intensive products such as textiles initially drove the economy and
were eventually replaced by heavy industries such as automobiles.
Hostile relations with North Korea dictate large expenditures on
the military and political uncertainty and potential famine in the
north has put the south on high alert. Any kind of significant
military effort could have multiple effects, both positive and
negative, on the economy. South Korea's lack of natural resources put
a premium on imported energy products, making the economy very
sensitive to oil prices.
Since 1991, GDP growth has fluctuated widely between 5% and 9%,
settling down at 5.6% last year. Currently the labor market is in need
of restructuring, and its rigidity has hurt performance. Relations
between labor and the large conglomerates, or Chaebols, could prove to
be a significant influence on future growth. Inflation in the same
period has been consistently dropping, save a brief rise in 1994 and
finished the year at 4.5%. The country consistently runs trade
deficits, and the current account deficit widened sharply in 1996,
more than doubling to $19.3 billion. South Korea's strong domestic
sectors are electronics, textiles and industrial machinery. Exports
revolve around electronics, textiles, automobiles, steel and footwear,
while imports focus on oil, food, chemicals and metals.
The stock market (Korea Stock Exchange) is currently undergoing
liberalization to include more foreign participation, which was only
first allowed in 1992, but the bond market remains off limits until
1999. Foreign ownership has since been increased to 55% for all listed
stocks except three. The foreign ownership liberalization is in
response to the KSE 1996 performance, which was down 18%. The number
of listed companies totaled 726 in 1997, a decline of 34 from the
previous year, while the market's capitalization plummeted 70 percent
from its 1996 level.
Over the calendar year 1997, the Korean stock market extended its
two-year decline plunging by 42% to its lowest year-end level since
1986. The collapse came as a direct result of the Asian region's
currency crisis and the failure of several Korean conglomerates. In
the summer of 1997 the South Korean won hit record lows against the
U.S. dollar as a series of nationwide labor strikes aggravated the
already escalating trade deficit. Despite aggressive official
intervention to support the local currency, the won had fallen from
860 to 914 to the U.S. dollar by year-end.
The Korean market poses risks for current and prospective
investors. The Korean government will need to maintain public support
to implement the radical and difficult restructuring of the economy
demanded by the IMF under a $58 million loan package. This opposition
could come from the country's major conglomerates that have yet to
institute necessary restructuring initiatives, and from workers
protesting against rising unemployment.
In addition, relations with its long-standing enemy, North Korea
have been worsening as widespread famine could prompt another attack
on its southern neighbor to divert the attention of its people from
their suffering. More importantly, South Korea's heavy reliance on
exporting to the Asian region holds its economy hostage to the
economic fortunes of its neighbors.
THAILAND. The Thai economy has witnessed a fundamental
transition in recent years. Traditionally it was a strong producer of
textiles, minerals and agricultural products, but more recently it has
tried to build high technology export industries. This proved
particularly fortuitous in the mid 1990s when flooding wiped out much
of their traditional exports, but the newer industries remained
strong, keeping the growth rate above 8%. (This level had been
achieved through the 1990s, giving the economy a name as one of the
fastest growing in the region.) Successive governments have also taken
steps toward reducing the influence of central planning, opening its
market to foreigners and abandoning five-year plans. This
restructuring is still underway, and the change can cause difficulty
at times.
The political situation in Thailand is tenuous. Democracy has a
short history in the country, and power is alternatively obtained by
the military, a non-elected bureaucratic elite, and democratically
elected officials. The frequent transfers of power have generally gone
without divisive, bloody conflicts, but there are bitter differences
between the military and the political parties. Free elections in 1992
and again in 1995 have produced non-military democratic leaders from
different parties, a healthy sign of party competition. More recently,
the dramatic downturn in the economy generated demands from all
sectors of society for the resignation of Prime Minister Chavalit. The
worsening economic situation threatened social stability of the nation
and the Prime Minister resigned after barely one year in power.
In 1997 GDP contracted by approximately 0.3%, compared with 7.2%
growth in 1996 and 8.6% in 1995. The 1997 current account deficit was
1.9% of GDP as against 7.9% in 1996. Inflation was 5.6%, however, the
government has projected a 16.2% rate for 1998. One cause for
Thailand's economic downturn was a decline in export growth as its
manufacturing industry faces stiff competition from low priced
competitors and its agriculture has suffered a severe drop in
production. In 1996, Thailand's currency, the baht, was linked to a
U.S. dollar dominated basket, and monetary policy had remained tight
to keep that link strong and avoid inflationary pressures.
The situation changed in early 1997, however, with the revelation
of many bad bank loans and a bubbling of property prices due to
over-investment. Many companies, faced with slowing exports, stopped
servicing their debts. Many other firms have stayed alive only with
infusions of public cash, and the government has been slow to let many
property laden financial firms fail. The stock market has reacted
strongly, dropping to new lows for the decade. Reluctant to float the
baht, indeed promising that it wouldn't, the government relented in
early July hoping to revive export and stock market growth. The
subsequent devaluation (approximately 20% against the dollar in the
first month) led to the need for a $16 billion loan coordinated by the
IMF to shore up foreign reserves. Most of the loan came from
neighboring countries led by Japan, indicating their desire to both
protect their own investments in Thailand, and also mitigate the
effect of the devaluation on their home currencies.
The total impact of the entire situation is negative, particularly
on inflation, unemployment and foreign debt. Significant turnover and
a major gamble on the currency has put the government in a precarious
position, especially given the fact that it is a six party coalition.
Dissatisfaction amongst the military, always a political factor, is
high.
The new Thai government has produced mixed results in their efforts
to remedy the country's serious economic woes. Crucial to Thailand's
recovery are both the outcome of newly instituted economic and banking
reforms and the outlook for both China's and Malaysia's economies.
Looking forward, currency risk remains high and the baht will likely
be highly vulnerable to regional contagion.

SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
Latin America represents one of the world's more advanced emerging
markets. With a total population of 427 million people and its
abundant natural resources, the area is a prime trading partner for
the United States and Canada. In Latin America exports represent, on
average, 16.6% of GDP. Strong export sectors are petroleum,
manufactured goods, agricultural commodities such as coffee and beef,
and metals and mining products. GDP growth in Latin America as a
region was 3.4% in 1996, up from 0.1% in 1995. Recognizing the
important role of international trade as a component of GDP, the
countries of Latin America have formed strong regional trade
organizations, notably MERCOSUR. Talk of extending NAFTA down through
Latin America indicates some desire to tie the economies even closer
to those of the north.
Politically, Latin American countries generally have strong
presidential systems closely modeled after the United States. Their
transition to democracy, largely complete in most countries,
nevertheless allows for a considerable military influence, reflecting
the strong authoritarian leanings of a large portion of the
population. The countries all enjoy good relations with the United
States, with whom they cooperate on a range of non-economic matters,
such as preservation of the environment and drug control.
Monetarist-minded governments were responsible for the successful
staving off of contagion from the recent currency crisis in Mexico,
increasing their stature in the eyes of most capital market
participants.
ARGENTINA. Prior to 1989, Argentine politics were
characterized by populist leaders, sometimes democratically elected
and sometimes not, who ruled with the overt support of the military.
Coups and outright military rule were not uncommon. Economic polices
were highly protectionist, with significant barriers and restrictions
on foreign trade and investment. Markets were highly regulated and the
state was heavily involved in many industries. Inflation was routinely
high and growth stagnant.
President Carlos Menem was first elected to office in 1989 and
undertook a program of deregulation, liberalization and macroeconomic
reform. The results have been positive. GDP growth in 1997 was 8.0%,
up from 4.4% in 1996 and -4.4% in 1995. Argentina's growth, averaging
over 6% from 1991 to 1997, had been driven primarily by domestic
consumption. In the wake of the Mexican currency crisis, however,
banking liquidity has been restrained. While deposits have increased
in reaction to peso stabilization, lending has not, putting downward
pressure on consumer spending. The positive effect is that inflation,
well over 150% at the beginning of the decade, was 0.4% in 1996. Still
troublesome for Argentina is unemployment, quite high at 17%. Menem's
economic liberalization policies have succeeded in attracting foreign
investment. From the United States alone, approximately $10 billion
was invested by 1996. Investors have been most attracted to the
telecommunications, finance, and energy sectors.
Argentina enjoys a positive trade balance. The export economy is
heavily weighted toward agriculture, which represents 60% of the total
value of all Argentine exports. Primary products are livestock,
oilseeds, and grain. Argentina's single biggest trading partner is
Brazil, and the United States is the second. Primary imports are
machinery, vehicles and chemicals.
The resignation of Economy Minister Domingo Cavallo in July 1996
was initially greeted with skepticism from the markets. Cavallo was
widely recognized as the man responsible for ensuring the
convertibility of the peso by pegging it to the dollar, a move which
saved Argentina from the hyperinflation and continuous drops in output
which could have followed from the Mexican crisis in 1994. Confidence
was quickly restored, however, with the appointment of Roque
Fernandez, who promptly reaffirmed commitment to Cavallo's plan and
introduced further measures for fiscal stability.
The central bank's main priority is maintaining convertibility
against the dollar. It is very active in the foreign exchange market
and even assists local firms with liquidity problems.
Legislative elections could prove to be critical for Menem, who
still has an extensive economic reform agenda which includes further
privatizations, labor market reforms and a revamped tax policy.
Failure to retain a friendly majority in the Lower House of Congress
could deprive Menem of the support he needs to pass such reforms.
The next presidential election is due in 1999. In accordance with
the constitution, Menem, a member of the Peronist party, can not seek
a third consecutive term. The next election is likely to present a
third candidate to the voters beyond the traditional contestants from
the Peronist and Radical parties. Frepaso, a center-left alliance,
first emerged in the 1995 elections and by 1999 could build itself up
enough to promote a viable alternative to the older parties. It is
uncertain how policies would be effected by the systemic change from a
predominantly two-party system to a three-way game.
The Argentine stock market reached an all-time high in October of
1997 in response to rising corporate earnings and strong economic
growth. However, the market underwent a significant correction due
largely to the "contagion effect" of the Asian economic and currency
crisis and the popular Mervel index ended the year only 5.9% ahead.
While there was little direct impact from the Asian crisis on
Argentina's economy, foreign investors fled the market, as they feared
that Asia's currency problems would spread to Latin America.
The Argentine market may pose special risks for investors. As an
emerging nation, Argentina's stock market may be particularly
vulnerable to widespread economic, currency and market turmoil such as
we have seen recently in Asia. These crises may prompt investors to
become increasingly averse to emerging market exposure on concerns
that the impact of these events will spread to other countries. In
addition, mutual funds that invest in emerging markets may be forced
to sell holdings in countries that have little similarity with the
markets in trouble, merely to raise cash to meet redemptions.
Similarly, the Asian crisis has accelerated a growing imbalance
between supply and demand for basic commodities such as oil, metals,
pulp, grains and others. This could impact the Argentinean stock
market where energy stocks (oil, gas and electricity) comprise
approximately 40% of the market's total value. A currency devaluation
by one or more of its Latin American neighbors could precipitate a
recession and political pressure for competitive devaluation to
protect the country's trade competitiveness.
While Argentina's political situation is relatively stable; there
is a high degree of dissatisfaction with the government's inability to
lower the country's high unemployment rate. This could eventually lead
to social unrest and a new government less favorable to investors.
BRAZIL. Brazil is the largest country in South America and
is home to vast amounts of natural resources. Its 155 million people
are descendants from indigenous tribes and European immigrants. They
live in diverse socio-economic conditions, from the urban cities of
Sao Paolo to the undeveloped trading posts of the distant regions.
Industrial development has been concentrated in specific areas. The
disenfranchised population is quite large and is a source of many of
Brazil's social problems.
The Brazilian economy is currently undergoing extensive reforms,
stemming from a 1994 effort to stabilize the currency called the Real
Plan. With the aim of curbing inflation, a new currency, the Real, was
introduced and supported via a floating exchange bond. The plan has
stabilized the exchange rate and controlled inflation, which was
reeling out of control in 1994 at 2,700%. Inflation in 1995 dropped to
81%, and fell even further in 1996, settling at 18.7%. Perhaps the
most remarkable achievement for the Brazilian economy in 1997 was the
lowest rate of inflation in the past 40 years, as the National
Consumer Price Index increased just 7.48%. At the same time, however,
the Real Plan has sent the trade and current account balances into a
deficit. The current account deficit is expected to reach $30 billion
in 1998, equivalent to 3.6% of GDP.
Other objectives of the administration of the current President,
Fernando Henrique Cardoso, are trade liberalization and privatization,
but these efforts are sporadic and often stalled by special interests
in the legislature. Some privatization efforts are performing well,
particularly in the utilities sector. Utilities and telecommunications
have been key draws for foreign investment, and foreign direct
investment (FDI) is coming in at record levels. In 1996 the country
received over $9.5 billion, with $2.4 billion coming from the United
States. Still, there are restrictions against investments in certain
industries, such as metals and mining.
Traditionally an agricultural economy, a strong industrial sector
has developed which produces metals, chemical, and manufactured
consumer goods. Agriculture still plays a significant role, however,
representing 11% of the GDP, 40% of exports and employing over 35% of
the workforce. Primary agricultural products are grains, coffee, and
cattle. Regarding energy and utilities, the country is a leading
producer of hydroelectric power, but it is dependent on imports for
oil.
Presidential elections will be held in 1998. President Cardoso
hopes to stand for re-election but currently is unable to, given a
constitutional provision on term limits. Efforts to gather
congressional support for constitutional reform, allowing Cardoso to
stand, could result in a great deal of special interest concessions,
translating into more public spending and horse-trading over fiscal
reforms.
In 1997 the Brazilian stock market rose to an all-time high in the
first quarter. Over the summer, the speculative attack on the Thai
currency triggered a sharp reversal in the Brazilian market, as
investors feared a raid on the Brazilian Real. However, the market
ended the year with a gain of 4.34%. By mid-year 1998 the Brazilian
market plummeted amid growing concern that Brazil, Latin America's
largest economy, might suffer the confidence crisis that had caused
large currency devaluations in Russia and Asia.
Investing in Brazil could entail special risks: High unemployment
is the chief challenge facing Brazil's president Cardoso, as he seeks
reelection in October. Joblessness is at a record high and social
unrest could lead to his defeat. Cardoso's main challenger is
considered to be strongly left of center on the political spectrum and
has proposed policies that could be detrimental to the progress made
in subduing inflation and denationalizing government ownership of many
of its businesses. He is considered by many to be unfriendly to the
interests of shareholders.
Brazil could be a likely target for a renewed attack on its
currency. The economy is in a more precarious state: interest rates
remain high and, despite austerity measures, little progress has been
made in reducing the current account deficit. This poses particular
risk for United States investors who would see their investment
returns eroded if the Brazilian real were to be devalued.
Overall, Brazil remains vulnerable to both external shocks and
changing sentiment due to worsening domestic indicators or political
risk.
CHILE. Chile is a transition economy which has recently made
great strides toward putting its authoritarian, statist, past behind
itself. In all of Latin America, it is the country with the highest
rates of growth. Averaging 7.3% so far this decade, GDP grew at 6.0%
in 1996, down from 6.6% the previous year. Inflation has been steadily
declining and is down over 15% in the last five years. Inflation in
1997 was 6.0%, a 0.6% drop over 1996. Unemployment in 1996 was 6.2%,
particularly low for the Latin American region. Chile is still
considered to have one of the best performing stock markets in the
region.
Chile has a strong, interventionist central bank, which focuses
more on the investment community than it does on the government.
Active steps are taken to control demand and inflation. One example is
the practice of restricting short-term flows of foreign capital
through the country.
Performance of the Chilean stock market was lackluster in 1997 as
weak copper prices and rising interest rates led to a contraction in
the domestic economy. Also contributing to the market's weakness was
the contagion effect of the Asian economic and currency crises, a
decline in pulp and steel prices; and uncertainty about the growth
prospects of its Latin American neighbors. These factors combined to
produce a 15% decline in the stock market for the 1997 calendar year.
The market weakness carried through into the first half of the next
year.
Eduardo Frei is President and is due for reelection in 1999.
President Frei has been trying to decentralize the government but
encounters stiff opposition from the powerful trade unions. Also high
on Frei's agenda is tax reform.
There is a considerable military component to political life in
Chile. In the legislature there is strong representation by parties
with authoritarian views. As part of the negotiated settlement with
coup leader General Augusto Pinochet in 1990, the army chain of
command ends with General Pinochet, not an elected official.
Furthermore, certain seats are reserved in the Senate for appointed
officials from the military. Pinochet must resign in 1998, and shortly
thereafter the reserved Senate seats will fall open to election. There
are constitutional reforms currently in progress further diminishing
the role and influence of the military, and thus the political
transition is still underway. A successful outcome requires that the
military acquiesce as it is stripped of its political powers.
Investors in the Chilean market face special risks. The Chilean
market is particularly sensitive to the fluctuation in the
international price of copper and pulp on the international markets
and they have a significant impact on the nation's economy and stock
market.
As is typical of most emerging markets, much of the Chilean equity
market is firmly held by controlling families and their associates.
Accordingly, these owners may not always act in the interests of
outside shareholders.
Chile is particularly vulnerable to outside shocks such as the
current economic and currency woes of other emerging markets worldwide
and it is particularly sensitive to events that impact its Latin
American neighbors. Any weakness in the Chilean currency versus the
dollar could erode the investment returns to United States investors
upon currency conversion.
MEXICO. The Mexican economy has recovered fairly well since
the currency crisis of December 1994 thanks in large part to growth in
exports, peso stabilization, and massive financial assistance from the
United States. GDP growth rose to 7.3%, with consumer spending and
investment leading the way. A major positive factor supporting growth
during 1997 was the strength of the peso, which closed the year little
changed from its 1996 year-end level. In addition, the nation's
inflation rate declined to 15.7% from the 27.7% rate of 1996. This
marked the second straight year of improvement. Inflation is the chief
concern of the central bank, which takes active measures such as the
setting of wage ceilings and manipulation of interest rates to control
it. Domestic consumption, while improved, has yet to return to
pre-1994 levels, and has also contributed to the containment of
inflation.
The Mexican economy is very strong in manufacturing and natural
resources, specifically oil. Manufacturing alone counts for 22% of the
Mexican GDP and 21% of all urban employment. The economy is also very
closely tied to the United States, which is responsible for 60% of all
foreign investment and with whom it conducts over 75% of all trade.
Trade pacts such as the North American Free Trade Agreement (NAFTA)
further integrate the economies, giving the United States strong
incentives to provide assistance in times of crisis. NAFTA also aided
the recent recovery, given the ease with which it allows increases in
exports and investment. The Mexican stock market listed 194 companies
with total capitalization of $156 billion in 1997, a 12% rise over
1996.
Internally, the various people of the Mexican states have recently
experienced a great deal of dissatisfaction with their relationship to
the federal government. Most notably, in Chiapas there have been armed
uprisings by indigenous groups demanding further autonomy. While the
rebellions have not strongly shaken financial markets, they serve as a
reminder of the diversity of Mexico, of the vast socio-economic gaps
between various peoples, and of the potential for such groups to
demand the attention of both their government and the world.
Politically, the landscape changed fundamentally in July 1997. The
defeat of candidates from the Institutional Revolutionary Party (PRI)
in legislative elections signaled the end of decades of one party
rule. Citizens now have the confidence that their votes count and that
the PRI is no longer invincible. Winning every presidential election
since its founding in 1929, the PRI was the country's monolithic
political machine, maintaining power through rigged elections and
ruling in an environment rife with intrigue and corruption. Internal
pressures including armed rebellion from domestic interest groups,
extensive crises and scandals caused by intra-party rivalries and
corruption, and deteriorating relationships with foreign countries
over financial mismanagement and mutual social problems all
contributed to the establishment of fully free and unfettered
elections. The response from the Mexican people was clear. Though they
took the most votes (39%) for the 500-member Lower House of Congress,
the PRI has lost their majority, and the President is now forced to
accommodate the interests of the opposition parties. Market reaction
to the new Mexican political world was positive. The IPC index,
consisting of 35 of the most representative stocks on the Mexican
Stock Exchange, rose 3.25% the day after the election. Further
financial implications of the new landscape are as yet uncertain.
Relevant considerations are the effect of the new configurations on
government consensus and policy making, the demands of newly empowered
groups on economic and other resources, the balance of power between
the executive and the legislature, and the ability of the government
to maintain law and order.
Following three straight years of strong gains, Mexico's stock
market fell sharply in late 1997 and continued its descent through
mid-1998 as the worsening Asian economic and currency crises
threatened to cause problems for Mexico's trade balance and raised
questions concerning the sustainability of its economic growth.
Foreign investors fled the Mexican market, as they feared that Asia's
currency problems would spread to Latin America.
Investors in Mexico face a number of potential risks. As an
emerging nation, Mexico's stock market may be particularly vulnerable
to widespread economic, currency and stock market turmoil such as
recently experienced in Asia and Russia. These crises may prompt
investors to become increasingly averse to emerging market exposure on
concern that the impact of these events will spread to other
countries. In addition, mutual funds that invest in emerging markets
may be forced to sell holdings in countries that have little
similarity with the troubled markets, merely to raise cash to meet
redemptions. Similarly, because the United States is Mexico's largest
trading partner, any economic downturn in the U.S. economy can have a
strongly adverse impact upon Mexico's economy and stock market.
While Mexico's political situation is relatively stable, there is a
high degree of dissatisfaction with the government's inability to
effectively address the nation's growing social problems, particularly
in the countries less developed regions. Occasional flair-ups of
strikes and armed rebellions could pose a threat to Mexico's political
and economic stability.

SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION
The Russian Federation is the largest republic of the Commonwealth
of Independent States with a 1995 population of 147,500,000. It is
about one and four fifths of the land area of the United States and
occupies most of Eastern Europe and north Asia.
Russia has had a long history of political and economic turbulence.
The USSR lasted 69 years and for more than half that time it ranked as
a nuclear superpower. In the 1930's tens of millions of its citizens
were collectivized under state agricultural and industrial enterprises
and millions died in political purges and the vast penal and labor
system or in state-created famines. During World War II, as many as 20
million Soviet citizens died. After decades of communist rule, the
Soviet Union was dissolved on December 8, 1991 following a failed coup
attempt against the government of Mikhail Gorbachev. On the day that
the leaders declared that the Soviet Union ceased to exist, the Soviet
republics were invited to join with Russia in the Commonwealth of
Independent states (CIS). At one time or another those that have
agreed to join have included the Ukraine, Belarus, Moldova, Georgia,
Armenia, Azerbaijan, Uzbekistan, Turkmenistan, Tajikistan, Kazakhstan
and Kyrgyzstan, but a number have dropped out since or have only
observer status. Each of the republics is a sovereign state that
controls its own economy and natural resources and collects its own
taxes, providing only minimal support to the CIS.
Boris Yeltsin, President of Russia, inherited the mantle of
economic and political chaos. With the freeing of most prices he
staked his political life on the rapid creation of a free market
economy. Since 1991 Yeltsin and his Russian reformers have been faced
with the daunting task of stabilizing the Russian economy while
transforming it into a modern and efficient structure able to compete
in international markets and respond to the needs of the Russian
people. To date, their efforts have yielded widely mixed results. On
the one hand, they have made some impressive progress. Since 1992,
they have abolished central planning, decontrolled prices, unified the
foreign exchange market, made the ruble convertible, and privatized
two thirds of the economy. They have accomplished this in spite of the
crushing burdens inherited from the communist system: huge industrial
enterprises that are unprofitable; an obsolete capital stock; a
crumbling energy sector, huge external debt; and armies that had to be
repatriated and resettled at home.
Russia remains a paradox among the major economies of the world in
that it is a country marked by stagnation in production levels, but
has few constraints on growth. Labor supply is adequate and savings
are high. In addition, there is almost unlimited scope for increasing
productivity through the introduction of improved technologies,
production process and market-oriented managerial development. There
are 147 million consumers who are slowly increasing their buying power
and education standards are high. Russia is also rich in natural
resources. It has 40% of the world's natural gas reserves, 6% of its
oil, 25% of coal, diamonds, gold and nickel, and 30% of timber and
bauxite. Approximately ten million people are engaged in agriculture
and they produce half of the region's grain, meat, milk, and other
dairy products.
The main reason for the continued poor performance of the Russian
economy is the country's failure to mobilize the resources that are
available. While the official unemployment rate was at 10.6% in 1996,
up to half of the working population is, in effect, unemployed or, to
a significant degree, underemployed in inefficient and unproductive
industries. Much of the country's savings have been siphoned off
through capital flight. Russia's technological potential for
assimilating both domestic and foreign technologies is not being
exploited. Industry privatization and restructuring initiatives have
generally failed to mobilize the available factors of production as
the country's privatization program virtually ensures the predominance
of the old management teams that are largely non market-oriented in
their management approach. Approximately 80% of Russian privatized
companies continue to be majority-owned by insiders and only 10% are
owned by investors with large enough stakes to influence the running
of the company.
In July 1996, Boris Yeltsin was re-elected for a second term and it
was hoped that the election would mark the start of a more stable
period of economic growth. However, macroeconomic indicators in 1996
proved contradictory. On the one hand, the Russian government
continued its strict credit policies, and the annual inflation rate
for 1997 dropped to 11%, down from 22% in 1996. Inflation has since
remained below 3% a month through the first half of 1997. In addition,
expenditure cuts trimmed the budget deficit to 7% of GDP for the first
nine months of 1996.
By the end of 1997, GDP was up 0.4% following 1996's 6% fall, and
industrial production was up by 1.9%. Non-payment continues to
represent a serious problem for the economy, particularly in the
energy sector.
While Russia is widely believed to be one of the most risky markets
in Eastern Europe, it is also recognized for its potential for
positive returns. However, the market has been essentially liquidity
driven and concentrated in very few of the country's largest
companies. At just $129 billion, the total capitalization of the stock
market accounts for just 28.7 percent of GDP. The majority of
investors in Russian equities are small and medium-sized United States
hedge funds. In addition, several country specific funds have been
established to make direct and portfolio investments in Russian
companies. To facilitate foreign investment, a number of the larger
Russian companies have issued equity in the form of American
depository receipts while six big firms have issued securities in the
form of Russian depository certificates. These certificates are issued
and marketed by the Bank of New York. Any investment in Russia is
risky and deciding which companies will perform well at this stage of
the country's transformation is far from easy. A combination of poor
accounting standards, inept management, limited shareholder rights and
the criminalization of large sectors of the economy pose a significant
risk, particularly to foreign investors.
In 1996 the Russian market delivered the world's best stock market
performance and was among the top performing markets in the first half
of 1997. However, the markets strength masked a rapidly deteriorating
political and economic picture. Many of the country's economic reform
initiatives have floundered as the proceeds of IMF and other
assistance have been squandered or stolen. Taxes were not being
collected and Russian banks, suffering from a collapsed ruble, could
not meet the demands of either domestic depositors or foreign
creditors. In July of 1998 the Yeltsin government effectively devalued
the Russian ruble by approximately 34% to strengthen the ailing
banking system and stimulate demand for Russian exports. In addition
the government announced a restructuring of their foreign debt that
would allow a 90-day moratorium on banks' foreign loans and a
rescheduling of $40 billion in domestic debt. These actions were
viewed by investors as being tantamount to default and they fled the
Russian stock market. President Yeltsin's relations with the communist
dominated Duma worsened and there was talk among the body of beginning
impeachment proceedings against the president. By August of 1998 the
ruble had fallen by 70 percent and food prices soared, heightening
fears of social unrest. By early September the Russian economy
appeared to be slipping out of control and the government in a state
of paralysis as the President and the Duma feuded over remedial
initiatives. Many observers fear that country's communist party could
regain control of the government and end free market reforms, which
could further negatively impact stock prices.

PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract . FMR i s also responsible for the placement
of transaction orders for other investment companies and
inves t ment accounts for which it or its affiliates act as
investment adviser. In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, FMR considers various
relevant factors, including, but not limited to: the size and type of
the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and, if a pplicable, arrangements
for payment of fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
in vest ment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
perfor mance of in vestment accounts; and effect securities
transactions and perform functions incidental thereto (such as
clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer .
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for inve stment accounts which they or their affiliates manage,
unless certain requirements are satisfied. Pursuant to such
requirements, the Board of Trustees has authorized NFSC to execute
portfolio transactions on national securities exchanges in accordance
with approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
Each fund's turnover rates for the fiscal periods ended October 31,
1998 and 1997 are indicated in the table below. [Variations in
turnover rates may be due to fluctuating volume of shareholder
purchase and redemption orders, market conditions, or changes in FMR's
investment outlook.]

TURNOVER RATES 1998 1997

INTERNATIONAL GROWTH & % 70%
INCOME

DIVERSIFIED INTERNATIONAL % 81%

INTERNATIONAL VALUE % 86%

OVERSEAS % 68%

WORLDWIDE % 85%

[The following tables show the brokerage commissions paid by the
funds. Significant changes in brokerage commissions paid by a fund
from year to year may result from changing asset levels throughout the
year. A fund may pay both commissions and spreads in connection with
the placement of portfolio transactions.]
[The following table shows the total amount of brokerage
commissions paid by each fund.]

FISCAL YEAR ENDED TOTAL AMOUNT PAID
OCTOBER 31

INTERNATIONAL GROWTH
& INCOME

1998 $

1997 $

1996 $

DIVERSIFIED
INTERNATIONAL

1998 $

1997 $

1996 $

INTERNATIONAL VALUE

1998 $

1997 $

1996 $

OVERSEAS

1998 $

1997 $

1996 $

WORLDWIDE

1998 $

1997 $

1996 $

Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund to NFSC, FBS and FBSJ, as
applicable, for the past three fiscal years. The second table shows
the approximate percentage of aggregate brokerage commissions paid by
a fund to NFSC, FBS and FBSJ for transactions involving the
approximate percentage of the aggregate dollar amount of transactions
for which the fund paid brokerage commissions for the fiscal year
ended 1998. NFSC, FBS and FBSJ are paid on a commission basis.

TOTAL AMOUNT PAID

FISCAL YEAR ENDED TO NFSC TO FBS TO FBSJ
OCTOBER 31

INTERNATIONAL GROWTH
& INCOME

1998 $ $ $

1997 $ $ $

1996 $ $ $

DIVERSIFIED
INTERNATIONAL

1998 $ $ $

1997 $ $ $

1996 $ $ $

INTERNATIONAL VALUE

1998 $ $ $

1997 $ $ $

1996 $ $ $

OVERSEAS

1998 $ $ $

1997 $ $ $

1996 $ $ $

WORLDWIDE

1998 $ $ $

1997 $ $ $

1996 $ $ $

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FISCAL YEAR % OF % OF % OF % OF % OF AGGREGATE % OF AGGREGATE
ENDED AGGREGATE AGGREGATE AGGREGATE AGGREGATE COMMISSIONS DOLLAR AMOUNT
OCTOBER 31, 1998 COMMISSIONS DOLLAR AMOUNT COMMISSIONS DOLLAR AMOUNT PAID TO FBSJ OF TRANSACTIONS
PAID TO NFSC OF TRANSACTIONS PAID TO FBS OF TRANSACTIONS EFFECTED
EFFECTED EFFECTED THROUGH FBSJ
THROUGH NFSC THROUGH FBS

INTERNATIONAL % % % % % %
GROWTH &
INCOME

DIVERSIFIED % % % % % %
INTERNATIONAL

INTERNATIONAL % % % % % %
VALUE

OVERSEAS % % % % % %

WORLDWIDE % % % % % %

</TABLE>

[The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, [[NFSC] [,/and] [FBS] [and FBSJ]] is
a result of the low commission rates charged by [[NFSC] [,/and] [FBS]
[and FBSJ]].]
[[NFSC] [,/and] [FBS] [and] [FBSJ] [has/have] used a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer
agent fees.]
[The following table shows the dollar amount of brokerage
commissions paid to firms that provided research services and the
approximate dollar amount of the transactions involved for the fiscal
year ended 1998.]

$ AMOUNT OF $ AMOUNT OF BROKERAGE
COMMISSIONS PAID TO TRANSACTIONS INVOLVED*
FIRMS THAT PROVIDED
RESEARCH SERVICES*

INTERNATIONAL GROWTH $ $
& INCOME

DIVERSIFIED $ $
INTERNATIONAL

INTERNATIONAL VALUE $ $

OVERSEAS $ $

WORLDWIDE $ $

[*The provision of research services was not necessarily a factor
in the placement of all this business with such firms.]

[For the fiscal year ended October 31, 1998 [the funds/[Name(s) of
Fund(s)]] paid no brokerage commissions to firms that provided
research services.]
The Trustees of each fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and o fficers of each fund are
substantially the same as those of other funds managed by FMR or its
affiliates, investment decisions for each fund are made independently
from those of other funds managed by FMR or investment accounts
managed by FMR affiliates. It sometimes happens that the same security
is held in the portfolio of more than one of these funds or investment
accounts. Simultaneous transactions are inevitable when several funds
and investment accou nts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one f und or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

VALUATION
Each fund's NAV is the value of a single share. The NAV of each
fund is computed by adding the value of the fund's investments, cash,
and other assets, subtracting its liabilities, and dividing the result
by the number of shares outstanding.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or closing bid price normally is used. Securities of other
open-end investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independ ent brokers or quotation services provide prices of
foreign securities in their local currency. Fidelity Service Company,
Inc. (FSC) gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates
the value of foreign securities from their local currencies into U.S.
dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation
of NAV. If an event that is expected to materially affect the value of
a portfolio security occurs after the close of an exchange or market
on which that security is traded, then that security will be valued in
good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or
less for which market quotations and information furnished by a
pricing service are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of
which approximate current value.
The procedures set forth above need not be used to determine the
value of the securities owned by a fund if, in the opinion of a
committee appointed by the Board of Trustees, some other method would
more accurately reflect the fair market value of such securities. For
example, securities and other assets for which there is no readily
available market value may be valued in good faith by a committee
appointed by the Board of Trustees. In making a good faith
determination of the value of a security, the committee may review
price movements in futures contracts and ADRs market and trading
trends, the bid/ask quotes of brokers and off-exchange institutional
trading.

PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's share price,
yield, if available, and total return fluctuate in response to market
conditions and other factors, and the value of fund shares when
redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing a
fund's interest and and dividend income for a given 30-day or
one-month period, net of expenses, by the average number of shares
entitled to receive distributions during the period, dividing this
figure by the fund's net asset value per share (NAV) at the end of the
period, and annualizing the result (assuming compounding of income) in
order to arrive at an annual percentage rate. Income is calculated for
purposes of yield quotations in accordance with standardized methods
applicable to all stock and bond funds. Dividends from equity
investments are treated as if they were accrued on a daily basis,
solely for the purposes of yield calculations. In general, interest
income is reduced with respect to bonds trading at a premium over
their par value by subtracting a portion of the premium from income on
a daily basis, and is increased with respect to bonds trading at a
discount by adding a portion of the discount to daily income. For a
fund's investments denominated in foreign currencies, income and
expenses are calculated first in their respective currencies, and then
are converted to U.S. dollars, either when they are actually converted
or at the end of the 30-day or one month period, whichever is earlier.
Capital gains and losses generally are excluded from the calculation
as are gains and losses from currency exchange rate fluctuations.
Income calculated for the purposes of calculating a fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, a fund's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statements.
In calculating a fund's yield, a fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in
order to reflect the risk premium on that security. This practice will
have the effect of reducing a fund's yield.
Yield information may be useful in reviewing a fund's performance and
in providing a basis for comparison with other investment
alternatives. However, a fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a fund's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect
all aspects of a fund's return, including the effect of reinvesting
dividends and capital gain di stributions, and any change in a
fund's NAV over a stated period. A cumulative total return reflects
actual performance over a stated perio d of time. Average annual
total returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in a fund over a stated
period, and then calculating the annually compounded percentage rate
that would have produced the same result if the rate of growth or
decline in value had been constant over the period. For example, a
cumulative total return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a compounded basis in ten
years. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that a
fund's performance is not constant over time, but changes from year to
year, and that average annual total returns represent averaged figures
as opposed to the actual year-to-year performance of a fund.
In addition to average annual total returns, a fund may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions
to total return. T otal returns may be quoted on a before-tax or
after-tax basis. Total returns may or may not include the effect of a
fund's small account f ee. Excluding a fund's small account fee
from a total return calculation produces a higher total return figure.
Total returns, yields, if applicable, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indexes may be used to
exhibit performance. An adjusted NAV includes any distributions paid
by a fund and reflects all elements of its return. Unless otherwise
indicated, a fund's adjusted NAVs are not adjusted for sales charges,
if any.
MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average.
On October 30 , 1998, the 13-week and 39-week long-term moving
averages are shown below.

<TABLE>
<CAPTION>
<S> <C> <C>
FUND NAME 13 WEEK LONG-TERM MOVING 39 WEEK LONG-TERM MOVING
AVERAGE AVERAGE

INTERNATIONAL GROWTH & $ $
INCOME

DIVERSIFIED INTERNATIONAL $ $

INTERNATIONAL VALUE $ $

OVERSEAS $ $

WORLDWIDE $ $

</TABLE>

CALCULATING HISTORICAL FUND RESULTS. The following table
shows performance for each fund calculated including certain fund
expenses.
HISTORICAL FUND RESULTS. The following table shows each
fund's total return for the fiscal periods ended October 31, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE CUMULATIVE
ANNUAL TOTAL TOTAL RETURNS
RETURNS

ONE YEAR FIVE YEARS TEN YEARS ONE YEAR FIVE YEARS TEN YEARS

INTERNATIONAL GROWTH & % %[A] %[A,B,C] % %[A] %[A,B,C]
INCOME

</TABLE>

[A Previously, the fund imposed a sales charge. If this sales charge
were taken into account, total returns would have been lower.]
[B Total returns do not include the deferred sales charge of 1% upon
redemption on shares purchased prior to October 12, 1990.]
[C If FMR had not reimbursed certain fund expenses during these
periods, total returns would have been lower.]

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE CUMULATIVE
ANNUAL TOTAL TOTAL RETURNS
RETURNS

ONE YEAR FIVE YEARS LIFE OF FUND* ONE YEAR FIVE YEARS LIFE OF FUND*

DIVERSIFIED INTERNATIONAL % % %[A] % % %[A]

</TABLE>

* From December 27, 1991 (commencement of operations).
[A If FMR had not reimbursed certain fund expenses during these
periods, total returns would have been lower.]

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE CUMULATIVE
ANNUAL TOTAL TOTAL RETURNS
RETURNS

ONE YEAR FIVE YEARS LIFE OF FUND* ONE YEAR FIVE YEARS LIFE OF FUND*

INTERNATIONAL VALUE % % % % % %

</TABLE>

* From November 1, 1994 (commencement of operations).

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE CUMULATIVE
ANNUAL TOTAL TOTAL RETURNS
RETURNS

ONE YEAR FIVE YEARS TEN YEARS ONE YEAR FIVE YEARS TEN YEARS

OVERSEAS % %[A] %[A] % %[A] %[A]

</TABLE>

[A Previously, the fund imposed a sales charge. If this sales charge
were taken into account, total returns would have been lower.]

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE CUMULATIVE
ANNUAL TOTAL TOTAL RETURNS
RETURNS

ONE YEAR FIVE YEARS LIFE OF FUND* ONE YEAR FIVE YEARS LIFE OF FUND*

WORLDWIDE % %[A] %[A,B] % %[A] %[A,B]

</TABLE>

* From May 30, 1990 (commencement of operations).
[A Previously, the fund imposed a sales charge. If this sales charge
were taken into account, total returns would have been lower.]
[B If FMR had not reimbursed certain fund expenses during these
periods, total returns would have been lower.]

The following tables show the income and capital elements of each
fund's cumulative total return. The tables compare each fund's return
to the record of the Standard & Poor's 500 Index (S&P 500) the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured
by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month-end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to
show how each fund's total return compared to the record of a broad
unmanaged index of common stocks and a narrower set of stocks of major
industrial companies, respectively, over the same period. Each fund
has the ability to invest in securities not included in either index,
and its investment portfolio may or may not be similar in composition
to the indexes. The S&P 500 and DJIA returns are based on the prices
of unmanaged groups of stocks and, unlike each fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10 year period ended
October 31, 1998 or l ife of each fund, as applicable, assuming
all distributions were reinvested. Total returns are based on past
results and are not an indication of future performance. Tax
consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the figures below.
Dur ing the 10-year period ended October 31, 1998, a
hypothetical $10,000 investment in Fidelity International Growth &
Income Fund would have grown to $______.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
INTERNATIONAL
GROWTH &
INCOME FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING*
OCTOBER 31 $10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990 $ $ $ $ $ $ $

1989 $ $ $ $ $ $ $

</TABLE>

* From month-end closest to initial investment date.

Explanatory Notes: With an initial invest ment of $ 10,000 in
Fidelity International Growth & Income Fund on November 1, 1988, the
net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends and $_____ for capital gain distributions. The figures in
the table do not include the effect of the fund's 2% sales charge
(which was in effect during the period January 1, 1991 through June 1,
1994), its 1% deferred sales charge on shares purchased prior to
October 12, 1990, or its $25 exchange fee in effect from December 1,
1987 through October 1, 1989. Prior to April 1991, the fund imposed a
2% sales charge which is no longer in effect and is not reflected in
the figures above.
During the period from Decem ber 27, 1991 (commencem ent of
operations) to October 31, 1998, a hypothetical $10,000 investment in
Fidelity Diversified International Fund would have grown to $______.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
DIVERSIFIED
INTERNATIONAL
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING**
OCTOBER 31 $10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992* $ $ $ $ $ $ $

</TABLE>

* From December 27, 1991 (commencement of operations).
** From month-end closest to initial investment date.

Explanatory Notes: With an initial investment of $10,000 in Fidelity
Diversified International Fund on December 27, 1991, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends
and $_____ for capital gain distributions.
During the period from November 1, 1994 (commenceme nt of
operations) to October 31, 1998, a hypothetical $10,000 investment
in Fidelity International Value Fund would have grown to $______.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
INTERNATIONAL
VALUE FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING**
OCTOBER 31 $10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1994 (commencement of operations).
** From month-end closest to initial investment date.

Explanatory Notes: With an initial investment of $10,000 in Fidelity
International Value Fund on November 1, 1994, the net amount invested
in fund shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $______. If distributions
had not been reinvested, the amount of distributions earned from the
fund over time would have been smaller, and cash payments for the
period would have amounted to $______ for dividends and $_____ for
capital gain distributions.
During the 10-year period ended O ctober 31, 19 98, a
hypothetical $10,000 investment in Fidelity Overseas Fund would have
grown to $______.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
OVERSEAS
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING*
OCTOBER 31 $10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990 $ $ $ $ $ $ $

1989 $ $ $ $ $ $ $

</TABLE>

* From month-end closest to initial investment date.

Explanatory Notes: With an initial investment of $ 10,000 in
Fidelity Overseas Fund on November 1, 1988, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends
and $_____ for capital gain distributions. The figures in the table do
not include the effect of the fund's 3% sales charge which was waived
through June 30, 1995 and eliminated as of July 1, 1995 and the fund's
$25 exchange fee, which was in effect from December 1, 1987 through
October 1, 1989. Prior to May 1994, the fund imposed a 3% sales charge
which is no longer in effect and is not included in the figures above.
During the period from May 30, 1990 (commencement of operations) to
October 3 1, 199 8, a hypothetical $10,000 investment in Fidelity
Worldwide Fund would have grown to $______.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
WORLDWIDE
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING**
OCTOBER 31 $10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990* $ $ $ $ $ $ $

</TABLE>

* From May 30, 1990 (commencement of operations).
** From month-end closest to initial investment date.

Explanatory Notes: With an initial investment of $10,000 in Fidelity
Diversified International Fund on May 30, 1990, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends
and $_____ for capital gain distributions.

INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL STOCK
MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
inde xes databas e, the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database, and the performance of national stock
markets as measured in U.S. dollars by the Morgan Stanley Capital
International stock market indexes for the twelve months end ed
October 31, 1998 . Of course, these results are not indicative of
future stock market performance or the funds' performance. Market
conditions during the periods measured fluctuated widely. Brokerage
commissions and other fees are not factored into the values of the
indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew from $____ billion in 1997 to
$____ billi on in 1998.
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of the markets are
m easure d in billions of U.S. dollars as of October 31, 1998..

TOTAL MARKET CAPITALIZATION
AUSTRALIA $ JAPAN $

AUSTRIA $ NETHERLANDS $

BELGIUM $ NORWAY $

CANADA $ SIN GA PORE $

DENMARK $ SPAIN $

FRANCE $ SWEDEN $

GERMANY $ SWITZERLAND $

HONG KONG $ UNITED KINGDOM $

ITALY $ UNITED STATES $

The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The val ue of the mar kets is measured
in billions of U.S. dollars as of October 31, 1998.

TOTAL MARKET CAPITALIZATION - LATIN AMERICA
ARGENTINA $

BRAZIL $

CHILE $

COLOMBIA $

MEXICO $

VENEZUELA $

TOTAL LATIN AMERICA $______

NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexe s
for the tw elve months ended October 31, 1998. The second table
shows the same performance as measured in local currency. Each table
measures total return based on the period's change in price, dividends
paid on stocks in the index, and the effect of reinvesting dividends
net of any applicable foreign taxes. These are unmanaged indexes
composed of a sampling of selected companies representing an
approximation of the market structure of the designated country.

STOCK MARKET PERFORMANCE MEASURED IN U.S. DOLLARS
AUSTRALIA % JAPAN %

AUSTRIA % NETHERLANDS %

BELGIUM % NORWAY %

CANADA % SINGAP ORE %

DENMARK % SPAIN %

FRANCE % SWEDEN %

GERMANY % SWITZERLAND %

HONG KONG % UNITED KINGDOM %

ITALY % UNITED STATES %

STOCK MARKET PERFORMANCE MEASURED IN LOCAL CURRENCY
AUSTRALIA % JAPAN %

AUSTRIA % NETHERLANDS %

BELGIUM % NORWAY %

CANADA % S ING APORE %

DENMARK % SPAIN %

FRANCE % SWEDEN %

GERMANY % SWITZERLAND %

HONG KONG % UNITED KINGDOM %

ITALY % UNITED STATES %

The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1998.

STOCK MARKET PERFORMANCE

FIVE YEARS ENDED TEN YEARS ENDED

OCTOBER 31, 1998 OCTOBER 31, 1998

GERMANY % %

HONG KONG % %

JAPAN % %

SPAIN % %

UNITED KINGDOM % %

UNITED STATES % %

PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. In addition to the mutual
fund rankings, a fund's performance may be compared to stock, bond,
and money market mutual fund performance indexes prepared by Lipper or
other organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The total r eturn of each index refl ects reinvestment of
all dividends and capital gains paid by securities included in each
index. Unlike a fund's returns, however, the index returns do not
reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index(es).
Diversified International may compare its performance to that of the
Morgan Stanley Capital International GDP-Weighted Europe, Australasia,
Far East Index, a market capitalization-weighted gross domestic
product weighted index that is designed to represent the performance
of developed stock markets outside of the United States and Canada.
The index returns for periods after January 1, 1997 are adjusted for
tax withholding rates applicable to U.S.-based mutual funds organized
as Massachusetts business trusts.
Each of International Value, Overseas, and International Growth &
Income may compare its performance to that of the Morgan Stanley
Capital International Europe, Australasia, Far East (EAFE) Index, a
ma rket capitalization-weigh ted index that is designed to
represent the performance of developed stock markets outside of the
United States and Canada. The index returns for periods after January
1, 1997 are adjusted for tax withholding rates applicable to
U.S.-based mutual funds organized as Massachusetts business trusts.
Worldwide may compare its performance to t hat of the Morgan Stanley
Capital International World Index, a market capitalization-weighted
index that is designed to represent the performanc e of developed
stock markets throughout the world.
Stocks are selected for the Morgan Stanley Capital International
(MSCI) indexes on the basis of industry representation, liquidity,
sufficient float, and avoidance of cross-ownership.
Effective October 1, 1998, the country of Malaysia was removed from
the Morgan Stanley Capital International EAFE Index, the Morgan
Stanley Capital International GDP-Weighted EAFE Index, and the Morgan
Stanley Capital International World Index. The index returns reflect
the inclusion of Malaysia prior to October 1, 1998.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates total returns in
the same method as the funds. The funds may also compare performance
to that of other compilations or indexes that may be developed and
made available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or total
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, a fund may also discuss or illustrate examples
of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of _________, 1998, FMR advised over $__ billion in
municipal fund assets, $__ billion in money market fund assets, $___
billion in equity fund assets, $__ billion in international fund
assets, and $___ billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
On October 12, 1990, International Growth & Income changed its sales
charge policy from a 1% sales charge upon purchase and a 1% deferred
sales charge upon redemption, to a 2% sales charge upon purchase. On
June 1, 1994, the 2% sales charge was eliminated. If you purchased
shares prior to October 12, 1990, when you redeem those shares a
deferred sales charge of 1% of the redemption amount will be deducted.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing each fund's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.

DISTRIBUTIONS AND TAXES
DIVIDENDS. Be cause each fund invests significantly in foreign
securities, corporate shareholders should not expect fund dividends to
qualify for the dividends-received deduction. Short-term capital gains
are taxable as dividends, but do not qualify for the
dividends-received deduction.
CAPITAL GAINS DISTRIBUTIONS. Each fund's capital gains
distributions are federally taxable to shareholders at a rate based
generally on the length of time the securities on which the gain was
realized were held, regardless of the length of time those shares on
which the distribution is received have been held.
[As of October 31 , 1998, [the/each] [fund/[Name(s) of
Fund(s)]] had a capital loss carryforward aggregating approximately
$____. This loss carryforward, of which $___, $___, and $___will
expire on October 31 , 199_, ____, and ____ , respectively, is
available to offset future capital gains.]
RETURNS OF CAPITAL. I f a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital los s when those
shares on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign gover nments ma y
withhold taxes on dividends and interest earned by a fund with respect
to foreign securities. Foreign governments may also impose taxes on
other payments or gains with respect to foreign securities. If, at the
close of its fiscal year, more than 50% of a fund's total assets is
invested in securities of foreign issuers, the fund may elect to pass
through eligible foreign taxes paid and thereby allow shareholders to
take a deduction or, if they meet certain holding period requirements
with respect to fund shares, a credit on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify
as a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual
tax consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund res ulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.

TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (66), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (55), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of National Arts Stabilization Inc., Chairman of
the Board of Trustees of the Greenwich Hospital Association, Director
of the Yale-New Haven Health Services Corp. (1998), a Member of the
Public Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (65), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (70), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board, of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of
various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A.
Hanna Company (chemicals, 1993), Imation Corp. (imaging and
information storage, 1997).
*ROBERT C. POZEN (52), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (70), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
ROBERT A. LAWRENCE (46), is Vice President of certain Equity Funds
(1997), Vice President of Fidelity Real Estate High Income Fund (1995)
and Fidelity Real Estate High Income Fund II (1996), and Senior Vice
President of FMR (1993).
RICHARD A. SPILLANE, JR. (47), is Vice President of certain Equity
Funds and Senior Vice President of FMR (1997). Since joining Fidelity,
Mr. Spillane is Chief Investment Officer for Fidelity International,
Limited. Prior to that position, Mr. Spillane served as Director of
Research.
ERIC D. ROITER 49, Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD MACE, JR. (36), is Vice President of Fidelity International
Value Fund (1995), Fidelity Overseas Fund (1996) and other funds
advised by FMR. Prior to his current responsibilities, Mr. Mace has
managed a variety of Fidelity funds.
GREGORY FRASER (38) is Vice President of Fidelity Diversified
International Fund (1994). Prior to his current responsibilities, Mr.
Fraser has managed a variety of Fidelity funds.
PENELOPE A. DOBKIN (44) is Vice President of Fidelity Worldwide Fund.
Prior to her current responsibilities, Ms. Dobkin has managed a
variety of Fidelity funds.
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
JOHN H. COSTELLO (52), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for
hi s or her service s for the fiscal year ended October 31, 1998
or calendar year ended December 31, 1997, as applicable.

COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREG J. Gary Ralph F. Cox Phyllis Burke Davis Robert M. Gates*** Edward
ATE Burkhead** C.
COMPEN Johnson
SATION 3d**
FROM A
FUND

Internation $ 0 $ $ $ $ 0
al Growth
& Income
B, C

Diversifie $ 0 $ $ $ $ 0
d
Internation
al B, D

Internation $ 0 $ $ $ $ 0
al ValueB,
E

OverseasB, $ 0 $ $ $ $ 0
F

Worldwide $ 0 $ $ $ $ 0
, B, G

TOTAL $ 0 $214,500 $210,000 $176,000 $ 0
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREG E. Bradley Jones Donald J. Kirk Peter S. William O. McCoy **** Gerald C. McDonough
ATE Lynch
COMPEN **
SATION
FROM A
FUND

Internation $ $ $ 0 $ $
al Growth
& Income
B, C

Diversifie $ $ $ 0 $ $
d
Internation
al B, D

Internation $ $ $ 0 $ $
al ValueB,
E

OverseasB, $ $ $ 0 $ $
F

Worldwide $ $ $ 0 $ $
, B, G

TOTAL $211,500 $211,500 $ 0 $214,500 $264,500
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

</TABLE>

AGGREG Marvin L. Mann Robert C. Pozen** Thomas R. Williams
ATE
COMPEN
SATION
FROM A
FUND

Internation $ $ 0 $
al Growth
& Income
B, C

Diversifie $ $ 0 $
d
Internation
al B, D

Internation $ $ 0 $
al ValueB,
E

OverseasB, $ $ 0 $
F

Worldwide $ $ 0 $
, B, G

TOTAL $214,500 $ 0 $214,500
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

* Information is for the calendar year ended December 31, 1997 for
230 funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
*** Mr. Gates was appointed to the Board of Trustees of Fidelity
Investment Trust effective March 1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees Fidelity
Investment Trust effective January 1, 1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
[B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.]
[C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__:
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__;E. Bradley Jones, $__; Donald J. Kirk, $__;:
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[F The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[G The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[H Certain of the non-interested Trustees' aggregate compensation from
a fund includes accrued voluntary deferred compensation as follows:
[trustee name, dollar amount of deferred compensation, fund name];
[trustee name, dollar amount of deferred compensation, fund name]; and
[trustee name, dollar amount of deferred compensation, fund name].

Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of October 31, 1998, approximately __% of [Fund Name(s)]'s total
outstanding shares was held by [FMR] [[and] [an] FMR affiliate[s]].
FMR Corp. is the ultimate parent company of [FMR] [[and] [this/these]
FMR affiliate[s]]. By virtue of his ownership interest in FMR Corp.,
as described in the "Control of Investment Advisers" section on page
___, Mr. Edward C. Johnson 3d, President and Trustee of the fund, may
be deemed to be a beneficial owner of these shares. As of the above
date, with the exception of Mr. Johnson 3d's deemed ownership of [NAME
OF FUND]'s shares, the Trustees, Members of the Advisory Board, and
officers of the funds owned, in the aggregate, less than __% of each
fund's total outstanding shares.]
[As of October 31, 1998, the Trustees, Members of the Advisory
Board, and officers of the fund owned, in the aggregate, less than __%
of each fund's total outstanding shares.]
[As of October 31, 1998, the following owned of record or
beneficially 5% or more (up to and including 25%) of each fund.]
[As of , October 31, 1998 approximately ____% of [NAME OF FUND]'s
total outstanding shares were held by [NAME OF SHAREHOLDER];
approximately ___% of [NAME OF FUND]'s total outstanding shares were
held by [NAME OF SHAREHOLDER]; and approximately ___% of [NAME OF
FUND]'s total outstanding shares were held by [NAME OF SHAREHOLDER].]

[A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
share holders.]

CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of
FMR, FMR U.K. and FMR Far East. The voting common stock of FMR
Corp. is divided into two classes. Class B is held predominantly
by members of the Edward C. Johnson 3d family and is entitled to 49%
of the vote on any matter acted upon by the voting common stock. Class
A is held predominantly by non-Johnson family member employees of FMR
Corp. and its affiliates and is entitled to 51% of the vote on any
such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under
which all Class B shares will be voted in accordance with the majority
vote of Class B shares. Under the Investment Company Act of 1940 (1940
Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the
execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, t o form a
controlling group with res pect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of FIIA, FIJ and FIIA(U.K.)L.
Edward C. Johnson 3d, Johnson family members, and various trusts for
the benefit of the Johnson family own, directly or indirectly, more
than 25% of the voting common stock of FIL. FIL provides investment
advisory services to non-U.S. investment companies and institutional
investors investing in securities throughout the world.
Fidelity investment personnel may invest in securities for their
own inves tment accounts pursuant to a code of ethics that sets
forth all employees' fiduciary responsibilities regarding the funds,
establishes procedures for personal investing and restricts certain
transactions. For example, all personal trades in most securities
require pre-clearance, and participation in initial public offerings
is prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.

MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, each fund pays all of its expenses that are
not assumed by those parties. Each fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor and non-interested
Trustees. Each fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each fund's transfer agent
agreement, the transfer agent bears the costs of providing these
services to existing shareholders. Other expenses paid by each fund
include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, International Growth & Income and Worldwide pays FMR a
monthly management fee which has two components: a group fee rate and
an individual fund fee rate.
For the services of FMR under the management contract, Diversified
International, International Value and Overseas pays FMR a monthly
management fee which has two components: a basic fee, which is the sum
of a group fee rate and an individual fund fee rate, and a performance
adjustment based on a comparison of each fund's performance to that of
Morgan Stanley Capital International Europe, Australasia, Far East
Index (the EAFE Index).
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE EFFECTIVE ANNUAL FEE
SCHEDULE RATES

Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate

0 - $3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3249

36 - 42 .3400 250 .3219

42 - 48 .3350 275 .3190

48 - 66 .3250 300 .3163

66 - 84 .3200 325 .3137

84 - 102 .3150 350 .3113

102 - 138 .3100 375 .3090

138 - 174 .3050 400 .3067

174 - 210 .3000 425 .3046

210 - 246 .2950 450 .3024

246 - 282 .2900 475 .3003

282 - 318 .2850 500 .2982

318 - 354 .2800 525 .2962

354 - 390 .2750 550 .2942

390 - 426 .2700

426 - 462 .2650

462 - 498 .2600

498 - 534 .2550

Over 534 .2500

</TABLE>

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $___ billion of group net assets - the approximate level for
October 1998 - was __%, which is the weighted average of the
respective fee rates for each level of group net assets up to $__
billion.
The individual fund fee rate for International Growth & Income and
Worldwide is 0.45 %. Based on the average group net assets of the
funds a dvised by FMR for October 1998, each fund's annual
management fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee
Rate

International 0.___% + 0.45% = 0.___%
Growth &
Income

Worldwide 0.___% 0.45% 0.___%

</TABLE>

The individual fund fee rate for Diversified International,
International Value and Overseas is 0.45% . Based on the average group
net assets of the funds advised by FMR for October 1998 , each
fund's annual basic fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate

Diversified 0.___% + 0.45% = 0.___%
International

International 0.___% 0.45% 0.___%
Value

Overseas 0.___% 0.45% 0.___%

</TABLE>

One-twelfth of the basic fee rate or management fee rate, as
applicable, is applied to each fund's average net assets for the
month, giving a dollar amount which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for Diversified
International, International Value and Overseas is subject to upward
or downward adjustment, depending upon whether, and to what extent,
the fund's investment performance for the performance period exceeds,
or is exceeded by, the record of the EAFE Index (the Index) over the
same period. Starting with the twelfth month, the performance
adjustment takes effect. Each month subsequent to the twelfth month, a
new month is added to the performance period until the performance
period includes 36 months. Thereafter, the performance period consists
of the most recent month plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(up to a maximum difference of (plus/minus)10.00) is multiplied by a
performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee.
The maximum annualized adjustment rate is (plus/minus)0.20% of a
fund's average net assets over the performance period.
The fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's shares at the NAV as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on a fund's
performance compared to the investment record of the Index, the
controlling factor is not whether the fund's performance is up or down
per se, but whether it is up or down more or less than the record of
the Index. Moreover, the comparative investment performance of each
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
For each of Morgan Stanley Capital International Europe, Australasia,
Far East Index and the Morgan Stanley Capital International
GDP-Weighted Europe, Australasia, Far East Index, the index returns
for periods prior to January 1, 1997 are adjusted for tax withholding
at non-treaty rates. The index returns for periods after January 1,
1997 are adjusted for tax withholding at treaty rates applicable to
U.S.-based mutual funds organized as Massachusetts business trusts.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by Diversified International, International Value and Overseas.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended October 31 Performance Adjustment Management Fees Paid to FMR

International 1998 N/A $
Growth &
Income

1997 N/A $

1996 N/A $

Diversified 1998 $ $ *
International

1997 $ $ *

1996 $ $ *

International 1998 $ $ *
Value

1997 $ $ *

1996 $ $ *

Overseas 1998 $ $ *

1997 $ $ *

1996 $ $ *

Worldwide 1998 N/A $

1997 N/A $

1996 N/A $

</TABLE>

* Including the amount of the performance adjustment.

During the reporting period, FMR v oluntarily modified the
breakpoints in the group fee rate schedules on January 1, 1996 to
provide for lower management fee rates as FMR's as sets under
management increase.
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses) which is subject to revision
or termination. FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
Expense reimbursements by FMR will increase a fund's total returns and
yield, and repayment of the reimbursement by a fund will lower its
total returns and yield.
SUB-ADVISERS. On behalf of each fund, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a
fee equal to 50% of its monthly management fee (including any
performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For providing investment advice and research services, fees paid to
the sub-advisers by FMR on behalf of the funds for the past three
fiscal years are shown in the table below.

Fiscal Year FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
Ended October
31

Internation
al Growth
& Income

1998 $ $ $ $ $

1997 $ $ $ $ N/A

1996 $ $ $ $ N/A

Diversified
Internation
al

1998 $ $ $ $ $

1997 $ $ $ $ N/A

1996 $ $ $ $ N/A

Internation
al Value

1998 $ $ $ $ $

1997 $ $ $ $ N/A

1996 $ $ $ $ N/A

Overseas

1998 $ $ $ $ $

1997 $ $ $ $ N/A

1996 $ $ $ $ N/A

Worldwide

1998 $ $ $ $ $

1997 $ $ $ $ N/A

1996 $ $ $ $ N/A

[Currently, [Name of Sub-adviser] is primarily responsible for
choosing investments for [Name(s) of Fund(s)].]
[For discretionary investment management and execution of portfolio
transactions, no fees were paid to [the sub-advisers/[Name(s) of
Sub-adviser(s)]] by FMR on behalf of [the fund[s]/[Name(s) of Fund(s)]
for the past three fiscal years.]
[For discretionary investment management and execution of portfolio
transactions, fees paid to [the sub-advisers/[Name(s) of
Sub-adviser(s)]] on behalf of [Name(s) of Fund(s)]] for the past three
fiscal years are shown in the table below.]

Fiscal Year FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
Ended October
31

International
Growth &
Income

1998 $ $ $ $ $

1997 $ 0 $0 $0 $0 N/A

1996 $ 0 $0 $0 $0 N/A

Diversified
International

1998 $ $ $ $ $

1997 $ 0 $0 $0 $0 N/A

1996 $ 0 $0 $0 $0 N/A

International
Value

1998 $ $ $ $ $

1997 $ 0 $0 $0 $0 N/A

1996 $ 0 $0 $0 $0 N/A

Overseas

1998 $ $ $ $ $

1997 $ 0 $0 $0 $0 N/A

1996 $ 0 $0 $0 $0 N/A

Worldwide

1998 $ $ $ $ $

1997 $ 0 $0 $0 $0 N/A

1996 $ 0 $0 $0 $0 N/A

DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are
continuously offered at NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR.
The Trustees have approved Distribution and Service Plans on behalf of
each fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee
rev enu e, as well as its past profits or its other resources, to
pay FDC for expenses incurred in connection with providing services
intended to result in the sale of fund shares and/or shareholder
support services. In addition , each Plan provides that FMR,
directly or through FDC, may pay intermediaries, such as banks,
broker-dealers and other service providers, that provide those
services. Currently, the Board of Trustees has authorized such
payments for each fund's shares.
[Payments made by FMR either directly or through FDC to intermediaries
for the fiscal year ended 1998 amounted to $____ [for [Fund Name]],
$____ [for [Fund Name]], and $_____ [for [Fund Name]].
[FMR made no payments either directly or through FDC to intermediaries
for the fiscal year ended 1998.]
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To
the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flo ws may r esult.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders
have other relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.

TRANSFER AND SERVICE AGENT AGREEMENTS
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state
tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percent age of the QSTP's or Freedom Fund's assets
that is invested in a fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month. The annual fee rates for pricing and bookkeeping services are
.0750% of the first $500 million of average net assets and .0375% of
average net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 and a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.

Fund 1998 1997 1996

International $ $ $
Growth &
Income

Diversified $ $ $
International

International $ $ $
Value

Overseas $ $ $

Worldwide $ $ $

For administering each fund's securities lending program, FSC receives
fees based on the number and duration of individual securities loans.
[For th e fiscal years ended October 31, 1998, 1997, and 1996, the
funds paid no securities lending fees.]
[For the fisc al years ended October 31, 1998, 1997, and 1996,
____________________ paid securities lending fees of $__, $__, and
$__, respectively.]
[Securities lending fees paid by the funds to FSC for the past three
fiscal years are shown in the table below.]

Fund 1998 1997 1996

International $ $ 0 $ 0
Growth &
Income

Diversified $ $ 0 $ 0
International

International $ $ 0 $ 0
Value

Overseas $ $ 0 $ 0

Worldwide $ $ 0 $ 0

DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity International Growth & Income Fund,
Fidelity Diversified International Fund, Fidelity International Value
Fund, Fidelity Overseas Fund, and Fidelity Worldwide Fund are funds of
Fidelity Investment Trust, an open-end management investment company
organized as a Massachusetts business trust on April 20, 1984.
Currently, there are nineteen funds of the trust: Fidelity Overseas
Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity Pacific Basin Fund, Fidelity International Growth & Income
Fund, Fidelity Canada Fund, Fidelity Worldwide Fund, Fidelity
Diversified International Fund, Fidelity International Value Fund,
Fidelity Japan Fund, Fidelity Emerging Markets Fund, Fidelity Latin
America Fund, Fidelity Southeast Asia Fund, Fidelity France Fund,
Fidelity Germany Fund, Fidelity Japan Small Companies Fund, Fidelity
Hong Kong and China Fund, Fidelity Nordic Fund, and Fidelity United
Kingdom Fund. The Trustees are permitted to create additional funds in
the trust.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying
assets of each fund in the trust shall be charged with the liabilities
and expenses attributable to such fund. Any general expenses of the
trust shall be allocated between or among any one or more of the
funds.
SHAREHOLDER LIABILITY. Th e trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust provides that the trust shall not have any
claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust shall include a provision limiting the
obligations created thereby to the trust and its assets.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may
be voted in the aggregate, by fund and by class.
The shares have no preemptive or conversion rights. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or any of its funds may be terminated upon the sale of
its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by a vote of
shareholders of the trust or the fund. In the event of the dissolution
or liquidation of the trust, shareholders of each of its funds are
entitled to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a
fund, shareholders of that fund are entitled to receive the underlying
assets of the fund available for distribution.
CUSTODIAN. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, New York, is custodian of the assets of each fund. The custodian
is responsible for the safekeeping of a fund's assets and the
appointment of any subcustodian banks and clearing agencies. The Bank
of New York, headquartered in New York, also may serve as a special
purpose custodian of certain assets in connection with repurchase
agreement transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITOR. ________________,LLP, One Post Office Square, Boston,
Massachusetts serves as the funds' independent accountant. The auditor
examines financial statements for the funds and provides other audit,
tax, and related services.

FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
f iscal period ended October 31, 1998, and report(s) of the
auditor, are inc luded in the fun ds' Annual Report and are
incorporated herein by reference.

APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, and Fidelity
Focus are registered trademarks of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.

FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS

FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE
FUND, FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND,
FIDELITY GERMANY FUND, FIDELITY HONG KONG & CHINA FUND, FIDELITY JAPAN
FUND, FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN AMERICA
FUND, FIDELITY NORDIC FUND, FIDELITY PACIFIC BASIN FUND, FIDELITY
SOUTHEAST ASIA FUND, FIDELITY UNITED KINGDOM FUND

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
<S> <C> <C>
FORM N-1A FORM N-1A IF INFORMATION IS REQUIRED IT WILL BE FOUND IN THIS
N-1A REQUIREMENTS PROSPECTUS SECTION
ITEM
NUMBER

1 a 1-3.... Front Cover Page

b 1-4.... Back Cover Page

2 a ......... Investment Summary; Investment Details

b ......... Investment Summary; Investment Details

c 1....... Investment Summary; Investment Details

2....... Performance

3 ......... Fee Table

4 a ......... Investment Details

b ......... Investment Summary; Investment Details

c ......... Investment Summary; Investment Details

5 a-c ......... *

6 a 1....... Front Cover Page; Fee Table; Fund Management

2....... Fund Management

3....... *

b ......... Buying and Selling Shares

7 a 1-3.... Valuing Shares; Buying and Selling Shares

b ......... Buying and Selling Shares; Account Features and
Policies

c 1-7.... Buying and Selling Shares; Exchanging Shares;
Account Features and Policies

d ......... Dividends and Capital Gains Distributions

e 1....... Investment Summary; Investment Details; Tax
Consequences

2....... *

3....... *

f 1-4.... *

8 a 1....... Fee Table; Buying and Selling Shares

2....... Fund Distribution

b 1-2.... *

c 1....... *

2....... *

3....... *

4....... *

9 a ......... **

b ......... *
</TABLE>

* Not Applicable
* To be filed by subsequent amendment

CROSS REFERENCE SHEET
(CONTINUED)
<TABLE>
<S> <C>
FORM N-1A IF INFORMATION IS REQUIRED IT WILL BE FOUND IN THIS
N-1A SAI SECTION
ITEM
NUMBER
10 a 1-3.... Front Cover Page

b ......... Front Cover Page

11 a ......... Description of the Trust

b ......... Description of the Trust

12 a ......... Investment Policies and Limitations; Description of
the Trust

b ......... Investment Policies and Limitations

c 1....... Investment Policies and Limitations

2....... Investment Policies and Limitations

d ......... Investment Policies and Limitations

e ......... Portfolio Transactions

13 a ......... Trustees and Officers

b-d ......... Trustees and Officers

e ......... Additional Purchase, Exchange and Redemption
Information

14 a ......... **

b ......... **

c ......... **

15 a 1....... Control of Investment Advisers

2....... Trustees and Officers

3....... Management Contracts

b ......... Distribution Services

c 1....... Management Contracts

2....... Management Contracts

d ......... Transfer and Service Agent Agreements

e 1-3.... *

f ......... Distribution Services

g 1....... *

2....... *

3....... *

4....... *

5....... *

6....... *

h 1....... *

2....... Transfer and Service Agent Agreements

3....... Description of the Trust

4....... Transfer and Service Agent Agreements

16 a ......... Portfolio Transactions

b 1....... Portfolio Transactions

2....... Portfolio Transactions

c ......... Portfolio Transactions

d ......... **

e ......... **

17 a 1-2.... Description of the Trust

b ......... *

18 a ......... Additional Purchase, Exchange and Redemption
Information

b ......... Additional Purchase, Exchange and Redemption
Information

c ......... Valuation

d ......... *

19 a ......... Distributions and Taxes

b ......... **

20 a 1-3.... Distribution Services

b ......... Distribution Services

c 1-4.... **

21 a 1-5.... *

b 1-5.... Performance

22 a-c ......... Financial Statements

</TABLE>

* Not Applicable
** To be filed in subsequent amendment

FIDELITY'S
TARGETED INTERNATIONAL
EQUITY
FUNDS

FUND NUMBER TRADING SYMBOL

FIDELITY CANADA FUND 309 FICDX

FIDELITY EMERGING MARKETS FUND 322 FEMKX

FIDELITY EUROPE FUND 301 FIEUX

FIDELITY EUROPE CAPITAL APPRECIATION FUND 341 FECAX

FIDELITY FRANCE FUND 345 FRANK

FIDELITY GERMANY FUND 346 FGERF

FIDELITY HONG KONG AND CHINA FUND 352 FHKCX

FIDELITY JAPAN FUND 350 FJPNX

FIDELITY JAPAN SMALL COMPANIES FUND 360 FJSCX

FIDELITY LATIN AMERICA FUND 349 FLATX

FIDELITY NORDIC FUND 342 FNORX

FIDELITY PACIFIC BASIN FUND 302 FPBFX

FIDELITY SOUTHEAST ASIA FUND 351 FSEAX

FIDELITY UNITED KINGDOM FUND 344 FUTYF

PROSPECTUS

DECEMBER 30, 1998
(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 2 INVESTMENT SUMMARY

7 PERFORMANCE

14 FEE TABLE

FUND BASICS 18 INVESTMENT DETAILS

22 VALUING SHARES

SHAREHOLDER INFORMATION 23 BUYING AND SELLING SHARES

28 EXCHANGING SHARES

28 ACCOUNT FEATURES AND POLICIES

31 DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

31 TAX CONSEQUENCES

FUND SERVICES 32 FUND MANAGEMENT

34 FUND DISTRIBUTION

APPENDIX 35 FINANCIAL HIGHLIGHTS

FUND SUMMARY

INVESTMENT SUMMARY
INVESTMENT OBJECTIVE. Canada Fund seeks growth of capital over the
long term.
PRINCIPAL INVESTMENT STRATEGIES. Fidelity Management & Research
Company (FMR)'s principal investment strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in Canada
or are registered in Canadian markets.
(small solid bullet) Potentially, investing in securities of U.S.
issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN CANADA. The Canadian
economy is significantly affected by the U.S. economy and the price of
natural resources.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Emerging Markets Fund seeks capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of emerging markets issuers.
(small solid bullet) Emphasizing countries with relatively low gross
national product per capita compared to the world's major economies
and countries with the potential for rapid economic growth.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in countries considered emerging markets as a
whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Europe Fund seeks growth of capital over the
long-term.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in Europe.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Europe Capital Appreciation Fund seeks long-term
capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in Europe.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. France Fund seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of French issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN FRANCE. The French
economy is significantly affected by government policies and
investments in the private sector and the restrictions required to
join the European Economic and Monetary Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Germany Fund seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of German issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN GERMANY. The German
economy is significantly affected by the reunification of eastern and
western Germany and the restrictions required to join the European
Economic and Monetary Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Hong Kong and China Fund seeks long-term growth
of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Hong Kong and Chinese issuers.
(small solid bullet) Investing mostly in securities of Hong Kong
issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory, and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN HONG KONG AND CHINA.
The Hong Kong and Chinese economies are generally considered emerging
markets and are significantly affected by general economic and
political conditions in other Asian countries and changes in Chinese
government policy.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Japan Fund seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Japanese issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy, significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Japan Small Companies Fund seeks long-term
growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Japanese issuers with small market capitalizations.
(small solid bullet) Potentially investing in securities of Japanese
issuers with larger market capitalizations and issuers located outside
of Japan.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy, significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
(small solid bullet) SMALL CAP INVESTING. The value of securities of
smaller, less well-known companies perform differently than the market
as a whole and other types of stocks and can be more volatile than
that of larger companies.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Latin America Fund seeks high total investment
return.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Latin American issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Latin America as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN LATIN AMERICA. The
Latin American economies are generally considered emerging markets and
are significantly affected by currency devaluations. The markets in
Latin America can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Nordic Fund seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Danish, Finnish, Norwegian, and Swedish issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in the Nordic region as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN NORDIC REGION. The
Nordic economies are significantly affected by the price of natural
resources and their governments' efforts to comply with the
restrictions required to join the European Economic and Monetary
Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Pacific Basin Fund seeks growth of capital over
the long-term.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of issuers that have their principal activities in the
Pacific Basin.
(small solid bullet) Investing significantly in securities of Japanese
issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in the Pacific Basin as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN PACIFIC BASIN. Many
Pacific Basin economies are generally considered emerging markets and
most are currently in recessions. International trade, government
policy, and political and social stability significantly affect
economic growth. The markets in the Pacific Basin can be extremely
volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. Southeast Asia Fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of Southeast Asian issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Southeast Asia as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market. Emerging markets can be subject to to greater social,
economic, regulatory and political uncertainties and can be extremely
volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN SOUTHEAST ASIA. Most
Southeast Asian economies are generally considered emerging markets
and are currently in recessions. International trade, government
policy and political and social stability significantly affect
economic growth. The markets in Southeast Asia can be extremely
volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE. United Kingdom Fund seeks long-term growth of
capital.
PRINCIPAL INVESTMENT STRATEGIES. FMR's principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in
securities of British issuers.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS. The fund is subject to the following
principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN UNITED KINGDOM. The
United Kingdom economies are significantly affected by the
restrictions required to join the European Economic and Monetary
Union.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in the fund's share price than
would occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.

PERFORMANCE
The following information illustrates the changes in the funds'
performance from year to year and compares the funds' performance to
the performance of a market index and similar funds over various
periods of time. Prior to February 19, 1993, Emerging Markets Fund
operated under certain different investment policies. Accordingly,
Emerging Market Fund's historical performance may not represent its
current investment policies. Returns are based on past results and are
not an indication of future performance.

YEAR-BY-YEAR RETURNS
The returns in the charts do not include the effect of the funds'
front-end sales charge. If the effect of the sales charge was
reflected, returns would be lower than those shown.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CANADA FUND

CALENDAR YEARS 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

% % % % % % % % % %

</TABLE>

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR CANADA FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR CANADA FUND WAS __%.

EMERGING MARKETS FUND

CALENDAR YEARS 1991 1992 1993 1994 1995 1996 1997

% % % % % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR EMERGING MARKETS FUND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE
LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR EMERGING MARKETS
FUND WAS __%.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EUROPE FUND

CALENDAR YEARS 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

% % % % % % % % % %

</TABLE>

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR EUROPE FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR EUROPE FUND WAS
__%.

EUROPE CAPITAL APPRECIATION FUND

CALENDAR YEARS 1994 1995 1996 1997

% % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR EUROPE CAPITAL APPRECIATION
FUND, THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __,
19__) AND THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __,
19__). THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR EUROPE
CAPITAL APPRECIATION FUND WAS __%.

FRANCE FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR FRANCE FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR FRANCE FUND WAS __%.

GERMANY FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR GERMANY FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR GERMANY FUND WAS __%.

HONG KONG AND CHINA FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR HONG KONG AND CHINA FUND,
THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR HONG KONG AND CHINA
FUND WAS __%.

JAPAN FUND

CALENDAR YEARS 1993 1994 1995 1996 1997

% % % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR JAPAN FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR JAPAN FUND WAS __%.

JAPAN SMALL COMPANIES FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR JAPAN SMALL COMPANIES FUND,
THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR JAPAN SMALL COMPANIES
FUND WAS __%.

LATIN AMERICA FUND

CALENDAR YEARS 1994 1995 1996 1997

% % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR LATIN AMERICA FUND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE
LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR LATIN AMERICA FUND
WAS __%.

NORDIC FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR NORDIC FUND, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR NORDIC FUND WAS __%.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PACIFIC BASIN FUND

CALENDAR YEARS 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

% % % % % % % % % %

</TABLE>

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR PACIFIC BASIN FUND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE
LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR PACIFIC BASIN FUND
WAS __%.

SOUTHEAST ASIA FUND

CALENDAR YEARS 1994 1995 1996 1997

% % % %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR SOUTHEAST ASIA FUND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE
LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR SOUTHEAST ASIA FUND
WAS __%.

UNITED KINGDOM FUND

CALENDAR YEARS 1996 1997

% %

PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: NIL
ROW: 10, COL: 1, VALUE: NIL
DURING THE PERIODS SHOWN IN THE CHART FOR UNITED KINGDOM FUND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__) AND THE
LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDING __, 19__). THE
YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1998 FOR UNITED KINGDOM FUND
WAS __%.

AVERAGE ANNUAL RETURNS
The returns in the table include the effect of each fund's front-end
sales charge.

For the periods ended December 31, 1997.
PAST 1 YEAR PAST 5 YEARS LIFE OF FUND

CANADA FUND

TORONTO STOCK
EXCHANGE INDEX

EMERGING
MARKETS FUND A

MSCI EMERGING
MARKETS FREE
INDEX

LIPPER EMERGING
MARKETS FUNDS
AVERAGE

EUROPE FUND

MSCI EUROPE
INDEX

LIPPER EUROPEAN
REGION FUNDS
AVERAGE

EUROPE CAPITAL
APPRECIATION
FUND B

MSCI EUROPE
INDEX

LIPPER EUROPEAN
REGION FUNDS
AVERAGE

FRANCE FUND C

SBF 250 INDEX

LIPPER EUROPEAN
REGION FUNDS
AVERAGE

GERMANY FUND
C

DAX 100 INDEX

LIPPER EUROPEAN
REGION FUNDS
AVERAGE

HONG KONG
AND CHINA
FUND C

HANG SENG
INDEX

LIPPER PACIFIC
EX-JAPAN FUNDS
AVERAGE

JAPAN FUND D

TOPIX INDEX

LIPPER JAPANESE
FUNDS AVERAGE

JAPAN SMALL
COMPANIES
FUND C

TOKYO STOCK
EXCHANGE
SECOND SECTION
INDEX

TOPIX INDEX

LIPPER JAPANESE
FUNDS AVERAGE

LATIN AMERICA
FUND B

MSCI LATIN
AMERICA FREE
INDEX

LIPPER LATIN
AMERICAN
REGION FUNDS
AVERAGE

NORDIC FUND C

FT-A-NORDIC
INDEX

LIPPER
EUROPEAN
REGION FUNDS
AVERAGE

PACIFIC BASIN
FUND

MSCI PACIFIC
INDEX

LIPPER PACIFIC
REGION FUNDS
AVERAGE

SOUTHEAST ASIA
FUND B

MSCI FAR EAST
EX-JAPAN FREE
INDEX

LIPPER PACIFIC
EX-JAPAN FUNDS
AVERAGE

UNITED
KINGDOM FUND
C

FT-ALL SHARES
INDEX

LIPPER
EUROPEAN
REGION FUNDS
AVERAGE

A FROM JANUARY 1, 1991.
B FROM JANUARY 1, 1994.
C FROM JANUARY 1, 1996.
D FROM JANUARY 1, 1993.

[If FMR had not reimbursed certain fund expenses during these periods,
________ fund's total returns would have been lower.]
Going forward, Japan Small Companies Fund's performance will be
compared to the Tokyo Stock Exchange Second Section Index rather than
Tokyo Stock Exchange Index (TOPIX) because the Tokyo Stock Exchange
Second Section Index provides a better indication of the performance
of Japanese small-capitalization stocks than the TOPIX, which
generally includes larger companies.
Morgan Stanley Capital International Far East ex Japan Free Index is a
market capitalization-weighted index of over 450 stocks traded in
eight Asian markets, excluding Japan.
Morgan Stanley Capital International Emerging Markets Free Index is a
market capitalization-weighted index that is designed to represent the
performance of emerging stock markets throughout the world. As of
October 31,1998, the index included over ___ common stocks of
companies domiciled in ___ countries.
Morgan Stanley Capital International Emerging Markets Free - Latin
America Index is a market capitalization-weighted index of
approximately 170 stocks traded in seven Latin American markets.
Morgan Stanley Capital International Europe Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. As of October 31,
1998, the index included over ____ common stocks of companies
domiciled in ____ European countries.
Morgan Stanley Capital International Pacific Index is a market
capitalization-weighted index of approximately 400 stocks traded in
six Pacific-region markets.
Toronto Stock Exchange (TSE) 300 is a market capitalization-weighted
index of 300 stocks traded in the Canadian market.
Societe des Bourses Francaises (SBF) 250 is a market
capitalization-weighted index of the stocks of the 250 largest
companies in the French market.
Deutscher Akteinindex (DAX) 100 is a market capitalization-weighted
index of the 100 most heavily traded stocks in the German market.
Hang Seng Index is a market capitalization-weighted index of the
stocks of the 33 largest companies in the Hong Kong market.
Tokyo Stock Exchange Index TOPIX is a market capitalization-weighted
index of over 1100 stocks traded in the Japanese market.
Tokyo Stock Exchange Second Section Index is a market
capitalization-weighted index that reflects the performance of the
smaller, less established and newly listed companies of the Tokyo
Stock Exchange.
FT - Actuaries World Nordic Index is a market capitalization-weighted
index of over 90 stocks traded in four Scandinavian markets.
FT - All Shares Index is a market capitalization-weighted index of
over 750 stocks traded in the U.K. market.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.

FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold or sell shares of a fund. The annual fund operating
expenses provided are [based on historical expenses/higher than the
expenses actually paid by [Fund Name] as the result of [expense
reimbursements] [and] [the payment or reduction of certain expenses]]
during the period.

SHAREHOLDER FEES (PAID BY THE INVESTOR)

MAXIMUM SALES CHARGE (LOAD) ON 3.00% X
PURCHASES (AS A % OF OFFERING PRICE)

SALES CHARGE (LOAD) ON NONE
REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE (LOAD) ON NONE
REDEMPTIONS

REDEMPTION FEE (SHORT-TERM TRADING FEE) 1.50%
ON SHARES HELD LESS THAN 90 DAYS
(AS A % OF AMOUNT REDEEMED)
FOR CANADA FUND, EMERGING MARKETS
FUND, FRANCE FUND, GERMANY FUND,
HONG KONG AND CHINA FUND, JAPAN FUND,
JAPAN SMALL COMPANIES FUND, LATIN
AMERICA FUND, NORDIC FUND, SOUTHEAST
ASIA FUND, AND UNITED KINGDOM FUND
ONLY.

REDEMPTION FEE (SHORT-TERM TRADING FEE) 1.00%
ON SHARES HELD LESS THAN 90 DAYS
(AS A % OF AMOUNT REDEEMED)
FOR EUROPE FUND, EUROPE CAPITAL
APPRECIATION FUND AND PACIFIC BASIN FUND
ONLY

ANNUAL ACCOUNT MAINTENANCE FEE (FOR $12.00
ACCOUNTS UNDER $2,500)

X LOWER SALES CHARGES MAY BE AVAILABLE FOR ACCOUNTS OVER $250,000.

FUND OPERATING EXPENSES (PAID BY THE FUNDS)

CANADA FUND MANAGEMENT FEE

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

EMERGING MANAGEMENT FEE
MARKETS
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

EUROPE FUND MANAGEMENT FEE

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

EUROPE MANAGEMENT FEE
CAPITAL
APPRECIATION
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

FRANCE FUND MANAGEMENT FEE

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES A

GERMANY MANAGEMENT FEE
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES A

HONG KONG MANAGEMENT FEE
AND CHINA
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

JAPAN FUND MANAGEMENT FEE

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

JAPAN SMALL MANAGEMENT FEE
COMPANIES
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

LATIN MANAGEMENT FEE
AMERICA
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

NORDIC FUND MANAGEMENT FEE

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

PACIFIC BASIN MANAGEMENT FEE
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

SOUTHEAST MANAGEMENT FEE
ASIA FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES

UNITED MANAGEMENT FEE
KINGDOM
FUND

DISTRIBUTION (12B-1) FEE NONE

OTHER EXPENSES

TOTAL ANNUAL FUND OPERATING
EXPENSES A

A FMR HAS VOLUNTARILY AGREED TO REIMBURSE FRANCE FUND, GERMANY FUND,
AND UNITED KINGDOM FUND TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS AND EXTRAORDINARY
EXPENSES), AS A PERCENTAGE OF THEIR RESPECTIVE AVERAGE NET ASSETS,
EXCEED 2.00%. THESE ARRANGEMENTS CAN BE TERMINATED BY FMR AT ANY TIME.

CANADA FUND %

EMERGING MARKETS FUND %

EUROPE FUND %

EUROPE CAPITAL %
APPRECIATION FUND

FRANCE FUND %

GERMANY FUND %

HONG KONG AND CHINA %
FUND

JAPAN FUND %

JAPAN SMALL COMPANIES %
FUND

LATIN AMERICA FUND %

PACIFIC BASIN FUND %

SOUTHEAST ASIA FUND %

UNITED KINGDOM FUND %

These EXAMPLES help you compare the cost of investing in the funds
with the cost of investing in other mutual funds.
Let's say, hypothetically, that each fund's annual return is 5% and
that your shareholder fees and each fund's annual operating expenses
are exactly as described in the fee table. These examples illustrate
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account after the number of years
indicated:

CANADA FUND 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

EMERGING 1 YEAR $
MARKETS
FUND

3 YEARS $

5 YEARS $

10 YEARS $

EUROPE FUND 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

EUROPE 1 YEAR $
CAPITAL
APPRECIATION
FUND

3 YEARS $

5 YEARS $

10 YEARS $

FRANCE FUND 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

GERMANY 1 YEAR $
FUND

3 YEARS $

5 YEARS $

10 YEARS $

HONG KONG 1 YEAR $
AND CHINA
FUND

3 YEARS $

5 YEARS $

10 YEARS $

JAPAN FUND 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

JAPAN SMALL 1 YEAR $
COMPANIES
FUND

3 YEARS $

5 YEARS $

10 YEARS $

LATIN 1 YEAR $
AMERICA
FUND

3 YEARS $

5 YEARS $

10 YEARS $

NORDIC FUND 1 YEAR $

3 YEARS $

5 YEARS $

10 YEARS $

PACIFIC BASIN 1 YEAR $
FUND

3 YEARS $

5 YEARS $

10 YEARS $

SOUTHEAST 1 YEAR $
ASIA FUND

3 YEARS $

5 YEARS $

10 YEARS $

UNITED 1 YEAR $
KINGDOM
FUND

3 YEARS $

5 YEARS $

10 YEARS $

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE:
CANADA FUND seeks growth of capital over the long term.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Canada
or are registered in Canadian markets. FMR may also invest the fund's
assets in U.S. issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
EMERGING MARKETS FUND seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of emerging markets issuers. Countries with emerging
markets include those that have an emerging stock market as defined by
the International Finance Corporation, those with low- to
middle-income economies according to the World Bank, and those listed
in World Bank publications as developing. FMR expects to emphasize
countries with relatively low gross national product per capita
compared to the world's major economies and countries with the
potential for rapid economic growth. FMR normally invests the fund's
assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
emerging market countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in countries considered emerging
markets as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
EUROPE FUND seeks growth of capital over the long-term.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.

INVESTMENT OBJECTIVE:
FRANCE FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of French issuers. FMR normally invests the fund's assets
primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
GERMANY FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of German issuers. FMR normally invests the fund's assets
primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
HONG KONG AND CHINA FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Hong Kong and Chinese issuers. Currently, FMR
anticipates that most of the fund's investments will be in Hong Kong
issuers. FMR normally invests the fund's assets primarily in common
stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
JAPAN FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers with small market capitalizations. FMR
may also invest the fund's assets in Japanese issuers with larger
market capitalizations and in issuers located outside of Japan. FMR
defines Japanese small market capitalization companies as those with
market capitalizations of 100 billion Yen (approximately U.S. $___
[m/b]illion as of October 31, 1998) or less at the time of the fund's
investment. Companies whose capitalization exceeds 100 billion Yen
after purchase will continue to be considered small-capitalized for
purposes of the 65% policy. FMR normally invests the fund's assets
primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
LATIN AMERICA FUND seeks high total investment return.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Latin American issuers. Latin America includes
Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Panama and
Venezuela. FMR normally invests the fund's assets primarily in common
stocks.
FMR normally diversifies the fund's investments across different Latin
American countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Latin America as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
NORDIC FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Danish, Finnish, Norwegian and Swedish issuers. FMR
normally invests the fund's assets primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
FMR normally diversifies the fund's investments across different
Nordic countries. In allocating the fund's assets across countries,
FMR will consider the size of the market in each country relative to
the size of the markets in the Nordic region as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
PACIFIC BASIN FUND seeks growth of capital over the long-term.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in the
Pacific Basin. The Pacific Basin includes Australia, Hong Kong,
Indonesia, Japan, South Korea, Malaysia, New Zealand, the People's
Republic of China, the Philippines, Singapore, Taiwan, and Thailand.
FMR normally invests a significant portion of the fund's assets in
Japanese issuers. FMR normally invests the fund's assets primarily in
common stocks.
FMR normally diversifies the fund's investments across different
Pacific Basin countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in the Pacific Basin as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
SOUTHEAST ASIA FUND seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of Southeast Asian issuers. Southeast Asia includes Hong
Kong, Indonesia, South Korea, Malaysia, the Philippines, the People's
Republic of China, Singapore, Taiwan, and Thailand. FMR normally
invests the fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
Southeast Asian countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Southeast Asia as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

INVESTMENT OBJECTIVE:
UNITED KINGDOM FUND seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:
FMR normally invests at least 65% of the fund's total assets in
securities of British issuers. FMR normally invests the fund's assets
primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

DESCRIPTION OF PRINCIPAL SECURITY TYPES:
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities and
warrants.
PRINCIPAL INVESTMENT RISKS:
Many factors affect each fund's performance. A fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political or financial
developments. A fund's reaction to these developments will be affected
by the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. Because FMR concentrates each fund's
investments in a particular country or group of countries, each fund's
performance is expected to be closely tied to economic and political
conditions within that country or group of countries and to be more
volatile than the performance of more geographically diversified
funds. When you sell your shares of a fund, they could be worth more
or less than what you paid for them.
The following factors may significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these factors. Different parts of the market can react differently
to these factors. For example, large cap stocks can react differently
than small cap stocks, and "growth stocks can react differently than
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently than the U.S. market.
Investing in emerging markets involves risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of foreign development;
political stability; market depth, infrastructure and capitalization
and regulatory oversight are generally less than in more developed
markets. Emerging market economies can be subject to greater social,
economic, regulatory and political uncertainties. All of these factors
generally make emerging market securities more volatile and
potentially less liquid than securities issued in more developed
markets.
GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.
ASIA. Asia includes countries in all stages of economic development
from the highly developed economy of Japan to the emerging market
economy of the People's Republic of China. Most Asian economies are
characterized by over-extension of credit, currency devaluations,
rising unemployment, decreased exports, and economic recessions.
Currency devaluations in any one country generally have a significant
affect on the entire region. Recently, the markets in each Asian
country have suffered significant downturns as well as significant
volatility. Increased political and social unrest in some or all Asian
countries could cause further economic and market uncertainty.
The Australia and New Zealand economies are dependent on the economies
of Asian countries and on the price and demand for agricultural
products and natural resources.
The HONG KONG AND CHINESE economies are dependent on the economies of
other Asian countries. The willingness and ability of the Chinese
government to support the Hong Kong and Chinese economies and markets
is uncertain. A small number of companies and industries, including
the real estate and financial services sector, represent a large
portion of the market in Hong Kong. China has yet to develop
comprehensive securities, corporate, or commercial laws, and its
market is relatively new and undeveloped. Changes in government policy
could significantly affect the markets in both countries.
The JAPANESE economy is currently in a recession. The economy is
characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The Japanese market has decreased
significantly recently.
The SOUTHEAST ASIA economies are generally in recessions. Many of
their economies are characterized by undeveloped financial services
sectors and heavy reliance on international trade. Currency
devaluations, political and social instability, and general economic
conditions have resulted in significant market downturns and
volatility. A small number of companies and industries represent a
large portion of the market in many Southeast Asian countries.
CANADA. The Canadian and U.S. economies are closely integrated. In
addition, the Canadian economy is very dependent on the demand, supply
and price of natural resources. As a result, the Canadian market is
relatively concentrated in issuers involved in the production and
distribution of natural resources. Periodic demands by the Province of
Quebec for sovereignty could significantly affect the Canadian market.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Economic and Monetary Union (EMU), which requires compliance with
restrictions on inflation rates, deficits and debt levels. Many
Eastern European countries continue to move toward market economies.
However, their markets remain relatively undeveloped and are
particularly sensitive to political and economic developments. The
tight fiscal and monetary controls necessary to join the EMU will
significantly affect every country in Europe.
The FRENCH economy is significantly influenced by the French
government, which controls a large portion of the economy through
regulation, ownership interests in many companies, and a large public
sector. Efforts to comply with the EMU restrictions have resulted in
reduced government spending, high unemployment and labor unrest in
France. In addition, a small number of companies represent a large
percentage of the French market.
The GERMAN economy has been significantly affected by the
reunification of western and eastern Germany in 1990. Reunification
has resulted in increased government spending, slower growth and
higher unemployment. Government policy has focused on complying with
the EMU restrictions and maintaining a strong currency. In addition, a
small number of companies represent a large percentage of the German
market.
The NORDIC economies are dependent on the export of natural resources
and natural resource products. Efforts to comply with the EMU
restrictions by Finland, Denmark and Sweden have resulted in reduced
government spending and higher unemployment. Norway has elected not to
join the EMU and, as a result, has more flexibility to pursue
different fiscal and economic goals. In addition, a small number of
companies represent a larger percentage of each of the Danish,
Finnish, Norwegian and Swedish markets.
The UNITED KINGDOM economies are generally experiencing stability with
low inflation, positive growth and a stable currency. The election of
the Labour party in 1997 has not significantly affected the
government's economic policies. Although the United Kingdom has stated
its intent to comply with the EMU restrictions on inflation rates,
deficits and debt levels, it has not formally committed to using the
common currency when it is established in 1999.
LATIN AMERICA. The economies of countries in Latin America are all
considered emerging market economies. High interest, inflation and
unemployment rates generally characterize each economy. Currency
devaluations in any country can have a significant affect on the
entire region. Recently, the markets in many Latin American countries
have experienced significant downturns as well as significant
volatility. A small number of companies and industries, including the
telecommunications sector, represent a large portion of the market in
many Latin American countries.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of issuer, and changes in general economic or
political conditions can affect the value of an issuer's securities.
SMALL CAP INVESTING. The value of securities of smaller, less
well-known companies can be more volatile than that of larger
companies and can react differently to issuer, political, market and
economic developments than the market as a whole and other types of
stocks. Smaller companies can have more limited product lines, markets
and financial resources.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance.

FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
CANADA FUND seeks growth of capital over the long term through
investments in securities of issuers that have their principal
activities in Canada or are registered in Canadian markets.
EMERGING MARKETS FUND seeks capital appreciation.
EUROPE FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal
activities in Europe.
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
FRANCE FUND seeks long-term growth of capital.
GERMANY FUND seeks long-term growth of capital.
HONG KONG AND CHINA FUND seeks long-term growth of capital.
JAPAN FUND seeks long-term growth of capital.
JAPAN SMALL COMPANIES FUND seeks long-term growth of capital.
LATIN AMERICA FUND seeks high total investment return.
NORDIC FUND seeks long-term growth of capital.
PACIFIC BASIN FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal
activities in the Pacific Basin.
SOUTHEAST ASIA FUND seeks capital appreciation.
UNITED KINGDOM FUND seeks long-term growth of capital.

VALUING SHARES
The funds are OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open.
Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the SEC. Each fund's assets are valued as of this time
for the purpose of computing the fund's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available for a
security or if a security's value has been materially affected by
events occurring after the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or
market), that security may be valued by another method that the Board
of Trustees believes accurately reflects fair value. In these
circumstances, the security's valuation may differ from the generally
expected valuation.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
WEB SITE and PHONE NUMBERS:
(small solid bullet) For information over the Internet, visit
Fidelity's Web site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use TouchTone Xpress(registered trademark), 1-800-544-5555.
(small solid bullet) For exchanges and redemptions, 1-800-544-7777.
(small solid bullet) For account assistance, 1-800-544-6666.
(small solid bullet) For mutual fund and retirement information,
1-800-544-8888.
(small solid bullet) For brokerage information, 1-800-544-7272.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:

BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048

SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517

You may buy or sell shares of the funds through a retirement account
or an investment professional. If you invest through a retirement
account or an investment professional, the procedures for buying,
selling and exchanging shares of a fund and the account features and
policies may differ. Additional fees may also apply to your
investments in a fund, including a transaction fee if you buy or sell
shares of the fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.

WAYS TO SET UP YOUR ACCOUNT

INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS

GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS

TRUST
FOR MONEY BEING INVESTED BY A TRUST

BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS

BUYING SHARES
The price to buy one share of each fund is the fund's offering price
or the fund's NAV, depending on whether you pay a sales charge.
If you pay a sales charge, your price will be the fund's offering
price. When you buy shares of a fund at the offering price, Fidelity
deducts the appropriate sales charge and invests the rest in the fund.
If you qualify for a sales charge waiver, your price will be the
fund's NAV.
The offering price of each fund is its NAV divided by the difference
between one and the applicable sales charge percentage. The maximum
sales charge is 3.00 % of the offering price.
Your shares will be bought at the next offering price or NAV, as
applicable, calculated after your investment is received in proper
form.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity Funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.

MINIMUMS

(double dagger)FIDELITY TRADITIONAL IRA, ROTH IRA, ROTH CONVERSION
IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.

There is no minimum account balance or initial or subsequent purchase
minimum for purchases through Fidelity Portfolio Advisory Services SM,
a qualified state tuition program, certain Fidelity retirement
accounts funded through salary deduction, or accounts opened with the
proceeds of distributions from such retirement accounts. In addition,
each fund may waive or lower investment minimums in other
circumstances.

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KEY INFORMATION

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SELLING SHARES
The price to sell one share of each fund is the fund's NAV, minus the
short-term trading fee, if applicable.
Each fund will deduct a short-term trading fee of 1.5% (1.0% for
Europe Fund, Europe Capital Appreciation Fund and Pacific Basin Fund)
from the redemption amount if you sell your shares after holding them
less than 90 days. This fee is paid to the fund rather than Fidelity,
and is designed to offset the brokerage commissions, market impact,
and other costs associated with fluctuations in fund asset levels and
cash flow caused by short-term shareholder trading.
If you bought shares on different days, the shares you held longest
will be redeemed first for purposes of determining whether the
short-term trading fee applies. The short-term trading fee does not
apply to shares that were acquired through reinvestment of
distributions.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the short-term trading fee, if
applicable.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 30 days;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges to
other Fidelity funds) may be delayed until investments credited to
your account have been received and collected, which can take up to
seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other assets rather than in cash if the Board of Trustees determines
it is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.

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KEY INFORMATION

INTERNET (bullet) Exchange to another
WWW.FIDELITY.COM Fidelity fund.
(bullet) Use Fidelity Money Line
to transfer to your bank account.

AUTOMATICALLY (bullet) Use Personal Withdrawal
Service to set up periodic redemptions from your
account.

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EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.

ACCOUNT FEATURES AND POLICIES

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AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS

FIDELITY AUTOMATIC
ACCOUNT BUILDER
TO MOVE MONEY FROM YOUR
BANK ACCOUNT TO A FIDELITY
FUND

MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (bullet) To set up for a new
account, complete the appropriate
section on the fund application.
(bullet) To set up for existing
accounts, call 1-800-544-6666 or
visit Fidelity's Web site for an
application.
(bullet) To make changes, call
1-800-544-6666 at least three
business days prior to your next
scheduled investment date.

DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF
YOUR PAYCHECK OR GOVERNMENT
CHECK TO A FIDELITY FUNDA

MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (bullet) To set up for a new
account, check the appropriate box
on the fund application.
(bullet) To set up for an
existing account, call
1-800-544-6666 or visit Fidelity's
Web site for an authorization form.
(bullet) To make changes you
will need a new authorization
form. Call 1-800-544-6666 or
visit Fidelity's Web site to obtain
one.

A BECAUSE THEIR SHARE PRICES
FLUCTUATE, THESE FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT
OF YOUR ENTIRE CHECK.

FIDELITY AUTOMATIC
EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY
MONEY MARKET FUND TO ANOTHER
FIDELITY FUND

MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, quarterly, or (bullet) To set up, call
annually 1-800-544-6666 after both
accounts are opened.
(bullet) To make changes, call
1-800-544-6666 at least three
business days prior to your next
scheduled exchange date.
(bullet) Monthly or quarterly
account statements (detailing
account balances and all
transactions completed during the
prior month or quarter).
(bullet) Financial reports
(every six months).

PERSONAL WITHDRAWAL
SERVICE
TO SET UP PERIODIC REDEMPTIONS
FROM YOUR FUND ACCOUNT TO YOU
OR TO YOUR BANK ACCOUNT.

FREQUENCY PROCEDURES
Monthly (bullet) To set up, call
1-800-544-6666.
(bullet) To make changes, call
Fidelity at 1-800-544-6666 at
least three business days prior to
your next scheduled withdrawal
date.
(bullet) Because of the funds'
front-end sales charge, you may
not want to set up a systematic
withdrawal program when you are
buying shares on a regular basis.

OTHER FEATURES.
THE FOLLOWING OTHER FEATURES ARE ALSO
AVAILABLE TO BUY AND SELL SHARES OF THE
FUNDS.

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TOUCHTONE XPRESS(registered trademark)
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE.
CALL 1-800-544-5555.
(bullet) For account balances and holdings;
(bullet) For mutual fund and brokerage trading;
(bullet) To obtain quotes;
(bullet) To review orders and mutual fund activity; and
(bullet) To change your personal identification number (PIN).

POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity if you need additional
copies of financial reports, prospectuses or historical account
information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's Web
site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500 (including any amount paid as a sales
charge), subject to an annual maximum charge of $24.00 per
shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30
will not be subject to the fee for that year. The fee, which is
payable to Fidelity, is designed to offset in part the relatively
higher costs of servicing smaller accounts. This fee will not be
deducted from Fidelity brokerage accounts, retirement accounts (except
non-prototype retirement accounts), accounts using regular investment
plans, or if total assets with Fidelity exceed $30,000. Eligibility
for the $30,000 waiver is determined by aggregating accounts with
Fidelity maintained by Fidelity Service Company, Inc. or FBSI which
are registered under the same social security number or which list the
same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV, minus the short-term trading fee, if
applicable, on the day your account is closed.
Fidelity may charge a FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.

DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gains distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gains distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gains distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gains distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.

TAXES ON DISTRIBUTIONS.
Distributions you receive from each fund are subject to federal income
tax, and may also be subject to state or local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income. Each
fund's distributions of long-term capital gains are taxable to you
generally as capital gains at a rate based on how long the securities
were held.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund is the difference between
the cost of your shares and the price you receive when you sell them.

FUND SERVICES

FUND MANAGEMENT
Each fund is a MUTUAL FUND, an investment that pools shareholders'
money and invests it toward a specified goal.
Fidelity Management & Research Company (FMR) is each fund's MANAGER.
As of ____, FMR had $__ billion in discretionary assets under
management.
As the manager, FMR is responsible for choosing the funds' investments
and handling their business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for each fund. FMR
Far East was organized in 1986 to provide investment research and
advice to FMR. Currently, FMR Far East provides investment research
and advice on issuers based outside the United States and may also
provide investment advisory services for each fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for each fund.
As of October 31, 1998, FIIA had $___ in discretionary assets under
management. Currently, FIIA is primarily responsible for choosing
investments for Southeast Asia Fund, Hong Kong and China Fund, Japan
Fund, and Pacific Basin Fund. Currently, FIIA provides investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for Canada Fund, Emerging
Markets Fund, Europe Fund, Europe Capital Appreciation Fund, France
Fund, Germany Fund, Japan Small Companies Fund, Latin America Fund,
Nordic Fund and United Kingdom Fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA (U.K.) L), in London, England, serves as a sub-adviser
for each fund. As of October 31, 1998, FIIA(U.K.)L had $___ in
discretionary assets under management. Currently, FIIA (U.K.) L is
primarily responsible for choosing investments for Emerging Markets
Fund, Europe Fund, France Fund, Germany Fund, Nordic Fund, and United
Kingdom Fund. Currently, FIIA (U.K.) L provides investment research
and advice on issuers based outside the United States and may also
provide investment advisory services for Canada Fund, Europe Capital
Appreciation Fund, Hong Kong and China Fund, Japan Fund, Japan Small
Companies Fund, Latin America Fund, Pacific Basin Fund, and Southeast
Asia Fund.
(small solid bullet) Fidelity Investment Japan Ltd. (FIJ), in Tokyo,
Japan, serves as a sub-adviser for Emerging Markets Fund, Hong Kong
and China Fund, Japan Fund, Japan Small Companies Fund, Pacific Basin
Fund, and Southeast Asia Fund. As of October 31, 1998, FIJ had $___ in
discretionary assets under management. Currently FIJ is primarily
responsible for choosing investments for Japan Small Companies Fund.
Currently, FIJ provides investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for Emerging Markets Fund, Hong Kong and China Fund,
Japan Fund, Pacific Basin Fund, and Southeast Asia Fund.
FMR may use broker-dealers and other firms that sell fund shares to
carry out a fund's transactions, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
A fund could be adversely affected if the computer systems used by FMR
and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.
Bob Haber is manager of Canada, which he has managed since July 1998.
Previously, he managed several other Fidelity funds. Mr. Haber joined
Fidelity in 1985. Currently, he is a director of U.S. integrated
research and chief investment officer for Fidelity Investments Canada
Limited.
Stephen Binder is associate manager of Canada, which he has managed
since July 1998. Previously, he managed other Fidelity funds. Since
joining Fidelity in 1989, Mr. Binder has worked as an analyst and
manager.
David Stewart is manager of Emerging Markets, which he has managed
since November 1997. Since joining Fidelity in 1994, Mr. Stewart has
worked as an analyst, portfolio manager and director for Fidelity
International Limited (FIL). Previously, he was an analyst with James
Capel, in London and Japan, from 1986 to 1994.
Thierry Serero is manager of Europe, which he has managed since
October 1998. Previously, he managed other portfolios for Fidelity
International Limited (FIL). Since joining Fidelity in 1991, he has
worked as a portfolio assistant, analyst and manager.
Kevin McCarey is Vice President and manager of Europe Capital
Appreciation, which he has managed since December 1993. He also
manages another Fidelity fund. Since joining Fidelity in 1985, Mr.
McCarey has worked as an analyst and manager.
Alexandra Edzard is manager of Germany and France, which she has
managed since September 1996 and May 1998, respectively. Ms. Edzard
joined Fidelity International, Limited as an analyst in 1994.
Previously, she was an investment officer for Deutsche Bank AG, in
London, from 1991 to 1994.
Joseph Tse is manager of Hong Kong and China, which he has managed
since November 1995. He also manages various funds for Fidelity
International Investment Services, Limited. Since joining Fidelity in
1990, Mr. Tse has worked as an analyst and manager.
Shigeki Makino is Vice President and manager of Japan and Pacific
Basin, which he has managed since October 1994 and May 1996,
respectively. Since joining Fidelity in 1990, Mr. Makino has worked as
an analyst, manager, and interim research director.
Brenda A. Reed is associate manager of Japan, which she has managed
since October 1998. She also manages other Fidelity portfolios. Since
joining Fidelity in 1992, Ms. Reed has worked as an analyst and
manager.
William J. Kennedy is associate manager of Pacific Basin, which he has
managed since October 1998. Since joining Fidelity in 1994, he has
been an international research analyst.
Patricia Satterthwaite is Vice President and manager of Latin America,
which she has managed since April 1993. She also manages another
Fidelity fund. Since joining Fidelity in 1986, Ms. Satterthwaite has
worked as an analyst and manager.
Trygve Toraasen is manager of Nordic, which he has managed since June
1998. Previously, he was associate manager for the fund since October
1997. Mr. Toraasen joined Fidelity in 1994 as a research analyst,
after receiving his MSBA from the University of Southern California.
Kenichi Mizushita is manager of Japan Small Companies, which he has
managed since December 1996. He also manages several funds for
Fidelity International, Limited. Since joining Fidelity in 1985, Mr.
Mizushita has worked as a research analyst and manager.
Allan Liu is Vice President and manager of Southeast Asia, which he
has managed since April 1993. Since joining Fidelity in 1986, Mr. Liu
has worked as an analyst, manager, and associate director of Fidelity
Investments Management Ltd.
Frederic Gautier is manager of United Kingdom, which he has managed
since August 1998. He is also an associate director of research and a
portfolio manager for Fidelity International Limited (FIL). Mr.
Gautier joined Fidelity as an analyst in 1994, after receiving his MBA
from the European Institute of Business Administration (INSEAD) in
France.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Each fund pays a management fee to FMR.
The management fee is calculated and paid to FMR every month.
For Emerging Markets Fund, France Fund, Germany Fund, Hong Kong and
China Fund, Japan Small Companies Fund, Latin America Fund, Nordic
Fund and United Kingdom Fund, the fee is calculated by adding a group
fee rate to an individual fund fee rate, dividing by twelve, and
multiplying the result by the fund's average net assets throughout the
month.
For Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Pacific Basin Fund, and Southeast Asia Fund, the fee is
determined by calculating a basic fee and then applying a performance
adjustment. The performance adjustment either increases or decreases
the management fee, depending on how well a fund has performed
relative to its performance index.

Management = Basic +/- Performance
fee fee adjustment

FUND PERFORMANCE
INDEX

Canada Fund TSE 300 Index

Europe Fund MSCI Europe Index

Europe Capital MSCI Europe Index
Appreciation Fund

Japan Fund TOPIX Index

Pacific Basin Fund MSCI Pacific Index

Southeast Asia Fund MSCI Far East
ex-Japan Free Index

The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
fund's average net assets over the performance period.
For Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Pacific Basin Fund and Southeast Asia Fund, the performance
period is the most recent 36-month period.
The total management fee for the fiscal year ended October 31, 1998 is
listed in the following table, [after reimbursement for _____ ], of
each fund's average net assets.

Fund Management
Fee

Canada Fund %

Emerging Markets Fund %

Europe Fund %

Europe Capital %
Appreciation Fund

France Fund %

Germany Fund %

Hong Kong and China %
Fund

Japan Fund %

Japan Small Companies %
Fund

Latin America Fund %

Nordic Fund %

Pacific Basin Fund %

Southeast Asia Fund %

United Kingdom Fund %

FMR pays FMR U.K., FMR Far East, FIJ, and FIIA for providing
assistance with investment advisory services, and FIIA in turn pays
FIIA(U.K.)L.
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, may be terminated by FMR at any time, can decrease a
fund's expenses and boost its performance.
[As of October 31, 1998, approximately __% and __% of _____ total
outstanding shares, respectively, were held by FMR and FMR
affiliates.]

FUND DISTRIBUTION
FDC distributes each fund's shares.
You may pay a sales charge when you buy your shares.
FDC collects the sales charge.
Each fund's sales charge may be reduced if you buy directly through
Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of
your account, must fall within the ranges shown below. Purchases made
with assistance or intervention from a financial intermediary are not
eligible for a sales charge reduction.

<TABLE>
<CAPTION>
<S> <C> <C>
Sales Charge

Ranges As a % of offering price As an approximate % of net amount invested

$0 - 249,999 3.00% 3.09%

$250,000 - 499,999 2.00% 2.04%

$500,000 - 999,999 1.00% 1.01%

$1,000,000 or more none none

</TABLE>

FDC may pay a portion of sales charge proceeds to securities dealers
who have sold a fund's shares, or to others, including banks and other
financial institutions (qualified recipients), under special
arrangements in connection with FDC's sales activities. The sales
charge paid to qualified recipients is 1.50% of a fund's offering
price.
The sales charge will also be reduced by the percentage of any sales
charge you previously paid on investments in other Fidelity funds or
by the percentage of any sales charge you would have paid if the
reductions in the table above had not existed. These sales charge
credits only apply to purchases made in one of the ways listed below,
and only if you continuously owned Fidelity fund shares, maintained a
Fidelity brokerage core account, or participated in The CORPORATEplan
for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds from a transaction in a Fidelity brokerage core
account, including any free credit balance, core money market fund, or
margin availability, to the extent such proceeds were derived from
redemption proceeds from another Fidelity fund.
3. As a participant in The CORPORATEplan for Retirement Program when
shares are bought through plan-qualified loan repayments, and for
exchanges into and out of the Managed Income Portfolio.
A fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more
than 200 eligible employees or a minimum of $3 million in plan assets
invested in Fidelity mutual funds.
2. To shares in a Fidelity account bought with the proceeds of a
distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan
that both qualified for waiver (1) above and had at least some of its
assets invested in Fidelity-managed products. (Distributions
transferred to an IRA account must be transferred within 60 days from
the date of the distribution. All other distributions must be
transferred directly into a Fidelity account).
3. If you are a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more.
4. If you buy shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code).
5. If you are an investor participating in the Fidelity Trust
Portfolios program.
6. To shares bought by a mutual fund or a qualified state tuition
program for which FMR or an affiliate serves as investment manager.
7. To shares bought through Portfolio Advisory Services or Fidelity
Charitable Advisory Services.
8. If you are a current or former trustee or officer of a Fidelity
fund or a current or retired officer, director, or regular employee of
FMR Corp. or Fidelity International Limited or their direct or
indirect subsidiaries (a Fidelity trustee or employee), the spouse of
a Fidelity trustee or employee, a Fidelity trustee or employee acting
as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee.
9. If you are a bank trust officer, registered representative, or
other employee of a qualified recipient, as defined on page 45.
10. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed
and distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
11. If you invest through a non-prototype pension or profit-sharing
plan that maintains all of its mutual fund assets in Fidelity mutual
funds, provided the plan executes a Fidelity non-prototype sales
charge waiver agreement confirming its qualification.
12. If you are a registered investment adviser (RIA) buying for your
discretionary accounts, provided you execute a Fidelity RIA load
waiver agreement which specifies certain aggregate minimum and
operating provisions. Except for correspondents of National Financial
Services Corporation, this waiver is available only for shares bought
directly from Fidelity, and is unavailable if the RIA is part of an
organization principally engaged in the brokerage business.
13. If you are a trust institution or bank trust department buying for
your non-discretionary, non-retirement fiduciary accounts, provided
you execute a Fidelity Trust load waiver agreement which specifies
certain aggregate minimum and operating provisions. This waiver is
available only for shares bought either directly from Fidelity or
through a bank-affiliated broker, and is unavailable if the trust
department or institution is part of an organization not principally
engaged in banking or trust activities.
More detailed information about waivers (1), (2), (5), (9), (10) and
(12) is contained in the Statement of Additional Information (SAI). A
representative of your plan or organization should call Fidelity for
more information.
To qualify for a sales charge reduction or waiver, you must notify
Fidelity in advance of your purchase.
To receive sales concessions and waivers, qualified recipients must
sign the appropriate agreement with FDC in advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of a fund, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.

APPENDIX

FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each fund's financial history for the past 5 years. Certain
information reflects financial results for a single fund share. Total
returns for each period include the reinvestment of all dividends and
distributions. This information has been audited by ______________,
independent accountants, whose report, along with each fund's
financial highlights and financial statements, are included in the
funds' Annual Report. A free copy of the Annual Report is available
upon request.

[Financial Highlights to be filed by subsequent amendment.]

You can obtain additional information about the funds. The funds'
Statement of Additional Information (SAI) includes more detailed
information about each fund and its investments. The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). The funds' annual and semi-annual reports include a
discussion of recent market conditions and the funds' investment
strategies, performance and holdings.

For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8888 or visit Fidelity's Web site at www.fidelity.com.

Fidelity Investments and (Pyramid) Design, Fidelity, Fidelity
Investments, TouchTone Xpress, Fidelity Money Line, Fidelity Automatic
Account Builder, Fidelity On-Line Xpress+, Fidelity Web Xpress and
Directed Dividends are registered trademarks of FMR Corp.

Portfolio Advisory Services is a service mark of FMR Corp.

The third party marks appearing above are the marks of their
respective owners.

TIF-pro-1298

FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS

FIDELITY CANADA FUND, FIDELITY EMERGING MARKETS FUND, FIDELITY EUROPE
FUND, FIDELITY EUROPE CAPITAL APPRECIATION FUND, FIDELITY FRANCE FUND,
FIDELITY GERMANY FUND, FIDELITY HONG KONG AND CHINA FUND, FIDELITY
JAPAN FUND, FIDELITY JAPAN SMALL COMPANIES FUND, FIDELITY LATIN
AMERICA FUND, FIDELITY NORDIC FUND, FIDELITY PACIFIC BASIN FUND,
FIDELITY SOUTHEAST ASIA FUND, AND FIDELITY UNITED KINGDOM FUND

FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1998

This Statement of Additional Information (SAI) is not a prospectus.
Portions of the funds' Annual Report is incorporated herein. The
Annual Report is supplied with this SAI.
To obtain a free additional copy of the Prospectus, dated December
30, 1998, or an Annual Report, please call Fidelity(registered
trademark) at 1-800-544-8888 or visit Fidelity's Web site at
www.fidelity.com.

TABLE OF CONTENTS PAGE

INVESTMENT POLICIES AND LIMITATIONS 3

SPECIAL CONSIDERATIONS REGARDING AFRICA 17

SPECIAL CONSIDERATIONS REGARDING CANADA 18

SPECIAL CONSIDERATIONS REGARDING EUROPE 18

SPECIAL CONSIDERATIONS REGARDING JAPAN, THE PACIFIC BASIN, AND 20
SOUTHEAST ASIA

SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA 25

SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION 27

PORTFOLIO TRANSACTIONS 27

VALUATION 33

PERFORMANCE 34

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION 47

DISTRIBUTIONS AND TAXES 48

TRUSTEES AND OFFICERS 48

CONTROL OF INVESTMENT ADVISER 48

MANAGEMENT CONTRACTS 54

DISTRIBUTION SERVICES 62

TRANSFER AND SERVICE AGENT AGREEMENTS 64

DESCRIPTION OF THE TRUST 65

FINANCIAL STATEMENTS 65

APPENDIX 66

TIF -ptb- 1298

[INSERT ITEM CODE ]

(fidelity_logo_graphic) (registered trademark)
82 Devonshire Street, Boston, MA 02109

INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.

INVESTMENT LIMITATIONS OF CANADA FUND
(CANADA FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF EMERGING MARKETS FUND
(EMERGING MARKETS FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in companies whose principal business
activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF EUROPE FUND
(EUROPE FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of the fund's total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF EUROPE CAPITAL APPRECIATION FUND
(EUROPE CAPITAL APPRECIATION FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF FRANCE FUND
(FRANCE FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF GERMANY FUND
(GERMANY FUND)

INVESTMENT LIMITATIONS OF HONG KONG AND CHINA FUND
(HONG KONG AND CHINA FUND)

INVESTMENT LIMITATIONS OF JAPAN FUND
(JAPAN FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF JAPAN SMALL COMPANIES FUND
(JAPAN SMALL COMPANIES FUND)

INVESTMENT LIMITATIONS OF LATIN AMERICA FUND
(LATIN AMERICA FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF NORDIC FUND
(NORDIC FUND)

INVESTMENT LIMITATIONS OF PACIFIC BASIN FUND
(PACIFIC BASIN FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of the fund's total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF SOUTHEAST ASIA FUND
(SOUTHEAST ASIA FUND)

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

INVESTMENT LIMITATIONS OF UNITED KINGDOM FUND
(UNITED KINGDOM FUND)

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2) ). The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 21.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act . These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of
mortgages, loans, receivables or other assets. Payment of interest and
repayment of principal may be largely dependent upon the cash flows
generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds, or other credit
enhancements. Asset-backed security values may also be affected by
other factors including changes in interest rates, the availability of
information concerning the pool and its structure, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities providing the credit
enhancement. In addition, these securities may be subject to
prepayment risk.
BORROWING. Each fund may borrow from banks or from other
funds advised by FMR or its affiliates, or through reverse repurchase
agreements. If a fund borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it
in cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an
issuer. In the event an issuer is liquidated or declares bankruptcy,
owners of bonds and preferred stock take precedence over the claims of
those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes,
preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the
underlying common stock (or cash or securities of equivalent value) at
a stated exchange ratio. A convertible security may also be called for
redemption or conversion by the issuer after a particular date and
under certain circumstances (including a specified price) established
upon issue. If a convertible security held by a fund is called for
redemption or conversion, the fund could be required to tender it for
redemption, convert it into the underlying common stock, or sell it to
a third party.
Convertible securities generally have less potential for gain or
loss than common stocks. Convertible securities generally provide
yields higher than the underlying common stocks, but generally lower
than comparable non-convertible securities. Because of this higher
yield, convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
COUNTRIES NOT CONSIDERED TO HAVE EMERGING MARKETS. As of October 31,
1998 , the following countries are not considered to have
emerging markets: [Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United
Kingdom, and the United States.]
DEBT SECURITIES. are used by issuers to borrow money. The
issuer usually pays a fixed, variable or floating rate of interest,
and must repay the amount borrowed at the maturity of the security.
Some debt securities, such as zero coupon bonds, do not pay interest
but are sold at a deep discount from their face values. Debt
securities include corporate bonds, government securities, and
mortgage and other asset-backed securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment b e renegotiated. There is no assurance that FMR will be
able to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement
and custodial practices (including those involving securities
settlement where fund assets may be released prior to receipt of
payment) are often less developed than those in U.S. markets, and may
result in increased risk or substantial delays in the event of a
failed trade or the insolvency of, or breach of duty by, a foreign
broker-dealer, secur ities depository or foreign subcustodian. In
addition, the costs associated with foreign investments, including
withholding taxes, brokerage commissions and custodial costs, are
generally higher than with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements
involve an agreement to purchase a foreign security and to sell that
security b ack to original seller at an agreed-upon price in either
U.S. dollars or foreign currency. Unlike typical U.S. repurchase
agreements, foreign repurchase agreements may not be fully
collateralized at all times. The value of a security purchased by a
fund may be more or less than the price at which the counterparty has
agreed to repurchase the security. In the event of default by the
counterparty, the fund may suffer a loss if the value of the security
purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve
higher credit risks than repurchase agreements in U.S. markets, as
well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging
markets may involve issuers or counterparties with lower credit
ratings than typical U.S. repurchase agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS . The following paragraphs pertain to
futures and options: Combined Positions, Correlation of Price Changes,
Futures Contracts, Futures Margin Payments, Limitations on Futures and
Options Transactions, Liquidity of Options and Futures Contracts,
Options and Futures Relating to Foreign Currencies, OTC Options,
Purchasing Put and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position
would involve writing a call option at one strike price and buying a
call option at a lower price, to reduce the risk of the written call
option in the event of a substantial price increase. Because combined
options positions involve multiple trades, they result in higher
transaction costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that
the options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer
agrees to purchase a specified underlying instrument at a specified
future date. In selling a futures contract, the seller agrees to sell
a specified underlying instrument at a specified future date. The
price at which the purchase and sale will take place is fixed when
the buyer and seller enter into the contract. Futures can be held
until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
Futures may be based on foreign indexes such as the CAC 40
(France), DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE
100 (United Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong),
and Nikkei 225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the
United States and abroad, foreign futures exchanges may follow
trading, settlement and margin procedures that are different from
those for U.S. exchanges. Futures contracts traded outside the United
States may involve greater risk of loss than U.S.-traded contracts,
including potentially greater risk of losses due to insolvency of a
futures broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, are not fundamental policies
and may be changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call
option takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the writer assumes
the obligation to pay the strike price for the option's underlying
instrument if the other party to the option chooses to exercise it.
The writer may seek to terminate a position in a put option before
exercise by closing out the option in the secondary market at its
current price. If the secondary market is not liquid for a put option,
however, the writer must continue to be prepared to pay the strike
price while the option is outstanding, regardless of price changes.
When writing an option on a futures contract, a fund will be required
to make margin payments to an FCM as described above for futures
contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they
are valued. Difficulty in selling securities may result in a loss or
may be costly to a fund. Under the supervision of the Board of
Trustees, FMR determines the liquidity of a fund's investments and,
through reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed
to the prices of other securities, securities indices, currencies, or
other financial indicators. Indexed securities typically, but not
always, are debt securities or deposits whose value at maturity or
coupon rate is determined by reference to a specific instrument or
statistic.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on
the performance of the security, currency, or other instrument to
which they are indexed, and may also be influenced by interest rate
changes in the United States and abroad. Indexed securities may be
more volatile than the underlying instruments. Indexed securities are
also subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities
are medium and high-quality securities. Some may possess speculative
characteristics and may be sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
ISSUER LOCATION. FMR determines where an issuer or its principal
activities are located by looking at such factors as the issuer's
country of organization, the primary trading market for the issuer's
securities, and the location of the issuer's assets, personnel, sales,
and earnings. The issuer of a security is considered to be located in
a particular country if (1) the security is issued or guaranteed by
the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary
trading market in that country; or (3) the issuer is organized under
the laws of that country, derives at least 50% of its revenues or
profits from goods sold, investments made, or services performed in
the country, or has at least 50% of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand .
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities
have poor protection with respect to the payment of interest and
repayment of principal, or may be in default. These securities are
often considered to be speculative and involve greater risk of loss or
price changes due to changes in the issuer's capacity to pay. The
market prices of lower-quality debt securities may fluctuate more than
those of higher-quality debt securities and may decline significantly
in periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and
less active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
PREFERRED STOCK is a class of equity or ownership in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, owners of bonds take precedence
over the claims of those who own preferred and common stock.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Because there
may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR to be of good
standing. Furthermore, they will only be made if, in FMR's judgment,
the consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a
fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of
cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, the
fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any dividends, interest, or
other distributions on the securities loaned and to any increase in
market value; (5) the fund may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able
to vote proxies on the securities loaned, either by terminating the
loan or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right
to invest without limitation in preferred stocks and investment-grade
debt instruments for temporary defensive purposes.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
ZERO COUPON BONDS. do not make interest payments; instead,
they are sold at a discount from their face value and are redeemed at
face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.

The result has been a steadily high level of real GDP growth,
averaging 11.35% per year so far this decade. With this growth has
come a doubling of total consumption, a tripling of real incomes for
many workers, and a reduction in the number of people living in
absolute poverty from 270 to 100 million people. Today there is a
market of more than 80 million people who are now able to afford
middle class western goods.
Such success has not come without negatives. As a communist system
in transition, there still exist high levels of subsidies to
state-owned enterprises (SOE) which are not productive. At the end of
1997, it was reported that close to half of the SOEs ran losses. In
addition, the inefficiencies endemic to communist systems, with their
parallel (thus redundant) political, economic and governmental policy
bodies, contribute to high levels of inflation. Fighting inflation and
attempting to cool runaway growth has forced the government to
repeatedly implement periods of fiscal and monetary austerity.
Periodic intervention seems to be their chosen method of guarding
against overheating.
Performance in 1997 reflects this dynamic between growth,
inflation, and the government's attempts to control them. Growth
slowed to 9.1%, largely as a result of a tightening of credits to
SOEs. Policy was a mix between a loose monetary stance and some
relatively austere fiscal positions. While growth was a priority, it
came at the cost of double-digit inflation.
China has two stock exchanges that are set up to accommodate
foreign investment, in Shenzhen and in Shanghai. In both cases,
foreign trading is limited to a special class of shares (Class B)
which was created for that purpose. Only foreign investors may own
Class B shares, but the government must approve sales of Class B
shares among foreign investors. As of December 1997, there were 51
companies with Class B shares on the two exchanges, for a total Class
B market capitalization of $2.1 billion U.S. dollars. In 1997, all of
China's stock market indices finished the year below the level at
which they began it. These markets were buoyed by strong speculative
buying in the year's second quarter. Market valuations peaked in
September and were subsequently hit by a heavy sell off from October
onwards.
In Shanghai, all "B" shares are denominated in Chinese renminbi but
all transactions in "B" shares must be settled in U.S. dollars. All
distributions made on "B" shares are also payable in U.S. dollars, the
exchange rate being the weighted average exchange rate for the U.S.
dollar as published by the Shanghai Foreign Exchange Adjustment
Center. In Shenzhen, the purchase and sale prices for "B" shares are
quoted in Hong Kong dollars. Dividends and other lawful revenue
derived from "B" shares are calculated in renminbi but payable in Hong
Kong dollars, the rate of exchange being the average rate published by
the Shenzhen Foreign Exchange Adjustment Center. There are no foreign
exchange restrictions on the repatriation of gains made on or income
derived from "B" shares, subject to the repayment of taxes imposed by
China thereon.
China's proven ability to nurture domestic consumption and expand
export markets leads many to believe that the bulk of its growth has
yet to be seen. Most sources, notably the World Bank, predict future
growth levels through the year 2000 of over 7%. This auspicious
indicator notwithstanding, there are a few special considerations
regarding China's future. While this list is not all-inclusive, it
does highlight some internal and external forces that have a strong
influence on the country's future.
To begin with the internal issues, one matter is that
infrastructure bottlenecks could prove to be a problem, as most FDI
has been concentrated in manufacturing and industry at the expense of
badly needed transportation and power improvements. Secondly, as with
all transition economies, the ability to develop and sustain a
credible legal, regulatory, and tax system could influence the course
of investments. Third, environmentalists warn of the current and
looming problems regarding pollution and resource destruction, a
common result of such industrial growth in developing economies which
can't afford effective environmental protection. This is a
particularly noteworthy issue, given the size of the country's
agricultural sector. Lastly, given China's unique method of transition
there exists the possibility that further economic liberalization
could give rise to new social issues which have heretofore been
effectively mitigated. One such issue is the possible dismantling of
inefficient state-owned enterprises, something which is potentially
socially explosive given the communist policy of providing social
welfare through the firm. Exposing what many economists feel is a high
level of open unemployment and widening the gap between the newly
empowered business class and the disenfranchised could pressure the
government to retreat on the road to reform and continue with massive
state spending.
Regarding external issues, China's position in the world economy
and its relationship with the United States also have a strong
influence on it's economic performance. The country has recently
enjoyed an almost uninterrupted positive trade balance. As the largest
country amidst the fastest growing region in the world, China and its
multi-million person ethnic diaspora have a significant role to play
in Asian growth. Should China ascend to become a member of the World
Trade Organization (WTO), as it desires, such movements of capital and
goods will become easier.
Export growth in China has recently been subject to fluctuations
caused by external political events, such as the U.S. elections and
debates over human rights issues. U.S. policy (specifically most
favored nation status) is frequently reconsidered by various elements
of the U.S. government in reaction to a variety of issues, from
nuclear proliferation to Tibetan rights. Significant changes in U.S.
policy could impact China's growth, as close to 9% of their GDP is
trade with the U.S. and the U.S. represents the third biggest investor
in China.
Perhaps the strongest influence on the Chinese economy is the
policy that is set by the political leaders in Beijing and this is
somewhat of an open question as the death of Deng has created a slight
vacuum in Chinese political society. A large part of Deng's strength
derived from a newly empowered business class endeared to him and it
is unclear if any of his successors can harness this loyalty as
effectively as he did. Sustained growth is one possible way to win
over this constituency, leading many to believe that the future
Chinese leadership will respect market forces at least as much as Deng
did. Choosing between double digit growth and reduced inflation could
continue to be a central economic question, with 1997 (Deng
influenced) decisions pointing to an acceptance of lower, albeit still
high, GDP growth.
Another key political player is the Chinese army. With provocative
situations occurring in Taiwan and the Korean peninsula, and with ever
present pressure from internal democrats, the military is in a
position of leverage regarding the shaping of the future political
scene. Finally, there is the communist party, long seen as a loser
amongst the beneficiaries of Deng's reforms. Many view the battle
between the party and the middle class as a zero sum game and as the
leadership settles, respective alliances and constituencies could
determine how much the government pursues its growth strategy.
As with almost all foreign investments, U.S. investors face the
significant risk of currency devaluation by the Chinese government.
Despite assurances from officials reemphasizing China's policy
commitment to maintain the current exchange rate of the renminbi
against the U.S. dollar, many observers believe that this policy will
be soon tested as China monitors the effect of regional devaluations
on exports. Government authorities feel that China has boosted its
international reputation by refraining from devaluing the renminbi at
a time when such a move could further destabilize the currencies of
its neighbors. Nevertheless, Chinese authorities have recently hinted
that a continued slide in the Japanese yen would make it very
difficult for them to maintain their promise not to devalue. If
efforts to prevent the slide in the yen fail, then China may be pushed
into devaluing their currency. For U.S. investors, a devaluation would
erode the investment returns on their investments.
The last significant force in the Chinese economy is the
acquisition on July 1, 1997 of Hong Kong as a Special Autonomous
Region (SAR). For the past 99 years as a British Colony, Hong Kong has
established itself as the world's freest market and more recently as
an economic gateway between China and the west.
A tiny, 814 square mile area adjacent to the coast of southern
China with a population of 6.3 million, Hong Kong has a long
established history as a global trading center. Originally a
manufacturing-based economy; most of these businesses have migrated to
southern China. In their place has emerged a developed, mature service
economy which currently accounts for approximately 80% of its Gross
Domestic Product. Hong Kong trades over $400 billion in goods and
services each year with countries throughout the world, notably China,
Japan, and the U.S. Its leading exports are textiles and electronics
while imports tend to revolve around foodstuffs and raw materials.
Hong Kong's currency, the HK dollar, was pegged to the US dollar at
HK7.7=$1 in 1983 and investors consider it to be a stable mechanism in
enduring confidence lapses and speculator attacks. The operation of a
currency board and accumulation of U.S. dollars in its monetary fund
is partly responsible for this stability.
The stock market (SEHK) listed 658 publicly traded companies by the
end of 1997, with total capitalization at $413 billion U.S. dollars. A
significant portion of SEHK firms are in real estate, and are
sensitive to fluctuations in the property markets. 1997 was a
tumultuous year for the Hong Kong stock market as a speculative attack
on the Hong Kong dollar in October provoked a global sell-off in
equities. Investors were shocked as the Hong Kong market, long
regarded as a safe-haven, plunged 40% in October. The stock market's
decline and the attack on the local currency sent interest rates
soaring, precipitating an erosion in local property values. This in
turn put additional pressure on the banking sector which is heavily
geared to real estate. The Hong Kong market's dramatic downturn
illustrates how vulnerable it is to the Asian region's economic
problems. The structural problems besetting Hong Kong's neighbors in
Southeast and Northeast Asia may not be quickly resolved. Exports to
the Asian region may remain depressed as the process of economic
reform in countries such as Thailand, Malaysia, Indonesia, Japan and
South Korea will likely hold back economic growth in the area.
Accordingly, Hong Kong and China will likely be more dependent upon
demand from the U.S. and Europe for some time to come.
As a trade center, Hong Kong's economy is very closely tied to that
of its trading partners, particularly China and the United States. In
the wake of Deng's reforms, Hong Kong and China have become
increasingly interdependent economically. Currently, China is Hong
Kong's largest trading partner. After Taiwan, Hong Kong is the largest
foreign investor in China, accounting for about 60 percent of overall
foreign direct investment. Hong Kong plays a particularly significant
role as an intermediary in U.S.-China trade. In 1996, it handled 56%
of China's exports to the U.S. and 49% of Chinese imports from the
U.S.
The critical question regarding the future of Hong Kong is how the
Chinese leadership will exert its influence now that it has become a
Special Autonomous Region (SAR). This new status is in accordance with
pledges made at the Joint Declaration on the Question of Hong Kong
made by the Chinese and British governments in 1984. Leading up to the
hand over of the colony, the Chinese government has pledged to uphold
the Basic Law of 1990 which states that Hong Kong's status as an
unfettered financial center will remain intact for at least 50 years
after 1997. Part of this status includes retaining the legal,
financial and monetary systems (specifically the HK$/US$ peg) which
guarantee economic freedom and foster market expansion.
Many investors and citizens are closely monitoring Chinese actions
in order to assess their actual commitment to these principles.
Already there is evidence of a clear, if slow, current of political
change coming from Beijing. Certain actions, such as the curbing of
media freedoms, indicate that there is the possibility of significant
interference from communist authorities. More significant was the
clash between the U.K. and Chinese governments over China's abolition
of the elected legislature and subsequent installation of governmental
leaders in both the executive and the legislature who are directly
appointed by Beijing. Mr. Tung Chee-hwa, appointed as the first Chief
Executive of the SAR, has surrounded himself with like-minded
Machiavellian figures who have strong ties to both market successes
and Beijing leaders. They are portrayed as believing in the powers of
capitalism and central authority, if not democracy, leading some to
speculate that the SAR could develop into a South Korean style of
corporatism which preserves the economic status quo without
incorporating further political freedoms.
In assessing the prospects for Hong Kong's future, it must be noted
that China has a very strong interest in a prosperous SAR.
Particularly if Beijing pursues a growth strategy as it has in the
past, Hong Kong can be a key agent in China's economic policy. Desire
for investment and new technologies necessary for modernization is a
strong incentive to send positive signals through the treatment of
Hong Kong. This is reinforced by the respect Hong Kong is due given
its role in China's recent dynamic performance.
To be sure, there are more adamant concerns over the effect of the
acquisition. Many are skeptical of Beijing's ability to leave the
currency alone. Some note the continuous drop in GDP as evidence that
Hong Kong has yet to mature as a service economy and that the
workforce hasn't fully adjusted to the switch out of manufacturing.
Additionally, by tying Hong Kong so closely with China, it now must
weather the ups and downs of Beijing's relationship with the U.S. Most
Favored Nation Status now means just as much, if not more, to the SAR
than it does to Beijing, with some asserting that revoking MFN could
result in substantial losses in trade, income, and jobs.
Hong Kong's competitive advantage has traditionally been a mix of
geography, market freedoms and entrepreneurial spirit. The
preservation of these advantages is now a function of the island's
independence from Beijing. Today's investors will be vigilant in
measuring how much of that independence is retained after July 1,
1997.
AUSTRALIA. Australia is a 3 million square mile continent
(about the size of the 48 continental United States) with a
predominantly European ethnic population of 18.2 million people. A
member of the British Commonwealth, its government is a democratic,
federal-state system.
The country has a western style capitalist economy with a workforce
of 9.2 million people that is concentrated in services, mining, and
agriculture. Australia's large agricultural sector specializes in
wheat and sheep rearing and together, these two activities account for
more than half of the country's export revenues. Australia also
possesses abundant natural resources such as bauxite, coal, iron ore,
copper, tin, silver, uranium, nickel, tungsten, mineral sands, lead,
zinc, diamonds, natural gas, and oil. The health of the country's
domestic economy is particularly sensitive to movements in the world
prices of these commodities. Primary trading partners are the United
States, Japan, South Korea, New Zealand, the United Kingdom and
Germany. Imports revolve around machinery and high technology
equipment.
Historically, Australia's strong points were its agricultural and
mining sectors. While this is still true to a large extent, the
government managed to boost its manufacturing sector by undertaking
protective measures in the 1970's and early 1980's. These have
subsequently been liberalized in an effort to spur growth in the
industrial sector. Today's economy is more diverse, as manufactures'
share of total exports is increasing. Part of the government's effort
to make manufacturing more competitive was a floating of the
Australian dollar in 1984, precipitating an initial depreciation, and
a campaign to reduce taxes. Such reforms have attracted foreign
investment, particularly in the transport and manufacturing sectors.
Restrictions do exist on investment in certain areas as media, mining
and some real estate.
With inflation well under control but unemployment stubbornly high
and signs of cyclical slack in the economy, Australia's monetary
policy is focused on preserving the low inflation environment while
keeping monetary conditions conducive to stronger economic growth. The
government has set a goal of achieving a government budget surplus in
fiscal year 1998/1999.
Australia is fully integrated into the world economy, participating
in GATT and also more regional trade associations such as the Asia and
the Pacific Economic Cooperation (APEC) forum. Future growth could
result from their movement towards regional economic liberalization,
but a countervailing force is the reality that some export markets in
Europe could be lost to continued European economic integration.
After suffering a significant recession in 1990-91, the Australian
economy has enjoyed six years of expansion. The medium-term outlook
appears favorable, with domestic spending supported by low interest
rates, improving consumer confidence and a strengthening labor market.
GDP growth has increased steadily throughout 1997. However, weakness
in commodity prices, particularly metal prices, coupled with an
increase in the nation's current account deficit have placed
significant pressure on the Australian dollar.
Investors should be aware that, while Australia's prospects for
strong economic growth appear favorable over the long-term, many
sectors currently face significant risks arising from the recent
turbulence in Asian countries, which account altogether for almost 60
percent of Australia's exports. While projections already embody a
more subdued outlook for growth in these countries, there is a risk of
this outlook deteriorating further, especially in Japan and Korea.
Due to the large position that the agriculture and natural resource
sectors have in the nation's export driven economy, any weakness in
commodity prices may negatively impact both the economy and stock
prices. In addition, United States investors face the risk that their
investment returns from investments in Australia could be eroded if
the Australian currency declines relative to the United States
dollar.
INDONESIA. Indonesia is a country that encompasses over
17,000 islands on which live 195 million people. It is a mixed economy
that balances free enterprise with significant government
intervention. Deregulation policies, diversification of strong
domestic sectors, and investment in infrastructure projects have all
contributed to high levels of growth since the late 1980's.
Indonesia's economy grew at 7.1% in 1996, the exact average of its
performance for the current decade. Growth in the 1990's had been
fairly steady, hovering between 6.5-7.5% for the most part, peaking at
8.1% in 1995. Moderate growth in investment, including public
investment, and also in import growth, helped to slowdown GDP growth.
Growth has been accompanied by moderately high levels of
inflation.
In recent years, Indonesia had been undergoing a diversification of
the core of its economy. No longer strictly revolving around oil and
textiles, it is now gaining strength in high technology manufactures,
such as electronics. Indonesia consistently runs a positive trade
balance. Strong export performers are oil, gas, and textiles and
apparel. Oil, once responsible for 80% of export revenues, now
accounts for only 25%, an indication of how far other (mostly
manufacturing and apparel) sectors have developed. Main imports are
raw materials and capital goods.
However, as with many of its Asian neighbors, Indonesia's bright
prospects came to a sudden halt in August of 1997 when the plunging
Thai baht began to destabilize the rupiah. By mid-year 1998 the local
currency had fallen more than 80% against the dollar, and hugely
increased the cost of servicing foreign debts; a collapse of the real
economy, and a growing number of bad loans. Various central bank
initiatives, including a doubling of interest rates, failed to halt
the currency's depreciation. The nation's banks, unable to service
their extensive short term borrowings, were suddenly in danger of
collapse. Of more than 200 local banks, a mere handful were estimated
to be solvent at mid-year 1998.
The social effects of this decline have been devastating. By the
end of 1998 the government expects 47% of the population to be living
below the poverty line and unemployment is expected to surpass 20% of
the workforce. This has led to an increase in social tensions and food
riots and large-scale strikes have broken out sporadically. Rioting
and attacks upon the countries business oriented ethnic Chinese
population have prompted as many as 80,000 to flee the country. Rising
popular opposition forced President Suharto to resign less than three
months after being appointed to his seventh consecutive five-year term
and was replaced by his vice-president, B. J. Habibie. The political
upheaval and resulting uncertainty has resulted in the further erosion
in public confidence at home and abroad.
The breakdown in public confidence in the Indonesian economy will
likely be difficult to reverse, and will prolong the period of
recovery. Resumption of lending by multilateral institutions under a
rescue package drawn up by the International Monetary Fund (IMF) may
speed up the process of restoring the faith in the government's
efforts to shore up the banking system. Nevertheless, even if the two
critical outstanding issues of restructuring the corporate sector's
external debt and shoring up the banking sector can be resolved this
year, the economy will remain weak in 1999 and recover only slowly in
the following years.
The Indonesian stock market plunged to record lows in 1997 under
the combined impact of the country's economic implosion, political
uncertainty and social unrest. The market's retreat continued into
mid-1998 as domestic and foreign investors fled the market for safer
havens overseas. While many investors believe that the market's steep
decline has brought valuations of a number of Indonesian companies to
very attractive levels, there remains considerable risk particularly
for foreign investors. As with most foreign investments, United States
investors could see their investment returns eroded if the Indonesian
currency declines in value relative to the U.S. dollar. Secondly, any
escalation of rioting and other forms of social unrest could be a
major obstacle in the path of economic recovery. Thirdly, many
question the will of the Indonesian government and its people to
accept the conditions of economic reform as mandated by the IMF.
Fourth, the Indonesian economy, currency and securities markets are
extremely sensitive to events that take place within the Asian region
and their fortunes are somewhat dependent upon how well other Asian
nations resolve their own economic and currency problems.
MALAYSIA. 1997 saw Malaysia's GDP growth slow to 7.4%, down
from over 8.2% in 1996 and 9.5% in 1995. Inflation has been kept
relatively low at 3.8%. Performance in 1996 avoided the economy's
potential overheating as export growth, investment, and consumption
all slowed. A large part of Malaysia's recent growth is due to its
manufacturing industries, particularly electronics and semiconductors.
This has led to an increased reliance on imports; thus the economy is
sensitive to shifts in foreign production and demand. This is
particularly true regarding its main trading partners: the United
States, Japan, and Singapore. Such shifts were partly responsible for
the slowdown in 1997. In addition, monetary policies to stem the
threat of overheating were evident, but the country still needs
massive public and private investment to finance several large
infrastructure projects. Government industrial policy seeks investment
to create more value added high technology manufacturing and service
sectors in order to decrease the emphasis on low skilled
manufacturing. Already U.S. investors have invested over $9 billion,
and most of this is in electronics and energy projects.
However, like its Asian neighbors, Malaysia has stumbled in its
dash to become a developed nation by 2020. The grandiose ambitions of
Malaysian Prime Minister Mahathir Mohamad have been set back by its
worst-ever currency crisis, which also brought a sharp fall in the
country's stock market. An overheated property market, a growing
current-account deficit and a highly leveraged economy, precipitated
much of the country's problems. Following the sharp decline of
Thailand's currency, the Malaysian ringgit came under severe pressure.
The Malaysian central bank attempted to defend the currency and the
resulting spikes in interbank rates marked the start of a period of
escalating interest rates. Once the central bank ceased using foreign
exchange reserves to slow the ringgit's depreciation in the
region-wide currency slide, the Malaysian currency quickly weakened
versus the United States dollar and by year end had declined by 35%.

PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and
investment accounts for which it or its affiliates act as
investment adviser. In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, FMR considers various
relevant factors, including, but not limited to: the size and type of
the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and, if applicable, arrangements
for payment of fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities
transactions and perform functions incidental thereto (such as
clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to D ecember 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage,
unless certain requirements are satisfied. Pursuant to such
requirements, the Board of Trustees has authorized NFSC to execute
portfolio transactions on national securities exchanges in accordance
with approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended October 31, 1998 and 1997, the
portfolio turnover rates for each fund are presented in the table
below. [Variations in turnover rate may be due to fluctuating volume
of shareholder purchase and redemption orders, market conditions, or
changes in FMR's investment outlook.]

TURNOVER RATES 1998 1997

CANADA FUND % %

EMERGING MARKETS FUND % %

EUROPE FUND % %

EUROPE CAPITAL % %
APPRECIATION FUND

FRANCE FUND % %

GERMANY FUND % %

HONG KONG AND CHINA % %
FUND

JAPAN FUND % %

JAPAN SMALL COMPANIES % %
FUND

LATIN AMERICA FUND % %

NORDIC FUND % %

PACIFIC BASIN FUND % %

SOUTHEAST ASIA FUND % %

UNITED KINGDOM FUND % %

The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.
The following table shows the total amount of brokerage commissions
paid by each fund.

FISCAL YEAR ENDED OCTOBER 31 TOTAL AMOUNT PAID

CANADA FUND

1998

1997

1996

EMERGING MARKETS
FUND

1998

1997

1996

EUROPE FUND

1998

1997

1996

EUROPE CAPITAL
APPRECIATION FUND

1998

1997

1996

FRANCE FUND

1998

1997

1996

GERMANY FUND

1998

1997

1996

HONG KONG AND CHINA
FUND

1998

1997

1996

JAPAN FUND

1998

1997

1996

JAPAN SMALL
COMPANIES

1998

1997

1996

LATIN AMERICA FUND

1998

1997

1996

NORDIC FUND

1998

1997

1996

PACIFIC BASIN FUND

1998

1997

1996

SOUTHEAST ASIA FUND

1998

1997

1996

UNITED KINGDOM FUND

1998

1997

1996

Of the following tables, the first shows the total amount of brokerage
commissions paid by each fund to NFSC, FBS and FBSJ, as applicable,
for the past three fiscal years. The second table shows the
approximate percentage of aggregate brokerage commissions paid by a
fund to NFSC, FBS and FBSJ for transactions involving the approximate
percentage of the aggregate dollar amount of transactions for which
the fund paid brokerage commissions for the fiscal year ended

October 31, 1998 . NFSC, FBS and FBSJ are paid on a commission
basis.
TOTAL AMOUNT PAID

FISCAL YEAR TO NFSC TO FBS TO FBSJ

CANADA FUND OCTOBER 31

1998 $ $ $

1997

1996

EMERGING
MARKETS FUND

1998

1997

1996

EUROPE FUND

1998

1997

1996

EUROPE
CAPITAL
APPRECIATION
FUND

1998

1997

1996

FRANCE FUND

1998

1997

1996

GERMANY
FUND

1998

1997

1996

HONG KONG
AND CHINA
FUND

1998

1997

1996

JAPAN FUND

1998

1997

1996

JAPAN SMALL
COMPANIES
FUND

1998

1997

1996

LATIN AMERICA
FUND

1998

1997

1996

NORDIC FUND

1998

1997

1996

PACIFIC BASIN
FUND

1998

1997

1996

SOUTHEAST ASIA
FUND

1998

1997

1996

UNITED
KINGDOM
FUND

1998

1996

1997

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FISCAL % OF % OF % OF % OF % OF % OF
YEAR AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE
ENDED COMMISSIONS DOLLAR COMMISSIONS DOLLAR COMMISSIONS DOLLAR
OCTOBER PAID TO NFSC AMOUNT OF PAID TO FBS AMOUNT OF PAID TO FBSJ AMOUNT OF
1998 TRANSACTIONS TRANSACTIONS TRANSACTIONS
EFFECTED EFFECTED EFFECTED
THROUGH THROUGH FBS THROUGH FBSJ
NFSC

CANADA FUND % % % % % %

EMERGING % % % % % %
MARKETS FUND

EUROPE FUND % % % % % %

EUROPE % % % % % %
CAPITAL
APPRECIATION
FUND

FRANCE FUND % % % % % %

GERMANY % % % % % %
FUND

HONG KONG % % % % % %
AND CHINA
FUND

JAPAN SMALL % % % % % %
COMPANIES
FUND

LATIN AMERICA % % % % % %
FUND

NORDIC FUND % % % % % %

PACIFIC BASIN % % % % % %
FUND

SOUTHEAST ASIA % % % % % %
FUND

UNITED % % % % % %
KINGDOM
FUND

</TABLE>

[ (dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar amount of transactions effected through, NFSC, FBS and FBSJ is
a result of the low commission rates charged by NFSC, FBS and FBSJ.]

[NFSC, FBS and FBSJ have used a portion of the commissions paid by a
fund to reduce that fund's custodian or transfer agent fees.]
The following table shows the dollar amount of brokerage
commissions paid to firms that provided research services and the
approximate dollar amount of the transactions involved for the fiscal
year ended October 31, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL YEAR ENDED $ AMOUNT OF $ AMOUNT OF BROKERAGE
OCTOBER 1998 COMMISSIONS PAID TO TRANSACTIONS INVOLVED*
FIRMS THAT PROVIDED
RESEARCH SERVICES*

CANADA FUND $ $

EMERGING MARKETS
FUND

EUROPE FUND

EUROPE CAPITAL
APPRECIATION FUND

FRANCE FUND

GERMANY FUND

HONG KONG AND CHINA
FUND

JAPAN FUND

JAPAN SMALL
COMPANIES FUND

LATIN AMERICA FUND

NORDIC FUND

PACIFIC BASIN FUND

SOUTHEAST ASIA FUND

UNITED KINGDOM FUND

</TABLE>

[*The provision of research services was not necessarily a factor in
the placement of all this business with such firms.]
The Trustees of each fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds managed by FMR or investment accounts managed by
FMR affiliates. It sometimes happens that the same security is held in
the portfolio of more than one of these funds or invest ment
accounts. Simultaneous transactions are inevitable when several funds
and investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

VALUATION
Each fund's NAV is the value of a single share. The NAV of each
fund is computed by adding the value of the fund's investments, cash,
and other assets, subtracting its liabilities, and dividing the result
by the number of shares outstanding.
GROWTH FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade. Most
equity securities for which the primary market is the United States
are valued at last sale price or, if no sale has occurred, at the
closing bid price. Most equity securities for which the primary market
is outside the United States are valued using the official closing
price or the last sale price in the principal market in which they are
traded. If the last sale price (on the local exchange) is unavailable,
the last evaluated quote or closing bid price normally is used.
Securities of other open-end investment companies are valued at their
respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Indepe ndent brokers or quotation services provide prices of
foreign securities in their local currency. FSC gathers all exchange
rates daily at the close of the NYSE using the last quoted price on
the local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the
value of the securities owned by a fund if, in the opinion of a
committee appointed by the Board of Trustees, some other method would
more accurately reflect the fair market value of such securities. For
example, securities and other assets for which there is no readily
available market value may be valued in good faith by a committee
appointed by the Board of Trustees. In making a good faith
determination of the value of a security, the committee may review
price movements in futures contracts and American Depositary Receipts
(ADRs), market and trading trends, the bid/ask quotes of brokers and
off-exchange institutional trading.

FUND NAME 13 WEEK LONG-TERM 39 WEEK LONG-TERM
MOVING AVERAGE MOVING AVERAGE

CANADA FUND $ $

EMERGING MARKETS FUND

EUROPE FUND

EUROPE CAPITAL
APPRECIATION FUND

FRANCE FUND

GERMANY FUND

HONG KONG AND CHINA
FUND

JAPAN FUND

JAPAN SMALL COMPANIES
FUND

LATIN AMERICA FUND

NORDIC FUND

PACIFIC BASIN FUND

SOUTHEAST ASIA FUND

UNITED KINGDOM FUND

CALCULATING HISTORICAL FUND RESULTS. The following table shows
performance for each fund calculated including certain fund expenses.
The funds have a maximum front-end sales charge of 3% which is
included in the and average annual and cumulative total returns.
Total returns do not include the effect of a fund's $25 exchange fee,
which was in effect from December 1, 1987 through October 23, 1989,
the effect of Europe Fund, Europe Capital Appreciation Fund, and
Pacific Basin Fund's short-term 1.0% trading fee, or Canada Fund,
Emerging Markets Fund, France Fund, Germany Fund, Hong Kong and China
Fund, Japan Fund, Japan Small Companies Fund, Latin America Fund,
Nordic Fund, Southeast Asia Fund, and United Kingdom Fund's 1.5%
short-term trading fee, applicable to shares held less than 90 days.
HISTORICAL FUND RESULTS. The following table shows each fund's
total return for the fiscal periods ended October 31, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS

ONE YEAR FIVE YEARS LIFE OF FUND ONE YEAR FIVE YEARS LIFE OF FUND

CANADA % % %+ % % %+
FUND

EMERGING % % % % % %
MARKETS
FUND
(11/1/90)*

EUROPE % % %+ % % %+
FUND

EUROPE % % % % % %
CAPITAL
APPRECIATI
ON FUND
(12/21/93)
*

FRANCE % % % % % %
FUND
(11/1/95)*

GERMANY % % % % % %
FUND
(11/1/95)*

HONG % % % % % %
KONG AND
CHINA
FUND
(11/1/95)*

JAPAN FUND % % % % % %
(9/15/92)*

JAPAN % % % % % %
SMALL
COMPANIES
FUND
(11/1/95)*

LATIN % % % % % %
AMERICA
FUND
(12/21/93)
*

NORDIC % % % % % %
FUND
(11/1/95)*

PACIFIC % % %+ % % %+
BASIN FUND

SOUTHEAST % % % % % %
ASIA FUND
(4/19/93)*

UNITED % % % % % %
KINGDOM
FUND
(11/1/95)*

</TABLE>

*Commencement of operations
+ 10 year return

[If FMR had not reimbursed certain fund expenses during these periods,
______ returns would have been lower.]
The following tables show the income and capital elements of each
fund's cumulative total return. The table compares each fund's return
to the record of the Standard & Poor's 500 Index (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured
by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month-end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to
show how each fund's total return compared to the record of a broad
unmanaged index of common stocks and a narrower set of stocks of major
industrial companies, respectively, over the same period. Each fund
has the ability to invest in securities not included in either index,
and its investment portfolio may or may not be similar in composition
to the indexes. The S&P 500 and DJIA returns are based on the prices
of unmanaged groups of stocks and, unlike each fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
October 31, 1998 , or life of each fund, as applicable, assuming
all distributions were reinvested. Total returns are based on past
results and are not an indication of future performance. Tax
consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the figures below.
During the 10 year period ended October 31, 1998 , a
hypothetical $10,000 investment in Canada Fund would have grown to
$______, inclu ding the effect of the fund's maximum sales
charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
CANADA
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990 $ $ $ $ $ $ $

1989 $ $ $ $ $ $ $

</TABLE>

[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in
Canada Fund on October 31, 1988, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was $_____. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $______. If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$______ for dividends and $_____ for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.5%
short-term trading fee applicable to shares held less than 90 days.
During the period from November 1, 1990 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Emerging Markets Fund would have grown to $______, including
the effect of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
EMERGING
MARKETS
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1990 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Emerging
Markets Fund on November 1, 1990, assuming the maximum sales charge
had been in effect, the net amount invested in fund shares was $_____.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days. Prior to February 19, 1993, Emerging Markets Fund
operated under certain different investment policies. Accordingly, the
fund's historical performance may not represent its current investment
policies.
During the 10 year period ended October 31, 1998 , a
hypothetical $10,000 investment in Europe Fund would have grown to
$______, includ ing the effect of the fund's maximum sales
charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
EUROPE
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990 $ $ $ $ $ $ $

1989 $ $ $ $ $ $ $

</TABLE>

[ ** From month-end closest to initial investment date.]

Explan atory Notes: With an initial investment of $10,000 in
Europe Fund on October 31, 1988, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was $_____. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $______. If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$______ for dividends and $_____ for capital gain distributions. [The
figures in the table do not include the effect of the fund's 3% sales
charge [(which was in effect during the period _____ through _____)],
and its 1.0% short-term trading fee applicable to shares held less
than 90 days.
During the period from December 21, 1993 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Europe Capital Appreciation Fund would have grown to $______,
including the effect of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
EUROPE
CAPITAL
APPRECIAT
ION FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993* $ $ $ $ $ $ $

</TABLE>

* From December 21, 1993 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Europe
Capital Appreciation Fund on December 21, 1993, assuming the maximum
sales charge had been in effect, the net amount invested in fund
shares was $_____. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $______. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $______ for dividends and $_____ for capital
gain distributions. The figures in the table do not include the effect
of the fund's 1.0% short-term trading fee applicable to shares held
less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
France Fund would have grown to $______, including the effect
of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
FRANCE
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in France
Fund on November 1, 1995, assuming the maximum sales charge had been
in effect, the net amount invested in fund shares was $_____. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends and $_____ for capital gain distributions. The figures in
the table do not include the effect of the fund's 1.5% short-term
trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Germany Fund would have grown to $______, including the effect
of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
GERMANY
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Germany
Fund on November 1, 1995, assuming the maximum sales charge had been
in effect, the net amount invested in fund shares was $_____. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends and $_____ for capital gain distributions. The figures in
the table do not include the effect of the fund's 1.5% short-term
trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Hong K ong and China Fund would have grown to $______, including
the effect of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
HONG
KONG AND
CHINA
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Hong Kong
and China Fund on November 1, 1995, assuming the maximum sales charge
had been in effect, the net amount invested in fund shares was $_____.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days.
During the period from September 15, 1992 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Japan F und would have grown to $______, including the effect of
the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
JAPAN
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992* $ $ $ $ $ $ $

</TABLE>

* From September 15, 1992 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Japan Fund
on September 15, 1992, assuming the maximum sales charge had been in
effect, the net amount invested in fund shares was $_____. The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends and $_____ for capital gain distributions. The figures in
the table do not include the effect of the fund's 3% 1.5% short-term
trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Japan Sm all Companies Fund would have grown to $______,
including the effect of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
JAPAN
SMALL
COMPANIE
S FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Japan
Small Companies Fund on November 1, 1995, assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$_____. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days.
During the period from April 19, 1993 (commencement of operations) to
October 31, 1998 , a hypothetical $10,000 investment in Latin
America Fund would have grown to $______, including the effect of
the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
LATIN
AMERICA
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993* $ $ $ $ $ $ $

</TABLE>

* From April 19, 1993 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Latin
America Fund on April 19, 1993, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was $_____. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $______. If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$______ for dividends and $_____ for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.5%
short-term trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
Nordi c Fund would have grown to $______, including the effect
of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
NORDIC
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Nordic
Fund on November 1, 1995, assuming the maximum sales charge had been
in effect, the net amount invested in fund shares was $_____. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends and $_____ for capital gain distributions. The figures in
the table do not include the effect of the fund's 1.5% short-term
trading fee applicable to shares held less than 90 days.
During the 10 year period ended October 31, 1998 , a
hypothetical $10,000 investment in Pacific Basin Fund would have grown
to $ ______, including the effect of the fund's maximum sales
charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
PACIFIC
BASIN
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993 $ $ $ $ $ $ $

1992 $ $ $ $ $ $ $

1991 $ $ $ $ $ $ $

1990 $ $ $ $ $ $ $

1989 $ $ $ $ $ $ $

</TABLE>

[** From month-end closest to initial investment date.]

Expla natory Notes: With an initial investment of $10,000 in
Pacific Basin Fund on October 31, 1988, assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$_____. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.0% short-term trading fee applicable to shares held less
than 90 days.
During the period from April 19, 1993 (commencement of operations) to
October 31, 1998 , a hypothetical $10,000 investment in
Southeast Asia Fund would have grown to $______, including the effect
of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
SOUTHEAS
T ASIA
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995 $ $ $ $ $ $ $

1994 $ $ $ $ $ $ $

1993* $ $ $ $ $ $ $

</TABLE>

* From April 19, 1993 (commencement of operations).
[ ** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in Southeast
Asia Fund on April 19, 1993, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was $_____. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $______. If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$______ for dividends and $_____ for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.5%
short-term trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1998 , a hypothetical $10,000 investment in
United Kingdom Fund would have grown to $______, including the
effect of the fund's maximum sales charge.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY INDEXES
UNITED
KINGDOM
FUND

FISCAL YEAR VALUE OF VALUE OF VALUE OF TOTAL VALUE S&P 500 DJIA COST OF
ENDED INITIAL REINVESTED REINVESTED LIVING[**]
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS

1998 $ $ $ $ $ $ $

1997 $ $ $ $ $ $ $

1996 $ $ $ $ $ $ $

1995* $ $ $ $ $ $ $

</TABLE>

* From November 1, 1995 (commencement of operations).
[** From month-end closest to initial investment date.]

Explanatory Notes: With an initial investment of $10,000 in United
Kingdom Fund on November 1, 1995, assuming the maximum sales charge
had been in effect, the net amount invested in fund shares was $_____.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.5% short-term trading fee applicable to shares held less
than 90 days.

INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL STOCK
MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the International Finance Corporation Emerging
Markets database, and the performance of national stock markets as
measured in U.S. dollars by the Morgan Stanley Capital International
stock market indexes for the twelve months ended October 31,
1998 . Of course, these results are not indicative of future stock
market performance or the funds' performance. Market conditions during
the periods measured fluctuated widely. Brokerage commissions and
other fees are not factored into the values of the indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew from $____ billion in 1997 to
$____ billion in 1998 .
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of the markets are measured
in billions of U.S. dollars as of October 31, 1998 .

TOTAL MARKET CAPITALIZATION
AUSTRALIA $ JAPAN $

AUSTRIA NETHERLANDS

BELGIUM NORWAY

CANADA SINGAPORE

DENMARK SPAIN

FRANCE SWEDEN

GERMANY SWITZERLAND

HONG KONG UNITED
KINGDOM

ITALY UNITED STATES

The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of the markets is measured in
billions of U.S. dollars as of October 31, 1998 .

TOTAL MARKET CAPITALIZATION - LATIN AMERICA
ARGENTINA $

BRAZIL

CHILE

COLOMBIA

MEXICO

VENEZUELA

TOTAL LATIN AMERICA $______

NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended October 31, 1998 . The second table
shows the same performance as measured in local currency. Each table
measures total return based on the period's change in price, dividends
paid on stocks in the index, and the effect of reinvesting dividends
net of any applicable foreign taxes. These are unmanaged indexes
composed of a sampling of selected companies representing an
approximation of the market structure of the designated country.

STOCK MARKET PERFORMANCE MEASURED IN U.S. DOLLARS
AUSTRALIA % JAPAN %

AUSTRIA NETHERLANDS

BELGIUM NORWAY

CANADA SINGAPORE

DENMARK SPAIN

FRANCE SWEDEN

GERMANY SWITZERLAND

HONG KONG UNITED
KINGDOM

ITALY UNITED STATES

STOCK MARKET PERFORMANCE MEASURED IN LOCAL CURRENCY
AUSTRALIA % JAPAN %

AUSTRIA NETHERLANDS

BELGIUM NORWAY

CANADA SINGAPORE

DENMARK SPAIN

FRANCE SWEDEN

GERMANY SWITZERLAND

HONG KONG UNITED
KINGDOM

ITALY UNITED STATES

The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1998 .

STOCK MARKET PERFORMANCE

FIVE YEARS ENDED TEN YEARS ENDED

OCTOBER 31, 1998 OCTOBER 31, 1998

GERMANY

HONG KONG

JAPAN

SPAIN

UNITED KINGDOM

UNITED STATES

PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. In addition to the mutual
fund rankings, a fund's performance may be compared to stock, bond,
and money market mutual fund performance indexes prepared by Lipper or
other organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The total return of each index reflects reinvestment of
all dividends and capital gains paid by securities included in each
index. Unlike a fund's returns, however, each index returns do
not reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index(es).
Latin America Fund may compare its performance to that of the Morgan
Stanley Capital International Emerging Markets Free - Latin America
Index, a market capitalization-weighted index of approximately 170
stocks traded in seven Latin American markets.
Pacific Basin Fund may compare its performance to that of the Morgan
Stanley Capital International Pacific Index, a market
capitalization-weighted index of over 400 stocks traded in six
Pacific-region markets. The index returns for periods after January 1,
1997 are adjusted for tax withholding rates applicable to U.S.-based
mutual funds organized as Massachusetts business trusts.
Southeast Asia Fund may compare its performance to that of the Morgan
Stanley Capital International Combined Far East ex Japan Free Index, a
market capitalization-weighted index of over 450 stocks traded in
eight Asian markets, excluding Japan.
Canada Fund may compare its performance to that of the Toronto Stock
Exchange (TSE) 300, a market capitalization -weighted index of 300
stocks traded in the Canadian market.
France Fund may compare its performance to that of the Societe des
Bourses Francaises (SBF) 250, a market capitalization-weighted index
of the stocks of the 250 largest companies in the French market.
Germany Fund may compare its performance to that of the Deutscher
Akteinindex (DAX) 100, a market-weighted index of the 100 most heavily
traded stocks in the German market.
Hong Kong and China Fund may compare its performance to that of the
Hang Seng Index, a market capitalization -weighted index of the stocks
of the 33 largest companies in the Hong Kong market.
Japan Fund may compare its performance to that of the Tokyo Stock
Price Index (TOPIX), a market capitalization -weighted index of over
1100 stocks traded in the Japanese market.
Japan Small Companies Fund may compare its performance to that of
the Tokyo Stock Exchange Second Section Index is a market
capitalization-weighted index that reflects the performance of the
smaller, less established and newly listed companies of the Tokyo
Stock Exchange.
Nordic Fund may compare its performance to that of the FT - Actuaries
World Nordic Index, a market capitalization -weighted index of over 90
stocks traded in four Scandinavian markets.
United Kingdom Fund may compare its performance to that of the FT -
All Shares Index, a market capitalization -weighted index of over 750
stocks traded in the U.K. market.
Each of Europe Fund and Europe Capital Appreciation Fund may compare
its performance to that of the Morgan Stanley Capital International
Europe Index, a market capitalization-weighted index that is designed
to represent the performance of developed stock markets in Europe. The
index returns for periods after January 1, 1997 are adjusted for tax
withholding rates applicable to U.S.-based mutual funds organized as
Massachusetts business trusts.
Emerging Markets may compare its performance to that of the Morgan
Stanley Capital International Emerging Markets Free Index, a market
capitalization-weighted index that is designed to represent the
performance of emerging stock markets throughout the world.
Stocks are selected for the Morgan Stanley Capital International
(MSCI) index on the basis of industry representation, liquidity,
sufficient float, and avoidance of cross-ownership. The MSCI Free
index excludes those stocks that cannot be purchased by foreign
investors in otherwise free markets.
Effective October 1, 1998, the country of Malaysia was removed from
the Morgan Stanley Capital International EAFE Index, the Morgan
Stanley Capital International GDP-Weighted EAFE Index and the Morgan
Stanley Capital International World Index. The index returns reflect
the inclusion of Malaysia prior to October 1, 1998.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates total returns in
the same method as the funds. The funds may also compare performance
to that of other compilations or indexes that may be developed and
made available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or total
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of October 31, 1998 , FMR advised over $__ billion in
municipal fund assets, $__ billion in money market fund assets, $___
billion in equity fund assets, $__ billion in international fund
assets, and $___ billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive each fund's front-end sales charge on shares acquired through
reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive each fund's
front-end sales charge in certain instances due to sales efficiencies
and competitive considerations. The sales charge will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs
but otherwise as defined in the Employee Retirement Income Security
Act) maintained by a U.S. employer and having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary
group of corporations (within the meaning of Section 1563(a)(1) of the
Internal Revenue Code, with "50%" substituted for "80%") any member of
which maintains an employee benefit plan having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity
mutual funds, the assets of which are held in a bona fide trust for
the exclusive benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used
to fund annuity contracts purchased by employee benefit plans
(including 403(b) programs, but otherwise as defined in the Employee
Retirement Income Security Act), which, in the aggregate, have either
more than 200 eligible employees or a minimum of $3,000,000 in assets
invested in Fidelity funds;
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan provided that: (i) at the time of the distribution, the employer,
or an affiliate (as described in waiver (1) above) of such employer,
maintained at least one employee benefit plan that qualified for
waiver (1) above and that had at least some portion of its assets
invested in one or more mutual funds advised by FMR, or in one or more
investment accounts or pools advised by Fidelity Management
Trust Company; and (ii) either (a) the distribution is transferred
from the plan to a Fidelity IRA account within 60 days from the date
of the distribution or (b) the distribution is transferred directly
from the plan into another Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the Trust Portfolios funds and
must, during the initial six-month period, reach and maintain an
aggregate balance of at least $500,000 in all accounts and subaccounts
purchased through the Trust Portfolios program);
7. to shares purchased by a mutual fund or a qualified state tuition
program for which FMR or an affiliate serves as investment manager;
8. to shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited or their
direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a
Fidelity Trustee or employee;
10. to shares purchased by a bank trust officer, registered
representative, or other employee of a qualified recipient. Qualified
recipients are securities dealers or other entities, including banks
and other financial institutions, who have sold the fund's shares
under special arrangements in connection with FDC's sales activities;
11. to shares purchased by contributions and exchanges to the
following prototype or prototype-like retirement plans sponsored by
FMR Corp. or FMR and that are marketed and distributed directly to
plan sponsors or participants without any intervention or assistance
from any intermediary distribution channel: The Fidelity Traditional
IRA, The Fidelity Roth IRA, The Fidelity Roth Conversion IRA, The
Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity
SIMPLE IRA, The Fidelity Retirement Plan, Fidelity Defined Benefit
Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The
Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers,
and The CORPORATEplan for Retirement (Profit Sharing and Money
Purchase Plan);
12. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains
all of its mutual fund assets in Fidelity mutual funds, provided the
plan executes a Fidelity non-prototype sales charge waiver request
form confirming its qualification;
13. to shares purchased by a registered investment adviser (RIA) for
his or her discretionary accounts, provided he or she executes a
Fidelity RIA load waiver agreement which specifies certain aggregate
minimum and operating provisions. This waiver is available only for
shares purchased directly from Fidelity, without a broker, unless
purchased through a brokerage firm which is a correspondent of
National Financial Services Corporation (NFSC). The waiver is
unavailable, however, if the RIA is part of an organization
principally engaged in the brokerage business, unless the brokerage
firm in the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution or bank trust
department for its non-discretionary, non-retirement fiduciary
accounts, provided it executes a Fidelity Trust load waiver agreement
which specifies certain aggregate minimum and operating provisions.
This waiver is available only for shares purchased either directly
from Fidelity or through a bank-affiliated broker, and is unavailable
if the trust department or institution is part of an organization not
principally engaged in banking or trust activities.
A fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction for
some purchases made directly with Fidelity as noted in the prospectus,
in connection with investments in other Fidelity funds. This includes
reductions for investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed above.
On October 12, 1990, each of Canada Fund, Europe Fund and Pacific
Basin Fund changed its sales charge policy from a 2% sales charge upon
purchase and a 1% deferred sales charge upon redemption, to a 3% sales
charge upon purchase. If you purchased your shares prior to that date,
when you redeem those shares a deferred sales charge of 1% of the
redemption amount will be deducted.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing each fund's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.

DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund invests significantly in
foreign securities, corporate shareholders should not expect fund
dividends to qualify for the dividends-received deduction. Short-term
capital gains are taxable as dividends, but do not qualify for the
dividends-received deduction.
CAPITAL GAINS DISTRIBUTIONS. Each fund's capital gains
distributions are federally taxable to shareholders at a rate based
generally on the length of time the securities on which the gain was
realized were held, regardless of the length of time those shares on
which the distribution is received have been held.
As of October 31, 1998 , ___ had a capital loss carryforward
aggregating approximately $____. This loss carryforward, of which
$___, $___, and $___will expire on October 31, 199_, ____, and ____ ,
respectively, is available to offset future capital gains.
RETURNS OF CAPITAL. If a fund's distributions exceed its
taxable income and capital gains realized during a taxable year, all
or a portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may
withhold taxes on dividends and interest earned by a fund with respect
to foreign securities. Foreign governments may also impose taxes on
other payments or gains with respect to foreign securities. If, at the
close of its fiscal year, more than 50% of a fund's total assets is
invested in securities of foreign issuers, the fund may elect to pass
through eligible foreign taxes paid and thereby allow shareholders to
take a deduction or, if they meet certain holding period requirements
with respect to fund shares, a credit on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the
Internal Revenue Code so that it will not be liable for federal
tax on income and capital gains distributed to shareholders. In order
to qualify as a regulated investment company, and avoid being subject
to federal income or excise taxes at the fund level, each fund intends
to distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal
income taxes, shareholders may be subject to state and local taxes on
fund distributions, and shares may be subject to state and local
personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax
situation.

TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates The business address of each Trustee,
Member of the Advisory Board, and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box
9235, Boston, Massachusetts 02205-9235. Those Trustees who are
"interested persons" by virtue of their affiliation with either the
trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d ( 68 ), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD ( 57 ), Member of the Advisory Board (1997), is
Vice Chairman and a Member of the Board of Directors of FMR Corp.
(1997) and President of Fidelity Personal Investments and Brokerage
Group (1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX ( 66 ), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS ( 66 ), Trustee. Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES ( 55 ), Trustee (1997), is a consultant, author,
and lecturer (1993). Mr. Gates was Director of the Central
Intelligence Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates
served as Assistant to the President of the United States and Deputy
National Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America.
E. BRADLEY JONES (70 ), Trustee. Prior to his retirement in
1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and
replacement products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK ( 65) , Trustee, is Executive-in-Residence (1995)
at Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of National Arts Stabilization Inc., Chairman of
the Board of Trustees of the Greenwich Hospital Association, Director
of the Yale-New Haven Health Services Corp. (1998), a Member of the
Public Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
*PETER S. LYNCH (55) , Trustee, is Vice Chairman and Director of
FMR. Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (65) , Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (70), Trustee and Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group
(strategic advisory services). Mr. McDonough is a Director of York
International Corp. (air conditioning and refrigeration), Commercial
Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products,
1996), and Associated Estates Realty Corporation (a real estate
investment trust, 1993). Mr. McDonough served as a Director of
ACME-Cleveland Corp. (metal working, telecommunications, and
electronic products) from 1987-1996 and Brush-Wellman Inc. (metal
refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board,
of Lexmark International, Inc. (office machines, 1991). Prior to 1991,
he held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of
various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A.
Hanna Company (chemicals, 1993), Imation Corp. (imaging and
information storage, 1997).
*ROBERT C. POZEN (52), Trustee (1997) and Senior Vice
President, is also President and a Director of FMR (1997); and
President and a Director of Fidelity Investments Money Management,
Inc. (1998), Fidelity Management & Research (U.K.) Inc. (1997), and
Fidelity Management & Research (Far East) Inc. (1997). Previously, Mr.
Pozen served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (70), Trustee, is President of The Wales
Group, Inc. (management and financial advisory services). Prior to
retiring in 1987, Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company), and Chairman and
Chief Executive Officer of The First National Bank of Atlanta and
First Atlanta Corporation (bank holding company). He is currently a
Director of ConAgra, Inc. (agricultural products), Georgia Power
Company (electric utility), National Life Insurance Company of
Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants,
1992).
RICHARD A. SPILLANE, JR. (47), is Vice President of certain
Equity Funds and Senior Vice President of FMR (1997). Since joining
Fidelity, Mr. Spillane is Chief Investment Officer for Fidelity
International, Limited. Prior to that position, Mr. Spillane served as
Director of Research.
PATRICIA SATTERTHWAIT E (39), Vice President, Latin America Fund
(1993), is a vice president of FMR.
KEVIN McCARE Y (38), Vice President, Europe Capital Appreciation
Fund (1993), is an employee of FMR.
ALLAN LIU (37), Vice President, Southeast Asia fund (1993), is
an employee of FMR.
SHIGEKI MAKINO (32), Vice President, Japan Fund (1994), and
Pacific Basin Fund (1996), is an employee of FMR.
DAVID STEWART (38), Vice President, Emerging Markets Fund (1997),
is an employee of FMR.
ERIC D. ROITER (50), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
JOHN H. COSTELLO (52), Assistant Treasurer, is an employee of
FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an
employee of FMR (1994). Prior to becoming Assistant Treasurer of the
Fidelity funds, Mr. Rush was Chief Compliance Officer of FMR Corp.
(1993-1994) and Chief Financial Officer of Fidelity Brokerage
Services, Inc. (1990-1993).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended October 31, 1998 , or
calendar year ended December 31, 1997, as applicable.

COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREG J. Gary Ralph F. Cox Phyllis Burke Davis Robert M. Gates *** Edward
ATE Burkhead** C.
COMPEN Johnson
SATION 3d**
FROM A
FUND

Canada $ $ $ $ $
Fund B, C,
+

Emerging $ $ $ $ $
Markets
Fund B, D,
+

Europe $ $ $ $ $
Fund B, E,
+

Europe $ $ $ $ $
Capital
Appreciati
on Fund C
B, F, +

France $ $ $ $ $
Fund B, E,
+

Germany $ $ $ $ $
Fund B, E,
+

Hong $ $ $ $ $
Kong and
China
Fund B, E,
+

Japan $ $ $ $ $
Fund B, E,
+

Japan $ $ $ $ $
Small
Companie
s Fund B,
E, +

Latin $ $ $ $ $
America
Fund B, E,
+

Nordic $ $ $ $ $
Fund B, E,
+

Pacific $ $ $ $ $
Basin
Fund B, E,
+

Southeast $ $ $ $ $
Asia Fund
B, E, +

United $ $ $ $ $
Kingdom
Fund B, E,
+

TOTAL $ $ $ $ $
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREG E. Bradley Jones Donald J. Kirk Peter S. William O. McCoy **** Gerald C. McDonough
ATE Lynch
COMPEN **
SATION
FROM A
FUND

Canada $ $ $ $ $
Fund B, C,
+

Emerging $ $ $ $ $
Markets
Fund B, D,
+

Europe $ $ $ $ $
Fund B, E,
+

Europe $ $ $ $ $
Capital
Appreciati
on Fund C
B, F, +

France $ $ $ $ $
Fund B, E,
+

Germany $ $ $ $ $
Fund B, E,
+

Hong $ $ $ $ $
Kong and
China
Fund B, E,
+

Japan $ $ $ $ $
Fund B, E,
+

Japan $ $ $ $ $
Small
Companie
s Fund B,
E, +

Latin $ $ $ $ $
America
Fund B, E,
+

Nordic $ $ $ $ $
Fund B, E,
+

Pacific $ $ $ $ $
Basin
Fund B, E,
+

Southeast $ $ $ $ $
Asia Fund
B, E, +

United $ $ $ $ $
Kingdom
Fund B, E,
+

TOTAL $ $ $ $ $
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

</TABLE>

AGGREG Marvin L. Mann Robert C. Pozen ** Thomas R. Williams
ATE
COMPEN
SATION
FROM A
FUND

Canada $ $ $
Fund B, C,
+

Emerging $ $ $
Markets
Fund B, D,
+

Europe $ $ $
Fund B, E,
+

Europe $ $ $
Capital
Appreciati
on Fund C
B, F, +

France $ $ $
Fund B, E,
+

Germany $ $ $
Fund B, E,
+

Hong $ $ $
Kong and
China
Fund B, E,
+

Japan $ $ $
Fund B, E,
+

Japan $ $ $
Small
Companie
s Fund B,
E, +

Latin $ $ $
America
Fund B, E,
+

Nordic $ $ $
Fund B, E,
+

Pacific $ $ $
Basin
Fund B, E,
+

Southeast $ $ $
Asia Fund
B, E, +

United $ $ $
Kingdom
Fund B, E,
+

TOTAL $ $ $
COMPE
NSATIO
N FROM
THE
FUND
COMPLE
X*, A

* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
***Mr. Gates was appointed to the Board of Trustees of Fidelity
Investment Trust effective March 1, 1997. Mr. Gates was elected to the
Board of Trustees of Fidelity Investment Trust on September 17, 1997.
**** Mr. McCoy was appointed to the Board of Trustees of Fidelity
Investment Trust effective January 1, 1997. Mr. McCoy was elected to
the Board of Trustees of Fidelity Investment Trust on September 17,
1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox, $_;
Phyllis Burke Davis, $__; Robert M. Gates, $__; E. Bradley Jones, $__;
Donald J. Kirk, $__; William O. McCoy, $__; Gerald C. McDonough, $__;
Marvin L. Mann, $; and Thomas R. Williams, $__. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $___.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk,
$__;William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann,
$__; and Thomas R. Williams, $__.
D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk,
$__;William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann,
$__; and Thomas R. Williams, $__.
E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.
F The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.
G Certain of the non-interested Trustees' aggregate compensation from
a fund includes accrued voluntary deferred compensation as follows:___

Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of October 31, 1998 , approximately __% of _____'s total
outstanding shares was held by FMR and FMR affiliates. FMR Corp. is
the ultimate parent company of FMR and these FMR affiliates. By virtue
of his ownership interest in FMR Corp., as described in the "Control
of Investment Advisers" section on page ___, Mr. Edward C. Johnson 3d,
President and Trustee of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's deemed ownership of ______'s shares, the Trustees,
Members of the Advisory Board, and officers of the funds owned, in the
aggregate, less than __% of each fund's total outstanding shares.
As of October 31, 1998 , the Trustees, Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than
__% of each fund's total outstanding shares.
As of October 31, 1998 , the following owned of record or
beneficially 5% or more (up to and including 25%) of each fund's
outstanding shares:
[INSERT BENEFICIAL OWNERSHIP NUMBERS HERE.]
[A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.]

CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
FMR U . K . and FMR Far East. The voting common stock of
FMR Corp. is divided into two classes. Class B is held predominantly
by members of the Edward C. Johnson 3d family and is entitled to 49%
of the vote on any matter acted upon by the voting common stock. Class
A is held predominantly by non-Johnson family member employees of FMR
Corp. and its affiliates and is entitled to 51% of the vote on any
such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under
which all Class B shares will be voted in accordance with the majority
vote of Class B shares. Under the 1940 Act, control of a company is
presumed where one individual or group of individuals owns more than
25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the
shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect
to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of FIIA, FIJ, and FIIA(U.K.)L.
Edward C. Johnson 3d, Johnson family members, and various trusts for
the benefit of the Johnson family own, directly or indirectly, more
than 25% of the voting common stock of FIL. FIL provides investment
advisory services to non-U.S. investment companies and institutional
investors investing in securities throughout the world.
Fidelity investment personnel may invest in securities for their
own investment accounts pursuant to a code of ethics that sets
forth all employees' fiduciary responsibilities regarding the funds,
establishes procedures for personal investing and restricts certain
transactions. For example, all personal trades in most securities
require pre-clearance, and participation in initial public offerings
is prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.

MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, as applicable, each fund pays all of its
expenses that are not assumed by those parties. Each fund pays for the
typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor
and non-interested Trustees. Each fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by each fund include interest, taxes, brokerage commissions, the
fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under
federal securities laws and making necessary filings under state
securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, Emerging Markets Fund, France Fund, Germany Fund, Hong Kong
and China Fund, Japan Small Companies Fund, Latin America Fund, Nordic
Fund, and United Kingdom Fund each pays FMR a monthly management fee
which has two components: a group fee rate and an individual fund fee
rate.
For the services of FMR under the management contract, Canada Fund,
Europe Fund, Europe Capital Appreciation Fund, Japan Fund, Pacific
Basin Fund, and Southeast Asia Fund each pays FMR a monthly management
fee which has two components: a basic fee, which is the sum of a group
fee rate and an individual fund fee rate, and a performance adjustment
based on a comparison of each fund's performance to that of its
performance index.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE EFFECTIVE ANNUAL FEE
SCHEDULE RATES

Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate

0 - $3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3249

36 - 42 .3400 250 .3219

42 - 48 .3350 275 .3190

48 - 66 .3250 300 .3163

66 - 84 .3200 325 .3137

84 - 102 .3150 350 .3113

102 - 138 .3100 375 .3090

138 - 174 .3050 400 .3067

174 - 210 .3000 425 .3046

210 - 246 .2950 450 .3024

246 - 282 .2900 475 .3003

282 - 318 .2850 500 .2982

318 - 354 .2800 525 .2962

354 - 390 .2750 550 .2942

390 - 426 .2700

426 - 462 .2650

462 - 498 .2600

498 - 534 .2550

Over 534 .2500

</TABLE>

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized r ates on the left. For example, the effective annual
fee rate at $___ billion of group net assets - the approximate level
for October 31, 1998 - was __%, which is the weighted average
of the respective fee rates for each level of group net assets up to
$__ billion.
The individual fund fee rate for Emerging Markets Fund, France Fund,
Germany Fund, Hong Kong and China Fund, Japan Small Companies Fund,
Latin America Fund, Nordic Fund, and United Kingdom Fund is 0.45%.
Based on the average group net assets of the funds advised by FMR for
October 31, 1998 , each fund's annual management fee rate would
be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management
Fee Rate

Emerging Markets 0.___% + 0.45% = 0.___%
Fund, France Fund,
Germany Fund, Hong
Kong and China Fund,
Japan Small
Companies Fund, Latin
America Fund, Nordic
Fund, and United
Kingdom Fund

</TABLE>

The individual fund fee rate for Canada Fund, Europe Fund, Europe
Capital Appreciation Fund, Japan Fund, Pacific Basin Fund, and
Southeast Asia Fund is 0.45% . Based on the average group net assets
of the funds advised by FMR for October 31, 1998 , each fund's
annual basic fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate

Canada Fund, Europe 0.___% + 0.45% = 0.___%
Fund, Europe Capital
Appreciation Fund,
Japan Fund, Pacific
Basin Fund, and
Southeast Asia Fund

</TABLE>

One-twelfth of the basic fee rate or management fee rate, as
applicable, is applied to each fund's average net assets for the
month, giving a dollar amount which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of Canada
Fund, Europe Fund, Europe Capital Appreciation Fund, Japan Fund,
Pacific Basin Fund, and Southeast Asia Fund is subject to upward or
downward adjustment, depending upon whether, and to what extent, each
fund's investment performance for the performance period exceeds, or
is exceeded by, the record of the Toronto Stock Exchange (TSE) 300,
Morgan Stanley Capital International Europe Index, Morgan Stanley
Capital International Europe Index, Tokyo Stock Exchange Index, Morgan
Stanley Capital International Pacific Index, and Morgan Stanley
Capital International Combined Far East ex-Japan Free Index,
respectively, (the Index) over the same period. Starting with the
twelfth month, the performance adjustment takes effect. Each month
subsequent to the twelfth month, a new month is added to the
performance period until the performance period includes 36 months.
Thereafter, the performance period consists of the most recent month
plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(up to a maximum difference (plus/minus)10.00) is multiplied by a
performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee.
The maximum annualized adjustment rate is (plus/minus)0.20% of a
fund's average net assets over the performance period.
A fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's shares at the NAV as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on a fund's
performance compared to the investment record of the applicable Index,
the controlling factor is not whether the fund's performance is up or
down per se, but whether it is up or down more or less than the record
of the Index. Moreover, the comparative investment performance of each
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
For each of Morgan Stanley Capital International Europe Index, Morgan
Stanley Capital International Pacific Index, the index returns for
periods prior to January 1, 1997 are adjusted for tax withholding at
non-treaty rates. The index returns for periods after January 1, 1997
are adjusted for tax withholding at treaty rates applicable to
U.S.-based mutual funds organized as Massachusetts business trusts.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by Canada Fund, Europe Fund, Europe Capital Appreciation Fund,
Japan Fund, Pacific Basin Fund, and Southeast Asia Fund.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Performance Adjustment Management Fees Paid to FMR
Ended October
31

Canada Fund 1998 $ $ *

1997 $ $ *

1996 $ $ *

Emerging 1998 $ $
Markets Fund

1997 $ $

1996 $ $

Europe Fund 1998 $ $ *

1997 $ $ *

1996 $ $ *

Europe Capital 1998 $ $ *
Appreciation
Fund

1997 $ $ *

1996 $ $ *

France Fund 1998 $ $

1997 $ $

1996 $ $

Germany Fund 1998 $ $

1997 $ $

1996 $ $

Homg Kong 1998 $ $
and China Fund

1997 $ $

1996 $ $

Japan Fund 1998 $ $ *

1997 $ $ *

1996 $ $ *

Japan Small 1998 $ $
Companies
Fund

1997 $ $

1996 $ $

Latin America 1998 $ $
Fund

1997 $ $

1996 $ $

Nordic Fund 1998 $ $

1997 $ $

1996 $ $

Pacific Basin 1998 $ $ *
Fund

1997 $ $ *

1996 $ $ *

Southeast Asia 1998 $ $ *
Fund

1997 $ $ *

1996 $ $ *

United 1998 $ $
Kingdom Fund

1997 $ $

1996 $ $

</TABLE>

* Including the amount of the performance adjustment.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Periods of
Expense
Limitation

Name of Fund From To Aggregate Fiscal Year Management Amount of
Operating Ended Fee Before Management
Expense Reimbursement Fee
Limitation Reimbursement

France Nov. 1, 1997 Oct. 31, 1998 2.0% 1998 $ $

Germany Nov. 1, 1997 Oct. 31, 1998 2.0% 1998 $ $

United Kingdom Nov. 1, 1997 Oct. 31, 1998 2.0% 1998 $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Periods of
Expense
Limitation

Name of Fund From To Aggregate Fiscal Year Management Amount of
Operating Ended Fee Before Management
Expense Reimbursement Fee
Limitation Reimbursement

France Nov. 1, 1996 Oct. 31, 1997 2.0% 1997 $ $

Germany Nov. 1, 1996 Oct. 31, 1997 2.0% 1997 $ $

Nordic Nov. 1, 1996 Oct. 31, 1997 2.0% 1997 $ $

United Kingdom Nov. 1, 1996 Oct. 31, 1997 2.0% 1997 $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Periods of
Expense
Limitation

Name of Fund From To Aggregate Fiscal Year Management Amount of
Operating Ended Fee Before Management
Expense Reimbursement Fee
Limitation Reimbursement

France Nov. 1, 1995 Oct. 31, 1996 2.0% 1996 $ $

Germany Nov. 1, 1995 Oct. 31, 1996 2.0% 1996 $ $

United Kingdom Nov. 1, 1995 Oct. 31, 1996 2.0% 1996 $ $

</TABLE>

SUB-ADVISERS. On behalf of the funds, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
On behalf of each fund, for providing discretionary investment
management and executing portfolio transactions, the sub-advisers are
compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a
fee equal to 50% of its monthly management fee (including any
performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For providing investment advice and research services, fees paid to
the sub-advisers by FMR on behalf of ______ for the past three fiscal
years are shown in the table below.

Fiscal Year Ended FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
October 31

Canada Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Emerging
Markets Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Europe Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Europe
Capital
Appreciation
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

France Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Germany
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Hong Kong
and China
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Japan Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Japan Small
Companies
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Latin America
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Nordic Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Pacific Basin
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Southeast
Asia Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

United
Kingdom
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Currently, FIIA is primarily responsible for choosing investments for
choosing investments for Southeast Asia Fund, Hong Kong and China
Fund, Japan Fund, and Pacific Basin Fund. Currently, FIIA (U.K.) L is
primarily responsible for choosing investments for Emerging Markets
Fund, Europe Fund, France Fund, Germany Fund, Nordic Fund, and United
Kingdom Fund. Currently, FIJ is primarily responsible for choosing
investments for Japan Small Companies Fund.
For discretionary investment management and execution of portfolio
transactions, fees paid to FMR U.K., FMR Far East, FIIA, FIIA (U.K.)
L, and FIJ for the past three fiscal years are shown in the table
below.

Fiscal Year Ended FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
October 31

Canada Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Emerging
Markets Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Europe Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Europe
Capital
Appreciation
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

France Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Germany
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Hong Kong
and China
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Japan Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Japan Small
Companies
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Latin America
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Nordic Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Pacific Basin
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

Southeast
Asia Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

United
Kingdom
Fund

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Sales Charge Deferred Sales
Revenue Charge Revenue

Fiscal Year Amount Paid to Amount Retained Amount Paid to Amount Retained
Ended FDC by FDC FDC by FDC

Canada Fund October 31 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Emerging 1998 $ $ $ $
Markets Fund

1997 $ $ $ $

1996 $ $ $ $

Europe Fund 1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Europe Capital 1998 $ $ $ $
Appreciation
Fund

1997 $ $ $ $

1996 $ $ $ $

France Fund 1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Germany Fund 1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Hong Kong and 1998 $ $ $ $
China Fund

1997 $ $ $ $

1996 $ $ $ $

Japan Fund 1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Japan Small 1998 $ $ $ $
Companies
Fund

1997 $ $ $ $

1996 $ $ $ $

Latin America 1998 $ $ $ $
Fund

1997 $ $ $ $

1996 $ $ $ $

Nordic Fund 1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

Pacific Basin 1998 $ $ $ $
Fund

1997 $ $ $ $

1996 $ $ $ $

Southeast Asia 1998 $ $ $ $
Fund

1997 $ $ $ $

1996 $ $ $ $

United 1998 $ $ $ $
Kingdom Fund

1997 $ $ $ $

1996 $ $ $ $

</TABLE>

TRANSFER AND SERVICE AGENT AGREEMENTS
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in a qualified
state tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's assets
that is invested in a fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month. The annual fee rates for pricing and bookkeeping services are
.0750% of the first $500 million of average net assets and .0375% of
average net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 and a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.

Fund 1998 1997 1996

Canada Fund $ $ $

Emerging $ $ $
Markets Fund

Europe Fund $ $ $

Europe Capital $ $ $
Appreciation
Fund

France Fund $ $ $

Germany Fund $ $ $

Hong Kong and $ $ $
China Fund

Japan Fund $ $ $

Japan Small $ $ $
Companies

Latin America $ $ $
Fund

Nordic Fund $ $ $

Pacific Basin $ $ $
Fund

Southeast Asia $ $ $
Fund

United $ $ $
Kingdom Fund

For administering each fund's securities lending program, FSC receives
fees based on the number and duration of individual securities loans.
Securities lending fees paid by the funds to FSC for the past three
fiscal years are shown in the table below.

Fund 1998 1997 1996

Canada Fund $ $ $

Emerging $ $ $
Markets Fund

Europe Fund $ $ $

Europe Capital $ $ $
Appreciation
Fund

France Fund $ $ $

Germany Fund $ $ $

Hong Kong and $ $ $
China Fund

Japan Fund $ $ $

Japan Small $ $ $
Companies

Latin America $ $ $
Fund

Nordic Fund $ $ $

Pacific Basin $ $ $
Fund

Southeast Asia $ $ $
Fund

United $ $ $
Kingdom Fund

DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Canada Fund, Emerging Markets Fund,
Europe Fund, Europe Capital Appreciation Fund, France Fund, Germany
Fund, Hong Kong and China Fund, Japan Fund, Japan Small Companies
Fund, Latin America Fund, Nordic Fund, Pacific Basin Fund, Southeast
Asia Fund, and United Kingdom Fund are funds of Fidelity Investment
Trust, an open-end management investment company organized as a
Massachusetts business trust on April 20, 1984. On November 3, 1986,
Fidelity Investment Trust changed its name from Fidelity Overseas Fund
to Fidelity Investment Trust. Currently, there are 19 funds in
Fidelity Investment Trust: Fidelity Canada Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe
Fund, Fidelity Europe Capital Appreciation Fund, Fidelity France Fund,
Fidelity Germany Fund, Fidelity Hong Kong and China Fund, Fidelity
International Growth & Income Fund, Fidelity International Value Fund,
Fidelity Japan Fund, Fidelity Japan Small Companies Fund, Fidelity
Latin America Fund, Fidelity Nordic Fund, Fidelity Overseas Fund,
Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, Fidelity
United Kingdom Fund, and Fidelity Worldwide Fund. The Trustees are
permitted to create additional funds in the trust.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust provides that the trust shall not have any
claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust shall include a provision limiting the
obligations created thereby to the trust and its assets.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.
The shares have no preemptive or share conversion rights. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or any of its funds may be terminated upon the sale of its
assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by a vote of
shareholders of the trust or the fund. In the event of the dissolution
or liquidation of the trust, shareholders of each of its funds are
entitled to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a
fund, shareholders of that fund are entitled to receive the underlying
assets of the fund available for distribution.
CUSTODIAN. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, is custodian of the assets of Emerging Markets Fund, Europe
Fund, Europe Capital Appreciation Fund, Japan Fund, Pacific Basin
Fund, and Southeast Asia Fund. Brown Brothers Harriman & Co., 40 Water
Street, Boston, Massachusetts is custodian of the assets of Canada
Fund, France Fund, Germany Fund, Hong Kong and China Fund, Japan Small
Companies Fund, Latin America Fund, Nordic Fund and United Kingdom
Fund. Each custodian is responsible for the safekeeping of a fund's
assets and the appointment of any subcustodian banks and clearing
agencies. The Bank of New York and The Chase Manhattan Bank, each
headquartered in New York, also may serve as special purpose
custodians of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. The Boston branch of Canada Fund's, France
Fund's, Germany Fund's, Hong Kong and China Fund's, Japan Small
Companies Fund's, Latin America Fund's, Nordic Fund's and United
Kingdom Fund's custodian leases its office space from an affiliate of
FMR at a lease payment which, when entered into, was consistent with
prevailing market rates. Transactions that have occurred to date
include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were
not influenced by existing or potential custodial or other fund
relationships.
AUDITOR. _________________________ serves as the funds' independent
accountant. The auditor examines financial statements for the funds
and provides other audit, tax, and related services.

FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended October 31, 1998 , and reports of the auditor,
are included in the funds' Annual Report and are incorporated herein
by reference.

APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design and Fidelity
Focus(registered trademark) are registered trademarks of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.

PART C. OTHER INFORMATION

Item 23. Exhibits
(a)(1) Restated Declaration of Trust, dated February 16, 1995, is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 58.
(2) Supplement, dated October 15, 1997, to the Restated
Declaration of Trust is incorporated herein by reference to Exhibit
1(b) of Post-Effective Amendment No. 73.
(b) By-Laws of the Trust are incorporated herein by reference to
Exhibit 2 of Fidelity Union Street Trust Post-Effective Amendment No.
87 (File No. 2-50318).
(c) Not applicable.
(d)(1) Management Contract, dated October 1, 1997, between Fidelity
Diversified International Fund and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(a) of
Post-Effective Amendment No. 73.
(2) Management Contract, dated October 1, 1997, between Fidelity
International Growth & Income Fund and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 73.
(3) Management Contract, dated October 1, 1997, between Fidelity
International Value Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(l) of Post-Effective
Amendment No. 73.
(4) Management Contract, dated October 1, 1997, between Fidelity
Overseas Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(r) of Post-Effective
Amendment No. 73.
(5) Management Contract, dated October 1, 1997, between Fidelity
Worldwide Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(x) of Post-Effective
Amendment No. 73.
(6) Management Contract, dated October 1, 1997, between Fidelity
Canada Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(dd) of Post-Effective Amendment No.
73.
(7) Management Contract, dated October 1, 1997, between Fidelity
Europe Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(ii) of Post-Effective Amendment No.
73.
(8) Management Contract, dated October 1, 1997, between Fidelity
Europe Capital Appreciation Fund and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(nn) of
Post-Effective Amendment No. 73.
(9) Management Contract, dated October 1, 1997, between Fidelity Japan
Fund and Fidelity Management & Research Company is incorporated herein
by reference to Exhibit 5(ss) of Post-Effective Amendment No. 73.
(10) Management Contract, dated October 1, 1997, between Fidelity
Pacific Basin Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(yy) of Post-Effective
Amendment No. 73.
(11) Management Contract, dated October 1, 1997, between Fidelity
Emerging Markets Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(eee) of Post-Effective
Amendment No. 73.
(12) Management Contract, dated October 1, 1997, between Fidelity
Latin America Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(kkk) of Post-Effective
Amendment No. 73.
(13) Management Contract, dated October 1, 1997, between Fidelity
Southeast Asia Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(ppp) of Post-Effective
Amendment No. 73.
(14) Management Contract, dated October 1, 1997, between Fidelity
France Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(hhhh) of Post-Effective
Amendment No. 73.
(15) Management Contract, dated October 1, 1997, between Fidelity
Germany Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(mmmm) of Post-Effective
Amendment No. 73.
(16) Management Contract, dated October 1, 1997, between Fidelity
United Kingdom Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(rrrr) of Post-Effective
Amendment No. 73.
(17) Management Contract, dated October 1, 1997, between Fidelity
Japan Small Companies Fund and Fidelity Management & Research Company
is incorporated herein by reference to Exhibit 5(wwww) of
Post-Effective Amendment No. 73.
(18) Management Contract, dated October 1, 1997, between Fidelity Hong
Kong and China Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(ccccc) of Post-Effective
Amendment No. 73.
(19) Management Contract, dated October 1, 1997, between Fidelity
Nordic Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(iiiii) of Post-Effective Amendment
No. 73.
(20) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Diversified International Fund is
incorporated herein by reference to Exhibit 5(p) of Post-Effective
Amendment No. 51.
(21) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Diversified International Fund is
incorporated herein by reference to Exhibit 5(nn) of Post-Effective
Amendment No. 51.
(22) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Diversified
International Fund is incorporated herein by reference to Exhibit
5(yyy) of Post-Effective Amendment No. 51.
(23) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Diversified International Fund is incorporated
herein by reference to Exhibit 5(e) of Post-Effective Amendment No.
74.
(24) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity International Growth & Income Fund is
incorporated herein by reference to Exhibit 5(f) of Post-Effective
Amendment No. 57.
(25) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity International Growth & Income Fund
is incorporated herein by reference to Exhibit 5(g) of Post-Effective
Amendment No. 57.
(26) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity International
Growth & Income Fund is incorporated herein by reference to Exhibit
5(h) of Post-Effective Amendment No. 57.
(27) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Growth & Income Fund is
incorporated herein by reference to Exhibit 5(i) of Post-Effective
Amendment No. 57.
(28) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity International Growth & Income Fund is
incorporated herein by reference to Exhibit 5(k) of Post-Effective
Amendment No. 74.
(29) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity International Value
Fund is incorporated herein by reference to Exhibit 5(k) of
Post-Effective Amendment No. 57.
(30) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity International Value Fund is
incorporated herein by reference to Exhibit 5(l) of Post-Effective
Amendment No. 57.
(31) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity International
Value Fund is incorporated herein by reference to Exhibit 5(m) of
Post-Effective Amendment No. 64.
(32) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity International Value Fund is
incorporated herein by reference to Exhibit 5(n) of Post-Effective
Amendment No. 57.
(33) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity Investments Japan
Limited on behalf of Fidelity International Value Fund is incorporated
herein by reference to Exhibit 5(o) of Post-Effective Amendment No.
57.
(34) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Overseas Fund is incorporated herein
by reference to Exhibit 5(q) of Post-Effective Amendment No. 57.
(35) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) on behalf of Fidelity Overseas Fund is incorporated herein by
reference to Exhibit 5(r) of Post-Effective Amendment No. 57.
(36) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Overseas Fund
is incorporated herein by reference to Exhibit 5(s) of Post-Effective
Amendment No. 57.
(37) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Overseas Fund is incorporated herein by
reference to Exhibit 5(t) of Post-Effective Amendment No. 57.
(38) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Overseas Fund is incorporated herein by
reference to Exhibit 5(w) of Post-Effective Amendment No. 74.
(39) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Worldwide Fund is incorporated herein
by reference to Exhibit 5(v) of Post-Effective Amendment No. 57.
(40) Sub-Advisory Agreement dated, April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Worldwide Fund is incorporated
herein by reference to Exhibit 5(w) of Post-Effective Amendment No.
57.
(41) Sub-Advisory Agreement dated, March 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Worldwide
Fund is incorporated herein by reference to Exhibit 5(x) of
Post-Effective Amendment No. 57.
(42) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Worldwide Fund is incorporated herein
by reference to Exhibit 5(y) of Post-Effective Amendment No. 57.
(43) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Worldwide Fund is incorporated herein by
reference to Exhibit 5(cc) of Post-Effective Amendment No. 74.
(44) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Canada Fund is incorporated herein by
reference to Exhibit 5(aa) of Post-Effective Amendment No. 57.
(45) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Canada Fund is incorporated herein
by reference to Exhibit 5(bb) of Post-Effective Amendment No. 57.
(46) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Canada Fund
is incorporated herein by reference to Exhibit 5(cc) of Post-Effective
Amendment No. 57.
(47) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Canada Fund is incorporated herein by
reference to Exhibit 5(dd) of Post-Effective Amendment No. 57.
(48) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Europe Fund is incorporated herein by
reference to Exhibit 5(ff) of Post-Effective Amendment No. 57.
(49) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Europe Fund is incorporated herein
by reference to Exhibit 5(gg) of Post-Effective Amendment No. 57.
(50) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Europe Fund
is incorporated herein by reference to Exhibit 5(hh) of Post-Effective
Amendment No. 57.
(51) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Fund is incorporated herein by
reference to Exhibit 5(ii) of Post-Effective Amendment No. 57.
(52) Sub-Advisory Agreement, dated November 18, 1993, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Europe Capital
Appreciation Fund is incorporated herein by reference to Exhibit
5(dd) of Post- Effective Amendment No. 53.
(53) Sub-Advisory Agreement, dated November 18, 1993, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Europe Capital Appreciation
Fund is incorporated herein by reference to Exhibit 5(ss) of Post-
Effective Amendment No. 53.
(54) Sub-Advisory Agreement, dated November 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Europe
Capital Appreciation Fund is incorporated herein by reference to
Exhibit 5(ggg) of Post-Effective Amendment No. 55.
(55) Sub-Advisory Agreement, dated November 18, 1993, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Capital Appreciation Fund is
incorporated herein by reference to Exhibit 5(uuu) of Post-Effective
Amendment No. 55.
(56) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Japan Fund is incorporated herein by
reference to Exhibit 5(z) of Post-Effective Amendment No. 53.
(57) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Japan Fund is incorporated herein by
reference to Exhibit 5(oo) of Post Effective Amendment No. 53.
(58) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Japan Fund is
incorporated herein by reference to Exhibit 5(ccc) of Post-Effective
Amendment No. 55.
(59) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Japan Fund is incorporated herein by
reference to Exhibit 5(qqq) of Post-Effective Amendment No. 55.
(60) Sub-Advisory Agreement, dated April 12, 1994, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Japan Fund is incorporated herein by reference
to Exhibit No. 5(ss)(i) of Post-Effective Amendment No. 57.
(61) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Pacific Basin Fund is incorporated
herein by reference to Exhibit 5(uu) of Post-Effective Amendment No.
57.
(62) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Pacific Basin Fund is incorporated
herein by reference to Exhibit 5(vv) of Post-Effective Amendment No.
57.
(63) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Pacific Basin
Fund is incorporated herein by reference to Exhibit 5(ww) of
Post-Effective Amendment No. 57.
(64) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Pacific Basin Fund is incorporated
herein by reference to Exhibit 5(xx) of Post-Effective Amendment No.
57.
(65) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Pacific Basin Fund is incorporated herein by
reference to Exhibit 5(ddd) of Post-Effective Amendment No. 74.
(66) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Emerging Markets Fund is incorporated
herein by reference to Exhibit 5(zz) of Post-Effective Amendment No.
57.
(67) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Emerging Markets Fund is
incorporated herein by reference to Exhibit 5(aaa) of Post-Effective
Amendment No. 57.
(68) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Emerging
Markets Fund is incorporated herein by reference to Exhibit 5(bbb) of
Post-Effective Amendment No. 57.
(69) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Emerging Markets Fund is incorporated
herein by reference to Exhibit 5(ccc) of Post-Effective Amendment No.
57.
(70) Sub-Advisory Agreement, dated October 1, 1997, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Emerging Markets Fund is incorporated herein by
reference to Exhibit 5(jjj) of Post-Effective Amendment No. 74.
(71) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Latin America Fund is incorporated
herein by reference to Exhibit 5(z) of Post-Effective Amendment No.
48.
(72) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Latin America Fund is incorporated
herein by reference to Exhibit 5(nn) of Post-Effective Amendment No.
48.
(73) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Latin America
Fund is incorporated herein by reference to Exhibit 5(ddd) of
Post-Effective Amendment No. 55.
(74) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Latin America Fund is incorporated
herein by reference to Exhibit 5(rrr) of Post-Effective Amendment No.
51.
(75) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Southeast Asia Fund is incorporated
herein by reference to Exhibit 5(aa) of Post-Effective Amendment No.
48.
(76) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Southeast Asia Fund is incorporated
herein by reference to Exhibit 5(oo) of Post-Effective Amendment No.
48.
(78) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Southeast
Asia Fund is incorporated herein by reference to Exhibit 5(eee) of
Post-Effective Amendment No. 55.
(79) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Southeast Asia Fund is incorporated
herein by reference to Exhibit 5(sss) of Post-Effective Amendment No.
51.
(80) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Southeast Asia Fund is incorporated herein by
reference to Exhibit 5(nnn) of Post-Effective Amendment No. 57.
(81) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity France Fund is
incorporated herein by reference to Exhibit 5(gggg) of Post-Effective
Amendment No. 62.
(82) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity France Fund is incorporated
herein by reference to Exhibit 5(hhhh) of Post-Effective Amendment No.
62.
(83) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity France Fund
is incorporated herein by reference to Exhibit 5(iiii) of
Post-Effective Amendment No. 62.
(84) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity France Fund is incorporated
herein by reference to Exhibit 5(jjjj) of Post-Effective Amendment No.
62.
(85) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Germany Fund is
incorporated herein by reference to Exhibit 5(llll) of Post-Effective
Amendment No. 62.
(86) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Germany Fund is
incorporated herein by reference to Exhibit 5(mmmm) of Post-Effective
Amendment No. 62.
(87) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Germany Fund
is incorporated herein by reference to Exhibit 5(nnnn) of
Post-Effective Amendment No. 62
(88) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Germany Fund is incorporated
herein by reference to Exhibit 5(ffff) of Post-Effective Amendment No.
62.
(89) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity United Kingdom Fund is
incorporated herein by reference to Exhibit 5(qqqq) of Post-Effective
Amendment No. 62.
(90) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity United Kingdom Fund is
incorporated herein by reference to Exhibit 5(rrrr) of Post-Effective
Amendment No. 62.
(91) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity United
Kingdom Fund is incorporated herein by reference to Exhibit 5(ssss) of
Post-Effective Amendment No. 62.
(92) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity United Kingdom Fund is
incorporated herein by reference to Exhibit 5(ffff) of Post-Effective
Amendment No. 62.
(93) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Japan Small Companies
Fund is incorporated herein by reference to Exhibit 5(vvvv) of
Post-Effective Amendment No. 62.
(94) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Japan Small Companies Fund
is incorporated herein by reference to Exhibit 5(wwww) of
Post-Effective Amendment No. 62.
(95) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Japan Small
Companies Fund is incorporated herein by reference to Exhibit 5(xxxx)
of Post-Effective Amendment No. 62.
(96) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Japan Small Companies Fund
is incorporated herein by reference to Exhibit 5(yyyy) of
Post-Effective Amendment No. 62.
(97) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Investments Japan
Limited on behalf of Fidelity Japan Small Companies Fund is
incorporated herein by reference to Exhibit 5(zzzz) of Post-Effective
Amendment No. 66.
(98) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Hong Kong and China
Fund is incorporated herein by reference to Exhibit 5(bbbbb) of
Post-Effective Amendment No. 62.
(99) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Hong Kong and China Fund is
incorporated herein by reference to Exhibit 5(ccccc) of Post-Effective
Amendment No. 62.
(100) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Hong Kong and
China Fund is incorporated herein by reference to Exhibit 5(ddddd) of
Post-Effective Amendment No. 62.
(101) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Hong Kong and China Fund is
incorporated herein by reference to Exhibit 5(eeeee) of Post-Effective
Amendment No. 62.
(102) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Investments Japan
Limited on behalf of Fidelity Hong Kong and China Fund is incorporated
herein by reference to Exhibit 5(fffff) of Post-Effective Amendment
No. 66.
(103) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Nordic Fund is
incorporated herein by reference to Exhibit 5(hhhhh) of Post-Effective
Amendment No. 62.
(104) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Nordic Fund is incorporated
herein by reference to Exhibit 5(iiiii) of Post-Effective Amendment
No. 62.
(105) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Nordic Fund
is incorporated herein by reference to Exhibit 5(jjjjj) of
Post-Effective Amendment No. 62.
(106) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Nordic Fund is incorporated
herein by reference to Exhibit 5(kkkkk) of Post-Effective Amendment
No. 62.
(e) (1) General Distribution Agreement, between Fidelity Overseas
Fund, Fidelity Europe Fund, Fidelity Pacific Basin Fund, Fidelity
International Growth & Income Fund, Fidelity Canada Fund, dated May
19, 1990, between Fidelity Worldwide Fund, dated September 30, 1990,
between Fidelity Emerging Markets Fund (formerly "Fidelity
International Opportunities Fund"), and dated December 12, 1991
between Fidelity Diversified International Fund and Fidelity
Distributors Corporation are incorporated herein by reference to
Exhibit Nos. 6(a)(1-8) of Post-Effective Amendment No. 57.
(2) General Distribution Agreement between Fidelity Diversified
International Fund and Fidelity Distributors Corporation, dated
December 12, 1991, is incorporated herein by reference to Exhibit 6(k)
of Post-Effective Amendment No. 38.
(3) General Distribution Agreement between Fidelity Japan Fund and
Fidelity Distributors Corporation, dated July 16, 1992, is
incorporated herein by reference to Exhibit 6(l) of Post-Effective
Amendment No. 55.
(4) General Distribution Agreement between Fidelity Latin America Fund
and Fidelity Distributors Corporation, dated March 18, 1993, is
incorporated herein by reference to Exhibit 6(m) of Post-Effective
Amendment No. 55.
(5) General Distribution Agreement between Fidelity Southeast Asia
Fund and Fidelity Distributors Corporation, dated March 18, 1993, is
incorporated herein by reference to Exhibit 6(n) of Post-Effective
Amendment No. 55.
(6) General Distribution Agreement between Fidelity Europe Capital
Appreciation Fund and Fidelity Distributors Corporation, dated
November 18, 1993, is incorporated herein by reference to Exhibit 6(p)
of Post-Effective Amendment No. 55.
(7) General Distribution Agreement between Fidelity International
Value Fund and Fidelity Distributors Corporation, dated September 16,
1994, is incorporated herein by reference to Exhibit 6(l) of
Post-Effective Amendment No. 58.
(8) General Distribution Agreement between Fidelity France Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(m) of Post-Effective
Amendment No. 66.
(9) General Distribution Agreement between Fidelity Germany Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(n) of Post-Effective
Amendment No. 66.
(10) General Distribution Agreement between Fidelity United Kingdom
Fund and Fidelity Distributors Corporation, dated September 14, 1995,
is incorporated herein by reference to Exhibit 6(o) of Post-Effective
Amendment No. 66.
(11) General Distribution Agreement between Fidelity Japan Small
Companies Fund and Fidelity Distributors Corporation, dated September
14, 1995, is incorporated herein by reference to Exhibit 6(p) of
Post-Effective Amendment No. 66.
(12) General Distribution Agreement between Fidelity Hong Kong and
China Fund and Fidelity Distributors Corporation, dated September 14,
1995, is incorporated herein by reference to Exhibit 6(q) of
Post-Effective Amendment No. 66.
(13) General Distribution Agreement between Fidelity Nordic Fund and
Fidelity Distributors Corporation, dated September 14, 1995, is
incorporated herein by reference to Exhibit 6(r) of Post-Effective
Amendment No. 66.
(14) Amendments to the General Distribution Agreement between Fidelity
Investment Trust on behalf of Fidelity France Fund, Fidelity Germany
Fund, Fidelity Hong Kong and China Fund, Fidelity International Value
Fund, Fidelity Japan Small Companies Fund, Fidelity Nordic Fund, and
Fidelity United Kingdom Fund and Fidelity Distributors Corporation,
dated March 14, 1996 and July 15, 1996, are incorporated herein by
reference to Exhibit 6(k) of Fidelity Select Portfolios'(File No.
2-69972) Post-Effective Amendment No. 57.
(15) Amendments to the General Distribution Agreement between Fidelity
Investment Trust on behalf of Fidelity Canada Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund,
Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity International Growth & Income Fund, Fidelity Japan Fund,
Fidelity Latin America Fund, Fidelity Overseas Fund, Fidelity Pacific
Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide Fund
and Fidelity Distributors Corporation, dated March 14, 1996 and July
15, 1996, are incorporated herein by reference to Exhibit 6(l) of
Fidelity Select Portfolios' (File No. 2-69972) Post-Effective
Amendment No. 57 .
(16) Form of Bank Agency Agreement (most recently revised January,
1997) is filed herein as Exhibit (e)(16).
(17) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is filed herein as Exhibit
(e)(17).
(f)(1) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Fidelity Select Portfolio's
(File No. 2-69972) Post-Effective Amendment No. 54.
(2) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
(g)(1) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Manhattan Bank, N.A. and Fidelity Investment Trust
on behalf of Fidelity Diversified Global Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe
Capital Appreciation Fund, Fidelity Europe Fund, Fidelity
International Growth & Income Fund, Fidelity International Value Fund,
Fidelity Japan Fund, Fidelity Overseas Fund, Fidelity Pacific Basin
Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide Fund is
incorporated herein by reference to Exhibit 8(a) of Post-Effective
Amendment No. 59.
(g)(2) Appendix A, dated February 26, 1998, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan Bank,
N.A. and Fidelity Investment Trust on behalf of Fidelity Diversified
Global Fund, Fidelity Diversified International Fund, Fidelity
Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity Europe Fund, Fidelity International Growth & Income Fund,
Fidelity International Value Fund, Fidelity Japan Fund, Fidelity
Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia
Fund, and Fidelity Worldwide Fund is incorporated herein by reference
to Exhibit 8(b) of Fidelity Puritan Trust's (File No. 2-11884)
Post-Effective Amendment No. 116.
(g)(3) Appendix B, dated June 18, 1998, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and
Fidelity Investment Trust on behalf of Fidelity Diversified Global
Fund, Fidelity Diversified International Fund, Fidelity Emerging
Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity
Europe Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Overseas Fund,
Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and
Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
8(b) of Fidelity Charles Street Trust's (File No. 2-73133)
Post-Effective Amendment No. 62 .
(g)(4) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity Investment
Trust on behalf of Fidelity France Fund, Fidelity Germany Fund,
Fidelity Japan Small Companies Fund, Fidelity United Kingdom Fund,
Fidelity Hong Kong and China Fund, Fidelity Nordic Fund, Fidelity
Canada Fund, and Fidelity Latin America Fund is incorporated herein by
reference to Exhibit 8(a) of Fidelity Commonwealth Trust's (File No.
2-52322) Post-Effective Amendment No. 56.
(g)(5) Appendix A, dated March 19, 1998, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity France Fund, Fidelity
Germany Fund, Fidelity Japan Small Companies Fund, Fidelity United
Kingdom Fund, Fidelity Hong Kong and China Fund, Fidelity Nordic Fund,
Fidelity Canada Fund, and Fidelity Latin America Fund is incorporated
herein by reference to Exhibit 8(e) of Fidelity Puritan Trust's (File
No. 2-11884) Post-Effective Amendment No. 116.
(g)(6) Appendix B, dated June 18, 1998, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity France Fund, Fidelity
Germany Fund, Fidelity Japan Small Companies Fund, Fidelity United
Kingdom Fund, Fidelity Hong Kong and China Fund, Fidelity Nordic Fund,
Fidelity Canada Fund, and Fidelity Latin America Fund is incorporated
herein by reference to Exhibit 8(f) of Fidelity Puritan Trust's (File
No. 2-25235) Post-Effective Amendment No. 116.
(g)(7) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and the Registrant, dated
February 12, 1996, is incorporated herein by reference to Exhibit 8(d)
of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(g)(8) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and the Registrant, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(g)(9) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November
13, 1995, is incorporated herein by reference to Exhibit 8(f) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(g)(10) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and the Registrant, dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(g) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(g)(11) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Investment Trust on behalf of Fidelity Canada
Fund, Fidelity Diversified International Fund, Fidelity Emerging
Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity International Growth & Income Fund,
Fidelity International Value Fund, Fidelity Japan Fund, Fidelity Latin
America Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund,
Fidelity Southeast Asia Fund and Fidelity Worldwide Fund, dated May
11, 1995, is incorporated herein by reference to Exhibit 8(h) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(g)(12) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Investment Trust on behalf
of Fidelity Canada Fund, Fidelity Diversified International Fund,
Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe
Capital Appreciation Fund, Fidelity International Growth & Income
Fund, Fidelity International Value Fund, Fidelity Japan Fund, Fidelity
Latin America Fund, Fidelity Overseas Fund, Fidelity Pacific Basin
Fund, Fidelity Southeast Asia Fund and Fidelity Worldwide Fund, dated
July 14, 1995, is incorporated herein by reference to Exhibit 8(i) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
(k) Not applicable.
(l) Not applicable.
(m)(1)Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Diversified International Fund is incorporated herein by
reference to Exhibit 15(c) of Post-Effective Amendment No. 73.
(2) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
International Value Fund is incorporated herein by reference to
Exhibit 15(d) of Post-Effective Amendment No. 73.
(3) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
International Growth & Income Fund is incorporated herein by reference
to Exhibit 15(e) of Post-Effective Amendment No. 73.
(4) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Overseas Fund is incorporated herein by reference to Exhibit 15(f) of
Post-Effective Amendment No. 73.
(5) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Worldwide Fund is incorporated herein by reference to Exhibit 15(g) of
Post-Effective Amendment No. 73.
(n) Not applicable.
(o) Not applicable.

Item 24. Trusts Controlled by or under Common Control with this Trust
The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.

Item 25. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("FSC") is appointed transfer agent, the Trust agrees to indemnify and
hold FSC harmless against any losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names FSC and/or the
Trust as a party and is not based on and does not result from FSC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FSC's performance
under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FSC's willful misfeasance, bad faith or negligence
or reckless disregard of its duties) which results from the negligence
of the Trust, or from FSC's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person
duly authorized by the Trust, or as a result of FSC's acting in
reliance upon advice reasonably believed by FSC to have been given by
counsel for the Trust, or as a result of FSC's acting in reliance upon
any instrument or stock certificate reasonably believed by it to have
been genuine and signed, countersigned or executed by the proper
person.

Item 26. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board and Director of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman
of the Board and Director of FMR Corp., Fidelity
Investments Money Management, Inc. (FIMM), Fidelity
Management & Research (U.K.) Inc. (FMR U.K.), and
Fidelity Management & Research (Far East) Inc. (FMR
Far East); Chairman of the Executive Committee of
FMR; Director of Fidelity Investments Japan Limited
(FIJ); President and Trustee of funds advised by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FIMM, FMR U.K., and FMR Far East;
Previously, General Counsel, Managing Director, and
Senior Vice President of FMR Corp.

Peter S. Lynch Vice Chairman of the Board and Director of FMR.

John H. Carlson Vice President of FMR and of funds advised by FMR.

Dwight D. Churchill Senior Vice President of FMR and Vice President of
Bond Funds advised by FMR; Vice President of FIMM.

Brian Clancy Vice President of FMR and Treasurer of FMR, FIMM,
FMR U.K., and FMR Far East.

Barry Coffman Vice President of FMR.

Arieh Coll Vice President of FMR.

Frederic G. Corneel Tax Counsel of FMR.

Stephen G. Manning Assistant Treasurer of FMR, FIMM, FMR U.K., FMR
Far East; Vice President and Treasurer of FMR Corp.;
Treasurer of Strategic Advisers, Inc.

William Danoff Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Scott E. DeSano Vice President of FMR.

Penelope Dobkin Vice President of FMR and of a fund advised by FMR.

Walter C. Donovan Vice President of FMR.

Bettina Doulton Vice President of FMR and of funds advised by FMR.

Margaret L. Eagle Vice President of FMR and of funds advised by FMR.

William R. Ebsworth Vice President of FMR.

Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Gregory Fraser Vice President of FMR and of a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
U.K., FMR Far East, and Strategic Advisers, Inc.;
Secretary of FIMM; Associate General Counsel FMR
Corp.

David L. Glancy Vice President of FMR and of a fund advised by FMR.

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

Boyce I. Greer Senior Vice President of FMR and Vice President of
Money Market Funds advised by FMR; Vice President
of FIMM.

Bart A. Grenier Senior Vice President of FMR; Vice President of
High-Income Funds advised by FMR.

Robert Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.

Fred L. Henning Jr. Senior Vice President of FMR and Vice President of
Fixed-Income Funds advised by FMR.

Bruce T. Herring Vice President of FMR.

Robert F. Hill Vice President of FMR; Director of Technical Research.

Abigail P. Johnson Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.;
Associate Director and Senior Vice President of Equity
Funds advised by FMR.

David B. Jones Vice President of FMR.

Steven Kaye Vice President of FMR and of a fund advised by FMR.

Francis V. Knox Vice President of FMR; Compliance Officer of FMR
U.K.

Harris Leviton Vice President of FMR and of a fund advised by FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.

Charles A. Mangum Vice President of FMR and of a fund advised by FMR.

Kevin McCarey Vice President of FMR and of a fund advised by FMR.

Neal P. Miller Vice President of FMR.

Jacques Perold Vice President of FMR.

Alan Radlo Vice President of FMR.

Eric D. Roiter Senior Vice President and General Counsel of FMR and
Secretary of funds advised by FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.

Fergus Shiel Vice President of FMR.

Richard A. Silver Vice President of FMR.

Carol A. Smith-Fachetti Vice President of FMR.

Steven J. Snider Vice President of FMR and of funds advised by FMR.

Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.

Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity Funds advised by FMR;
Previously, Senior Vice President and Director of
Operations and Compliance of FMR U.K.

Thomas M. Sprague Vice President of FMR and of funds advised by FMR.

Robert E. Stansky Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Scott D. Stewart Vice President of FMR.

Thomas Sweeney Vice President of FMR.

Beth F. Terrana Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of funds advised by FMR.

George A. Vanderheiden Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.

Steven S. Wymer Vice President of FMR and of a fund advised by FMR.

</TABLE>

(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.

Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FIMM, and FMR Far East; President
and Chief Executive Officer of FMR Corp.; Chairman
of the Executive Committee of FMR; Director of
Fidelity Investments Japan Limited (FIJ); President and
Trustee of funds advised by FMR.

Brian Clancy Treasurer of FMR U.K., FMR Far East, FMR, and
FIMM and Vice President of FMR.

Stephen G. Manning Assistant Treasurer of FMR U.K., FMR, FMR Far East,
and FIMM; Vice President and Treasurer of FMR
Corp.; Treasurer of Strategic Advisers, Inc.

Francis V. Knox Compliance Officer of FMR U.K.; Vice President of
FMR.

Jay Freedman Clerk of FMR U.K., FMR Far East, FMR Corp. and
Strategic Advisers, Inc.; Assistant Clerk of FMR;
Secretary of FIMM; Associate General Counsel FMR
Corp.

Sarah H. Zenoble Senior Vice President and Director of Operations and
Compliance.

(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC. (FMR Far
East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.

Edward C. Johnson 3d Chairman of the Board and Director of FMR Far
East, FMR, FMR Corp., FIMM, and FMR U.K.;
Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR
Corp.; Director of Fidelity Investments Japan
Limited (FIJ); President and Trustee of funds
advised by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR Far East; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.

Robert H. Auld Senior Vice President of FMR Far East.

Brian Clancy Treasurer of FMR Far East, FMR U.K., FMR,
and FIMM and Vice President of FMR.

Jay Freedman Clerk of FMR Far East, FMR U.K., FMR Corp.
and Strategic Advisers, Inc.; Assistant Clerk of
FMR; Secretary of FIMM; Associate General
Counsel FMR Corp.

Stephen G. Manning Assistant Treasurer of FMR Far East, FMR,
FMR U.K., and FIMM; Vice President and
Treasurer of FMR Corp.; Treasurer of Strategic
Advisers, Inc.

Billy Wilder Vice President of FMR Far East; President and
Representative Director of Fidelity Investments
Japan Limited.

(5) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (FIIA)
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda
The directors and officers of FIIA have held, during the past two
fiscal years, the following positions of a substantial nature.

Robert H. Auld Director of FIIA and Senior Vice President of
Fidelity Management & Research (Far East) Inc.
(FMR Far East).

Anthony J. Bolton Director of FIIA, Fidelity International
Investment Advisors (U.K.) Limited
(FIIA(U.K.)L), Fidelity Investment Management
Limited (FIML (U.K.)), Fidelity Investment
Services Limited (FISL (U.K.)), and Fidelity
Investments International (FII).

Brett P. Goodin Director, Vice President, Secretary and Chief
Legal Officer of many Fidelity International
Limited (FIL) companies.

Simon Haslam Director of FIIA, FISL (U.K.), and FII;
Previously, Chief Financial Officer of FIL;
Company Secretary of Fidelity Investments
Group of Companies (U.K.).

K.C. Lee Director of FIIA and Fidelity Investments
Management (Hong Kong) Limited.

Peter Phillips Director of FIIA and Fidelity Investments
Management (Hong Kong) Limited.

Terrence V. Richards Assistant Secretary of FIIA.

David J. Saul President and Director of FIIA; Previously,
Director of Fidelity International Limited; and
numerous companies and funds in the FIL group.

(6) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
(FIIA(U.K.)L)
26 Lovat Lane, London, EC3R 8LL, England
The directors and officers of FIIA(U.K.)L have held, during the past
two fiscal years, the following positions of a substantial nature.

Anthony J. Bolton Director of FIIA(U.K.)L, Fidelity International
Investment Advisors (FIIA), Fidelity Investment
Management Limited (FIML (U.K.)), Fidelity
Investment Services Limited (FISL (U.K.)), and
Fidelity Investments International (FII).

Pamela Edwards Director of FIIA(U.K.)L, FISL (U.K.), and FII;
Previously, Director of Legal Services for
Europe.

Simon Haslam Director of FIIA, FISL (U.K.), and FII; Chief
Financial Officer of FIL (U.K.); Previously,
Company Secretary of Fidelity Investments
Group of Companies (U.K.).

Sally Walden Director of FIIA(U.K.)L and FISL (U.K.).

Sally Hinchliffe Assistant Company Secretary of Fidelity
International Group of Companies (U.K.).

Emma Barratt Assistant Company Secretary of Fidelity
International Group of Companies (U.K.).

(7) FIDELITY INVESTMENTS JAPAN LIMITED (FIJ)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
The directors and officers of FIJ have held, during the past two
fiscal years, the following positions of a substantial nature.

Edward C. Johnson 3d Director of FIJ; Chairman of the Board and
Director of FMR Far East, FMR, FMR Corp.,
FMR U.K., and FIMM; Chairman of the
Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.;
President and Trustee of funds advised by FMR.

Yasuo Kuramoto Vice Chairman, Representative Director of FIJ.

Billy Wilder President and Representative Director of FIJ;
Vice President of FMR Far East.

Simon Fraser Director and Chief Investment Officer of FIJ.

Simon Haslam Director of FIJ; Chief Financial Officer of
Fidelity International Limited.

Noboru Kawai Director and General Manager of
Administration of FIJ.

Tetsuzo Nishimura Director and Vice President of Broker
Distribution of FIJ.

Hiroshi Yamashita Managing Director and Portfolio Manager of
FIJ.

Item 27. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
most funds advised by FMR.
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

Michael Mlinac Director None

James Curvey Director None
Martha B. Willis President None

Eric D. Roiter Senior Vice President Secretary

Caron Ketchum Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Holland Compliance Officer None

* 82 Devonshire Street, Boston, MA
(c) Not applicable.

Item 28. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the
funds' respective custodian: The Chase Manhattan Bank, 1 Chase
Manhattan Plaza, New York, N.Y. and Brown Brothers Harriman & Co., 40
Water Street, Boston, MA.

Item 29. Management Services
Not applicable.

Item 30. Undertakings
Not applicable.

SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 75 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 20th day
of October 1998.

FIDELITY INVESTMENT TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
(Signature) (Title) (Date)

/s/Edward C. Johnson 3d (dagger) President and Trustee October 20, 1998

Edward C. Johnson 3d (Principal Executive Officer)

/s/Richard A. Silver Treasurer October 20, 1998

Richard A. Silver

/s/Robert C. Pozen Trustee October 20, 1998

Robert C. Pozen

/s/Ralph F. Cox * Trustee October 20, 1998

Ralph F. Cox

/s/Phyllis Burke Davis * Trustee October 20, 1998

Phyllis Burke Davis

/s/Robert M. Gates ** Trustee October 20, 1998

Robert M. Gates

/s/E. Bradley Jones * Trustee October 20, 1998

E. Bradley Jones

/s/Donald J. Kirk * Trustee October 20, 1998

Donald J. Kirk

/s/Peter S. Lynch * Trustee October 20, 1998

Peter S. Lynch

/s/Marvin L. Mann * Trustee October 20, 1998

Marvin L. Mann

/s/William O. McCoy * Trustee October 20, 1998

William O. McCoy

/s/Gerald C. McDonough * Trustee October 20, 1998

Gerald C. McDonough

/s/Thomas R. Williams * Trustee October 20, 1998

Thomas R. Williams

</TABLE>

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.

POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.

WITNESS our hands on this nineteenth day of December, 1996.

/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________

Edward C. Johnson 3d Peter S. Lynch

/s/J. Gary Burkhead_______________ /s/William O. McCoy______________

J. Gary Burkhead William O. McCoy

/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________

Ralph F. Cox Gerald C. McDonough

/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________

Phyllis Burke Davis Marvin L. Mann

/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________

E. Bradley Jones Thomas R. Williams

/s/Donald J. Kirk __________________

Donald J. Kirk

POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust

</TABLE>

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997

Edward C. Johnson 3d

POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997

Robert M. Gates

Exhibit e(16)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to
your customers shares of the mutual funds, or the separate series or
classes of the mutual funds, listed on Schedules A and B attached to
this Agreement (the "Portfolios"). We may periodically change the
list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and act as agent for the
Portfolios. You (____________________________________) are a division
or affiliate of a bank (____________________________________) and
desire to make Portfolio shares available to your customers on the
following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for
your customers; in no transaction are you authorized to act as agent
for us or for any Portfolio; (ii) you will initiate transactions only
upon your customers' orders; (iii) we will execute transactions only
upon receiving instructions from you acting as agent for your
customers; and (iv) each transaction will be for your customer's
account and not for your own account. Each transaction will be
without recourse to you, provided that you act in accordance with the
terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to make Portfolio shares available to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You will not withhold placing customers'
orders so as to profit yourself as a result of such withholding (for
example, by a change in a Portfolio's net asset value from that used
in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your
customers only in states where you may legally make such Portfolio's
shares available. You will not make available shares of any Portfolio
unless such shares are registered under the applicable state and
federal laws and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent
with respect to sales of Portfolio shares will be as provided in the
Prospectus or in the applicable schedule of agency fees issued by us
and in effect at the time of the sale. Upon written notice to you, we
or any Portfolio may change or discontinue any schedule of agency
fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of agency fees, distribution payments, or service
payments, or the termination of a Plan, any agency fees, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any agency fee, distribution
payment, or service payment, you will remit such overpayment.
(d) If, within seven (7) business days after our confirmation of
the original purchase order for shares of a Portfolio, such shares are
redeemed by the issuing Portfolio or tendered for redemption by the
customer, you agree (i) to refund promptly to us the full amount of
any agency fee, distribution payment, or service payment paid to you
on such shares, and (ii) if not yet paid to you, to forfeit the right
to receive any agency fee, distribution payment, or service payment
payable to you on such shares. We will notify you of any such
redemption within ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to
this Agreement represents to the other party that it is either (i) a
registered broker/dealer under the 1934 Act, or (ii) a "bank" as
defined in Section 3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents
that it is qualified to act as a broker/dealer in the states where it
transacts business, and it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees
to maintain its broker/dealer registration and qualifications and its
NASD membership in good standing throughout the term of this
Agreement. It agrees to abide by all of the NASD's rules and
regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will
terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized
to engage in the transactions to be performed under this Agreement,
and you agree to comply with all applicable federal and state laws,
including the rules and regulations of all applicable federal and
state bank regulatory agencies and authorities. This Agreement will
terminate automatically without notice in the event that you cease to
be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In ordering Portfolio shares from us under this Agreement, you will
rely only on the representations contained in the Prospectus. Upon
your request, we will furnish you with a reasonable number of copies
of the Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with making Portfolio shares available to your customers
without obtaining our prior written approval. You may not distribute
or make available to investors any information that we furnish you
marked "FOR DEALER USE ONLY" or that otherwise indicates that it is
confidential or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is file against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend making Portfolio shares available
to your customers in the event of any such filing or violation, or in
the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934
Act.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION

By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________

** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **

Exhibit e(17)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute
shares of the mutual funds, or the separate series or classes of the
mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios
by giving you written notice of the change. We are the Portfolios'
principal underwriter and, as agent for the Portfolios, we offer to
sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a
broker/dealer under the Securities Exchange Act of 1934 (the "1934
Act") and have executed a written agreement with a bank or bank
affiliate to provide brokerage services to that bank, bank affiliate
and/or their customers. As used in this Agreement, the term "Bank"
means a bank as defined in Section 3(a)(6) of the 1934 Act, or an
affiliate of such a bank, with which you have entered into a written
agreement to provide brokerage services; and the term "Bank Client"
means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in
the Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with
the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the 1934 Act. If we do not receive your payment on or
before such settlement date, we may, without notice, cancel the sale,
or, at our option, sell the shares that you ordered back to the
issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to
make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply
only with respect to (i) shares of the "Fidelity Funds" (as designated
on Schedule A attached to this Agreement) purchased or maintained for
the account of Bank Clients, and (ii) shares of the "Fidelity Advisor
Funds" (as designated on Schedule B attached to this Agreement).
Anything to the contrary notwithstanding, neither we nor any Portfolio
will provide to you, nor may you retain, concessions on your sales of
shares of, or distribution payments or service payments with respect
to assets of, the Fidelity Funds attributable to you or any of your
clients, other than Bank Clients. When you place an order in shares
of the Fidelity Funds with us, you will identify the Bank on behalf of
whose Clients you are placing the order; and you will identify as a
non-Bank Client Order, any order in shares of the Fidelity Funds
placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either
party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 11.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION

Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________

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