FIDELITY'S
BROADLY DIVERSIFIED INTERNATIONAL EQUITY
FUNDS
Fidelity International Growth & Income Fund
Fidelity Diversified International Fund
Fidelity International Value Fund
Fidelity Overseas Fund
Fidelity Worldwide Fund
SEMIANNUAL REPORT
APRIL 30, 1999
(Fidelity logo graphic)(registered)
CONTENTS
MARKET RECAP 3 A REVIEW OF WHAT HAPPENED IN
WORLD MARKETS DURING THE
LAST 6 MONTHS.
INTERNATIONAL GROWTH & INCOME 4 5 7 8 13 PERFORMANCE FUND TALK: THE
FUND MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
DIVERSIFIED INTERNATIONAL FUND 15 16 18 19 27 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
INTERNATIONAL VALUE FUND 29 30 32 33 35 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
OVERSEAS FUND 37 38 40 41 47 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
WORLDWIDE FUND 49 50 52 53 58 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NOTES TO FINANCIAL STATEMENTS 60 NOTES TO THE FINANCIAL
STATEMENTS
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MARKET RECAP
Turnarounds, rebounds and recoveries were the characteristics that
defined the performance of many of the world's markets during the
six-month period ending April 30, 1999. Perhaps the most influential
and consistent catalyst for the marked improvement was the propensity
toward interest-rate cuts. Another commonality on a global scale was
the enhanced prospects for commodities - particularly within the
energy sector - which helped broaden market breadth, leading to a
noticeable rotation out of the narrow band of growth stocks that had
been so dominant for the past few years.
EUROPE: European indexes posted mixed results during the six-month
period. Toward the end of 1998, European stocks surged in response to
a strong U.S. market, increased merger and acquisition activity and
enthusiasm about the European Monetary Union's single currency - the
euro. Many European markets stalled in 1999, however, as the outlook
for economic growth and corporate profits deteriorated. The U.K. stock
market was among the strongest performers in Europe as the economy
improved amid a favorable environment of declining interest rates and
encouraging earnings growth. Although the implementation of the euro
was smooth, its weakness against the U.S. dollar contributed to
investors' lukewarm interest in European stocks during the first
quarter of 1999. For the six months ending April 30, the Morgan
Stanley Europe Index returned 10.95%
EMERGING MARKETS: Rallying from their bleak outlook in the fall of
1998, emerging markets returned an impressive 34.87% over the past six
months, as measured by the Morgan Stanley Capital International
Emerging Markets Free Index. Three key factors contributed to the
abrupt reversal in performance. First, interest rates plummeted across
most emerging markets - particularly in Asia. Second, many countries
began to build up current-account surpluses, a measure of export and
other trade activity. Third, newly confident investors pumped massive
inflows of money back into emerging markets, significantly increasing
the regions' liquidity, despite a Brazilian currency crisis in
January. For the six months, the Far East markets posted the largest
gains. Latin America also staged a remarkable comeback, while Europe
and the Middle East posted more modest, but positive, returns.
JAPAN AND THE FAR EAST: Long-awaited government intervention and
corporate restructuring helped spur investor confidence in the
Japanese market, as witnessed by the 26.62% return of the Tokyo Stock
Exchange Index (TOPIX) for the six-month period ending April 30, 1999.
Japanese small-cap stocks in particular were the prime beneficiaries
of a government program that guarantees the credit of small companies.
However, the deep recession in Japan continued to plague the nation's
economy. Steadily falling interest rates helped the Hong Kong market
stage a notable recovery. The Hang Seng Index - which measures the
performance of the Hong Kong stock market - had a six-month return of
31.22%.
U.S. AND CANADA: Investor confidence in the U.S. market was bolstered
by a near-perfect economic environment of strong domestic growth, low
interest rates, benign inflation and improving overseas markets for
much of the six-month period. The hype surrounding equities was
greatest in the technology sector, most notably Internet stocks.
Pharmaceutical, finance and telecommunications shares also performed
well. Late in the period, economically sensitive cyclical stocks
outperformed other sectors as investors worried about the potential
threat of inflation due to strong economic indicators in the U.S. and
signs that global markets were beginning to turn around. As market
leadership broadened into cyclicals and value-oriented sectors, the
surge in stock prices continued to drive the Dow Jones Industrials,
Standard & Poor's 500 and NASDAQ indexes, which returned 26.58%,
22.32% and 43.79%, respectively, for the six-month period. Canada
experienced similarly strong results for similar reasons. Investor
confidence was boosted by the cut in interest rates by the Bank of
Canada, a strong economy and a strengthening Canadian dollar. For the
period, the Toronto Stock Exchange 300 returned 20.63%.
BONDS: As the black cloud hanging over many global economies gave way
to brighter equity forecasts, most bond sectors were left with only
modest gains. The Lehman Brothers Aggregate Bond Index - a widely
followed measure of taxable bond performance - posted a total return
of 0.69% for the six-month period. Confronted with strong indications
of improving conditions abroad, U.S. Treasuries gave back nearly all
of their flight-to-quality gains captured during the fall. Reflective
of this downturn, the Lehman Brothers Treasury Index returned -1.21%.
The Lehman Brothers Corporate Bond Index returned 1.75%. The dramatic
turnaround in the worldwide economy triggered a furious rally in the
high-yield bond market, however. The Merrill Lynch High Yield Master
II Index - a broad measure of the high-yield market - returned 8.88%
during the six-month period. Elsewhere, the JP Morgan Emerging Markets
Bond Index returned 14.66%, while the Salomon Brothers Non-U.S. World
Government Bond Index returned -4.30%.
Standard & Poor's 500 Index(registered trademark)
Morgan Stanley Capital International Europe, Australasia, Far East
Index
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: 6.1
Row: 2, Col: 2, Value: 7.38
Row: 3, Col: 1, Value: 31.57
Row: 3, Col: 2, Value: 56.16
Row: 4, Col: 1, Value: 18.56
Row: 4, Col: 2, Value: 69.44
Row: 5, Col: 1, Value: 5.1
Row: 5, Col: 2, Value: 24.63
Row: 6, Col: 1, Value: 16.61
Row: 6, Col: 2, Value: 28.27
Row: 7, Col: 1, Value: 31.69
Row: 7, Col: 2, Value: 10.53
Row: 8, Col: 1, Value: -3.1
Row: 8, Col: 2, Value: -23.45
Row: 9, Col: 1, Value: 30.47
Row: 9, Col: 2, Value: 12.13
Row: 10, Col: 1, Value: 7.62
Row: 10, Col: 2, Value: -12.17
Row: 11, Col: 1, Value: 10.08
Row: 11, Col: 2, Value: 32.56
Row: 12, Col: 1, Value: 1.32
Row: 12, Col: 2, Value: 7.78
Row: 13, Col: 1, Value: 37.58
Row: 13, Col: 2, Value: 11.21
Row: 14, Col: 1, Value: 22.96
Row: 14, Col: 2, Value: 6.05
Row: 15, Col: 1, Value: 32.11
Row: 15, Col: 2, Value: 4.82
Row: 16, Col: 1, Value: 14.63
Row: 16, Col: 2, Value: 10.02
Row: 17, Col: 1, Value: 9.050000000000001
Row: 17, Col: 2, Value: 5.57
* YEAR TO DATE THROUGH APRIL 30, 1999.
INTERNATIONAL GROWTH & INCOME
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the past 10 year total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY INTL GROWTH & INCOME 17.46% 2.47% 56.30% 140.56%
MSCI EAFE 15.40% 9.74% 52.59% 79.68%
International Funds Average 15.11% 3.24% 50.24% 142.81%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Morgan Stanley Capital International Europe, Australasia, Far
East (EAFE) Index - a market capitalization-weighted index that is
designed to represent the performance of developed stock markets
outside the United States and Canada. As of April 30, 1999, the index
included over 1,020 equity securities of countries domiciled in 20
countries. To measure how the fund's performance stacked up against
its peers, you can compare it to the international funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Inc. The past six months average represents a peer
group of 597 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY INTL GROWTH & INCOME 2.47% 9.34% 9.17%
MSCI EAFE 9.74% 8.82% 6.04%
International Funds Average 3.24% 8.29% 8.97%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Int'l Growth & Income MS EAFE (Net MA tax)
00305 MS001
1989/04/30 10000.00 10000.00
1989/05/31 9716.60 9455.97
1989/06/30 9748.99 9296.79
1989/07/31 10672.06 10464.22
1989/08/31 10526.32 9993.60
1989/09/30 10947.37 10448.83
1989/10/31 10421.05 10029.02
1989/11/30 10809.72 10533.17
1989/12/31 11371.97 10921.82
1990/01/31 11175.34 10515.44
1990/02/28 10782.07 9781.51
1990/03/31 10773.88 8762.51
1990/04/30 10749.30 8692.98
1990/05/31 11445.71 9684.85
1990/06/30 11806.20 9599.55
1990/07/31 12355.14 9734.77
1990/08/31 11298.23 8789.44
1990/09/30 10208.55 7564.51
1990/10/31 11232.69 8743.20
1990/11/30 10978.70 8227.45
1990/12/31 11004.91 8360.74
1991/01/31 11394.32 8631.16
1991/02/28 12037.68 9556.41
1991/03/31 11605.95 8982.72
1991/04/30 11783.72 9070.93
1991/05/31 11766.79 9165.58
1991/06/30 11199.62 8492.09
1991/07/31 11589.02 8909.32
1991/08/31 11546.70 8728.39
1991/09/30 11919.17 9220.31
1991/10/31 11842.98 9351.02
1991/11/30 11512.83 8914.47
1991/12/31 11889.47 9374.84
1992/01/31 11872.33 9174.60
1992/02/29 11889.47 8846.22
1992/03/31 11503.73 8262.22
1992/04/30 12009.48 8301.50
1992/05/31 12549.52 8857.16
1992/06/30 12429.51 8437.05
1992/07/31 12026.62 8221.12
1992/08/31 12240.93 8736.75
1992/09/30 12035.20 8564.23
1992/10/31 11392.29 8114.99
1992/11/30 11366.58 8191.36
1992/12/31 11492.25 8233.72
1993/01/31 11597.61 8232.71
1993/02/28 11913.67 8481.40
1993/03/31 12800.39 9220.68
1993/04/30 13511.52 10095.75
1993/05/31 13827.58 10308.97
1993/06/30 13643.21 10148.13
1993/07/31 14099.74 10503.36
1993/08/31 14837.21 11070.37
1993/09/30 14740.64 10821.18
1993/10/31 15144.49 11154.66
1993/11/30 14626.50 10179.63
1993/12/31 15523.74 10914.67
1994/01/31 16336.59 11837.46
1994/02/28 16045.03 11804.67
1994/03/31 15188.00 11296.23
1994/04/30 15391.21 11775.52
1994/05/31 15673.94 11707.91
1994/06/30 15294.02 11873.36
1994/07/31 15550.25 11987.55
1994/08/31 15700.45 12271.36
1994/09/30 15338.20 11884.86
1994/10/31 15497.23 12280.63
1994/11/30 15020.12 11690.42
1994/12/31 15078.00 11763.62
1995/01/31 14567.19 11311.72
1995/02/28 14667.53 11279.25
1995/03/31 15506.72 11982.75
1995/04/30 15789.49 12433.41
1995/05/31 15588.81 12285.19
1995/06/30 15625.30 12069.75
1995/07/31 16546.58 12821.17
1995/08/31 16355.03 12332.09
1995/09/30 16473.61 12572.94
1995/10/31 16263.81 12234.97
1995/11/30 16510.09 12575.40
1995/12/31 16922.40 13082.06
1996/01/31 16969.54 13135.77
1996/02/29 16931.83 13180.18
1996/03/31 17214.65 13460.07
1996/04/30 17648.32 13851.40
1996/05/31 17667.17 13596.51
1996/06/30 17789.73 13673.03
1996/07/31 17374.92 13273.40
1996/08/31 17591.75 13302.49
1996/09/30 18015.99 13655.88
1996/10/31 17997.14 13516.14
1996/11/30 18892.75 14053.92
1996/12/31 19069.35 13873.14
1997/01/31 18923.04 13390.35
1997/02/28 19147.38 13612.63
1997/03/31 19147.38 13664.36
1997/04/30 19166.89 13739.51
1997/05/31 20122.80 14636.29
1997/06/30 21010.43 15445.68
1997/07/31 21546.90 15697.75
1997/08/31 20249.60 14527.49
1997/09/30 21546.90 15343.50
1997/10/31 20366.65 14168.03
1997/11/30 20288.62 14026.35
1997/12/31 20427.55 14151.33
1998/01/31 20614.20 14801.15
1998/02/28 21744.45 15753.61
1998/03/31 22905.81 16241.65
1998/04/30 23476.13 16372.89
1998/05/31 23424.28 16296.43
1998/06/30 23351.70 16422.73
1998/07/31 23787.21 16592.21
1998/08/31 19452.83 14539.59
1998/09/30 19286.92 14097.00
1998/10/31 20479.40 15569.71
1998/11/30 21702.97 16370.46
1998/12/31 22465.93 17019.39
1999/01/31 22809.74 16972.24
1999/02/28 22218.82 16570.85
1999/03/31 23164.30 17265.83
1999/04/30 24056.06 17968.20
IMATRL PRASUN SHR__CHT 19990430 19990615 103826 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity International Growth & Income Fund on April 30,
1989. As the chart shows, by April 30, 1999, the value of the
investment would have grown to $24,056 - a 140.56% increase on the
initial investment. For comparison, look at how both the Morgan
Stanley Capital International EAFE Index did over the same period.
With dividends and capital gains, if any, reinvested in each, the same
$10,000 in the MSCI EAFE index would have grown to $17,968 - a 79.68%
increase.
INTERNATIONAL GROWTH & INCOME
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Bill Bower)
An interview with Bill Bower, Portfolio Manager of Fidelity
International Growth & Income Fund
Q. HOW DID THE FUND PERFORM, BILL?
A. Over the past six months, very well. For the six-month period that
ended April 30, 1999, the fund posted a total return of 17.46%. In
comparison, the Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index was up 15.40%, while the
international funds average tracked by Lipper Inc. returned 15.11%
during the same period. For the 12-month period that ended April 30,
1999, the fund returned 2.47%, while the Morgan Stanley International
EAFE index and the international funds average returned 9.74% and
3.24%, respectively.
Q. WHAT FACTORS LED TO THE FUND'S STRONG PERFORMANCE OVER THE PAST SIX
MONTHS?
A. The key factor was strong stock selection across a wide range of
industries and geographical regions. A number of exceptional
performers allowed the fund to outperform the EAFE index despite its
underweighting in Japanese stocks, which rallied considerably and
represented the largest country component of the Morgan Stanley EAFE
index at the end of the period. While the fund was underweighted
relative to the index in Japan, the Japanese stocks we did own
performed very well, which helped the fund surpass the performance of
the index. In addition, the fund's investments in energy, technology
and business services stocks contributed positively to total return.
Beyond strong stock and industry selection, the fund benefited from a
number of geographical asset allocations, such as our underweighting
in German equities and overweighting in Canada and Mexico relative to
the index.
Q. WHY DID THE FUND UNDERPERFORM DURING THE 12-MONTH PERIOD?
A. Stock selection in the third quarter of 1998 was disappointing. In
addition, prior to July 1, 1998, the fund was required to invest 25%
of its assets in bonds. This investment requirement hurt performance
because bonds significantly underperformed equities during this
period. Following the fund's Board of Trustees vote to eliminate this
investment limitation, the fund can now invest most of its assets in
equity securities and performance compares much more favorably with
the index and the Lipper Inc. peer group.
Q. IN THE LAST REPORT, YOU DISCUSSED DIVERSIFYING THE FUND'S INDUSTRY
ALLOCATIONS TO BE MORE IN LINE WITH THE EAFE INDEX AND FIDELITY'S
EQUITY RESEARCH EXPERTISE. HOW HAVE THESE CHANGES WORKED OUT?
A. With the exception of a few health care holdings and the fund's
underweighting in Japan, it has worked out very well. Given the fund's
somewhat conservative investment methodology, it doesn't make sense
for me to make aggressive sector and geographical bets versus the
index. At the same time, it's important to emphasize that the fund is
constructed on a stock-by-stock basis. As a result, while the
portfolio's industry and country allocations may correspond to the
index, the underlying stock holdings can vary significantly. This
approach allows me to fully utilize the expertise of our global
research team, and increases our chances of locating the most
promising growth opportunities and outperforming the benchmark over
the long term.
Q. YOU MENTIONED SOME INDUSTRIES AND COUNTRY ALLOCATIONS THAT HELPED
PERFORMANCE. WHAT SPECIFIC STOCKS WERE STANDOUTS?
A. Finnish telecommunications equipment manufacturer Nokia was the
second-largest holding in the portfolio and the top contributor during
the period. The company's earnings growth exceeded expectations and
sales of its new handsets were well above estimates. In addition,
product price pressures - declining prices that could hurt profits -
were well under analyst estimates. As a result, the stock price surged
almost 67% from approximately $45 at the beginning of the period to
roughly $75 on April 30, 1999. JDS Fitel, Inc. also provided a
significant boost to the fund's return. While this Canadian
manufacturer of high capacity fiber optic network solutions
represented a relatively small component of the fund's assets, the
stock performed incredibly well as demand for its products increased
significantly along with higher demand for data and voice
transmission. Energy and energy services stocks such as BP Amoco, Elf
Aquitaine and Shell Transport & Trading rebounded strongly during the
last four months and provided a solid contribution to total return.
Japanese stock Softbank also helped. Shares of this Internet company
appreciated considerably after the market realized it was undervalued
relative to its listed Internet holdings. Honda Motor also performed
well as the company produced strong earnings and sales results.
Q. WHAT HOLDINGS WERE DISAPPOINTMENTS?
A. Swiss pharmaceutical company Novartis was a major disappointment
for the fund. While the company appeared to be undervalued relative to
its cash flow and business fundamentals, investors punished the stock
after it missed earnings estimates. Nestle, one of the largest food
processors in the world, also turned in negative results as sales in
emerging markets and weakening European demand cut into earnings.
Another detractor was German bank Bayerische Hypo-und Vereinsbank. Its
stock declined significantly as a result of weakening fundamentals and
a disappointing merger.
Q. WHAT'S YOUR OUTLOOK OVER THE NEXT SIX MONTHS?
A. Looking at the fund's current holdings and asset allocation, and
given my predictions for corporate earnings and fundamental business
prospects, I don't anticipate making major changes to the portfolio.
Again, I run the portfolio with a stock-by-stock approach while
focusing on companies that demonstrate the most promising growth,
value and income potential. I think there will be a number of
opportunities in the finance, technology and utility sectors due to
consolidation, strong product demand and favorable stock valuations.
Of course, I will be monitoring these developments very closely. In
addition, I will continue to concentrate a substantial amount of
assets on the fund's top 20 or 30 investments and may further pare
down the total number of holdings to focus on a smaller number of
companies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)
FUND FACTS
GOAL: growth of capital and current income by
investing mainly in foreign stocks
FUND NUMBER: 305
TRADING SYMBOL: FIGRX
START DATE: December 31, 1986
SIZE: as of April 30, 1999, more than
$892 million
MANAGER: Bill Bower, since 1998;
international equity analyst, 1996-1998;
manager, Fidelity Select Construction &
Housing Portfolio, 1994-1996; joined
Fidelity in 1994
BILL BOWER ON THE STATE OF THE UNITED KINGDOM
AND JAPANESE MARKETS, WHICH REPRESENT THE
TWO LARGEST INVESTMENT COMPONENTS FOR THE
FUND AND THE MORGAN STANLEY EAFE INDEX:
"The U.K. is the fund's largest geographic investment at about
23% of investments. Having spent the last three months
living in and working out of Fidelity's London office, I'm
optimistic that the fund's stock and industry selection
continues its positive momentum. In general, U.K. stock
valuations look attractive relative to earnings and cash flow
growth. I also believe many companies and industries are
poised for strong above-consensus earnings growth. This is
the foundation for the fund's large exposure to U.K. stocks.
However, I am also optimistic that macroeconomic trends
continue to stimulate the economy. Specifically, the Bank of
England could continue to cut interest rates. Relative to
European interest rates, U.K. rates are approximately 2%
higher short term and 0.50% long term. Declining interest
rates should be positive for stimulating economic growth and
for stock valuations. The fund's investments in economically
sensitive industries like homebuilding, construction and
retailing should do well against this economic backdrop.
"Japan is the fund's second largest geographic
commitment at about 18% of investments, which is about
5% below the MSCI EAFE index weighting. The fund's
Japanese holdings are really an eclectic group of stocks
with the main themes being the service, specialty finance,
telecommunications, pharmaceutical and electronics
industries. The investment discipline in Japan, like in the
rest of the world, focuses on earnings and cash flow growth
relative to valuation. In addition, the fund seeks companies
where management's interests are most aligned with
shareholders. This has lead to some successful investments
in young companies like Nidec, Fancl, Hikari Tsushin,
Softbank Corporation and Aiful Corporation. Companies
such as these are springing up all over Japan to address
unmet consumer demand and/or drive the development of
new industries. Most often, these companies are run by
their founders who also happen to be major shareholders.
"In my opinion, the more difficult investment decisions in
Japan are in the more established industries that are in need
of reform and restructuring, such as banking and
manufacturing. Factoring out these large industries, the fund
would be about neutrally weighted in Japan. The investment
process for these industries can be difficult because old bias
can cloud the real extent and rate of change and reform. In
addition, the biggest drivers of stock performance can come
from atypical/non-fundamental sources, such as government
intervention.
"The Japanese government's reform programs are a step in the
right direction. In my opinion, however, to make their program
more successful, serious consideration needs to be given to
corporate tax relief, and a more flexible corporate cost
structure."
INTERNATIONAL GROWTH & INCOME
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 3.6%
Australia 3.3%
France 10.4%
United Kingdom 23.4%
Germany 7.3%
Italy 3.8%
Switzerland 6.3%
Japan 18.5%
Other 16.2%
Netherlands 7.2%
Row: 1, Col: 1, Value: 3.3
Row: 1, Col: 2, Value: 10.4
Row: 1, Col: 3, Value: 7.3
Row: 1, Col: 4, Value: 3.8
Row: 1, Col: 5, Value: 18.5
Row: 1, Col: 6, Value: 7.2
Row: 1, Col: 7, Value: 16.2
Row: 1, Col: 8, Value: 6.3
Row: 1, Col: 9, Value: 23.4
Row: 1, Col: 10, Value: 3.6
AS OF OCTOBER 31, 1998
Finland 2.9%
United States 10.2%
France 13.7%
United Kingdom 17.3%
Germany 8.4%
Switzerland 6.5%
Japan 13.2%
Spain 3.0%
Other 17.1%
Netherlands 7.7%
Row: 1, Col: 1, Value: 2.9
Row: 1, Col: 2, Value: 13.7
Row: 1, Col: 3, Value: 8.4
Row: 1, Col: 4, Value: 13.2
Row: 1, Col: 5, Value: 7.7
Row: 1, Col: 6, Value: 17.1
Row: 1, Col: 7, Value: 3.0
Row: 1, Col: 8, Value: 6.5
Row: 1, Col: 9, Value: 17.3
Row: 1, Col: 10, Value: 10.2
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks and investment companies 97.4 91.9
Bonds 0.6 0.8
Short-term investments 2.0 7.3
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
BP Amoco PLC (United 2.0 1.9
Kingdom, Oil & Gas)
Nokia AB sponsored ADR 1.7 1.4
(Finland, Communications
Equipment)
Elf Aquitaine (France, Oil & 1.5 1.4
Gas)
Shell Transport & Trading Co. 1.3 0.6
PLC (Reg.) (United Kingdom,
Oil & Gas)
Takeda Chemical Industries 1.2 1.0
Ltd. (Japan, Drugs &
Pharmaceuticals)
Novartis AG (Reg.) 1.2 1.7
(Switzerland, Drugs &
Pharmaceuticals)
British Telecommunications 1.2 1.2
PLC (United Kingdom,
Telephone Services)
Lloyds TSB Group PLC (United 1.2 1.0
Kingdom, Banks)
Mannesmann AG (Germany, 1.2 1.0
Cellular)
Telecom Italia Spa (Italy, 1.1 0.0
Telephone Services)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 24.0 20.9
UTILITIES 16.3 14.8
HEALTH 8.3 8.6
TECHNOLOGY 8.1 7.2
SERVICES 6.7 6.7
ENERGY 6.1 5.4
DURABLES 5.2 6.1
RETAIL & WHOLESALE 5.0 3.1
NONDURABLES 5.0 5.6
MEDIA & LEISURE 4.2 4.0
</TABLE>
INTERNATIONAL GROWTH & INCOME
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
AUSTRALIA - 2.5%
AMP Ltd. 140,800 $ 1,643,534
Australia & New Zealand 425,308 3,366,891
Banking Group Ltd.
Brambles Industries Ltd. 100,800 2,960,218
Cable & Wireless Optus Ltd. 520,600 1,170,616
(a)
Coles Myer Ltd. 290,300 1,541,487
Commonwealth Bank of Australia 120,100 2,185,465
Lend Lease Corp. Ltd. 74,500 1,003,789
National Australia Bank Ltd. 29,400 572,033
News Corp. Ltd. sponsored ADR 119,500 3,898,688
Perpetual Trustees Australia 17,900 247,418
Ltd.
Telstra Corp. Ltd. 557,700 3,024,446
Westfield Holdings Ltd. 130,100 860,416
22,475,001
BELGIUM - 0.2%
Electrabel SA 6,000 1,982,709
BRITISH VIRGIN ISLANDS - 0.2%
Mih Ltd. (a) 102,600 2,013,525
CANADA - 1.7%
Celestica, Inc. (sub-vtg.) (a) 47,400 1,886,891
CGI Group, Inc. Class A 188,900 4,667,399
(sub-vtg.) (a)
Cinar Films, Inc. Class B 96,000 2,004,000
(sub-vtg.) (a)
JDS Fitel, Inc. (a) 63,100 3,811,119
Videotron Group Ltd. 144,900 2,963,638
(sub-vtg.)
15,333,047
DENMARK - 0.5%
Falck AS 20,000 1,537,980
Tele Danmark AS Class B 12,500 1,290,550
Unidanmark AS Class A 21,500 1,478,810
4,307,340
FINLAND - 2.8%
Nokia AB sponsored ADR 200,200 14,852,338
Pohjola Group Insurance Corp. 40,700 1,932,728
Class B
Sampo Insurance Co. Ltd. 70,100 2,212,554
Sonera Group PLC 86,200 1,715,849
Teito Corp. Class B 96,000 3,832,009
24,545,478
FRANCE - 10.4%
AXA SA de CV 62,600 8,099,524
Banque Nationale de Paris 87,600 7,276,307
Cap Gemini SA 7,600 1,164,384
Castorama Dubois 15,000 3,597,273
Investissements SA
Clarins SA 14,000 1,279,242
Compagnie Financiere de 18,700 1,991,836
Paribas Class A (Reg.)
Elf Aquitaine 86,300 13,484,373
France Telecom SA 86,100 6,969,387
Groupe Danone 18,200 4,875,350
SHARES VALUE (NOTE 1)
Havas Advertising SA 7,000 $ 1,423,027
Lagardere S.C.A. (Reg.) 22,900 908,760
NRJ SA 10,100 2,213,633
Rhone-Poulenc SA Class A 52,400 2,469,348
Sanofi SA 25,200 3,956,905
Societe Generale, France 12,200 2,188,201
Class A
Suez Lyonnaise des Eaux 40,400 6,886,859
Television Francaise 1 SA 18,400 3,604,155
(T.F.1)
Total SA sponsored ADR 136,300 9,268,400
Union Assurances Federales SA 18,183 2,029,178
Vivendi SA 37,600 8,802,186
92,488,328
GERMANY - 7.1%
Apcoa Parking AG 13,370 1,005,087
BASF AG 115,600 5,091,727
Boss (Hugo) AG 1,790 2,403,180
DaimlerChrysler AG (Reg.) 99,125 9,732,836
Deutsche Bank AG (RFD) 31,700 1,778,890
Deutsche Telekom AG 169,300 6,687,998
Hannover Rueckversicherungs AG 23,000 1,897,052
Hoechst AG 55,400 2,630,790
Mannesmann AG 78,760 10,307,138
Metro AG 22,200 1,575,094
Munich Reinsurance AG:
(Reg.) 11,300 2,236,154
(RFD) 11,300 2,249,315
Primacom AG (a) 100,800 4,375,809
RWE AG 44,800 2,039,672
Schering AG 12,300 1,419,533
Siemens AG 43,200 3,188,089
Veba AG 57,800 3,176,209
Viag AG 3,496 1,754,542
63,549,115
HONG KONG - 2.0%
Dah Sing Financial Holdings 744,000 2,346,806
Ltd.
Hutchison Whampoa Ltd. 535,000 4,796,937
Johnson Electric Holdings 1,713,100 5,116,337
Ltd.
Li & Fung Ltd. 410,000 1,004,993
South China Morning Post 1,986,000 1,197,806
Holdings
Wing Hang Bank Ltd. 612,500 1,872,750
Yue Yuen Industrial Holdings 570,000 1,257,467
Ltd.
17,593,096
IRELAND - 1.1%
Bank of Ireland, Inc. 219,200 4,398,086
CRH PLC 34,800 687,182
Elan Corp. PLC sponsored ADR 56,800 2,925,200
(a)
Irish Life & Permanent PLC 106,426 1,500,208
9,510,676
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ISRAEL - 0.4%
Bezeq Israeli 290,000 $ 1,126,667
Telecommunication Corp. Ltd.
(a)
ECI Telecom Ltd. 75,000 2,765,625
3,892,292
ITALY - 3.1%
Assicurazioni Generali Spa 123,000 4,796,459
Banca Commerciale Italiana Spa 114,400 946,484
Banca di Roma 558,400 917,004
Finmeccanica Spa (a) 1,630,000 1,606,416
Olivetti & Co. Spa 641,200 2,232,232
San Paolo-IMI Spa 178,300 2,686,397
Telecom Italia Mobile Spa 432,700 2,610,497
Telecom Italia Spa 955,040 10,141,288
Unicredito Italiano Spa 326,500 1,664,191
27,600,968
JAPAN - 18.5%
Aeon Credit Service Ltd. 51,700 4,460,630
Aiful Corp. 56,200 4,599,380
Ajinomoto Co., Inc. 88,000 1,017,993
Alps Electric Co. Ltd. 73,000 1,238,273
Banyu Pharmaceutical Co. Ltd. 166,000 3,059,139
BellSystem24, Inc. 5,500 2,169,961
Benesse Corp. 27,200 2,269,325
Dainippon Screen 194,000 942,536
Manufacturing Co. Ltd.
DDI Corp. 1,966 9,765,773
Don Quijote Co. Ltd. 5,000 1,164,349
Fancl Corp. 17,000 2,420,841
Fuji Heavy Industries Ltd. 396,000 2,653,711
Fuji Photo Film Co. Ltd. 99,000 3,740,073
Fuji Soft ABC, Inc. 55,900 3,399,514
Fujitsu Support & Service, 4,000 489,194
Inc.
Furukawa Electric Co. Ltd. 235,000 1,027,559
Futaba Corp. 11,000 464,399
Hikari Tsushin, Inc. 12,000 2,512,984
Hirose Electric Co. Ltd. 10,000 929,804
Hitachi Information Systems, 20,000 254,481
Ltd.
Honda Motor Co. Ltd. 184,000 8,130,500
Hoya Corp. 33,000 1,727,676
Ito-Yokado Co. Ltd. 29,000 1,780,616
Japan Business Computer Co. 100,000 1,574,803
Ltd.
Kao Corp. 233,000 5,913,804
Kawasumi Laboratories, Inc. 75,000 1,294,187
Kokusai Denshin Denwa 41,600 2,522,902
Konami Co. Ltd. 71,600 2,519,015
Kyocera Corp. 43,800 2,601,290
Matsushita Electric 201,000 3,821,997
Industrial Co. Ltd.
Meiji Seika Kaisha Ltd. 348,000 2,095,929
Mitsumi Electric Co. Ltd. 26,000 496,566
Nichicon Corp. 164,000 2,163,679
Nichii Gakkan Co. 7,000 545,317
SHARES VALUE (NOTE 1)
Nidec Corp. 19,000 $ 2,466,912
Nihon Unisys Ltd. 198,000 3,939,102
Nippon System Development Co. 62,600 3,198,693
Nippon Zeon Co. Ltd. 350,000 2,321,997
Nomura Securities Co. Ltd. 187,000 2,017,557
NTT Mobile Communication 49 2,873,178
Network, Inc. (a)
NTT Mobile Communication 117 6,860,445
Network, Inc. (c)
Omron Corp. 245,000 3,375,984
Orix Corp. 48,900 3,936,413
Ryohin Keikaku Co. Ltd. 4,700 856,299
Secom Ltd. 41,000 4,004,523
Shimano, Inc. 43,000 1,094,991
Shohkoh Fund & Co. Ltd. 8,400 4,925,448
Softbank Corp. 28,600 3,806,785
Sony Corp. 61,200 5,661,000
Square Co. Ltd. 26,600 958,117
Takeda Chemical Industries 254,000 11,042,553
Ltd.
Takefuji Corp. 63,000 5,224,493
Terumo Corp. 229,000 4,987,435
Tokyo Seimitsu Co. Ltd. 30,000 1,661,082
Uni-Charm Corp. 54,000 2,447,143
Union Tool Co. 8,200 604,456
World Co. Ltd. 10,000 553,694
164,586,500
KOREA (SOUTH) - 0.2%
Korea Electric Power Corp. 33,400 961,111
Samsung Electronics Co. Ltd. 11,977 921,075
1,882,186
LUXEMBOURG - 1.0%
Minorco SA (For. Reg.) 100,000 2,516,780
Stolt Comex Seaway SA 501,770 6,272,125
8,788,905
MEXICO - 0.6%
Grupo Financiero Bancomer SA 10,281,000 3,535,648
de CV Series A
Grupo Televisa SA de CV 54,000 2,214,000
sponsored ADR (a)
5,749,648
NETHERLANDS - 6.8%
ABN AMRO Holding NV 156,500 3,736,585
Ahrend NV 73,400 1,429,973
Akzo Nobel NV 155,900 7,056,611
Beter Bed Holding NV 106,600 3,075,655
Equant NV (a) 20,000 1,819,018
Fortis Amev NV 168,800 6,023,047
Grand Hotel Krasnapolsky NV 37,800 3,033,716
ING Groep NV 160,390 9,900,560
Koninklijke (Royal) Philips 13,700 1,182,203
Electronics NV
Koninklijke (Royal) Philips 52,600 4,490,725
Electronics NV ADR
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - CONTINUED
Koninklijke Ahold NV 61,500 $ 2,288,834
Koninklijke KPN NV 64,600 2,701,740
Nutreco Holding NV 67,900 2,757,078
Samas Groep NV 162,500 2,391,564
Vedior NV 78,038 1,759,947
Vendex NV CVA 82,600 2,059,610
Vnu NV 115,700 4,691,871
60,398,737
NEW ZEALAND - 0.1%
Telecom Corp. of New Zealand 244,300 1,270,838
Ltd.
PORTUGAL - 0.4%
Electricidade de Portugal SA 105,500 1,988,321
Telecel Comunicacoes Pessoais 9,000 1,205,444
SA
3,193,765
SINGAPORE - 0.6%
Allgreen Properties Ltd. 111,000 67,412
Development Bank of Singapore 112,000 1,188,679
Ltd. (For. Reg.)
Oversea-Chinese Banking Corp. 130,000 1,218,750
(For. Reg.)
Overseas Union Bank Ltd. 195,000 1,000,295
United Overseas Bank Ltd. 128,000 988,679
(For. Reg.)
Want Want Holdings Ltd. 789,000 962,580
5,426,395
SOUTH AFRICA - 0.2%
Impala Platinum Holdings Ltd. 85,500 1,949,055
SPAIN - 2.1%
Banco Popular Espanol SA 20,600 1,461,356
Banco Santander Central 222,380 4,840,974
Hispano SA
Endesa SA 138,500 3,085,386
Telefonica SA 182,700 8,579,186
Telefonica SA rights 6/15/99 182,700 170,230
(a)
Union Electrica Fenosa SA 49,300 657,183
18,794,315
SWEDEN - 1.5%
Ericsson (L.M.) Telefon AB 174,700 4,716,900
Class B
Hennes & Mauritz AB Class B 23,100 1,996,184
Scandic Hotels AB 20,800 618,098
Securitas AB Class B 67,500 1,002,924
Skandinaviska Enskilda Banken 144,700 1,891,975
Class A
Svenska Handelsbanken 35,200 1,322,160
Swedish Match Co. 514,000 1,692,377
13,240,618
SWITZERLAND - 6.3%
Bank Sarasin & Compagnie 2,281 4,071,076
Class B (Reg.)
Credit Suisse Group (Reg.) 45,900 9,110,728
Julius Baer Holding AG 1,319 4,297,136
SHARES VALUE (NOTE 1)
Nestle SA (Reg.) 5,200 $ 9,632,283
Novartis AG (Reg.) 7,510 11,003,825
Roche Holding AG 425 5,002,953
participation certificates
Selecta Group (Reg.) 8,770 2,906,070
Swisscom AG 4,600 1,690,289
United Bank of Switzerland AG 25,050 8,514,370
56,228,730
TAIWAN - 0.6%
Taiwan Semiconductor 775,000 2,618,884
Manufacturing Co. Ltd.
Taiwan Semiconductor 52,300 1,255,200
Manufacturing Co. Ltd. ADR
(a)
Yuanta Securities Co. Ltd. (a) 1,023,000 1,705,000
5,579,084
UNITED KINGDOM - 23.4%
Abbey National PLC 136,000 3,076,108
Alliance & Leicester PLC 140,900 2,111,006
Allied Zurich PLC (a) 449,000 5,960,313
Amvescap PLC 173,900 1,849,009
Arcadia Group PLC 1,081,100 4,876,626
Ashtead Group PLC 1,668,300 6,114,361
AstraZeneca Group PLC: 88,700 3,481,468
(Sweden)
(UK) 82,836 3,239,435
BBA Group PLC 341,100 2,731,075
Berkeley Group PLC 72,500 865,469
BG PLC 373,000 2,103,161
Boots Co. PLC 103,120 1,366,389
BP Amoco PLC 929,537 17,535,389
BP Amoco PLC sponsored ADR 24,333 2,754,191
British American Tobacco PLC 232,500 1,953,317
British Energy PLC 160,700 1,366,927
British Telecommunications PLC 630,700 10,580,006
Bryant Group PLC 378,900 915,612
BTR Siebe PLC 409,500 2,092,913
Cadbury Schweppes PLC 137,000 1,830,765
Caradon PLC 720,600 1,834,201
CGU PLC 306,600 4,847,948
Dixons Group PLC 145,400 3,108,357
Glaxo Wellcome PLC 312,300 9,095,721
Hays PLC 306,000 3,406,395
HSBC Holdings PLC Ord. 65,200 2,488,331
Iceland Group PLC 1,245,200 4,834,501
Independent Insurance PLC 199,200 872,878
Kingfisher PLC 201,700 3,021,930
Lloyds TSB Group PLC 644,500 10,388,086
Misys PLC 100,000 940,019
National Grid Group PLC 284,700 1,973,349
National Westminster Bank PLC 183,800 4,432,644
Next PLC 137,400 1,697,765
Prudential Corp. PLC 302,100 4,314,446
Rentokil Initial PLC 895,400 5,275,905
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Reuters Group PLC 360,900 $ 4,895,471
Royal & Sun Alliance 513,800 4,436,642
Insurance Group PLC
Royal Bank of Scotland Group 140,700 3,322,948
PLC
Saatchi & Saatchi PLC 188,200 730,688
Scoot.com PLC (a) 2,124,300 1,522,900
Scottish & Southern Energy PLC 212,200 1,994,719
Select Appointments Holdings 118,000 1,505,576
PLC
Shell Transport & Trading Co. 1,476,100 11,178,489
PLC (Reg.)
Smith (WH) Group 102,400 1,182,809
SmithKline Beecham PLC 741,300 9,738,861
Standard Chartered PLC 207,000 3,748,281
Tarmac PLC 1,151,200 2,197,681
Taylor Nelson Sofres PLC 886,100 2,241,186
Triad Group PLC 133,000 1,124,881
Unilever PLC 809,300 7,245,770
Vodafone Group PLC 406,000 7,282,632
Wimpey George PLC 680,100 1,862,590
WPP Group PLC 296,700 2,624,131
208,172,271
UNITED STATES OF AMERICA - 1.4%
AFLAC, Inc. 70,900 3,846,325
AirTouch Communications, Inc. 58,800 5,490,450
(a)
Manpower, Inc. 130,100 2,943,513
12,280,288
TOTAL COMMON STOCKS 852,832,910
(Cost $691,984,622)
PREFERRED STOCKS - 1.7%
CONVERTIBLE PREFERRED STOCKS
- - 0.8%
AUSTRALIA - 0.8%
National Australia Bank Ltd. 76,800 2,616,000
$1.97 EXCAPS
Village Roadshow Ltd. $3.25 60,000 2,520,000
PRIDES (a)(c)
WBK Trust $3.135 STRYPES 55,000 1,907,813
7,043,813
NONCONVERTIBLE PREFERRED
STOCKS - 0.9%
GERMANY - 0.2%
Dyckerhoff AG 1,600 445,543
RWE AG (non-vtg.) 40,000 1,207,032
1,652,575
SHARES VALUE (NOTE 1)
ITALY - 0.7%
Telecom Italia Spa Risp 1,175,000 $ 6,321,221
TOTAL NONCONVERTIBLE 7,973,796
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 15,017,609
(Cost $11,475,058)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.6%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (D)
NETHERLANDS - 0.4%
Koninklijke Ahold NV 3% Baa1 NLG 4,810,000 3,072,818
9/30/03
UNITED STATES OF AMERICA - 0.2%
Bell Atlantic Financial A1 1,800,000 1,980,000
Services, Inc. 4.25% 9/15/05
TOTAL CONVERTIBLE BONDS 5,052,818
(Cost $5,095,262)
CASH EQUIVALENTS - 2.0%
SHARES
Taxable Central Cash Fund (b) 17,814,548 17,814,548
(Cost $17,814,548)
TOTAL INVESTMENT IN $ 890,717,885
SECURITIES - 100%
(Cost $726,369,490)
</TABLE>
SECURITY TYPE ABBREVIATIONS
EXCAPS - Exchangeable Capital Units
PRIDES - Preferred Redeemable
Increased Dividend Equity
Securities
STRYPES - Structured Yield Product
Exchangeable for Common Stock
CURRENCY ABBREVIATIONS
NLG - Dutch guilder
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $9,380,445 or 1.1% of net assets.
(d) Principal amount is stated in United States dollars unless
otherwise noted.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $437,993,530 and $461,260,800, respectively.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $2,413,714. The weighted average interest rate was 5.18%.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $727,409,064. Net unrealized appreciation
aggregated $163,308,821, of which $190,856,903 related to appreciated
investment securities and $27,548,082 related to depreciated
investment securities.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 2.6%
CASH EQUIVALENTS 2.0
CONSTRUCTION & REAL ESTATE 2.6
DURABLES 5.2
ENERGY 6.1
FINANCE 24.0
HEALTH 8.3
HOLDING COMPANIES 0.3
INDUSTRIAL MACHINERY & 3.3
EQUIPMENT
MEDIA & LEISURE 4.2
NONDURABLES 5.0
RETAIL & WHOLESALE 5.0
SERVICES 6.7
TECHNOLOGY 8.1
TRANSPORTATION 0.3
UTILITIES 16.3
100.0%
INTERNATIONAL GROWTH & INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 890,717,885
value (cost $726,369,490) -
See accompanying schedule
Foreign currency held at 307,456
value (cost $306,144)
Receivable for investments 10,264,372
sold
Receivable for fund shares 1,113,871
sold
Dividends receivable 3,592,966
Interest receivable 115,528
Other receivables 12,034
TOTAL ASSETS 906,124,112
LIABILITIES
Payable for investments $ 9,546,772
purchased
Payable for fund shares 3,353,157
redeemed
Accrued management fee 545,420
Other payables and accrued 418,423
expenses
TOTAL LIABILITIES 13,863,772
NET ASSETS $ 892,260,340
Net Assets consist of:
Paid in capital $ 714,451,091
Distributions in excess of (750,658)
net investment income
Accumulated undistributed net 14,488,616
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 164,071,291
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 39,844,747 $ 892,260,340
shares outstanding
NET ASSET VALUE, offering $22.39
price and redemption price
per share ($892,260,340
(divided by) 39,844,747
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 6,139,048
Dividends
Interest 793,249
6,932,297
Less foreign taxes withheld (637,390)
TOTAL INCOME 6,294,907
EXPENSES
Management fee $ 3,171,163
Transfer agent fees 1,260,889
Accounting fees and expenses 231,383
Non-interested trustees' 1,353
compensation
Custodian fees and expenses 215,142
Registration fees 24,853
Audit 23,733
Legal 2,149
Interest 2,427
Miscellaneous 2,007
Total expenses before 4,935,099
reductions
Expense reductions (178,569) 4,756,530
NET INVESTMENT INCOME 1,538,377
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 18,887,081
Foreign currency transactions 29,775 18,916,856
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 119,561,001
Assets and liabilities in (148,376) 119,412,625
foreign currencies
NET GAIN (LOSS) 138,329,481
NET INCREASE (DECREASE) IN $ 139,867,858
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 154,283
Expense reductions Directed
brokerage arrangements
Custodian credits 50
Transfer agent credits 24,236
$ 178,569
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 1,538,377 $ 15,664,243
income
Net realized gain (loss) 18,916,856 56,252,297
Change in net unrealized 119,412,625 (50,786,245)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 139,867,858 21,130,295
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (2,856,080) (18,064,755)
From net investment income
In excess of net investment (750,658) -
income
From net realized gain (25,246,859) (42,970,040)
TOTAL DISTRIBUTIONS (28,853,597) (61,034,795)
Share transactions Net 555,954,561 1,025,290,014
proceeds from sales of shares
Reinvestment of distributions 27,912,115 59,414,450
Cost of shares redeemed (620,385,356) (1,294,204,233)
NET INCREASE (DECREASE) IN (36,518,680) (209,499,769)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 74,495,581 (249,404,269)
IN NET ASSETS
NET ASSETS
Beginning of period 817,764,759 1,067,169,028
End of period (including $ 892,260,340 $ 817,764,759
under (over) distribution of
net investment income of
$(750,658) and $7,030,622,
respectively)
OTHER INFORMATION
Shares
Sold 26,399,457 49,300,775
Issued in reinvestment of 1,401,211 2,997,727
distributions
Redeemed (29,360,681) (62,013,953)
Net increase (decrease) (1,560,013) (9,715,451)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 19.75 $ 20.88 $ 19.09 $ 17.83 $ 17.54
period
Income from Investment
Operations
Net investment income .04 D .34 D .48 D, E .54 .54
Net realized and unrealized 3.32 (.22) F 1.97 1.32 .28
gain (loss)
Total from investment 3.36 .12 2.45 1.86 .82
operations
Less Distributions
From net investment income (.07) (.37) (.29) (.60) (.21)
In excess of net investment (.02) - - - -
income
From net realized gain (.63) (.88) (.37) - (.32)
In excess of net realized gain - - - - -
Total distributions (.72) (1.25) (.66) (.60) (.53)
Net asset value, end of period $ 22.39 $ 19.75 $ 20.88 $ 19.09 $ 17.83
TOTAL RETURNB, C 17.46% .55% 13.17% 10.66% 4.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 892,260 $ 817,765 $ 1,067,169 $ 1,007,076 $ 903,235
(000 omitted)
Ratio of expenses to average 1.16% A 1.17% 1.17% 1.16% 1.18%
net assets
Ratio of expenses to average 1.12% A, G 1.13% G 1.15% G 1.14% G 1.18%
net assets after expense
reductions
Ratio of net investment .36% A 1.62% 2.33% 2.76% 2.98%
income to average net assets
Portfolio turnover rate 107% A 143% 70% 95% 141%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET GAIN ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 17.25
period
Income from Investment
Operations
Net investment income .38 D
Net realized and unrealized .02
gain (loss)
Total from investment .40
operations
Less Distributions
From net investment income (.03)
In excess of net investment -
income
From net realized gain (.05)
In excess of net realized gain (.03)
Total distributions (.11)
Net asset value, end of period $ 17.54
TOTAL RETURNB, C 2.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,367,938
(000 omitted)
Ratio of expenses to average 1.21%
net assets
Ratio of expenses to average 1.21%
net assets after expense
reductions
Ratio of net investment 2.16%
income to average net assets
Portfolio turnover rate 173%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET GAIN ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
DIVERSIFIED INTERNATIONAL
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY DIVERSIFIED 15.38% 5.51% 92.74% 137.47%
INTERNATIONAL
MSCI EAFE 15.40% 9.74% 52.59% 96.27%
MSCI GDP-Wtd EAFE 16.28% 13.24% 66.54% 127.12%
International Funds Average 15.11% 3.24% 50.24% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on December 27, 1991. For example, if
you invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index - a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets outside the United States and
Canada. As of April 30, 1999, the index included over 1,020 equity
securities of companies domiciled in 20 countries. You can also
compare the fund's returns to the performance of the Morgan Stanley
Capital International (MSCI) GDP-Weighted Europe, Australasia, Far
East (EAFE) Index - a gross domestic product weighted, unmanaged index
of over 1,000 foreign stocks. To measure how the fund's performance
stacked up against its peers, you can compare it to the international
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Inc. The past six months average
represents a peer group of 597 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY DIVERSIFIED 5.51% 14.02% 12.50%
INTERNATIONAL
MSCI EAFE 9.74% 8.82% 9.62%
MSCI GDP-Wtd EAFE 13.24% 10.74% 11.82%
International Funds Average 3.24% 8.29% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Diversified International
MS EAFE (Net MA tax)
MS GDP EAFE (Net MA tax)
00325 MS001 MS005
1991/12/27 10000.00 10000.00 10000.00
1991/12/31 10060.00 10240.13 10196.19
1992/01/31 9860.00 10021.41 10109.92
1992/02/29 9680.00 9662.72 9972.49
1992/03/31 9140.00 9024.82 9481.13
1992/04/30 9240.00 9067.72 9563.81
1992/05/31 9750.00 9674.68 10126.93
1992/06/30 9540.00 9215.78 9797.41
1992/07/31 9190.00 8979.92 9450.48
1992/08/31 9350.00 9543.15 9920.65
1992/09/30 9140.00 9354.70 9556.68
1992/10/31 8460.00 8864.00 9168.72
1992/11/30 8460.00 8947.42 9213.47
1992/12/31 8671.06 8993.69 9211.91
1993/01/31 8873.42 8992.59 9318.58
1993/02/28 9176.96 9264.23 9644.58
1993/03/31 9915.57 10071.75 10303.18
1993/04/30 10522.64 11027.58 11252.11
1993/05/31 10785.71 11260.48 11427.99
1993/06/30 10482.17 11084.80 11230.18
1993/07/31 10805.94 11472.82 11568.15
1993/08/31 11362.43 12092.16 12415.92
1993/09/30 11210.66 11819.97 12155.45
1993/10/31 11453.49 12184.23 12489.74
1993/11/30 11028.54 11119.20 11494.70
1993/12/31 11850.64 11922.09 12303.22
1994/01/31 12739.44 12930.05 13243.97
1994/02/28 12484.04 12894.23 13171.27
1994/03/31 12085.61 12338.86 12982.15
1994/04/30 12320.58 12862.39 13637.94
1994/05/31 12300.15 12788.54 13324.95
1994/06/30 12136.69 12969.27 13319.05
1994/07/31 12555.55 13093.99 13628.32
1994/08/31 12872.25 13404.00 13859.17
1994/09/30 12504.47 12981.83 13371.97
1994/10/31 12729.22 13414.13 13778.34
1994/11/30 12044.75 12769.44 13164.27
1994/12/31 11979.79 12849.40 13264.12
1995/01/31 11428.51 12355.78 12924.34
1995/02/28 11566.33 12320.32 12909.67
1995/03/31 12128.21 13088.75 13494.32
1995/04/30 12509.87 13581.01 14097.55
1995/05/31 12615.88 13419.11 13961.27
1995/06/30 12806.71 13183.79 13805.48
1995/07/31 13633.63 14004.56 14707.85
1995/08/31 13421.60 13470.33 14093.61
1995/09/30 13676.04 13733.41 14260.84
1995/10/31 13495.81 13364.25 13847.46
1995/11/30 13633.63 13736.10 14139.27
1995/12/31 14132.55 14289.53 14744.32
1996/01/31 14555.74 14348.19 14931.68
1996/02/29 14566.88 14396.70 14976.23
1996/03/31 14856.44 14702.43 15174.76
1996/04/30 15391.00 15129.88 15647.33
1996/05/31 15546.91 14851.46 15416.27
1996/06/30 15691.69 14935.05 15537.25
1996/07/31 15190.54 14498.53 15091.25
1996/08/31 15446.68 14530.30 15082.83
1996/09/30 15914.43 14916.31 15497.62
1996/10/31 16014.66 14763.67 15327.98
1996/11/30 16905.60 15351.09 15982.90
1996/12/31 16961.57 15153.62 15869.12
1997/01/31 17076.88 14626.27 15573.96
1997/02/28 17365.14 14869.07 15686.25
1997/03/31 17388.20 14925.57 15988.99
1997/04/30 17445.86 15007.66 15953.65
1997/05/31 18541.27 15987.21 16789.15
1997/06/30 19486.78 16871.30 17792.30
1997/07/31 20040.25 17146.65 18188.00
1997/08/31 18852.59 15868.37 16886.29
1997/09/30 20155.56 16759.69 17974.61
1997/10/31 19106.27 15475.73 16651.14
1997/11/30 18944.84 15320.98 16586.70
1997/12/31 19289.47 15457.49 16831.02
1998/01/31 19851.53 16167.29 17709.76
1998/02/28 20891.95 17207.66 18731.79
1998/03/31 21860.61 17740.75 19756.23
1998/04/30 22506.38 17884.10 20057.32
1998/05/31 22530.30 17800.58 20345.74
1998/06/30 22386.79 17938.53 20540.65
1998/07/31 22637.92 18123.66 20812.20
1998/08/31 19325.35 15881.58 18073.52
1998/09/30 19145.97 15398.14 17572.88
1998/10/31 20581.02 17006.79 19532.26
1998/11/30 21442.05 17881.45 20548.92
1998/12/31 22065.54 18590.27 21379.50
1999/01/31 22339.49 18538.77 21405.37
1999/02/28 21691.97 18100.33 20736.45
1999/03/31 22663.25 18859.46 21831.96
1999/04/30 23746.61 19626.66 22712.01
IMATRL PRASUN SHR__CHT 19990430 19990512 103712 R00000000000092
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Diversified International Fund on December 27,
1991, when the fund started. As the chart shows, by April 30, 1999,
the value of the investment would have grown to $23,747 - a 137.47%
increase on the initial investment. For comparison, look at how both
the Morgan Stanley Capital International EAFE Index and the Morgan
Stanley Capital International GDP-weighted EAFE Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 in the EAFE index would have grown to $19,627 - a 96.27%
increase. If $10,000 was put into the MSCI GDP-Weighted EAFE index, it
would have grown to $22,712 - a 127.12% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
DIVERSIFIED INTERNATIONAL
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Greg Fraser)
An interview with Greg Fraser, Portfolio Manager of
Fidelity Diversified International Fund
Q. HOW DID THE FUND PERFORM, GREG?
A. For the six-month and one-year periods that ended April 30, 1999,
the fund returned 15.38% and 5.51%, respectively. For the same
periods, the capitalization-weighted Morgan Stanley Capital
International EAFE Index and Morgan Stanley Capital International
GDP-Weighted EAFE Index - two broad measures of stock performance in
Europe, Australia and the Far East - were up 15.40% and 16.28% for the
past six months and 9.74% and 13.24% for the past 12 months,
respectively. The Lipper Inc. international funds average was up
15.11% for the past six months and 3.24% for the past year.
Q. WHY DID THE FUND OUTPERFORM THE COMPETITORS YET TRAIL THE EAFE
INDEXES?
A. In two words, Japan and cash. The fund was underweighted in Japan
relative to the indexes but overweighted relative to many competitors,
and market returns in Japan were high, especially near the end of the
period. This positioning helped the fund versus competitors but hurt
the fund versus the indexes. Since many markets had positive returns
during the period, the cash the fund carried - which it does normally
to meet redemptions and take advantage of buying opportunities - hurt
its performance versus the indexes, which, by construction, do not
hold cash. Relative to many competitors, cash levels were generally
similar, so cash didn't have a big impact there. Of course, there were
other factors that contributed to performance differences, but these
were two of the most important ones.
Q. ISN'T THE USE OF TWO DIFFERENT INDEXES CONFUSING?
A. Yes, it can be. Most international funds use the
capitalization-weighted version of the index. In this version,
companies are weighted by their market values. When the fund was
launched in the early 1990s, Japan tended to account for over 50% of
the capitalization-weighted index. To lower the pressure to invest in
what appeared to be an expensive market, we chose the GDP-weighted
index, in which the weights are adjusted to take the size of the
different economies into account. And, by and large, it was beneficial
for shareholders over the past seven years or so not to be heavily
invested in Japan. But now, the differences in the country weights in
the cap-weighted EAFE index are not that great. In order to be more
comparable with other funds, and to make comparisons simpler in
general, we would like to switch our primary benchmark to the
capitalization-weighted EAFE index. I urge shareholders to return
their proxies for the July 14, 1999, meeting that - if shareholders
agree - would allow this simplification.
Q. WHICH STOCKS HELPED THE FUND?
A. Telephone service providers - broadly defined - were especially
helpful over the period. These included Hikari Tsushin, a seller of
telephone subscription services in Japan; BCE, the large Canadian
telephone conglomerate; Telecom Italia, the major provider of
fixed-line service in Italy; Mannesmann, a relatively new entrant into
Germany's deregulated telephone service market; and Nokia, a leading
provider of cellular handsets. As energy stocks finally rebounded from
lows reached in the early part of the year, BP Amoco, one of the
largest integrated oil companies in the world, and Shell Transport &
Trading, the U.K. portion of the Royal Dutch Shell group of companies,
contributed meaningfully to the fund's returns.
Q. WHICH STOCKS HELD BACK THE FUND'S PERFORMANCE?
A. There were a variety of stocks that hurt the fund. Some of the
fund's long-term winners took a breather during the period, including
Unilever, the worldwide consumer products giant; Novartis, one of the
largest pharmaceutical companies in the world; and Nestle, the
worldwide candy and beverage leader. As investors became more
confident after last year's worldwide economic and market travails,
these stocks - generally considered defensive because they offer
steady, but not stellar, earnings - lost ground to more aggressive
stocks. Although these stocks were not cheap even at the end of the
period, they tend to provide greater earnings visibility than many
other companies, so the fund retained moderate holdings in each of
them.
Q. IT LOOKS AS THOUGH YOU INCREASED THE WEIGHTINGS OF TECHNOLOGY
STOCKS. WHY WAS THAT?
A. I try to learn from what happens in the U.S. markets to benefit our
shareholders. One important investing theme that worked well in the
U.S. over the past several years was buying successful technology
companies. So, I've tried to focus especially carefully on
international technology companies, looking for those that can become
world leaders.
Q. HOW HAS THE INTRODUCTION OF THE EURO AFFECTED THE FUND?
A. The euro is the new European regional currency adopted at the
beginning of the year by about a dozen European countries. While it
won't be fully implemented until well after 2000, many financial
transactions are already conducted in euros. Although from a
technological point of view the adoption was very smooth, the currency
itself has been much weaker than most observers expected. And, as I've
cautioned in past reports, some unforeseen circumstances could still
present major challenges to it prior to the final phase-out of the
participating countries' national currencies. In sum, up until now the
euro hasn't had too much of an impact on the fund, but it is an issue
that I'll continue to watch closely.
Q. GREG, WHAT'S YOUR OUTLOOK FOR THE FUND?
A. Over the past few months, market leadership appeared to shift from
large-capitalization growth stocks to smaller-cap and more
value-oriented stocks. It's very hard to know how long this shift will
remain intact. I attempt to position the fund so that it can perform
competitively in a variety of market environments: growth or value,
large-capitalization or mid- and small-capitalization. I'm closely
watching Japan, where the country seems to have made some genuine
steps to reform, including a lower corporate tax rate and a greater
reliance on corporate restructuring. If structural reforms gain
momentum in Japan, shareholders should not be surprised to see an
increase in the fund's Japanese holdings.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)
FUND FACTS
GOAL: long-term growth by investing mainly in
foreign equity securities that are determined,
mainly through both quantitative and
fundamental analysis, to be undervalued
compared to others in their industries and
countries
FUND NUMBER: 325
TRADING SYMBOL: FDIVX
START DATE: December 27,1991
SIZE: as of April 30, 1999, more than
$2.5 billion
MANAGER: Greg Fraser, since 1991; manager,
Fidelity Select Environmental Services
Portfolio, 1991; Fidelity Select Defense and
Aerospace Portfolio, 1989-1990; joined
Fidelity in 1986
GREG FRASER DISCUSSES WHAT CONSTITUTES AN
INTERNATIONAL COMPANY:
"Diversified International is basically an international fund,
not a global fund. That means it generally does not invest in
United States companies. If it were global, it would. But
what are United States - or for that matter, international
- - companies? The answer to this question is becoming
cloudier all the time. There are many tests that one could
use to determine the `nationality' of a company: where the
stock is listed; where the customers are located; where the
production assets are located; where the profits are
generated; where the taxes are paid; where the employees
are located; where the stockholders are located; where the
lenders are located; which indexes the stock is included
within - the list goes on and on.
"Is a company like Coca-Cola - where the majority of
current profits and most of the expected future earnings
growth are from outside the United States - really a
`United States' company? Its primary stock exchange
listing is in the United States, a majority of the shareholders
are probably in the United States, and it pays a lot of
United States taxes, so many observers consider it a
domestic company. What about Carnival Corporation?
Many of its customers are from the United States; it has an
administrative headquarters in Miami, and it's listed on the
New York Stock Exchange. On the other hand, many of its
employees are not United States citizens, it is incorporated
in the Republic of Panama and, perhaps most tellingly,
relative to its income it doesn't pay much in United States
income taxes. While most observers probably consider
it a United States company, I believe it could be
reasonable to consider it an international company.
"The situation is becoming even less clear with
trans-national mergers such as Pharmacia & Upjohn,
and DaimlerChrysler. Is the successor company's
`nationality' determined by the larger of the predecessors?
Or where the new headquarters are? Or does it have `dual
nationality?' For the purposes of Fidelity Diversified
International Fund, I consider these international
companies, though some domestic fund managers no
doubt think of them as from the United States.
"In sum, because it is an international fund, Diversified
International attempts to keep true United States exposure
to a minimal level. When considering how to classify a
company, I consider all of the factors listed above as well
as other applicable circumstances. But it's important to
remember that some companies are neither clearly domestic
nor international, so that the same company might be
categorized differently by different people."
DIVERSIFIED INTERNATIONAL
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 5.5%
Canada 4.4%
France 11.7%
United Kingdom 13.4%
Switzerland 5.5%
Germany 7.3%
Italy 6.1%
Other 22.8%
Japan 16.8%
Netherlands 6.5%
Row: 1, Col: 1, Value: 4.4
Row: 1, Col: 2, Value: 11.7
Row: 1, Col: 3, Value: 7.3
Row: 1, Col: 4, Value: 6.1
Row: 1, Col: 5, Value: 16.8
Row: 1, Col: 6, Value: 6.5
Row: 1, Col: 7, Value: 22.8
Row: 1, Col: 8, Value: 5.5
Row: 1, Col: 9, Value: 13.4
Row: 1, Col: 10, Value: 5.5
AS OF OCTOBER 31, 1998
United States 11.1%
France 12.6%
United Kingdom 9.4%
Germany 7.4%
Switzerland 6.9%
Italy 5.2%
Sweden 3.7%
Japan 13.4%
Other 24.0%
Netherlands 6.3%
Row: 1, Col: 1, Value: 12.6
Row: 1, Col: 2, Value: 7.4
Row: 1, Col: 3, Value: 5.2
Row: 1, Col: 4, Value: 13.4
Row: 1, Col: 5, Value: 6.3
Row: 1, Col: 6, Value: 24.0
Row: 1, Col: 7, Value: 3.7
Row: 1, Col: 8, Value: 6.9
Row: 1, Col: 9, Value: 9.4
Row: 1, Col: 10, Value: 11.1
<TABLE>
<CAPTION>
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ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks and investment companies 95.4 89.5
Bonds 0.6 1.0
Short-term investments 4.0 9.5
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TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
BP Amoco PLC sponsored ADR 1.8 0.9
(United Kingdom, Oil & Gas)
BCE, Inc. (Canada, Telephone 1.5 1.0
Services)
Mannesmann AG (Germany, 1.3 1.1
Cellular)
Telecom Italia Spa (Italy, 1.3 0.9
Telephone Services)
Elf Aquitaine SA sponsored 1.2 1.2
ADR (France, Oil & Gas)
Assicurazioni Generali Spa 1.2 1.4
(Italy, Insurance)
Shell Transport & Trading Co. 1.2 1.2
PLC (Reg.) (United Kingdom,
Oil & Gas)
Kao Corp. (Japan, Household 1.1 1.1
Products)
Telefonica SA sponsored ADR 1.1 1.3
(Spain, Telephone Services)
Vivendi SA (France, Water) 1.1 1.2
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 21.1 20.6
UTILITIES 13.9 11.4
TECHNOLOGY 8.7 5.8
NONDURABLES 8.4 8.5
ENERGY 7.7 6.8
HEALTH 5.5 7.0
BASIC INDUSTRIES 5.1 4.3
MEDIA & LEISURE 4.3 3.9
DURABLES 4.2 4.7
SERVICES 3.0 2.3
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DIVERSIFIED INTERNATIONAL
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 89.5%
SHARES VALUE (NOTE 1)
AUSTRALIA - 3.1%
AAPT Ltd. (a) 2,100,000 $ 7,499,709
AMP Ltd. 250,000 2,918,207
Australia & New Zealand 500,000 3,958,180
Banking Group Ltd.
Australian Oil & Gas Corp. 275,000 314,637
Ltd.
Broken Hill Proprietary Co. 250,000 2,824,626
Ltd. (The)
Cable & Wireless Optus Ltd. 1,100,000 2,473,449
(a)
Commonwealth Bank of Australia 1,000,000 18,197,045
CSR Ltd. 1,000,000 2,671,854
Fosters Brewing Group Ltd. 500,000 1,457,615
HIH Insurance Ltd. 1,474,784 1,892,176
Keycorp Ltd. 100,000 224,859
National Australia Bank Ltd. 250,000 4,864,229
National Mutual Property Trust 1,000,000 833,301
News Corp. Ltd. sponsored 350,000 10,696,875
ADR (ltd. vtg.)
North Ltd. 280,000 592,570
Pasminco Ltd. 500,000 558,841
Tyndall Australia Ltd. 1,800,000 3,309,395
Westfield Trust Unit 1,000,000 2,228,750
WMC Ltd. 2,750,000 11,876,193
79,392,511
AUSTRIA - 0.2%
Austria Tabak AG (c) 75,000 4,605,780
RHI AG 50,000 1,529,437
6,135,217
BAHAMAS (NASSAU) - 0.1%
Sun International Hotels Ltd. 75,000 3,173,438
(a)
BELGIUM - 1.0%
Delhaize Freres & Compagnie 150,000 13,150,296
Le Lion SA
Telinfo SA 100,000 12,758,540
25,908,836
BERMUDA - 0.8%
Global Crossing Ltd. (a) 150,000 8,100,000
RenaissanceRe Holdings Ltd. 100,000 3,118,750
Sea Containers Ltd. Class A 100,000 3,193,750
Terra Nova (Bermuda) Holdings 300,000 6,731,250
Ltd. Class A
21,143,750
BRAZIL - 0.2%
Compania Cervejaria Brahma PN:
warrants 4/30/03 (a) 188,529 5,094
(Pfd. Reg.) (a) 3,000,000 1,415,791
Telebras sponsored:
ADR 50,000 3,906
ADR (PFD) 50,000 4,559,375
5,984,166
BRITISH VIRGIN ISLANDS - 0.0%
MIH Ltd. (a) 50,000 981,250
SHARES VALUE (NOTE 1)
CANADA - 4.1%
Alberta Energy Co. Ltd. 300,000 $ 8,853,809
Barrick Gold Corp. 100,000 2,021,277
BCE, Inc. 850,000 38,795,470
Beau Canada Exploration Ltd. 350,000 557,310
(a)
Canadian Imperial Bank of 100,000 2,573,782
Commerce
Canadian Natural Resources 225,000 4,416,609
Ltd. (a)
Canadian Pacific Ltd. 200,000 4,516,129
Celestica, Inc. (sub-vtg.) (a) 100,000 3,980,782
Chum Ltd. Class B 10,000 247,083
Counsel Corp. (a) 100,000 652,025
Falconbridge Ltd. 100,000 1,492,793
Gulf Canada Resources Ltd. (a) 1,698,800 6,879,149
Harrowston, Inc. Class A (a) 400,000 1,592,313
JDS Fitel, Inc. (a) 10,000 603,981
Maritime Telegraph & 50,000 1,338,367
Telephone Co. Ltd.
Marsulex, Inc. (a) 75,000 185,312
Noranda, Inc. 100,000 1,338,367
Potash Corp. of Saskatchewan 150,000 9,142,073
Rio Algom Ltd. 200,000 2,711,050
Russel Metals, Inc. (a) 10,000 27,454
Saskatchewan Wheat Pool 79,400 504,084
Class B (non-vtg.)
SMK Speedy International, 100,000 542,210
Inc. (a)
Suncor Energy, Inc. 150,000 5,996,911
Thomson Corp. 50,000 1,509,952
Toronto Dominion Bank 75,000 4,007,378
104,485,670
CHILE - 0.1%
Santa Isabel SA sponsored ADR 200,000 2,000,000
DENMARK - 0.5%
Den Danske Bank Group AS 10,000 1,153,485
F. Junckers Industrier AS (e) 90,000 2,242,887
Sydbank AS 50,000 1,687,505
Tryg Baltica Forsikring AS 100,000 2,534,818
(Reg.)
Unidanmark AS Class A 75,000 5,158,640
12,777,335
FINLAND - 1.9%
Elcoteq Network Corp. Class A 146,000 1,167,115
Kesko OY 200,000 3,176,400
Merita Ltd. Series A 500,000 2,991,110
Metsa Tissue PLC 721,500 5,729,432
Metsa-Serla Ltd. Class B Free 200,000 1,715,256
Shares
Nokia AB sponsored ADR 300,000 22,256,250
Stora Enso Oyj 50,000 584,987
UPM-Kymmene Corp. 300,000 9,100,386
Valmet OY 65,000 798,335
47,519,271
FRANCE - 11.5%
Accor SA 40,000 10,566,824
Atos SA (a) 30,000 2,572,884
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - CONTINUED
AXA SA de CV 175,000 $ 22,642,438
Canal Plus SA 50,000 13,933,808
Cap Gemini SA 125,000 19,151,045
CNP Assurances 25,000 627,339
Compagnie Financiere de 50,000 5,325,764
Paribas Class A (Reg.)
Compagnie Generale de 50,000 525,000
Geophysique SA sponsored ADR
(a)
Credit Commercial de France 50,000 5,294,000
Dexia France 40,000 5,611,640
Elf Aquitaine SA sponsored ADR 400,000 31,250,000
Eurafrance (Societe) 15,750 7,937,824
France Telecom SA 50,000 4,047,263
Groupe Danone 75,000 20,090,730
Immobiliere Marseillaise Ste 1,000 1,806,313
Class B
Isis SA 75,000 5,900,163
L'Oreal SA 2,000 1,283,266
Lafarge SA 50,000 4,870,480
Lagardere S.C.A. (Reg.) 75,000 2,976,287
LVMH Moet Hennessy Louis 15,000 4,030,852
Vuitton
Marine Wendel SA 30,000 4,796,364
Pernod-Ricard (a) 100,000 6,760,438
Rhone-Poulenc SA Class A 200,000 9,424,993
Scor SA 200,000 9,995,072
Societe Generale, France 100,000 17,936,072
Class A
Suez Lyonnaise des Eaux 100,000 17,046,680
Total SA Class B 150,000 20,400,000
Union Assurances Federales SA 70,000 7,811,826
Vivendi SA 115,000 26,921,578
291,536,943
GERMANY - 6.6%
Aachener & Muenchener 10,000 1,058,800
Beteiligungs AG
Adva AG Optical Networking (a) 26,400 2,060,086
Allianz AG (Reg.) 40,000 12,578,544
BASF AG 300,000 13,213,824
Bayer AG 350,000 14,619,381
Buderus AG 10,000 3,388,160
Commerzbank AG 100,000 3,245,222
DaimlerChrysler AG (Reg.) 175,000 17,182,813
Depfa Bank AG 100,000 8,364,520
Deutsche Bank AG 100,000 5,795,871
Deutsche Bank AG (RFD) 11,111 623,509
Deutsche Lufthansa AG (Reg.) 150,000 3,486,099
Deutsche Telekom AG 250,000 9,875,957
ERGO Versicherungs Gruppe AG 5,000 631,045
Fresenius Medical Care AG 100,000 1,800,000
sponsored ADR
Heidelberger Druckmaschinen AG 9,400 559,245
Hoechst AG 50,000 2,374,359
Linde AG 2,000 1,220,796
Mannesmann AG 250,000 32,716,920
SHARES VALUE (NOTE 1)
Metro AG 40,000 $ 2,838,008
Primacom AG (a) 15,300 664,185
RWE AG 150,000 6,829,260
Siemens AG 100,000 7,379,836
Teles AG (a) 5,000 1,101,099
Veba AG 200,000 10,990,344
Viag AG 3,000 1,505,614
166,103,497
HONG KONG - 0.3%
CDL Hotels International Ltd. 2,000,000 825,668
(a)
China Telecom (Hong Kong) 1,000,000 2,287,500
Ltd. (a)
Hutchison Whampoa Ltd. 150,000 1,344,936
Jardine Strategic Holdings 400,000 988,000
Ltd.
Johnson Electric Holdings 800,000 2,389,277
Ltd.
7,835,381
INDONESIA - 0.0%
PT Bank PAN Indonesia (For. 660 80
Reg.)
PT Telkomunikasi Indonesia 75,000 656,250
sponsored ADR
656,330
IRELAND - 1.1%
Anglo-Irish Bank Corp. PLC 2,000,000 5,928,480
Bank of Ireland, Inc. (Great 100,000 2,002,473
Britain)
CBT Group PLC sponsored ADR 55,000 852,500
(a)
Elan Corp. PLC sponsored ADR 100,000 5,150,000
(a)
Hibernian Group PLC 250,000 2,091,130
Independent Newspapers PLC 99,053 491,489
(United Kingdom)
Irish Life & Permanent PLC 760,625 10,721,960
Ryan Hotels PLC 900,000 869,940
28,107,972
ISRAEL - 0.9%
Bezeq Israeli 700,000 2,719,541
Telecommunication Corp.
Ltd. (a)
ECI Telecom Ltd. 200,000 7,375,000
Forsoft Ltd. (a) 100,000 687,500
Koor Industries Ltd. 165,000 3,547,500
sponsored ADR
Nice Systems Ltd. sponsored 15,000 431,250
ADR (a)
Teva Pharmaceutical 200,000 9,150,000
Industries Ltd. ADR
23,910,791
ITALY - 5.7%
Aem Spa 1,500,000 3,292,339
Alitalia Linee Aeree Italiane 2,000,000 6,187,627
Class A
Assicurazioni Generali Spa 800,000 31,196,483
Banca Commerciale Italiana Spa 1,000,000 8,273,463
Banca di Roma 1,500,000 2,463,298
Eni Spa sponsored ADR 400,000 26,150,000
Istituto Nazionale Delle 3,000,000 7,937,824
Assicurazioni Spa
Olivetti & Co. Spa 2,500,000 8,703,336
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ITALY - CONTINUED
SAES Getters Spa sponsored ADR 125,000 $ 531,250
San Paolo-IMI Spa 100,000 1,506,672
Telecom Italia Mobile Spa 1,500,000 9,049,564
Telecom Italia Spa 3,000,000 31,856,116
Unicredito Italiano Spa 1,000,000 5,097,063
Unione Immobiliare Spa 5,000,000 2,858,760
145,103,795
JAPAN - 16.8%
Acom Co. Ltd. 50,000 3,748,534
Advantest Corp. 125,000 9,559,808
Alps Electric Co. Ltd. 100,000 1,696,264
Amway Japan Ltd. sponsored ADR 300,000 1,425,000
Asahi Glass Co. Ltd. 150,000 1,148,434
Bank of Tokyo-Mitsubishi Ltd. 275,000 4,021,875
ADR
BellSystem24, Inc. 40,000 15,781,537
C Two-Network Co. Ltd. (a) 16,000 1,407,271
C. Uyemura & Co. Ltd. 50,000 1,759,089
Canon, Inc. 225,000 5,503,434
Chiyoda Fire & Marine 350,000 1,248,953
Insurance Co. Ltd.
Chukyo Coca-Cola Bottling Co. 250,000 2,879,460
Computer Engineering & 50,000 1,239,739
Consulting Ltd.
DDI Corp. 500 2,483,665
Fancl Corp. 32,500 4,628,078
Fuji Bank Ltd. 400,000 3,122,801
Fuji Coca-Cola Bottling Co. 405,000 5,597,671
Ltd.
Fuji Heavy Industries Ltd. 400,000 2,680,516
Fuji Photo Film Co. Ltd. 500,000 18,889,260
Fuji Soft ABC, Inc. 130,000 7,905,846
Fujirebio, Inc. 75,000 400,193
Fujitsu Business Systems Ltd. 100,000 1,826,101
Fujitsu Ltd. 150,000 2,569,526
Furukawa Electric Co. Ltd. 500,000 2,186,296
Hikari Tsushin, Inc. 75,000 15,706,148
Hokkaido Coca-Cola Bottling 300,000 3,392,528
Co. Ltd.
Honda Motor Co. Ltd. 150,000 6,628,125
Horipro, Inc. 50,000 335,065
Hoya Corp. 25,000 1,308,846
Inet Corp. 25,000 209,415
Isewan Terminal Service Co. 250,000 630,340
Ltd.
Itoki Crebio Corp. 200,000 629,921
Jafco Co. Ltd. 50,000 2,504,607
Japan Information Processing 25,000 324,594
Service Co. Ltd.
Japan Tobacco, Inc. 200 2,010,387
Jichodo Co. Ltd. 140,000 996,817
Kao Corp. 1,100,000 27,919,248
Kawagishi Bridge Works Co. 200,000 601,441
Ltd.
Keiiyu Co. Ltd. 150,000 1,457,530
Kinki Coca-Cola Bottling Co. 300,000 4,246,942
Ltd.
Kirin Brewery Co. Ltd. 200,000 2,261,685
Kokusai Denshin Denwa 75,000 4,548,500
SHARES VALUE (NOTE 1)
Kokusai Securities Co. Ltd. 100,000 $ 1,248,115
Kuraray Co. Ltd. 250,000 2,848,048
Kyocera Corp. 100,000 5,939,018
Levi Strauss Japan 525,000 5,497,151
Mabuchi Motors Co. Ltd. 50,000 3,882,560
Matsushita Communication 100,000 7,178,756
Industrial Co. Ltd.
Matsushita Electric 375,000 7,130,591
Industrial Co. Ltd.
Mikasa Coca-Cola Bottling Co. 200,000 1,975,205
Minebea Co. Ltd. 430,000 4,160,244
Minolta Co. Ltd. 400,000 2,214,776
Mitsui Marine & Fire 600,000 3,327,190
Insurance Co. Ltd.
NGK Insulators Ltd. 350,000 4,265,790
Nichicon Corp. 300,000 3,957,949
Nihon Unisys Ltd. 100,000 1,989,445
Nikon Corp. (a) 100,000 1,373,764
Nintendo Co. Ltd. 70,000 6,526,218
Nippon System Development Co. 75,000 3,832,300
Nippon Telegraph & Telephone 500 5,444,798
Corp.
Nishio Rent All Co. Ltd. 50,000 479,561
Nomura Securities Co. Ltd. 1,200,000 12,946,892
NTT Mobile Communication 50 2,931,814
Network, Inc. (a)
NTT Mobile Communication 100 5,863,628
Network, Inc. (c)
Omron Corp. 100,000 1,377,953
Orix Corp. 100,000 8,049,924
Ricoh Elemex Corp. 150,000 1,130,843
Riken Vitamin Oil Co. Ltd. 400,000 4,255,319
Rohm Co. Ltd. 50,000 6,031,161
Sangetsu Co. Ltd. 100,000 1,838,666
Sanseido Co. Ltd. 25,000 249,623
Sanwa Bank Ltd. AG 100,000 1,122,466
Sanyo Coca-Cola Bottling Co. 150,000 3,555,872
Ltd.
Secom Ltd. 150,000 14,650,694
Sekisui House Ltd. 650,000 7,279,695
Senshukai Co. Ltd. 132,000 1,449,589
Sharp Corp. 250,000 2,931,814
Shikoku Coca-Cola Bottling 377,000 5,542,260
Co. Ltd.
Shohkoh Fund & Co. Ltd. 5,000 2,931,814
Snow Brand Milk Products Co. 300,000 1,558,050
Ltd.
Softbank Corp. 50,000 6,655,218
Sony Corp. 50,000 4,625,000
Suzuken Co. Ltd. 125,000 3,224,996
Takeda Chemical Industries 300,000 13,042,385
Ltd.
Takefuji Corp. 50,000 4,146,423
Terumo Corp. 100,000 2,177,919
THK Co. Ltd. 125,000 2,167,448
Tokio Marine & Fire 500,000 5,825,934
Insurance Co. Ltd. (The)
Tokyo Electron Ltd. 175,000 9,968,168
Tokyo Seimitsu Co. Ltd. 150,000 8,305,411
Toshiba Corp. 800,000 5,361,032
Toyo Information System Co. 150,000 4,334,897
Ltd.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Toyoda Automatic Loom Works 500,000 $ 9,570,279
Ltd.
Toyota Corolla Gifu Co. Ltd. 16,000 142,067
Toyota Motor Corp. 125,000 3,578,125
Uni-Charm Corp 50,000 2,265,874
Union Tool Co. 10,000 737,142
Yahoo Japan Corp. 4 1,387,167
425,906,531
KOREA (SOUTH) - 0.1%
Nam Yang Dairy Products 20,000 3,197,309
LUXEMBOURG - 0.8%
Espirito Santo Financial 150,000 2,418,750
Holding SA ADR
Quilmes Industrial SA 250,000 2,734,375
sponsored ADR
Societe Europeene de
Communication SA sponsored
ADR:
Class A (a) 100,800 1,675,800
Class B (a) 643,400 10,937,800
Stolt Comex Seaway SA 200,000 2,500,000
20,266,725
MEXICO - 0.1%
Elamex SA de CV (a) 367,000 1,330,375
Grupo Radio Centro SA de CV 125,000 781,250
sponsored ADR
2,111,625
NETHERLANDS - 6.4%
ABN AMRO Holding NV 600,000 14,325,564
Aegon NV 50,000 4,804,305
Akzo Nobel NV 200,000 9,052,740
Equant NV (Reg.) (a) 10,000 892,500
Fortis Amev NV 150,000 5,352,234
ING Groep NV 400,000 24,691,216
Koninklijke (Royal) Philips 225,000 19,415,745
Electronics NV
Koninklijke Ahold NV 150,000 5,582,523
Koninklijke KPN NV 70,000 2,927,582
Koninklijke Pakhoed NV 50,000 1,159,386
Rodamco NV 50,000 1,259,972
Samas Groep NV 100,000 1,471,732
Smit International NV 100,004 2,223,569
STMicroelectronics NV (a) 100,000 10,200,000
Telegraaf Holdings CVA 200,000 4,362,256
TNT Post Group NV 250,000 6,749,850
Unilever NV 400,000 25,975,000
Van Melle NV 6,200 367,615
Vedior NV 250,000 5,638,110
Vnu NV 60,000 2,433,122
Wolters Kluwer NV 300,000 13,086,768
161,971,789
NEW ZEALAND - 0.4%
CDL Hotels New Zealand Ltd. 200,000 41,392
SHARES VALUE (NOTE 1)
Fletcher Challenge Ltd.:
Forestry Division 7,000,000 $ 3,758,832
Paper Division 3,000,000 2,802,343
Fletcher Challenge Ltd. 700,000 1,158,973
Building Division
Sky City Ltd. 250,000 623,675
Tranz Rail Holdings Ltd. 50,000 331,250
sponsored ADR
8,716,465
NORWAY - 0.5%
Bergensbanken ASA 38,700 322,570
Choice Hotels Skandanavia ASA 150,000 288,524
(a)
Merkantildata 100,000 1,000,218
Petroleum Geo-Services ASA 50,000 837,500
sponsored ADR (a)
Saga Petroleum AS Class A 350,000 3,882,256
Schibsted AS Series B 400,000 4,975,443
11,306,511
PANAMA - 0.3%
Banco Latinamericano de 225,000 7,171,875
Exporaciones SA Class E
PORTUGAL - 0.3%
Electricidade de Portugal SA 100,000 1,884,664
Portugal Telecom SA 60,000 2,506,180
Telecel Comunicacoes Pessoais 30,000 4,018,146
SA
8,408,990
RUSSIA - 0.0%
Vimpel Communications 40,000 660,000
sponsored ADR (a)
SINGAPORE - 0.4%
Allgreen Properties Ltd. 310,000 188,267
Datacraft Asia Ltd. 600,000 1,884,000
Delgro Corp. Ltd. 700,000 1,403,302
Fraser & Neave Ltd. 600,000 2,653,302
Haw Par Brothers 1,500,000 2,379,127
International Ltd.
Times Publishing Ltd. 1,500,000 2,547,170
11,055,168
SOUTH AFRICA - 0.5%
Anglo American Platinum Corp. 50,000 914,145
Ltd.
Anglogold Ltd. 200,000 9,421,454
Impala Platinum Holdings Ltd. 50,000 1,139,798
Sappi Ltd. 50,000 362,364
11,837,761
SPAIN - 2.1%
Banco Santander Central 500,000 10,750,000
Hispano SA ADR
Endesa SA 200,000 4,455,430
Mapfre Vida SA 23,800 747,163
Repsol SA sponsored ADR 450,000 7,425,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - CONTINUED
Telefonica SA sponsored ADR 200,000 $ 27,875,000
Union Electrica Fenosa SA 150,000 1,999,544
53,252,137
SWEDEN - 2.7%
Celsius Industrier AB Class B 200,000 3,090,492
Electrolux AB 375,000 7,622,223
Ericsson (L.M.) Telefon AB 350,000 9,450,000
ADR Class B
Finnveden Invest AB Series B 100,000 1,557,132
Hemkopskedjan AB Series B 200,000 1,580,906
Icon Medialab International 22,400 822,737
AB (a)
Investor AB Class B Free 200,000 9,105,065
shares
Kinnevik Investment AB Series 425,000 9,345,767
B
Mo Och Domsjoe AB Series B 75,000 1,934,529
Modern Times Group AB Series 300,000 6,240,416
B (a)
Nordbanken Holding AB 300,000 1,889,955
Ortivus AB Series B (a) 75,000 490,318
Svedala Industri AB Free 100,000 1,759,203
shares
Svenska Handelsbanken 75,000 2,817,102
Swedish Match Co. 3,000,000 9,877,688
67,583,533
SWITZERLAND - 5.3%
Bank for International 500 2,828,084
Settlements
Bucher Holding AG (Bearer) 1,500 1,328,740
Credit Suisse Group (Reg.) 100,000 19,849,081
Edipresse SA (Bearer) 25,000 6,315,617
Julius Baer Holding AG 1,000 3,257,874
Nestle SA (Reg.) 13,000 24,080,709
Novartis AG (Reg.) 12,000 17,582,677
PubliGroupe SA 10,000 6,135,171
Richemont Compagnie Financier 2,000 3,404,199
Class A Unit
Roche Holding AG 1,200 14,125,984
participation certificates
Swiss Reinsurance Co. (Reg.) 5,000 10,951,444
UBS AG 70,000 23,792,651
133,652,231
UNITED KINGDOM - 13.4%
Aggreko PLC 350,000 1,246,109
Allied Domecq PLC 1,000,000 7,829,460
Allied Zurich PLC (a) 1,600,000 21,239,424
Antofagasta Holdings PLC 1,000,000 4,752,450
Asda Group PLC 1,000,000 3,346,853
AstraZeneca Group PLC:
(Sweden) 160,000 6,257,058
(UK) 50,000 1,962,496
Bank of Scotland 100,000 1,498,230
Barclays PLC 350,000 11,130,399
Billiton PLC 2,400,000 8,158,104
Biocompatibles International 100,000 153,045
PLC (a)
SHARES VALUE (NOTE 1)
BP Amoco PLC sponsored ADR 400,000 $ 45,274,989
British American Tobacco PLC 600,000 5,040,819
British Telecommunications PLC 250,000 4,193,755
Capital Radio PLC 100,000 1,388,682
CGU PLC 100,000 1,581,197
Diageo PLC 1,000,000 11,558,925
Dixons Group PLC 100,000 2,137,797
Dorling Kindersley Holdings 500,000 2,883,690
PLC
Elementis PLC 200,000 322,200
Ellis & Everard PLC 815,384 2,824,205
Energis PLC (a) 200,000 5,364,630
Glaxo Wellcome PLC sponsored 150,000 8,737,500
ADR
Hanson PLC 800,000 7,829,976
Hillsdown Holdings PLC 200,000 264,204
House of Fraser PLC 600,000 903,771
HSBC Holdings PLC Ord. 400,000 15,265,836
Hyder PLC 200,000 2,493,828
Lloyds TSB Group PLC 650,000 10,476,736
Logica PLC 300,000 2,899,800
Man (E D & F) Group PLC 500,000 2,480,940
Misys PLC 150,000 1,410,028
National Grid Group PLC 400,000 2,772,531
National Westminster Bank PLC 450,000 10,852,502
Norwich Union PLC 200,000 1,425,735
Nycomed Amersham PLC 400,000 3,279,996
Paterson Zochonis PLC Class A 256,700 1,054,536
(non-vtg.)
Professional Staff PLC 353,000 2,206,250
sponsored ADR (a)
Reckitt & Colman PLC 200,000 2,381,058
Rio Tinto PLC (Reg.) 600,000 10,492,443
Royal & Sun Alliance 500,000 4,317,480
Insurance Group PLC
Royal Bank of Scotland Group 100,000 2,361,726
PLC
Schroder Venture 200,000 789,390
International Investment
Trust PLC
Severn Trent PLC 500,000 6,584,963
Shell Transport & Trading Co. 4,000,000 30,291,955
PLC (Reg.)
Signet Group PLC 1,500,000 1,461,983
SmithKline Beecham PLC 200,000 13,137,500
sponsored ADR
South African Breweries PLC 809,543 6,800,361
Tomkins PLC 1,500,000 6,385,601
Unilever PLC ADR 300,000 10,743,750
United Biscuits Holdings PLC 150,000 467,593
Vodafone Group PLC sponsored 80,000 14,350,000
ADR
Wetherspoon (JD) PLC 200,000 950,490
WPP Group PLC 300,000 2,653,317
Xenova Group PLC (a) 50,000 87,800
338,756,096
UNITED STATES OF AMERICA - 1.3%
AppliedTheory Corp. (a) 600 12,300
Global TeleSystems Group, 20,000 1,322,500
Inc. (a)
Globalstar Telecommunications 100,000 2,012,500
Ltd. (a)
Hollinger International, Inc. 300,000 4,218,750
Class A
Informatica Corp. (a) 700 19,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
Marimba, Inc. (a) 500 $ 30,375
Mpath Interactive, Inc. (a) 500 19,688
Orthofix International NV (a) 642,900 9,643,500
Pharmacia & Upjohn, Inc. 250,000 14,000,000
United International 25,000 1,493,750
Holdings, Inc. Class A (a)
32,773,138
TOTAL COMMON STOCKS 2,271,384,037
(Cost $1,862,222,804)
NONCONVERTIBLE PREFERRED
STOCKS - 0.4%
GERMANY - 0.4%
Marschollek Lautenschlaeger 6,000 3,361,266
und Partner AG
Volkswagen AG 150,000 6,398,858
9,760,124
PORTUGAL - 0.0%
Lusomundo-SGPS, SA (non-vtg.) 50,000 502,930
TOTAL NONCONVERTIBLE 10,263,054
PREFERRED STOCKS
(Cost $9,541,305)
INVESTMENT COMPANIES - 5.5%
ARGENTINA - 0.0%
Argentina Fund, Inc. 30,000 375,000
AUSTRALIA - 0.0%
First Australia Fund, Inc. 50,000 406,250
BRAZIL - 0.1%
Brazil Fund, Inc. 150,000 2,278,125
CANADA - 0.3%
Economic Investment Trust 61,673 4,169,383
Ltd.
United Corporations Ltd. 82,966 2,747,501
6,916,884
CHILE - 0.3%
Chile Fund, Inc. 300,000 3,618,750
Five Arrows Chile Investment 750,000 1,642,500
Trust Ltd.
Genesis Chile Fund (a) 35,000 1,032,500
6,293,750
CHINA - 0.0%
China Fund, Inc. 125,000 1,179,688
EMERGING MARKETS - 0.8%
Asia Tigers Fund, Inc. 500,000 4,343,750
Central European Equity Fund, 175,000 2,231,250
Inc.
Emerging Markets 480,000 4,200,000
Infrastructure Fund, Inc.
Emerging Markets 250,000 2,593,750
Telecommunication Fund, Inc.
SHARES VALUE (NOTE 1)
Southern Africa Fund, Inc. 25,000 $ 303,125
Templeton Dragon Fund, Inc. 700,000 6,737,500
20,409,375
FRANCE - 0.2%
France Growth Fund, Inc. 450,000 6,018,750
GERMANY - 0.3%
New Germany Fund, Inc. (The) 700,000 8,400,000
HONG KONG - 0.2%
Asia Pacific Fund, Inc. 400,000 3,600,000
Greater China Fund, Inc. 100,000 750,000
4,350,000
INDIA - 0.2%
India Fund (a) 375,000 3,140,625
India Growth Fund (a) 150,000 1,425,000
Jardine Fleming India Fund, 190,000 1,187,500
Inc. (a)
5,753,125
ISRAEL - 0.1%
First Israel Fund, Inc. 125,000 1,718,750
ITALY - 0.2%
Italy Fund, Inc. (The) 285,000 4,275,000
KOREA (SOUTH) - 0.3%
Korea Equity Fund (a) 175,000 776,563
Korea Fund, Inc. (The) (a) 400,000 5,000,000
Korean Investment Fund, Inc. 250,000 1,515,625
(a)
7,292,188
MEXICO - 0.6%
Mexico Fund, Inc. (The) 850,000 14,928,125
MULTI-NATIONAL - 0.8%
Blackrock North American 450,000 4,556,250
Government Income Trust,
Inc.
MFS Government Markets Income 1,000,000 6,312,500
Trust
Morgan Stanley Asia-Pacific 575,000 5,246,875
Fund, Inc.
RCM Strategic Global 125,000 1,203,125
Government Fund, Inc.
Scudder New Asia Fund, Inc. 25,000 306,250
(a)
Strategic Global Income Fund, 250,000 2,765,625
Inc.
20,390,625
PHILIPPINES - 0.0%
First Philippine Fund, Inc. 75,000 609,375
(a)
PORTUGAL - 0.1%
Portugal Fund, Inc. 158,900 2,204,738
SINGAPORE - 0.1%
Singapore Fund, Inc. 275,000 2,440,625
WEBS Index Fund, Inc. 99,000 761,063
3,201,688
INVESTMENT COMPANIES -
CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - 0.3%
Kemper Growth Fund of Spain, 169,042 $ 3,683,421
Series A (a)
Spain Fund, Inc. 200,000 2,875,000
6,558,421
SWITZERLAND - 0.2%
Swiss Helvetia Fund, Inc. 400,000 5,600,000
TAIWAN - 0.3%
Taiwan Equity Fund, Inc. 120,000 1,260,000
Taiwan Fund, Inc. 440,000 7,150,000
8,410,000
THAILAND - 0.1%
Thai Euro Fund Ltd. 50,000 462,500
Thai Prime Fund (a) 200,000 1,070,000
1,532,500
TOTAL INVESTMENT COMPANIES 139,102,357
(Cost $131,248,767)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.6%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (D)
ISRAEL - 0.1%
Tecnomatix Tech Ltd. 5.25% - $ 3,225,000 2,241,375
8/15/04
ITALY - 0.2%
Banca Popolare di Milano 2.5% A- ITL 50,000,000 5,309,066
4/15/08 (c)
NETHERLANDS - 0.1%
Bilbao Vizcaya Investments NV Aa3 1,000,000 2,859,000
3.5% 7/12/06
UNITED STATES OF AMERICA - 0.2%
Bell Atlantic Financial A1 1,000,000 1,100,000
Services, Inc. 4.25% 9/15/05
Nestle Holdings, Inc. 3% - 4,000,000 4,880,000
6/17/02
5,980,000
TOTAL CONVERTIBLE BONDS 16,389,441
(Cost $14,800,183)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 4.0%
MATURITY AMOUNT VALUE (NOTE 1)
Investments in repurchase $ 2,719,105 $ 2,718,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 4.88%,
dated 4/30/99 due 5/3/99
SHARES
Taxable Central Cash Fund (b) 98,100,084 98,100,084
TOTAL CASH EQUIVALENTS 100,818,084
(Cost $100,818,084)
TOTAL INVESTMENT IN $ 2,537,956,973
SECURITIES - 100%
(Cost $2,118,631,143)
</TABLE>
CURRENCY ABBREVIATIONS
ITL - Italian lira
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $15,778,474 or 0.6% of net assets.
(d) Principal amount is stated in United States dollars unless
otherwise noted.
(e) Affiliated company
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $884,122,689 and $531,113,536, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company.
The commissions paid to these affiliated firms were $32,968 for the
period.
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
F. Junkers Industrier AS $ - $ 533,092 $ - $ 2,242,887
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $2,125,059,361. Net unrealized appreciation
aggregated $412,897,612, of which $499,073,075 related to appreciated
investment securities and $86,175,463 related to depreciated
investment securities.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
AEROSPACE & DEFENSE 0.1%
BASIC INDUSTRIES 5.1
CASH EQUIVALENTS 4.0
CONSTRUCTION & REAL ESTATE 1.4
DURABLES 4.2
ENERGY 7.7
FINANCE 21.1
HEALTH 5.5
HOLDING COMPANIES 0.9
INDUSTRIAL MACHINERY & 2.5
EQUIPMENT
INVESTMENT COMPANIES 5.5
MEDIA & LEISURE 4.3
NONDURABLES 8.4
PRECIOUS METALS 1.0
RETAIL & WHOLESALE 1.6
SERVICES 3.0
TECHNOLOGY 8.7
TRANSPORTATION 1.1
UTILITIES 13.9
100.0%
DIVERSIFIED INTERNATIONAL
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,537,956,973
value (including repurchase
agreements of $2,718,000)
(cost $2,118,631,143) - See
accompanying schedule
Receivable for investments 23,956,415
sold
Receivable for fund shares 8,136,649
sold
Dividends receivable 7,080,313
Interest receivable 655,766
Other receivables 33,659
TOTAL ASSETS 2,577,819,775
LIABILITIES
Payable for investments $ 29,950,827
purchased
Payable for fund shares 8,514,695
redeemed
Accrued management fee 1,733,010
Other payables and accrued 1,021,932
expenses
TOTAL LIABILITIES 41,220,464
NET ASSETS $ 2,536,599,311
Net Assets consist of:
Paid in capital $ 2,084,886,193
Distributions in excess of (4,528,560)
net investment income
Accumulated undistributed net 36,860,080
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 419,381,598
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 132,996,810 $ 2,536,599,311
shares outstanding
NET ASSET VALUE, offering $19.07
price and redemption price
per share ($2,536,599,311
(divided by) 132,996,810
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 19,262,807
Dividends
Interest 3,409,974
22,672,781
Less foreign taxes withheld (1,782,932)
TOTAL INCOME 20,889,849
EXPENSES
Management fee Basic fee $ 8,196,364
Performance adjustment 1,262,565
Transfer agent fees 3,089,804
Accounting fees and expenses 489,065
Non-interested trustees' 4,185
compensation
Custodian fees and expenses 375,596
Registration fees 148,495
Audit 18,540
Legal 4,686
Total expenses before 13,589,300
reductions
Expense reductions (381,667) 13,207,633
NET INVESTMENT INCOME 7,682,216
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 48,031,369
(including realized gain
(loss) of $(289,344) on
sales of investments in
affiliated issuers)
Foreign currency transactions (14,736) 48,016,633
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 264,576,570
Assets and liabilities in (6,371) 264,570,199
foreign currencies
NET GAIN (LOSS) 312,586,832
NET INCREASE (DECREASE) IN $ 320,269,048
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 316,111
Expense reductions Directed
brokerage arrangements
Custodian credits 6,701
Transfer agent credits 58,855
$ 381,667
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 7,682,216 $ 27,052,311
income
Net realized gain (loss) 48,016,633 74,228,503
Change in net unrealized 264,570,199 (350,064)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 320,269,048 100,930,750
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (21,886,222) (17,340,499)
From net investment income
In excess of net investment (4,528,560) -
income
From net realized gain (53,970,880) (37,418,194)
TOTAL DISTRIBUTIONS (80,385,662) (54,758,693)
Share transactions Net 1,131,258,233 1,769,510,488
proceeds from sales of shares
Reinvestment of distributions 75,587,571 53,307,005
Cost of shares redeemed (854,945,050) (1,438,501,445)
NET INCREASE (DECREASE) IN 351,900,754 384,316,048
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 591,784,140 430,488,105
IN NET ASSETS
NET ASSETS
Beginning of period 1,944,815,171 1,514,327,066
End of period (including $ 2,536,599,311 $ 1,944,815,171
under (over) distribution of
net investment income of
$(4,528,560) and
$23,593,280, respectively)
OTHER INFORMATION
Shares
Sold 63,177,624 100,969,939
Issued in reinvestment of 4,456,614 3,298,675
distributions
Redeemed (47,663,567) (82,605,831)
Net increase (decrease) 19,970,671 21,662,783
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 17.21 $ 16.57 $ 14.38 $ 12.73 $ 12.46
period
Income from Investment
Operations
Net investment income .06 D .26 D .24 D, E .15 .22
Net realized and unrealized 2.50 .98 2.46 2.13 .47
gain (loss)
Total from investment 2.56 1.24 2.70 2.28 .69
operations
Less Distributions
From net investment income (.19) (.19) (.15) (.22) (.03)
In excess of net investment (.04) - - - -
income
From net realized gain (.47) (.41) (.36) (.41) (.39)
Total distributions (.70) (.60) (.51) (.63) (.42)
Net asset value, end of period $ 19.07 $ 17.21 $ 16.57 $ 14.38 $ 12.73
TOTAL RETURN B, C 15.38% 7.72% 19.30% 18.66% 6.02%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,536,599 $ 1,944,815 $ 1,514,327 $ 665,492 $ 295,017
(000 omitted)
Ratio of expenses to average 1.23% A 1.22% 1.25% 1.29% 1.13%
net assets
Ratio of expenses to average 1.20% A, F 1.19% F 1.23% F 1.27% F 1.12% F
net assets after expense
reductions
Ratio of net investment .70% A 1.46% 1.49% 1.53% 1.55%
income to average net assets
Portfolio turnover rate 51% A 95% 81% 94% 101%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 11.32
period
Income from Investment
Operations
Net investment income .05
Net realized and unrealized 1.20
gain (loss)
Total from investment 1.25
operations
Less Distributions
From net investment income (.01)
In excess of net investment -
income
From net realized gain (.10)
Total distributions (.11)
Net asset value, end of period $ 12.46
TOTAL RETURN B, C 11.14%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 351,152
(000 omitted)
Ratio of expenses to average 1.25%
net assets
Ratio of expenses to average 1.25%
net assets after expense
reductions
Ratio of net investment .96%
income to average net assets
Portfolio turnover rate 89%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
INTERNATIONAL VALUE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY INTL VALUE 19.39% 3.92% 60.59%
MSCI EAFE 15.40% 9.74% 46.52%
International Funds Average 15.11% 3.24% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1994. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index - a market capitalization-weighted
index that is designed to represent the performance of developed stock
markets outside the United States and Canada. As of April 30, 1999,
the index included over 1,020 equity securities of countries domiciled
in 20 countries. To measure how the fund's performance stacked up
against its peers, you can compare it to the international funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 597 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY INTL VALUE 3.92% 11.11%
MSCI EAFE 9.74% 8.87%
International Funds Average 3.24% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
International Value MS EAFE (Net MA tax)
00335 MS001
1994/11/01 10000.00 10000.00
1994/11/30 9700.00 9533.02
1994/12/31 9790.00 9592.71
1995/01/31 9440.00 9224.21
1995/02/28 9530.00 9197.73
1995/03/31 10000.00 9771.40
1995/04/30 10170.00 10138.89
1995/05/31 10030.00 10018.03
1995/06/30 10040.00 9842.35
1995/07/31 10830.00 10455.10
1995/08/31 10800.00 10056.27
1995/09/30 10860.00 10252.67
1995/10/31 10630.00 9977.08
1995/11/30 10820.00 10254.68
1995/12/31 11150.86 10667.84
1996/01/31 11253.73 10711.64
1996/02/29 11294.88 10747.85
1996/03/31 11521.18 10976.09
1996/04/30 11912.08 11295.20
1996/05/31 11840.07 11087.35
1996/06/30 11973.80 11149.75
1996/07/31 11562.33 10823.87
1996/08/31 11562.33 10847.59
1996/09/30 11870.93 11135.76
1996/10/31 11654.91 11021.81
1996/11/30 12251.54 11460.35
1996/12/31 12219.78 11312.93
1997/01/31 12198.62 10919.24
1997/02/28 12452.54 11100.50
1997/03/31 12547.75 11142.68
1997/04/30 12568.91 11203.96
1997/05/31 13394.15 11935.25
1997/06/30 14060.68 12595.26
1997/07/31 14409.82 12800.82
1997/08/31 13351.83 11846.52
1997/09/30 14187.64 12511.94
1997/10/31 13193.13 11553.40
1997/11/30 13087.33 11437.87
1997/12/31 13178.62 11539.78
1998/01/31 13581.27 12069.69
1998/02/28 14364.81 12846.37
1998/03/31 15039.52 13244.35
1998/04/30 15453.05 13351.37
1998/05/31 15431.29 13289.02
1998/06/30 15289.82 13392.01
1998/07/31 15518.35 13530.21
1998/08/31 12395.09 11856.39
1998/09/30 12329.79 11495.48
1998/10/31 13450.68 12696.41
1998/11/30 14353.93 13349.39
1998/12/31 14726.16 13878.56
1999/01/31 15075.74 13840.11
1999/02/28 14507.67 13512.79
1999/03/31 15359.77 14079.52
1999/04/30 16058.94 14652.27
IMATRL PRASUN SHR__CHT 19990430 19990512 104056 R00000000000057
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity International Value Fund on November 1, 1994,
when the fund started. As the chart shows, by April 30, 1999, the
value of the investment would have grown to $16,059 - a 60.59%
increase on the initial investment. For comparison, look at how the
Morgan Stanley Capital International EAFE Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $14,652 - a 46.52% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
INTERNATIONAL VALUE
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Richard Mace)
An interview with Richard Mace, Portfolio Manager of Fidelity
International Value Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. It was a good period. For the six months that ended April 30, 1999,
the fund returned 19.39%. The Morgan Stanley Capital International
Europe, Australasia, Far East (EAFE) Index returned 15.40% during that
time, while the international funds average - as tracked by Lipper
Inc. - returned 15.11%. For the 12 months that ended April 30, 1999,
the fund returned 3.92%, while the EAFE index and Lipper average
returned 9.74% and 3.24%, respectively, during the same time.
Q. WHAT WERE THE MAIN FACTORS THAT HELPED THE FUND TOP BOTH ITS INDEX
AND PEER GROUP DURING THE SIX-MONTH PERIOD?
A. Strong individual stock selection in several areas - most notably
energy-related and telecommunications stocks - provided a nice boost.
The fund's energy-related investments - which accounted for just under
8% of the portfolio at the end of the period - performed well as the
price of oil bubbled back up. When I look at oil companies, I don't
try to guess where prices will go. Instead, I try to focus on what
price the energy stocks currently reflect. If Shell and BP Amoco, for
instance, are reflecting an $11 per barrel oil price, I try to
determine the sustainability of that price over a five-year period.
Recently, we began to see cuts being made in oil production as well as
a pick-up in overall demand. These trends helped two of the fund's
larger holdings - Elf Aquitaine and Shell - post strong results.
Telecommunications was another fertile area, as the industry itself
has undergone a major transformation sparked primarily by global
privatization, deregulation and technological advances. As a result,
we saw a lot of merger and acquisition activity as companies try to
expand their sales reach globally while at the same time trying to
fortify their positions at home. The fund's stakes in companies such
as the United Kingdom's Vodafone Group - which the fund no longer held
at the end of the period - performed quite well.
Q. WHAT FACTORS PROVED DETRIMENTAL TO THE FUND'S PERFORMANCE?
A. Minimal exposure to certain segments of the Japanese market -
namely banks - hurt performance relative to the EAFE Index. Japan has
shown signs of gradual improvement, and optimism was stoked by the
government's unveiling of a plan to infuse capital into the country's
beleaguered banking system. Still, I could find no great benefit to
the shareholders of these banks, so I decided to avoid them. In
addition, the fund's food and household products positions declined
during the period, namely U.K. company Unilever, Swiss-based Nestle
and France's Danone. These companies were hit particularly hard, as
investors became concerned that economic weakness would erode sales.
Q. THE FUND'S EXPOSURE TO PHARMACEUTICAL STOCKS HAS DECLINED GRADUALLY
OVER THE PAST YEAR. WHY?
A. Much of the decline was simply due to depreciation, as many of
Europe's larger drug makers stumbled upon trying times. Growth
prospects for companies such as Switzerland's Novartis, for example,
didn't appear to be as strong as they were two or three years ago. The
stock prices of these companies had risen sharply over the past couple
of years due partly to rampant merger and acquisition activity.
Lately, though, it's been an altogether different story as new product
pipelines have not been as riveting as in years past. The fund no
longer held a stake in Novartis at the end of the period.
Q. WERE THERE ANY OTHER INVESTMENTS THAT PERFORMED PARTICULARLY WELL
DURING THE PERIOD?
A. The fund's position in Finland's Nokia - a large telecommunications
company - continued to generate good results. Nokia's primary line of
business is cellular phones and sales for the company were booming at
a time when its competitors were struggling. I also found Nokia to be
attractive from a valuation standpoint. Eighteen months ago, the stock
was trading at a price-to-earnings (P/E) ratio of around 20 and the
company was growing its earnings at almost double that. When I held up
Nokia to its counterparts here in the States, I felt the stock should
have been trading at a higher P/E multiple. I felt it was a bargain.
Q. DID YOU FOLLOW ANY SPECIFIC STRATEGIES DURING THE PERIOD?
A. I've recently been moving the fund away from Japanese small- and
mid-cap stocks and rotating the proceeds into small- and mid-cap
stocks in the U.K. My thinking behind this was that while the Japanese
economy has shown flickers of hope, I'm not completely sold on a
turnaround there. The Japanese stocks had performed very well and I
decided to take advantage of that appreciation. The U.K. stocks, on
the other hand, were performing quite poorly and I was able to find a
number of attractively valued names with good growth prospects.
Q. WHAT'S YOUR OUTLOOK?
A. I'm optimistic that Europe's economies can continue to improve.
Since the beginning of 1999, the European Central Bank has cut
interest rates and the euro has depreciated 9% against the dollar. The
weaker euro could bode well for European exporters. Consumer spending
also is expected to be fairly strong, and stronger domestic growth
could allow more small company stocks to perform well. My outlook on
Japan is a bit more tentative. We've begun to see signs of gradual
improvement, but nothing to write home about yet. I'd like to see more
concrete evidence of a turnaround in Japan before I commit to that
market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)
FUND FACTS
GOAL: seeks growth of capital primarily
through investments in foreign securities
FUND NUMBER: 335
TRADING SYMBOL: FIVFX
START DATE: November 1, 1994
SIZE: as of April 30, 1999, more than
$427 million
MANAGER: Richard Mace, since inception;
joined Fidelity in 1987
RICK MACE DISCUSSES HIS VALUE
INVESTING DISCIPLINE:
"There are broad differences in the way different investors
define value. Many define value as a stock that is trading at
low valuation multiples, such as a low price-to-earnings ratio
(P/E), price-to-book value or price-to-cash flow. While all of
these measures have historically been useful, I feel they are
weak indicators of value.
"A stock's P/E ratio is simply the price of the stock divided
by its earnings per share. In other words, P/E multiples give
an investor an idea of how much he or she is paying for a
company's earnings power. My investment process looks for
stocks with low P/E multiples relative to estimated earnings
growth rates. A stock is not a good value based solely on the
fact that it is trading at a P/E of seven, for example. It is only
a good value if the company can grow its earnings and
generate a positive return for shareholders.
"Accordingly, I would rather have a stock that is trading
at a P/E of 20 and has the opportunity to grow earnings at
20% per year than to own one with a P/E of seven that is not
likely to grow its earnings. Once I sift through the stock
universe for companies with low multiples relative to their
estimated earnings growth rates, I then subject potential
investments to intensive fundamental research to determine
their attractiveness. Emphasis is placed on balance sheet
quality, free cash flow, return on capital and management's
dedication to generating shareholder value. Stocks and
industries that make the grade are then compared to peer
groups in both the local and international markets to
determine their relative attractiveness to competitors.
"This, in a nutshell, is the stock selection process that I
use in constructing the fund's portfolio. Weightings by
geographic markets and industry sectors are a residual of
this stock-picking process."
INTERNATIONAL VALUE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 12.0%
France 15.7%
United Kingdom
11.7%
Germany 7.9%
Switzerland 4.1%
Italy 8.4%
Spain 4.2%
Other 11.9%
Japan 16.6%
Netherlands 7.5%
Row: 1, Col: 1, Value: 15.7
Row: 1, Col: 2, Value: 7.9
Row: 1, Col: 3, Value: 8.4
Row: 1, Col: 4, Value: 16.6
Row: 1, Col: 5, Value: 7.5
Row: 1, Col: 6, Value: 11.9
Row: 1, Col: 7, Value: 4.2
Row: 1, Col: 8, Value: 4.1
Row: 1, Col: 9, Value: 11.7
Row: 1, Col: 10, Value: 12.0
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE
AS OF OCTOBER 31, 1998
United States 4.7%
France 17.1%
United Kingdom 11.5%
Switzerland 8.2%
Germany 9.1%
Italy 3.7%
Spain 4.4%
Japan 13.8%
Other 18.5%
Netherlands 9.0%
Row: 1, Col: 1, Value: 17.1
Row: 1, Col: 2, Value: 9.1
Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 13.8
Row: 1, Col: 5, Value: 9.0
Row: 1, Col: 6, Value: 18.5
Row: 1, Col: 7, Value: 4.4
Row: 1, Col: 8, Value: 8.199999999999999
Row: 1, Col: 9, Value: 11.5
Row: 1, Col: 10, Value: 4.7
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE
<TABLE>
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ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks, investment companies 91.9 95.8
and equity futures
Short-term investments 8.1 4.2
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Elf Aquitaine (France, Oil & 6.0 1.7
Gas)
Telecom Italia Spa (Italy, 4.9 1.1
Telephone Services)
Mannesmann AG (Germany, 4.3 2.3
Cellular)
AirTouch Communications, Inc. 3.9 0.0
(United States of America,
Cellular)
Telefonica SA (Spain, 3.4 3.8
Telephone Services)
Nokia AB (Finland, 3.0 3.5
Communications Equipment)
Akzo Nobel NV (Netherlands, 3.0 1.0
Chemicals & Plastics)
Nestle SA (Reg.) 2.9 1.4
(Switzerland, Foods)
Banque Nationale de Paris 2.7 1.4
(France, Banks)
DDI Corp. (Japan, Telephone 2.3 0.7
Services)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
UTILITIES 22.1 16.9
FINANCE 21.0 26.8
ENERGY 7.9 4.8
TECHNOLOGY 7.2 11.0
HEALTH 6.0 5.3
NONDURABLES 5.2 2.8
DURABLES 4.3 5.0
BASIC INDUSTRIES 4.1 2.3
SERVICES 2.0 4.7
RETAIL & WHOLESALE 1.9 1.9
</TABLE>
INTERNATIONAL VALUE
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 83.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.2%
Australia & New Zealand 406,000 $ 3,214,042
Banking Group Ltd.
WMC Ltd. 427,074 1,844,368
5,058,410
FINLAND - 3.0%
Nokia AB 179,600 13,324,069
FRANCE - 15.7%
AXA SA de CV 61,000 7,892,507
Banque Nationale de Paris 141,200 11,728,476
Cap Gemini SA 5,800 888,608
Compagnie Generale de 200,000 2,100,000
Geophysique SA sponsored ADR
(a)
Elf Aquitaine 168,600 26,343,744
Groupe Danone 11,200 3,000,216
Sanofi SA 43,150 6,775,415
Societe Generale, France 10,000 1,793,607
Class A
Vivendi SA 34,110 7,985,174
68,507,747
GERMANY - 7.4%
BASF AG 105,700 4,655,671
DaimlerChrysler AG (Reg.) 48,119 4,724,684
Deutsche Bank AG (RFD) 74,100 4,158,225
Mannesmann AG 142,800 18,687,905
32,226,485
HONG KONG - 1.3%
Dah Sing Financial Holdings 498,000 1,570,846
Ltd.
Dao Heng Bank Group Ltd. 293,500 1,192,735
Johnson Electric Holdings 453,000 1,352,928
Ltd.
Wing Hang Bank Ltd. 454,500 1,389,657
5,506,166
IRELAND - 1.2%
Bank of Ireland, Inc. 270,785 5,422,397
ITALY - 6.9%
Assicurazioni Generali Spa 66,700 2,601,007
Banca Commerciale Italiana Spa 316,200 2,616,069
San Paolo-IMI Spa 217,500 3,277,012
Telecom Italia Spa 2,036,200 21,621,808
30,115,896
JAPAN - 12.6%
DDI Corp. 1,989 9,880,021
Fuji Photo Film Co. Ltd. 130,000 4,911,208
Honda Motor Co. Ltd. 105,000 4,639,687
Ito-Yokado Co. Ltd. 40,000 2,456,023
Kyocera Corp. 92,000 5,463,896
Matsushita Electric 260,000 4,943,876
Industrial Co. Ltd.
Nichicon Corp. 357,000 4,709,960
Nikko Securities Co. Ltd. 116,000 665,606
SHARES VALUE (NOTE 1)
Nomura Securities Co. Ltd. 543,000 $ 5,858,468
Ryohin Keikaku Co. Ltd. 12,400 2,259,172
Takeda Chemical Industries 80,000 3,477,969
Ltd.
Terumo Corp. 272,000 5,923,940
55,189,826
LUXEMBOURG - 0.3%
Stolt Comex Seaway SA 120,000 1,500,000
MEXICO - 2.0%
Banacci SA de CV Class O (a) 3,244,000 8,210,231
Empresas ICA Sociedad 42,100 276,281
Controladora SA de CV
sponsored ADR
Tubos de Acero de Mexico SA 18,900 209,081
sponsored ADR
8,695,593
NETHERLANDS - 7.5%
Akzo Nobel NV 287,100 12,995,208
Beter Bed Holding NV 51,100 1,474,353
ING Groep NV 139,148 8,589,333
Koninklijke (Royal) Philips 52,100 4,495,824
Electronics NV
Samas Groep NV 92,500 1,361,352
Vedior NV 88,400 1,993,636
Vnu NV 45,600 1,849,173
32,758,879
SINGAPORE - 0.0%
Allgreen Properties Ltd. 53,000 32,188
SPAIN - 4.2%
Banco Santander Central 151,900 3,306,700
Hispano SA
Telefonica SA 318,300 14,946,661
18,253,361
SWITZERLAND - 4.1%
Credit Suisse Group (Reg.) 27,100 5,379,101
Nestle SA (Reg.) 6,700 12,410,827
17,789,928
TAIWAN - 0.6%
Taiwan Semiconductor 754,000 2,547,921
Manufacturing Co. Ltd.
UNITED KINGDOM - 11.7%
Allied Zurich PLC (a) 148,350 1,969,293
Arcadia Group PLC 756,500 3,412,420
Caradon PLC 2,385,800 6,072,768
HSBC Holdings PLC Ord. 5,321 203,074
Lloyds TSB Group PLC 296,500 4,779,003
MFI Furniture Group PLC 2,644,200 1,916,913
Rentokil Initial PLC 733,500 4,321,953
Reuters Group PLC 147,800 2,004,851
Royal & Sun Alliance 214,700 1,853,926
Insurance Group PLC
Shell Transport & Trading Co. 834,600 6,320,416
PLC (Reg.)
SmithKline Beecham PLC 742,400 9,753,313
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Standard Chartered PLC 212,800 $ 3,853,306
Unilever PLC 517,800 4,635,932
51,097,168
UNITED STATES OF AMERICA - 3.9%
AirTouch Communications, Inc. 184,400 17,218,350
(a)
TOTAL COMMON STOCKS 365,244,384
(Cost $305,175,328)
NONCONVERTIBLE PREFERRED
STOCKS - 2.0%
GERMANY - 0.5%
Wella AG 2,900 2,302,890
ITALY - 1.5%
Telecom Italia Spa Risp 1,161,620 6,249,240
TOTAL NONCONVERTIBLE 8,552,130
PREFERRED STOCKS
(Cost $9,623,933)
INVESTMENT COMPANIES - 2.3%
EMERGING MARKETS - 2.3%
Asia Tigers Fund, Inc. 559,700 4,862,394
Templeton Dragon Fund, Inc. 554,100 5,333,213
TOTAL INVESTMENT COMPANIES 10,195,607
(Cost $10,064,358)
GOVERNMENT OBLIGATIONS - 0.5%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
UNITED STATES OF AMERICA - 0.5%
U.S. Treasury Bills, yields - $ 2,300,000 2,283,301
at date of purchase 4.34% to
4.41% 7/1/99 (c) (Cost
$2,282,855)
CASH EQUIVALENTS - 11.6%
SHARES
Taxable Central Cash Fund (b) 50,704,882 50,704,882
(Cost $50,704,882)
TOTAL INVESTMENT IN $ 436,980,304
SECURITIES - 100%
(Cost $377,851,356)
<TABLE>
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FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)
PURCHASED
110 Nikkei 225 Index Jun. 1999 $ 9,168,500 $ 197,719
Contracts (Japan)
75 Topix Index Contracts Jun. 1999 8,467,337 436,358
(Japan)
$ 17,635,837 $ 634,077
</TABLE>
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF INVESTMENT IN
SECURITIES - 4.0%
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security or a portion of security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $1,886,205.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $431,598,996 and $508,306,328, respectively.
The market value of futures contracts opened and closed during the
period amounted to $39,685,812 and $23,016,318, respectively.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $3,694,000. The weighted average interest rate was 5.20%.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $378,401,888. Net unrealized appreciation
aggregated $58,578,416, of which $70,415,273 related to appreciated
investment securities and $11,836,857 related to depreciated
investment securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $18,475,000 all of which will expire on October 31, 2006
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 4.1%
CASH EQUIVALENTS 11.6
CONSTRUCTION & REAL ESTATE 1.8
DURABLES 4.3
ENERGY 7.9
FINANCE 21.0
GOVERNMENT OBLIGATIONS 0.5
HEALTH 6.0
INDUSTRIAL MACHINERY & 1.3
EQUIPMENT
INVESTMENT COMPANIES 2.3
MEDIA & LEISURE 0.4
NONDURABLES 5.2
PRECIOUS METALS 0.4
RETAIL & WHOLESALE 1.9
SERVICES 2.0
TECHNOLOGY 7.2
UTILITIES 22.1
100.0%
INTERNATIONAL VALUE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 436,980,304
value (cost $377,851,356) -
See accompanying schedule
Cash 2,019
Foreign currency held at 1,804,938
value (cost $1,804,938)
Receivable for investments 2,243,068
sold
Receivable for fund shares 432,776
sold
Dividends receivable 1,318,224
Interest receivable 170,463
Other receivables 9,362
TOTAL ASSETS 442,961,154
LIABILITIES
Payable for investments $ 10,956,841
purchased
Payable for fund shares 3,768,621
redeemed
Accrued management fee 292,380
Payable for daily variation 240,307
on futures contracts
Other payables and accrued 190,840
expenses
TOTAL LIABILITIES 15,448,989
NET ASSETS $ 427,512,165
Net Assets consist of:
Paid in capital $ 356,217,464
Distributions in excess of (1,327,552)
net investment income
Accumulated undistributed net 12,731,433
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 59,890,820
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 29,073,527 $ 427,512,165
shares outstanding
NET ASSET VALUE, offering $14.70
price and redemption price
per share ($427,512,165
(divided by) 29,073,527
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 1,919,799
Dividends
Interest 750,559
2,670,358
Less foreign taxes withheld (186,534)
TOTAL INCOME 2,483,824
EXPENSES
Management fee Basic fee $ 1,554,517
Performance adjustment 131,303
Transfer agent fees 514,651
Accounting fees and expenses 131,669
Non-interested trustees' 701
compensation
Custodian fees and expenses 94,530
Registration fees 26,332
Audit 17,599
Legal 1,039
Interest 1,067
Miscellaneous 2,468
Total expenses before 2,475,876
reductions
Expense reductions (103,787) 2,372,089
NET INVESTMENT INCOME 111,735
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 33,697,900
Foreign currency transactions (107,927)
Futures contracts 332,266 33,922,239
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 40,380,581
Assets and liabilities in 85,931
foreign currencies
Futures contracts 634,077 41,100,589
NET GAIN (LOSS) 75,022,828
NET INCREASE (DECREASE) IN $ 75,134,563
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 102,746
Expense reductions Directed
brokerage arrangements
Transfer agent credits 1,041
$ 103,787
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 111,735 $ 3,233,365
income
Net realized gain (loss) 33,922,239 (19,725,721)
Change in net unrealized 41,100,589 7,859,169
appreciation (depreciation)
NET INCREASE (DECREASE) IN 75,134,563 (8,633,187)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (268,305) (1,833,828)
From net investment income
In excess of net investment (1,327,552) -
income
From net realized gain - (8,557,828)
TOTAL DISTRIBUTIONS (1,595,857) (10,391,656)
Share transactions Net 315,797,066 689,788,871
proceeds from sales of shares
Reinvestment of distributions 1,458,882 9,766,146
Cost of shares redeemed (372,037,535) (674,521,648)
NET INCREASE (DECREASE) IN (54,781,587) 25,033,369
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 18,757,119 6,008,526
IN NET ASSETS
NET ASSETS
Beginning of period 408,755,046 402,746,520
End of period (including $ 427,512,165 $ 408,755,046
under (over) distribution of
net investment income of
$(1,327,552) and
$3,827,529, respectively)
OTHER INFORMATION
Shares
Sold 23,391,726 53,050,043
Issued in reinvestment of 112,655 821,375
distributions
Redeemed (27,504,554) (53,089,578)
Net increase (decrease) (4,000,173) 781,840
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995 G
Net asset value, beginning of $ 12.36 $ 12.47 $ 11.33 $ 10.63 $ 10.00
period
Income from Investment
Operations
Net investment income .00 D .09 D .13 D .16 E .11 D
Net realized and unrealized 2.39 .14 F 1.33 .85 .52
gain (loss)
Total from investment 2.39 .23 1.46 1.01 .63
operations
Less Distributions
From net investment income (.01) (.06) (.10) (.01) -
In excess of net investment (.04) - - - -
income
From net realized gain - (.28) (.22) (.30) -
Total distributions (.05) (.34) (.32) (.31) -
Net asset value, end of period $ 14.70 $ 12.36 $ 12.47 $ 11.33 $ 10.63
TOTAL RETURN B, C 19.39% 1.95% 13.20% 9.64% 6.30%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 427,512 $ 408,755 $ 402,747 $ 270,865 $ 56,828
(000 omitted)
Ratio of expenses to average 1.19% A 1.23% 1.30% 1.28% 1.72%
net assets
Ratio of expenses to average 1.14% A, H 1.21% H 1.28% H 1.26% H 1.72%
net assets after expense
reductions
Ratio of net investment .05% A .71% 1.03% 1.74% 1.08%
income to average net assets
Portfolio turnover rate 223% A 137% 86% 71% 109%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.04 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FOR THE PERIOD NOVEMBER 1,
1994 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1995.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
OVERSEAS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY OVERSEAS 16.09% 3.36% 59.05% 134.69%
MSCI EAFE 15.40% 9.74% 52.59% 79.68%
International Funds Average 15.11% 3.24% 50.24% 142.81%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Morgan Stanley Capital International Europe, Australasia, Far
East (EAFE) Index - a market capitalization-weighted index that is
designed to represent the performance of developed stock markets
outside the United States and Canada. As of April 30, 1999 the index
included over 1,020 equity securities of companies domiciled in 20
countries. To measure how the fund's performance stacked up against
its peers, you can compare it to the international funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Inc. The past six months average represents a peer
group of 597 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY OVERSEAS 3.36% 9.73% 8.91%
MSCI EAFE 9.74% 8.82% 6.04%
International Funds Average 3.24% 8.29% 8.97%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Overseas MS EAFE (Net MA tax)
00094 MS001
1989/04/30 10000.00 10000.00
1989/05/31 9518.98 9455.97
1989/06/30 9240.89 9296.79
1989/07/31 10157.84 10464.22
1989/08/31 9921.08 9993.60
1989/09/30 10450.96 10448.83
1989/10/31 9883.50 10029.02
1989/11/30 10443.44 10533.17
1989/12/31 11117.69 10921.82
1990/01/31 10865.37 10515.44
1990/02/28 10640.66 9781.51
1990/03/31 10991.53 8762.51
1990/04/30 10963.94 8692.98
1990/05/31 11709.06 9684.85
1990/06/30 11918.01 9599.55
1990/07/31 12505.43 9734.77
1990/08/31 11121.63 8789.44
1990/09/30 9887.65 7564.51
1990/10/31 10829.89 8743.20
1990/11/30 10471.13 8227.45
1990/12/31 10383.65 8360.74
1991/01/31 10614.03 8631.16
1991/02/28 10999.39 9556.41
1991/03/31 10639.16 8982.72
1991/04/30 10789.95 9070.93
1991/05/31 10810.90 9165.58
1991/06/30 10132.34 8492.09
1991/07/31 10685.24 8909.32
1991/08/31 10764.82 8728.39
1991/09/30 11238.14 9220.31
1991/10/31 11275.84 9351.02
1991/11/30 10869.54 8914.47
1991/12/31 11278.04 9374.84
1992/01/31 11407.52 9174.60
1992/02/29 11170.89 8846.22
1992/03/31 10938.72 8262.22
1992/04/30 11603.97 8301.50
1992/05/31 12104.03 8857.16
1992/06/30 11818.28 8437.05
1992/07/31 11068.20 8221.12
1992/08/31 10974.44 8736.75
1992/09/30 10519.03 8564.23
1992/10/31 9804.66 8114.99
1992/11/30 9755.55 8191.36
1992/12/31 9986.06 8233.72
1993/01/31 10277.11 8232.71
1993/02/28 10487.87 8481.40
1993/03/31 11200.44 9220.68
1993/04/30 11978.25 10095.75
1993/05/31 12254.25 10308.97
1993/06/30 11963.20 10148.13
1993/07/31 12510.17 10503.36
1993/08/31 13217.73 11070.37
1993/09/30 13102.31 10821.18
1993/10/31 13629.22 11154.66
1993/11/30 13006.97 10179.63
1993/12/31 13985.89 10914.67
1994/01/31 14980.14 11837.46
1994/02/28 14699.71 11804.67
1994/03/31 14276.52 11296.23
1994/04/30 14755.80 11775.52
1994/05/31 14567.14 11707.91
1994/06/30 14373.39 11873.36
1994/07/31 14776.19 11987.55
1994/08/31 14990.34 12271.36
1994/09/30 14577.34 11884.86
1994/10/31 14873.07 12280.63
1994/11/30 14261.22 11690.42
1994/12/31 14163.62 11763.62
1995/01/31 13556.61 11311.72
1995/02/28 13566.99 11279.25
1995/03/31 13971.66 11982.75
1995/04/30 14371.15 12433.41
1995/05/31 14573.49 12285.19
1995/06/30 14682.44 12069.75
1995/07/31 15341.33 12821.17
1995/08/31 14915.90 12332.09
1995/09/30 15123.43 12572.94
1995/10/31 14822.52 12234.97
1995/11/30 14988.54 12575.40
1995/12/31 15446.17 13082.06
1996/01/31 15738.41 13135.77
1996/02/29 15770.29 13180.18
1996/03/31 16004.08 13460.07
1996/04/30 16439.78 13851.40
1996/05/31 16445.10 13596.51
1996/06/30 16567.31 13673.03
1996/07/31 16105.04 13273.40
1996/08/31 16221.93 13302.49
1996/09/30 16689.52 13655.88
1996/10/31 16514.17 13516.14
1996/11/30 17385.58 14053.92
1996/12/31 17469.35 13873.14
1997/01/31 17480.68 13390.35
1997/02/28 17871.53 13612.63
1997/03/31 18030.14 13664.36
1997/04/30 18166.08 13739.51
1997/05/31 19276.33 14636.29
1997/06/30 20278.95 15445.68
1997/07/31 20953.02 15697.75
1997/08/31 19395.28 14527.49
1997/09/30 20783.09 15343.50
1997/10/31 19327.31 14168.03
1997/11/30 19236.68 14026.35
1997/12/31 19376.99 14151.33
1998/01/31 19996.29 14801.15
1998/02/28 21121.75 15753.61
1998/03/31 22086.43 16241.65
1998/04/30 22705.73 16372.89
1998/05/31 22670.00 16296.43
1998/06/30 22449.67 16422.73
1998/07/31 22640.23 16592.21
1998/08/31 18555.22 14539.59
1998/09/30 18543.31 14097.00
1998/10/31 20216.62 15569.71
1998/11/30 21401.63 16370.46
1998/12/31 21864.59 17019.39
1999/01/31 22174.51 16972.24
1999/02/28 21572.90 16570.85
1999/03/31 22478.36 17265.83
1999/04/30 23468.89 17968.20
IMATRL PRASUN SHR__CHT 19990430 19990514 092047 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Overseas Fund on April 30, 1989. As the chart
shows, by April 30, 1999, the value of the investment would have grown
to $23,469 - a 134.69% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International EAFE
Index did over the period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $17,968 -
a 79.68% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
OVERSEAS
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Richard Mace)
An interview with Richard Mace, Portfolio Manager of
Fidelity Overseas Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. It was a pretty good period. For the six months that ended April
30, 1999, the fund returned 16.09%. The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index returned
15.40% during that time, while the international funds average - as
tracked by Lipper Inc. - returned 15.11%. For the 12 months that ended
April 30, 1999, the fund returned 3.36%, while the EAFE index and
Lipper average returned 9.74% and 3.24%, respectively, during the same
time.
Q. WHAT FACTORS CONTRIBUTED POSITIVELY TO THE FUND'S PERFORMANCE
DURING THE PERIOD?
A. Good stock selection in several industries - especially
telecommunications - helped performance. The telecommunications
industry has undergone a major transformation, sparked primarily by
worldwide privatization, deregulation and technological advances. This
spawned a rash of mergers, acquisitions and alliances among industry
participants seeking to expand their global market shares and defend
their positions at home. The fund's stakes in companies such as
Japan's NTT Mobile and DDI Corp., and the United Kingdom's British
Telecommunications and Vodafone Group, performed very nicely. The
fund's energy-related investments - which represented about 8% of the
portfolio at the end of the period - also performed well as the price
of oil perked up again. When I look at oil companies, I don't try to
guess where prices will go. Instead, I try to focus on what price the
energy stocks currently reflect. If BP Amoco and Shell are reflecting
a $12 per barrel oil price, I need to decide whether that price is
sustainable for the next five years. Recently, we began to see cuts
being made in oil production as well as a pick-up in overall demand.
This helped the fund's top three holdings - Elf Aquitaine, BP Amoco
and Shell - post strong results.
Q. WHAT FACTORS HINDERED THE FUND'S PERFORMANCE?
A. A major underweighting - relative to the EAFE Index - in Japanese
banks detracted from performance. Bank shares in general soared
following the Japanese government's unveiling of a plan to inject
capital into the country's troubled banking system. However, I could
find no great benefit to the shareholders of these banks, so I decided
to avoid them. In addition, the fund's food and household products
positions declined during the period, namely Swiss-based Nestle and
France's Danone. These companies were hit particularly hard, as
investors became concerned that economic weakness would bite into
their sales.
Q. THE FUND'S COMBINED INVESTMENTS IN JAPAN, THE U.K. AND FRANCE WERE
AROUND 51% AT THE CLOSE OF THE PERIOD. HOW DID YOU POSITION THE FUND
WITHIN THESE MARKETS AND HOW DID EACH PERFORM?
A. The fund was underweighted - at 17% and 21%, respectively - in both
Japan and the U.K. relative to the EAFE index during the period. At
approximately 13%, the fund was overweighted in France. The
underweighting in Japan hurt somewhat, as the Japanese market turned
the corner a bit and beat the EAFE's return over the past six months.
The fund's investments in France performed well for the most part, but
the Euro muted much of that performance. The fund's U.K. positions,
while moderately underweighted relative to the index, outperformed it.
It's important to note that the fund's country weightings are
accumulated strictly as a result of my stock selection process. If our
research team uncovers more stocks that meet my investing criteria in
a particular country, the fund may be overweighted in that market. The
opposite may hold true for those markets where we find fewer
opportunities.
Q. YOU MENTIONED THAT JAPAN MAY HAVE TURNED A CORNER DURING THE
PERIOD. HOW SO?
A. While it's much too early to say that Japan is climbing out of its
economic woes, there were some signs of gradual improvement. The
Japanese government has shown a willingness to provide financial aid
to companies for internal improvement measures. In addition to that,
more and more company executives in Japan are being rewarded with
stock options. This gives companies the incentive to work hard to
improve their share price. These developments had a positive effect on
the Japanese equity market, most notably in the small-company
category.
Q. WHICH OTHER INVESTMENTS STOOD OUT AMONG THE FUND'S TOP
CONTRIBUTORS?
A. The fund's long-standing position in Finnish telecom company Nokia
generated good results. When I looked at the stock a year and a half
ago, it was trading at a price-to-earnings (P/E) ratio of 20 and the
company was growing its earnings at an annual clip of 30% to 40%. On
that basis, when I compared Nokia to its counterpart growth stocks in
the U.S., the stock should have been trading at a higher P/E multiple.
Thus, I felt the valuation was attractive. Add to that the fact that
Nokia's cellular phone sales were booming at a time when its major
competitors were struggling and the fund ended up with a positive
performer during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I'm optimistic that Europe's economies can continue to improve.
Since the beginning of 1999, the European Central Bank has cut
interest rates and the euro has depreciated 9% against the dollar. A
weaker euro could bode well for European exporters. Consumer spending
also is expected to be fairly strong, and stronger domestic growth
could allow more small company stocks to perform well. My outlook on
Japan is a bit more tentative. We've begun to see signs of gradual
improvement, but nothing to write home about yet. I'd like to see more
concrete evidence of a turnaround in Japan before I commit to that
market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)
FUND FACTS
GOAL: seeks growth of capital primarily
through investments in foreign securities
FUND NUMBER: 094
TRADING SYMBOL: FOSFX
START DATE: December 4, 1984
SIZE: as of April 30, 1999, more than
$3.9 billion
MANAGER: Richard Mace, since 1996; joined
Fidelity in 1987
RICK MACE ON HOW HIS INVESTMENT
STRATEGY SHAPES THE BLUEPRINTS FOR
PORTFOLIO CONSTRUCTION . . .
"One of my main focuses in structuring the portfolio is to try
to maximize the risk-adjusted return of the fund. Generally,
I'm looking for stocks that have two or three times more
upside potential than downside. To keep the risk level in
check, the fund typically has been broadly diversified -
with over 300 different holdings. The portfolio hasn't been
highly concentrated, with the top 10 positions accounting
for only around 15% of the fund's total assets at the end of
the period.
"Country and industry weightings also are widely
diversified; more than two-thirds of the portfolio has been
constructed through individual security selection rather
than through market or industry selection factors. Most of
my investment ideas emanate from our research analysts,
located in the U.S., London, Tokyo and Hong Kong. It is
these people who provide the fundamental analysis upon
which I base my investment decisions, and I owe a lot of the
fund's relative success to their efforts. Largely through this
research, I was drawn to the opportunities that cyclical
stocks seemed to offer. These stocks performed well during
the period, and the fund benefited from its positions in
energy companies. In fact, the fund's top three holdings
were oil-related stocks that received a nice boost from the
recent pickup in oil prices. Again, I try not to make large
bets on any given industry, but I do try to pick those
investments that have the best risk return characteristics."
. . . AND ON SMALL- AND MID-CAP STOCKS:
"One strategy I followed towards the end of the period was
to move out of some of the fund's Japanese-based small-
and mid-cap stocks and rotate into U.K.-based small- and
mid-caps. My reasoning? The Japanese stocks had done
very well through the period and, with the economic
outlook still relatively uncertain there, I wanted to take
advantage of this strong performance. In the U.K., the
small- and mid-cap sectors have done poorly of late and I've
been able to detect some good buying opportunities. Many
of these stocks are somewhat cyclical; some are driven by
the consumer and some driven by industry. Many also were
valued attractively for the type of growth they were
offering."
OVERSEAS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Australia 3.1%
United States 6.9%
France 12.8%
United Kingdom 21.0%
Germany 8.2%
Italy 4.6%
Switzerland 6.1%
Japan 17.1%
Other 12.8%
Netherlands 7.4%
Row: 1, Col: 1, Value: 3.1
Row: 1, Col: 2, Value: 12.8
Row: 1, Col: 3, Value: 8.199999999999999
Row: 1, Col: 4, Value: 4.6
Row: 1, Col: 5, Value: 17.1
Row: 1, Col: 6, Value: 7.4
Row: 1, Col: 7, Value: 12.8
Row: 1, Col: 8, Value: 6.1
Row: 1, Col: 9, Value: 21.0
Row: 1, Col: 10, Value: 6.9
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE
AS OF OCTOBER 31, 1998
United States 11.6%
France 15.2%
United Kingdom 17.3%
Germany 9.2%
Italy 4.3%
Switzerland 6.8%
Sweden 3.1%
Japan 15.3%
Other 9.4%
Netherlands 7.8%
Row: 1, Col: 1, Value: 15.2
Row: 1, Col: 2, Value: 9.199999999999999
Row: 1, Col: 3, Value: 4.3
Row: 1, Col: 4, Value: 15.3
Row: 1, Col: 5, Value: 7.8
Row: 1, Col: 6, Value: 9.4
Row: 1, Col: 7, Value: 3.1
Row: 1, Col: 8, Value: 6.8
Row: 1, Col: 9, Value: 17.3
Row: 1, Col: 10, Value: 11.6
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks, investment companies 93.3 94.8
and equity futures
Bonds 1.0 0.2
Short-term investments 5.7 5.0
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Elf Aquitaine (France, Oil & 2.1 1.8
Gas)
BP Amoco PLC (United 1.8 0.9
Kingdom, Oil & Gas)
Shell Transport & Trading Co. 1.6 0.8
PLC (Reg.) (United
Kingdom, Oil & Gas)
Telecom Italia Spa (Italy, 1.5 0.1
Telephone Services)
SmithKline Beecham PLC 1.4 1.4
(United Kingdom, Drugs &
Pharmaceuticals)
Nokia AB (Finland, 1.4 1.2
Communications Equipment)
Telefonica SA (Spain, 1.3 1.7
Telephone Services)
Novartis AG (Reg.) 1.3 1.8
(Switzerland, Drugs &
Pharmaceuticals)
Takeda Chemical Industries 1.3 1.1
Ltd. (Japan, Drugs &
Pharmaceuticals)
Lloyds TSB Group PLC (United 1.2 1.2
Kingdom, Banks)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 23.7 21.1
UTILITIES 15.3 14.3
HEALTH 7.9 8.5
ENERGY 7.7 7.2
NONDURABLES 5.7 4.6
TECHNOLOGY 5.6 5.4
DURABLES 4.8 5.9
BASIC INDUSTRIES 3.8 4.3
INDUSTRIAL MACHINERY & 3.7 5.5
EQUIPMENT
RETAIL & WHOLESALE 3.2 2.5
</TABLE>
OVERSEAS
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 88.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 2.8%
AMP Ltd. 404,000 $ 4,715,822
Australia & New Zealand 1,668,797 13,210,797
Banking Group Ltd.
Brambles Industries Ltd. 90,600 2,660,673
Broken Hill Proprietary Co. 910,658 10,289,073
Ltd. (The)
Cable & Wireless Optus Ltd. 2,308,800 5,191,545
(a)
Coles Myer Ltd. 1,345,626 7,145,246
Commonwealth Bank of Australia 213,700 3,888,709
CSR Ltd. 452,517 1,209,059
David Jones Ltd. 1,298,600 1,308,856
Fosters Brewing Group Ltd. 993,700 2,896,865
Goodman Fielder Ltd. 2,014,700 1,945,336
National Australia Bank Ltd. 766,800 14,919,564
News Corp. Ltd. 1,192,617 9,988,569
News Corp. Ltd. sponsored ADR 82,300 2,515,294
(ltd. vtg.)
North Ltd. 849,100 1,796,967
Rio Tinto Ltd. 408,000 6,867,194
Smith (Howard) Ltd. 82,200 698,890
WMC Ltd. 4,608,671 19,903,078
Woodside Petroleum Ltd. 374,362 2,550,118
113,701,655
BELGIUM - 0.5%
Electrabel SA 23,500 7,765,610
Fortis B 235,800 7,926,865
Solvay & Compagnie SA 31,200 2,180,281
Tractebel 13,500 1,859,623
19,732,379
CANADA - 1.0%
BCE, Inc. 535,600 24,445,710
Celestica, Inc. (sub-vtg.) (a) 92,500 3,682,224
Cinar Films, Inc. Class B 251,800 5,256,325
(sub-vtg.) (a)
Newbridge Networks Corp. (a) 59,700 2,212,629
Noranda, Inc. 198,400 2,655,319
38,252,207
DENMARK - 0.6%
Den Danske Bank Group AS 55,500 6,401,840
International Service Systems 56,500 3,322,961
AS Class B
Tele Danmark AS Class B 35,400 3,654,838
Unidanmark AS Class A 129,600 8,914,129
22,293,768
FINLAND - 2.2%
Helsinki Telephone Corp. 52,100 2,201,023
Class E
Merita Ltd. Series A 257,800 1,542,216
Nokia AB 733,600 54,423,927
Sampo Insurance Co. Ltd. 177,300 5,596,089
Sonera Group PLC (c) 134,800 2,683,253
Stora Enso Oyj 117,000 1,368,870
SHARES VALUE (NOTE 1)
Teito Corp. Class B 124,000 $ 4,949,678
UPM-Kymmene Corp. 499,100 15,140,009
87,905,065
FRANCE - 12.6%
Alcatel Alsthom Compagnie 58,600 7,123,564
Generale d'Electricite SA
(RFD)
Atos SA (a) 64,800 5,557,429
AXA SA de CV 250,765 32,445,320
Banque Nationale de Paris 411,400 34,172,061
Canal Plus SA 16,100 4,486,686
Cap Gemini SA 63,222 9,686,139
Castorama Dubois 42,200 10,120,328
Investissements SA
Club Mediterranee SA (a) 40,000 3,705,800
Coflexip SA sponsored ADR 149,100 6,634,950
Compagnie de St. Gobain 73,100 12,577,221
Compagnie Financiere de 93,800 9,991,133
Paribas Class A (Reg.)
Elf Aquitaine 530,000 82,812,486
France Telecom SA 379,200 30,694,443
Groupe Danone 74,300 19,903,217
L'Oreal SA 9,030 5,793,944
Lafarge SA 53,862 5,246,676
Lagardere S.C.A. (Reg.) 121,800 4,833,490
LVMH Moet Hennessy Louis 11,300 3,036,575
Vuitton
Michelin SA (Compagnie 174,689 7,944,063
Generale des Etablissements)
Class B
Pechiney SA Class A 29,450 1,247,266
Pinault Printemps SA 30,900 5,136,556
Rhone-Poulenc SA Class A 274,625 12,941,693
Sanofi SA 120,100 18,858,107
Scor SA 209,000 10,444,850
Seita 54,320 3,278,299
Societe Generale, France 109,900 19,711,743
Class A
Suez Lyonnaise des Eaux 121,500 20,711,716
Television Francaise 1 SA 61,300 12,007,321
(T.F.1)
Total SA Class B 328,690 44,701,840
Union Assurances Federales SA 95,500 10,657,563
Valeo SA 79,100 6,700,086
Vivendi SA 176,700 41,365,590
504,528,155
GERMANY - 7.4%
Allianz AG (Reg.) 67,300 21,163,400
BASF AG 576,600 25,396,970
Bayer AG 378,100 15,793,108
Bayerische Hypo-und 158,000 10,164,565
Vereinsbank AG
Continental Gummi-Werke AG 67,000 1,681,269
DaimlerChrysler AG (Reg.) 469,987 46,146,849
Deutsche Bank AG 72,500 4,202,007
Deutsche Bank AG (RFD) 214,600 12,042,579
Deutsche Lufthansa AG (Reg.) 389,600 9,054,561
Deutsche Telekom AG 856,600 33,838,979
Fresenius Medical Care AG 57,800 3,078,292
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - CONTINUED
Hoechst AG 71,500 $ 3,395,333
Holzmann (Phillip) AG (a) 3,676 589,661
Mannesmann AG 332,200 43,474,243
Metro AG 85,700 6,080,431
Munich Reinsurance AG:
(Reg.) 28,200 5,580,490
(RFD) 28,200 5,613,334
RWE AG 184,400 8,395,437
Schering AG 53,400 6,162,851
Siemens AG 179,900 13,276,325
Veba AG 129,450 7,113,500
Viag AG 21,700 10,890,605
Volkswagen AG 40,600 2,855,215
295,990,004
HONG KONG - 0.5%
Cheung Kong Holdings Ltd. 502,000 4,565,815
China Telecom (Hong Kong) 322,000 736,575
Ltd. (a)
Dah Sing Financial Holdings 830,800 2,620,600
Ltd.
Dao Heng Bank Group Ltd. 1,006,000 4,088,217
Johnson Electric Holdings 1,575,500 4,705,382
Ltd.
Sun Hung Kai Properties Ltd. 290,716 2,550,371
Wing Hang Bank Ltd. 369,000 1,128,237
20,395,197
IRELAND - 0.7%
Bank of Ireland, Inc. 1,044,149 20,908,802
CRH PLC 299,261 5,909,393
26,818,195
ITALY - 4.0%
Assicurazioni Generali Spa 858,400 33,473,826
Banca Commerciale Italiana Spa 1,393,900 11,532,380
Banca di Roma 5,632,600 9,249,849
Eni Spa sponsored ADR 1,946,200 12,821,281
Italgas Spa 620,800 2,796,824
Olivetti & Co. Spa 675,200 2,350,597
San Paolo-IMI Spa 876,700 13,208,997
Telecom Italia Mobile Spa 956,200 5,768,795
Telecom Italia Spa 5,491,470 58,312,301
Unicredito Italiano Spa 1,950,200 9,940,293
Unione Immobiliare Spa 1,740,200 994,963
160,450,106
JAPAN - 14.7%
Aiful Corp. (c) 119,280 9,761,815
Bank of Tokyo-Mitsubishi Ltd. 183,000 2,701,005
Banyu Pharmaceutical Co. Ltd. 572,000 10,541,129
Canon, Inc. 413,000 10,101,859
Dai Nippon Printing Co. Ltd. 135,000 2,139,554
Daiwa House Industry Co. Ltd. 339,000 4,046,532
Daiwa Securities Co. Ltd. 926,000 5,662,422
SHARES VALUE (NOTE 1)
DDI Corp. 6,021 $ 29,908,299
Fancl Corp. 24,700 3,517,339
Fuji Bank Ltd. 1,045,000 8,158,317
Fuji Photo Film Co. Ltd. 500,000 18,889,260
Furukawa Electric Co. Ltd. 2,745,000 12,002,764
Hitachi Ltd. 567,000 4,139,100
Honda Motor Co. Ltd. 734,000 32,433,623
Hoya Corp. 55,000 2,879,460
Ito-Yokado Co. Ltd. 320,000 19,648,181
Kao Corp. 446,000 11,319,986
Kirin Brewery Co. Ltd. 170,000 1,922,432
Kokusai Securities Co. Ltd. 55,000 686,463
Kyocera Corp. 146,000 8,670,966
Matsushita Electric 1,362,000 25,898,306
Industrial Co. Ltd.
Minolta Co. Ltd. 1,584,000 8,770,514
Mitsubishi Electric Corp. 3,732,000 13,036,052
Mitsubishi Estate Co. Ltd. 1,153,000 11,792,703
Mitsubishi Trust & Banking 600,000 6,584,017
Corp.
Mitsui Fudosan Co. Ltd. 515,000 4,745,351
NGK Insulators Ltd. 284,000 3,461,384
Nichicon Corp. 156,000 2,058,134
Nikko Securities Co. Ltd. 3,075,000 17,644,286
Nikon Corp. (a) 181,000 2,486,514
Nippon Telegraph & Telephone 800 8,711,676
Corp.
Nomura Securities Co. Ltd. 1,649,000 17,791,187
NTT Mobile Communication 493 28,907,688
Network, Inc. (a)
Omron Corp. 1,836,000 25,299,211
Orix Corp. 138,300 11,133,045
Paris Miki, Inc. 1,640 54,676
Ricoh Co. Ltd. 575,000 5,539,035
Rohm Co. Ltd. 24,000 2,894,957
Ryohin Keikaku Co. Ltd. 30,200 5,502,178
Sankyo Co. Ltd. 197,000 4,133,732
Secom Ltd. 105,000 10,255,486
Sekisui House Ltd. 501,000 5,610,965
Sharp Corp. 1,379,000 16,171,887
Shimano, Inc. 79,000 2,011,727
Shin-Etsu Chemical Co. Ltd. 254,000 8,085,106
Shohkoh Fund & Co. Ltd. 12,200 7,153,627
Softbank Corp. 39,100 5,204,381
Sony Corp. 109,500 10,128,749
Sumitomo Realty & Development 847,000 3,696,490
Co. Ltd.
Takeda Chemical Industries 1,150,000 49,995,809
Ltd.
Takefuji Corp. 133,800 11,095,828
Takefuji Corp. (c) 96,900 8,035,768
Terumo Corp. 542,000 11,804,322
THK Co. Ltd. 598,700 10,381,211
Tokyo Electron Ltd. 92,000 5,240,408
Toyota Motor Corp. 169,000 4,837,625
Yahoo Japan Corp. 11 3,814,709
Yamanouchi Pharmaceutical Co. 259,000 8,200,871
Ltd.
587,300,121
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
LUXEMBOURG - 0.1%
Stolt Comex Seaway SA 184,300 $ 2,303,750
MALAYSIA - 0.1%
Malayan Banking BHD 104,000 276,421
Oriental Holdings BHD 1,994,800 4,225,826
4,502,247
MEXICO - 0.6%
Banacci SA de CV Class O (a) 2,258,000 5,714,766
Elektra SA de CV Unit 1,044,100 729,355
Empresas ICA Sociedad 388,800 2,551,500
Controladora SA de CV
sponsored ADR
Grupo Financiero Bancomer SA 41,464,000 14,259,516
de CV Series A
Tubos de Acero de Mexico SA 175,200 1,938,150
sponsored ADR
25,193,287
NETHERLANDS - 7.2%
ABN AMRO Holding NV 601,800 14,368,541
Aegon NV 129,400 12,433,541
Ahrend NV 89,800 1,749,476
Akzo Nobel NV 800,400 36,229,065
CSM NV 70,200 3,760,985
Equant NV (Reg.) (a) 153,100 13,664,175
Fortis Amev NV 573,400 20,459,807
Heineken NV 176,200 8,861,627
ING Groep NV 677,534 41,822,846
Koninklijke (Royal) Philips 359,200 30,996,158
Electronics NV
Koninklijke Ahold NV 403,853 15,030,124
Koninklijke KPN NV 386,800 16,176,982
Nutreco Holding NV 126,522 5,137,423
Royal Dutch Petroleum Co. 149,250 8,759,107
(Hague Registry)
Samas Groep NV 142,200 2,092,803
STMicroelectronics NV (a) 70,000 7,140,000
TNT Post Group NV 145,700 3,933,813
Unilever NV 298,900 20,507,601
Vedior NV 355,114 8,008,687
Vendex NV CVA 169,600 4,228,932
Vnu NV 248,600 10,081,237
Wolters Kluwer NV 63,200 2,756,946
288,199,876
NEW ZEALAND - 0.1%
Lion Nathan Ltd. 919,700 2,314,954
PORTUGAL - 0.2%
Electricidade de Portugal SA 271,800 5,122,517
Portugal Telecom SA 32,000 1,336,629
6,459,146
SINGAPORE - 0.5%
Allgreen Properties Ltd. 488,000 296,368
Development Bank of Singapore 497,000 5,274,764
Ltd. (For. Reg.)
SHARES VALUE (NOTE 1)
Oversea-Chinese Banking Corp. 660,000 $ 6,187,500
(For. Reg.)
Overseas Union Bank Ltd. 1,026,000 5,263,090
United Overseas Bank Ltd. 578,000 4,464,505
(For. Reg.)
21,486,227
SPAIN - 2.7%
Banco Bilbao Vizcaya SA (Reg.) 459,700 6,892,102
Banco Santander Central 1,048,708 22,829,249
Hispano SA
Endesa SA 565,100 12,588,819
Iberdrola SA 600,700 8,427,280
Mapfre Vida SA 76,200 2,392,179
Repsol SA 135,000 2,201,245
Telefonica SA 1,127,800 52,958,984
Telefonica SA sponsored ADR 20 2,788
Union Electrica Fenosa SA 127,400 1,698,279
109,990,925
SWEDEN - 1.8%
ABB AB Series A 426,300 5,953,981
Electrolux AB 428,700 8,713,725
Ericsson (L.M.) Telefon AB 735,100 19,847,700
Class B
Nordbanken Holding AB 962,400 6,062,975
Skandia Foersaekrings AB 323,300 6,263,940
Svenska Handelsbanken 262,500 9,859,858
Swedish Match Co. 2,917,800 9,607,039
Volvo AB Class B 251,600 6,667,401
72,976,619
SWITZERLAND - 6.1%
ABB AG 2,700 3,941,929
Credit Suisse Group (Reg.) 152,800 30,329,396
Gretag Imaging Holding AG 43,000 4,105,315
(Reg.) (a)
Holderbank Financiere Glarus 1,800 2,172,047
AG (Bearer)
Julius Baer Holding AG 4,612 15,025,315
Nestle SA (Reg.) 25,600 47,420,472
Novartis AG (Reg.) 34,689 50,827,124
Roche Holding AG 2,220 26,133,071
participation certificates
Swiss Reinsurance Co. (Reg.) 5,573 12,206,479
Swisscom AG 32,300 11,868,766
UBS AG 115,711 39,329,592
Zurich Allied AG (Reg.) 3,000 1,935,039
245,294,545
TAIWAN - 0.4%
Taiwan Semiconductor 4,480,000 15,138,838
Manufacturing Co. Ltd.
UNITED KINGDOM - 21.0%
Abbey National, PLC 474,900 10,741,497
Allied Domecq PLC 595,500 4,662,443
Allied Zurich PLC (a) 1,981,550 26,304,363
Amvescap PLC 852,700 9,066,418
Asda Group PLC 1,597,400 5,346,262
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Ashtead Group PLC 687,100 $ 2,518,239
Bank of Scotland 290,100 4,346,365
Bass PLC 271,000 4,265,396
BBA Group PLC 466,243 3,733,054
Boots Co. PLC 425,900 5,643,377
BP Amoco PLC 3,877,432 73,146,393
British Aerospace PLC 551,786 4,133,512
British American Tobacco PLC 975,150 8,192,591
British Energy PLC 441,700 3,757,136
British Telecommunications PLC 2,498,800 41,917,422
BTP PLC 266,600 1,795,279
BTR Siebe PLC 1,604,200 8,198,902
Cadbury Schweppes PLC 617,400 8,250,467
Caradon PLC 9,416,790 23,969,309
CGU PLC 601,400 9,509,316
Cookson Group PLC 2,145,162 6,047,748
Courtaulds Textiles PLC 987,400 2,775,774
Diageo PLC 1,395,400 16,129,324
Dixons Group PLC 453,800 9,701,323
Gallaher Group PLC 328,400 1,892,685
General Electric Co. PLC 1,007,500 10,687,998
Glaxo Wellcome PLC 1,521,600 44,316,519
Hays PLC 288,100 3,207,132
HSBC Holdings PLC 81,438 3,067,377
HSBC Holdings PLC Ord. 909,610 34,714,893
Kingfisher PLC 1,329,200 19,914,473
Ladbroke Group PLC 702,400 3,425,817
Lloyds TSB Group PLC 3,026,800 48,786,129
Marks & Spencer PLC 170,500 1,165,998
Misys PLC 318,441 2,993,404
National Grid Group PLC 1,011,460 7,010,761
National Westminster Bank PLC 269,100 6,489,796
Orange PLC (a) 736,900 10,043,254
Pearson PLC 489,200 10,418,698
Peninsular & Oriental Steam 228,300 3,322,994
Navigation Co.
Prudential Corp. PLC 846,300 12,086,446
Rentokil Initial PLC 4,220,189 24,866,335
Reuters Group PLC 1,146,300 15,549,124
Rio Tinto PLC (Reg.) 368,400 6,442,360
RMC Industries, Inc. 161,200 2,441,116
Royal & Sun Alliance 848,013 7,322,558
Insurance Group PLC
Royal Bank of Scotland Group 460,700 10,880,472
PLC
Saatchi & Saatchi PLC 458,000 1,778,190
Sainsbury (J.) PLC 699,400 4,450,597
Schroders PLC 72,119 1,725,328
Scottish & Newcastle PLC 257,500 3,221,174
Scottish & Southern Energy PLC 646,100 6,073,460
Shell Transport & Trading Co. 8,689,700 65,807,001
PLC (Reg.)
SmithKline Beecham PLC 4,265,144 56,033,517
SHARES VALUE (NOTE 1)
Somerfield PLC 313,800 $ 1,754,195
South African Breweries PLC 638,000 5,339,515
(a)
Standard Chartered PLC 633,250 11,466,663
Tarmac PLC 6,387,761 12,194,459
Tomkins PLC 709,500 3,020,389
Unilever PLC 3,087,800 27,645,483
Vodafone Group PLC 2,437,538 43,723,383
Wimpey George PLC 984,300 2,695,702
WPP Group PLC 580,300 5,132,400
837,259,705
UNITED STATES OF AMERICA - 0.8%
AirTouch Communications, Inc. 163,900 15,304,163
(a)
Baker Hughes, Inc. 129,400 3,865,825
Halliburton Co. 120,700 5,144,838
McDermott International, Inc. 37,800 1,096,200
Newmont Mining Corp. 83,800 2,016,438
Noble Drilling Corp. (a) 79,400 1,558,225
Smith International, Inc. 24,400 1,094,950
Weatherford International, 72,000 2,439,000
Inc. (a)
32,519,639
TOTAL COMMON STOCKS 3,541,006,610
(Cost $2,624,298,920)
PREFERRED STOCKS - 1.3%
CONVERTIBLE PREFERRED STOCKS - 0.3%
AUSTRALIA - 0.3%
WBK Trust $3.135 STRYPES 315,800 10,954,313
NONCONVERTIBLE PREFERRED
STOCKS - 1.0%
GERMANY - 0.6%
Dyckerhoff AG 12,700 3,536,498
SAP AG (Systeme Anwendungen 40,900 15,459,856
Produkte)
Volkswagen AG 67,300 2,870,954
Wella AG 5,450 4,327,845
26,195,153
ITALY - 0.4%
Banca Intesa Spa 34,300 89,013
Telecom Italia Spa Risp 2,707,400 14,565,170
14,654,183
TOTAL NONCONVERTIBLE 40,849,336
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 51,803,649
(Cost $35,334,942)
INVESTMENT COMPANIES - 1.0%
SHARES VALUE (NOTE 1)
EMERGING MARKETS - 0.3%
Asia Tigers Fund, Inc. 258,200 $ 2,243,113
Emerging Markets 164,200 1,436,750
Infrastructure Fund, Inc.
Emerging Markets 132,900 1,378,838
Telecommunication Fund, Inc.
Morgan Stanley Emerging 199,300 2,204,756
Markets Fund, Inc. (a)
Templeton Dragon Fund, Inc. 563,200 5,420,800
12,684,257
GERMANY - 0.2%
New Germany Fund, Inc. (The) 662,700 7,952,400
HONG KONG - 0.1%
Asia Pacific Fund, Inc. 381,100 3,429,900
MULTI-NATIONAL - 0.3%
European Warrant Fund, Inc. 215,200 3,308,700
Morgan Stanley Asia-Pacific 1,089,800 9,944,425
Fund, Inc.
13,253,125
TAIWAN - 0.1%
Taiwan Fund, Inc. 145,600 2,366,000
TOTAL INVESTMENT COMPANIES 39,685,682
(Cost $41,205,235)
<TABLE>
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CONVERTIBLE BONDS - 0.8%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (E)
FRANCE - 0.2%
Groupe Danone 3% 1/1/02 A1 EUR 2,785,244 4,841,024
Suez Lyonnaise des Eaux 4% A+ EUR 1,981,837 4,301,375
1/1/06
9,142,399
NETHERLANDS - 0.2%
Koninklijke Ahold NV 3% Baa1 NLG 8,640,000 5,519,573
9/30/03
UNITED STATES OF AMERICA - 0.4%
Nestle Holdings, Inc. 3% - 9,860,000 12,029,200
6/17/02
Roche Holdings, Inc. liquid - 5,780,000 3,554,700
yield option note 0% 4/20/10
(c)
15,583,900
TOTAL CONVERTIBLE BONDS 30,245,872
(Cost $32,881,343)
GOVERNMENT OBLIGATIONS (F) -
0.5%
ITALY - 0.2%
Italian Republic 5% 6/28/01 Aa3 3,690,000 6,854,175
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (E) VALUE (NOTE 1)
UNITED STATES OF AMERICA - 0.3%
U.S. Treasury Bills, yield at - $ 12,400,000 $ 12,309,972
date of purchase 4.34%
7/1/99 (d)
TOTAL GOVERNMENT OBLIGATIONS 19,164,147
(Cost $18,377,566)
CASH EQUIVALENTS - 7.8%
SHARES
Taxable Central Cash Fund (b) 313,658,458 313,658,458
(Cost $313,658,458)
TOTAL INVESTMENT IN $ 3,995,564,418
SECURITIES - 100%
(Cost $3,065,756,464)
</TABLE>
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FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)
PURCHASED
1,076 Nikkei 225 Index Jun. 1999 $ 89,684,600 $ 6,648,072
Contracts (Japan)
59 Topix Index Contracts Jun. 1999 6,452,654 268,205
(Japan)
$ 96,137,254 $ 6,916,277
</TABLE>
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF INVESTMENT IN
SECURITIES - 2.4%
SECURITY TYPE ABBREVIATIONS
STRYPES - Structured Yield Product
Exchangeable for Common Stock
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
NLG - Dutch guilder
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $24,035,536 or 0.6% of net assets.
(d) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $9,927,400.
(e) Principal amount is stated in United States dollars unless
otherwise noted.
(f) For foreign government obligations not individually rated by S&P
or Moody's, the ratings listed have been assigned by FMR, the fund's
investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,693,401,079 and $1,763,249,740, respectively.
The market value of futures contracts opened and closed during the
period amounted to $269,273,242 and $384,072,956 for the period.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company.
The commissions paid to these affiliated firms were $5,276 for the
period.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $3,071,773,193. Net unrealized appreciation
aggregated $923,791,225, of which $1,017,689,282 related to
appreciated investment securities and $93,898,057 related to
depreciated investment securities.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
AEROSPACE & DEFENSE 0.1%
BASIC INDUSTRIES 3.8
CASH EQUIVALENTS 7.8
CONSTRUCTION & REAL ESTATE 3.0
DURABLES 4.8
ENERGY 7.7
FINANCE 23.7
GOVERNMENT OBLIGATIONS 0.5
HEALTH 7.9
HOLDING COMPANIES 0.4
INDUSTRIAL MACHINERY & 3.7
EQUIPMENT
INVESTMENT COMPANIES 1.0
MEDIA & LEISURE 1.9
NONDURABLES 5.7
PRECIOUS METALS 0.6
RETAIL & WHOLESALE 3.2
SERVICES 2.8
TECHNOLOGY 5.6
TRANSPORTATION 0.5
UTILITIES 15.3
100.0%
OVERSEAS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 3,995,564,418
value (cost $3,065,756,464)
- - See accompanying schedule
Foreign currency held at 7,048,514
value (cost $6,967,425)
Receivable for investments 16,551,684
sold
Receivable for fund shares 6,227,234
sold
Dividends receivable 15,352,136
Interest receivable 1,469,256
Other receivables 82,962
TOTAL ASSETS 4,042,296,204
LIABILITIES
Payable to custodian bank $ 26,051
Payable for investments 49,003,441
purchased
Payable for fund shares 13,408,841
redeemed
Accrued management fee 3,012,957
Payable for daily variation 1,351,646
on futures contracts
Other payables and accrued 1,851,144
expenses
TOTAL LIABILITIES 68,654,080
NET ASSETS $ 3,973,642,124
Net Assets consist of:
Paid in capital $ 2,877,103,355
Distributions in excess of (13,027,892)
net investment income
Accumulated undistributed 173,003,354
net realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 936,563,307
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 102,902,580 $ 3,973,642,124
shares outstanding
NET ASSET VALUE, offering $38.62
price and redemption price
per share ($3,973,642,124
(divided by) 102,902,580
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 26,868,909
Dividends
Interest 7,514,897
34,383,806
Less foreign taxes withheld (2,627,132)
TOTAL INCOME 31,756,674
EXPENSES
Management fee Basic fee $ 13,945,690
Performance adjustment 3,528,289
Transfer agent fees 5,283,126
Accounting fees and expenses 590,020
Non-interested trustees' 6,442
compensation
Custodian fees and expenses 708,766
Registration fees 107,486
Audit 31,920
Legal 1,822
Miscellaneous 16,469
Total expenses before 24,220,030
reductions
Expense reductions (845,288) 23,374,742
NET INVESTMENT INCOME 8,381,932
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 179,442,340
Foreign currency transactions 628,664
Futures contracts 12,911,489 192,982,493
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 369,429,324
Assets and liabilities in (701,478)
foreign currencies
Futures contracts 4,404,607 373,132,453
NET GAIN (LOSS) 566,114,946
NET INCREASE (DECREASE) IN $ 574,496,878
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 728,113
Expense reductions Directed
brokerage arrangements
Transfer agent credits 117,175
$ 845,288
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
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INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 8,381,932 $ 31,812,695
income
Net realized gain (loss) 192,982,493 85,208,677
Change in net unrealized 373,132,453 69,551,645
appreciation (depreciation)
NET INCREASE (DECREASE) IN 574,496,878 186,573,017
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,381,932) (36,842,102)
From net investment income
In excess of net investment (12,556,520) -
income
From net realized gain (53,392,758) (145,109,412)
TOTAL DISTRIBUTIONS (74,331,210) (181,951,514)
Share transactions Net 1,896,297,532 3,450,931,991
proceeds from sales of shares
Reinvestment of distributions 71,180,715 176,077,752
Cost of shares redeemed (2,097,344,039) (3,805,741,237)
NET INCREASE (DECREASE) IN (129,865,792) (178,731,494)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 370,299,876 (174,109,991)
IN NET ASSETS
NET ASSETS
Beginning of period 3,603,342,248 3,777,452,239
End of period (including $ 3,973,642,124 $ 3,603,342,248
under (over) distribution of
net investment income of
$(13,027,892) and
$17,037,956, respectively)
OTHER INFORMATION
Shares
Sold 52,417,713 98,986,406
Issued in reinvestment of 2,054,839 5,371,501
distributions
Redeemed (57,697,481) (108,950,453)
Net increase (decrease) (3,224,929) (4,592,546)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
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SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 33.95 $ 34.12 $ 31.08 $ 28.57 $ 29.17
period
Income from Investment
Operations
Net investment income .08 E .29 E .43 E .48 F .31
Net realized and unrealized 5.30 1.22 4.61 2.72 (.44)
gain (loss)
Total from investment 5.38 1.51 5.04 3.20 (.13)
operations
Less Distributions
From net investment income (.08) (.34) (.37) (.34) (.02)
In excess of net investment (.12) - - - -
income
From net realized gain (.51) (1.34) (1.63) (.35) (.45)
Total distributions (.71) (1.68) (2.00) (.69) (.47)
Net asset value, end of
period $ 38.62 $ 33.95 $ 34.12 $ 31.08 $ 28.57
TOTAL RETURN B, C 16.09% 4.60% 17.03% 11.41% (.34)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,973,642 $ 3,603,342 $ 3,777,452 $ 3,114,625 $ 2,276,306
(000 omitted)
Ratio of expenses to average 1.29% A 1.26% 1.23% 1.14% 1.05%
net assets
Ratio of expenses to average 1.25% A, D 1.24% D 1.20% D 1.12% D 1.05%
net assets after expense
reductions
Ratio of net investment .45% A .82% 1.28% 1.74% 1.78%
income to average net assets
Portfolio turnover rate 98% A 69% 68% 82% 49%
A ANNUALIZED
B TOTAL RETURNS DO NOT
INCLUDE THE FORMER ONE TIME
SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
E NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
F INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.08 PER
SHARE.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 27.16
period
Income from Investment
Operations
Net investment income .18
Net realized and unrealized 2.26
gain (loss)
Total from investment 2.44
operations
Less Distributions
From net investment income (.15)
In excess of net investment (.17)
income
From net realized gain (.11)
Total distributions (.43)
Net asset value, end of period $ 29.17
TOTAL RETURN B, C 9.13%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,283,211
(000 omitted)
Ratio of expenses to average 1.24%
net assets
Ratio of expenses to average 1.24%
net assets after expense
reductions
Ratio of net investment .90%
income to average net assets
Portfolio turnover rate 49%
A ANNUALIZED
B TOTAL RETURNS DO NOT
INCLUDE THE FORMER ONE TIME
SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
E NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
F INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.08 PER
SHARE.
</TABLE>
WORLDWIDE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY WORLDWIDE 15.69% -5.67% 58.05% 131.16%
MSCI World 19.57% 15.95% 115.06% 171.88%
Global Funds Average 19.65% 6.99% 91.01% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on May 30, 1990. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Morgan Stanley Capital
International World Index - a market capitalization-weighted index
that is designed to represent the performance of developed stock
markets throughout the world. As of April 30, 1999, the index included
over 1,460 equity securities of companies domiciled in 22 countries.
To measure how the fund's performance stacked up against its peers,
you can compare it to the global funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 248 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY WORLDWIDE -5.67% 9.59% 9.85%
MSCI World 15.95% 16.55% 11.86%
Global Funds Average 6.99% 13.56% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Worldwide MS World Index (Net)
00318 MS004
1990/05/30 10000.00 10000.00
1990/05/31 10030.00 9976.64
1990/06/30 10290.00 9902.62
1990/07/31 10570.00 9989.88
1990/08/31 9380.00 9051.77
1990/09/30 8450.00 8094.23
1990/10/31 8950.00 8846.73
1990/11/30 8950.00 8698.31
1990/12/31 8898.23 8877.31
1991/01/31 9150.44 9198.82
1991/02/28 9654.88 10047.22
1991/03/31 9321.95 9748.02
1991/04/30 9412.75 9821.21
1991/05/31 9483.37 10040.73
1991/06/30 8807.43 9417.84
1991/07/31 9352.22 9859.59
1991/08/31 9493.46 9825.22
1991/09/30 9654.88 10079.83
1991/10/31 9695.23 10240.21
1991/11/30 9180.71 9790.88
1991/12/31 9599.06 10500.46
1992/01/31 9701.07 10302.97
1992/02/29 9996.89 10122.11
1992/03/31 9762.27 9642.19
1992/04/30 10190.71 9773.45
1992/05/31 10619.15 10159.10
1992/06/30 10251.92 9815.63
1992/07/31 10149.91 9837.48
1992/08/31 10007.10 10073.46
1992/09/30 10007.10 9977.88
1992/10/31 9823.48 9704.42
1992/11/30 9976.49 9874.98
1992/12/31 10194.86 9951.68
1993/01/31 10530.15 9981.98
1993/02/28 10781.62 10215.46
1993/03/31 11399.81 10804.71
1993/04/30 11682.71 11302.49
1993/05/31 12049.43 11559.98
1993/06/30 11923.70 11460.02
1993/07/31 12185.64 11693.15
1993/08/31 12950.52 12226.26
1993/09/30 12814.31 11997.44
1993/10/31 13369.63 12325.16
1993/11/30 13128.64 11625.06
1993/12/31 13920.64 12191.05
1994/01/31 14914.21 12992.28
1994/02/28 14689.86 12821.27
1994/03/31 14134.32 12265.65
1994/04/30 14625.76 12641.94
1994/05/31 14604.39 12671.61
1994/06/30 14305.25 12633.52
1994/07/31 14743.28 12870.80
1994/08/31 14989.00 13255.48
1994/09/30 14700.54 12904.26
1994/10/31 14914.21 13268.36
1994/11/30 14401.40 12689.97
1994/12/31 14332.82 12809.88
1995/01/31 14253.69 12614.52
1995/02/28 14423.25 12795.36
1995/03/31 14502.37 13408.98
1995/04/30 14864.08 13873.19
1995/05/31 15011.03 13988.72
1995/06/30 15214.49 13981.28
1995/07/31 15836.18 14677.67
1995/08/31 15440.56 14347.51
1995/09/30 15587.50 14762.30
1995/10/31 15056.24 14526.70
1995/11/30 15101.46 15027.93
1995/12/31 15363.09 15464.12
1996/01/31 15786.03 15740.67
1996/02/29 15991.79 15833.30
1996/03/31 16266.13 16093.49
1996/04/30 16746.23 16468.62
1996/05/31 17043.43 16479.56
1996/06/30 17032.00 16559.58
1996/07/31 16414.73 15971.03
1996/08/31 16849.10 16151.29
1996/09/30 17169.17 16780.32
1996/10/31 17352.06 16894.13
1996/11/30 18152.22 17837.53
1996/12/31 18239.31 17548.51
1997/01/31 18464.49 17756.70
1997/02/28 18974.10 17957.61
1997/03/31 18725.22 17599.05
1997/04/30 18689.67 18170.96
1997/05/31 19791.85 19289.22
1997/06/30 20834.77 20247.97
1997/07/31 21699.92 21177.22
1997/08/31 20538.49 19757.23
1997/09/30 22150.28 20827.25
1997/10/31 20467.38 19727.72
1997/11/30 20064.43 20073.46
1997/12/31 20441.89 20314.75
1998/01/31 20762.29 20877.50
1998/02/28 22223.34 22286.37
1998/03/31 23633.13 23224.02
1998/04/30 24504.63 23447.48
1998/05/31 24402.10 23150.13
1998/06/30 23799.74 23696.03
1998/07/31 23389.62 23654.49
1998/08/31 19109.00 20496.55
1998/09/30 18750.15 20855.53
1998/10/31 19980.50 22737.29
1998/11/30 20992.99 24085.90
1998/12/31 21910.20 25258.95
1999/01/31 22360.86 25808.38
1999/02/28 21512.56 25118.17
1999/03/31 22162.04 26160.33
1999/04/30 23116.39 27187.93
IMATRL PRASUN SHR__CHT 19990430 19990512 104317 R00000000000111
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Worldwide Fund on May 30, 1990, when the fund
started. As the chart shows, by April 30, 1999, the value of the
investment would have grown to $23,116 - a 131.16% increase on the
initial investment. For comparison, look at how the Morgan Stanley
Capital International World Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $27,188 - a 171.88% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
WORLDWIDE
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Penny Dobkin)
An interview with Penny Dobkin, Portfolio Manager of
Fidelity Worldwide Fund
Q. HOW DID THE FUND PERFORM, PENNY?
A. The fund trailed its benchmarks during the period, but both
absolute and relative performance improved considerably over the
results of the prior six-month period. For the six months that ended
April 30, 1999, the fund had a total return of 15.69%, compared to
19.57% for the Morgan Stanley Capital International World Index and
19.65% for the global funds average monitored by Lipper Inc. For the
12 months that ended April 30, 1999, the fund returned -5.67%, while
the index and the average posted returns of 15.95% and 6.99%,
respectively.
Q. WHY DID THE FUND UNDERPERFORM ITS BENCHMARKS?
A. The fund had a lighter weighting of Japanese stocks than the index
did for most of the period. That hurt relative performance because
Japanese stocks were extremely strong from early February through the
end of April. Moreover, the fund carried a slightly smaller weighting
of U.S. stocks, which also advanced sharply. As the period progressed,
I brought the fund's weightings of Japanese and U.S. stocks more in
line with those of the index. In fact, at the end of the period, the
fund had a slightly heavier weighting of Japanese stocks than the
index did, while nine of the fund's 10 largest holdings were
U.S.-based. Another factor depressing the fund's performance was a
relatively strong emphasis on defensive stocks - that is, the shares
of companies whose revenues tend to be less sensitive to economic
fluctuations - at a time when investors began to favor cyclical
shares. Examples of defensive holdings would include the shares of
utility, insurance, beverage and tobacco companies.
Q. WHAT ATTRACTED YOU TO DEFENSIVE STOCKS?
A. My expectations for modest economic growth following the extreme
weakness in worldwide stock markets last fall seemed to dictate a bias
toward defensive stocks. However, economic growth in the U.S. - by far
the fund's biggest country allocation - came in consistently above
most analysts' estimates, and a strong surge in oil prices helped stir
interest in cyclical stocks in three of the fund's other important
markets: France, the United Kingdom and Japan.
Q. YOU INCREASED THE FUND'S FINANCE HOLDINGS FROM THE 12.6% REPORTED
SIX MONTHS AGO TO 20.8% AT THE END OF THE PERIOD. HEALTH CARE HOLDINGS
ALSO SAW A SIGNIFICANT RISE - FROM 2.2% TO 11.7%. WHY WAS THAT?
A. The fund had been significantly underweighted in those sectors
relative to the index, and I wanted to bring the fund's sector and
country weightings closer to those of the index.
Q. WHAT WAS YOUR VIEW OF THE MARKETS IN EUROPE AND LATIN AMERICA?
A. With stocks in Japan and the United States performing so well, I
gradually decreased the fund's holdings in Europe to make way for
purchases in those stronger markets. On the other hand, I felt that
Latin America offered insufficient profit potential for the degree of
risk involved - especially prior to Brazil's devaluation of its
currency in January. Consequently, I liquidated the fund's Latin
American holdings entirely late in 1998, and there were no Latin
American securities in the fund at the end of the period.
Q. DID THE INTRODUCTION OF THE EURO HAVE ANY APPRECIABLE EFFECT ON THE
WAY YOU RAN THE FUND?
A. I expected last year that the euro and the new equity indexes that
are based on it would encourage investors to concentrate on
approximately 50 leading large-capitalization stocks of companies in
the European Economic Union member countries. In anticipation of that
shift, the fund moved from mid-cap to large-cap European stocks in the
fourth quarter of 1998 and avoided the shares of companies in
non-member countries like Sweden and Finland. What surprised me was
the euro's weakness against the U.S. dollar since its introduction at
the beginning of 1999. It began trading at $1.15, briefly moved higher
and subsequently declined to around $1.08 at the end of the period.
That weakness contributed to investors' lukewarm interest in European
stocks during the period and also to my decision to underweight
Europe. A U.S. investor who purchases a foreign stock that rises can
still lose money if the currency of the country in which the company
is based declines in the meantime. That's one factor that makes
foreign investments riskier than those that are U.S.-based.
Q. WHAT HOLDINGS DID WELL FOR THE FUND?
A. MCI WorldCom - the fund's fifth-largest holding at the end of the
period - benefited from a leadership position in the strong
telecommunications sector. Oracle, a software company, and KLA-Tencor,
a semiconductor capital equipment manufacturer, also helped the fund's
performance. I bought both stocks near the bottom of 1998's sharp
correction, and they subsequently rebounded nicely. Another strong
performer, DDI, is the premier Japanese provider of mobile
communications. The stock benefited from investor interest in a new
generation of cellular technology. I'd also like to mention three
energy service stocks: Baker Hughes, Halliburton and Weatherford. I
bought all three when oil prices were near their low point in December
of 1998, and they all recovered substantially by the end of the
period.
Q. WHAT STOCKS WERE DISAPPOINTING?
A. Philip Morris topped the list of detractors from performance. The
company lost two multi-million-dollar lawsuits filed by the families
of smokers who had contracted lung cancer. The stock was further
damaged by the trend away from owning defensive shares. Also
underperforming was Finnish biotechnology stock Raisio Group, which
the fund did not hold at the end of the period. The Food and Drug
Administration classified the company's cholesterol-reducing product
as a food additive instead of giving it the more commercially viable
status of a nutritional supplement. To make matters worse, rival
Unilever beat Raisio to the punch by bringing a similar product to
market first.
Q. WHAT'S YOUR OUTLOOK, PENNY?
A. I believe that the worldwide rally in cyclical stocks has reached
the point where it is likely to pause, at least for a while. In that
case, we may well see money flow back into some of the defensive names
held by the fund. In terms of countries and regions, we could see a
similar pause in the markets that have been strong recently, such as
Japan. While Japan has benefited from some genuine progress in
reforming its troubled financial sector and from a
faster-than-expected improvement in the economic prospects for
Southeast Asia, its economic growth is still virtually nonexistent. As
a result, we may see the pendulum swing back in favor of European
stocks for a while. Europe also looks attractive from a currency
standpoint because the euro seems unlikely to decline much further. A
stable or rising euro would increase the attractiveness of European
shares. At current levels, overall stock valuations in the U.S. are
exceedingly high by most standards, and my recent bias toward
reasonably valued defensive stocks is one way of trying to maintain a
favorable risk/reward profile for the fund.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in common stocks from around the
world
FUND NUMBER: 318
TRADING SYMBOL: FWWFX
START DATE: May 30, 1990
SIZE: as of April 30, 1999, more than
$949 million
MANAGER: Penelope Dobkin, since inception;
manager, Fidelity Europe Fund, 1986-1990;
Fidelity United Kingdom Fund, 1987-1989;
Fidelity Select Financial Services Portfolio,
1983-1986; joined Fidelity in 1980
PENNY DOBKIN ON THE RECENT SURGE IN
CYCLICAL STOCKS:
"During the last three months of the period - that is,
February, March and April of 1999 - cyclical stocks took
over leadership of the U.S. market and, indeed, most markets
around the world. In the U.S., we saw this phenomenon
manifested in the relative strength of the Dow Jones
Industrial Average (DJIA) versus the Standard & Poor's 500
Index and the NASDAQ Composite Index. The DJIA has a
comparatively high weighting of cyclical components,
including Alcoa, Caterpillar, AlliedSignal, Chevron and
International Paper. Consequently, we saw the DJIA make
new highs toward the end of the period even on days when
the other averages were treading water or even declining.
"Cyclical stocks behave as their name implies - they rise
and fall in cycles that follow the general level of growth in
the economy. While that might be said of all stocks to some
extent, cyclicals are more sensitive to economic
fluctuations than most stocks because the underlying
companies operate businesses - for example,
manufacturing steel, chemicals, paper or industrial
equipment - that typically experience strong demand for
their products only in the latter stages of an expansion,
when the economy is really humming along. This phase also
tends to be marked by surging commodity prices. While we
have not seen commodity prices as a group advance sharply
during this cycle, one important commodity - oil - rallied
impressively, from under $11 dollars a barrel in December
to approximately $18 a barrel at the end of the period. That,
together with ongoing strength in the U.S. economy and the
apparent beginning of a recovery in Southeast Asia, led
many investors to feel that cyclical stocks were due for a
rebound.
"It is important, however, to keep in mind that stock prices
are anticipatory in nature, reflecting or discounting what
investors feel is going to happen in the future. Recently,
cyclical stocks appear to have discounted a significant
pickup in business that, in most cases, has not yet
materialized. It may take a while for economic reality to
catch up with these predictions. And, of course, there is no
guarantee that what the market has discounted will come
to pass at all. If there are further shocks to the world
financial system - for instance, more currency
devaluations - investors might be forced to reassess the
prospects for cyclical shares.
"Another factor to consider is that cyclical stocks are very
seasonal, typically advancing most strongly in the first
quarter, as orders are booked for the remainder of the year.
Therefore, while I feel that stocks in the cyclical sector
deserve some serious attention, in the short term I think
it's unlikely that they will keep up the feverish pace they've
been setting recently."
WORLDWIDE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Australia 1.8%
France 5.1%
Germany 2.5%
Italy 2.0%
Japan 11.0%
United States 51.0%
Netherlands 3.2%
Other 8.9%
Switzerland 3.6%
United Kingdom 10.9%
Row: 1, Col: 1, Value: 1.8
Row: 1, Col: 2, Value: 5.1
Row: 1, Col: 3, Value: 2.5
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 11.0
Row: 1, Col: 6, Value: 3.2
Row: 1, Col: 7, Value: 8.9
Row: 1, Col: 8, Value: 3.6
Row: 1, Col: 9, Value: 10.9
Row: 1, Col: 10, Value: 51.0
AS OF OCTOBER 31, 1998
Canada 3.1%
France 10.1%
Germany 3.8%
Italy 3.8%
United States 44.8%
Japan 4.4%
Netherlands 4.0%
Other 12.4%
Switzerland 6.1%
United Kingdom 7.5%
Row: 1, Col: 1, Value: 3.1
Row: 1, Col: 2, Value: 10.1
Row: 1, Col: 3, Value: 3.8
Row: 1, Col: 4, Value: 3.8
Row: 1, Col: 5, Value: 4.4
Row: 1, Col: 6, Value: 4.0
Row: 1, Col: 7, Value: 12.4
Row: 1, Col: 8, Value: 6.1
Row: 1, Col: 9, Value: 7.5
Row: 1, Col: 10, Value: 44.8
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks and investment companies 95.8 89.8
Bonds 0.3 0.0
Short-term investments 3.9 10.2
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
General Electric Co. (United 1.7 0.0
States of America,
Electrical Equipment)
Microsoft Corp. (United 1.7 1.2
States of America, Computer
Services & Software)
Citigroup, Inc. (United 1.7 0.0
States of America, Credit &
Other Finance)
Textron, Inc. (United States 1.4 0.0
of America, Aerospace &
Defense)
MCI WorldCom, Inc. (United 1.3 1.8
States of America, Telephone
Services)
DDI Corp. (Japan, Telephone 1.2 0.0
Services)
Philip Morris Companies, Inc. 1.1 1.7
(United States of America,
Tobacco)
Mobil Corp. (United States 1.1 0.0
of America, Oil & Gas)
Warner-Lambert Co. (United 1.0 0.0
States of America, Drugs &
Pharmaceuticals)
Federated Department Stores, 1.0 0.6
Inc. (United States of
America, General Merchandise
Stores)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 20.8 12.6
UTILITIES 11.7 10.2
HEALTH 11.7 2.2
TECHNOLOGY 10.1 9.9
ENERGY 7.7 7.7
NONDURABLES 6.7 8.9
MEDIA & LEISURE 5.3 4.1
RETAIL & WHOLESALE 4.6 6.8
DURABLES 4.3 8.8
INDUSTRIAL MACHINERY & 3.9 2.5
EQUIPMENT
</TABLE>
WORLDWIDE
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.8%
AMP Ltd. 529,100 $ 6,176,093
Australia & New Zealand 110,000 870,800
Banking Group Ltd.
Goodman Fielder Ltd. 1,006,300 971,654
HIH Insurance Ltd. 211,446 271,289
HIH Insurance Ltd. 5,024,157 3,056,908
(Installment Receipts) (d)
National Australia Bank Ltd. 151,600 2,949,669
National Mutual Holdings Ltd. 746,300 1,312,884
News Corp. Ltd. sponsored ADR 36,800 1,124,700
(ltd. vtg.)
WMC Ltd. 152,900 660,316
17,394,313
BELGIUM - 0.2%
Fortis B 49,800 1,674,122
CANADA - 1.5%
BCE, Inc. 128,000 5,842,141
Imasco Ltd. 330,000 7,270,419
Newbridge Networks Corp. (a) 25,800 956,211
14,068,771
DENMARK - 0.4%
Ratin AS Class B 13,300 2,291,732
Unidanmark AS Class A 17,300 1,189,926
3,481,658
FINLAND - 1.1%
Nokia AB sponsored ADR 91,000 6,751,063
Pohjola Group Insurance Corp. 19,300 916,503
Class B
Sampo Insurance Co. Ltd. 91,800 2,897,468
10,565,034
FRANCE - 4.8%
AXA SA de CV 22,500 2,911,171
Banque Nationale de Paris 76,300 6,337,696
Compagnie Financiere de 23,300 2,481,806
Paribas Class A (Reg.)
Elf Aquitaine 29,500 4,609,374
Eramet SA 20,597 785,092
Groupe Danone 20,300 5,437,891
Michelin SA (Compagnie 17,100 777,630
Generale des Etablissements)
Class B
Rhone-Poulenc SA Class A 86,600 4,081,022
Schneider SA 17,400 1,137,628
Societe Generale, France 30,200 5,416,694
Class A
Synthelabo 36,400 7,457,552
Vivendi SA 19,300 4,518,143
45,951,699
GERMANY - 2.1%
DaimlerChrysler AG (Reg.) 45,000 4,418,438
Deutsche Bank AG 27,800 1,611,252
Deutsche Bank AG (RFD) 18,500 1,038,153
Fresenius Medical Care AG 36,200 1,927,927
SHARES VALUE (NOTE 1)
Hannover Rueckversicherungs AG 14,700 $ 1,212,464
Mannesmann AG 28,900 3,782,076
Munich Reinsurance AG:
(Reg.) 7,300 1,444,595
(RFD) 7,300 1,453,097
RWE AG 68,400 3,114,143
20,002,145
HONG KONG - 0.6%
Dao Heng Bank Group Ltd. 646,000 2,625,237
South China Morning Post 3,880,000 2,340,124
Holdings
Wing Hang Bank Ltd. 256,000 782,733
5,748,094
IRELAND - 1.0%
Bank of Ireland, Inc.: 45,800 917,133
(Great Britain)
(Ireland) 111,300 2,233,152
Independent Newspapers PLC: 1,119,900 5,556,809
(Ireland)
(United Kingdom) 250,000 1,230,855
9,937,949
ITALY - 1.0%
San Paolo-IMI Spa 96,700 1,456,952
Telecom Italia Spa 795,500 8,447,180
9,904,132
JAPAN - 11.0%
Aiful Corp. 56,400 4,615,748
Bank of Tokyo-Mitsubishi Ltd. 213,000 3,143,793
Banyu Pharmaceutical Co. Ltd. 279,000 5,141,564
Citizen Watch Co. Ltd. 282,000 2,338,583
Dainippon Screen 207,000 1,005,696
Manufacturing Co. Ltd.
Daiwa Securities Co. Ltd. 89,000 544,228
DDI Corp. 2,341 11,628,522
Fancl Corp. 3,900 555,369
Fuji Bank Ltd. 187,000 1,459,909
Fuji Coca-Cola Bottling Co. 53,000 732,535
Ltd.
Fuji Heavy Industries Ltd. 602,000 4,034,176
Fuji Photo Film Co. Ltd. 143,000 5,402,328
Fujikura Ltd. 303,000 1,578,707
Funai Electric Co. Ltd. 4,600 618,445
Furukawa Electric Co. Ltd. 390,000 1,705,311
Heiwa Corp. 149,000 2,683,448
Hokkaido Coca-Cola Bottling 42,000 474,954
Co. Ltd.
Honda Motor Co. Ltd. 129,000 5,700,187
Kawasumi Laboratories, Inc. 31,000 534,930
Mikasa Coca-Cola Bottling Co. 54,000 533,305
Minolta Co. Ltd. 259,000 1,434,068
Mitsubishi Electric Corp. 310,000 1,082,845
Mitsumi Electric Co. Ltd. 109,000 2,081,756
Nichicon Corp. 110,000 1,451,248
Nomura Securities Co. Ltd. 205,000 2,211,761
NTT Mobile Communication 70 4,104,540
Network, Inc. (c)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Omron Corp. 105,000 $ 1,446,850
Onward Kashiyama & Co. Ltd. 87,000 1,063,997
Orix Corp. 41,000 3,300,469
Otsuka Kagu Ltd. 11,000 1,382,141
Ricoh Co. Ltd. 246,000 2,369,744
Sankyo Co. Ltd. (Gunma) 53,100 1,841,464
Sanwa Bank Ltd. AG 139,000 1,560,228
Senshukai Co. Ltd. 86,000 944,429
Shikoku Coca-Cola Bottling 18,000 264,617
Co. Ltd.
Shionogi & Co. Ltd. 175,000 1,556,793
Sony Corp. 35,500 3,283,750
Takeda Chemical Industries 140,000 6,086,446
Ltd.
Terumo Corp. 168,000 3,658,904
Tokyo Seimitsu Co. Ltd. 7,000 387,586
World Co. Ltd. 30,700 1,699,841
Yamanouchi Pharmaceutical Co. 230,000 7,282,626
Ltd.
104,927,841
NETHERLANDS - 3.2%
ABN AMRO Holding NV 137,000 3,271,004
Akzo Nobel NV 10,800 488,848
Fortis Amev NV 36,000 1,284,536
IHC Caland NV 61,400 2,788,943
ING Groep NV 67,900 4,191,334
Koninklijke (Royal) Philips 67,500 5,824,724
Electronics NV
Koninklijke KPN NV 30,300 1,267,225
Samas Groep NV 398,532 5,865,323
Vendex NV CVA 203,800 5,081,700
Wolters Kluwer NV 21,200 924,798
30,988,435
NEW ZEALAND - 0.7%
Lion Nathan Ltd. 1,730,000 4,354,540
Telecom Corp. of New Zealand 410,000 2,132,802
Ltd.
6,487,342
NORWAY - 0.2%
Christiania Bank Og 475,000 1,827,321
Kreditkasse
PORTUGAL - 0.4%
Banco Espirito Santo e 32,300 777,691
Comercial de Lisboa SA
Banco Pinto & Sotto Mayor SA 150,000 2,803,173
3,580,864
SINGAPORE - 0.9%
Development Bank of Singapore 161,000 1,708,726
Ltd. (For. Reg.)
Oversea-Chinese Banking Corp. 116,000 1,087,500
(For. Reg.)
Overseas Union Bank Ltd. 500,000 2,564,859
United Overseas Bank Ltd. 423,000 3,267,276
(For. Reg.)
8,628,361
SHARES VALUE (NOTE 1)
SPAIN - 1.3%
Banco Santander Central 93,700 $ 2,039,749
Hispano SA
Endesa SA 84,200 1,875,736
Telefonica SA 131,400 6,170,252
Telefonica SA rights 6/15/99 131,400 122,431
(a)
Union Electrica Fenosa SA 150,000 1,999,544
12,207,712
SWEDEN - 0.4%
ABB AB Series A 95,800 1,338,005
Avesta Sheffield AB 92,700 398,880
Investor AB Class B Free 16,600 755,720
shares
Svenska Handelsbanken 23,100 867,668
3,360,273
SWITZERLAND - 3.6%
Credit Suisse Group (Reg.) 28,500 5,656,988
Julius Baer Holding AG 900 2,932,087
Kuoni Reisen Holding AG Class 254 900,000
B (Reg.)
Nestle SA (Reg.) 3,327 6,162,809
Novartis AG (Reg.) 4,400 6,446,982
Roche Holding AG 322 3,790,472
participation certificates
Swisscom AG 2,700 992,126
UBS AG 21,500 7,307,743
34,189,207
UNITED KINGDOM - 10.9%
Abbey National PLC 67,300 1,522,221
Alliance & Leicester PLC 68,800 1,030,782
Allied Domecq PLC 628,200 4,918,467
Allied Zurich PLC (a) 417,700 5,544,817
Amvescap PLC 425,000 4,518,855
Arcadia Group PLC 292,500 1,319,409
BP Amoco PLC sponsored ADR 71,016 8,038,124
British Energy PLC 142,100 1,208,714
BTP PLC 350,000 2,356,893
Glaxo Wellcome PLC 189,800 5,527,915
Halifax PLC 50,200 708,440
Iceland Group PLC 1,187,550 4,610,675
ICI (Imperial Chemical 92,100 991,518
Industries) PLC Class L
Independent Insurance PLC 883,400 3,870,988
MFI Furniture Group PLC 728,800 528,344
Nycomed Amersham PLC 192,500 1,578,498
Orange PLC (a) 477,300 6,505,150
Rentokil Initial PLC 640,000 3,771,029
Royal & Sun Alliance 612,400 5,288,050
Insurance Group PLC
Royal Bank of Scotland Group 144,500 3,412,694
PLC
Scottish & Southern Energy PLC 155,600 1,462,669
Severn Trent PLC 50,000 658,496
Shell Transport & Trading Co.
PLC:
ADR 55,000 2,499,063
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Shell Transport & Trading Co.
PLC: - continued
(Reg.) 1,063,400 $ 8,053,116
Smith (David S.) Holdings PLC 777,200 1,677,773
SmithKline Beecham PLC 110,000 7,225,625
sponsored ADR
Tarmac PLC 1,072,900 2,048,204
Unilever PLC 480,000 4,297,504
United Utilities PLC 156,700 1,774,679
Vodafone Group PLC sponsored 33,600 6,027,000
ADR
Yorkshire Water PLC 191,800 1,337,926
104,313,638
UNITED STATES OF AMERICA -
46.5%
Abbott Laboratories 150,000 7,265,625
Alliant Techsystems, Inc. (a) 62,900 5,149,938
Allied Waste Industries, Inc. 130,000 2,299,375
(a)
Ambac Financial Group, Inc. 48,100 2,904,038
Applied Materials, Inc. (a) 45,000 2,413,125
AT&T Corp. 182,811 9,231,956
AT&T Corp. (Liberty Media 12,000 766,500
Group) Class A (a)
Autodesk, Inc. 90,000 2,677,500
Automatic Data Processing, 43,500 1,935,750
Inc.
Avon Products, Inc. 60,000 3,258,750
Baker Hughes, Inc. 210,000 6,273,750
Bank One Corp. 140,000 8,260,000
Baxter International, Inc. 100,000 6,300,000
Becton, Dickinson & Co. 35,000 1,301,563
Belo (A.H.) Corp. Class A 145,000 3,135,625
BJ Services Co. (a) 80,000 2,140,000
Bristol-Myers Squibb Co. 70,000 4,449,375
Burlington Northern Santa Fe 164,200 6,013,825
Corp.
Canandaigua Wine, Inc. Class 34,100 1,756,150
A (a)
Case Corp. 20,400 706,350
Caterpillar, Inc. 14,100 907,688
CBS Corp. (a) 190,000 8,656,875
CEC Entertainment, Inc. (a) 80,200 3,007,500
Cincinnati Bell, Inc. 178,100 4,029,513
Citigroup, Inc. 210,000 15,802,500
CKE Restaurants, Inc. 44,850 734,419
Clorox Co. 34,269 3,953,786
CNF Transportation, Inc. 70,000 3,058,125
Coastal Corp. (The) 15,000 573,750
Consolidated Stores Corp. (a) 86,500 2,973,438
CSX Corp. 90,000 4,432,500
CVS Corp. 50,000 2,381,250
Dallas Semiconductor Corp. 41,200 1,751,000
Dayton Hudson Corp. 25,000 1,682,813
Dollar Tree Stores, Inc. (a) 90,000 3,285,000
Electronics for Imaging, Inc. 17,600 832,700
(a)
Exxon Corp. 55,600 4,618,275
Federal-Mogul Corp. 30,000 1,316,250
Federated Department Stores, 200,000 9,337,500
Inc. (a)
SHARES VALUE (NOTE 1)
First Data Corp. 18,700 $ 793,581
Fortune Brands, Inc. 150,000 5,925,000
Fox Entertainment Group, Inc. 53,000 1,358,125
Freddie Mac 36,500 2,290,375
General Electric Co. 155,000 16,352,485
Halliburton Co. 155,000 6,606,875
Harcourt General, Inc. 41,000 1,955,188
Helmerich & Payne, Inc. 110,000 2,832,500
Household International, Inc. 175,000 8,804,688
IMC Global, Inc. 155,000 3,875,000
IMS Health, Inc. 40,000 1,200,000
Ingersoll-Rand Co. 8,700 601,931
Intel Corp. 151,200 9,251,550
International Business 37,400 7,823,613
Machines Corp.
Johnson & Johnson 80,000 7,800,000
King World Productions, Inc. 120,000 4,230,000
(a)
KLA-Tencor Corp. (a) 40,000 1,985,000
Kulicke & Soffa Industries, 80,000 1,830,000
Inc. (a)
Lehman Brothers Holdings, 20,000 1,111,250
Inc.
Lilly (Eli) & Co. 59,000 4,343,875
Litton Industries, Inc. (a) 700 43,838
Lockheed Martin Corp. 50,000 2,153,125
LSI Logic Corp. (a) 73,200 2,488,800
Lucent Technologies, Inc. 110,000 6,613,750
MBIA, Inc. 35,800 2,407,550
MCI WorldCom, Inc. (a) 145,000 11,917,188
Merck & Co., Inc. 81,400 5,718,350
Meredith Corp. 23,700 869,494
Micron Technology, Inc. (a) 42,300 1,570,388
Microsoft Corp. (a) 195,500 15,896,594
Mobil Corp. 100,000 10,475,000
Newell Rubbermaid, Inc. 125,431 5,950,133
Noble Drilling Corp. (a) 20,000 392,500
Oracle Corp. (a) 192,500 5,209,531
Outback Steakhouse, Inc. (a) 45,500 1,629,469
Owens-Corning 75,600 2,693,250
Parker-Hannifin Corp. 9,800 459,988
PepsiCo, Inc. 70,000 2,585,625
PG&E Corp. 100,000 3,106,250
Philip Morris Companies, Inc. 309,000 10,834,313
Praxair, Inc. 40,000 2,070,000
Procter & Gamble Co. 80,700 7,570,669
Raytheon Co. Class B 20,000 1,405,000
Republic Services, Inc. Class 60,000 1,233,750
A (a)
Ruby Tuesday, Inc. 82,000 1,496,500
Saks, Inc. (a) 170,700 4,832,944
Seagate Technology, Inc. (a) 60,000 1,672,500
SLM Holding Corp. 66,700 2,847,256
Solutia, Inc. 15,000 365,625
Starwood Hotels & Resorts 90,000 3,301,875
Worldwide, Inc.
Texas Instruments, Inc. 21,600 2,205,900
Textron, Inc. 140,000 12,897,500
Tosco Corp. 70,600 1,888,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
Toys R Us, Inc. (a) 100,000 $ 2,175,000
Tribune Co. 16,800 1,401,750
U.S. Bancorp 150,000 5,559,375
U.S. Foodservice (a) 90,000 3,785,625
Ultramar Diamond Shamrock 50,000 1,153,125
Corp.
Union Pacific Corp. 70,000 4,200,000
Unisys Corp. (a) 140,614 4,420,553
USFreightways Corp. 141,700 5,313,750
USX-Marathon Group 160,000 5,000,000
Warner-Lambert Co. 140,000 9,511,250
Washington Mutual, Inc. 24,800 1,019,900
Waste Management, Inc. 100,000 5,650,000
Weatherford International, 175,000 5,928,125
Inc. (a)
Wells Fargo & Co. 190,000 8,205,625
442,672,396
TOTAL COMMON STOCKS 891,911,307
(Cost $768,822,362)
PREFERRED STOCKS - 2.0%
CONVERTIBLE PREFERRED STOCKS
- - 0.6%
UNITED STATES OF AMERICA - 0.6%
Readers Digest Automatic 174,000 5,709,375
Common Exchange Trust $1.93
TRACES
NONCONVERTIBLE PREFERRED
STOCKS - 1.4%
GERMANY - 0.4%
Dyckerhoff AG 3,900 1,086,011
Wella AG 3,917 3,110,490
4,196,501
ITALY - 1.0%
Telecom Italia Mobile Spa 800,000 2,665,635
Telecom Italia Spa Risp 1,223,250 6,580,795
9,246,430
TOTAL NONCONVERTIBLE 13,442,931
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 19,152,306
(Cost $14,995,195)
INVESTMENT COMPANIES - 0.2%
EMERGING MARKETS - 0.1%
Asia Tigers Fund, Inc. 66,100 574,244
Templeton Dragon Fund, Inc. 58,800 565,950
1,140,194
HONG KONG - 0.0%
Asia Pacific Fund, Inc. 38,700 348,300
SHARES VALUE (NOTE 1)
MULTI-NATIONAL - 0.1%
Morgan Stanley Asia-Pacific 58,800 $ 536,550
Fund, Inc.
TOTAL INVESTMENT COMPANIES 2,025,044
(Cost $1,844,155)
CONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
FRANCE - 0.3%
AXA SA de CV 2.5% 1/1/14 A2 EUR 2,310,000 2,557,002
(Cost $2,619,425)
CASH EQUIVALENTS - 3.9%
SHARES
Taxable Central Cash Fund (b) 37,124,255 37,124,255
(Cost $37,124,255)
TOTAL INVESTMENT IN $ 952,769,914
SECURITIES - 100%
(Cost $825,405,392)
SECURITY ABBREVIATIONS
TRACES - Trust Automatic Common
Exchange Securities
CURRENCY ABBREVIATIONS
AUD - Australian Dollar
EUR - European Monetary Unit
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $4,104,540 or 0.4% of net assets.
(d) Purchased on an installment basis. Market value reflects only
those payments made through April 30, 1999. The remaining installments
aggregating AUD 4,923,674 are due June 30, 1999.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $813,329,990 and $892,240,804, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company.
The commissions paid to these affiliated firms were $81,313 for the
period.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $825,498,190. Net unrealized appreciation
aggregated $127,271,724, of which $148,859,581 related to appreciated
investment securities and $21,587,857 related to depreciated
investment securities.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
AEROSPACE & DEFENSE 2.2%
BASIC INDUSTRIES 1.8
CASH EQUIVALENTS 3.9
CONSTRUCTION & REAL ESTATE 1.5
DURABLES 4.3
ENERGY 7.7
FINANCE 20.8
HEALTH 11.7
HOLDING COMPANIES 0.1
INDUSTRIAL MACHINERY & 3.9
EQUIPMENT
INVESTMENT COMPANIES 0.2
MEDIA & LEISURE 5.3
NONDURABLES 6.7
PRECIOUS METALS 0.1
RETAIL & WHOLESALE 4.6
SERVICES 1.0
TECHNOLOGY 10.1
TRANSPORTATION 2.4
UTILITIES 11.7
100.0%
WORLDWIDE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 952,769,914
value (cost $825,405,392) -
See accompanying schedule
Cash 3,428
Foreign currency held at 640,369
value (cost $641,774)
Receivable for investments 18,245,543
sold
Receivable for fund shares 1,072,911
sold
Dividends receivable 2,434,436
Interest receivable 127,912
Other receivables 49,283
TOTAL ASSETS 975,343,796
LIABILITIES
Payable for investments $ 20,437,114
purchased
Payable for fund shares 4,806,273
redeemed
Accrued management fee 579,909
Other payables and accrued 378,825
expenses
TOTAL LIABILITIES 26,202,121
NET ASSETS $ 949,141,675
Net Assets consist of:
Paid in capital $ 800,703,067
Undistributed net investment 909,839
income
Accumulated undistributed net 20,120,145
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 127,408,624
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 54,423,530 $ 949,141,675
shares outstanding
NET ASSET VALUE, offering $17.44
price and redemption price
per share ($949,141,675
(divided by) 54,423,530
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 5,587,434
Dividends
Interest 944,753
6,532,187
Less foreign taxes withheld (303,299)
TOTAL INCOME 6,228,888
EXPENSES
Management fee $ 3,593,631
Transfer agent fees 1,473,394
Accounting fees and expenses 254,029
Non-interested trustees' 2,067
compensation
Custodian fees and expenses 123,411
Registration fees 19,513
Audit 19,776
Legal 2,623
Miscellaneous 3,582
Total expenses before 5,492,026
reductions
Expense reductions (230,546) 5,261,480
NET INVESTMENT INCOME 967,408
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 22,066,874
Foreign currency transactions 153,760 22,220,634
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 119,907,385
Assets and liabilities in (43,146) 119,864,239
foreign currencies
NET GAIN (LOSS) 142,084,873
NET INCREASE (DECREASE) IN $ 143,052,281
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 206,323
Expense reductions Directed
brokerage arrangements
Custodian credits 662
Transfer agent credits 23,561
$ 230,546
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 967,408 $ 10,606,399
income
Net realized gain (loss) 22,220,634 54,276,462
Change in net unrealized 119,864,239 (97,262,806)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 143,052,281 (32,379,945)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (6,008,791) (7,179,216)
From net investment income
From net realized gain (26,442,346) (75,708,622)
TOTAL DISTRIBUTIONS (32,451,137) (82,887,838)
Share transactions Net 289,824,673 1,176,690,836
proceeds from sales of shares
Reinvestment of distributions 31,563,832 81,441,133
Cost of shares redeemed (454,952,771) (1,331,950,770)
NET INCREASE (DECREASE) IN (133,564,266) (73,818,801)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (22,963,122) (189,086,584)
IN NET ASSETS
NET ASSETS
Beginning of period 972,104,797 1,161,191,381
End of period (including $ 949,141,675 $ 972,104,797
undistributed net investment
income of $909,839 and
$12,289,760, respectively)
OTHER INFORMATION
Shares
Sold 17,496,769 67,640,582
Issued in reinvestment of 2,000,227 5,220,585
distributions
Redeemed (27,415,011) (77,774,326)
Net increase (decrease) (7,918,015) (4,913,159)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 15.59 $ 17.27 $ 15.18 $ 13.32 $ 13.96
period
Income from Investment
Operations
Net investment income .02 D .16 D .21 D, E .22 .17
Net realized and unrealized 2.37 (.57) 2.43 1.79 (.08)
gain (loss)
Total from investment 2.39 (.41) 2.64 2.01 .09
operations
Less Distributions
From net investment income (.10) (.11) (.17) (.15) (.16)
From net realized gain (.44) (1.16) (.38) - (.57)
Total distributions (.54) (1.27) (.55) (.15) (.73)
Net asset value, end of period $ 17.44 $ 15.59 $ 17.27 $ 15.18 $ 13.32
TOTAL RETURN B, C 15.69% (2.38)% 17.95% 15.25% .95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 949,142 $ 972,105 $ 1,161,191 $ 877,218 $ 659,045
(000 omitted)
Ratio of expenses to average 1.14% A 1.15% 1.18% 1.19% 1.17%
net assets
Ratio of expenses to average 1.09% A, F 1.12% F 1.16% F 1.18% F 1.16% F
net assets after expense
reductions
Ratio of net investment .20% A .91% 1.24% 1.71% 2.05%
income to average net assets
Portfolio turnover rate 178% A 100% 85% 49% 70%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 12.76
period
Income from Investment
Operations
Net investment income .08
Net realized and unrealized 1.37
gain (loss)
Total from investment 1.45
operations
Less Distributions
From net investment income (.10)
From net realized gain (.15)
Total distributions (.25)
Net asset value, end of period $ 13.96
TOTAL RETURN B, C 11.55%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 748,738
(000 omitted)
Ratio of expenses to average 1.32%
net assets
Ratio of expenses to average 1.32%
net assets after expense
reductions
Ratio of net investment 1.40%
income to average net assets
Portfolio turnover rate 69%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity International Growth & Income Fund, Fidelity Diversified
International Fund, Fidelity International Value Fund, Fidelity
Overseas Fund and Fidelity Worldwide Fund (the funds) are funds of
Fidelity Investment Trust (the trust). The trust is registered under
the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust. Each fund is authorized to issue an unlimited number
of shares. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management
to make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the funds:
SECURITY VALUATION. Securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price in the principal market in which such securities
are normally traded. If trading or events occurring in other markets
after the close of the principal market in which securities are traded
are expected to materially affect the value of those securities, then
they are valued at their fair value taking this trading or these
events into account. Fair value is determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the funds are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. Each fund
may be subject to foreign taxes on income and gains on investments
which are accrued based upon each fund's understanding of the tax
rules and regulations that exist in the markets in which they invest.
Each fund accrues such taxes as applicable. The schedules of
investments include information regarding income taxes under the
caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the funds
are informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income ,which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. For certain funds, under a Deferred
Compensation Plan (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 compensation. Deferred amounts are
treated as though equivalent dollar amounts had been invested in
shares of the fund or are invested in a cross-section of other
Fidelity funds. Deferred amounts remain in the fund until distributed
in accordance with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions, foreign currency transactions,
passive foreign investment companies (PFIC), market discount, capital
loss carryforwards and losses deferred due to wash sales. The funds
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income, distributions in excess of net
investment income and accumulated undistributed net realized gain
(loss) on investments and foreign currency transactions may include
temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. Certain funds use foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms.
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
The U.S. dollar value of foreign currency contracts is determined
using contractual currency exchange rates established at the time of
each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the funds may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the funds are recorded
as interest income in the accompanying financial statements.
FUTURES CONTRACTS. Certain funds may use futures contracts to manage
their exposure to the stock market and to fluctuations in currency
values. Buying futures tends to increase a fund's exposure to the
underlying instrument, while selling futures tends to decrease a
fund's exposure to the underlying instrument or hedge other fund
investments. Futures contracts involve, to varying degrees, risk of
loss in excess of the futures variation margin reflected in each
applicable fund's Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in each applicable fund's schedule of investments under the
caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise
from changes in the value of the underlying instruments or if the
counterparties do not perform under the contracts' terms. Gains
(losses) are realized upon the expiration or closing of the futures
contracts. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they
are traded.
RESTRICTED SECURITIES. Certain funds are permitted to invest in
securities that are subject to legal or contractual restrictions on
resale. These securities generally may be resold in transactions
exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may
be difficult. At the end of the period, the funds had no investments
in restricted securities (excluding 144a securities).
3. PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and sales of securities (other than
short-term securities) and the market value of future contracts opened
and closed is included under the caption "Other Information" at the
end of each applicable fund's schedule of investments.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of each fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .45%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
for Diversified International, International Value and Overseas is
subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on each fund's investment performance as compared to the
appropriate index over a specified period of time. For the period,
each fund's management fee was equivalent to the following annualized
rates expressed as a percentage of average net assets after the
performance adjustment, if applicable:
International Growth & Income .74%
Diversified International .86%
International Value .81%
Overseas .93%
Worldwide .74%
SUB-ADVISER FEE. FMR, on behalf of the funds, entered into
sub-advisory agreements with Fidelity Management & Research (U.K.)
Inc., Fidelity Management & Research (Far East) Inc., Fidelity
International Investment Advisors (FIIA), and Fidelity Investments
Japan Limited (FIJ). In addition, FIIA entered into a sub-advisory
agreement with its subsidiary, Fidelity International Investment
Advisors (U.K.) Limited (FIIA(U.K.)L). Under the sub-advisory
arrangements, FMR may receive investment advice and research services
and may grant the sub-advisers investment management authority to buy
and sell securities. FMR pays its sub-advisers either a portion of its
management fee or a fee based on costs incurred for these services.
FIIA pays FIIA(U.K.)L a fee based on costs incurred for either
service.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD. Fidelity Distributors Corporation (FDC), an affiliate of
FMR, is the general distributor of the fund. Shares of International
Growth & Income purchased prior to October 12, 1990, are subject to a
1% deferred sales charge upon redemption. For the period, FDC received
no deferred sales charges for redemption of shares of International
Growth & Income.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the funds' transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, each fund's transfer agent
fee was equivalent to an annualized rate expressed as a percentage of
average net assets:
International Growth & Income .30%
Diversified International .28%
International Value .25%
Overseas .28%
Worldwide .31%
ACCOUNTING FEES. FSC maintains each fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. Certain funds placed a portion of their
portfolio transactions with brokerage firms which are affiliates of
FMR. The commissions paid to these affiliated firms are shown under
the caption "Other Information" at the end of each applicable fund's
schedule of investments
5. BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. Each fund has
established borrowing arrangements with certain banks. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. Information regarding a fund's participation in the program
is included under the caption "Other Information" at the end of each
applicable fund's schedule of investments.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses.
In addition, certain funds have entered into arrangements with their
custodian and transfer agent whereby credits realized on uninvested
cash balances were used to offset a portion of certain funds'
expenses.
For the period, the reductions under these arrangements are shown
under the caption "Other Information" on each applicable fund's
Statement of Operations.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company which the fund has ownership of at
least 5% of the voting securities. Information regarding transactions
with affiliated companies is included in "Other Information" at the
end of each applicable fund's schedule of investments.
8. CHANGE IN INDEPENDENT AUDITOR.
Based on the recommendation of the Audit Committee of the Fidelity
Diversified International Fund and the Fidelity Worldwide Fund, the
Board of Trustees has determined not to retain PricewaterhouseCoopers
LLP as the funds' independent auditor and voted to appoint Deloitte &
Touche LLP for the fiscal year ended October 31, 1999. For the fiscal
years ended October 31, 1998 and October 31, 1997,
PricewaterhouseCoopers LLP's audit reports contained no adverse
opinion or disclaimer of opinion; nor were their reports qualified as
to uncertainty, audit scope, or accounting principles. Further, there
were no disagreements between the funds and PricewaterhouseCoopers LLP
on accounting principles, financial statement disclosure or audit
scope, which if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have caused them to make reference to
the disagreement in their report.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)
TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)
FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+X(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)
MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)
FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
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 - CP61
400 East Las Colinas Blvd.
Irving, TX 75039-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)
FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
950 Northgate Drive
San Rafael, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Ave.
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29115 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.,
London, England
Fidelity Management & Research (Far East) Inc.,
Tokyo, Japan
Fidelity International Investment Advisors, Pemboke, Bermuda
Fidelity International Investment Advisors
(U.K.) Limited, London England
Fidelity Investments Japan Limited, Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
Robert Lawrence, VICE PRESIDENT, DIVERSIFIED INTERNATIONAL FUND
Richard Spillane Jr., VICE PRESIDENT, INTERNATIONAL GROWTH &
INCOME FUND, INTERNATIONAL VALUE FUND, OVERSEAS FUND,
WORLDWIDE FUND
Penelope A. Dobkin, VICE PRESIDENT, WORLDWIDE FUND
Gregory Fraser, VICE PRESIDENT, DIVERSIFIED INTERNATIONAL FUND
Richard Mace Jr., VICE PRESIDENT, INTERNATIONAL VALUE FUND,
OVERSEAS FUND
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
Matthew N. Karstetter, DEPUTY TREASURER
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S INTERNATIONAL EQUITY FUNDS
Canada Fund
Diversified International Fund
Emerging Markets Fund
Europe Fund
Europe Capital Appreciation Fund
France Fund
Germany Fund
Global Balanced Fund
Hong Kong and China Fund
International Growth & Income Fund
International Value Fund
Japan Fund
Japan Small Companies Fund
Latin America Fund
Nordic Fund
Overseas Fund
Pacific Basin Fund
Southeast Asia Fund
United Kingdom Fund
Worldwide Fund
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress (registered trademark)(AUTOMATED GRAPHIC)
1-800-544-5555
(AUTOMATED GRAPHIC) AUTOMATED LINE FOR QUICKEST SERVICE
(Fidelity Logo Graphic)(registered trademark)
P.O. Box 193
Boston, MA 02101
BULK RATE
U.S. POSTAGE
P A I D
F I D E L I T Y
INVESTMENTS
(recycle logo) Printed on Recycled Paper
IBD-SANN-0699
1.703569.101
78100
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
Fidelity United Kingdom Fund
SEMIANNUAL REPORT
APRIL 30, 1999
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET RECAP 4 A REVIEW OF WHAT HAPPENED IN
WORLD MARKETS DURING THE
PAST SIX MONTHS.
CANADA FUND 5 6 7 8 12 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EMERGING MARKETS FUND 14 15 16 17 20 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EUROPE FUND 22 23 24 25 28 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EUROPE CAPITAL APPRECIATION 30 31 32 33 35 PERFORMANCE FUND TALK: THE
FUND MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
FRANCE FUND 37 38 39 40 42 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
GERMANY FUND 44 45 46 47 49 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
HONG KONG AND CHINA FUND 51 52 53 54 56 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
JAPAN FUND 58 59 60 61 64 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
JAPAN SMALL COMPANIES FUND 66 67 68 69 72 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
LATIN AMERICA FUND 74 75 76 77 79 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NORDIC FUND 81 82 83 84 86 PERFORMANCE FUND TALK: THE
MANAGERS' OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
PACIFIC BASIN FUND 88 89 90 91 94 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
SOUTHEAST ASIA FUND 96 97 98 99 101 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
UNITED KINGDOM FUND 103 104 105 106 108 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NOTES TO FINANCIAL STATEMENTS 110 NOTES TO THE FINANCIAL
STATEMENTS
</TABLE>
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
(recycle logo) This report is printed on recycled paper using
soy-based inks.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF EACH FUND'S
PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS
STATED ON THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF
FIDELITY OR ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH
VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND,
BECAUSE INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR
MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
MARKET RECAP
Turnarounds, rebounds and recoveries were the characteristics that
defined the performance of many of the world's markets during the
six-month period ending April 30, 1999. Perhaps the most influential
and consistent catalyst for the marked improvement was the propensity
toward interest-rate cuts. Another commonality on a global scale was
the enhanced prospects for commodities - particularly within the
energy sector - which helped broaden market breadth, leading to a
noticeable rotation out of the narrow band of growth stocks that had
been so dominant for the past few years.
EUROPE: European indexes posted mixed results during the six-month
period. Toward the end of 1998, European stocks surged in response to
a strong U.S. market, increased merger and acquisition activity and
enthusiasm about the European Monetary Union's single currency - the
euro. Many European markets stalled in 1999, however, as the outlook
for economic growth and corporate profits deteriorated. The U.K. stock
market was among the strongest performers in Europe as the economy
improved amid a favorable environment of declining interest rates and
encouraging earnings growth. Although the implementation of the euro
was smooth, its weakness against the U.S. dollar contributed to
investors' lukewarm interest in European stocks during the first
quarter of 1999. For the six months ending April 30, the Morgan
Stanley Europe Index returned 10.95%
EMERGING MARKETS: Rallying from their bleak outlook in the fall of
1998, emerging markets returned an impressive 34.87% over the past six
months, as measured by the Morgan Stanley Capital International
Emerging Markets Free Index. Three key factors contributed to the
abrupt reversal in performance. First, interest rates plummeted across
most emerging markets - particularly in Asia. Second, many countries
began to build up current-account surpluses, a measure of export and
other trade activity. Third, newly confident investors pumped massive
inflows of money back into emerging markets, significantly increasing
the regions' liquidity, despite a Brazilian currency crisis in
January. For the six months, the Far East markets posted the largest
gains. Latin America also staged a remarkable comeback, while Europe
and the Middle East posted more modest, but positive, returns.
JAPAN AND THE FAR EAST: Long-awaited government intervention and
corporate restructuring helped spur investor confidence in the
Japanese market, as witnessed by the 26.62% return of the Tokyo Stock
Exchange Index (TOPIX) for the six-month period ending April 30, 1999.
Japanese small-cap stocks in particular were the prime beneficiaries
of a government program that guarantees the credit of small companies.
However, the deep recession in Japan continued to plague the nation's
economy. Steadily falling interest rates helped the Hong Kong market
stage a notable recovery. The Hang Seng Index - which measures the
performance of the Hong Kong stock market - had a six-month return of
31.22%.
U.S. AND CANADA: Investor confidence in the U.S. market was bolstered
by a near-perfect economic environment of strong domestic growth, low
interest rates, benign inflation and improving overseas markets for
much of the six-month period. The hype surrounding equities was
greatest in the technology sector, most notably Internet stocks.
Pharmaceutical, finance and telecommunications shares also performed
well. Late in the period, economically sensitive cyclical stocks
outperformed other sectors as investors worried about the potential
threat of inflation due to strong economic indicators in the U.S. and
signs that global markets were beginning to turn around. As market
leadership broadened into cyclicals and value-oriented sectors, the
surge in stock prices continued to drive the Dow Jones Industrials,
Standard & Poor's 500 and NASDAQ indexes, which returned 26.58%,
22.32% and 43.79%, respectively, for the six-month period. Canada
experienced similarly strong results for similar reasons. Investor
confidence was boosted by the cut in interest rates by the Bank of
Canada, a strong economy and a strengthening Canadian dollar. For the
period, the Toronto Stock Exchange 300 returned 20.63%.
BONDS: As the black cloud hanging over many global economies gave way
to brighter equity forecasts, most bond sectors were left with only
modest gains. The Lehman Brothers Aggregate Bond Index - a widely
followed measure of taxable bond performance - posted a total return
of 0.69% for the six-month period. Confronted with strong indications
of improving conditions abroad, U.S. Treasuries gave back nearly all
of their flight-to-quality gains captured during the fall. Reflective
of this downturn, the Lehman Brothers Treasury Index returned -1.21%.
The Lehman Brothers Corporate Bond Index returned 1.75%. The dramatic
turnaround in the worldwide economy triggered a furious rally in the
high-yield bond market, however. The Merrill Lynch High Yield Master
II Index - a broad measure of the high-yield market - returned 8.88%
during the six-month period. Elsewhere, the JP Morgan Emerging Markets
Bond Index returned 14.66%, while the Salomon Brothers Non-U.S. World
Government Bond Index returned -4.30%.
Standard & Poor's 500 Index(registered trademark)
Morgan Stanley Capital International Europe, Australasia, Far East
Index
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: 6.1
Row: 2, Col: 2, Value: 7.38
Row: 3, Col: 1, Value: 31.57
Row: 3, Col: 2, Value: 56.16
Row: 4, Col: 1, Value: 18.56
Row: 4, Col: 2, Value: 69.44000000000001
Row: 5, Col: 1, Value: 5.1
Row: 5, Col: 2, Value: 24.63
Row: 6, Col: 1, Value: 16.61
Row: 6, Col: 2, Value: 28.27
Row: 7, Col: 1, Value: 31.69
Row: 7, Col: 2, Value: 10.53
Row: 8, Col: 1, Value: -3.1
Row: 8, Col: 2, Value: -23.45
Row: 9, Col: 1, Value: 30.47
Row: 9, Col: 2, Value: 12.13
Row: 10, Col: 1, Value: 7.619999999999999
Row: 10, Col: 2, Value: -12.17
Row: 11, Col: 1, Value: 10.08
Row: 11, Col: 2, Value: 32.56
Row: 12, Col: 1, Value: 1.32
Row: 12, Col: 2, Value: 7.78
Row: 13, Col: 1, Value: 37.58
Row: 13, Col: 2, Value: 11.21
Row: 14, Col: 1, Value: 22.96
Row: 14, Col: 2, Value: 6.05
Row: 15, Col: 1, Value: 32.11
Row: 15, Col: 2, Value: 4.819999999999999
Row: 16, Col: 1, Value: 14.63
Row: 16, Col: 2, Value: 10.02
Row: 17, Col: 1, Value: 9.050000000000001
Row: 17, Col: 2, Value: 5.57
* YEAR TO DATE THROUGH APRIL 30, 1999.
CANADA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the past five year and past 10 year total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CANADA 15.21% -17.09% 23.94% 88.01%
FIDELITY CANADA (INCL. 11.76% -19.58% 20.23% 82.37%
3.00% SALES CHARGE)
Toronto Stock Exchange 300 20.63% -8.63% 72.24% 105.51%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Toronto Stock Exchange 300 Index - a market
capitalization-weighted index of 300 stocks traded in the Canadian
market. This benchmark includes reinvested dividends and capital gains
if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CANADA -17.09% 4.39% 6.52%
FIDELITY CANADA (INCL. 3.00% -19.58% 3.75% 6.19%
SALES CHARGE)
Toronto Stock Exchange 300 -8.63% 11.49% 7.47%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Canada Toronto Stck Exchange 300
00309 DR001
1989/04/30 9700.00 10000.00
1989/05/31 10026.89 10042.45
1989/06/30 10510.11 10355.89
1989/07/31 11149.67 11084.36
1989/08/31 11206.52 11285.94
1989/09/30 11135.46 11104.48
1989/10/31 10979.12 11119.56
1989/11/30 11043.08 11296.61
1989/12/31 11361.26 11480.83
1990/01/31 10439.88 10479.83
1990/02/28 10499.32 10407.34
1990/03/31 10677.66 10514.11
1990/04/30 10164.95 9715.92
1990/05/31 10833.70 10377.90
1990/06/30 11086.33 10395.87
1990/07/31 11175.50 10574.04
1990/08/31 10529.05 9934.32
1990/09/30 10358.14 9426.44
1990/10/31 10083.21 9118.34
1990/11/30 10410.16 9372.88
1990/12/31 10737.25 9779.79
1991/01/31 10784.87 9818.08
1991/02/28 11776.85 10539.06
1991/03/31 12292.68 10609.38
1991/04/30 12387.91 10598.14
1991/05/31 12935.49 10957.70
1991/06/30 12951.36 10792.36
1991/07/31 12911.68 10950.39
1991/08/31 12800.58 11000.17
1991/09/30 12372.04 10730.83
1991/10/31 12919.62 11236.87
1991/11/30 12435.53 10941.87
1991/12/31 12636.03 10994.66
1992/01/31 12863.78 11091.03
1992/02/29 12939.70 11002.76
1992/03/31 12576.99 10464.71
1992/04/30 12425.15 10278.79
1992/05/31 12534.81 10307.65
1992/06/30 12467.33 10395.79
1992/07/31 12787.87 10704.98
1992/08/31 12593.86 10513.60
1992/09/30 12054.00 9809.95
1992/10/31 12003.39 9997.09
1992/11/30 11969.65 9495.66
1992/12/31 12273.35 9852.31
1993/01/31 12205.78 9757.03
1993/02/28 12966.00 10349.39
1993/03/31 13675.54 10772.64
1993/04/30 14030.31 11226.33
1993/05/31 14224.59 11549.36
1993/06/30 14951.02 11732.06
1993/07/31 14410.42 11721.00
1993/08/31 14773.63 11934.97
1993/09/30 14047.20 11422.26
1993/10/31 15052.38 12314.35
1993/11/30 14706.06 11981.87
1993/12/31 15399.48 12558.08
1994/01/31 16076.76 13172.97
1994/02/28 15391.02 12624.74
1994/03/31 14823.80 12088.00
1994/04/30 14713.75 11931.76
1994/05/31 14781.47 12126.90
1994/06/30 13968.75 11310.87
1994/07/31 14239.66 11727.34
1994/08/31 14773.01 12371.21
1994/09/30 14849.20 12664.81
1994/10/31 14544.43 12403.01
1994/11/30 13486.19 11659.86
1994/12/31 13553.97 11819.22
1995/01/31 12605.19 11237.34
1995/02/28 13121.94 11702.63
1995/03/31 13943.65 12195.74
1995/04/30 14367.21 12495.65
1995/05/31 14816.18 12883.25
1995/06/30 15019.49 13128.64
1995/07/31 15536.24 13477.03
1995/08/31 15341.40 13412.33
1995/09/30 15561.65 13512.90
1995/10/31 14867.01 13285.11
1995/11/30 15476.94 13749.49
1995/12/31 16182.34 13909.04
1996/01/31 16454.59 14576.08
1996/02/29 16599.23 14531.23
1996/03/31 16854.47 14801.13
1996/04/30 17177.78 15305.20
1996/05/31 17586.17 15555.21
1996/06/30 17016.13 15056.25
1996/07/31 16522.66 14604.84
1996/08/31 17228.83 15336.01
1996/09/30 17696.77 15888.30
1996/10/31 18581.61 17124.04
1996/11/30 19117.62 18279.98
1996/12/31 18764.62 17767.09
1997/01/31 20244.92 18653.90
1997/02/28 19744.38 18537.44
1997/03/31 18402.53 17444.35
1997/04/30 18530.33 17667.98
1997/05/31 20202.32 19160.67
1997/06/30 19850.88 19352.72
1997/07/31 20777.40 20707.71
1997/08/31 19989.32 19796.17
1997/09/30 21331.18 21220.49
1997/10/31 20106.47 20238.03
1997/11/30 19201.25 19078.22
1997/12/31 19912.69 19589.36
1998/01/31 19491.06 19257.49
1998/02/28 20515.01 20864.55
1998/03/31 21430.53 22338.36
1998/04/30 21996.71 22491.51
1998/05/31 21225.74 21898.90
1998/06/30 20695.70 21141.38
1998/07/31 18623.72 19325.40
1998/08/31 14419.53 14882.26
1998/09/30 14877.29 15511.27
1998/10/31 15828.96 17036.97
1998/11/30 16166.26 17543.01
1998/12/31 16941.07 18007.41
1999/01/31 17970.37 18932.86
1999/02/28 16880.52 17819.42
1999/03/31 17389.12 18654.50
1999/04/30 18236.78 20551.13
IMATRL PRASUN SHR__CHT 19990430 19990610 145651 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Canada Fund on April 30, 1989, and the current
3.00% sales charge was paid. As the chart shows, by April 30, 1999,
the value of the investment would have grown to $18,237 - an 82.37%
increase on the initial investment. For comparison, look at how the
Toronto Stock Exchange 300 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $20,551 - a 105.51% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
CANADA
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Robert Haber)
An interview with Robert Haber, Portfolio Manager of Fidelity Canada
Fund
Q. HOW DID THE FUND PERFORM, BOB?
A. For the six months that ended April 30, 1999, the fund returned
15.21%, while the Toronto Stock Exchange (TSE) 300 returned 20.63%.
For the 12 months that ended April 30, 1999, the fund returned -17.09%
and the TSE 300 returned -8.63%.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF THE TSE 300 OVER THE
PAST SIX MONTHS?
A. While the fund enjoyed participating in the rebound of the Canadian
market, it lagged the TSE 300 because of the fund's bias toward
large-capitalization stocks. Unlike many markets in the world,
smaller- and mid-cap issues drove the returns of the TSE 300. In
addition, the fund was held back because it was underweighted relative
to the index in Nortel, a telecommunications equipment stock that
posted strong returns during the period.
Q. WHY DID YOU CHOOSE TO UNDERWEIGHT NORTEL?
A. I sought to take advantage of the Nortel story through the fund's
investment in BCE - a diversified telecommunications company - the
largest company in Canada, the fund's top holding and the top
contributor to its performance. BCE owns about 41% of Nortel, and was
selling at a more attractive valuation.
Q. WHAT SORTS OF SHIFTS DID YOU MAKE WITH THE FUND'S INVESTMENTS
DURING THE PAST SIX MONTHS?
A. I divested some of the fund's holdings in bank stocks and
reallocated them toward utilities, especially BCE. Banks suffered as
the Canadian government squelched any hope that regulations would be
eased to allow more consolidation within that sector. Those stocks
also were generally fairly valued and didn't offer the kind of
attractive earnings growth found elsewhere. BCE, on the other hand,
enjoyed solid cash flow growth and future prospects based on a number
of factors. First, it was at the forefront of the trend of integrating
transmission of telephone, data, satellite TV and Internet commerce
under one corporate umbrella. The company is very well managed, and
owns a piece of a number of high-growth telephone, satellite and cable
systems. I found BCE's stock to be selling at a cheap valuation
relative to the aggregate value of its diversified businesses, even
though it was duly rewarded with share-price increases during the
period.
Q. WHICH OTHER STOCKS PERFORMED WELL? WHICH WERE DISAPPOINTMENTS?
A. In spite of problems in the banking sector, Toronto Dominion Bank
thrived due to the strength of one of its assets: Waterhouse
Securities, the second-largest discount broker in the U.S. During the
period, U.S. discount brokers did very well. JDS Fitel also proved to
be a winner for the fund. This manufacturer and distributor of fiber
optic components benefited from the growth of the use of fiber optics
for data and Internet transmissions. As I mentioned earlier, most
banks struggled, including the fund's investments in Royal Bank of
Canada, Bank of Nova Scotia and Bank of Montreal.
Q. WHAT IS YOUR OUTLOOK?
A. I'm optimistic about the Canadian market. It rebounded well from a
sharp decline last year, due to the significant value it offered
global investors interested in taking advantage of a strong economy, a
strengthening Canadian dollar and declining interest rates. If we
continue to see a resurgence in worldwide economic growth and
commodity prices, the Canadian market should benefit; it holds the
highest weighting in natural resource stocks among the G7 group of
developed nations. While the Canadian market may experience some
short-term declines, I believe it has the potential to attract the
investors who fled over the past few years due to an economic downturn
in the country.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth by investing mainly in
equity securities of Canadian issuers
FUND NUMBER: 309
TRADING SYMBOL: FICDX
START DATE: November 17, 1987
SIZE: as of April 30, 1999, more than $45 million
MANAGER: Robert Haber, since 1998; chief
investment officer, Fidelity Investments
Canada, since 1998; manager, Fidelity
Advisor Income & Growth Fund, 1987-1996;
Fidelity Balanced Fund, 1988-1996; Fidelity
Global Balanced Fund, 1993-1996; Fidelity
Advisor Annuity Income & Growth Fund,
1995-1996; director of equity research,
1996-1997; joined Fidelity in 1985
CANADA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 14.1%
Canada 85.9%
Row: 1, Col: 1, Value: 85.90000000000001
Row: 1, Col: 2, Value: 14.1
AS OF OCTOBER 31, 1998
United States 18.0%
Canada 82.0%
Row: 1, Col: 1, Value: 82.0
Row: 1, Col: 2, Value: 18.0
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 93.9 92.9
Short-term investments 6.1 7.1
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
BCE, Inc. (Telephone Services) 11.7 5.0
Toronto Dominion Bank (Banks) 5.2 0.0
Bank of Nova Scotia (Banks) 4.1 2.9
Bombardier, Inc. Class B 2.7 0.6
(Railroads)
CGI Group, Inc. Class A 2.6 2.0
(sub. vtg.) (Services)
ATI Technologies, Inc. 2.2 0.1
(Computer Services & Software)
Imasco Ltd. (Tobacco) 2.2 1.5
JDS Fitel, Inc. (Electronic 2.1 0.9
Instruments)
Seagram Co. Ltd. (Beverages) 2.0 0.2
Thomson Corp. (Publishing) 1.9 0.6
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
UTILITIES 20.0 12.7
FINANCE 17.0 16.4
ENERGY 10.3 13.9
TECHNOLOGY 7.6 6.1
MEDIA & LEISURE 6.6 2.6
NONDURABLES 6.3 7.5
BASIC INDUSTRIES 5.6 6.8
TRANSPORTATION 4.4 5.0
DURABLES 3.6 3.4
PRECIOUS METALS 3.2 3.4
</TABLE>
CANADA
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.9%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.2%
Gulfstream Aerospace Corp. (a) 500 $ 24,375
Orbital Sciences Corp. (a) 2,300 48,444
72,819
BASIC INDUSTRIES - 5.6%
CHEMICALS & PLASTICS - 1.6%
Agrium, Inc. 5,600 51,119
DuPont Canada, Inc. 2,000 66,712
Intertape Polymer Group, Inc. 15,700 460,655
NOVA Chemicals Corp. 5,600 118,188
Potash Corp. of Saskatchewan 700 42,663
739,337
IRON & STEEL - 1.1%
Dofasco, Inc. 7,600 118,668
IPSCO, Inc. 3,600 80,055
Stelco, Inc. Series A 35,900 290,748
489,471
METALS & MINING - 1.7%
Alcan Aluminium Ltd. 13,000 410,432
Cominco Ltd. 5,000 82,189
Falconbridge Ltd. 3,900 58,219
Inco Ltd. 6,500 124,468
Noranda, Inc. 4,500 60,226
Southernera Resources Ltd. (a) 13,000 42,382
777,916
PAPER & FOREST PRODUCTS - 1.2%
Abitibi-Consolidated, Inc. 4,200 49,437
Domtar, Inc. 10,500 91,884
Donohue, Inc. Class A (sub. 11,100 167,605
vtg.)
Macmillan Bloedel Ltd. 16,400 214,990
523,916
TOTAL BASIC INDUSTRIES 2,530,640
CONSTRUCTION & REAL ESTATE -
2.7%
BUILDING MATERIALS - 1.8%
Jannock Ltd. 20,400 241,524
Lafarge Corp. 2,600 87,913
Premdor, Inc. (a) 35,500 377,660
Richelieu Hardware Ltd. (a) 2,900 18,511
United Dominion Industries 2,500 59,626
Ltd.
785,234
CONSTRUCTION - 0.1%
Lennar Corp. 1,990 48,133
ENGINEERING - 0.8%
Bracknell Corp. (a) 86,700 368,936
TOTAL CONSTRUCTION & REAL 1,202,303
ESTATE
SHARES VALUE (NOTE 1)
DURABLES - 3.6%
AUTOS, TIRES, & ACCESSORIES -
1.8%
Airboss of America Corp. (a) 61,800 $ 197,234
Barrett Resources Corp. (a) 2,000 60,750
Canadian Tire Corp. Ltd. 4,400 120,796
Series A
Magna International, Inc. 2,400 142,896
Class A
Uni-Select, Inc. 1,000 21,963
Ventra Group, Inc. (a) 28,200 73,548
Wescast Industries, Inc. 5,600 186,410
Class A
803,597
CONSUMER DURABLES - 0.1%
Unican Security Systems Ltd. 1,400 32,334
CONSUMER ELECTRONICS - 0.2%
Fantom Technologies, Inc. 9,600 108,058
HOME FURNISHINGS - 1.0%
Dorel Industries, Inc. Class B 20,700 440,426
TEXTILES & APPAREL - 0.5%
Gildan Activewear, Inc. Class 8,600 115,563
A (a)
Quiksilver, Inc. (a) 1,200 31,875
Shaw Industries, Inc. (a) 5,580 101,138
248,576
TOTAL DURABLES 1,632,991
ENERGY - 10.3%
OIL & GAS - 10.3%
Alberta Energy Co. Ltd. 26,400 779,135
Anderson Exploration Ltd. (a) 10,800 129,719
Canada Occidental Petroleum 3,000 45,402
Ltd.
Canadian Hunter Exploration 6,500 71,603
Ltd. (a)
Canadian Natural Resources 9,400 184,516
Ltd. (a)
Compton Petroleum Corp. (a) 70,600 84,313
Enbridge, Inc. 5,000 232,841
Encal Energy Ltd. (a) 6,900 33,624
Ensign Resource Service 20,100 337,299
Group, Inc.
Imperial Oil Ltd. 5,900 122,495
Kerr-McGee Corp. 230 9,746
Merit Energy Ltd. (a) 25,900 122,656
Paramount Resources Ltd. 2,000 28,003
Penn West Petroleum Ltd. (a) 19,400 319,561
Petro-Canada 16,600 226,156
Post Energy Corp. (a) 61,000 234,454
Renaissance Energy Ltd. 4,500 68,102
Rio Alto Exploration Ltd. (a) 45,900 693,068
Suncor Energy, Inc. 10,900 435,776
Talisman Energy, Inc. (a) 3,400 89,842
Tosco Corp. 1,000 26,750
Ulster Petroleums Ltd. (a) 35,600 359,176
USX-Marathon Group 1,130 35,313
4,669,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 17.0%
BANKS - 12.6%
Bank of Montreal, Canada 8,000 $ 333,837
Bank of Nova Scotia 77,000 1,831,194
Canadian Imperial Bank of 24,600 633,150
Commerce
National Bank of Canada 5,200 83,871
Royal Bank of Canada 9,200 448,950
Toronto Dominion Bank 43,800 2,340,309
5,671,311
CREDIT & OTHER FINANCE - 0.8%
Power Corp. of Canada 16,200 303,542
Providian Financial Corp. 430 55,497
359,039
FEDERAL SPONSORED CREDIT - 0.2%
Freddie Mac 1,650 103,538
INSURANCE - 2.4%
Fairfax Financial Holdings 2,500 692,776
Ltd. rights 6/30/99 (a)(c)
Great-West Lifeco, Inc. 23,300 384,602
1,077,378
SECURITIES INDUSTRY - 1.0%
Bear Stearns Companies, Inc. 4,040 188,365
CI Fund Management, Inc. 2,300 30,940
Lehman Brothers Holdings, 1,390 77,232
Inc.
PaineWebber Group, Inc. 1,250 58,672
Schwab (Charles) Corp. 900 98,775
453,984
TOTAL FINANCE 7,665,250
HEALTH - 0.9%
DRUGS & PHARMACEUTICALS - 0.6%
Amgen, Inc. (a) 1,130 69,424
Biochem Pharma, Inc. 1,700 35,003
Biogen, Inc. (a) 430 40,877
Medimmune, Inc. (a) 1,250 68,906
Schering-Plough Corp. 1,100 53,144
267,354
MEDICAL EQUIPMENT & SUPPLIES
- - 0.2%
VISX, Inc. (a) 630 81,113
MEDICAL FACILITIES MANAGEMENT
- - 0.1%
Lincare Holdings, Inc. (a) 1,800 53,325
TOTAL HEALTH 401,792
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 1.1%
General Instrument Corp. (a) 800 29,200
Research in Motion Ltd. (a) 5,400 65,415
Teklogix International, Inc. 26,500 395,590
(a)
490,205
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
Skyjack, Inc. (a) 11,300 $ 127,193
POLLUTION CONTROL - 0.2%
Republic Services, Inc. Class 1,500 30,844
A (a)
Waste Management, Inc. 1,700 96,050
126,894
TOTAL INDUSTRIAL MACHINERY & 744,292
EQUIPMENT
MEDIA & LEISURE - 6.6%
BROADCASTING - 2.3%
Cablevision Systems Corp. 1,060 82,018
Class A (a)
Chancellor Media Corp. (a) 1,300 71,338
Cogeco Cable, Inc. 13,900 281,434
Cogeco, Inc. (sub. vtg.) 13,600 280,027
Comcast Corp. Class A 1,700 111,669
(special)
Cox Communications, Inc. 334 26,511
Class A (a)
Shaw Communications, Inc. 1,800 74,125
Class B
Time Warner, Inc. 1,600 112,000
1,039,122
ENTERTAINMENT - 1.1%
Cinar Films, Inc. Class B 24,000 501,000
(sub. vtg.) (a)
PUBLISHING - 3.0%
Thomson Corp. 28,700 866,712
Torstar Corp. 42,800 484,695
1,351,407
RESTAURANTS - 0.2%
Sportscene Restaurants, Inc. 20,000 96,088
Class A
TOTAL MEDIA & LEISURE 2,987,617
NONDURABLES - 6.3%
BEVERAGES - 2.0%
Seagram Co. Ltd. 15,900 905,765
FOODS - 2.1%
High Liner Foods, Inc. (a) 36,800 176,802
Saputo Group, Inc. 8,950 223,289
Weston George Ltd. 14,100 561,290
961,381
TOBACCO - 2.2%
Imasco Ltd. 44,100 971,592
TOTAL NONDURABLES 2,838,738
PRECIOUS METALS - 3.2%
Barrick Gold Corp. 24,000 485,106
Euro-Nevada Mining Corp. Ltd. 18,600 318,511
Meridian Gold, Inc. (a) 64,400 369,073
Placer Dome, Inc. 17,000 240,357
Stillwater Mining Co. (a) 285 8,069
Teck Corp. Class B (sub-vtg.) 2,700 23,720
1,444,836
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - 1.1%
APPAREL STORES - 0.2%
AnnTaylor Stores Corp. (a) 1,500 $ 71,250
DRUG STORES - 0.2%
Jean Coutu Group, Inc. Class A 4,300 91,489
GENERAL MERCHANDISE STORES -
0.1%
Dayton Hudson Corp. 727 48,936
GROCERY STORES - 0.6%
Loblaw Companies Ltd. 5,700 143,967
Safeway, Inc. (a) 2,300 124,056
268,023
TOTAL RETAIL & WHOLESALE 479,698
SERVICES - 2.8%
CGI Group, Inc. Class A (sub. 46,800 1,156,349
vtg.) (a)
Mosaic Group, Inc. (a) 40,400 112,299
1,268,648
TECHNOLOGY - 7.6%
COMMUNICATIONS EQUIPMENT - 1.0%
Jabil Circuit, Inc. (a) 3,070 142,947
Mitel Corp. (a) 3,400 19,135
Newbridge Networks Corp. (a) 8,200 303,912
465,994
COMPUTER SERVICES & SOFTWARE
- - 3.6%
ATI Technologies, Inc. (a) 64,800 971,778
CMGI, Inc. (a) 100 25,456
Concentric Network Corp. (a) 900 75,150
Corel Corp. (a) 5,300 16,187
e-Auction Global Trading, 12,300 135,300
Inc. (a)
GEAC Computer Ltd. (a) 1,800 35,086
Oracle Corp. (a) 9,800 265,213
Polycom, Inc. (a) 1,400 34,213
Wang Laboratories, Inc. (a) 2,280 57,143
1,615,526
COMPUTERS & OFFICE EQUIPMENT
- - 0.2%
Comverse Technology, Inc. (a) 900 57,713
Hutchinson Technology, Inc. 1,530 33,756
(a)
91,469
ELECTRONIC INSTRUMENTS - 2.1%
JDS Fitel, Inc. (a) 15,300 924,091
ELECTRONICS - 0.7%
Celestica, Inc. (sub-vtg.) (a) 5,800 230,885
Sanmina Corp. (a) 1,300 86,288
317,173
TOTAL TECHNOLOGY 3,414,253
SHARES VALUE (NOTE 1)
TRANSPORTATION - 4.4%
RAILROADS - 4.4%
Bombardier, Inc. Class B 78,800 $ 1,222,292
Canadian National Railway Co. 8,400 530,405
Canadian Pacific Ltd. 10,200 230,323
1,983,020
UTILITIES - 20.0%
CELLULAR - 1.9%
QUALCOMM, Inc. 300 60,000
Teleglobe, Inc. 27,300 804,760
864,760
ELECTRIC UTILITY - 0.7%
AES Corp. (a) 2,400 120,000
IPALCO Enterprises, Inc. 1,700 39,206
Transalta Corp. 9,900 142,690
301,896
GAS - 1.8%
Transcanada Pipelines Ltd. 35,100 484,221
Westcoast Energy, Inc. 16,300 315,484
799,705
TELEPHONE SERVICES - 15.6%
Ameritech Corp. 1,060 72,544
BCE, Inc. 115,300 5,262,490
BCT.Telus Communications, 3,800 94,674
Inc.
Manitoba Telecom Services, 42,700 514,334
Inc.
Maritime Telegraph & 5,200 139,190
Telephone Co. Ltd.
MCI WorldCom, Inc. (a) 930 76,434
McLeodUSA, Inc. Class A (a) 1,120 62,790
Nortel Networks Corp. 12,100 822,169
7,044,625
TOTAL UTILITIES 9,010,986
TOTAL COMMON STOCKS 42,347,433
(Cost $36,382,166)
CASH EQUIVALENTS - 6.1%
Taxable Central Cash Fund (b) 2,741,607 2,741,607
(Cost $2,741,607)
TOTAL INVESTMENT IN $ 45,089,040
SECURITIES - 100%
(Cost $39,123,773)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $692,776 or 1.5% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $73,352,831 and $82,796,973, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company.
The commissions paid to these affiliated firms were $1,286 for the
period.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $39,125,841. Net unrealized appreciation
aggregated $5,963,199, of which $6,662,807 related to appreciated
investment securities and $699,608 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $6,389,000, all of which will expire on October 31,
2006, respectively.
CANADA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 45,089,040
value (cost $39,123,773) -
See accompanying schedule
Foreign currency held at 79,679
value (cost $79,619)
Receivable for investments 3,237,010
sold
Receivable for fund shares 32,774
sold
Dividends receivable 11,091
Interest receivable 11,953
TOTAL ASSETS 48,461,547
LIABILITIES
Payable for investments $ 2,512,888
purchased
Payable for fund shares 48,386
redeemed
Accrued management fee 11,389
Other payables and accrued 44,251
expenses
TOTAL LIABILITIES 2,616,914
NET ASSETS $ 45,844,633
Net Assets consist of:
Paid in capital $ 46,646,152
Distributions in excess of (29,989)
net investment income
Accumulated undistributed net (6,744,827)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 5,973,297
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 3,044,070 $ 45,844,633
shares outstanding
NET ASSET VALUE and $15.06
redemption price per share
($45,844,633 (divided by)
3,044,070 shares)
Maximum offering price per $15.53
share (100/97.00 of $15.06)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 245,935
Dividends
Interest 94,763
340,698
Less foreign taxes withheld (35,220)
TOTAL INCOME 305,478
EXPENSES
Management fee Basic fee $ 173,171
Performance adjustment (102,740)
Transfer agent fees 90,817
Accounting fees and expenses 30,390
Custodian fees and expenses 56,309
Registration fees 9,692
Audit 12,230
Legal 184
Total expenses before 270,053
reductions
Expense reductions (17,893) 252,160
NET INVESTMENT INCOME 53,318
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,213,508
Foreign currency transactions 37,777 1,251,285
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 5,310,933
Assets and liabilities in 7,266 5,318,199
foreign currencies
NET GAIN (LOSS) 6,569,484
NET INCREASE (DECREASE) IN $ 6,622,802
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 9,525
charges paid to FDC
Sales charges - Retained by $ 9,525
FDC
Deferred sales charges $ 2,101
withheld by FDC
Expense Reductions
Directed brokerage $ 16,923
arrangements
Transfer agent credits 970
$ 17,893
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 53,318 $ 412,429
income
Net realized gain (loss) 1,251,285 (7,161,849)
Change in net unrealized 5,318,199 (7,122,677)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 6,622,802 (13,872,097)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (218,427) (246,908)
From net investment income
In excess net investment (29,989) -
income
From net realized gain - (10,106,122)
TOTAL DISTRIBUTIONS (248,416) (10,353,030)
Share transactions Net 5,065,869 7,142,290
proceeds from sales of shares
Reinvestment of distributions 237,716 10,182,688
Cost of shares redeemed (13,265,509) (42,155,827)
NET INCREASE (DECREASE) IN (7,961,924) (24,830,849)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 10,386 20,258
TOTAL INCREASE (DECREASE) (1,577,152) (49,035,718)
IN NET ASSETS
NET ASSETS
Beginning of period 47,421,785 96,457,503
End of period (including $ 45,844,633 $ 47,421,785
under/(over) distribution of
net investment income of
$(28,989) and $352,447,
respectively)
OTHER INFORMATION
Shares
Sold 357,823 449,694
Issued in reinvestment of 17,767 627,013
distributions
Redeemed (939,783) (2,578,744)
Net increase (decrease) (564,193) (1,502,037)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 13.14 $ 18.88 $ 21.84 $ 17.55 $ 17.18
period
Income from Investment
Operations
Net investment income .02 D .09 D .03 D .08 D .05
Net realized and unrealized 1.97 (3.70) 1.39 4.27 .33
gain (loss)
Total from investment 1.99 (3.61) 1.42 4.35 .38
operations
Less Distributions
From net investment income (.06) (.05) (.13) (.08) (.01)
In excess of net investment (.01) - - - -
income
From net realized gain - (2.08) (4.29) - -
In excess of net realized gain - - - - -
Total distributions (.07) (2.13) (4.42) (.08) (.01)
Redemption fees added to paid - - .04 .02 -
in capital
Net asset value, end of period $ 15.06 $ 13.14 $ 18.88 $ 21.84 $ 17.55
TOTAL RETURN B, C 15.21% (21.27)% 8.21% 24.99% 2.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 45,845 $ 47,422 $ 96,458 $ 129,671 $ 326,763
(000 omitted)
Ratio of expenses to average 1.16% A .94% .93% 1.01% 1.09% E
net assets
Ratio of expenses to average 1.08% A, F .80% F .92% F .98% F 1.08% F
net assets after expense
reductions
Ratio of net investment .23% A .57% .18% .40% .26%
income to average net assets
Portfolio turnover rate 350% A 215% 139% 139% 75%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 17.82
period
Income from Investment
Operations
Net investment income -
Net realized and unrealized (.60)
gain (loss)
Total from investment (.60)
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain -
In excess of net realized gain (.04)
Total distributions (.04)
Redemption fees added to paid -
in capital
Net asset value, end of period $ 17.18
TOTAL RETURN B, C (3.37)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 368,330
(000 omitted)
Ratio of expenses to average 1.57%
net assets
Ratio of expenses to average 1.57%
net assets after expense
reductions
Ratio of net investment (.14)%
income to average net assets
Portfolio turnover rate 59%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
EMERGING MARKETS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). Prior to February 19, 1993, Emerging Markets
operated under certain different investment policies. Accordingly, the
fund's historical performance may not represent its current investment
policies.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EMERGING MARKETS 28.34% -16.02% -44.75% -3.44%
FIDELITY EMERGING MARKETS 24.49% -18.54% -46.41% -6.33%
(INCL. 3.00% SALES CHARGE)
MSCI Emerging Markets Free 34.87% -10.19% -12.84% 139.85%
Emerging Markets Funds 26.92% -16.37% -15.27% n/a
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on November 1, 1990. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Morgan Stanley Capital
International (MSCI) Emerging Markets Free Index - a market
capitalization-weighted index that is designed to represent the
performance of emerging stock markets throughout the world. As of
April 30, 1999, the index included over 860 equity securities of
companies domiciled in 25 countries. However, to measure how the
fund's performance stacked up against its peers, you can compare it to
the emerging markets funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 191 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EMERGING MARKETS -16.02% -11.19% -0.41%
FIDELITY EMERGING MARKETS -18.54% -11.73% -0.77%
(INCL. 3.00% SALES CHARGE)
MSCI Emerging Markets Free -10.19% -2.71% 10.84%
Emerging Markets Funds -16.37% -3.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Emerging Markets MS EMF Index (Gross)
00322 MS006
1990/11/01 9700.00 10000.00
1990/11/30 9564.20 9571.06
1990/12/31 9777.33 9975.54
1991/01/31 9709.16 10782.17
1991/02/28 10118.17 12378.30
1991/03/31 10108.44 12889.03
1991/04/30 10332.42 13027.70
1991/05/31 10332.42 14052.74
1991/06/30 9972.10 13551.10
1991/07/31 10186.34 14255.08
1991/08/31 10108.44 14557.58
1991/09/30 10225.30 14002.85
1991/10/31 10127.91 14578.49
1991/11/30 9991.58 14362.80
1991/12/31 10438.08 15976.83
1992/01/31 10517.68 17826.43
1992/02/29 10826.15 18620.48
1992/03/31 10806.24 19252.13
1992/04/30 11064.96 19122.79
1992/05/31 11542.58 19054.82
1992/06/30 11522.68 17165.89
1992/07/31 11144.56 17354.93
1992/08/31 10865.95 16548.35
1992/09/30 10796.29 16609.34
1992/10/31 10995.30 17499.53
1992/11/30 10905.75 17309.63
1992/12/31 11048.91 17823.04
1993/01/31 11201.38 17909.23
1993/02/28 11770.60 18207.62
1993/03/31 12095.86 18807.85
1993/04/30 12482.12 19240.41
1993/05/31 12756.56 19769.94
1993/06/30 12919.19 20356.62
1993/07/31 13142.82 20904.76
1993/08/31 14057.63 22673.81
1993/09/30 14372.73 23280.87
1993/10/31 16446.31 25369.70
1993/11/30 17096.84 26492.37
1993/12/31 20082.32 30871.45
1994/01/31 19501.26 31433.12
1994/02/28 18950.78 30873.94
1994/03/31 17115.84 28080.18
1994/04/30 16952.74 27518.51
1994/05/31 17391.08 28460.32
1994/06/30 16167.79 27675.84
1994/07/31 17401.28 29396.67
1994/08/31 19613.39 33045.18
1994/09/30 20112.90 33420.73
1994/10/31 19623.58 32817.87
1994/11/30 18267.77 31111.53
1994/12/31 16480.81 28612.77
1995/01/31 14212.53 25568.64
1995/02/28 14376.01 24912.84
1995/03/31 14089.92 25071.12
1995/04/30 14386.23 26195.85
1995/05/31 15837.11 27589.45
1995/06/30 16021.03 27671.05
1995/07/31 16828.21 28292.18
1995/08/31 16317.33 27625.75
1995/09/30 16245.81 27494.64
1995/10/31 15469.28 26442.14
1995/11/30 14968.62 25970.59
1995/12/31 15956.70 27122.44
1996/01/31 17548.21 29050.35
1996/02/29 17340.17 28588.47
1996/03/31 17464.99 28811.13
1996/04/30 18359.57 29963.08
1996/05/31 18349.17 29829.29
1996/06/30 18276.35 30015.55
1996/07/31 16840.87 27964.18
1996/08/31 17517.00 28679.97
1996/09/30 17901.88 28928.42
1996/10/31 17277.76 28156.91
1996/11/30 18182.73 28628.69
1996/12/31 17552.02 28758.18
1997/01/31 18565.85 30719.77
1997/02/28 19558.57 32035.35
1997/03/31 18470.81 31193.85
1997/04/30 17298.56 31248.96
1997/05/31 17023.98 32143.32
1997/06/30 17150.71 33863.53
1997/07/31 16855.01 34369.04
1997/08/31 13010.88 29995.61
1997/09/30 13422.75 30826.73
1997/10/31 10930.41 25768.45
1997/11/30 10275.64 24828.22
1997/12/31 10395.44 25426.53
1998/01/31 9691.58 23432.32
1998/02/28 10633.67 25878.08
1998/03/31 11055.99 27001.09
1998/04/30 11153.44 26706.95
1998/05/31 9691.58 23047.01
1998/06/30 8727.84 20629.47
1998/07/31 8998.55 21283.56
1998/08/31 6118.15 15129.63
1998/09/30 6594.61 16089.38
1998/10/31 7298.47 17783.62
1998/11/30 7720.78 19262.66
1998/12/31 7634.15 18983.49
1999/01/31 7428.41 18677.21
1999/02/28 7450.07 18858.89
1999/03/31 8348.84 21344.31
1999/04/30 9366.73 23985.04
IMATRL PRASUN SHR__CHT 19990430 19990628 140946 R00000000000105
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Emerging Markets Fund on November 1, 1990, when
the fund started, and the current 3.00% sales charge was paid. As the
chart shows, by April 30, 1999, the value of the investment would have
been $9,367 - a 6.33% decrease on the initial investment. For
comparison, look at how the Morgan Stanley Capital International
Emerging Markets Free Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 would have
grown to $23,985 - a 139.85% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
EMERGING MARKETS
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of David Stewart)
An interview with David Stewart, Portfolio Manager of Fidelity
Emerging Markets Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. The fund was competitive with its peers but lagged its benchmark
index. For the six months that ended April 30, 1999, the fund returned
28.34%. That trailed the 34.87% return of the Morgan Stanley Capital
International Emerging Markets Free Index but edged the 26.92% return
of the emerging markets fund average tracked by Lipper Inc. For the 12
months that ended April 30, 1999, the fund's return was -16.02%,
compared to -10.19% and -16.37% for the index and average,
respectively.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX OVER THE PAST SIX MONTHS?
A. One reason had to do with the abrupt reversal that occurred in most
emerging markets during the period. This reversal was triggered by
plummeting interest rates, particularly in Asia. Lower interest rates
allowed emerging-market economies to function more normally and
jump-started their stock markets. I and many of my peers had been
favoring defensive holdings, including utility, beverage and tobacco
shares. Although these stocks were the place to be during hard
economic times, they were outperformed by other sectors when the
markets rallied. I made adjustments as the period progressed, but they
were insufficient to catch up to the index. In addition, the fund's
relatively high cash levels for part of the period - another defensive
measure - held back its returns.
Q. HOW WAS THE FUND POSITIONED IN LATIN AMERICA AND EUROPE?
A. To compensate for the fund's relatively heavy position in Asia, I
slightly underweighted Europe and Latin America. Overall, this
decision had a positive influence on the fund's returns, but stock
selection was a drawback for the reasons I mentioned.
Q. WHAT WERE YOU BUYING WHEN YOU BEGAN SELLING DEFENSIVE ISSUES?
A. For the most part, I bought cyclical stocks to replace the
defensive components of the portfolio that I sold. Cyclical stocks -
that is, stocks that are more sensitive to fluctuations in economic
activity - were the clear winners during the period. This was
attributable to several factors, including surprisingly robust growth
in the U.S. economy, the apparent beginnings of a recovery in Asia and
sharply advancing crude oil prices.
Q. WHAT HOLDINGS MADE A POSITIVE CONTRIBUTION TO THE FUND'S
PERFORMANCE?
A. Samsung Fire & Marine Insurance and Samsung Electronics performed
well in the surging South Korean market. As part of a drive to make
South Korean companies more competitive in world markets, many of the
country's conglomerates are being restructured, and Samsung is a
leader in that process. Yapi Ve Kredi Bankasi is a leading Turkish
bank that responded well to the climate of falling interest rates.
Another Turkish company, Haci Omer Sabanci Holding, is a holding
company with interests in banking, chemicals and telecommunications.
The company benefited from lower interest rates and a generally strong
worldwide market for telecommunications.
Q. WHAT STOCKS UNDERPERFORMED DURING THE PERIOD?
A. Real Africa Holdings was a disappointment. The company is a
conglomerate structured to benefit from black business initiatives in
South Africa. Real Africa stock was hurt along with others in that
sector when, due to the controversial activities of rival black
business group New Africa Investments Ltd., the whole black business
sector was derated - that is, its prospects were downgraded. China
Resources Beijing Land, a construction and real estate stock, weakened
when Chinese stocks were derated as a result of increased devaluation
risk for the yuan, the Chinese currency. Currency risk is ever present
when investing overseas, and it is one reason that foreign investments
are considered to have more risk than those based in the U.S.
Q. WHAT'S YOUR OUTLOOK, DAVID?
A. After being neglected by investors due to negative developments in
Asia and Russia, emerging markets benefited from a substantial
infusion of investment funds during the period, as investors took
lower interest rates as a signal to re-enter these markets. In the
rush to invest, however, market participants did not distinguish
between good and bad stocks. My expectation is that most emerging
market rallies will pause, with the next uptick being driven by
earnings rather than interest rates. At that point, the companies with
strong earnings growth should be the clear winners, and the fund is
positioned to benefit from that scenario.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of emerging market
issuers, which can be found in regions such as
Southeast Asia, Latin America and Eastern
Europe
FUND NUMBER: 322
TRADING SYMBOL: FEMKX
START DATE: November 1, 1990
SIZE: as of April 30, 1999, more than $334
million
MANAGER: David Stewart, since 1997;
manager, Fidelity Emerging Markets Pilot Fund,
since 1995; analyst covering emerging markets,
since 1995; joined Fidelity in 1994
EMERGING MARKETS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 7.8%
Brazil 8.4%
Thailand 4.9%
India 5.7%
Taiwan 9.9%
Korea (South) 10.7%
South Africa 8.1%
Malaysia 4.2%
Mexico 11.3%
Other 29.0%
Row: 1, Col: 1, Value: 8.4
Row: 1, Col: 2, Value: 5.7
Row: 1, Col: 3, Value: 10.7
Row: 1, Col: 4, Value: 4.2
Row: 1, Col: 5, Value: 11.3
Row: 1, Col: 6, Value: 29.0
Row: 1, Col: 7, Value: 8.1
Row: 1, Col: 8, Value: 9.9
Row: 1, Col: 9, Value: 4.9
Row: 1, Col: 10, Value: 7.8
AS OF OCTOBER 31, 1998
United States 8.9%
Brazil 11.0%
Thailand 4.8%
India 5.3%
Taiwan 4.9%
Israel 3.9%
South Africa 11.6%
Korea (South) 6.8%
Mexico 12.4%
Other 30.4%
Row: 1, Col: 1, Value: 11.0
Row: 1, Col: 2, Value: 5.3
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 6.8
Row: 1, Col: 5, Value: 12.4
Row: 1, Col: 6, Value: 30.4
Row: 1, Col: 7, Value: 11.6
Row: 1, Col: 8, Value: 4.9
Row: 1, Col: 9, Value: 4.8
Row: 1, Col: 10, Value: 8.9
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Common Stocks 90.5 91.0
Preferred Stocks 1.7 0.1
Short-term investments 7.8 8.9
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Telefonos de Mexico SA 3.3 3.8
sponsored ADR representing
Class L shares (Mexico,
Telephone Services)
Samsung Electronics Co. Ltd. 2.2 2.2
(Korea (South), Electronics)
Cathay Life Insurance Co. 2.1 3.0
Ltd. (Taiwan, Insurance)
Korea Electric Power Corp. 2.0 2.1
(Korea (South), Electric
Utility)
Liberty Life Association of 1.8 1.5
Africa Ltd. (South Africa,
Insurance)
China Trust Co. Ltd. (Taiwan, 1.8 0.1
Credit & Other Finance)
Far Eastern Textile Ltd. 1.7 0.0
(Taiwan, Textiles & Apparel)
Johnnies Industrial Corp. 1.7 1.1
Ltd. (Reg.) (South Africa,
Precious Metals)
Siam Commercial Bank PLC 1.6 0.0
5.25% (Thailand, Banks)
Reliance Industries Ltd. 1.5 0.0
(India, Chemicals & Plastics)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
UTILITIES 21.7 23.5
FINANCE 20.2 21.1
NONDURABLES 10.8 12.1
BASIC INDUSTRIES 7.6 3.4
TECHNOLOGY 6.2 5.7
HEALTH 4.0 2.1
PRECIOUS METALS 3.8 3.2
MEDIA & LEISURE 3.3 2.2
ENERGY 3.1 4.8
DURABLES 2.4 1.1
</TABLE>
EMERGING MARKETS
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.5%
SHARES VALUE (NOTE 1)
ARGENTINA - 2.7%
Perez Companc SA Class B 372,800 $ 2,312,308
Telefonica de Argentina SA 68,800 2,571,400
sponsored ADR
YPF Sociedad Anonima 99,700 4,187,400
sponsored ADR representing
Class D shares
9,071,108
BRAZIL - 8.4%
Centrais Electricas 207,588,000 4,362,402
Brasileiras SA
Companhia Vale do Rio Doce (a) 197,000 3,773,221
Compania Cervejaria Brahma PN 7,115,648 3,358,090
(Pfd. Reg.) (a)
Compania Energertica Minas 57,363,173 1,377,681
Gerais
Souza Cruz Industria Comerico 408,600 2,710,916
Tele Centro Sul Participacoes 38,820 2,062,313
SA sponsored ADR (a)
Tele Norte Leste 170,500 2,887,844
Participacoes SA ADR (a)
Tele Sudeste Celular 60,300 1,722,319
Participacoes SA ADR
Telebras sponsored:
ADR 20,900 1,633
ADR (PFD) 11,800 1,076,013
Telesp Participacoes SA ADR 115,200 2,880,000
(a)
Votorantim Celulose e Papel 93,761,000 2,369,499
SA (Pfd. Reg.)
28,581,931
CHILE - 2.3%
Compania Cervecerias Unidas 52,400 1,287,075
SA sponsored ADR
Compania de 107,300 2,836,744
Telecomunicaciones de Chile
SA sponsored ADR
Embotelladora Andina 80,000 1,445,000
sponsored ADR Class A
Enersis SA sponsored ADR 33,554 637,526
Santa Isabel SA sponsored ADR 82,600 826,000
Vina Concha Stet y Toro SA 27,900 905,006
sponsored ADR
7,937,351
CHINA - 1.1%
Guangshen Railway Co. Ltd. 15,050,000 1,980,442
Class H
Shanghai Petrochemical Co. 9,530,000 1,782,733
Ltd. Class H
3,763,175
COLOMBIA - 0.7%
Suramericana de Inversiones SA 1,063,600 2,363,556
CROATIA - 1.3%
Pliva D.D.:
GDR (c) 133,700 2,085,720
GDR (Reg.S) unit 157,700 2,460,120
4,545,840
SHARES VALUE (NOTE 1)
CZECH REPUBLIC - 0.5%
Ceske Energeticke Zavody AS 1,166,000 $ 1,646,917
EGYPT - 1.9%
Commercial International Bank 444,880 4,383,538
Ltd.
Egypt Mobile Phone (a) 145,000 1,935,861
Orascom Construction 8,826 113,450
Industries (a)
6,432,849
GREECE - 2.3%
Alpha Credit Bank 9,760 697,505
Alpha Credit Bank rights 9,760 0
5/31/99 (a)
Hellenic Telecommunication 193,100 4,485,009
Organization SA (OTE)
STET Hellas 101,200 2,732,400
Telecommunications SA ADR
(a)
7,914,914
HONG KONG - 0.8%
China Resources Beijing Land 8,848,000 1,563,836
Ltd.
Glorious Sun Enterprises 6,402,000 1,090,222
2,654,058
HUNGARY - 1.2%
Matav RT sponsored ADR 94,000 2,643,750
MOL Magyar Olay-es Gazipari 62,800 1,400,719
RT Series A (For.Reg.)
4,044,469
INDIA - 5.7%
Dr. Reddy's Laboratories Ltd. 156,800 3,223,172
(a)
Hindustan Petroleum Corp. 3,100 13,415
Ltd.
ITC Ltd. 90,000 2,013,805
Mahanagar Telephone Nigam 480,200 1,761,070
Ltd.
Pentafour Software & Exports 76,500 1,831,818
Ltd.
Punjab Tractors Ltd. 63,300 1,943,285
Ranbaxy Laboratories Ltd. 152,200 2,026,667
Reliance Industries Ltd. 1,653,894 5,240,615
State Bank of India 349,400 1,291,988
Tata Engineering & Locomotive 7,125 23,808
Co. Ltd.
Tata Power Co. Ltd. 650 986
19,370,629
ISRAEL - 2.1%
Bank Hapoalim BM (Reg.) 690,300 1,646,928
Bezeq Israeli 858,617 3,335,777
Telecommunication Corp.
Ltd. (a)
ECI Telecom Ltd. 54,100 1,994,938
6,977,643
KOREA (SOUTH) - 10.7%
Kookmin Bank 96,000 1,308,541
Korea Electric Power Corp. 229,400 6,601,163
Korea Telecom 81,600 4,212,855
Medison Co. Ltd. 340,970 3,815,652
Nong Shim Co. Ltd. 31,100 1,753,219
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - CONTINUED
Pohang Iron & Steel Co. Ltd. 12,200 $ 1,047,753
Samsung Electronics Co. Ltd. 98,330 7,561,939
Samsung Fire & Marine 8,531 3,947,877
Insurance
Shinsegae Department Store (a) 44,600 1,538,579
SK Telecom Co. Ltd. 2,491 2,606,800
SK Telecom Co. Ltd. ADR 121,500 1,685,813
36,080,191
LUXEMBOURG - 1.4%
Minorco SA (For. Reg.) 184,000 4,630,875
MALAYSIA - 4.2%
Amway Holding BHD 660,000 1,372,105
Carlsberg Brewery BHD 589,000 1,922,000
Genting BHD 652,000 2,058,947
Malayan Banking BHD 1,318,000 3,503,105
Rothmans of Pall Mall 532,000 3,850,000
Malaysia BHD
YTL Cement BHD 2,584,800 1,380,827
14,086,984
MEXICO - 11.3%
Cifra SA de CV Series C (a) 2,306,300 4,287,909
Empresas ICA Sociedad 200,300 1,314,469
Controladora SA de CV
sponsored ADR
Fomento Economico Mexicano SA 60,600 2,204,325
de CV sponsored ADR
Gruma SA de CV Class B 114,731 889,165
sponsored ADR (a)
Grupo Carso SA de CV Class A-1 281,000 1,354,417
Grupo Financiero Bancomer SA 14,074,900 4,840,374
de CV Series A
Grupo Modelo SA de CV Class C 1,938,000 5,050,672
Grupo Televisa SA de CV 105,700 4,333,700
sponsored ADR (a)
Kimberly-Clark de Mexico SA 669,000 2,581,096
de CV Class A
Telefonos de Mexico SA 149,900 11,354,922
sponsored ADR representing
Class L shares
38,211,049
PAKISTAN - 0.2%
Dandot Cement Co. Ltd. (a) 93,750 1,386
Hub Power Co. Ltd. GDR unit 91,300 730,400
731,786
PANAMA - 0.5%
Panamerican Beverages, Inc. 78,300 1,737,281
Class A
PERU - 1.0%
Cementos Lima S.A. 3,000 47,678
Compania de Minas 150,400 2,425,200
Buenaventura SA sponsored
ADR Class B
Telefonica del Peru SA ADR 70,400 1,060,400
3,533,278
SHARES VALUE (NOTE 1)
PHILIPPINES - 3.7%
Benpres Holdings Corp. (a) 11,132,000 $ 2,605,517
First Phillipines Holdings 770,500 699,073
Corp. Class B
Manila Electric Co. Class B 1,094,000 4,171,729
QueenBee Resources Corp. 4,321,000 2,613,623
warrants 3/25/03 (a)
San Miguel Corp. Class B 1,216,800 2,592,000
12,681,942
POLAND - 0.5%
Bank Handlowy w Warszawie SA 143,100 1,659,960
GDR (Reg.S) unit
RUSSIA - 0.7%
Unified Energy Systems 395,800 2,226,375
sponsored ADR
SINGAPORE - 0.0%
Allgreen Properties Ltd. 39,000 23,685
SOUTH AFRICA - 8.1%
Anglo American Platinum Corp. 130,200 2,380,432
Ltd.
Anglogold Ltd. 47,890 2,255,967
Barlow Ltd. 128,100 770,130
Gold Fields Ltd. 391,607 2,434,946
Iscor Ltd. 2,717,800 850,537
Johnnies Industrial Corp. 869,100 5,604,326
Ltd. (Reg.)
Liberty Life Association of 423,403 6,116,112
Africa Ltd.
Real Africa Holdings Ltd. 1,611,651 3,145,656
Standard Bank Investment 647,200 1,966,784
Corp. Ltd.
Theta Group Ltd. (a) 591,200 2,044,917
27,569,807
SRI LANKA - 0.3%
Development Finance Corp. of 233,669 379,240
Ceylon
John Keells Holdings Ltd. 141,223 389,441
National Development Bank 150,000 227,828
996,509
TAIWAN - 9.9%
Bank Sinopac 3,583,070 2,520,202
Cathay Life Insurance Co. 1,992,600 7,129,486
Ltd.
China Trust Co. Ltd. (a) 6,959,000 6,086,465
Far Eastern Textile Ltd. 4,197,000 5,634,505
Hon Hai Precision Industry 501,000 2,727,156
Co.
Nan Ya Plastics Corp. (a) 1,499,000 2,383,731
Phoenixtec Power Co. Ltd. 1,501,000 2,685,275
Taiwan Semiconductor 1,288,000 4,352,416
Manufacturing Co. Ltd.
33,519,236
THAILAND - 3.3%
Bangkok Bank Ltd. PCL (For. 802,300 2,400,412
Reg.) (a)
Bangkok Expressway PCL 2,497,200 2,187,574
(For.Reg.) (a)
BEC World PCL (For.Reg.) 160,000 845,283
Electricity Generating PCL 466,000 1,036,253
(For. Reg.)
Ministry of Finance of the 5,283,200 2,064,863
Kingdom of Thailand (Siam
Commercial Bank PLC)
warrants 5/31/02 (a)
National Finance PCL (a) 449,400 321,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Nithipat Finance PCL:
(For. Reg.) warrants 12/15/99 49,800 $ 0
(a)
(For.Reg.) (a) 2,395,900 1
PTT Exploration & Production 246,200 2,269,553
Public Co.Ltd. (For.Reg.) (a)
11,124,939
TURKEY - 3.1%
Erciyas Biracilik Ve Malt 5,013,200 137,424
Finansbank AS 306,548,600 1,524,313
Guney Biraciliu 31,258,675 1,275,354
Haci Omer Sabanci Holding AS 119,708,370 3,281,506
Koytas Tekstil Sanayi ve 26,770,000 119,461
Ticaret AS (a)
Sabah Yayincilik AS (a) 303,737,700 1,123,070
Yapi Ve Kredi Bankasi AS 119,427,510 2,862,677
10,323,805
UNITED KINGDOM - 0.6%
South African Breweries PLC 227,000 1,906,856
TOTAL COMMON STOCKS 306,348,998
(Cost $288,264,418)
CONVERTIBLE PREFERRED STOCKS
- - 1.7%
PHILIPPINES - 0.1%
PDCP Development Bank 2,252,138 278,371
(non-vtg.) (a)
THAILAND - 1.6%
Siam Commercial Bank PLC 5.25 5,283,200 5,411,371
%
TOTAL CONVERTIBLE PREFERRED 5,689,742
STOCKS
(Cost $4,592,541)
CASH EQUIVALENTS - 7.8%
Taxable Central Cash Fund (b) 26,259,392 26,259,392
(Cost $26,259,392)
TOTAL INVESTMENT IN $ 338,298,132
SECURITIES - 100%
(Cost $319,116,351)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the taxable central cash
fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, express as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At the period end, the value of these securities amounted to
$2,085,720 or 0.6% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $136,547,679 and $137,973,738, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $319,916,174. Net unrealized appreciation
aggregated $18,381,958, of which $62,471,954 related to appreciated
investment securities and $44,089,996 related to depreciated
investment securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $116,340,000 of which $97,014,000 and 19,326,000 will
expire on September 30, 2004 and 2006, respectively.
The fund intends to elect to defer to its fiscal year ending September
30, 1999 approximately $262,816,000 of losses recognized during the
period November 1, 1997 to September 30, 1998.
The fund intends to elect to defer to its fiscal year ending September
30, 1999 approximately $5,752,000 of currency losses recognized during
the period November 1, 1997 to September 30, 1998.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 7.6%
CASH EQUIVALENTS 7.8
CONSTRUCTION & REAL ESTATE 1.9
DURABLES 2.4
ENERGY 3.1
FINANCE 20.2
GOVERNMENT SECURITIES 0.6
HEALTH 4.0
HOLDING COMPANIES 2.2
INDUSTRIAL MACHINERY & 1.9
EQUIPMENT
MEDIA & LEISURE 3.3
NONDURABLES 10.8
PRECIOUS METALS 3.8
RETAIL & WHOLESALE 1.8
SERVICES 0.1
TECHNOLOGY 6.2
TRANSPORTATION 0.6
UTILITIES 21.7
100.0%
EMERGING MARKETS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 338,298,132
value (cost $319,116,351) -
See accompanying schedule
Cash 498,287
Foreign currency held at 2,169,836
value (cost $2,139,188)
Receivable for investments 9,379,495
sold
Receivable for fund shares 1,555,454
sold
Dividends receivable 1,444,029
Interest receivable 74,266
Other receivables 1,181
TOTAL ASSETS 353,420,680
LIABILITIES
Payable for investments $ 16,908,788
purchased
Payable for fund shares 631,390
redeemed
Accrued management fee 186,147
Other payables and accrued 1,136,361
expenses
TOTAL LIABILITIES 18,862,686
NET ASSETS $ 334,557,994
Net Assets consist of:
Paid in capital $ 821,454,244
Distributions in excess of (17,833,526)
net investment income
Accumulated undistributed net (487,383,270)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 18,320,546
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 38,656,910 $ 334,557,994
shares outstanding
NET ASSET VALUE and $8.65
redemption price per share
($334,557,994 (divided by)
38,656,910 shares)
Maximum offering price per $8.92
share (100/97.00 of 8.65)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 3,261,868
Dividends
Interest 437,183
3,699,051
Less foreign taxes withheld (286,598)
TOTAL INCOME 3,412,453
EXPENSES
Management fee $ 1,011,288
Transfer agent fees 752,877
Accounting fees and expenses 85,834
Custodian fees and expenses 140,148
Registration fees 12,363
Audit 18,590
Legal 671
Total expenses before 2,021,771
reductions
Expense reductions (22,570) 1,999,201
NET INVESTMENT INCOME 1,413,252
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (53,158,608)
Foreign currency transactions 3,720 (53,154,888)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 123,978,274
Assets and liabilities in (823,489) 123,154,785
foreign currencies
NET GAIN (LOSS) 69,999,897
NET INCREASE (DECREASE) IN $ 71,413,149
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 121,796
charges paid to FDC
Sales charges - Retained by $ 121,725
FDC
Expense Reductions $ 21,598
Directed brokerage
arrangements
Transfer agent credits 972
$ 22,570
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 1,413,252 $ 3,929,378
income
Net realized gain (loss) (53,154,888) (312,486,391)
Change in net unrealized 123,154,785 156,845,961
appreciation (depreciation)
NET INCREASE (DECREASE) IN 71,413,149 (151,711,052)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (3,929,378)
From net investment income
In excess of net investment - (6,890,670)
income
TOTAL DISTRIBUTIONS - (10,820,048)
Share transactions Net 53,832,949 99,292,935
proceeds from sales of shares
Reinvestment of distributions - 10,654,699
Cost of shares redeemed (61,527,962) (176,082,060)
NET INCREASE (DECREASE) IN (7,695,013) (66,134,426)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 130,808 206,513
TOTAL INCREASE (DECREASE) 63,848,944 (228,459,013)
IN NET ASSETS
NET ASSETS
Beginning of period 270,709,050 499,168,063
End of period (including $ 334,557,994 $ 270,709,050
distributions in excess of
net investment income of
$17,833,526 and
$19,246,778, respectively)
OTHER INFORMATION
Shares
Sold 7,102,891 11,211,119
Issued in reinvestment of - 1,174,708
distributions
Redeemed (8,640,310) (20,409,357)
Net increase (decrease) (1,537,419) (8,023,530)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 6.74 $ 10.35 $ 16.61 $ 15.14 $ 19.25
period
Income from Investment
Operations
Net investment income .04 D .09 D .15 D .12 D .05
Net realized and unrealized 1.87 (3.47) (6.17) 1.60 (4.13)
gain (loss)
Total from investment 1.91 (3.38) (6.02) 1.72 (4.08)
operations
Less Distributions
From net investment income - (.08) (.13) (.18) (.04)
In excess of net investment - (.15) (.12) (.09) -
income
Total distributions - (.23) (.25) (.27) (.04)
Redemption fees added to paid - - .01 .02 .01
in capital
Net asset value, end of period $ 8.65 $ 6.74 $ 10.35 $ 16.61 $ 15.14
TOTAL RETURN B, C 28.34% (33.23)% (36.74)% 11.69% (21.17)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 334,558 $ 270,709 $ 499,168 $ 1,263,164 $ 1,095,583
(000 omitted)
Ratio of expenses to average 1.49% A 1.59% 1.36% 1.30% 1.28%
net assets
Ratio of expenses to average 1.47% A, E 1.56% E 1.35% E 1.29% E 1.28%
net assets after expense
reductions
Ratio of net investment 1.04% A 1.01% .89% .74% .46%
income to average net assets
Portfolio turnover rate 108% A 87% 69% 77% 78%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 16.18
period
Income from Investment
Operations
Net investment income .06
Net realized and unrealized 2.97
gain (loss)
Total from investment 3.03
operations
Less Distributions
From net investment income (.04)
In excess of net investment (.01)
income
Total distributions (.05)
Redemption fees added to paid .09
in capital
Net asset value, end of period $ 19.25
TOTAL RETURN B, C 19.32%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,976,371
(000 omitted)
Ratio of expenses to average 1.52%
net assets
Ratio of expenses to average 1.52%
net assets after expense
reductions
Ratio of net investment .39%
income to average net assets
Portfolio turnover rate 107%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
EUROPE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the past five year and past 10 year total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY EUROPE 8.10% -2.80% 120.61% 238.14%
FIDELITY EUROPE (INCL. 4.86% -5.71% 113.99% 227.99%
3.00% SALES CHARGE)
MSCI Europe 10.95% 5.93% 137.07% 294.83%
European Region Funds Average 8.95% -0.20% 105.24% 185.35%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Morgan Stanley Capital International (MSCI) Europe Index - a
market capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. As of April 30,
1999, the index included over 580 equity securities of companies
domiciled in 15 European countries. To measure how the fund's
performance stacked up against its peers, you can compare it to the
European region funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 142 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY EUROPE -2.80% 17.15% 12.96%
FIDELITY EUROPE (INCL. -5.71% 16.43% 12.61%
3.00% SALES CHARGE)
MSCI Europe 5.93% 18.84% 14.72%
European Region Funds Average -0.20% 15.24% 10.55%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Europe MS Europe (Net MA tax)
00301 MS002
1989/04/30 9700.00 10000.00
1989/05/31 9435.64 9487.59
1989/06/30 9693.22 9879.03
1989/07/31 10560.87 11041.88
1989/08/31 10479.52 10903.95
1989/09/30 10954.02 11091.20
1989/10/31 10194.83 10364.01
1989/11/30 10791.33 10939.44
1989/12/31 11526.63 12116.91
1990/01/31 11670.63 12084.45
1990/02/28 11368.92 11794.88
1990/03/31 11711.77 11961.30
1990/04/30 11478.63 11643.86
1990/05/31 12184.90 12591.51
1990/06/30 12692.32 13033.74
1990/07/31 13460.31 13582.61
1990/08/31 11855.77 12235.91
1990/09/30 10683.22 10794.87
1990/10/31 11163.21 11704.57
1990/11/30 11149.49 11822.18
1990/12/31 10997.44 11651.45
1991/01/31 11215.00 12043.50
1991/02/28 11895.76 13096.97
1991/03/31 11257.11 12218.02
1991/04/30 11229.04 12090.29
1991/05/31 11278.17 12446.93
1991/06/30 10288.61 11402.31
1991/07/31 10807.95 12191.47
1991/08/31 11025.51 12414.05
1991/09/30 11425.55 12787.13
1991/10/31 11179.91 12517.75
1991/11/30 10843.04 12223.08
1991/12/31 11454.95 13179.18
1992/01/31 11505.73 13175.38
1992/02/29 11643.57 13225.97
1992/03/31 11244.57 12763.10
1992/04/30 11984.53 13467.52
1992/05/31 12572.15 14233.92
1992/06/30 12456.08 13968.84
1992/07/31 12006.30 13469.77
1992/08/31 12042.57 13425.85
1992/09/30 11853.95 13203.80
1992/10/31 10968.89 12282.52
1992/11/30 10961.64 12276.53
1992/12/31 11165.89 12558.16
1993/01/31 11106.73 12579.25
1993/02/28 11173.28 12723.17
1993/03/31 11905.35 13377.69
1993/04/30 12297.27 13672.74
1993/05/31 12445.16 13819.84
1993/06/30 12097.61 13617.94
1993/07/31 12105.01 13664.69
1993/08/31 13088.49 14863.78
1993/09/30 13073.70 14817.60
1993/10/31 13628.30 15434.90
1993/11/30 13362.09 15101.72
1993/12/31 14199.08 16235.53
1994/01/31 15223.91 17062.34
1994/02/28 14867.45 16458.09
1994/03/31 14451.57 15992.27
1994/04/30 14867.45 16654.49
1994/05/31 14295.62 15946.54
1994/06/30 14124.82 15779.11
1994/07/31 14770.90 16606.09
1994/08/31 15238.76 17132.79
1994/09/30 15030.82 16453.42
1994/10/31 15728.90 17170.19
1994/11/30 15142.22 16512.49
1994/12/31 15087.39 16606.36
1995/01/31 14763.01 16476.35
1995/02/28 15027.04 16849.66
1995/03/31 15389.14 17631.57
1995/04/30 15909.65 18195.42
1995/05/31 16226.49 18567.97
1995/06/30 16686.65 18743.01
1995/07/31 17433.48 19719.98
1995/08/31 17101.55 18957.64
1995/09/30 17855.92 19530.33
1995/10/31 17735.22 19438.08
1995/11/30 17622.07 19576.30
1995/12/31 17929.11 20196.67
1996/01/31 17984.11 20328.70
1996/02/29 18644.07 20699.04
1996/03/31 19099.76 20946.55
1996/04/30 19390.46 21098.10
1996/05/31 19948.29 21261.13
1996/06/30 20160.43 21495.24
1996/07/31 19775.44 21225.99
1996/08/31 20443.27 21855.86
1996/09/30 20788.97 22315.73
1996/10/31 21307.51 22833.81
1996/11/30 22124.61 23990.90
1996/12/31 22523.87 24455.61
1997/01/31 22430.76 24528.24
1997/02/28 22913.24 24859.37
1997/03/31 23344.92 25669.79
1997/04/30 23260.28 25548.63
1997/05/31 24343.73 26646.46
1997/06/30 25528.75 27986.25
1997/07/31 26332.87 29302.72
1997/08/31 25105.53 27633.64
1997/09/30 27433.25 30318.80
1997/10/31 26282.08 28838.94
1997/11/30 26798.42 29289.11
1997/12/31 27678.96 30366.36
1998/01/31 28742.11 31637.50
1998/02/28 30711.25 34118.20
1998/03/31 32930.01 36555.61
1998/04/30 33743.55 37272.83
1998/05/31 34048.63 38035.81
1998/06/30 34399.93 38460.66
1998/07/31 35352.15 39228.73
1998/08/31 28917.76 34302.78
1998/09/30 28427.79 32939.93
1998/10/31 30341.46 35585.34
1998/11/30 32079.48 37487.01
1998/12/31 33428.14 39134.57
1999/01/31 33887.43 38890.77
1999/02/28 32559.49 37911.88
1999/03/31 32599.42 38334.22
1999/04/30 32799.12 39483.48
IMATRL PRASUN SHR__CHT 19990430 19990628 141106 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Europe Fund on April 30, 1989, and the current
3.00% sales charge was paid. As the chart shows, by April 30, 1999,
the value of the investment would have grown to $32,799 - a 227.99%
increase on the initial investment. For comparison, look at how the
Morgan Stanley Capital International Europe Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $39,483 - a 294.83% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
EUROPE
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Tierry Serero)
An interview with Thierry Serero, Portfolio Manager of Fidelity Europe
Fund
Q. HOW DID THE FUND PERFORM, THIERRY?
A. For the six months ending April 30, 1999, the fund produced a
return of 8.10%. The Morgan Stanley Capital International Europe Index
returned 10.95% in that period, while the European region funds
average, as tracked by Lipper Inc., returned 8.95%. For the 12 months
ending April 30, 1999, the fund declined 2.80%, the index returned
5.93% and the average of the peer group fell 0.20%.
Q. WHAT FACTORS INFLUENCED THE PERFORMANCE OF EUROPEAN STOCK MARKETS
DURING THE PERIOD?
A. Many European markets rose strongly towards the end of 1998 in the
wake of a rising U.S. stock market, renewed merger and acquisition
activity in Europe and enthusiasm about the imminent introduction of
the euro, the European Monetary Union's single currency. Over the
first three months of 1999, markets advanced little in Europe because
prospects for economic growth and corporate profits worsened.
Investors took heart after the European Central Bank decided to cut
interest rates by a surprisingly large 0.5%, to 2.5%, in early April.
Over the period as a whole, returns from continental European markets
differed substantially. While Finland and Sweden enjoyed very strong
increases with 51% and 21%, respectively, countries such as Germany
and Switzerland offered very meager returns between 2% and zero
percent. The U.K. stock market was among the strongest performers in
Europe, as it became apparent that earlier expectations about a
recession had been too pessimistic. Beginning in late February, a
significant shift in investor sentiment affected markets worldwide.
Many investors took profits on their holdings in growth companies, and
bought bargain cyclical stocks, such as chemicals, steel or oil
companies. This is why Germany and France - markets with many general
industrial companies - were among the best-performing markets during
April.
Q. WHY DID THE FUND UNDERPERFORM THE BENCHMARK INDEX?
A. The underperformance was due mostly to the shift in market
sentiment towards cyclical stocks. This occurred in the last three
months of the period and was most pronounced in April. The fund had
more than the benchmark index invested in growth stocks and had less
than the index in cyclical stocks.
Q. WHICH FUND HOLDINGS PERFORMED PARTICULARLY WELL?
A. Telecom holdings such as Mannesmann and Nokia helped performance.
As well as manufacturing a range of industrial products, Mannesmann
operates the largest mobile phone network in Germany. Its profits were
boosted by growth in the telecoms unit. Finnish company Nokia is the
leading manufacturer of mobile phone handsets. Its share price rose on
good sales growth and on expectations that the interest-rate cut in
Europe could increase demand for Nokia's products.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The two largest holdings in the portfolio - Glaxo Wellcome of the
U.K. and Novartis of Switzerland - were disappointing. Along with
other pharmaceutical shares, their performance was affected by the
rotation of investor sentiment towards more cyclical stocks. The share
price of Novartis, the world's third-largest pharmaceutical company,
also suffered on news that profits in 1999 would be lower than
anticipated. Nevertheless, I maintained the fund's holdings in these
companies.
Q. WHAT IS YOUR OUTLOOK FOR THE EUROPEAN MARKET?
A. Analysts have become more optimistic about economic growth
prospects in Europe than they were at the beginning of the year,
primarily because of the surprisingly large cut in European interest
rates, the depreciation of the euro and expectations that consumer
spending will grow relatively strongly. Smaller companies in
particular could benefit from accelerating domestic growth and strong
consumer demand. The main risk to stock markets in the region is
probably any downturn in the U.S. market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of European issuers
FUND NUMBER: 301
TRADING SYMBOL: FIEUX
START DATE: October 1, 1986
SIZE: as of April 30, 1999, more than $1.4
billion
MANAGER: Thierry Serero, since October
1998; manager, several funds for Fidelity
International Limited, since 1994; research
analyst, Fidelity International Services Limited,
1991-1994; joined Fidelity in 1991
EUROPE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Finland 2.7%
United Kingdom 31.5%
France 13.5%
Germany 15.0%
Italy 5.3%
Switzerland 10.7%
Ireland 2.0%
Spain 3.8%
Other 5.4%
Netherlands 10.1%
Row: 1, Col: 1, Value: 2.7
Row: 1, Col: 2, Value: 13.5
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 5.3
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 6, Value: 10.1
Row: 1, Col: 7, Value: 5.4
Row: 1, Col: 8, Value: 3.8
Row: 1, Col: 9, Value: 10.7
Row: 1, Col: 10, Value: 31.5
AS OF OCTOBER 31, 1998
Finland 2.8%
France 12.8%
United Kingdom 33.3%
Germany 10.1%
Italy 6.0%
Netherlands 6.3%
Switzerland 10.5%
Sweden 3.0%
Other 11.4%
Spain 3.8%
Row: 1, Col: 1, Value: 2.8
Row: 1, Col: 2, Value: 12.8
Row: 1, Col: 3, Value: 10.1
Row: 1, Col: 4, Value: 6.1
Row: 1, Col: 5, Value: 6.3
Row: 1, Col: 6, Value: 11.4
Row: 1, Col: 7, Value: 3.8
Row: 1, Col: 8, Value: 3.0
Row: 1, Col: 9, Value: 10.5
Row: 1, Col: 10, Value: 33.3
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 94.8 94.7
Bonds 5.2 3.2
Short-term investments 0.0 2.1
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Glaxo Wellcome PLC (United 4.2 3.0
Kingdom, Drugs &
Pharmaceuticals)
Novartis AG (Reg.) 3.4 3.3
(Switzerland, Drugs &
Pharmaceuticals)
BP Amoco PLC (United Kingdom, 2.9 2.4
Oil & Gas)
Vodafone Group PLC (United 2.9 0.9
Kingdom, Cellular)
Mannesmann AG (Germany, 2.8 1.6
Cellular)
Telecom Italia Spa Risp 2.4 1.1
(Italy, Telephone Services)
Deutsche Telekom AG 2.4 0.4
(Germany, Telephone Services)
Lloyds TSB Group PLC (United 2.4 0.9
Kingdom, Banks)
UBS AG (Switzerland, Banks) 2.4 2.1
Standard Chartered PLC 2.2 0.0
(United Kingdom, Banks)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 30.7 23.4
UTILITIES 19.7 14.0
HEALTH 10.8 12.7
TECHNOLOGY 8.7 6.9
INDUSTRIAL MACHINERY & 6.3 8.2
EQUIPMENT
ENERGY 5.2 7.0
RETAIL & WHOLESALE 4.3 3.7
SERVICES 4.3 3.2
CONSTRUCTION & REAL ESTATE 3.5 3.0
NONDURABLES 2.0 6.4
</TABLE>
EUROPE
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.1%
SHARES VALUE (NOTE 1)
BELGIUM - 1.1%
Mobistar SA (a) 217,785 $ 12,267,428
Telinfo SA 28,500 3,636,184
15,903,612
DENMARK - 1.0%
Ratin AS Class B 83,310 14,355,202
FINLAND - 2.7%
Nokia AB 409,495 30,379,398
Sampo Insurance Co. Ltd. 250,400 7,903,332
38,282,730
FRANCE - 12.6%
Banque Nationale de Paris 130,086 10,805,315
Bouygues 63,430 16,158,620
Castorama Dubois 39,750 9,532,773
Investissements SA
Club Mediterranee SA (a) 122,040 11,306,396
Dassault Systemes SA 215,733 7,955,802
Elf Aquitaine 129,500 20,234,372
Galeries Lafayette SA 6,340 7,316,943
Genset SA (a) 58,000 2,837,160
Legrand SA 60,620 14,505,687
Neopost SA (a) 497,300 8,993,324
Pinault Printemps SA 94,600 15,725,509
Societe Generale, France 51,120 9,168,920
Class A
Total SA Class B 92,728 12,611,008
TRANSGENE SA sponsored ADR 414,700 5,131,913
(a)(d)
Vivendi SA 112,100 26,242,686
178,526,428
GERMANY - 13.7%
Aachener & Muenchener 28,600 3,028,168
Beteiligungs AG
Aachener & Muenchener 37,069 3,964,114
Beteiligungs AG (Reg.)
Berliner Kraft-und Licht AG 147,000 2,334,654
Deutsche Bank AG 228,200 13,226,178
Deutsche Telekom AG 862,700 34,079,952
Dresdner Bank AG 399,070 17,011,272
Karstadt AG 32,975 14,838,420
Mannesmann AG 300,300 39,299,564
Munich Reinsurance AG:
(Reg.) 108,024 21,376,839
(RFD) 25,494 5,074,693
Preussag AG 263,000 13,839,681
Preussag AG rights 5/30/99 (a) 263,000 247,833
Siemens AG 347,770 25,664,856
193,986,224
IRELAND - 2.0%
Bank of Ireland, Inc. (Great 583,200 11,678,423
Britain)
Irish Life & Permanent PLC 876,483 12,713,877
SHARES VALUE (NOTE 1)
IWP International PLC 575,660 $ 1,298,344
(United Kingdom Reg.)
Saville Systems PLC sponsored 267,200 3,223,100
ADR (a)
28,913,744
ITALY - 2.5%
Alleanza Assicurazioni Spa 660,500 7,918,597
Banca Commerciale Italiana Spa 1,504,400 12,446,598
Societa Assicuratrice 605,200 7,656,749
Industriale (SAI)
Unicredito Italiano Spa 1,368,070 6,973,139
34,995,083
NETHERLANDS - 6.2%
Equant NV (a) 314,555 28,609,067
ING Groep NV 338,900 20,919,633
Koninklijke (Royal) Philips 280,100 24,170,445
Electronics NV
TNT Post Group NV 490,100 13,232,406
86,931,551
PORTUGAL - 0.9%
Banco Pinto & Sotto Mayor SA 218,000 4,073,945
Telecel Comunicacoes Pessoais 63,340 8,483,646
SA
12,557,591
SPAIN - 3.8%
Argentaria Caja Postal y 471,600 11,115,088
Banco Hipotecario de Espana
SA
Banco Santander Central 916,680 19,955,141
Hispano SA
Grupo Acciona SA 186,300 9,349,860
Prosegur CIA de Securidad SA 567,700 6,581,834
Tabacalera SA Series A 340,600 6,689,636
53,691,559
SWEDEN - 0.9%
Industri-Matematik 680,000 1,275,000
International Corp. (a)
Mandamus AB 21,625 120,297
Securitas AB Class B 752,000 11,173,317
12,568,614
SWITZERLAND - 10.7%
Kudelski SA (a) 3,232 12,618,373
Lindt & Spruengli AG 2,935 7,472,310
Novartis AG (Reg.) 32,448 47,543,559
Richemont Compagnie Financier 7,031 11,967,463
Class A Unit
Stratec Holding AG 900 1,712,598
Stratec Holding AG (a) 3,300 6,171,260
Swisscom AG 55,255 20,303,675
UBS AG 98,746 33,563,273
Zurich Allied AG (Reg.) 15,900 10,255,709
151,608,220
UNITED KINGDOM - 31.5%
Allied Zurich PLC (a) 990,715 13,151,385
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Anite Group PLC 3,062,900 $ 2,121,763
Babcock International Group 3,190,000 4,727,963
PLC
BP Amoco PLC 2,160,946 40,765,488
British Energy PLC 753,200 6,406,779
British Land Co. PLC 1,369,800 12,523,294
Canary Wharf Group PLC (a) 1,961,570 12,077,861
Capita Group PLC 1,343,300 14,196,209
Electrocomponents PLC 626,020 5,345,147
Financial Objects PLC (a) 636,200 2,716,033
General Electric Co. PLC 1,998,050 21,196,184
Glaxo Wellcome PLC 2,050,680 59,725,947
Go-Ahead Group (The) PLC 257,600 3,797,191
Kingfisher PLC 927,300 13,893,087
Lloyds TSB Group PLC 2,088,800 33,667,393
Misys PLC 1,202,100 11,299,962
Nycomed Amersham PLC 1,438,834 11,798,424
Orange PLC (a) 1,127,300 15,364,039
Prudential Corp. PLC 1,400,570 20,002,261
Royal & Sun Alliance 1,612,200 13,921,283
Insurance Group PLC
Royal Bank of Scotland Group 845,120 19,959,419
PLC
Scoot.com PLC (a) 6,074,260 4,354,607
Sema Group PLC 953,900 9,235,765
Serco Group PLC 447,200 9,942,061
Shield Diagnostics Group PLC 522,700 3,747,210
(a)
Stagecoach Holdings PLC 2,275,800 7,690,093
Standard Chartered PLC 1,713,000 31,018,387
Vodafone Group PLC 2,257,325 40,490,809
445,136,044
UNITED STATES OF AMERICA - 1.5%
Global TeleSystems Group, 112,000 7,406,000
Inc. (a)
Pharmacia & Upjohn, Inc. unit 241,200 13,417,680
20,823,680
TOTAL COMMON STOCKS 1,288,280,282
(Cost $1,079,827,175)
NONCONVERTIBLE PREFERRED
STOCKS - 3.7%
GERMANY - 1.3%
Marschollek Lautenschlaeger 31,490 17,641,047
und Partner AG
ITALY - 2.4%
Telecom Italia Spa Risp 6,409,262 34,480,309
TOTAL NONCONVERTIBLE 52,121,356
PREFERRED STOCKS
(Cost $52,112,608)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 5.2%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (B) VALUE (NOTE 1)
FRANCE - 0.9%
Groupe Danone 3% 1/1/02 A1 EUR 7,329,833 $ 12,739,962
ITALY - 0.4%
Mediobanca International Ltd. - ITL 5,780,000 5,670,186
3.5% 1/2/01 (c)
NETHERLANDS - 3.9%
Deutsche Finance BV 0% Aa1 47,520,000 27,007,598
2/12/17
Telefonica Europe BV 2% A2 17,885,000 28,660,713
7/15/02
55,668,311
TOTAL CONVERTIBLE BONDS 74,078,459
(Cost $75,843,605)
TOTAL INVESTMENT IN $ 1,414,480,097
SECURITIES - 100%
(Cost $1,207,783,388)
</TABLE>
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
ITL - Italian lira
LEGEND
(a) Non-income producing
(b) Principal amount is stated in United States dollars unless
otherwise noted.
(c) Principal amount in thousands
(d) Affiliated company
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $916,761,341 and $1,176,925,088, respectively.
The fund participated in the interfund lending program as a borrower.
The average daily balance during the period for which loans were
outstanding amounted to $20,876,692. The weighted average interest
rate was 4.99%. Interest expense includes $38,208 paid under the
interfund lending program.
The fund participated in the bank borrowing program. The average daily
balance during the period for which loans were outstanding amounted to
$9,922,130. The weighted average interest rate was 5.08%. Interest
expense includes $32,689 paid under the bank borrowing program.
Transactions during the period with companies which are or were
affiliates are as follows.
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
TRANSGENE SA sponsored ADR $ 1,503,613 $ - $ - $ 5,131,913
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $1,208,909,377. Net unrealized appreciation
aggregated $205,570,720, of which $265,650,581 related to appreciated
investment securities and $60,079,861 related to depreciated
investment securities.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 1.0%
CONSTRUCTION & REAL ESTATE 3.5
ENERGY 5.2
FINANCE 30.7
HEALTH 10.8
HOLDING COMPANIES 0.9
INDUSTRIAL MACHINERY & 6.3
EQUIPMENT
MEDIA & LEISURE 1.1
NONDURABLES 2.0
RETAIL & WHOLESALE 4.3
SERVICES 4.3
TECHNOLOGY 8.7
TRANSPORTATION 1.5
UTILITIES 19.7
100.0%
EUROPE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 1,414,480,097
value (cost $1,207,783,388)
- - See accompanying schedule
Cash 663
Receivable for investments 65,636,807
sold
Receivable for fund shares 2,343,874
sold
Dividends receivable 4,290,837
Interest receivable 159,879
Redemption fees receivable 1,764
TOTAL ASSETS 1,486,913,921
LIABILITIES
Payable for investments $ 33,681,402
purchased
Payable for fund shares 4,594,123
redeemed
Accrued management fee 711,856
Notes payable 8,054,000
Other payables and accrued 696,759
expenses
TOTAL LIABILITIES 47,738,140
NET ASSETS $ 1,439,175,781
Net Assets consist of:
Paid in capital $ 1,149,816,531
Undistributed net investment 2,112,934
income
Accumulated undistributed net 80,363,534
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 206,882,782
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 43,812,500 $ 1,439,175,781
shares outstanding
NET ASSET VALUE and $32.85
redemption price per share
($1,439,175,781 (divided by)
43,812,500 shares)
Maximum offering price per $33.87
share (100/97.00 of $32.85)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 10,456,789
Dividends
Interest 1,504,459
11,961,248
Less foreign taxes withheld (1,106,373)
TOTAL INCOME 10,854,875
EXPENSES
Management fee Basic fee $ 5,876,288
Performance adjustment (846,324)
Transfer agent fees 1,921,702
Accounting fees and expenses 380,871
Non-interested trustees' 2,375
compensation
Custodian fees and expenses 389,149
Registration fees 24,919
Audit 21,558
Legal 3,734
Interest 70,897
Miscellaneous 1,372
Total expenses before 7,846,541
reductions
Expense reductions (349,967) 7,496,574
NET INVESTMENT INCOME 3,358,301
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 88,464,876
Foreign currency transactions (1,022,920) 87,441,956
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 36,528,448
Assets and liabilities in 28,130 36,556,578
foreign currencies
NET GAIN (LOSS) 123,998,534
NET INCREASE (DECREASE) IN $ 127,356,835
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 392,471
charges paid to FDC
Sales charges - Retained by $ 392,368
FDC
Deferred sales charges $ 27,477
withheld by FDC
Expense reductions Directed $ 318,074
brokerage arrangements
Custodian credits 383
Transfer agent credits 31,510
$ 349,967
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 3,358,301 $ 16,048,867
income
Net realized gain (loss) 87,441,956 128,972,621
Change in net unrealized 36,556,578 (74,276,909)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 127,356,835 70,744,579
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (13,415,770) (11,392,134)
From net investment income
From net realized gain (107,821,576) (68,664,194)
TOTAL DISTRIBUTIONS (121,237,346) (80,056,328)
Share transactions Net 234,963,525 1,112,727,257
proceeds from sales of shares
Reinvestment of distributions 118,738,030 78,862,444
Cost of shares redeemed (507,262,670) (512,978,219)
NET INCREASE (DECREASE) IN (153,561,115) 678,611,482
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 259,709 949,915
TOTAL INCREASE (DECREASE) (147,181,917) 670,249,648
IN NET ASSETS
NET ASSETS
Beginning of period 1,586,357,698 916,108,050
End of period (including $ 1,439,175,781 $ 1,586,357,698
undistributed net investment
income of $2,112,934 and
$15,517,755, respectively)
OTHER INFORMATION
Shares
Sold 7,015,842 31,701,697
Issued in reinvestment of 3,755,167 2,653,514
distributions
Redeemed (15,292,233) (15,522,060)
Net increase (decrease) (4,521,224) 18,833,151
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 32.82 $ 31.05 $ 27.12 $ 23.51 $ 21.18
period
Income from Investment
Operations
Net investment income .07 D .39 D .44 D .30 D .27
Net realized and unrealized 2.48 4.10 5.44 4.23 2.37
gain (loss)
Total from investment 2.55 4.49 5.88 4.53 2.64
operations
Less Distributions
From net investment income (.28) (.39) (.24) (.12) (.20)
From net realized gain (2.25) (2.35) (1.73) (.81) (.11)
Total distributions (2.53) (2.74) (1.97) (.93) (.31)
Redemption fees added to paid .01 .02 .02 .01 -
in capital
Net asset value, end of period $ 32.85 $ 32.82 $ 31.05 $ 27.12 $ 23.51
TOTAL RETURN B, C 8.10% 15.45% 23.35% 20.14% 12.76%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,439,176 $ 1,586,358 $ 916,108 $ 691,762 $ 492,867
(000 omitted)
Ratio of expenses to average .99% A 1.10% 1.19% 1.27% 1.18% E
net assets
Ratio of expenses to average .95% A, F 1.09% F 1.18% F 1.27% 1.18%
net assets after expense
reductions
Ratio of net investment .43% A 1.15% 1.53% 1.20% 1.12%
income to average net assets
Portfolio turnover rate 119% A 114% 57% 45% 38%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 18.43
period
Income from Investment
Operations
Net investment income .18
Net realized and unrealized 2.65
gain (loss)
Total from investment 2.83
operations
Less Distributions
From net investment income (.08)
From net realized gain -
Total distributions (.08)
Redemption fees added to paid -
in capital
Net asset value, end of period $ 21.18
TOTAL RETURN B, C 15.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 507,460
(000 omitted)
Ratio of expenses to average 1.35%
net assets
Ratio of expenses to average 1.35%
net assets after expense
reductions
Ratio of net investment .85%
income to average net assets
Portfolio turnover rate 49%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
EUROPE CAPITAL APPRECIATION
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). Fidelity Europe Capital Appreciation has a 3%
sales charge, which was waived beginning July 1, 1998 through December
31, 1998.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EUROPE CAPITAL APP 10.63% -2.65% 104.73% 137.29%
FIDELITY EUROPE CAPITAL APP 7.31% -5.57% 98.59% 130.17%
(INCL. 3.00% SALES CHARGE)
MSCI Europe 10.95% 5.93% 137.07% 145.31%
European Region Funds Average 8.95% -0.20% 105.24% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on December 21, 1993. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Morgan Stanley Capital
International (MSCI) Europe Index - a market capitalization-weighted
index that is designed to represent the performance of developed stock
markets in Europe. As of April 30, 1999, the index included over 580
equity securities of companies domiciled in 15 European countries. To
measure how the fund's performance stacked up against its peers, you
can compare it to the European region funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Inc. The past six months average represents a peer group of 142
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EUROPE CAPITAL APP -2.65% 15.41% 17.50%
FIDELITY EUROPE CAPITAL APP -5.57% 14.71% 16.83%
(INCL. 3.00% SALES CHARGE)
MSCI Europe 5.93% 18.84% 18.23%
European Region Funds Average -0.20% 15.24% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Europe Cap. Appreciation MS Europe (Net MA tax)
00341 MS002
1993/12/21 9700.00 10000.00
1993/12/31 9729.10 10087.27
1994/01/31 11145.30 10600.97
1994/02/28 10670.00 10225.54
1994/03/31 10786.40 9936.13
1994/04/30 11242.30 10347.57
1994/05/31 10825.20 9907.72
1994/06/30 10602.10 9803.69
1994/07/31 11145.30 10317.50
1994/08/31 11339.30 10644.74
1994/09/30 10941.60 10222.65
1994/10/31 11009.50 10667.98
1994/11/30 10534.20 10259.35
1994/12/31 10398.40 10317.67
1995/01/31 10272.30 10236.89
1995/02/28 10563.30 10468.83
1995/03/31 10786.40 10954.64
1995/04/30 11300.50 11304.96
1995/05/31 11475.10 11536.43
1995/06/30 11640.00 11645.19
1995/07/31 12241.40 12252.18
1995/08/31 11737.00 11778.54
1995/09/30 12086.20 12134.35
1995/10/31 11717.60 12077.04
1995/11/30 11649.70 12162.91
1995/12/31 11926.02 12548.36
1996/01/31 12005.13 12630.39
1996/02/29 12311.69 12860.48
1996/03/31 12509.47 13014.26
1996/04/30 12865.47 13108.42
1996/05/31 13152.25 13209.72
1996/06/30 13221.47 13355.17
1996/07/31 12954.47 13187.88
1996/08/31 13439.03 13579.22
1996/09/30 13735.69 13864.95
1996/10/31 13913.69 14186.83
1996/11/30 14793.81 14905.74
1996/12/31 15013.99 15194.47
1997/01/31 15389.62 15239.60
1997/02/28 15566.38 15445.33
1997/03/31 15842.58 15948.85
1997/04/30 15919.91 15873.58
1997/05/31 16638.02 16555.66
1997/06/30 17654.42 17388.08
1997/07/31 18460.91 18206.02
1997/08/31 17367.18 17169.01
1997/09/30 19201.12 18837.32
1997/10/31 18306.24 17917.87
1997/11/30 18328.34 18197.57
1997/12/31 18761.13 18866.87
1998/01/31 19553.49 19656.64
1998/02/28 21125.44 21197.92
1998/03/31 23016.89 22712.30
1998/04/30 23643.11 23157.91
1998/05/31 24243.78 23631.96
1998/06/30 24103.19 23895.92
1998/07/31 24448.26 24373.13
1998/08/31 19834.65 21312.60
1998/09/30 19310.67 20465.85
1998/10/31 20805.94 22109.46
1998/11/30 21968.92 23290.99
1998/12/31 22825.19 24314.63
1999/01/31 23106.35 24163.15
1999/02/28 22224.53 23554.96
1999/03/31 22301.21 23817.36
1999/04/30 23016.89 24531.41
IMATRL PRASUN SHR__CHT 19990430 19990628 141213 R00000000000068
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Europe Capital Appreciation Fund on December 21,
1993, when the fund started, and the current 3.00% sales charge was
paid. As the chart shows, by April 30, 1999, the value of the
investment would have grown to $23,017 - a 130.17% increase on the
initial investment. For comparison, look at how the Morgan Stanley
Capital International Europe Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $24,531 - a 145.31% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
EUROPE CAPITAL APPRECIATION
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Kevin McCarey)
An interview with Kevin McCarey, Portfolio Manager of Fidelity Europe
Capital Appreciation Fund
Q. HOW DID THE FUND PERFORM, KEVIN?
A. For the six months that ended April 30, 1999, the fund returned
10.63%. This trailed slightly the 10.95% return of the Morgan Stanley
Capital International Europe Index during the same time period. The
European region funds average - as tracked by Lipper Inc. - had a
six-month return of 8.95% as of April 30, 1999. For the 12 months that
ended April 30, 1999, the fund returned -2.65%, while the Morgan
Stanley index and Lipper average returned 5.93% and -0.20%,
respectively.
Q. WHAT FACTORS FIGURED INTO THE FUND'S PERFORMANCE?
A. General economic weakness throughout Europe and the depreciation of
the euro teamed up to hurt overall returns. As of April 30, the euro -
the new uniform currency of 11 European nations - was down around 9%
for 1999. This contrasted sharply with the rosy U.S. economic picture
and strong dollar. Excluding the depreciation of the euro, local
market returns in Europe were actually pretty good. Individual stock
selection also hurt in some cases, with Telecom Italia being a prime
example. Telecom Italia was the subject of a hostile takeover bid by
Olivetti, an Italian computer company. Normally, this would be a
positive development but the shares the fund owned in Telecom Italia -
which are called "savings" shares and are unique to Italy - were not
part of Olivetti's takeover bid. On the positive side, the fund's
positions in United Kingdom-based cyclical stocks - or stocks that
tend to mirror the ups and downs of the economy - performed well. My
strategy there was to favor more retail-oriented names rather than
commodity cyclicals such as steel or chemicals. Commodity cyclicals
tend to depend on a more global economic recovery. U.K. cyclical
stocks that helped performance included advertising agency Saatchi &
Saatchi as well as large retailer Dixons, both medium-cap stocks.
Q. WHEN THE PERIOD BEGAN, EUROPEAN MARKETS - SIMILAR TO THOSE IN THE
U.S. - WERE BEING FUELED PRIMARILY BY LARGE-CAP GROWTH STOCKS. DID
THIS CONTINUE?
A. The playing field got a little more level during the period, due
mostly to economic swings. If you look back over time, smaller stocks
tend to do best when the economies in question are trying to pick
themselves up off the floor. This is what we've seen recently in the
U.K., where small- and medium-sized companies have performed well of
late. Part of this also may be attributable to the fact that
large-company growth stocks just got too pricey relative to small- and
mid-cap names.
Q. EUROPEAN PHARMACEUTICAL STOCKS ENDURED A TOUGH STRETCH DURING THE
PERIOD. WHAT HAPPENED TO THIS GROUP?
A. High valuations, very little new product excitement and
deteriorating fundamentals equaled trouble. Swiss-based drug maker
Novartis - the fund's largest individual position at the start of the
period - experienced disappointing sales growth and its share price
became a bit too expensive. Consequently, the fund no longer held
Novartis at the end of the period. High valuations also harmed the
companies that were doing well, including U.K.-based Glaxo Wellcome.
That being said, I still held a favorable view on drug stocks such as
the U.K.'s SmithKline Beecham - which had good sales prospects - as
well as France's Sanofi, which was in the process of merging with
another company as the period came to a close.
Q. WHICH OTHER INDIVIDUAL STOCKS PERFORMED WELL? WHICH PROVED
DISAPPOINTING?
A. Two of the fund's best performers were energy companies BP Amoco -
based in the U.K. - and France's Elf Aquitaine. Both companies
benefited handsomely from the rise in oil prices, which had hovered at
or near all-time lows through the first half of the period.
Telecommunications stocks such as Finland's Nokia and Germany's
Deutsche Telekom also performed well. Nokia continued to benefit from
the demand for mobile communications, while Deutsche Telekom -
Europe's largest Internet provider - took advantage of the popularity
of the Internet. Disappointments included food company Nestle, which
didn't meet its unit growth target, and Allianz, a Germany-based
insurance company whose stock price tends to move in line with bond
prices. Bond prices fell during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I'm reasonably optimistic about the U.K. market's prospects -
particularly on the mid-cap side - and will continue to look for good
opportunities there in the coming months. In terms of the overall
portfolio, I may look to hold down the sector bets and instead
concentrate on finding the best individual names within each sector.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of European issuers
FUND NUMBER: 341
TRADING SYMBOL: FECAX
START DATE: December 21, 1993
SIZE: as of April 30, 1999, more than $549
million
MANAGER: Kevin McCarey, since inception;
manager, Fidelity Select Financial Services
Portfolio, Fidelity Select Automotive Portfolio,
1988-1990; Fidelity Select Regional Banks
Portfolio, 1986-1989; joined Fidelity in 1985
EUROPE CAPITAL APPRECIATION
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Finland 3.8%
United Kingdom 33.2%
France 18.8%
Germany 12.9%
Switzerland 7.4%
Italy 5.4%
Sweden 2.2%
Spain 4.9%
Netherlands 7.8%
Other 3.6%
Row: 1, Col: 1, Value: 3.8
Row: 1, Col: 2, Value: 18.8
Row: 1, Col: 3, Value: 12.9
Row: 1, Col: 4, Value: 5.4
Row: 1, Col: 5, Value: 7.8
Row: 1, Col: 6, Value: 3.6
Row: 1, Col: 7, Value: 4.9
Row: 1, Col: 8, Value: 2.2
Row: 1, Col: 9, Value: 7.4
Row: 1, Col: 10, Value: 33.2
AS OF OCTOBER 31, 1998
United States 3.2%
France 17.3%
United Kingdom 29.7%
Germany 13.1%
Italy 7.3%
Switzerland 11.4%
Netherlands 5.5%
Sweden 2.1%
Spain 4.5%
Other 5.9%
Row: 1, Col: 1, Value: 17.3
Row: 1, Col: 2, Value: 13.1
Row: 1, Col: 3, Value: 7.3
Row: 1, Col: 4, Value: 5.5
Row: 1, Col: 5, Value: 5.9
Row: 1, Col: 6, Value: 4.5
Row: 1, Col: 7, Value: 2.1
Row: 1, Col: 8, Value: 11.4
Row: 1, Col: 9, Value: 29.7
Row: 1, Col: 10, Value: 3.2
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 100.0 96.8
Short-term investments 0.0 3.2
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Mannesmann AG (Germany, 3.4 1.5
Cellular)
SmithKline Beecham PLC 3.4 1.8
(United Kingdom, Drugs &
Pharmaceuticals)
Elf Aquitaine (France, Oil & 2.9 1.2
Gas)
Nokia AB sponsored ADR 2.8 1.5
(Finland, Communications
Equipment)
Arcadia Group PLC (United 2.5 0.0
Kingdom, Apparel Stores)
Banque Nationale de Paris 2.5 1.2
(France, Banks)
BP Amoco PLC (United Kingdom, 2.5 2.2
Oil & Gas)
British Telecommunications 2.4 1.7
PLC (United Kingdom,
Telephone Services)
DaimlerChrysler AG (Reg.) 2.2 1.8
(Germany, Autos, Tires, &
Accessories)
Roche Holding AG 2.2 1.8
participation certificates
(Switzerland, Drugs &
Pharmaceuticals)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 26.0 26.4
UTILITIES 20.2 17.8
RETAIL & WHOLESALE 9.8 4.2
HEALTH 8.3 12.8
ENERGY 7.3 7.1
TECHNOLOGY 6.2 3.6
DURABLES 5.3 2.7
NONDURABLES 4.8 6.9
SERVICES 3.9 2.7
MEDIA & LEISURE 2.3 1.8
</TABLE>
EUROPE CAPITAL APPRECIATION
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.4%
SHARES VALUE (NOTE 1)
BELGIUM - 0.7%
Electrabel SA 12,000 $ 3,965,418
FINLAND - 3.8%
Nokia AB sponsored ADR 207,000 15,356,813
Sonera Group PLC 107,900 2,147,797
UPM-Kymmene Corp. 100,000 3,033,462
20,538,072
FRANCE - 18.8%
AXA SA de CV 44,000 5,692,956
Banque Nationale de Paris 160,000 13,290,058
Cap Gemini SA 32,000 4,902,668
Castorama Dubois 26,000 6,235,273
Investissements SA
Compagnie de St. Gobain 15,000 2,580,825
Compagnie Financiere de 57,300 6,103,326
Paribas Class A (Reg.)
Compagnie Generale de 72,400 760,200
Geophysique SA sponsored ADR
(a)
Elf Aquitaine 100,000 15,624,997
France Telecom SA 70,000 5,666,168
Groupe Danone 28,000 7,500,539
Havas Advertising SA 15,000 3,049,344
Rhone-Poulenc SA Class A 21,000 989,624
Sanofi SA 30,000 4,710,601
Societe Generale, France 12,000 2,152,329
Class A
Suez Lyonnaise des Eaux 42,000 7,159,606
Television Francaise 1 SA 26,700 5,229,943
(T.F.1)
Vivendi SA 39,825 9,323,060
100,971,517
GERMANY - 11.3%
Allianz AG (Reg.) 16,000 5,031,418
DaimlerChrysler AG (Reg.) 120,000 11,782,500
Deutsche Telekom AG 250,000 9,875,957
Fresenius Medical Care AG 91,400 1,645,200
sponsored ADR
Hoechst AG 28,000 1,329,641
Mannesmann AG 139,800 18,295,300
Metro AG 36,200 2,568,397
Primacom AG (a) 84,200 3,655,189
Schering AG 7,000 807,864
Wella AG 8,800 5,823,400
60,814,866
IRELAND - 1.5%
Bank of Ireland, Inc. (Great 212,200 4,249,248
Britain)
CRH PLC 108,200 2,136,584
Elan Corp. PLC sponsored ADR 27,000 1,390,500
(a)
7,776,332
ITALY - 5.4%
Assicurazioni Generali Spa 160,000 6,239,297
Banca Commerciale Italiana Spa 1,086,300 8,987,463
Italgas Spa 300,000 1,351,558
Mondadori (Arnoldo) Editore 105,200 1,869,276
Spa
SHARES VALUE (NOTE 1)
Olivetti & Co. Spa 574,500 $ 2,000,027
Telecom Italia Spa 800,000 8,494,964
28,942,585
LUXEMBOURG - 0.4%
Stolt Comex Seaway SA 167,800 2,097,500
NETHERLANDS - 7.8%
ABN AMRO Holding NV 180,400 4,307,220
Aegon NV 25,000 2,402,153
ASM Lithography Holding N V 12,800 499,200
(a)
Fortis Amev NV 265,200 9,462,750
ING Groep NV 118,700 7,327,118
Koninklijke (Royal) Philips 55,000 4,746,071
Electronics NV
Koninklijke Ahold NV 135,000 5,024,271
Koninklijke KPN NV 53,500 2,237,509
STMicroelectronics NV (a) 9,500 969,000
TNT Post Group NV 58,000 1,565,965
Vendex NV CVA 141,600 3,530,759
42,072,016
SPAIN - 4.9%
Banco Santander Central 386,760 8,419,351
Hispano SA
Endesa SA 175,000 3,898,502
Gas Natural SDG SA Series E 22,700 1,837,457
Iberdrola SA 200,000 2,805,820
Telefonica SA 194,200 9,119,201
Telefonica SA rights 6/15/99 165,000 153,738
(a)
26,234,069
SWEDEN - 2.2%
Electrolux AB 230,000 4,674,963
Ericsson (L.M.) Telefon AB 161,700 4,365,900
Class B
Swedish Match Co. 500,000 1,646,281
Volvo AB Class B 46,000 1,219,000
11,906,144
SWITZERLAND - 7.4%
Credit Suisse Group (Reg.) 30,200 5,994,423
Julius Baer Holding AG 1,000 3,257,874
Nestle SA (Reg.) 2,000 3,704,724
Roche Holding AG 1,000 11,771,654
participation certificates
Swatch Group AG (The) (Bearer) 2,700 1,927,559
Swisscom AG 9,000 3,307,087
UBS AG 29,000 9,856,955
39,820,276
UNITED KINGDOM - 33.2%
Abbey National, PLC 176,000 3,980,845
Allied Zurich PLC (a) 260,000 3,451,406
Amvescap PLC 230,000 2,445,498
Arcadia Group PLC 3,000,000 13,532,400
Bank of Scotland 45,000 674,204
BP Amoco PLC 700,000 13,205,254
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
British Telecommunications PLC 782,800 $ 13,131,486
Cable & Wireless 420,000 4,797,236
Communications PLC (a)
Cadbury Schweppes PLC 160,000 2,138,119
CGU PLC 170,000 2,688,034
de la Rue PLC 344,000 1,584,966
Diageo PLC 100,000 1,155,893
Dixons Group PLC 342,300 7,317,679
Electrocomponents PLC 300,000 2,561,490
GKN PLC Class L 200,000 3,420,153
Glaxo Wellcome PLC 150,000 4,368,742
HSBC Holdings PLC Ord. 95,000 3,625,636
Laird Group PLC 362,000 1,804,948
Lloyds TSB Group PLC 500,000 8,059,028
MFI Furniture Group PLC 3,023,300 2,191,741
New Look Group PLC 225,100 805,052
Next PLC 201,000 2,483,630
NFC PLC 1,246,300 3,413,242
Premier Farnell PLC 461,800 2,179,802
Rentokil Initial PLC 350,000 2,062,281
Reuters Group PLC 260,000 3,526,801
Royal Bank of Scotland Group 402,800 9,513,032
PLC
Saatchi & Saatchi PLC 800,000 3,106,008
Shell Transport & Trading Co. 1,300,000 9,844,885
PLC (Reg.)
Smith (David S.) Holdings PLC 1,132,300 2,444,341
SmithKline Beecham PLC 1,377,200 18,093,025
Standard Chartered PLC 130,000 2,353,993
Storehouse PLC 1,400,000 3,270,330
Trinity PLC 184,700 1,701,996
Unilever PLC 600,000 5,371,880
Vodafone Group PLC 231,500 4,152,536
Wickes PLC 1,170,500 7,504,989
177,962,581
UNITED STATES OF AMERICA - 1.0%
AirTouch Communications, Inc. 54,000 5,042,250
(a)
TOTAL COMMON STOCKS 528,143,626
(Cost $439,001,698)
NONCONVERTIBLE PREFERRED
STOCKS - 1.6%
GERMANY - 1.6%
Dyckerhoff AG 4,000 1,113,858
SAP AG (Systeme Anwendungen 19,300 7,295,238
Produkte)
TOTAL NONCONVERTIBLE 8,409,096
PREFERRED STOCKS
(Cost $7,778,653)
INVESTMENT COMPANIES - 0.0%
SHARES VALUE (NOTE 1)
MULTI-NATIONAL - 0.0%
European Warrant Fund, Inc. 20,000 $ 307,500
(Cost $326,000)
TOTAL INVESTMENT IN $ 536,860,222
SECURITIES - 100%
(Cost $447,106,351)
LEGEND
(a) Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $500,140,397 and $655,832,420, respectively.
The fund participated in the bank borrowing program. The average daily
balance during the period for which loans were outstanding amounted to
$10,250,905. The weighted average interest rate was 5.09%.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $447,843,538. Net unrealized appreciation
aggregated $89,016,684, of which $96,625,432 related to appreciated
investment securities and $7,608,748 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $13,819,000, all of which will expire on October 31,
2006.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 1.3%
CONSTRUCTION & REAL ESTATE 1.5
DURABLES 5.3
ENERGY 7.3
FINANCE 26.0
HEALTH 8.3
INDUSTRIAL MACHINERY & 2.2
EQUIPMENT
INVESTMENT COMPANIES 0.0
MEDIA & LEISURE 2.3
NONDURABLES 4.8
RETAIL & WHOLESALE 9.8
SERVICES 3.9
TECHNOLOGY 6.2
TRANSPORTATION 0.9
UTILITIES 20.2
100.0%
EUROPE CAPITAL APPRECIATION
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 536,860,222
value (cost $447,106,351) -
See accompanying schedule
Receivable for investments 44,220,514
sold
Receivable for fund shares 777,021
sold
Dividends receivable 2,722,794
Interest receivable 3,695
Redemption fees receivable 309
Other receivables 21,793
TOTAL ASSETS 584,606,348
LIABILITIES
Payable to custodian bank $ 149,338
Payable for investments 22,447,092
purchased
Payable for fund shares 2,597,608
redeemed
Accrued management fee 286,982
Notes payable 9,544,000
Other payables and accrued 301,935
expenses
TOTAL LIABILITIES 35,326,955
NET ASSETS $ 549,279,393
Net Assets consist of:
Paid in capital $ 468,702,692
Distributions in excess of (51,641)
net investment income
Accumulated undistributed net (9,198,398)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 89,826,740
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 30,499,872 $ 549,279,393
shares outstanding
NET ASSET VALUE and $18.01
redemption price per share
($549,279,393 (divided by)
30,499,872 shares)
Maximum offering price per $18.57
share (100/97.00 of $18.01)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 3,769,389
Dividends
Interest 335,131
4,104,520
Less foreign taxes withheld (430,474)
TOTAL INCOME 3,674,046
EXPENSES
Management fee Basic fee $ 2,394,861
Performance adjustment (138,623)
Transfer agent fees 793,656
Accounting fees and expenses 186,745
Non-interested trustees' 1,039
compensation
Custodian fees and expenses 156,243
Registration fees 25,318
Audit 20,878
Legal 147
Interest 59,534
Total expenses before 3,499,798
reductions
Expense reductions (153,852) 3,345,946
NET INVESTMENT INCOME 328,100
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 14,658,396
Foreign currency transactions (46,775) 14,611,621
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 48,196,231
Assets and liabilities in 3,450 48,199,681
foreign currencies
NET GAIN (LOSS) 62,811,302
NET INCREASE (DECREASE) IN $ 63,139,402
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 208,601
charges paid to FDC
Sales charges - Retained by $ 208,572
FDC
Expense Reductions $ 150,389
Directed brokerage
arrangements
Transfer agent credits 3,463
$ 153,852
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 328,100 $ 5,311,907
income
Net realized gain (loss) 14,611,621 (23,544,162)
Change in net unrealized 48,199,681 11,533,145
appreciation (depreciation)
NET INCREASE (DECREASE) IN 63,139,402 (6,699,110)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (3,656,037)
From net investment income
From net realized gain - (45,993,007)
TOTAL DISTRIBUTIONS - (49,649,044)
Share transactions Net 103,276,437 619,171,673
proceeds from sales of shares
Reinvestment of distributions - 48,775,275
Cost of shares redeemed (268,098,564) (333,641,119)
NET INCREASE (DECREASE) IN (164,822,127) 334,305,829
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 155,017 800,051
TOTAL INCREASE (DECREASE) (101,527,708) 278,757,726
IN NET ASSETS
NET ASSETS
Beginning of period 650,807,101 372,049,375
End of period (including $ 549,279,393 $ 650,807,101
under/(over) distributions
of net investment income of
$(51,641) and $5,124,361,
respectively)
OTHER INFORMATION
Shares
Sold 5,809,003 34,085,254
Issued in reinvestment of - 3,398,974
distributions
Redeemed (15,278,248) (19,973,021)
Net increase (decrease) (9,469,245) 17,511,207
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 16.28 $ 16.57 $ 14.07 $ 12.08 $ 11.35
period
Income from Investment
Operations
Net investment income .01 D .15 D .20 D .22 E .23
Net realized and unrealized 1.72 1.79 F 3.81 2.00 .50
gain (loss)
Total from investment 1.73 1.94 4.01 2.22 .73
operations
Less Distributions
From net investment income - (.17) H (.23) (.23) -
From net realized gain - (2.08) H (1.29) - -
Total distributions - (2.25) (1.52) (.23) -
Redemption fees added to paid - .02 .01 - -
in capital
Net asset value, end of period $ 18.01 $ 16.28 $ 16.57 $ 14.07 $ 12.08
TOTAL RETURN B, C 10.63% 13.65% 31.57% 18.74% 6.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 549,279 $ 650,807 $ 372,049 $ 170,192 $ 194,433
(000 omitted)
Ratio of expenses to average 1.09% A 1.12% 1.10% 1.33% 1.36%
net assets
Ratio of expenses to average 1.04% A, I 1.08% I 1.07% I 1.30% I 1.36%
net assets after expense
reductions
Ratio of net investment .10% A .89% 1.33% 1.66% 1.45%
income to average net assets
Portfolio turnover rate 162% A 179% 189% 155% 176%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.04 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FOR THE PERIOD DECEMBER 21,
1993 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1994.
H THE AMOUNTS SHOWN REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994 G
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income .08 D
Net realized and unrealized 1.27
gain (loss)
Total from investment 1.35
operations
Less Distributions
From net investment income -
From net realized gain -
Total distributions -
Redemption fees added to paid -
in capital
Net asset value, end of period $ 11.35
TOTAL RETURN B, C 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 352,855
(000 omitted)
Ratio of expenses to average 1.54% A
net assets
Ratio of expenses to average 1.54% A
net assets after expense
reductions
Ratio of net investment .79% A
income to average net assets
Portfolio turnover rate 317% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.04 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FOR THE PERIOD DECEMBER 21,
1993 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1994.
H THE AMOUNTS SHOWN REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
FRANCE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY FRANCE 8.47% 0.88% 87.82%
FIDELITY FRANCE (INCL. 5.22% -2.14% 82.19%
3.00% SALES CHARGE)
SBF 250 11.00% 10.58% 100.14%
European Region Funds Average 8.95% -0.20% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Society des Bourses Franeaises 250 Index (SBF
250) - a market capitalization-weighted index of 250 largest companies
in the French market. To measure how the fund's performance stacked up
against its peers, you can compare the fund's performance to the
European region funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 142 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY FRANCE 0.88% 19.76%
FIDELITY FRANCE (INCL. -2.14% 18.72%
3.00% SALES CHARGE)
SBF 250 10.58% 21.95%
European Region Funds Average -0.20% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
France SBF 250
00345 EX001
1995/11/01 9700.00 10000.00
1995/11/30 9515.70 9996.87
1995/12/31 9952.70 10331.57
1996/01/31 10381.19 10618.07
1996/02/29 10799.95 11028.30
1996/03/31 11150.53 11258.88
1996/04/30 11403.73 11466.65
1996/05/31 11647.19 11517.59
1996/06/30 11803.01 11777.11
1996/07/31 11559.54 11522.35
1996/08/31 11393.99 11290.00
1996/09/30 11617.98 11688.17
1996/10/31 11919.87 11888.32
1996/11/30 12299.67 12521.77
1996/12/31 12484.65 12692.23
1997/01/31 13045.52 12947.26
1997/02/28 13180.55 13046.89
1997/03/31 13585.62 13392.49
1997/04/30 13076.68 12816.85
1997/05/31 12889.72 12695.77
1997/06/30 13855.67 13730.74
1997/07/31 14125.72 14007.70
1997/08/31 13388.28 13106.00
1997/09/30 14707.37 14283.43
1997/10/31 13782.97 13413.94
1997/11/30 13814.13 13600.74
1997/12/31 14290.14 14013.96
1998/01/31 14665.89 14539.07
1998/02/28 15724.84 15771.19
1998/03/31 17410.05 17395.62
1998/04/30 18059.09 18099.22
1998/05/31 19357.16 19161.02
1998/06/30 19527.95 19713.51
1998/07/31 19619.05 19896.29
1998/08/31 16487.74 17660.05
1998/09/30 15485.73 16376.52
1998/10/31 16795.18 18030.99
1998/11/30 17706.10 19077.94
1998/12/31 18423.46 19816.20
1999/01/31 19231.90 20468.32
1999/02/28 17968.00 19175.46
1999/03/31 17865.52 19389.56
1999/04/30 18218.50 20014.23
IMATRL PRASUN SHR__CHT 19990430 19990628 141400 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity France Fund on November 1, 1995, when the fund
started, and the current 3.00% sales charge was paid. As the chart
shows, by April 30, 1999, the value of the investment would have grown
to $18,219 - an 82.19% increase on the initial investment. For
comparison, look at how the Society des Bourses Franeaises 250 Index
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $20,014 - a 100.14%
increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
FRANCE
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Alexandra Edzard)
An interview with Alexandra Edzard, Portfolio Manager of Fidelity
France Fund
Q. HOW DID THE FUND PERFORM, ALEXANDRA?
A. For the six-month period that ended April 30, 1999, the fund
returned 8.47%, compared to 11.00% for the Societe des Bourses
Francaises (SBF) 250 Index and the European region funds average
return of 8.95%, as monitored by Lipper Inc. For the one-year period,
the fund returned 0.88%, compared to the SBF 250's return of 10.58%
and the Lipper European region funds average return of -0.20%. The
fund's higher weightings in information technology companies and water
and power companies - both of which lagged the market - were two
primary factors in the fund's performance relative to its benchmarks,
as was the fund's underweighting in cyclical companies.
Q. HOW DID THE INVESTMENT ENVIRONMENT CHANGE DURING THE SIX-MONTH
PERIOD?
A. The climate in the French stock market improved as the period
progressed as fears receded about the effects of emerging-market
problems on the European economy. The domestic French economy remained
healthy, with strong consumer spending that helped support the retail,
leisure and tourism industries. In general, stocks of energy-related
companies and other cyclical companies gained strength during the
period as confidence in economic growth grew.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. I tended to emphasize companies with proactive managements and
clear business strategies as well as companies that have leadership
positions in their industries. I also emphasized companies in
industries where I expect to see merger-and-acquisition activity. In
light of the strong domestic economy and healthy consumer spending, I
emphasized merchandising, leisure and tourism, and personal care
products companies. I also overweighted business services and
information technology companies because of their long-term growth
prospects, while I tended to de-emphasize cyclical companies in
industries such as chemicals, automobiles and electrical components.
Q. WHAT STOCKS HELPED THE FUND'S PERFORMANCE?
A. Accor, an international hotel company, was a very strong performer.
A number of companies in consumer-related industries did very well,
including: Castorama and Carrefour, two retailers; TF-1, a media
company; and Havas, a large advertising company that is acquiring a
major Spanish company. Several telecommunications-related stocks did
well, including Equant, which provides data network services to
international businesses and was one of the fund's largest holdings at
the end of the period. While the fund was underweighted in France
Telecom, the stock nevertheless helped performance on an absolute
basis, if not relative to the index. A significant investment in Elf
Acquitaine, the major oil company, also helped, as this stock rose by
50%, benefiting from rising oil prices, industry consolidation and a
rally in cyclical stocks. The fund's emphasis on banking stocks also
helped as the sector rallied amidst strong takeover activity. Banking
stocks that supported performance included Banque National de Paris
(BNP) and Credit Commercial France (CCF).
Q. WHAT HOLDINGS HURT PERFORMANCE?
A. Stocks in defensive industries tended to do poorly, including two
water utility and power companies, Vivendi and Suez Lyonnaise des
Eaux. I continued to like them for their strong fundamentals and
attractive valuations. L'Oreal, the world's largest cosmetic company,
also was a weak performer as investors appeared to favor cyclical
companies over stable growth companies. Information technology stocks,
which had been strong performers in 1998, lagged the market because of
investor concerns about high stock valuations and future profit
growth. My investment in Cap Gemini, a major computer services
company, also did not help.
Q. WHAT IS YOUR OUTLOOK?
A. The domestic French economy continues to be strong, helping
industries such as retailing and media. The pace of global economic
growth will continue to have an important influence on performance,
however. The largest 40 companies in the benchmark SBF 250 index,
reflecting more than three-quarters of the index's market
capitalization, are internationally focused, so their fortunes depend
more on factors outside France than inside France. I plan to continue
to look for opportunities among companies with strong revenue growth
from international operations.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of French issuers
FUND NUMBER: 345
TRADING SYMBOL: FRANX
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than $11 million
MANAGER: Alexandra Edzard, since 1998;
manager, Fidelity Germany Fund, since 1996;
joined Fidelity in 1994
FRANCE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Austria 0.6%
United States 0.4%
Belgium 0.9%
Netherlands 5.8%
France 92.3%
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 1.8
Row: 1, Col: 3, Value: 90.3
Row: 1, Col: 4, Value: 5.8
Row: 1, Col: 5, Value: 1.1
AS OF OCTOBER 31, 1998
Belgium 2.5%
United States 3.6%
Other 0.8%
Netherlands 1.4%
France 91.7%
Row: 1, Col: 1, Value: 2.5
Row: 1, Col: 2, Value: 91.7
Row: 1, Col: 3, Value: 1.4
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 5, Value: 3.6
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 99.6 96.4
Short-term investments 0.4 3.6
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
France Telecom SA (Telephone 9.0 7.4
Services)
Total SA Class B (Oil & Gas) 6.1 3.6
L'Oreal SA (Household Products) 5.7 5.4
Vivendi SA (Water) 5.5 7.2
AXA SA de CV (Insurance) 4.9 5.2
Suez Lyonnaise des Eaux 4.3 5.4
(Services)
Equant NV (Computer Services 4.0 0.9
& Software)
Carrefour Supermarche SA 3.9 0.0
(General Merchandise Stores)
Cap Gemini SA (Computer 3.1 2.9
Services & Software)
Groupe Danone (Foods) 2.9 3.9
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
UTILITIES 15.6 17.1
FINANCE 14.3 13.4
NONDURABLES 11.7 12.0
TECHNOLOGY 11.4 8.6
RETAIL & WHOLESALE 9.7 5.7
ENERGY 8.6 7.5
DURABLES 6.4 0.5
SERVICES 6.4 10.9
HEALTH 5.3 7.9
MEDIA & LEISURE 3.3 5.4
</TABLE>
FRANCE
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 99.6%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.8%
CHEMICALS & PLASTICS - 0.8%
Compagnie Generale d' 1,784 $ 90,082
Industrie et de
Participations (CGIP)
CONSTRUCTION & REAL ESTATE -
3.2%
CONSTRUCTION - 1.8%
Alstom SA 6,165 202,353
ENGINEERING - 1.4%
Bouygues 342 87,124
VA Technologie AG 640 60,987
148,111
TOTAL CONSTRUCTION & REAL 350,464
ESTATE
DURABLES - 6.4%
AUTOS, TIRES, & ACCESSORIES -
3.8%
Michelin SA (Compagnie 2,300 104,594
Generale des Etablissements)
Class B
Peugeot SA 850 141,297
Valeo SA 2,081 176,269
422,160
CONSUMER ELECTRONICS - 0.3%
Moulinex Espana SA (a) 2,960 38,831
TEXTILES & APPAREL - 2.3%
Christian Dior SA 1,925 252,328
TOTAL DURABLES 713,319
ENERGY - 8.6%
OIL & GAS - 8.6%
Elf Aquitaine 1,795 280,469
Total SA Class B 4,950 673,200
953,669
FINANCE - 14.3%
BANKS - 7.6%
Banque Nationale de Paris 3,092 256,830
Compagnie Financiere de 1,573 167,549
Paribas Class A (Reg.)
Credit Commercial de France 897 94,974
Dexia France 757 106,200
Societe Generale, France 1,176 210,928
Class A
836,481
INSURANCE - 6.7%
Assurances Generales (Bearer) 2,304 121,852
AXA SA de CV 4,175 540,184
Scor SA 990 49,476
Union Assurances Federales SA 280 31,247
742,759
TOTAL FINANCE 1,579,240
SHARES VALUE (NOTE 1)
HEALTH - 5.3%
DRUGS & PHARMACEUTICALS - 5.3%
Genset SA (a) 1,117 $ 54,640
Rhone-Poulenc SA Class A 4,625 217,953
Sanofi SA 1,298 203,812
Synthelabo 551 112,888
589,293
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.9%
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.5%
Compagnie de Fives-Lille 244 19,092
Legrand SA 779 186,406
Sidel SA 576 69,525
275,023
POLLUTION CONTROL - 0.4%
Serp Recyclage (a) 295 43,572
TOTAL INDUSTRIAL MACHINERY & 318,595
EQUIPMENT
MEDIA & LEISURE - 3.3%
BROADCASTING - 1.9%
NRJ SA 296 64,875
Television Francaise 1 SA 776 152,001
(T.F.1)
216,876
LODGING & GAMING - 1.4%
Accor SA 217 57,325
Club Mediterranee SA (a) 1,040 96,351
153,676
TOTAL MEDIA & LEISURE 370,552
NONDURABLES - 11.7%
BEVERAGES - 1.7%
LVMH Moet Hennessy Louis 707 189,987
Vuitton
FOODS - 2.9%
Groupe Danone 1,198 320,916
HOUSEHOLD PRODUCTS - 6.7%
Clarins SA 1,275 116,502
L'Oreal SA 979 628,159
744,661
TOBACCO - 0.4%
Seita 750 45,264
TOTAL NONDURABLES 1,300,828
RETAIL & WHOLESALE - 9.7%
APPAREL STORES - 0.4%
DU Pareil AU Meme AS 636 42,357
GENERAL MERCHANDISE STORES -
4.9%
Carrefour Supermarche SA 546 433,579
Galeries Lafayette SA 95 109,639
543,218
COMMON STOCKS - CONTINUED
SHARES VALUE(NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.8%
Casino Guichard Perrachon et 919 $ 90,687
Compagnie
RETAIL & WHOLESALE,
MISCELLANEOUS - 3.6%
Castorama Dubois 665 159,479
Investissements SA
Pinault Printemps SA 1,430 237,711
397,190
TOTAL RETAIL & WHOLESALE 1,073,452
SERVICES - 6.4%
ADVERTISING - 1.4%
Havas Advertising SA 780 158,566
SERVICES - 5.0%
ALTEN (a) 350 21,494
Cegedim SA 1,311 53,997
Suez Lyonnaise des Eaux 2,798 476,966
552,457
TOTAL SERVICES 711,023
TECHNOLOGY - 11.4%
COMPUTER SERVICES & SOFTWARE
- - 8.2%
Atos SA (a) 511 43,825
Cap Gemini SA 2,243 343,646
Equant NV (a) 4,935 448,843
Ilog SA sponsored ADR (a) 7,798 41,914
Sopra SA 510 29,564
907,792
COMPUTERS & OFFICE EQUIPMENT
- - 0.8%
Neopost SA (a) 4,865 87,980
ELECTRONICS - 2.4%
Schneider SA 959 62,700
STMicroelectronics NV 1,960 204,619
267,319
TOTAL TECHNOLOGY 1,263,091
UTILITIES - 15.6%
CELLULAR - 0.9%
Mobistar SA (a) 1,754 98,800
TELEPHONE SERVICES - 9.2%
France Telecom SA 12,374 1,001,613
Omnicom SA 100 20,647
1,022,260
WATER - 5.5%
Vivendi SA 2,581 604,214
TOTAL UTILITIES 1,725,274
TOTAL COMMON STOCKS 11,038,882
(Cost $8,977,669)
CASH EQUIVALENTS - 0.4%
MATURITY AMOUNT VALUE (NOTE 1)
Investments in repurchase $ 47,019 $ 47,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 4.89%,
dated 4/30/99 due 5/3/99
TOTAL INVESTMENT IN $ 11,085,882
SECURITIES - 100%
(Cost $9,024,669)
LEGEND
(a) Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $7,814,417 and $13,808,690, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $9,053,002. Net unrealized appreciation
aggregated $2,032,880, of which $2,208,897 related to appreciated
investment securities and $176,017 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $1,955,000, all of which will expire on October 31,
2006.
FRANCE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 11,085,882
value (including repurchase
agreements of $47,000) (cost
$9,024,669) - See
accompanying schedule
Cash 568
Receivable for investments 131,008
sold
Receivable for fund shares 3,599
sold
Dividends receivable 51,334
Other receivables 649
TOTAL ASSETS 11,273,040
LIABILITIES
Payable for investments $ 85,310
purchased
Payable for fund shares 22,444
redeemed
Accrued management fee 21,190
Other payables and accrued 50,887
expenses
TOTAL LIABILITIES 179,831
NET ASSETS $ 11,093,209
Net Assets consist of:
Paid in capital $ 10,689,470
Accumulated net investment (130,210)
loss
Accumulated undistributed net (1,523,878)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 2,057,827
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 693,443 $ 11,093,209
shares outstanding
NET ASSET VALUE and $16.00
redemption price per share
($11,093,209 (divided by)
693,443 shares)
Maximum offering price per $16.49
share (100/97.00 of $16.00)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 15,897
Dividends
Interest 6,884
22,781
Less foreign taxes withheld (3,991)
TOTAL INCOME 18,790
EXPENSES
Management fee $ 56,416
Transfer agent fees 25,676
Accounting fees and expenses 30,323
Non-interested trustees' 27
compensation
Custodian fees and expenses 56,689
Registration fees 7,720
Audit 15,451
Miscellaneous 8
Total expenses before 192,310
reductions
Expense reductions (43,310) 149,000
NET INVESTMENT INCOME (LOSS) (130,210)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 788,043
Foreign currency transactions (1,188) 786,855
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 643,641
Assets and liabilities in (6,851) 636,790
foreign currencies
NET GAIN (LOSS) 1,423,645
NET INCREASE (DECREASE) IN $ 1,293,435
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 15,443
charges paid to FDC
Sales charges - Retained by $ 15,443
FDC
Expense reductions Directed $ 2,034
brokerage arrangements
FMR reimbursement 41,276
$ 43,310
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ (130,210) $ 49,705
income (loss)
Net realized gain (loss) 786,855 (2,314,802)
Change in net unrealized 636,790 977,565
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,293,435 (1,287,532)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (16,501)
From net investment income
From net realized gain - (474,417)
TOTAL DISTRIBUTIONS - (490,918)
Share transactions Net 4,473,291 27,069,838
proceeds from sales of shares
Reinvestment of distributions - 487,606
Cost of shares redeemed (11,123,106) (15,052,615)
NET INCREASE (DECREASE) IN (6,649,815) 12,504,829
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 19,428 125,407
TOTAL INCREASE (DECREASE) (5,336,952) 10,851,786
IN NET ASSETS
NET ASSETS
Beginning of period 16,430,161 5,578,375
End of period (including $ 11,093,209 $ 16,430,161
undistributed net investment
income (loss) of $(130,210)
and $37,763, respectively)
OTHER INFORMATION
Shares
Sold 274,147 1,626,364
Issued in reinvestment of - 39,450
distributions
Redeemed (694,236) (972,730)
Net increase (decrease) (420,089) 693,084
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 G
Net asset value, beginning of $ 14.75 $ 13.27 $ 12.24 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.14) D .06 D .10 D .23
Net realized and unrealized 1.37 2.46 H 1.66 1.98
gain (loss)
Total from investment 1.23 2.52 1.76 2.21
operations
Less Distributions
From net investment income - (.04) (.16) (.04)
From net realized gain - (1.15) (.61) -
Total distributions - (1.19) (.77) (.04)
Redemption fees added to paid .02 .15 .04 .07
in capital
Net asset value, end of period $ 16.00 $ 14.75 $ 13.27 $ 12.24
TOTAL RETURN B, C 8.47% 21.85% 15.63% 22.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 11,093 $ 16,430 $ 5,578 $ 5,542
(000 omitted)
Ratio of expenses to average 2.00% A, E 2.12% E 2.00% E 2.00% E
net assets
Ratio of expenses to average 1.97% A, F 2.12% 2.00% 2.00%
net assets after expense
reductions
Ratio of net investment (1.72)% A .40% .78% 1.74%
income (loss) to average net
assets
Portfolio turnover rate 107% A 182% 150% 129%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME(LOSS)
PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
G FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
H THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
</TABLE>
GERMANY
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY GERMANY -1.56% -9.51% 65.17%
FIDELITY GERMANY (INCL. -4.51% -12.22% 60.21%
3.00% SALES CHARGE)
DAX 100 1.50% -0.36% 76.97%
European Region Funds Average 8.95% -0.20% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Deutscher Aktienindex 100 (DAX 100) Index - a
market capitalization-weighted index of the 100 most heavily traded
stocks in the German market. To measure how the fund's performance
stacked up against its peers, you can compare the fund's performance
to the European region funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Inc. The
past six months average represents a peer group of 142 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY GERMANY -9.51% 15.43%
FIDELITY GERMANY (INCL. -12.22% 14.43%
3.00% SALES CHARGE)
DAX 100 -0.36% 17.74%
European Region Funds Average -0.20% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Germany DAX 100
00346 EX002
1995/11/01 9700.00 10000.00
1995/11/30 9622.40 10045.93
1995/12/31 9835.80 10293.16
1996/01/31 10320.80 10746.76
1996/02/29 10369.30 10830.07
1996/03/31 10495.40 10812.65
1996/04/30 10194.70 10413.05
1996/05/31 10573.00 10679.84
1996/06/30 10650.60 10956.77
1996/07/31 10524.50 10921.61
1996/08/31 10660.30 11180.88
1996/09/30 10747.60 11282.48
1996/10/31 10999.80 11378.77
1996/11/30 11523.60 11820.89
1996/12/31 11650.51 12007.46
1997/01/31 11570.43 11917.66
1997/02/28 12000.82 12383.06
1997/03/31 12631.39 13186.91
1997/04/30 12341.13 12745.27
1997/05/31 12951.68 13390.51
1997/06/30 13352.04 13933.20
1997/07/31 14473.05 15226.21
1997/08/31 13221.92 13796.83
1997/09/30 14242.84 14883.23
1997/10/31 13251.95 13772.76
1997/11/30 13642.30 14115.89
1997/12/31 14018.54 14726.44
1998/01/31 14634.74 15145.43
1998/02/28 15349.97 16176.40
1998/03/31 16560.36 17180.21
1998/04/30 17704.73 17760.59
1998/05/31 18750.07 19367.83
1998/06/30 19256.24 20055.83
1998/07/31 19960.47 20301.79
1998/08/31 15944.16 16938.45
1998/09/30 15669.08 16560.16
1998/10/31 16274.27 17435.20
1998/11/30 17132.55 18261.47
1998/12/31 17286.60 18447.96
1999/01/31 17341.62 18214.98
1999/02/28 16032.19 16900.12
1999/03/31 15261.94 16522.94
1999/04/30 16021.19 17697.48
IMATRL PRASUN SHR__CHT 19990430 19990527 113809 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Germany Fund on November 1, 1995, when the fund
started, and the current 3.00% sales charge was paid. As the chart
shows, by April 30, 1999, the value of the investment would have grown
to $16,021 - a 60.21% increase on the initial investment. For
comparison, look at how the Deutscher Aktienindex 100 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 would have grown to $17,697 - a 76.97% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
GERMANY
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Alexandra Edzard)
An interview with Alexandra Edzard, Portfolio Manager of Fidelity
Germany Fund
Q. HOW DID THE FUND PERFORM, ALEXANDRA?
A. For the six-month period that ended April 30, 1999, the fund
returned -1.56%, compared to the 1.50% return of the Deutscher
Aktienindex 100 (DAX 100) and the European region funds average return
of 8.95%, as monitored by Lipper Inc. For the one-year period, the
fund returned -9.51%, compared to the DAX 100's return of -0.36% and
the Lipper European region funds average return of -0.20%.
Q. WHAT FACTORS AFFECTED INVESTMENT PERFORMANCE DURING THE PERIOD?
A. Uncertainties about the global economy continued to hold back the
German stock market, particularly as Germany experienced slower
economic growth than most other European countries during the period.
Fund performance relative to the index and its peer group was held
back by overweightings in information technology, insurance and
utilities, all of which lagged the market. The fund also did not fully
participate in a rally in cyclical stocks. However, stock selection
within some sectors helped, including in the cyclical and banking
industries.
Q. WHAT WERE YOUR PRINCIPAL STRATEGIES DURING THE SIX-MONTH PERIOD?
A. I did not have much confidence that German economic growth would
increase, so I emphasized companies with the ability to grow
independently of the domestic economy, including companies with
significant foreign businesses. I tended to emphasize information
technology, telecommunciations, business services and insurance. I
de-emphasized the stocks of companies tied to the domestic economy,
including banks and utilities, and cyclical companies in general,
including chemicals, capital goods and energy-related companies.
Q. WHAT SPECIFIC INVESTMENT DECISIONS HELPED FUND PERFORMANCE?
A. The emphasis on telecommunications certainly helped. Mannesmann, a
diversified company that has become the largest provider of mobile
telephone services in Germany and is expanding throughout Europe, was
a significant contributor to performance, as was Deutsche Telekom,
Germany's largest telephone company. The six-month period saw a strong
rally in almost all cyclical stocks, even those companies that I do
not consider very strong. Nevertheless, some cyclical companies in
which the fund invested performed very well, including: BASF, the
chemical company, and Linde, which is involved in industrial gases and
forklift trucks. The investments in Credit Suisse and Julius Baer, two
high-quality Swiss banking companies with some business activities in
Germany, also helped fund performance. Both banks are particularly
strong in private banking and were able to gather assets successfully.
A number of my small- and mid-cap investments did quite well,
including Apcoa Parking and DIS Deutscher Industries, a temporary
employment firm.
Q. WHAT WERE SOME OF THE DISAPPOINTMENTS?
A. My emphasis on information technology, insurance and utilities did
not help. Information technology stocks, including SAP, a leader in
the software industry, had risen to very high valuations in 1998 and
investors were worried about future earnings growth. I tended to
emphasize specialty insurers such as Hannover, a reinsurance company,
and MLP, an insurance broker, both of which have extremely cheap stock
valuations. However, the entire insurance industry lagged in
performance because of investor concerns about the value of the stock
and bond portfolios of insurance companies in an uncertain environment
for bond yields.
Q. WHAT IS YOUR OUTLOOK FOR INVESTING IN THE GERMAN MARKET?
A. I don't see any catalysts triggering an above-average increase in
German economic growth. The IFO Index, which reflects surveys of
business leaders' confidence, indicates a great deal of concern. Even
though consumer confidence surveys tend to be very optimistic, I have
not seen this confidence reflected in retail sales. The German tax and
social security cost environment, as well as unattractive labor laws,
do not attract foreign investment, nor do they encourage domestic
companies to invest on their home turf. I expect to continue to
emphasize companies that are improving through restructuring and
companies that can benefit from international business and are not
wholly dependent on the German economy. Some companies with
international businesses have not performed well recently, but still
have healthy franchises and could offer opportunities. Examples would
include Hugo Boss, a clothing manufacturer, and Wella, a hair products
company. Both were fund holdings at the end of the period. The
importance of internationally focused businesses is reflected in their
weight in the German market. The largest 30 companies in the DAX 100
index, representing about 85% of the market capitalization of the
index, are heavily involved in international activities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of German issuers
FUND NUMBER: 346
TRADING SYMBOL: FGERF
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than $20 million
MANAGER: Alexandra Edzard, since 1996;
manager, Fidelity France Fund, since 1998;
joined Fidelity in 1994
GERMANY
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30,1999
United States 1.3%
France 2.8%
Switzerland 3.4%
Netherlands 1.2%
Germany 91.3%
Row: 1, Col: 1, Value: 2.8
Row: 1, Col: 2, Value: 91.3
Row: 1, Col: 3, Value: 1.2
Row: 1, Col: 4, Value: 3.4
Row: 1, Col: 5, Value: 1.3
AS OF OCTOBER 31, 1998
United States 3.4%
Switzerland 2.6%
Germany 94.0%
Row: 1, Col: 1, Value: 94.0
Row: 1, Col: 2, Value: 2.6
Row: 1, Col: 3, Value: 3.4
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Common Stocks 86.4 79.6
Preferred Stocks 12.3 17.0
Short-term investments 1.3 3.4
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
DaimlerChrysler AG (Reg.) 9.8 6.4
(Autos, Tires, & Accessories)
Mannesmann AG (Cellular) 9.6 8.5
Allianz AG (Reg.) (Insurance) 8.5 8.2
BASF AG (Chemicals & Plastics) 6.5 1.2
Deutsche Bank AG (Banks) 4.8 1.5
Veba AG (Electric Utility) 4.8 3.3
Siemens AG (Electrical 4.7 2.1
Equipment)
Deutsche Telekom AG 4.5 1.9
(Telephone Services)
SAP AG (Systeme Anwendungen 3.6 7.8
Produkte) (Computer
Services & Software)
Volkswagen AG (Autos, Tires, 3.4 1.4
& Accessories)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 27.5 33.0
UTILITIES 20.2 15.4
DURABLES 17.8 13.3
BASIC INDUSTRIES 8.6 7.5
INDUSTRIAL MACHINERY & 7.0 12.2
EQUIPMENT
TECHNOLOGY 6.2 9.3
RETAIL & WHOLESALE 3.9 0.0
HEALTH 2.7 2.3
NONDURABLES 1.6 2.7
SERVICES 1.5 0.9
</TABLE>
GERMANY
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 86.4%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 8.6%
CHEMICALS & PLASTICS - 8.6%
BASF AG 30,850 $ 1,358,822
Hoechst AG 9,190 436,407
1,795,229
DURABLES - 11.9%
AUTOS, TIRES, & ACCESSORIES -
9.8%
DaimlerChrysler AG (Reg.) 20,673 2,029,830
TEXTILES & APPAREL - 2.1%
Boss (Hugo) AG 334 448,415
TOTAL DURABLES 2,478,245
FINANCE - 24.7%
BANKS - 9.9%
Bayerische Hypo-und 4,220 271,484
Vereinsbank AG
BHF Bank AG 2,311 87,109
Credit Suisse Group (Reg.) 1,540 305,676
Deutsche Bank AG 17,192 996,426
Julius Baer Holding AG 101 329,045
UBS AG 190 64,580
2,054,320
INSURANCE - 14.8%
Allianz AG (Reg.) 5,635 1,772,002
Hannover Rueckversicherungs AG 5,642 465,355
Munich Reinsurance AG:
(Reg.) 2,801 554,289
(RFD) 1,431 284,847
3,076,493
TOTAL FINANCE 5,130,813
HEALTH - 2.7%
DRUGS & PHARMACEUTICALS - 2.1%
Rhone-Poulenc SA Class A 5,410 254,946
Schering AG 1,622 187,194
442,140
MEDICAL FACILITIES MANAGEMENT
- - 0.6%
Fresenius Medical Care AG 2,105 112,107
TOTAL HEALTH 554,247
INDUSTRIAL MACHINERY &
EQUIPMENT - 7.0%
ELECTRICAL EQUIPMENT - 4.7%
Siemens AG 13,216 975,319
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
Linde AG 780 476,111
TOTAL INDUSTRIAL MACHINERY & 1,451,430
EQUIPMENT
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
Primacom AG (a) 1,645 $ 71,411
NONDURABLES - 0.4%
BEVERAGES - 0.4%
Hawesko Holding AG (a) 2,125 85,498
RETAIL & WHOLESALE - 3.9%
GENERAL MERCHANDISE STORES -
2.7%
Metro AG 7,944 563,628
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.2%
Vendex NV CVA 9,680 241,368
TOTAL RETAIL & WHOLESALE 804,996
SERVICES - 1.5%
LEASING & RENTAL - 1.0%
Apcoa Parking AG 2,725 204,851
SERVICES - 0.5%
DIS Deutscher Industrie 2,325 118,408
Service AG
TOTAL SERVICES 323,259
TECHNOLOGY - 5.7%
COMMUNICATIONS EQUIPMENT - 0.1%
Teles AG (a) 60 13,213
COMPUTER SERVICES & SOFTWARE
- - 5.6%
Cap Gemini SA 2,170 332,462
IXOS Software AG 354 72,770
SAP AG (Systeme Anwendungen 2,315 757,397
Produkte)
1,162,629
TOTAL TECHNOLOGY 1,175,842
UTILITIES - 19.7%
CELLULAR - 9.6%
Mannesmann AG 15,225 1,992,460
ELECTRIC UTILITY - 5.6%
Berliner Kraft-und Licht AG 10,529 167,222
Veba AG 18,129 996,220
1,163,442
TELEPHONE SERVICES - 4.5%
Deutsche Telekom AG 23,578 931,421
TOTAL UTILITIES 4,087,323
TOTAL COMMON STOCKS 17,958,293
(Cost $14,942,575)
NONCONVERTIBLE PREFERRED
STOCKS - 12.3%
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
1.4%
BUILDING MATERIALS - 1.4%
Dyckerhoff AG 1,005 $ 279,857
DURABLES - 5.9%
AUTOS, TIRES, & ACCESSORIES -
5.6%
Bayerische Motoren Werke 855 333,141
(BMW) AG (non-vtg.)
Porsche AG (non-vtg.) 55 136,268
Volkswagen AG 16,549 705,965
1,175,374
HOME FURNISHINGS - 0.3%
Moebel Walther AG 2,757 57,507
TOTAL DURABLES 1,232,881
FINANCE - 2.8%
INSURANCE - 2.8%
Marschollek Lautenschlaeger 1,055 591,023
und Partner AG
NONDURABLES - 1.2%
HOUSEHOLD PRODUCTS - 1.2%
Wella AG 312 247,759
TECHNOLOGY - 0.5%
ELECTRONICS - 0.5%
Sartorius AG (non-vtg.) 597 101,137
UTILITIES - 0.5%
ELECTRIC UTILITY - 0.5%
RWE AG (non-vtg.) 3,410 102,899
TOTAL NONCONVERTIBLE 2,555,556
PREFERRED STOCKS
(Cost $2,580,071)
CASH EQUIVALENTS - 1.3%
Taxable Central Cash Fund (b) 264,358 264,358
(Cost $264,358)
TOTAL INVESTMENT IN $ 20,778,207
SECURITIES - 100%
(Cost $17,787,004)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $15,407,697 and $28,164,933, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $17,879,252. Net unrealized appreciation
aggregated $2,898,955, of which $3,638,159 related to appreciated
investment securities and $739,204 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $2,136,000, all of which will expire on October 31,
2006.
GERMANY
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 20,778,207
value (cost $17,787,004) -
See accompanying schedule
Receivable for investments 588,281
sold
Receivable for fund shares 17,313
sold
Dividends receivable 53,175
Interest receivable 1,361
Other receivables 35
TOTAL ASSETS 21,438,372
LIABILITIES
Payable for investments $ 667,703
purchased
Payable for fund shares 30,939
redeemed
Accrued management fee 12,858
Other payables and accrued 36,608
expenses
TOTAL LIABILITIES 748,108
NET ASSETS $ 20,690,264
Net Assets consist of:
Paid in capital $ 23,000,648
Accumulated net investment (107,224)
loss
Accumulated undistributed net (5,193,867)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 2,990,707
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 1,421,239 $ 20,690,264
shares outstanding
NET ASSET VALUE and $14.56
redemption price per share
($20,690,264 (divided by)
1,421,239 shares)
Maximum offering price per $15.01
share (100/97.00 of $14.56)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 79,132
Dividends
Special Dividend from RWE AG 32,630
Interest 11,959
123,721
Less foreign taxes withheld (10,988)
TOTAL INCOME 112,733
EXPENSES
Management fee $ 106,411
Transfer agent fees 51,751
Accounting fees and expenses 30,356
Non-interested trustees' 53
compensation
Custodian fees and expenses 28,314
Registration fees 9,116
Audit 15,507
Legal 72
Miscellaneous 3
Total expenses before 241,583
reductions
Expense reductions (21,626) 219,957
NET INVESTMENT INCOME (LOSS) (107,224)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (1,939,905)
Foreign currency transactions 4,546 (1,935,359)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 1,548,924
Assets and liabilities in (4,133) 1,544,791
foreign currencies
NET GAIN (LOSS) (390,568)
NET INCREASE (DECREASE) IN $ (497,792)
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 30,304
charges paid to FDC
Sales charges - Retained by $ 30,304
FDC
Expense reductions Directed $ 21,626
brokerage arrangements
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ (107,224) $ 48,103
income (loss)
Net realized gain (loss) (1,935,359) (3,233,307)
Change in net unrealized 1,544,791 827,872
appreciation (depreciation)
NET INCREASE (DECREASE) IN (497,792) (2,357,332)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (6,803)
From net investment income
From net realized gain - (1,168,956)
TOTAL DISTRIBUTIONS - (1,175,759)
Share transactions Net 9,396,961 46,714,688
proceeds from sales of shares
Reinvestment of distributions - 1,171,719
Cost of shares redeemed (23,071,131) (22,470,888)
NET INCREASE (DECREASE) IN (13,674,170) 25,415,519
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 67,183 180,382
TOTAL INCREASE (DECREASE) (14,104,779) 22,062,810
IN NET ASSETS
NET ASSETS
Beginning of period 34,795,043 12,732,233
End of period (including $ 20,690,264 $ 34,795,043
undistributed net investment
income (loss) of $(107,224)
and $16,792, respectively)
OTHER INFORMATION
Shares
Sold 616,324 2,771,374
Issued in reinvestment of - 93,141
distributions
Redeemed (1,547,076) (1,474,029)
Net increase (decrease) (930,752) 1,390,486
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 G
Net asset value, beginning of $ 14.79 $ 13.24 $ 11.34 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.06) D, K .03 D, E (.02) D .01
Net realized and unrealized (.21) 2.65 F 2.21 1.31
gain (loss)
Total from investment (.27) 2.68 2.19 1.32
operations
Less Distributions
From net investment income - (.01) H (.01) -
From net realized gain - (1.24) H (.35) -
Total distributions - (1.25) (.36) -
Redemption fees added to paid .04 .12 .07 .02
in capital
Net asset value, end of period $ 14.56 $ 14.79 $ 13.24 $ 11.34
TOTAL RETURN B, C (1.56)% 22.81% 20.47% 13.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 20,690 $ 34,795 $ 12,732 $ 7,178
(000 omitted)
Ratio of expenses to average 1.70% A 1.76% 2.00% I 2.00% I
net assets
Ratio of expenses to average 1.55% A, J 1.74% J 2.00% 2.00%
net assets after expense
reductions
Ratio of net investment (.75)% A .20% (.18)% .12%
income (loss) to average net
assets
Portfolio turnover rate 110% A 139% 120% 133%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.08 PER
SHARE.
F THE AMOUNT SHOWN FOR A
SHARE OUTSTANDING DOES NOT
CORRESPOND WITH THE
AGGREGATE NET LOSS ON
INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND
SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
G FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
H THE AMOUNTS SHOWN REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
J FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
K INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
FROM RWE AG WHICH AMOUNTED
TO $.02 PER SHARE.
</TABLE>
HONG KONG AND CHINA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY HONG KONG AND CHINA 29.25% 19.79% 35.42%
FIDELITY HONG KONG AND CHINA 25.38% 16.19% 31.36%
(INCL. 3.00% SALES CHARGE)
Hang Seng 31.22% 30.01% 48.62%
China Region Funds Average 14.26% 2.35% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Hang Seng Index - a market
capitalization-weighted index of the stocks of the 33 largest
companies in the Hong Kong market. You can also compare the fund's
performance to the China region funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 28 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY HONG KONG AND CHINA 19.79% 9.06%
FIDELITY HONG KONG AND CHINA 16.19% 8.11%
(INCL. 3.00% SALES CHARGE)
Hang Seng 30.01% 12.00%
China Region Funds Average 2.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Hong Kong and China Hang Seng
00352 EX004
1995/11/01 9700.00 10000.00
1995/11/30 9729.10 10055.31
1995/12/31 9942.65 10355.18
1996/01/31 11136.94 11707.43
1996/02/29 11001.00 11493.79
1996/03/31 10787.39 11344.61
1996/04/30 10816.52 11377.80
1996/05/31 11156.36 11717.22
1996/06/30 11010.71 11485.79
1996/07/31 10738.84 11172.35
1996/08/31 11272.87 11703.04
1996/09/30 12010.80 12513.71
1996/10/31 12593.38 13153.37
1996/11/30 13962.44 14151.17
1996/12/31 14017.97 14238.54
1997/01/31 13741.76 14107.81
1997/02/28 13899.59 14226.29
1997/03/31 13021.62 13329.79
1997/04/30 13297.84 13761.33
1997/05/31 15320.13 15770.49
1997/06/30 15438.51 16275.44
1997/07/31 16888.65 17575.67
1997/08/31 15300.40 15196.09
1997/09/30 15921.89 16236.25
1997/10/31 10910.54 11505.49
1997/11/30 10999.32 11431.72
1997/12/31 10926.40 11656.10
1998/01/31 9716.76 10104.22
1998/02/28 11630.37 12566.68
1998/03/31 11858.41 12638.18
1998/04/30 10966.06 11431.68
1998/05/31 9617.61 9866.13
1998/06/30 9131.77 9474.51
1998/07/31 8655.85 8841.87
1998/08/31 7604.85 8110.53
1998/09/30 8507.12 8789.59
1998/10/31 10162.94 11326.10
1998/11/30 10470.30 11606.20
1998/12/31 10342.98 11205.69
1999/01/31 9729.16 10599.24
1999/02/28 9841.69 10992.69
1999/03/31 10864.74 12198.25
1999/04/30 13135.90 14862.47
IMATRL PRASUN SHR__CHT 19990430 19990511 085938 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Hong Kong and China Fund on November 1, 1995,
when the fund started, and the current 3.00% sales charge was paid. As
the charts shows, by April 30, 1999, the value of the investment would
have grown to $13,136 - a 31.36% increase on the initial investment.
For comparison, look at how the Hang Seng Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $14,862 - a 48.62% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
HONG KONG AND CHINA
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Joseph Tse)
An interview with Joseph Tse, Portfolio Manager of
Fidelity Hong Kong and China Fund
Q. HOW DID THE FUND PERFORM, JOSEPH?
A. For the six months that ended April 30, 1999, the fund returned
29.25%, compared to the 31.22% return of the Hang Seng Index, and the
China region funds average of 14.26%, as tracked by Lipper Inc. For
the one-year period that ended April 30, 1999, the fund returned
19.79%, compared to the Hang Seng Index return of 30.01% and the
Lipper China region funds average return of 2.35%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S SLIGHT UNDERPERFORMANCE OF
THE HANG SENG INDEX?
A. The fund's underweighting in Hong Kong Telecommunications relative
to its benchmark negatively influenced performance. This stock was
under pressure early in the period spurred by investors' fear of
deregulation and the impact it would have on the former monopoly going
forward. Contrary to this belief, the stock soared over 50% in the
first quarter as the firm, with some help from Microsoft, announced
its intention on becoming Hong Kong's one true Internet play. The fund
added some of this stock in anticipation of the Internet euphoria, but
not enough to keep pace with the index. Also detracting from relative
performance was the fund's slight overweighting in property developers
during the six-month period. After outperforming sharply in the fourth
quarter, property shares slipped, rising at a slower rate than those
of the broader market over the last four months of the period.
Q. WHAT WERE YOUR STRATEGIES TO BOOST FUND PERFORMANCE DURING THE
PERIOD?
A. Overall, much of the success can be attributed to astute security
selection - sticking to the highest-quality companies in our universe.
In doing so, I effectively increased the fund's correlation with the
market to take advantage of its advances. Also important was avoiding
bull market stocks, such as China "red chips" - Chinese-related
companies that operate in Hong Kong. During the period, "red chips"
were grounded, as bullish investors, who previously rallied around the
companies' conglomeration efforts, turned bearish when they discovered
that what they were buying really wasn't a good investment after all.
Q. SPECIFICALLY, WHICH HOLDINGS BENEFITED PERFORMANCE? WHICH HURT?
A. The fund underweighted utilities, which showed diminishing growth
prospects in the face of de-regulation. In general, the rotation away
from defensive positions, like utilities, into cyclical stocks helped
the fund. Also, having good exposure to the red-hot banking sector was
beneficial. HSBC, a global banking and financial services company,
performed brilliantly over the six-month period. The fund had a
sizable position in smaller banks, which did well, but could not
outdeliver HSBC's solid gains. Like banks, real estate was a key
contributor. Real estate stocks made a steady surge as industry
leaders Sun Hung Kai Properties, Cheung Kong Holdings and Henderson
Land Development continued to benefit from a favorable interest-rate
environment and a stronger economy. On the downside, the higher
quality small- to mid-sized companies in my universe dragged down
relative performance. With a lower sensitivity to the swings of the
market, these stocks generally underperform during a boom. Notable
laggards included retailer Glorious Sun as well as Varitronix, a niche
liquid crystal display manufacturer.
Q. HOW ABOUT MAINLAND CHINA? ARE YOU STILL CAUTIOUS OF INVESTING IN
THE REGION?
A. I prefer to invest in professionally managed Hong Kong companies,
and thus maintain a very low exposure to China-company controlled
shares. China holdings have never made up a significant percentage of
the portfolio, due to the inherent policy risks and the fact that, on
the whole, these companies have failed to meet the quality criteria
necessary to warrant our consideration.
Q. WHAT'S YOUR OUTLOOK?
A. I am optimistic. We are at the early stages of an economic
recovery, barring any unforeseen circumstances. Hong Kong is adjusting
back to equilibrium, as interest rates have fallen steadily. I suspect
we may hear more talk of China potentially depreciating its currency
in 2000 as it struggles to compete with its neighbors over labor
costs. Earnings have dropped significantly over the last two years, so
if they stage a comeback over the next six to 12 months or so, we
should expect big things from cyclical stocks. Overall, I feel that
productivity will continue to drive companies' bottom lines. This
should protect us in a downturn.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Hong Kong and
Chinese issuers
FUND NUMBER: 352
TRADING SYMBOL: FHKCX
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than $157 million
MANAGER: Joseph Tse, since inception;
director of research, Fidelity Investments
Management (Hong Kong), since 1994;
manager, Asian portion of various global
equity funds, since 1993; joined Fidelity in
1990
HONG KONG AND CHINA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 5.6%
United Kingdom 13.2%
Taiwan 1.7%
Singapore 2.6%
Hong Kong 75.4%
Other 1.5%
Row: 1, Col: 1, Value: 75.40000000000001
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 2.6
Row: 1, Col: 4, Value: 1.7
Row: 1, Col: 5, Value: 13.2
Row: 1, Col: 6, Value: 5.6
AS OF OCTOBER 31, 1998
United States 13.2%
United Kingdom 4.9%
Taiwan 3.2%
Singapore 2.6%
Hong Kong 75.8%
Other 0.3%
Row: 1, Col: 1, Value: 75.0
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 2.6
Row: 1, Col: 4, Value: 3.2
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 13.2
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 94.4 86.8
Short-term investments 5.6 13.2
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
HSBC Holdings PLC (Banks) 10.9 4.9
Hutchison Whampoa Ltd. 9.2 10.2
(Electrical Equipment)
Sun Hung Kai Properties Ltd. 7.4 5.5
(Real Estate)
Cheung Kong Holdings Ltd. 6.6 6.3
(Real Estate)
Henderson Land Development 4.4 3.9
Co. Ltd. (Real Estate)
China Telecom (Hong Kong) 4.4 3.5
Ltd. (Cellular)
Hong Kong Telecommunications 3.5 4.6
Ltd. (Telephone Services)
Hong Kong & China Gas Co. 3.4 4.9
Ltd. (Gas)
Johnson Electric Holdings 3.2 7.8
Ltd. (Electrical Equipment)
Liu Chong Hing Bank Ltd. 2.3 2.0
(Banks)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
CONSTRUCTION & REAL ESTATE 25.5 19.0
FINANCE 23.2 7.9
UTILITIES 15.8 23.4
INDUSTRIAL MACHINERY & 12.6 18.0
EQUIPMENT
TECHNOLOGY 5.2 6.9
MEDIA & LEISURE 4.5 3.2
TRANSPORTATION 2.7 1.8
HOLDING COMPANIES 2.2 0.2
DURABLES 1.5 1.8
NONDURABLES 0.7 1.1
</TABLE>
HONG KONG AND CHINA
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.4%
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
25.5%
BUILDING MATERIALS - 0.2%
Shui On Construction & 230,000 $ 268,536
Materials Ltd.
REAL ESTATE - 25.3%
Amoy Properties Ltd. 1,026,000 933,173
Cheung Kong Holdings Ltd. 1,157,000 10,523,203
Great Eagle Holdings Ltd. 246,000 358,624
Hang Lung Development Co. 600,000 774,064
Ltd.
Henderson Investment Ltd. 566,000 449,073
Henderson Land Development 1,150,000 6,958,188
Co. Ltd.
HKR International Ltd. 916,800 680,092
Hysan Development Ltd. 538,000 829,422
New World Development Co. 1,378,738 3,415,139
Ltd.
Sun Hung Kai Properties Ltd. 1,343,021 11,781,950
Wharf Holdings Ltd. 1,389,000 3,404,719
40,107,647
TOTAL CONSTRUCTION & REAL 40,376,183
ESTATE
DURABLES - 1.5%
TEXTILES & APPAREL - 1.5%
Glorious Sun Enterprises 10,848,000 1,847,349
Yue Yuen Industrial Holdings 262,000 577,993
Ltd.
2,425,342
FINANCE - 23.2%
BANKS - 22.1%
Bank of East Asia Ltd. 708,000 1,721,749
Dah Sing Financial Holdings 456,000 1,438,365
Ltd.
Dao Heng Bank Group Ltd. 740,000 3,007,238
Hang Seng Bank Ltd. 228,000 2,698,773
HSBC Holdings PLC 456,676 17,200,782
Liu Chong Hing Bank Ltd. 2,877,000 3,563,170
Standard Chartered PLC 148,050 2,680,836
Wing Hang Bank Ltd. 850,000 2,598,919
34,909,832
INSURANCE - 0.4%
Axa China Region Ltd. 768,000 589,527
SECURITIES INDUSTRY - 0.7%
Guoco Group Ltd. 440,000 1,160,838
TOTAL FINANCE 36,660,197
HOLDING COMPANIES - 2.2%
First Pacific Co. Ltd. 302,000 233,767
Jardine Matheson Holdings 159,000 677,340
Ltd.
Jardine Strategic Holdings 474,000 1,170,780
Ltd.
Wheelock & Co. Ltd. 1,228,000 1,425,825
3,507,712
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 12.6%
ELECTRICAL EQUIPMENT - 12.6%
Chen Hsong Holdings Ltd. 2,804,000 $ 311,101
Hutchison Whampoa Ltd. 1,625,000 14,570,137
Johnson Electric Holdings 1,709,080 5,104,331
Ltd.
19,985,569
MEDIA & LEISURE - 4.5%
BROADCASTING - 1.5%
APT Satellite Holdings Ltd. 208,000 106,666
(a)
Asia Satellite 232,000 419,026
Telecommunications Holdings
Ltd.
Television Broadcasts Ltd. 440,000 1,788,087
2,313,779
PUBLISHING - 1.6%
Singapore Press Holdings Ltd. 82,000 1,208,726
South China Morning Post 2,143,000 1,292,496
Holdings
2,501,222
RESTAURANTS - 1.4%
Cafe de Coral Holdings Ltd. 6,846,000 2,252,177
TOTAL MEDIA & LEISURE 7,067,178
NONDURABLES - 0.7%
BEVERAGES - 0.7%
Vitasoy International 2,955,000 1,067,434
Holdings Ltd.
RETAIL & WHOLESALE - 0.5%
APPAREL STORES - 0.5%
Giordano International Ltd. 1,740,000 808,123
TECHNOLOGY - 5.2%
COMMUNICATIONS EQUIPMENT - 1.8%
Datacraft Asia Ltd. 409,000 1,284,260
Singapore Telecommunications 834,000 1,544,080
Ltd.
2,828,340
COMPUTERS & OFFICE EQUIPMENT
- - 0.7%
Compal Electronics, Inc. (a) 88,360 305,342
D-Link Corp. (a) 226,000 466,514
Hon Hai Precision Industry 60,000 326,606
Co.
1,098,462
ELECTRONICS - 2.7%
ASM Pacific Technology Ltd. 956,000 666,004
Phoenixtec Power Co. Ltd. 32,000 57,248
Siliconware Precision 105,000 187,844
Industries Co. Ltd.
Taiwan Semiconductor 202,000 682,599
Manufacturing Co. Ltd.
Varitronix International Ltd. 1,172,000 2,010,966
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Winbond Electronics Corp. (a) 321,000 $ 349,468
Winbond Electronics Corp. 29,300 300,325
sponsored GDR (a)(c)
4,254,454
TOTAL TECHNOLOGY 8,181,256
TRANSPORTATION - 2.7%
AIR TRANSPORTATION - 1.0%
Swire Pacific Ltd.:
Class A 132,000 740,779
Class B 998,000 849,767
1,590,546
SHIPPING - 0.5%
Shun Tak Holdings Ltd. 2,446,000 828,345
TRUCKING & FREIGHT - 1.2%
New World Infrastructure Ltd. 645,200 1,177,813
(a)
Shenzhen Expressway Co. Ltd. 3,104,000 636,714
Class H
1,814,527
TOTAL TRANSPORTATION 4,233,418
UTILITIES - 15.8%
CELLULAR - 6.6%
Cable & Wireless Optus Ltd. 167,400 376,414
(a)
China Telecom (Hong Kong) 3,006,000 6,876,226
Ltd. (a)
Smartone Telecommunications 934,000 3,235,315
Holdings Ltd.
10,487,955
ELECTRIC UTILITY - 1.3%
Beijing Datang Power 1,320,000 395,934
Generation Co. Ltd.
CLP Holdings Ltd. 181,000 971,398
Hong Kong Electric Holdings 84,000 267,671
Ltd. (a)
Huaneng Power International, 1,218,000 412,479
Inc. Class H
2,047,482
GAS - 3.4%
Hong Kong & China Gas Co. 3,827,800 5,382,713
Ltd.
TELEPHONE SERVICES - 4.5%
Cable & Wireless PLC 63,500 912,503
Hong Kong Telecommunications 2,078,708 5,560,537
Ltd.
Telecom Corp. of New Zealand 129,900 675,734
Ltd.
7,148,774
TOTAL UTILITIES 25,066,924
TOTAL COMMON STOCKS 149,379,336
(Cost $112,220,473)
CASH EQUIVALENTS - 5.6%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b) 8,846,237 $ 8,846,237
(Cost $8,846,237)
TOTAL INVESTMENT IN $ 158,225,573
SECURITIES - 100%
(Cost $121,066,710)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $300,325 or 0.2% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $52,725,980 and $58,958,930, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $124,171,186. Net unrealized appreciation
aggregated $34,054,387, of which $38,637,773 related to appreciated
investment securities and $4,583,386 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $55,966,000 all of which will expire on October 31,
2006.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 158,225,573
value (cost $121,066,710) -
See accompanying schedule
Foreign currency held at 498,992
value (cost $498,992)
Receivable for investments 735,451
sold
Receivable for fund shares 443,118
sold
Dividends receivable 722,700
Interest receivable 12,866
Redemption fees receivable 1,092
TOTAL ASSETS 160,639,792
LIABILITIES
Payable to custodian bank $ 10,930
Payable for investments 2,424,052
purchased
Payable for fund shares 417,535
redeemed
Accrued management fee 83,809
Other payables and accrued 100,404
expenses
TOTAL LIABILITIES 3,036,730
NET ASSETS $ 157,603,062
Net Assets consist of:
Paid in capital $ 179,947,424
Undistributed net investment 849,206
income
Accumulated undistributed net (60,350,701)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 37,157,133
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 12,270,272 $ 157,603,062
shares outstanding
NET ASSET VALUE and $12.84
redemption price per share
($157,603,062 (divided by)
12,270,272 shares)
Maximum offering price per $13.24
share (100/97.00 of $12.84)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 1,817,784
Dividends
Interest (including income on 450,020
securities loaned of
$324,121)
2,267,804
Less foreign taxes withheld (39,101)
TOTAL INCOME 2,228,703
EXPENSES
Management fee $ 477,235
Transfer agent fees 257,538
Accounting and security 45,233
lending fees
Non-interested trustees' 224
compensation
Custodian fees and expenses 64,090
Registration fees 11,253
Audit 25,188
Legal 290
Total expenses before 881,051
reductions
Expense reductions (15,526) 865,525
NET INVESTMENT INCOME 1,363,178
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 2,833,096
Foreign currency transactions 4,404 2,837,500
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 29,378,518
Assets and liabilities in (4,480) 29,374,038
foreign currencies
NET GAIN (LOSS) 32,211,538
NET INCREASE (DECREASE) IN $ 33,574,716
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 65,858
charges paid to FDC
Sales charges - Retained by $ 65,858
FDC
Expense Reductions $ 15,459
Directed brokerage
arrangements
Transfer agent credits 67
$ 15,526
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 1,363,178 $ 4,741,212
income
Net realized gain (loss) 2,837,500 (61,779,009)
Change in net unrealized 29,374,038 41,852,376
appreciation (depreciation)
NET INCREASE (DECREASE) IN 33,574,716 (15,185,421)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (4,312,559) (968,977)
from net investment income
Share transactions Net 35,782,690 103,918,242
proceeds from sales of shares
Reinvestment of distributions 4,182,802 960,768
Cost of shares redeemed (52,664,035) (125,865,511)
NET INCREASE (DECREASE) IN (12,698,543) (20,986,501)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 215,629 548,707
TOTAL INCREASE (DECREASE) 16,779,243 (36,592,192)
IN NET ASSETS
NET ASSETS
Beginning of period 140,823,819 177,416,011
End of period (including $ 157,603,062 $ 140,823,819
undistributed net investment
income of $849,206 and
$3,798,587, respectively)
OTHER INFORMATION
Shares
Sold 3,251,515 10,103,475
Issued in reinvestment of 415,738 81,433
distributions
Redeemed (5,140,354) (12,481,967)
Net increase (decrease) (1,473,101) (2,297,059)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 F
Net asset value, beginning of $ 10.25 $ 11.06 $ 12.97 $ 10.00
period
Income from Investment
Operations
Net investment income D .11 .31 .17 .29
Net realized and unrealized 2.78 (1.10) (1.95) 2.64
gain (loss)
Total from investment 2.89 (.79) (1.78) 2.93
operations
Less Distributions
From net investment income (.32) (.06) (.14) (.01)
From net realized gain - - (.08) -
Total distributions (.32) (.06) (.22) (.01)
Redemption fees added to paid .02 .04 .09 .05
in capital
Net asset value, end of period $ 12.84 $ 10.25 $ 11.06 $ 12.97
TOTAL RETURN B, C 29.25% (6.85)% (13.36)% 29.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 157,603 $ 140,824 $ 177,416 $ 109,880
(000 omitted)
Ratio of expenses to average 1.37% A 1.41% 1.31% 1.62%
net assets
Ratio of expenses to average 1.35% A, E 1.40% E 1.31% 1.62%
net assets after expense
reductions
Ratio of net investment 2.12% A 3.07% 1.18% 2.53%
income to average net assets
Portfolio turnover rate 85% A 109% 174% 118%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
F FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER
31,1996.
</TABLE>
JAPAN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY JAPAN 35.75% 33.38% 4.91% 48.19%
FIDELITY JAPAN (INCL. 3.00% 31.68% 29.37% 1.76% 43.74%
SALES CHARGE)
TOPIX 26.62% 22.31% -26.03% 6.42%
Japanese Funds Average 35.93% 29.94% -14.04% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on September 15, 1992. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Tokyo Stock Exchange
Index (TOPIX) - a market capitalization-weighted index of over 1,100
stocks traded in the Japanese market. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Japanese funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Inc. The past six months
average represents a peer group of 44 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY JAPAN 33.38% 0.96% 6.12%
FIDELITY JAPAN (INCL. 3.00% 29.37% 0.35% 5.63%
SALES CHARGE)
TOPIX 22.31% -5.85% 0.94%
Japanese Funds Average 29.94% -3.37% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Japan Fund TOPIX
00350 TK001
1992/09/15 9700.00 10000.00
1992/09/30 9641.80 9815.42
1992/10/31 9544.80 9336.12
1992/11/30 9641.80 9576.86
1992/12/31 9661.20 9437.20
1993/01/31 9748.50 9388.21
1993/02/28 10301.40 9815.57
1993/03/31 11484.80 11253.41
1993/04/30 13036.80 13170.39
1993/05/31 13405.40 13966.69
1993/06/30 12610.00 13389.70
1993/07/31 13453.90 14330.57
1993/08/31 13686.70 14650.81
1993/09/30 13318.10 13889.46
1993/10/31 12949.50 13636.41
1993/11/30 11252.00 11429.98
1993/12/31 11637.09 11715.04
1994/01/31 13010.29 13586.06
1994/02/28 13621.71 14249.19
1994/03/31 13391.17 13845.83
1994/04/30 13701.90 14386.73
1994/05/31 14082.78 14648.69
1994/06/30 14934.77 15465.45
1994/07/31 14443.62 14910.88
1994/08/31 14393.51 14947.34
1994/09/30 14042.69 14552.59
1994/10/31 14303.30 14937.45
1994/11/30 13331.03 14052.07
1994/12/31 13552.55 14299.84
1995/01/31 12387.96 13546.80
1995/02/28 11810.82 12780.10
1995/03/31 12758.98 13884.10
1995/04/30 12913.57 14548.67
1995/05/31 12181.84 13609.31
1995/06/30 12016.94 12960.37
1995/07/31 12820.82 13960.65
1995/08/31 12769.29 13417.71
1995/09/30 12738.37 13428.96
1995/10/31 12449.80 12721.44
1995/11/30 12594.08 13464.74
1995/12/31 13263.98 14067.55
1996/01/31 13171.23 13932.57
1996/02/29 12810.51 13709.11
1996/03/31 13171.23 14169.24
1996/04/30 14016.33 15121.58
1996/05/31 13511.33 14389.30
1996/06/30 13748.37 14458.38
1996/07/31 13068.16 13756.75
1996/08/31 12573.47 13177.79
1996/09/30 12862.04 13557.37
1996/10/31 12037.55 12655.38
1996/11/30 12336.43 12756.39
1996/12/31 11779.52 11779.59
1997/01/31 10892.44 10516.37
1997/02/28 11181.26 10724.66
1997/03/31 10995.59 10331.19
1997/04/30 11542.28 10584.92
1997/05/31 12872.89 11901.06
1997/06/30 13574.29 12672.60
1997/07/31 13935.31 12178.72
1997/08/31 12295.26 11093.36
1997/09/30 12439.66 10753.27
1997/10/31 11449.44 9937.19
1997/11/30 11036.85 9188.53
1997/12/31 10515.02 8470.67
1998/01/31 11186.63 9376.43
1998/02/28 11008.24 9454.41
1998/03/31 10305.14 8817.25
1998/04/30 10777.37 8701.22
1998/05/31 10441.56 8293.03
1998/06/30 10462.55 8346.71
1998/07/31 10724.90 8236.34
1998/08/31 9633.52 7389.77
1998/09/30 9738.46 7235.42
1998/10/31 10588.47 8404.64
1998/11/30 11312.56 8804.35
1998/12/31 11890.92 9128.11
1999/01/31 11796.21 9173.65
1999/02/28 11722.55 8955.23
1999/03/31 13469.36 10158.76
1999/04/30 14374.33 10642.34
IMATRL PRASUN SHR__CHT 19990430 19990514 100830 R00000000000083
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Japan Fund on September 15, 1992, when the fund
started, and the current 3.00% sales charge was paid. As the chart
shows, by April 30, 1999, the value of the investment would have grown
to $14,374 - a 43.74% increase on the initial investment. For
comparison, look at how the Tokyo Stock Exchange Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have been $10,642 - a 6.42% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
JAPAN
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Brenda Reed)
NOTE TO SHAREHOLDERS: Brenda Reed became Portfolio Manager of Fidelity
Japan Fund on December 31, 1998.
Q. HOW DID THE FUND PERFORM, BRENDA?
A. The fund did well. For the six months that ended April 30, 1999,
the fund had a total return of 35.75%. That substantially bettered the
26.62% return of the Tokyo Stock Exchange Index (TOPIX) but slightly
trailed the 35.93% of the Japanese funds average monitored by Lipper
Inc. For the 12 months that ended April 30, 1999, the fund returned
33.38%, compared to 22.31% and 29.94%, respectively, for the index and
the average.
Q. WHY DID THE FUND OUTPERFORM THE INDEX?
A. For one thing, the fund owned a number of stocks that benefited
substantially from the restructuring occurring in many Japanese
industries. A second factor was the fund's overweighting in the strong
telecommunications sector. Favorable stock selection in the telecom
sector also played a part. Finally, I'd mention the fund's relatively
heavy emphasis on small- and mid-capitalization stocks, which were
even stronger than the large-cap shares. It's also worth noting that
the fund's high absolute returns were attributable in part to a stable
yen. Currency fluctuation is one factor that tends to make foreign
investments riskier than those that are U.S.-based.
Q. WHY IS RESTRUCTURING SUCH AN IMPORTANT TREND IN JAPAN NOW?
A. After years of operating in a fairly protected environment,
Japanese businesspeople are being told by their government that they
must compete effectively or go out of business. The biggest problems,
of course, are in the troubled financial sector, where most banks are
still in the process of recovering from a huge backlog of bad real
estate loans. These problems have been exacerbated because the
Japanese economy has been extremely depressed for the past several
years. This has made it difficult for companies in most industries to
grow their way out of their problems. The other ways to improve
performance are to cut unnecessary costs, improve economies of scale
through mergers and acquisitions, close down unprofitable business
lines and increase productivity through investments in technology - in
other words, restructuring.
Q. SPEAKING OF THE FINANCE SECTOR, THE FUND'S FINANCE COMPONENT
INCREASED FROM 11.0% IN THE LAST REPORT TO 17.4% AT THE END OF THE
PERIOD. WHY THE BIG INCREASE?
A. When I began managing the fund at the end of 1998, one of the
decisions I made was to keep the fund's sector allocations closer to
those of the index. Although the fund had some non-bank finance
holdings, it owned virtually no bank stocks when I took over. I bought
enough bank stock to bring the fund's weighting in that area more in
line with that of the index. Beyond that, however, the restructuring
going on in the banking industry indicated to me that some banks were
genuinely worthy investments. I tried to concentrate on the most
progressive banks at the forefront of the restructuring movement.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Hikari Tsushin helped the fund's performance. The stock is a play
on the exploding market for cellular communications in Japan. Earnings
were strong because the company opened a lot of new stores and sales
at existing stores were robust. Sony Music Entertainment, a publicly
traded subsidiary of Sony Corp., benefited from the parent company's
restructuring plans, which included a lucrative buyout offer for Sony
Music Entertainment.
Q. WHAT STOCKS DETRACTED FROM THE FUND'S PERFORMANCE?
A. Riso Kagaku was a laggard in the portfolio. The company makes
risographs, an industrial printer designed for large printing runs.
The stock suffered from earnings downgrades as business from Southeast
Asia and Latin America fell off. On the positive side, the company has
a great balance sheet and healthy cash flow, together with a
competitive new product line. Since the stock was modestly valued, I
decided to maintain the position.
Q. WHAT'S YOUR OUTLOOK, BRENDA?
A. With a surging stock market, concrete government initiatives
designed to help the most troubled parts of the economy and a flurry
of announced corporate restructurings, things are looking up for
Japan. However, the sustainability of the rally in Japanese stocks
will depend to a large extent on whether companies follow through on
the changes they have promised. Backed by the largest equity research
department in Tokyo, the fund is well positioned to make informed
decisions about which companies are taking the mandate for change
seriously.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Japanese issuers
FUND NUMBER: 350
TRADING SYMBOL: FJPNX
START DATE: September 15, 1992
SIZE: as of April 30, 1999, more than $370 million
MANAGER: Brenda Reed, since December 1998;
associate manager, Japan Fund,
October-December 1998; manager, Fidelity Select
Automotive Portfolio, 1994-1996; Fidelity Select
Air Transportation Portfolio, 1993-1994; joined
Fidelity in 1992
JAPAN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 4.8%
Japan 95.2%
Row: 1, Col: 1, Value: 95.2
Row: 1, Col: 2, Value: 4.8
AS OF OCTOBER 31,1998
United States 9.6%
Japan 90.4%
Row: 1, Col: 1, Value: 90.40000000000001
Row: 1, Col: 2, Value: 9.6
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 94.5 90.4
Bonds 1.6 1.1
Short-term investments 3.9 8.5
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
NTT Mobile Communication 2.8 1.3
Network, Inc. (Cellular)
Toyota Motor Corp. (Autos, 2.8 3.2
Tires, & Accessories)
Bank of Tokyo-Mitsubishi Ltd. 2.8 0.5
(Banks)
Takeda Chemical Industries 2.5 2.5
Ltd. (Drugs & Pharmaceuticals)
Honda Motor Co. Ltd. (Autos, 2.3 1.7
Tires, & Accessories)
Shohkoh Fund & Co. Ltd. 2.2 1.6
(Credit & Other Finance)
Sanwa Bank Ltd. AG (Banks) 2.1 0.0
Matsushita Electric 2.0 1.7
Industrial Co. Ltd.
(Consumer Electronics)
Takefuji Corp. (Credit & 2.0 1.6
Other Finance)
Ito-Yokado Co. Ltd. (General 1.9 2.2
Merchandise Stores)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 23.0 25.5
FINANCE 17.4 11.0
DURABLES 13.3 15.8
UTILITIES 7.8 3.8
HEALTH 7.3 8.6
INDUSTRIAL MACHINERY & 6.6 7.9
EQUIPMENT
NONDURABLES 5.2 1.8
BASIC INDUSTRIES 4.8 2.0
RETAIL & WHOLESALE 4.5 3.7
SERVICES 3.4 5.9
</TABLE>
JAPAN
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.5%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 4.8%
CHEMICALS & PLASTICS - 2.7%
Asahi Chemical Industry Co. 280,000 $ 1,630,089
Ltd.
Nippon Zeon Co. Ltd. 280,000 1,857,597
Shin-Etsu Chemical Co. Ltd. 210,000 6,684,536
10,172,222
IRON & STEEL - 0.5%
Nippon Steel Corp. 800,000 1,795,946
METALS & MINING - 1.0%
Fujikura Ltd. 250,000 1,302,563
Furukawa Electric Co. Ltd. 600,000 2,623,555
3,926,118
PAPER & FOREST PRODUCTS - 0.6%
Oji Paper Co. Ltd. 400,000 2,395,711
TOTAL BASIC INDUSTRIES 18,289,997
CONSTRUCTION & REAL ESTATE -
1.2%
CONSTRUCTION - 0.3%
Sumitomo Forestry Co. Ltd. 150,000 1,118,278
ENGINEERING - 0.6%
Nippon Computer Systems Corp. 175,000 2,448,065
REAL ESTATE - 0.3%
Meiwa Estate Co. Ltd. 30,000 952,421
TOTAL CONSTRUCTION & REAL 4,518,764
ESTATE
DURABLES - 13.3%
AUTOS, TIRES, & ACCESSORIES -
7.2%
Bridgestone Corp. 110,000 2,948,567
Fuji Heavy Industries Ltd. 250,000 1,675,322
Hino Motors Ltd. 570,000 2,716,787
Honda Motor Co. Ltd. 193,000 8,528,187
NGK Spark Plug Co. Ltd. 85,000 893,575
Toyota Motor Corp. 370,000 10,591,249
27,353,687
CONSUMER DURABLES - 1.0%
Sankyo Co. Ltd. (Gunma) 110,000 3,814,709
CONSUMER ELECTRONICS - 4.7%
Citizen Watch Co. Ltd. 343,000 2,844,446
Matsushita Electric 401,000 7,624,979
Industrial Co. Ltd.
Sharp Corp. 145,000 1,700,452
Sony Corp. 58,700 5,429,750
17,599,627
HOME FURNISHINGS - 0.4%
Otsuka Kagu Ltd. 12,000 1,507,790
TOTAL DURABLES 50,275,813
SHARES VALUE (NOTE 1)
FINANCE - 15.8%
BANKS - 6.3%
Bank of Tokyo-Mitsubishi Ltd. 700,000 $ 10,331,713
Fuji Bank Ltd. 400,000 3,122,801
Mitsubishi Trust & Banking 200,000 2,194,672
Corp.
Sanwa Bank Ltd. AG 698,000 7,834,813
23,483,999
CREDIT & OTHER FINANCE - 8.2%
Acom Co. Ltd. 71,000 5,322,918
Aeon Credit Service Ltd. 66,000 5,694,421
Aiful Corp. 32,400 2,651,600
Shohkoh Fund & Co. Ltd. 14,000 8,209,080
Takefuji Corp. 90,000 7,463,561
Takefuji Corp. (c) 20,000 1,658,569
31,000,149
SECURITIES INDUSTRY - 1.3%
Daiwa Securities Co. Ltd. 390,000 2,384,821
Nikko Securities Co. Ltd. 450,000 2,582,091
4,966,912
TOTAL FINANCE 59,451,060
HEALTH - 7.3%
DRUGS & PHARMACEUTICALS - 4.2%
Banyu Pharmaceutical Co. Ltd. 360,000 6,634,278
Takeda Chemical Industries 215,000 9,347,043
Ltd.
15,981,321
MEDICAL EQUIPMENT & SUPPLIES
- - 3.1%
Hoya Corp. 94,000 4,921,260
Kawasumi Laboratories, Inc. 95,000 1,639,303
Terumo Corp. 230,000 5,009,214
11,569,777
TOTAL HEALTH 27,551,098
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.6%
ELECTRICAL EQUIPMENT - 3.0%
Mitsubishi Electric Corp. 600,000 2,095,828
NGK Insulators Ltd. 300,000 3,656,391
Omron Corp. 420,000 5,787,401
11,539,620
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.6%
Daifuku Co. Ltd. 206,000 1,389,094
Fuji Machine Manufacturing 140,000 4,995,811
Co. Ltd.
Max Co. Ltd. 150,000 1,698,777
THK Co. Ltd. 310,000 5,375,272
13,458,954
TOTAL INDUSTRIAL MACHINERY & 24,998,574
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 1.6%
ENTERTAINMENT - 1.2%
Avex, Inc. 7,500 $ 691,071
Sony Music Entertainment Ltd. 50,800 3,702,127
4,393,198
LEISURE DURABLES & TOYS - 0.4%
Shimano, Inc. 67,000 1,706,148
TOTAL MEDIA & LEISURE 6,099,346
NONDURABLES - 5.2%
BEVERAGES - 2.9%
Fuji Coca-Cola Bottling Co. 100,000 1,382,141
Ltd.
Ito En Ltd. 50,000 3,451,164
Kinki Coca-Cola Bottling Co. 104,000 1,472,273
Ltd.
Kita Kyushu Coca-Cola 60,000 2,925,113
Bottling Co. Ltd.
Mikuni Coca-Cola Bottling Co. 80,000 1,675,322
Ltd.
10,906,013
HOUSEHOLD PRODUCTS - 1.6%
Kao Corp. 170,000 4,314,793
Uni-Charm Corp. 37,000 1,676,746
5,991,539
TOBACCO - 0.7%
Japan Tobacco, Inc. 270 2,714,022
TOTAL NONDURABLES 19,611,574
RETAIL & WHOLESALE - 4.5%
APPAREL STORES - 0.8%
World Co. Ltd. 55,000 3,045,317
GENERAL MERCHANDISE STORES -
2.1%
Ito-Yokado Co. Ltd. 116,000 7,122,466
Seiyu Ltd. (a) 165,000 988,231
8,110,697
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.6%
Don Quijote Co. Ltd. 11,000 2,561,568
Paris Miki, Inc. 50,490 1,683,282
Senshukai Co. Ltd. 150,000 1,647,261
5,892,111
TOTAL RETAIL & WHOLESALE 17,048,125
SERVICES - 3.4%
PRINTING - 1.5%
Dai Nippon Printing Co. Ltd. 150,000 2,377,282
Riso Kagaku Corp. 32,600 1,556,542
Toppan Forms Co. Ltd. 90,000 1,711,342
5,645,166
SHARES VALUE (NOTE 1)
SERVICES - 1.9%
Benesse Corp. 60,000 $ 5,005,863
Nippon System Development Co. 45,000 2,299,380
7,305,243
TOTAL SERVICES 12,950,409
TECHNOLOGY - 23.0%
COMMUNICATIONS EQUIPMENT - 2.3%
Matsushita Communication 40,000 2,871,503
Industrial Co. Ltd.
NEC Corp. 480,000 5,733,623
8,605,126
COMPUTER SERVICES & SOFTWARE
- - 3.4%
Fuji Soft ABC, Inc. 30,100 1,830,508
Hitachi Information Systems, 165,000 2,099,472
Ltd.
Konami Co. Ltd. 100,000 3,518,177
Oracle Corp. Japan 13,000 1,589,881
Square Co. Ltd. 60,000 2,161,166
Trend Micro, Inc. (a) 13,000 1,720,556
12,919,760
COMPUTERS & OFFICE EQUIPMENT
- - 4.6%
Canon, Inc. 77,000 1,883,397
Fujitsu Support & Service, 14,000 1,712,180
Inc.
Hitachi Ltd. 550,000 4,015,000
Nidec Corp. 23,000 2,986,262
Ricoh Co. Ltd. 245,000 2,360,110
Softbank Corp. 33,000 4,392,444
17,349,393
ELECTRONIC INSTRUMENTS - 1.5%
Anritsu Corp. 150,000 1,341,933
Dainippon Screen 313,000 1,520,690
Manufacturing Co. Ltd.
Tokyo Seimitsu Co. Ltd. 50,000 2,768,470
5,631,093
ELECTRONICS - 9.5%
Alps Electric Co. Ltd. 100,000 1,696,264
Futaba Corp. 40,000 1,688,725
Hirose Electric Co. Ltd. 69,000 6,415,647
Kyocera Corp. 43,000 2,553,778
Minebea Co. Ltd. 129,000 1,248,073
Mitsumi Electric Co. Ltd. 120,000 2,291,841
Nichicon Corp. 446,000 5,884,151
Nitto Denko Corp. 145,000 2,757,162
Rohm Co. Ltd. 41,000 4,945,552
TDK Corp. 64,000 4,841,012
Toko, Inc. 300,000 1,517,842
35,840,047
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 1.7%
Fuji Photo Film Co. Ltd. 128,000 $ 4,835,651
Noritsu Koki Co. Ltd. 45,000 1,485,173
6,320,824
TOTAL TECHNOLOGY 86,666,243
UTILITIES - 7.8%
CELLULAR - 6.1%
Hikari Tsushin, Inc. 25,000 5,235,383
NTT Mobile Communication 182 10,671,802
Network, Inc. (a)
NTT Mobile Communication 118 6,919,082
Network, Inc. (c)
22,826,267
TELEPHONE SERVICES - 1.7%
DDI Corp. 600 2,980,399
Japan Telecom Co. Ltd. 50 707,824
Kokusai Denshin Denwa 45,000 2,729,100
6,417,323
TOTAL UTILITIES 29,243,590
TOTAL COMMON STOCKS 356,704,593
(Cost $265,553,702)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 1.6%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
CONVERTIBLE BONDS - 0.7%
FINANCE - 0.7%
SECURITIES INDUSTRY - 0.7%
Kokusai Securities Co. Ltd. - JPY 190,000,000 2,482,828
1.25% 9/30/13
NONCONVERTIBLE BONDS - 0.9%
FINANCE - 0.9%
CREDIT & OTHER FINANCE - 0.9%
SB Treasury Co. LLC 9.4% Baa2 3,314,000 3,326,428
12/29/49 (c)(d)
TOTAL CORPORATE BONDS 5,809,256
(Cost $4,563,687)
</TABLE>
CASH EQUIVALENTS - 3.9%
SHARES
Taxable Central Cash Fund (b) 14,818,328 14,818,328
(Cost $14,818,328)
TOTAL INVESTMENT IN $ 377,332,177
SECURITIES - 100%
(Cost $284,935,717)
CURRENCY ABBREVIATIONS
JPY - Japanese yen
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $11,904,079 or 3.2% of net assets.
(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $163,091,293 and $132,288,255, respectively.
The fund participated in the bank borrowing program. The average daily
balances during the period for which loans were outstanding amounted
to $3,662,200. The weighted average interest rate was 5.07%.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $285,246,534. Net unrealized appreciation
aggregated $92,085,643, of which $96,851,298 related to appreciated
investment securities and $4,765,655 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $86,198,000 of which $31,995,00, $20,273,000 and
$33,930,00 will expire on October 31, 2003, 2005 and 2006,
respectively.
JAPAN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 377,332,177
value (cost $284,935,717) -
See accompanying schedule
Receivable for investments 2,201,723
sold
Receivable for fund shares 1,504,991
sold
Dividends receivable 747,748
Interest receivable 168,759
Redemption fees receivable 1,234
TOTAL ASSETS 381,956,632
LIABILITIES
Payable for investments $ 10,349,324
purchased
Payable for fund shares 643,577
redeemed
Accrued management fee 263,649
Other payables and accrued 144,134
expenses
TOTAL LIABILITIES 11,400,684
NET ASSETS $ 370,555,948
Net Assets consist of:
Paid in capital $ 369,435,182
Distributions in excess of (6,219,300)
net investment income
Accumulated undistributed net (85,024,475)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 92,364,541
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 27,125,560 $ 370,555,948
shares outstanding
NET ASSET VALUE and $13.66
redemption price per share
($370,555,948 (divided by)
27,125,560 shares)
Maximum offering price per $14.08
share (100/97.00 of $13.66)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 678,755
Dividends
Interest 793,102
1,471,857
Less foreign taxes withheld (140,260)
TOTAL INCOME 1,331,597
EXPENSES
Management fee Basic fee $ 1,128,249
Performance adjustment 295,686
Transfer agent fees 434,268
Accounting fees and expenses 95,200
Non-interested trustees' 584
compensation
Custodian fees and expenses 54,406
Registration fees 15,721
Audit 6,846
Legal 591
Interest 5,154
Total expenses before 2,036,705
reductions
Expense reductions (9,483) 2,027,222
NET INVESTMENT INCOME (LOSS) (695,625)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 2,449,940
Foreign currency transactions (214,469) 2,235,471
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 89,036,410
Assets and liabilities in (108,333) 88,928,077
foreign currencies
NET GAIN (LOSS) 91,163,548
NET INCREASE (DECREASE) IN $ 90,467,923
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 485,040
charges paid to FDC
Sales charges - Retained by $ 485,040
FDC
Expense reductions Directed $ 6,991
brokerage arrangements
Custodian credits 1,536
Transfer agent credits 956
$ 9,483
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ (695,625) $ (886,023)
income (loss)
Net realized gain (loss) 2,235,471 (33,687,055)
Change in net unrealized 88,928,077 15,140,754
appreciation (depreciation)
NET INCREASE (DECREASE) IN 90,467,923 (19,432,324)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (833,682) (3,904,278)
in excess of net investment
income
Share transactions Net 135,022,082 166,701,599
proceeds from sales of shares
Reinvestment of distributions 804,286 3,837,897
Cost of shares redeemed (120,560,855) (137,739,104)
NET INCREASE (DECREASE) IN 15,265,513 32,800,392
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 261,679 375,918
TOTAL INCREASE (DECREASE) 105,161,433 9,839,708
IN NET ASSETS
NET ASSETS
Beginning of period 265,394,515 255,554,807
End of period (including $ 370,555,948 $ 265,394,515
distributions in excess of
net investment income of
$6,219,300 and $4,689,993,
respectively)
OTHER INFORMATION
Shares
Sold 11,260,453 16,601,342
Issued in reinvestment of 73,856 370,453
distributions
Redeemed (10,521,594) (13,676,838)
Net increase (decrease) 812,715 3,294,957
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 10.09 $ 11.10 $ 11.68 $ 12.08 $ 14.27
period
Income from Investment
Operations
Net investment income (loss) (.03) D (.04) D (.06) D (.02) D (.02)
Net realized and unrealized 3.62 (.81) (.55) (.40) (1.89)
gain (loss)
Total from investment 3.59 (.85) (.61) (.42) (1.91)
operations
Less Distributions
In excess of net investment (.03) (.18) (.01) - -
income
From net realized gain - - - - (.36)
Total distributions (.03) (.18) (.01) - (.36)
Redemption fees added to paid .01 .02 .04 .02 .08
in capital
Net asset value, end of period $ 13.66 $ 10.09 $ 11.10 $ 11.68 $ 12.08
TOTAL RETURN B, C 35.75% (7.52)% (4.89)% (3.31)% (12.96)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 370,556 $ 265,395 $ 255,555 $ 290,495 $ 343,981
(000 omitted)
Ratio of expenses to average 1.34% A 1.49% 1.42% 1.15% 1.15%
net assets
Ratio of expenses to average 1.34% A 1.48% E 1.40% E 1.14% E 1.15%
net assets after expense
reductions
Ratio of net investment (.46)% A (.37)% (.54)% (.12)% (.06)%
income (loss) to average net
assets
Portfolio turnover rate 91% A 62% 70% 83% 86%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 13.35
period
Income from Investment
Operations
Net investment income (loss) (.04) D
Net realized and unrealized 1.31
gain (loss)
Total from investment 1.27
operations
Less Distributions
In excess of net investment -
income
From net realized gain (.39)
Total distributions (.39)
Redemption fees added to paid .04
in capital
Net asset value, end of period $ 14.27
TOTAL RETURN B, C 10.45%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 469,639
(000 omitted)
Ratio of expenses to average 1.42%
net assets
Ratio of expenses to average 1.42%
net assets after expense
reductions
Ratio of net investment (.32)%
income (loss) to average net
assets
Portfolio turnover rate 153%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
JAPAN SMALL COMPANIES
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY JAPAN SMALL COMPANIES 88.19% 87.56% 13.84%
FIDELITY JAPAN SMALL 82.54% 81.94% 10.43%
COMPANIES (INCL. 3.00%
SALES CHARGE)
TOPIX Second Section 62.11% 51.04% -16.49%
Japanese Funds Average 35.93% 29.94% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Tokyo Stock Exchange Second Section Stock Index
(TOPIX Second Section) - a market capitalization-weighted index that
reflects the performance of the smaller, less established and newly
listed companies of the Tokyo Stock Exchange. To measure how the
fund's performance stacked up against its peers, you can compare the
fund's performance to the Japanese funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. the past six months average represents a peer group of 44 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY JAPAN SMALL COMPANIES 87.56% 3.78%
FIDELITY JAPAN SMALL 81.94% 2.88%
COMPANIES (INCL. 3.00%
SALES CHARGE)
TOPIX Second Section 51.04% -5.02%
Japanese Funds Average 29.94% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Japan Small Companies TOPIX 2nd Section Index
00360 EX005
1995/11/01 9700.00 10000.00
1995/11/30 9661.20 10335.33
1995/12/31 10262.60 10975.96
1996/01/31 10107.40 10804.92
1996/02/29 9894.00 10597.01
1996/03/31 10272.30 10646.28
1996/04/30 11028.90 11708.81
1996/05/31 10602.10 11395.42
1996/06/30 10679.70 11315.66
1996/07/31 10185.00 10994.68
1996/08/31 9709.70 10749.69
1996/09/30 9632.10 10480.50
1996/10/31 8856.10 9863.12
1996/11/30 8477.80 9534.70
1996/12/31 7738.69 8704.07
1997/01/31 7036.95 7918.69
1997/02/28 7027.20 7943.57
1997/03/31 6637.34 7373.48
1997/04/30 6666.58 7289.86
1997/05/31 7748.44 8537.79
1997/06/30 8099.31 8954.32
1997/07/31 7797.17 8282.33
1997/08/31 6773.79 7335.82
1997/09/30 6471.65 6623.67
1997/10/31 6305.96 6488.83
1997/11/30 5643.20 5546.61
1997/12/31 5389.64 5109.59
1998/01/31 5946.18 5889.51
1998/02/28 5985.23 6039.62
1998/03/31 5467.75 5636.64
1998/04/30 5887.60 5528.93
1998/05/31 5770.43 5257.19
1998/06/30 5721.61 5270.87
1998/07/31 5926.65 5282.13
1998/08/31 5311.53 4839.95
1998/09/30 5243.18 4632.10
1998/10/31 5868.07 5151.68
1998/11/30 6356.26 5552.29
1998/12/31 7069.02 5866.27
1999/01/31 7537.68 5940.63
1999/02/28 8221.15 6193.52
1999/03/31 10027.46 7536.45
1999/04/30 11042.90 8351.16
IMATRL PRASUN SHR__CHT 19990430 19990514 091936 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Japan Small Companies Fund on November 1, 1995,
when the fund started, and the current 3.00% sales charge was paid. As
the chart shows, by April 30, 1999, the value of the investment would
have been $11,043 - a 10.43% increase on the initial investment. For
comparison, look at how the Tokyo Stock Exchange Second Section Stock
Index did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 would have been $8,351 - a 16.49%
decrease.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
JAPAN SMALL COMPANIES
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Kenichi Mizushita)
An interview with Kenichi Mizushita, Portfolio Manager of Fidelity
Japan Small Companies Fund
Q. HOW DID THE FUND PERFORM, KENICHI?
A. For the six months that ended April 30, 1999, the fund returned
88.19%, outperforming the Japanese funds average - mainly
large-cap-oriented funds - which returned 35.93%, according to Lipper
Inc. The fund also outperformed the Tokyo Stock Exchange Second
Section Stock Price Index, which returned 62.11% during the same
period. For the 12 months that ended April 30, 1999, the fund returned
87.56%, compared to the Second Section Stock index's return of 51.04%
and the Japanese funds average return of 29.94%.
Q. HOW DID YOU MANAGE TO OUTPERFORM THE INDEX AND THE FUND'S PEER
GROUP BY SUCH A WIDE MARGIN?
A. I focused on the two ends of the small company spectrum. First,
within the Second Section index - the fund's benchmark - I focused on
larger companies, which outperformed smaller companies in the index
during the period as more conservative investors sought out the
perceived safety of larger, more established companies. Second,
relative to its peer group, the fund held stocks of many OTC
companies, which are even smaller than the companies in the Second
Section index. OTC stocks outperformed most other equities during the
period, boosted by the government's credit guarantee for small
businesses and the return of individual investors to the equity
markets.
Q. HOW DID JAPAN'S NEW GOVERNMENT PLAY A PART IN THE MARKET'S
RECOVERY?
A. The credit crunch, a major concern in Japan for so long, spurred
investors' flight to the perceived safety of large-cap stocks over the
last couple of years. Recently, however, the government implemented a
program that guarantees the credit of small companies - so corporate
business and investor sentiment improved. Individual investors
re-entered the market, actively buying and selling small stocks. In
fact, the percentage of purchases made by individuals has increased,
with individual investors now making up 70% of the market, compared to
30% six months ago. Although this was an important contribution by the
government, the bulk of the recovery was due to investors coming back
to the equity markets because stocks were so cheap. Investors also
returned to small-cap stocks by purchasing IPOs, which had been
oversold and were selling at a significant discount to their growth
potential.
Q. WHICH STOCKS HELPED THE FUND'S PERFORMANCE?
A. Hikari Tsushin, a wholesaler of mobile handsets, performed very
well, aggressively expanding its market share to become the largest
distributor of mobile phones. Don Quijote, another top holding, is a
fast-growing discount chain store featuring late night operation, and
had strong earnings during the period. Union Tool, also a top-10
holding, manufactures drills for printed circuit boards. The company
enjoyed increasing demand from electronics industry customers during
the period, and performed well.
Q. WHICH STOCKS DETRACTED FROM THE FUND'S PERFORMANCE?
A. Defensive stocks performed relatively poorly in light of the
small-cap market's strong recovery over the last six months. Aderans,
a wig maker, and Rock Field, a food processing company, did relatively
well when the market was down, but underperformed across the period. I
still like these companies, and the fund is still holding them.
Q. THE FUND'S DEFINITION OF SMALL CAPITALIZATION IS CHANGING. WHY?
A. The fund normally invests at least 65% of its total assets in
securities of Japanese issuers with small market capitalizations. The
fund's current definition of small market capitalization is issuers
with market caps of $100 billion yen or less. Market caps have
changed. I believe there are good opportunities among small cap stocks
in the Second Section index and the JASDAQ index that are above $100
billion yen in market cap. The definition of small capitalization is
being changed to give the fund the added flexibility to pursue those
opportunities. Going forward, the fund will define small market
capitalization issuers as those whose market capitalization is similar
to that of companies in the Second Section index or the JASDAQ.
Q. WHAT'S YOUR OUTLOOK, KENICHI?
A. I think the continuing uncertainty about when the downturn in the
economy will end, and corporate efforts to cut costs by reducing the
number of employees, will continue to put downward pressure on
economic growth. Uncertainty about Japan's financial system still
exists, but it is widely believed that significant progress has been
made dealing with those problems. I believe that the small-cap market
offers the ability to invest in companies that are innovative and
competitive, and that can produce strong growth and profits even in a
difficult environment. Against this backdrop, stock selection will be
based on the analysis of each company's fundamental strengths and
weaknesses.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. FOR MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Japanese issuers
with small market capitalizations
FUND NUMBER: 360
TRADING SYMBOL: FJSCX
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than
$510 million
MANAGER: Kenichi Mizushita, since 1996;
manager, several Fidelity Investments Japan, Ltd.,
and institutional funds; joined Fidelity in 1985
JAPAN SMALL COMPANIES
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 7.2%
Japan 92.8%
Row: 1, Col: 1, Value: 92.8
Row: 1, Col: 2, Value: 7.2
AS OF OCTOBER 31,1998
United States 3.7%
Japan 96.3%
Row: 1, Col: 1, Value: 96.3
Row: 1, Col: 2, Value: 3.7
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 92.8 96.3
Short-term investments 7.2 3.7
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Shohkoh Fund & Co. Ltd. 2.8 4.6
(Credit & Other Finance)
Hikari Tsushin, Inc. (Cellular) 2.5 1.7
Don Quijote Co. Ltd. (Retail 2.3 2.7
& Wholesale, Miscellaneous)
Sony Music Entertainment Ltd. 2.2 3.9
(Entertainment)
Fancl Corp. (Household 2.1 0.0
Products)
Union Tool Co. (Industrial 2.1 3.9
Machinery & Equipment)
Yamada Denki Co. Ltd. (Retail 2.0 1.9
& Wholesale, Miscellaneous)
Q'Sai Co. Ltd. (Foods) 1.9 1.1
Takasago Electric Industry 1.7 0.0
Co. (Leisure Durables & Toys)
Fujimi, Inc. (Building 1.6 0.0
Materials)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 18.5 21.6
RETAIL & WHOLESALE 12.3 14.2
CONSTRUCTION & REAL ESTATE 10.1 6.8
NONDURABLES 9.3 6.6
MEDIA & LEISURE 8.1 6.8
INDUSTRIAL MACHINERY & 7.6 9.8
EQUIPMENT
FINANCE 6.4 7.7
SERVICES 6.2 7.6
DURABLES 4.8 6.3
HEALTH 3.8 3.1
</TABLE>
JAPAN SMALL COMPANIES
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.8%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 2.1%
CHEMICALS & PLASTICS - 1.8%
C. Uyemura & Co. Ltd. 200,000 $ 7,036,354
Canon Chemicals, Inc. 260,000 2,395,711
9,432,065
METALS & MINING - 0.3%
Toami Corp. 187,000 1,331,462
PAPER & FOREST PRODUCTS - 0.0%
Rengo Co. Ltd. 31,000 114,776
TOTAL BASIC INDUSTRIES 10,878,303
CONSTRUCTION & REAL ESTATE -
10.1%
BUILDING MATERIALS - 4.6%
Arc Land Sakamoto Co. Ltd. 449,000 4,362,875
Fujimi, Inc. 161,000 8,361,534
Hitachi Metals Techno Ltd. 478,000 2,002,010
Kondotec, Inc. 435,500 2,918,412
Mitani Sekisan Co. Ltd. 5,000 16,544
Nichiha Corp. 505,000 6,154,925
23,816,300
CONSTRUCTION - 1.2%
Geotop Corp. 80,000 292,846
Japan Foundation Engineering 307,500 2,969,907
Co., Ltd
Maeda Road Construction Co. 412,000 2,719,517
Ltd.
5,982,270
ENGINEERING - 0.5%
Ataka Construction & 150,000 728,765
Engineering Co. Ltd.
NEC System Integration & 52,000 980,064
Constuction Ltd.
Nippon Kokan Koji Corp. 152,000 407,438
Sawako Corp. 87,500 475,687
2,591,954
REAL ESTATE - 3.8%
Able, Inc. 133,000 4,601,189
Meiwa Estate Co. Ltd. 226,000 7,174,903
Sumitomo Real Estate Sales 419,000 7,897,051
Co. Ltd.
19,673,143
TOTAL CONSTRUCTION & REAL 52,063,667
ESTATE
DURABLES - 4.8%
AUTOS, TIRES, & ACCESSORIES -
1.1%
FCC Co. Ltd. 206,000 2,122,466
Koha Co. Ltd. 100,000 3,367,398
5,489,864
CONSUMER DURABLES - 2.6%
Aderans Co. Ltd. 98,000 3,964,986
SHARES VALUE (NOTE 1)
Heiwa Corp. 206,000 $ 3,710,001
Sankyo Co. Ltd. (Gunma) 160,000 5,548,668
13,223,655
CONSUMER ELECTRONICS - 0.8%
Funai Electric Co. Ltd. 31,000 4,167,783
HOME FURNISHINGS - 0.3%
Nitori Co. Ltd. 118,000 1,759,424
TOTAL DURABLES 24,640,726
FINANCE - 6.4%
CREDIT & OTHER FINANCE - 6.4%
Acom Co. Ltd. 20,000 1,499,414
Aeon Credit Service Ltd. 24,000 2,070,698
Aiful Corp. 39,200 3,208,108
Jafco Co. Ltd. 100,000 5,009,214
Mycal Card, Inc. 180,000 6,438,264
Shohkoh Fund & Co. Ltd. 24,600 14,424,518
32,650,216
HEALTH - 3.8%
DRUGS & PHARMACEUTICALS - 1.5%
JCR Pharmaceuticals Co. Ltd. 574,000 7,500,753
Kobayashi Pharmaceutical Co. 2,000 129,000
Ltd. (a)
7,629,753
MEDICAL EQUIPMENT & SUPPLIES
- - 2.3%
Hogy Medical Co. 190,000 7,607,639
Japan Medical Dynamic 188,000 4,425,197
Marketing, Inc. (a)
12,032,836
TOTAL HEALTH 19,662,589
INDUSTRIAL MACHINERY &
EQUIPMENT - 7.6%
ELECTRICAL EQUIPMENT - 1.7%
Hakuto Co. Ltd. 288,000 6,634,277
Mirai Industry Co. Ltd. 158,000 2,117,608
8,751,885
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.9%
Glory Ltd. 154,000 3,321,746
Iuchi Seieido Co. Ltd. 127,000 2,659,574
Max Co. Ltd. 210,000 2,378,288
Misumi Corp. 144,000 4,282,124
Nitto Kohki Co. Ltd. 128,000 1,672,642
THK Co. Ltd. 145,000 2,514,240
Union Tool Co. 143,400 10,570,614
Yushin Precision Equipment 122,500 2,888,570
Co. Ltd.
30,287,798
TOTAL INDUSTRIAL MACHINERY & 39,039,683
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 8.1%
ENTERTAINMENT - 4.5%
Aruze Corp. 114,000 $ 6,016,083
Avex, Inc. 62,500 5,758,921
Sony Music Entertainment Ltd. 154,000 11,222,985
22,997,989
LEISURE DURABLES & TOYS - 1.7%
Takasago Electric Industry 123,000 8,438,348
Co.
PUBLISHING - 0.7%
Asia Securities Printing Co. 251,000 3,734,093
Ltd.
RESTAURANTS - 1.2%
Anrakutei Co. Ltd. 80,400 1,481,655
Saizeriya Co. Ltd. 86,000 4,653,711
Umenohana Co. Ltd. (a) 6 175,909
6,311,275
TOTAL MEDIA & LEISURE 41,481,705
NONDURABLES - 9.3%
AGRICULTURE - 1.4%
Hokuto Corp. 226,000 7,004,523
BEVERAGES - 2.3%
Chukyo Coca-Cola Bottling Co. 270,000 3,109,817
Fuji Coca-Cola Bottling Co. 220,000 3,040,710
Ltd.
Mikasa Coca Cola Bottling Co. 263,000 2,597,395
Sanyo Coca-Cola Bottling Co. 20,000 474,116
Ltd.
Shikoku Coca-Cola Bottling 156,300 2,297,759
Co. Ltd.
11,519,797
FOODS - 3.5%
Ariake Japan 50,000 1,926,621
Q'Sai Co. Ltd. 310,000 10,023,454
Rock Field Co. Ltd. 228,800 4,944,748
Yonekyu Corp. 90,000 1,217,541
18,112,364
HOUSEHOLD PRODUCTS - 2.1%
Fancl Corp. 76,800 10,936,505
TOTAL NONDURABLES 47,573,189
RETAIL & WHOLESALE - 12.3%
APPAREL STORES - 2.3%
Fast Retailing Co. Ltd. 40,000 2,057,296
Naigai Clothes Co. Ltd. 308,000 2,115,597
World Co. Ltd. 139,400 7,718,495
11,891,388
GENERAL MERCHANDISE STORES -
2.2%
Circle K Japan Co. Ltd. 28,000 1,266,544
Matsumotokiyoshi Co. Ltd. 40,000 1,752,387
Ryohin Keikaku Co. Ltd. 45,200 8,235,047
11,253,978
SHARES VALUE (NOTE 1)
GROCERY STORES - 1.2%
C Two-Network Co. Ltd. (a) 70,000 $ 6,156,810
RETAIL & WHOLESALE,
MISCELLANEOUS - 6.6%
Don Quijote Co. Ltd. 50,400 11,736,639
Jac Co. Ltd. (a) 42,000 5,769,810
Paris Miki, Inc. 186,000 6,201,038
Yamada Denki Co. Ltd. 280,000 10,437,259
34,144,746
TOTAL RETAIL & WHOLESALE 63,446,922
SERVICES - 6.2%
PRINTING - 0.7%
Riso Kagaku Corp. 75,700 3,614,424
SERVICES - 5.5%
Aucnet, Inc. 90,400 3,748,366
BellSystem24, Inc. 19,400 7,654,046
Moshi Moshi Hotline, Inc. (a) 11,000 626,571
NIC Corp. 136,000 3,018,931
Nichii Gakkan Co. 81,500 6,349,053
Nippon System Development Co. 131,000 6,693,751
28,090,718
TOTAL SERVICES 31,705,142
TECHNOLOGY - 18.5%
COMPUTER SERVICES & SOFTWARE
- - 4.2%
Computer Engineering & 80,000 1,983,582
Consulting Ltd.
Diamond Computer Service Co. 53,000 1,043,307
Ltd.
Fuji Soft ABC, Inc. 89,100 5,418,546
Ines Corp. 310,000 4,102,865
Obic Co. Ltd. 27,600 5,433,071
Trend Micro, Inc. (a) 28,000 3,705,813
21,687,184
COMPUTERS & OFFICE EQUIPMENT
- - 4.9%
Argotechnos 21Corp. 154,000 6,217,792
Fujitsu Support & Service, 21,000 2,568,269
Inc.
IO Data Device, Inc. 49,600 1,620,372
Japan Business Computer Co. 260,000 4,094,488
Ltd.
Melco, Inc. 261,000 7,105,461
Toyo Information System Co. 124,000 3,583,515
Ltd.
25,189,897
ELECTRONIC INSTRUMENTS - 4.1%
Cosel Co. Ltd. 515,000 7,463,143
Nagano Keiki Co. Ltd. (a) 171,000 3,853,158
Sony Chemicals Corp. 111,000 5,625,314
Tokyo Seimitsu Co. Ltd. 70,000 3,875,858
20,817,473
ELECTRONICS - 5.3%
Citizen Electronics Co. Ltd. 160,000 7,907,522
Koa Denko Co. Ltd. 470,000 4,448,819
Kuroda Electric Co. Ltd. 64,000 1,790,585
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Kyoden Co. Ltd. 24,000 $ 689,563
Mimasu Semiconductor 100,000 1,666,946
Industries Co. Ltd.
Paltek Corp. 57,000 2,010,136
Sumida Electric Co. Ltd. 298,000 7,164,181
Toko, Inc. 310,000 1,568,437
27,246,189
TOTAL TECHNOLOGY 94,940,743
TRANSPORTATION - 0.7%
TRUCKING & FREIGHT - 0.7%
Miroku Jyoho Service Co., 215,000 3,475,875
Ltd.
UTILITIES - 2.9%
CELLULAR - 2.9%
Hikari Tsushin, Inc. 61,400 12,858,099
NTT Mobile Communication 40 2,345,451
Network, Inc. (c)
15,203,550
TOTAL COMMON STOCKS 476,762,310
(Cost $341,665,026)
CASH EQUIVALENTS - 7.2%
Taxable Central Cash Fund (b) 36,850,169 36,850,169
(Cost $36,850,169)
TOTAL INVESTMENT IN $ 513,612,479
SECURITIES - 100%
(Cost $378,515,195)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $2,345,451 or 0.5% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $262,339,601 and $17,474,693, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $378,553,783. Net unrealized appreciation
aggregated $135,058,696, of which $142,072,450 related to appreciated
investment securities and $7,013,754 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $53,802,000 of which $38,185,000 and $15,617,000 will
expire on October 31, 2005 and 2006, respectively.
JAPAN SMALL COMPANIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 513,612,479
value (cost $378,515,195) -
See accompanying schedule
Receivable for fund shares 3,356,458
sold
Dividends receivable 705,538
Interest receivable 189,116
Redemption fees receivable 9,180
TOTAL ASSETS 517,872,771
LIABILITIES
Payable for investments $ 5,324,771
purchased
Payable for fund shares 1,121,154
redeemed
Accrued management fee 276,117
Other payables and accrued 189,750
expenses
TOTAL LIABILITIES 6,911,792
NET ASSETS $ 510,960,979
Net Assets consist of:
Paid in capital $ 432,217,666
Distributions in excess of (695,327)
net investment income
Accumulated undistributed net (55,644,396)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 135,083,036
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 45,159,887 $ 510,960,979
shares outstanding
NET ASSET VALUE and $11.31
redemption price per share
($510,960,979 (divided by)
45,159,887 shares)
Maximum offering price per $11.66
share (100/97.00 of $11.31)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 752,733
Dividends
Interest 615,182
1,367,915
Less foreign taxes withheld (132,835)
TOTAL INCOME 1,235,080
EXPENSES
Management fee $ 743,281
Transfer agent fees 224,630
Accounting fees and expenses 60,029
Non-interested trustees' 240
compensation
Custodian fees and expenses 32,691
Registration fees 101,442
Audit 15,926
Legal 246
Total expenses before 1,178,485
reductions
Expense reductions (1,135) 1,177,350
NET INVESTMENT INCOME 57,730
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (1,935,260)
Foreign currency transactions 131,715 (1,803,545)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 137,623,450
Assets and liabilities in (44,925) 137,578,525
foreign currencies
NET GAIN (LOSS) 135,774,980
NET INCREASE (DECREASE) IN $ 135,832,710
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 994,245
charges paid to FDC
Sales charges - Retained by $ 993,457
FDC
Expense reductions Directed $ 184
brokerage arrangements
Transfer agent credits 951
$ 1,135
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 57,730 $ (187,068)
income (loss)
Net realized gain (loss) (1,803,545) (15,537,371)
Change in net unrealized 137,578,525 8,665,467
appreciation (depreciation)
NET INCREASE (DECREASE) IN 135,832,710 (7,058,972)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (141,696)
in excess of net investment
income
Share transactions Net 334,651,933 68,052,610
proceeds from sales of shares
Reinvestment of distributions - 141,028
Cost of shares redeemed (60,077,065) (45,513,438)
NET INCREASE (DECREASE) IN 274,574,868 22,680,200
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 566,262 233,658
TOTAL INCREASE (DECREASE) 410,973,840 15,713,190
IN NET ASSETS
NET ASSETS
Beginning of period 99,987,139 84,273,949
End of period (including $ 510,960,979 $ 99,987,139
distributions in excess of
net investment income of
$695,327 and $753,057,
respectively)
OTHER INFORMATION
Shares
Sold 34,982,043 11,458,260
Issued in reinvestment of - 25,139
distributions
Redeemed (6,459,502) (7,861,499)
Net increase (decrease) 28,522,541 3,621,900
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1998 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 F
Net asset value, beginning of $ 6.01 $ 6.47 $ 9.13 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .00 (.01) (.03) (.03)
Net realized and unrealized 5.28 (.45) (2.63) (.87)
gain (loss)
Total from investment 5.28 (.46) (2.66) (.90)
operations
Less Distributions
In excess of net investment - (.01) (.01) -
income
From net realized gain - - (.03) -
Total distributions - (.01) (.04) -
Redemption fees added to paid .02 .01 .04 .03
in capital
Net asset value, end of period $ 11.31 $ 6.01 $ 6.47 $ 9.13
TOTAL RETURN B, C 88.19% (6.94)% (28.80)% (8.70)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 510,961 $ 99,987 $ 84,274 $ 105,664
(000 omitted)
Ratio of expenses to average 1.16% A 1.23% 1.35% 1.34%
net assets
Ratio of expenses to average 1.16% A 1.23% 1.34% E 1.34%
net assets after expense
reductions
Ratio of net investment .06% A (.20)% (.46)% (.32)%
income (loss) to average net
assets
Portfolio turnover rate 17% A 39% 101% 66%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
F FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER
31,1996.
</TABLE>
LATIN AMERICA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LATIN AMERICA 25.66% -21.92% 2.15% 41.50%
FIDELITY LATIN AMERICA 21.89% -24.27% -0.92% 37.26%
(INCL. 3.00% SALES CHARGE)
MSCI EMF - Latin America 28.33% -14.42% 21.43% 75.92%
Latin American Funds Average 25.52% -21.78% -0.69% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on April 19, 1993. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Morgan Stanley Capital
International (MSCI) Emerging-Markets Free - Latin America Index - a
market capitalization-weighted index of over 180 stocks traded in
seven Latin American markets. To measure how the fund's performance
stacked up against its peers, you can compare it to the Latin American
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Inc. The past six months average
represents a peer group of 49 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LATIN AMERICA -21.92% 0.43% 5.92%
FIDELITY LATIN AMERICA -24.27% -0.18% 5.39%
(INCL. 3.00% SALES CHARGE)
MSCI EMF - Latin America -14.42% 3.96% 9.82%
Latin American Funds Average -21.78% -0.38% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Latin America MS EMF Latin America
00349 MS007
1993/04/19 9700.00 10000.00
1993/04/30 9641.80 9629.27
1993/05/31 9874.60 9880.87
1993/06/30 10379.00 10503.42
1993/07/31 10737.90 10785.19
1993/08/31 11746.70 11714.82
1993/09/30 11960.10 11920.39
1993/10/31 12881.60 12392.75
1993/11/30 13861.30 13204.75
1993/12/31 15722.24 14878.84
1994/01/31 16981.97 17327.50
1994/02/28 16093.32 16826.00
1994/03/31 14462.50 15684.24
1994/04/30 13437.14 14487.31
1994/05/31 14169.54 15343.10
1994/06/30 12851.22 14360.38
1994/07/31 14042.59 15721.44
1994/08/31 16132.38 18278.52
1994/09/30 16679.24 19062.61
1994/10/31 15829.65 18120.86
1994/11/30 15360.92 17604.02
1994/12/31 12079.76 14974.08
1995/01/31 10331.75 13338.86
1995/02/28 8710.70 11406.56
1995/03/31 8564.22 11013.06
1995/04/30 9618.88 12602.53
1995/05/31 9667.71 12888.85
1995/06/30 9804.43 13089.71
1995/07/31 10331.75 13494.70
1995/08/31 10527.06 13648.86
1995/09/30 10361.05 13532.50
1995/10/31 9521.23 12443.72
1995/11/30 9863.02 12667.34
1995/12/31 10090.87 13052.35
1996/01/31 11504.18 14390.58
1996/02/29 10901.30 13561.89
1996/03/31 11316.40 13731.96
1996/04/30 11800.68 14492.29
1996/05/31 12373.92 14958.43
1996/06/30 12709.95 15342.23
1996/07/31 12186.13 14737.59
1996/08/31 12561.70 15152.37
1996/09/30 12759.37 15498.77
1996/10/31 12443.10 15347.63
1996/11/30 12601.23 15494.03
1996/12/31 13190.77 15951.46
1997/01/31 14347.85 17521.55
1997/02/28 15122.60 18680.87
1997/03/31 15032.04 18395.98
1997/04/30 15766.54 19316.04
1997/05/31 16903.50 20684.98
1997/06/30 18352.37 22458.18
1997/07/31 19569.83 23720.20
1997/08/31 17436.77 21447.02
1997/09/30 19217.67 23503.38
1997/10/31 15605.55 19038.69
1997/11/30 16662.02 19689.74
1997/12/31 17528.97 20998.04
1998/01/31 15788.29 18665.66
1998/02/28 16541.56 19646.12
1998/03/31 17579.87 21039.04
1998/04/30 17579.87 20557.00
1998/05/31 15045.19 17898.10
1998/06/30 14261.37 16840.37
1998/07/31 14882.32 17673.60
1998/08/31 9120.76 11542.94
1998/09/30 9874.04 12724.85
1998/10/31 10922.52 13708.79
1998/11/30 11502.75 14767.44
1998/12/31 10807.56 13626.18
1999/01/31 9421.44 12012.79
1999/02/28 10182.24 12779.37
1999/03/31 12099.88 15377.27
1999/04/30 13725.70 17592.42
IMATRL PRASUN SHR__CHT 19990430 19990514 144109 R00000000000076
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Latin America Fund on April 19, 1993, when the
fund started, and the current 3.00% sales charge was paid. As the
chart shows, by April 30, 1999, the value of the investment would have
grown to $13,726 - a 37.26% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International
Emerging Markets Free - Latin America Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $17,592 - a 75.92% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
LATIN AMERICA
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Patti Satterthwaite)
An interview with Patti Satterthwaite, Portfolio Manager of Fidelity
Latin America Fund
Q. HOW DID THE FUND PERFORM, PATTI?
A. For the six-month period that ended April 30, 1999, the fund
provided a total return of 25.66%. To get a sense of how the fund did
relative to its competitors, the Latin American funds average returned
25.52%. To gauge how the fund did relative to the Latin American
markets, the Morgan Stanley Capital International Emerging Markets
Free - Latin America Index returned 28.33%. For the 12-month period
that ended April 30, 1999, the fund returned -21.92%. That returned
compared to the Latin American funds average's -21.78% return and the
Morgan Stanley index's -14.42% return.
Q. WHAT PRECIPITATED THE LATIN AMERICAN MARKETS' TURNAROUND?
A. The Latin American market rally - which really only began in
February 1999 - was fueled by optimism that the worst of the region's
financial crisis was behind it. Brazil's willingness to raise interest
rates calmed investors who worried that inflation would spiral out of
control. Mexico also surprised observers who feared that it, too,
would face runaway inflation or would be crippled by a weakened
currency. Positive developments on the economic front also helped
restore much needed confidence to the region. Finally, commodity
prices, which are the lifeblood of many Latin American economies,
started to show signs of bottoming.
Q. WHICH OF THE FUND'S HOLDINGS PERFORMED BEST AGAINST THIS FAVORABLE
BACKDROP?
A. First, let me point out that the fund's large stake in Mexican
stocks - relative to its benchmark index - helped its performance,
since Mexico was the region's best and most consistent performer
during the past six months. Among the fund's Mexican holdings,
Telefonos de Mexico ("Telmex") was one of the fund's best performers
and its largest holding at 12.5% of investments at the end of the
period. Telmex, formerly a government owned phone company, was
privatized in 1990 and remains Mexico's largest phone company,
cellular provider and Internet service provider. The company continued
to prove its dominance against new and old competitors in a
deregulated environment.
Q. WHAT OTHER GROUPS OF MEXICAN STOCKS PERFORMED WELL?
A. Mexican banking stocks such as Grupo Financiero Bancomber, rallied
in response to better economic conditions and below-forecast inflation
and interest rates. In addition, I think investors recognized that
Mexican banks were cheap and attractive alternatives to banks in other
markets around the world. Grupo Televisa - one of Latin America's
leading Spanish-language media companies -was another Mexican winner,
thanks to the company's restructuring and cost-cutting efforts.
Q. WHICH OF THE FUND'S BRAZILIAN HOLDINGS PERFORMED WELL?
A. Companies that benefited from Brazil's effective devaluation of its
currency - primarily those that export goods - performed the best. The
stock price of paper and pulp companies Aracruz Celulose and
Votorantim Celulose e Papel each nearly doubled over the past six
months, thanks to their ability to sell very low-cost product in
foreign markets.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. Beginning in mid-March, a lot of new money came into the fund. I
wasn't always able to put that money to work as quickly as I would
have liked given the rapid and ongoing rise in stock prices. In
addition, my decision to own more of cement company Apasco in Mexico -
which posted good gains - rather than the better-performing Cemex, was
somewhat of a disappointment.
Q. WHAT'S YOUR OUTLOOK FOR THE LATIN AMERICAN MARKETS, PATTI?
A. There are a couple of things that could derail the Latin American
rally, including higher inflation in Brazil or problems in other
emerging markets in Southeast Asia or Europe. But from a valuation
standpoint, I think things look fairly favorable. In spite of their
recent run-up, Latin American stocks are priced attractively compared
to stocks in much of the rest of the world.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: high total investment return by investing
mainly in equity and debt securities of Latin
American issuers
FUND NUMBER: 349
TRADING SYMBOL: FLATX
START DATE: April 19, 1993
SIZE: as of April 30, 1999, more than
$386 million
MANAGER: Patti Satterthwaite, since 1993;
assistant manager, Latin American portion of
Fidelity Emerging Markets Fund, since 1990;
securities and Latin American analyst,
1986-1990; joined Fidelity in 1986
LATIN AMERICA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30,1999
United States 9.1%
Argentina 11.7%
Peru 2.0%
Panama 1.5%
Other 2.4%
Brazil 24.5%
Mexico 46.1%
Chile 2.7%
Row: 1, Col: 1, Value: 11.7
Row: 1, Col: 2, Value: 24.5
Row: 1, Col: 3, Value: 2.7
Row: 1, Col: 4, Value: 46.1
Row: 1, Col: 5, Value: 2.4
Row: 1, Col: 6, Value: 1.5
Row: 1, Col: 7, Value: 2.0
Row: 1, Col: 8, Value: 9.1
AS OF OCTOBER 31, 1998
Argentina 7.6%
United States 9.7%
Peru 1.7%
Panama 1.4%
Other 1.5%
Brazil 34.6%
Mexico 40.4%
Chile 3.1%
Row: 1, Col: 1, Value: 7.6
Row: 1, Col: 2, Value: 34.6
Row: 1, Col: 3, Value: 3.1
Row: 1, Col: 4, Value: 40.4
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 1.4
Row: 1, Col: 7, Value: 1.7
Row: 1, Col: 8, Value: 9.699999999999999
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 90.9 90.3
Short-term investments 9.1 9.7
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Telefonos de Mexico SA 12.5 12.2
sponsored ADR representing
Class L shares (Mexico,
Telephone Services)
YPF Sociedad Anonima 5.3 3.5
sponsored ADR representing
Class D shares (Argentina,
Oil & Gas)
Grupo Televisa SA de CV 4.9 1.3
sponsored ADR (Mexico,
Broadcasting)
Cifra SA de CV Series C 4.8 4.0
(Mexico, General Merchandise
Stores)
Grupo Financiero Bancomer SA 4.1 3.1
de CV Series A (Mexico, Banks)
Grupo Modelo SA de CV Class C 4.0 3.7
(Mexico, Beverages)
Banacci SA de CV Class O 3.4 0.0
(Mexico, Banks)
Telesp Participacoes SA ADR 3.2 0.0
(Brazil, Telephone Services)
Tele Norte Leste 2.9 0.0
Participacoes SA ADR
(Brazil, Telephone Services)
Embratel Participacoes SA ADR 2.9 0.0
(Brazil, Telephone Services)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
UTILITIES 31.9 40.1
NONDURABLES 19.8 19.1
FINANCE 8.6 7.0
ENERGY 8.3 6.7
RETAIL & WHOLESALE 6.2 6.1
BASIC INDUSTRIES 5.3 4.2
MEDIA & LEISURE 4.9 1.3
CONSTRUCTION & REAL ESTATE 2.2 2.2
PRECIOUS METALS 2.0 1.7
HOLDING COMPANIES 1.3 1.3
</TABLE>
LATIN AMERICA
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.9%
SHARES VALUE (NOTE 1)
ARGENTINA - 11.7%
Banco de Galicia y Buenos 38,695 $ 892,403
Aires SA ADR Class B
Bansud SA Class B (a) 636,684 1,949,052
Cresud S.A.C.I.F.y A. 111,582 1,269,245
sponsored ADR
Inversiones y Representacions 44,580 1,493,430
SA sponsored GDR
Perez Companc SA Class B 1,471,836 9,129,126
Telefonica de Argentina SA 260,900 9,751,138
sponsored ADR
YPF Sociedad Anonima 487,800 20,487,600
sponsored ADR representing
Class D shares
44,971,994
BRAZIL - 24.5%
Aracruz Celulose SA ADR 132,950 2,659,000
Banco Bradesco SA (Reg. Pfd.) 65,324,483 345,155
Centrais Electricas 500,036,100 10,508,114
Brasileiras SA
Companhia Brasileira de 321,249,000 2,235,530
Petroleo Ipiranga SA Class B
Companhia de Electricidade do 2,008,714,550 542,733
Estado do Rio de Janeiro
(CERJ)
Companhia de Tecidos Norte 10,053,310 694,164
de Minas
Companhia Paulista de Forca 80,306 5,063
e Luz (a)
Companhia Vale do Rio Doce (a) 194,000 3,715,761
Compania Cervejaria Brahma PN:
warrants 4/30/03 (a) 1,895,770 51,222
(Pfd. Reg.) (a) 20,826,523 9,828,668
(Reg.) 117,827 43,155
Compania Cimento Portland Itau 6,044,000 653,173
Compania Energertica Minas 209,176,329 5,023,749
Gerais
Dixie Toga SA 1,904,400 571,720
Embratel Participacoes SA ADR 682,140 11,084,775
Encorpar Redito e Participa SA 11,465,310 9,638
Itausa Investimentos Itau SA 2,080,000 1,123,987
Perdigao SA (a) 1,202,539,630 1,487,380
Souza Cruz Industria Comerico 578,500 3,838,142
Tele Centro Sul Participacoes 179,668 9,544,863
SA sponsored ADR (a)
Tele Norte Leste 657,240 11,132,003
Participacoes SA ADR (a)
Tele Sudeste Celular 113,868 3,252,355
Participacoes SA ADR
Telecomunicacoes de Minas 269,577 6,652
Gerais SA
Telesp rights 5/31/99 (a) 724,796 4
Telesp Participacoes SA ADR 499,340 12,483,500
(a)
Votorantim Celulose e Papel 126,688,499 3,201,633
SA (Pfd. Reg.)
94,042,139
CHILE - 2.7%
Chilectra SA sponsored ADR 37,500 825,000
Cristalerias de Chile SA 124,700 1,995,200
sponsored ADR
SHARES VALUE (NOTE 1)
Embotelladora Andina 192,900 $ 3,484,256
sponsored ADR Class A
Enersis SA sponsored ADR 42,278 803,282
Santa Isabel SA sponsored ADR 114,500 1,145,000
Supermercados Unimarc SA 86,200 323,250
sponsored ADR
Vina Concha Stet y Toro SA 61,000 1,978,688
sponsored ADR
10,554,676
COLOMBIA - 1.4%
Banco Ganadero SA sponsored 79,800 758,100
ADR Class C
Compania Nacional de 136,000 579,259
Chocolates (a)
Noel (Industria Alimenticias) 97,207 254,958
Suramericana de Inversiones SA 1,761,400 3,914,223
5,506,540
LUXEMBOURG - 1.0%
Quilmes Industrial SA 342,300 3,743,906
sponsored ADR
MEXICO - 46.1%
Apasco SA de CV 657,000 3,848,092
Banacci SA de CV Class O (a) 5,202,000 13,165,728
Cemex SA Series B 148,000 683,933
Cifra SA de CV Series C (a) 9,942,200 18,484,692
Coca Cola Femsa SA de CV ADR 281,100 5,815,256
Elektra SA de CV Unit 6,957,300 4,860,016
Empresas ICA Sociedad 220,200 1,445,063
Controladora SA de CV
sponsored ADR
Fomento Economico Mexicano SA 175,920 6,399,090
de CV sponsored ADR
Gruma SA de CV:
Class B (a) 1 2
Class B sponsored ADR (a) 355,036 2,751,529
Grupo Carso SA de CV Class A-1 2,276,100 10,970,778
Grupo Financiero Bancomer SA 46,431,700 15,967,914
de CV Series A
Grupo Financiero Inbursa SA 73,466 236,070
Class B
Grupo Indus Bimbo SA de CV 1,369,000 2,892,481
Series A
Grupo Mexico SA Series B 54,000 207,469
Grupo Modelo SA de CV Class C 5,873,200 15,306,298
Grupo Televisa SA de CV 459,100 18,823,100
sponsored ADR (a)
Kimberly-Clark de Mexico SA 1,914,000 7,384,481
de CV Class A
Telefonos de Mexico SA 634,900 48,093,675
sponsored ADR representing
Class L shares
177,335,667
PANAMA - 1.5%
Panamerican Beverages, Inc. 253,500 5,624,531
Class A
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PERU - 2.0%
Compania de Minas
Buenaventura SA:
Class B 232,618 $ 1,813,242
sponsored ADR Class B 367,200 5,921,100
7,734,342
TOTAL COMMON STOCKS 349,513,795
(Cost $314,957,486)
NONCONVERTIBLE BONDS - 0.0%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
BRAZIL - 0.0%
Companhia Vale do Rio Doce 0% - BRL 290,000 0
11/19/00 (Cost $0)
CASH EQUIVALENTS - 9.1%
SHARES
Taxable Central Cash Fund (b) 35,158,039 35,158,039
(Cost $35,158,039)
TOTAL INVESTMENT IN $ 384,671,834
SECURITIES - 100%
(Cost $350,115,525)
CURRENCY ABBREVIATIONS
BRL - Brazilian real
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $68,502,039 and $83,013,800, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $350,738,782. Net unrealized appreciation
aggregated $33,933,052, of which $80,254,602 related to appreciated
investment securities and $46,321,550 related to depreciated
investment securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $74,514,000 of which $36,899,000 and $37,615,000 will
expire on October 31, 2003 and 2004, respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 5.3%
CASH EQUIVALENTS 9.1
CONSTRUCTION & REAL ESTATE 2.2
DURABLES 0.2
ENERGY 8.3
FINANCE 8.6
HOLDING COMPANIES 1.3
MEDIA & LEISURE 4.9
NONDURABLES 19.8
PRECIOUS METALS 2.0
RETAIL & WHOLESALE 6.2
SERVICES 0.2
UTILITIES 31.9
100.0%
LATIN AMERICA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 384,671,834
value (cost $350,115,525) -
See accompanying schedule
Receivable for investments 477,857
sold
Receivable for fund shares 5,404,622
sold
Dividends receivable 2,623,954
Interest receivable 140,072
Redemption fees receivable 988
TOTAL ASSETS 393,319,327
LIABILITIES
Payable for investments $ 5,922,011
purchased
Payable for fund shares 540,786
redeemed
Accrued management fee 212,682
Other payables and accrued 222,668
expenses
TOTAL LIABILITIES 6,898,147
NET ASSETS $ 386,421,180
Net Assets consist of:
Paid in capital $ 451,657,712
Undistributed net investment 3,429,569
income
Accumulated undistributed net (103,166,135)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 34,500,034
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 29,336,180 $ 386,421,180
shares outstanding
NET ASSET VALUE and $13.17
redemption price per share
($386,421,180 (divided by)
29,336,180 shares)
Maximum offering price per $13.58
share (100/97.00 of $13.17)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 6,292,721
Dividends
Interest 640,470
6,933,191
Less foreign taxes withheld (545,313)
TOTAL INCOME 6,387,878
EXPENSES
Management fee $ 1,126,847
Transfer agent fees 632,853
Accounting fees and expenses 96,521
Non-interested trustees' 85
compensation
Custodian fees and expenses 76,097
Registration fees 19,447
Audit 32,629
Legal 837
Miscellaneous 11,829
Total expenses before 1,997,145
reductions
Expense reductions (8,769) 1,988,376
NET INVESTMENT INCOME 4,399,502
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (26,635,903)
Foreign currency transactions (1,078,250) (27,714,153)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 94,213,240
Assets and liabilities in 36,534 94,249,774
foreign currencies
NET GAIN (LOSS) 66,535,621
NET INCREASE (DECREASE) IN $ 70,935,123
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 196,756
Sales charges paid to FDC
Sales charges - Retained by $ 196,747
FDC
Expense reductions Directed $ 7,358
brokerage arrangements
Transfer agent credits 1,411
$ 8,769
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 4,399,502 $ 8,857,496
income
Net realized gain (loss) (27,714,153) 45,290,179
Change in net unrealized 94,249,774 (200,090,681)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 70,935,123 (145,943,006)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (7,666,729) (10,041,240)
from net investment income
Share transactions Net 77,372,633 115,794,938
proceeds from sales of shares
Reinvestment of distributions 7,377,095 9,873,405
Cost of shares redeemed (94,113,988) (446,516,807)
NET INCREASE (DECREASE) IN (9,364,260) (320,848,464)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 277,502 530,116
TOTAL INCREASE (DECREASE) 54,181,636 (476,302,594)
IN NET ASSETS
NET ASSETS
Beginning of period 332,239,544 808,542,138
End of period (including $ 386,421,180 $ 332,239,544
undistributed net investment
income of $3,429,569 and
$6,696,796, respectively)
OTHER INFORMATION
Shares
Sold 6,800,081 8,079,774
Issued in reinvestment of 701,738 578,067
distributions
Redeemed (9,132,608) (29,806,543)
Net increase (decrease) (1,630,789) (21,148,702)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 10.73 $ 15.51 $ 12.59 $ 9.75 $ 16.21
period
Income from Investment
Operations
Net investment income .15 D .22 D, E .20 D .22 .04
Net realized and unrealized 2.53 (4.81) 2.92 2.72 (6.52)
gain (loss)
Total from investment 2.68 (4.59) 3.12 2.94 (6.48)
operations
Less Distributions
From net investment income (.25) (.20) (.23) (.12) -
From net realized gain - - - - -
Total distributions (.25) (.20) (.23) (.12) -
Redemption fees added to paid .01 .01 .03 .02 .02
in capital
Net asset value, end of period $ 13.17 $ 10.73 $ 15.51 $ 12.59 $ 9.75
TOTAL RETURN B, C 25.66% (30.01)% 25.42% 30.69% (39.85)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 386,421 $ 332,240 $ 808,542 $ 557,889 $ 466,289
(000 omitted)
Ratio of expenses to average 1.31% A 1.34% 1.30% 1.32% 1.41%
net assets
Ratio of expenses to average 1.31% A 1.33% F 1.29% F 1.32% 1.41%
net assets after expense
reductions
Ratio of net investment 2.90% A 1.49% 1.19% 1.48% .97%
income to average net assets
Portfolio turnover rate 48% A 31% 64% 70% 57%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 13.28
period
Income from Investment
Operations
Net investment income .07
Net realized and unrealized 2.82
gain (loss)
Total from investment 2.89
operations
Less Distributions
From net investment income (.05)
From net realized gain (.05)
Total distributions (.10)
Redemption fees added to paid .14
in capital
Net asset value, end of period $ 16.21
TOTAL RETURN B, C 22.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 888,530
(000 omitted)
Ratio of expenses to average 1.48%
net assets
Ratio of expenses to average 1.48%
net assets after expense
reductions
Ratio of net investment .47%
income to average net assets
Portfolio turnover rate 77%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
NORDIC
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY NORDIC 19.50% 5.20% 113.80%
FIDELITY NORDIC (INCL. 15.91% 2.04% 107.38%
3.00% SALES CHARGE)
FT-Actuaries World Nordic 21.59% 6.35% 103.56%
European Region Funds Average 8.95% -0.20% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the FT/S&P-Actuaries World Nordic Index - a market
capitalization-weighted index of over 90 stocks traded in four
Scandinavian markets. To measure how the fund's performance stacked up
against its peers, you can compare the fund's performance to the
European region funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 142 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY NORDIC 5.20% 24.28%
FIDELITY NORDIC (INCL. 2.04% 23.20%
3.00% SALES CHARGE)
FT-Actuaries World Nordic 6.35% 22.55%
European Region Funds Average -0.20% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Nordic FT Nordic
00342 FT002
1995/11/01 9700.00 10000.00
1995/11/30 9845.50 10178.00
1995/12/31 9554.50 9911.00
1996/01/31 9612.70 9809.37
1996/02/29 10204.40 10456.70
1996/03/31 10340.20 10564.18
1996/04/30 10476.00 10606.06
1996/05/31 10990.10 10977.77
1996/06/30 11106.50 11058.76
1996/07/31 10980.40 10822.25
1996/08/31 11630.30 11437.85
1996/09/30 12018.30 11769.52
1996/10/31 12386.90 12210.52
1996/11/30 13269.60 12915.13
1996/12/31 13537.43 13283.75
1997/01/31 13880.77 13676.71
1997/02/28 13969.05 13661.62
1997/03/31 14332.01 14093.06
1997/04/30 13439.33 13296.07
1997/05/31 14302.58 14246.43
1997/06/30 15136.41 15111.48
1997/07/31 15617.09 15775.44
1997/08/31 14999.07 15074.22
1997/09/30 16843.30 16846.82
1997/10/31 15636.71 15544.47
1997/11/30 15705.38 15583.27
1997/12/31 15177.38 15331.98
1998/01/31 15593.63 15587.89
1998/02/28 17077.22 16969.39
1998/03/31 18219.26 18157.18
1998/04/30 19713.51 19141.41
1998/05/31 19830.92 19281.53
1998/06/30 20119.10 19279.69
1998/07/31 20791.51 19608.59
1998/08/31 16575.57 16383.65
1998/09/30 16212.68 15544.47
1998/10/31 17354.72 16741.19
1998/11/30 18358.01 17652.13
1998/12/31 19660.15 18400.78
1999/01/31 21015.65 19564.24
1999/02/28 19574.76 18618.50
1999/03/31 20119.10 19577.79
1999/04/30 20738.15 20356.31
IMATRL PRASUN SHR__CHT 19990430 19990527 142715 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Nordic Fund on November 1, 1995, when the fund
started, and the current 3.00% sales charge was paid. As the chart
shows, by April 30, 1999, the value of the investment would have grown
to $20,738 - a 107.38% increase on the initial investment. For
comparison, look at how the FT/S&P-Actuaries World Nordic Index did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $20,356 -
a 103.56% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
NORDIC
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Trygve Toraasen)
An interview with Trygve Toraasen, Portfolio Manager of Fidelity
Nordic Fund
Q. TRYGVE, HOW DID THE FUND PERFORM?
A. For the six months that ended April 30, 1999, the fund posted a
total return of 19.50%, compared to 21.59% for the FT/S&P-Actuaries
World Nordic Index and 8.95% for the European funds average tracked by
Lipper Inc. For the 12 months that ended April 30, 1999, the fund
returned 5.20%, the Nordic index returned 6.35% and the Lipper
European funds average returned -0.20%.
Q. OVER THE PAST SIX MONTHS, WHY DID THE FUND BEAT THE LIPPER GROUP
BUT LAG THE INDEX?
A. The fund beat the Lipper average because it benefited from the
strength of the Nordic markets relative to other European markets. The
Nordic markets were driven by the solid performance of
large-capitalization stocks such as the fund's top two holdings, Nokia
and Ericsson. The fund trailed the Nordic index slightly because it
was underweighted relative to the index in cyclical stocks - those
that tend to move in concert with the economy, such as paper and
steel, which make up about a quarter of the index. The Nordic markets
- - as well as many others worldwide - witnessed a significant and
speedy rotation into cyclicals in April, because those stocks were
cheap, the European Central Bank cut short-term interest rates and
there was promising news regarding an economic rebound in the Far East
and Germany. While I increased the fund's weightings in cyclicals
toward the end of the period so that their representation approached
that found in the index, I didn't match that weighting because I
remained unconvinced that the recovery would be as strong as many
investors expect. The fund's bank holdings also held back its
performance at the beginning of the period.
Q. THE FUND MAINTAINS A HEAVY WEIGHTING IN TELECOMMUNICATIONS STOCKS,
INCLUDING NOKIA AND ERICSSON . . .
A. That's true, although I pared back the fund's investments in Nokia
during the period because I felt that, while the company's long-term
outlook was positive, it wasn't strong enough to warrant the stock's
high current valuation. Nokia's stock performed quite well due to
consistently solid earnings that met or beat estimates, largely due to
continued strong cellular handset sales. Ericsson did not do as well
as Nokia recently because of some internal problems, but the stock
still rose based on the company's potential and sound cellular
infrastructure business.
Q. WHICH OTHER STOCKS PERFORMED WELL? WHICH WERE DISAPPOINTMENTS?
A. Besides Nokia and Ericsson, ABB did well. A Swedish power company,
ABB's stock rose as it restructured by divesting itself of
low-returning businesses, and redeploying capital into higher-growth
acquisitions. Hennes & Mauritz, a Swedish retailer, continued to
succeed at rolling out its stores in new markets throughout Europe. On
the down side, the fund's bank investments - including Den Danske
Bank, Svenska Handelsbanken and ForeningsSparbanken - suffered from
the market's rotation out of this sector and into cyclicals. In
addition, there was concern that interest rates have dropped so low
that the banks' net interest income would be affected. Tele Danmark
also struggled because of concerns that increasing competition in the
Danish telephone market would put downward pressure on fixed-line and
cellular rates in that country.
Q. WHAT'S YOUR OUTLOOK?
A. All in all, the environment looked pretty good for the Nordic
markets at the end of the period. Sweden was still enjoying very high
consumer spending, low inflation and steady growth. While the Oslo
exchange was buoyed by higher oil prices, the Norwegian onshore
economy was starting to grow more slowly. Many stocks could witness a
high correlation between the price of oil and their performance.
Denmark appeared to have the potential for further interest-rate cuts
that should prove positive for the economy. And Finland looked to have
good growth prospects, with less negative impact from problems from
its neighbor, Russia, than expected.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of issuers in
Denmark, Finland, Norway and Sweden
FUND NUMBER: 342
TRADING SYMBOL: FNORX
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than $99 million
MANAGER: Trygve Toraasen, since 1998;
associate portfolio manager, Fidelity Nordic
Fund, 1997-1998; research analyst,
1994-1998; joined Fidelity in 1994
NORDIC
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 5.5%
Denmark 11.5%
Finland 24.7%
Sweden 49.8%
Norway 8.5%
Row: 1, Col: 1, Value: 11.5
Row: 1, Col: 2, Value: 24.7
Row: 1, Col: 3, Value: 8.5
Row: 1, Col: 4, Value: 49.8
Row: 1, Col: 5, Value: 5.5
AS OF OCTOBER 31, 1998
Norway 2.8%
United States 2.3%
Denmark 15.5%
Sweden 48.4%
Finland 31.0%
Row: 1, Col: 1, Value: 2.8
Row: 1, Col: 2, Value: 15.5
Row: 1, Col: 3, Value: 31.0
Row: 1, Col: 4, Value: 48.4
Row: 1, Col: 5, Value: 2.3
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stock 96.1 97.7
Short-term investments 3.9 2.3
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Nokia AB (Finland, 12.7 17.3
Communications Equipment)
Ericsson (L.M.) Telefon AB 11.9 11.4
Class B (Sweden, Electrical
Equipment)
ABB AB Series A (Sweden, 4.6 1.8
Holding Companies)
Skandia Foersaekrings AB 4.0 2.1
(Sweden, Insurance)
Hennes & Mauritz AB Class B 3.9 3.3
(Sweden, Apparel Stores)
Svenska Handelsbanken 2.7 3.0
(Sweden, Banks)
Volvo AB Class B (Sweden, 2.7 2.2
Autos, Tires, & Accessories)
NCL Holdings AS (Norway, 2.6 1.3
Entertainment)
Tele Danmark AS Class B 2.6 2.6
(Denmark, Telephone Services)
Skandinaviska Enskilda Banken 2.4 0.7
Class A (Sweden, Banks)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 19.9 17.7
TECHNOLOGY 15.3 19.0
INDUSTRIAL MACHINERY & 13.9 15.0
EQUIPMENT
BASIC INDUSTRIES 7.2 3.4
DURABLES 6.0 4.2
SERVICES 5.7 3.8
UTILITIES 5.2 7.6
HOLDING COMPANIES 4.6 1.8
RETAIL & WHOLESALE 4.2 4.2
MEDIA & LEISURE 4.1 5.4
</TABLE>
NORDIC
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.1%
SHARES VALUE (NOTE 1)
DENMARK - 11.5%
Carlsberg AS Class B 10,420 $ 492,718
Danisco AS 9,720 455,396
Den Danske Bank Group AS 5,199 599,697
Falck AS 11,060 850,503
GN Store Nordic AS 37,680 1,287,802
International Service Systems 19,200 1,129,219
AS Class B
Novo-Nordisk AS Class B 7,089 696,564
Ratin AS Class B 3,570 615,149
Sondagsavisen AS (Reg.) 8,870 555,780
Sydbank AS 14,730 497,139
Tele Danmark AS Class B 24,150 2,493,343
Unidanmark AS Class A 6,360 437,453
Vestas Wind Systems AS (a) 15,300 1,045,826
11,156,589
FINLAND - 24.7%
Eimo Oyj (a) 13,000 236,748
Hackman OY AB Class A 10,600 269,359
Helsinki Telephone Corp. 9,800 414,012
Class E
Jaakko Poyry Group Oyj 27,250 311,605
JOT Automation Group Oyj 4,800 153,124
KCI (Konecranes International) 6,390 236,801
Merita Ltd. Series A 183,800 1,099,532
Metra OY Series B 8,100 201,971
Metsa-Serla Ltd. Class B Free 139,220 1,193,990
Shares
Okobank Class A 23,180 206,161
Nokia AB 166,300 12,337,372
Pohjola Group Insurance Corp. 18,781 891,857
Class B
Raisio Group PLC 62,800 575,161
Sampo Insurance Co. Ltd. 23,810 751,511
Sonera Group PLC 32,300 642,946
Sponda Oyj 35,600 190,351
Stora Enso Oyj 120,570 1,410,638
Talentum OY Class B 22,380 296,199
Teito Corp. Class B 13,114 523,468
UPM-Kymmene Corp. 67,210 2,038,790
23,981,596
NORWAY - 8.5%
Agresso Group ASA (a) 46,600 140,428
Christiania Bank Og 210,400 809,407
Kreditkasse
Den Norske Bank ASA Class A 163,500 591,244
Free shares
Hafslund ASA Series B 112,700 419,104
Kvaerner ASA Class B 22,700 369,683
Kvaerner ASA 25,300 506,110
NCL Holdings AS (a) 971,817 2,504,844
Norsk Hydro AS 48,700 2,182,610
Storebrand ASA (a) 106,800 773,784
8,297,214
SHARES VALUE (NOTE 1)
SWEDEN - 49.8%
ABB AB Series A 318,777 $ 4,452,246
Assa Abloy AB Class B 12,850 562,089
Atlas Copco AB Series B 21,800 575,259
Avesta Sheffield AB 58,000 249,569
Biora AB sponsored ADR (a) 18,300 221,888
Electrolux AB 105,000 2,134,222
Ericsson (L.M.) Telefon AB 428,300 11,564,100
Class B
Europolitan Holdings AB 6,580 560,789
ForeningsSparbanken AB Series 39,450 867,507
A
Gambro AB Series B 23,300 245,106
Hemkopskedjan AB Series B 38,410 303,613
Hennes & Mauritz AB Class B 44,000 3,802,256
IBS (International Business 27,706 490,698
Systems) AB Class B Free
shares (a)
Investor AB Class B Free 50,000 2,276,266
shares
Munters AB 50,850 525,853
Munters AB (c) 8,300 85,832
NCC AB Series B 25,500 266,733
Netcom AB Series B (a) 14,600 470,302
Nobel Biocare AB 34,920 554,128
Nordbanken Holding AB 137,913 868,831
Scandic Hotels AB 19,960 593,137
Scania AB 28,000 777,140
Securitas AB Class B 134,400 1,996,933
Skandia Foersaekrings AB 202,500 3,923,439
Skandinaviska Enskilda Banken 180,616 2,361,583
Class A
Skanska AB Class B 12,800 508,933
SSAB Swedish Steel Series A 24,100 306,517
Svenska Cellulosa AB (SCA) 60,500 1,549,733
Class B
Svenska Handelsbanken 69,732 2,619,229
Volvo AB Class B 98,118 2,600,128
48,314,059
UNITED STATES OF AMERICA - 1.6%
Pharmacia & Upjohn, Inc. unit 27,400 1,524,231
TOTAL COMMON STOCKS 93,273,689
(Cost $73,230,731)
CASH EQUIVALENTS - 3.9%
Taxable Central Cash Fund (b) 3,785,757 3,785,757
(Cost $3,785,757)
TOTAL INVESTMENT IN $ 97,059,446
SECURITIES - 100%
(Cost $77,016,488)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $85,832 or 0.1% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $49,790,852 and $72,664,099, respectively.
The fund participated in the bank borrowing program as a borrower. The
average daily balances during the period for which loans were
outstanding amounted to $1,313,000. The weighted average interest rate
was 5.18%.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $77,228,695. Net unrealized appreciation
aggregated $19,830,751, of which $23,735,621 related to appreciated
investment securities and $3,904,870 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $8,285,000, all of which will expire on October 31,
2006.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
AEROSPACE & DEFENSE 0.2%
BASIC INDUSTRIES 7.2
CASH EQUIVALENTS 3.9
CONSTRUCTION & REAL ESTATE 2.5
DURABLES 6.0
ENERGY 2.3
FINANCE 19.9
HEALTH 3.4
HOLDING COMPANIES 4.6
INDUSTRIAL MACHINERY & 13.9
EQUIPMENT
MEDIA & LEISURE 4.1
NONDURABLES 1.6
RETAIL & WHOLESALE 4.2
SERVICES 5.7
TECHNOLOGY 15.3
UTILITIES 5.2
100.0%
NORDIC
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 97,059,446
value (cost $77,016,488) -
See accompanying schedule
Receivable for investments 16,442,511
sold
Receivable for fund shares 61,980
sold
Dividends receivable 611,080
Interest receivable 2,467
Redemption fees receivable 71
TOTAL ASSETS 114,177,555
LIABILITIES
Payable for investments $ 13,896,482
purchased
Payable for fund shares 343,944
redeemed
Accrued management fee 63,131
Other payables and accrued 73,176
expenses
TOTAL LIABILITIES 14,376,733
NET ASSETS $ 99,800,822
Net Assets consist of:
Paid in capital $ 78,736,132
Undistributed net investment 855,725
income
Accumulated undistributed net 172,744
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 20,036,221
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 5,136,463 $ 99,800,822
shares outstanding
NET ASSET VALUE and $19.43
redemption price per share
($99,800,822 (divided by)
5,136,463 shares)
Maximum offering price per $20.03
share (100/97.00 of $19.43)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 1,673,374
Dividends
Interest 55,980
1,729,354
Less foreign taxes withheld (244,957)
TOTAL INCOME 1,484,397
EXPENSES
Management fee $ 402,712
Transfer agent fees 169,387
Accounting fees and expenses 34,395
Non-interested trustees' 182
compensation
Custodian fees and expenses 27,732
Registration fees 13,968
Audit 14,980
Legal 274
Interest 6,272
Miscellaneous 9
Total expenses before 669,911
reductions
Expense reductions (41,239) 628,672
NET INVESTMENT INCOME 855,725
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 9,236,499
Foreign currency transactions (11,448) 9,225,051
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 7,940,112
Assets and liabilities in (4,103) 7,936,009
foreign currencies
NET GAIN (LOSS) 17,161,060
NET INCREASE (DECREASE) IN $ 18,016,785
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 66,508
charges paid to FDC
Sales charges - Retained by $ 66,508
FDC
Expense reductions Directed $ 40,640
brokerage arrangements
Custodian credits 2
Transfer agent credits 597
$ 41,239
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 855,725 $ 204,042
income
Net realized gain (loss) 9,225,051 (9,029,156)
Change in net unrealized 7,936,009 4,055,394
appreciation (depreciation)
NET INCREASE (DECREASE) IN 18,016,785 (4,769,720)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (302,313)
From net investment income
From net realized gain - (5,108,510)
TOTAL DISTRIBUTIONS - (5,410,823)
Share transactions Net 26,051,410 137,620,320
proceeds from sales of shares
Reinvestment of distributions - 5,325,815
Cost of shares redeemed (46,203,475) (104,656,126)
NET INCREASE (DECREASE) IN (20,152,065) 38,290,009
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 77,745 471,151
TOTAL INCREASE (DECREASE) (2,057,535) 28,580,617
IN NET ASSETS
NET ASSETS
Beginning of period 101,858,357 73,277,740
End of period (including $ 99,800,822 $ 101,858,357
undistributed net investment
income of $855,725 and
$178,966, respectively)
OTHER INFORMATION Shares
Sold 1,381,503 7,537,796
Issued in reinvestment of - 375,060
distributions
Redeemed (2,510,710) (6,243,438)
Net increase (decrease) (1,129,207) 1,669,418
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 G
Net asset value, beginning of $ 16.26 $ 15.94 $ 12.77 $ 10.00
period
Income from Investment
Operations
Net investment income D .14 .03 .10 .17 H
Net realized and unrealized 3.02 1.46 I 3.19 2.57
gain (loss)
Total from investment 3.16 1.49 3.29 2.74
operations
Less Distributions
From net investment income - (.07) (.05) -
From net realized gain - (1.18) (.10) -
Total distributions - (1.25) (.15) -
Redemption fees added to paid .01 .08 .03 .03
in capital
Net asset value, end of period $ 19.43 $ 16.26 $ 15.94 $ 12.77
TOTAL RETURN B, C 19.50% 10.99% 26.24% 27.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 99,801 $ 101,858 $ 73,278 $ 30,871
(000 omitted)
Ratio of expenses to average 1.24% A 1.35% 1.42% 2.00% E
net assets
Ratio of expenses to average 1.16% A, F 1.35% 1.42% 2.00%
net assets after expense
reductions
Ratio of net investment 1.58% A .20% .67% 1.52%
income to average net assets
Portfolio turnover rate 96% A 69% 74% 35%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G FOR THE PERIOD NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1996.
H INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.16 PER SHARE.
I THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
PACIFIC BASIN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the past five year and past 10 year total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PACIFIC BASIN 35.62% 29.31% 0.71% 31.60%
FIDELITY PACIFIC BASIN 31.55% 25.43% -2.31% 27.65%
(INCL. 3.00% SALES CHARGE)
MSCI Pacific 27.60% 20.31% -14.68% -19.45%
Pacific Region Funds Average 31.39% 15.14% -16.36% 56.30%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Morgan Stanley Capital International (MSCI) Pacific Index - a
market capitalization-weighted index of over 400 stocks traded in five
Pacific-region markets. To measure how the fund's performance stacked
up against its peers, you can compare it to the Pacific region funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 51 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PACIFIC BASIN 29.31% 0.14% 2.78%
FIDELITY PACIFIC BASIN 25.43% -0.47% 2.47%
(INCL. 3.00% SALES CHARGE)
MSCI Pacific 20.31% -3.13% -2.14%
Pacific Region Funds Average 15.14% -3.85% 4.10%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Pacific Basin MS Pacific (Net MA tax)
00302 MS003
1989/04/30 9700.00 10000.00
1989/05/31 9323.54 9441.23
1989/06/30 8890.62 9020.31
1989/07/31 9950.97 10190.95
1989/08/31 9417.66 9560.45
1989/09/30 10195.67 10144.77
1989/10/31 9900.78 9873.25
1989/11/30 10220.76 10343.28
1989/12/31 10362.37 10354.52
1990/01/31 10009.78 9768.66
1990/02/28 9382.94 8820.62
1990/03/31 8801.81 7232.20
1990/04/30 8703.87 7280.87
1990/05/31 9546.18 8292.24
1990/06/30 9689.83 7958.15
1990/07/31 10016.31 7897.73
1990/08/31 8684.28 7144.33
1990/09/30 7267.37 6024.24
1990/10/31 8416.57 7325.71
1990/11/30 7646.08 6513.35
1990/12/31 7542.42 6790.61
1991/01/31 7687.98 7002.25
1991/02/28 8382.68 7865.46
1991/03/31 8276.82 7437.00
1991/04/30 8634.09 7628.13
1991/05/31 8574.55 7598.60
1991/06/30 8428.99 7102.05
1991/07/31 8534.85 7341.57
1991/08/31 7959.24 6969.16
1991/09/30 8455.45 7517.39
1991/10/31 8700.25 7837.30
1991/11/30 8290.05 7333.10
1991/12/31 8488.54 7558.13
1992/01/31 8270.20 7265.29
1992/02/29 8190.81 6756.43
1992/03/31 7674.75 6113.88
1992/04/30 7595.35 5833.61
1992/05/31 8204.04 6288.60
1992/06/30 8032.02 5794.09
1992/07/31 7674.75 5713.55
1992/08/31 7899.70 6496.27
1992/09/30 7846.77 6347.42
1992/10/31 7939.39 6123.31
1992/11/30 7906.31 6238.79
1992/12/31 7841.86 6167.38
1993/01/31 7922.02 6155.90
1993/02/28 8382.91 6454.37
1993/03/31 8950.68 7234.08
1993/04/30 9859.11 8386.62
1993/05/31 10340.04 8630.61
1993/06/30 9805.67 8489.11
1993/07/31 10326.68 8991.01
1993/08/31 10800.93 9256.94
1993/09/30 10827.65 8910.73
1993/10/31 11675.96 9108.55
1993/11/30 11101.52 7823.40
1993/12/31 12853.49 8368.76
1994/01/31 13202.18 9337.49
1994/02/28 13332.08 9578.21
1994/03/31 12333.88 9049.48
1994/04/30 12675.73 9440.78
1994/05/31 13051.77 9665.37
1994/06/30 12997.07 9981.55
1994/07/31 12969.72 9767.40
1994/08/31 13585.05 9937.15
1994/09/30 13407.29 9688.44
1994/10/31 13646.58 9933.50
1994/11/30 12525.32 9379.19
1994/12/31 12491.91 9442.29
1995/01/31 11334.54 8845.99
1995/02/28 11149.36 8626.90
1995/03/31 11504.28 9289.23
1995/04/30 11635.45 9684.32
1995/05/31 11566.01 9296.96
1995/06/30 11457.99 8902.96
1995/07/31 12206.42 9544.85
1995/08/31 12075.26 9185.31
1995/09/30 11936.37 9270.40
1995/10/31 11481.14 8819.62
1995/11/30 11380.83 9253.26
1995/12/31 11728.04 9704.90
1996/01/31 11905.51 9721.36
1996/02/29 11650.89 9611.66
1996/03/31 11959.52 9906.45
1996/04/30 12592.22 10410.90
1996/05/31 12237.29 9959.13
1996/06/30 12399.32 9961.18
1996/07/31 11766.62 9503.47
1996/08/31 11535.15 9253.27
1996/09/30 11874.64 9555.25
1996/10/31 11303.67 9111.69
1996/11/30 11735.76 9359.10
1996/12/31 11403.85 8872.64
1997/01/31 10697.90 8126.45
1997/02/28 10922.87 8296.29
1997/03/31 10628.08 7992.65
1997/04/30 10969.42 8159.45
1997/05/31 12094.29 8958.34
1997/06/30 12660.60 9513.76
1997/07/31 12986.43 9286.95
1997/08/31 11411.61 8366.43
1997/09/30 11690.89 8334.89
1997/10/31 10403.11 7323.45
1997/11/30 10046.25 6920.88
1997/12/31 9681.96 6617.33
1998/01/31 10141.12 6976.59
1998/02/28 10164.87 7227.47
1998/03/31 9681.96 6829.67
1998/04/30 9871.95 6694.92
1998/05/31 9452.38 6240.74
1998/06/30 9294.05 6228.94
1998/07/31 9460.29 6120.87
1998/08/31 8351.97 5397.68
1998/09/30 8621.14 5380.47
1998/10/31 9412.79 6312.69
1998/11/30 10061.95 6603.07
1998/12/31 10481.90 6787.56
1999/01/31 10497.75 6836.97
1999/02/28 10370.89 6703.93
1999/03/31 11782.22 7549.43
1999/04/30 12765.40 8054.71
IMATRL PRASUN SHR__CHT 19990430 19990514 094056 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Pacific Basin Fund on April 30, 1989, and the
current 3.00% sales charge was paid. As the chart shows, by April 30,
1999, the value of the investment would have grown to $12,765 - a
27.65% increase on the initial investment. For comparison, look at how
the Morgan Stanley Capital International Pacific Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have been $8,055 - a 19.45% decrease.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
PACIFIC BASIN
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of William Kennedy)
NOTE TO SHAREHOLDERS: William Kennedy became Portfolio Manager of
Fidelity Pacific Basin Fund on December 31, 1998.
Q. HOW DID THE FUND PERFORM, BILL?
A. The fund did well on both an absolute basis and relative to its
benchmarks. For the six months that ended April 30, 1999, the fund
returned 35.62%. That compared favorably with the 27.60% return
recorded by the Morgan Stanley Capital International Pacific Index and
the 31.39% return posted by the Pacific region funds average tracked
by Lipper Inc. For the 12 months that ended April 30, 1999, the fund
returned 29.31%, again substantially bettering the returns of the
index and the average, which were 20.31% and 15.14%, respectively.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
A. The fund benefited from strong stock selection in Japanese
small-capitalization stocks, particularly in the software sector.
Compared to their U.S. counterparts, Japanese companies have been slow
to make the necessary expenditures for software and the information
technology infrastructure required by that software. Now they are
playing catch-up, and the result was healthy sales for Japanese
software companies. Another helpful influence relative to the index
was the fund's larger weighting in telecommunications stocks.
Q. WHAT ABOUT BIG-PICTURE, MACROECONOMIC CONSIDERATIONS?
A. Stock markets in the Pacific Basin experienced a resurgence partly
because the region's currencies were relatively stable during the
period. Currency risk is one factor that tends to make foreign
investments riskier than U.S.-based ones, and the area's volatile
currencies were particularly instrumental in scaring off potential
investors during much of 1998. In addition, when the period began,
investor sentiment toward Japan - by far the largest country
allocation in the fund and the index - was so negative that those
stocks were due for a rebound. Furthermore, investors responded to
concrete initiatives by the Japanese government to rebuild the ailing
financial services sector, including a bank bailout program and the
adoption of new banking laws.
Q. YOU TOOK OVER THE FUND AT THE END OF 1998. CAN YOU COMMENT ON SOME
OF THE CHANGES YOU MADE SINCE THEN?
A. Sure. I tried to bring the fund's country and sector allocations
closer to those of the index. My thinking is that, rather than making
bets on specific countries or sectors, I'd prefer to rely on
Fidelity's stock-picking expertise to add value for the fund's
shareholders. Consequently, I added to the fund's investments in Hong
Kong and decreased its Australian holdings. Sector changes included
buying more bank stocks in Japan, Singapore and Hong Kong, thereby
raising the fund's allocation of finance stocks from the 12.0%
reported last fall to 17.8% at the end of the period. The fund's
weighting of utilities also rose - from the 4.6% mentioned in the
previous annual report to 12.2% at the period's conclusion. I paid for
these purchases, in part, by liquidating some holdings in the
technology sector, where the fund had been overweighted relative to
the index.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Hikari Tsushin was one of the fund's most positive contributors.
The company, a provider of mobile telephone services for the retail
market, benefited from strong consumer demand and healthy incentive
programs from suppliers. Another helpful holding was Nippon Telegraph
& Telephone, which enjoyed robust performance from its mobile
communications and software services subsidiaries. Fuji Soft ABC was
an example of the resurgent Japanese software group.
Q. WHAT ABOUT DISAPPOINTMENTS?
A. Riso Kagaku hurt performance. The company, which makes low-end
printing machines, suffered from mediocre earnings prospects, and I
sold the stock shortly after taking over the fund. Goodman Fielder, a
retail food business in Australia, underperformed due to downwardly
revised profit estimates from the company. The fund no longer holds
that stock.
Q. WHAT'S YOUR OUTLOOK, BILL?
A. The economies of Southeast Asia appear to be improving much more
rapidly than most observers expected. In particular, the countries
with significant structural problems, such as Thailand and Indonesia,
have done much to alleviate those problems. The continuing improvement
of Japan, of course, is one key to a thorough revitalization of the
region. That said, my focus will remain firmly bottom-up, with the
goal of selecting the best stocks available for the fund's
shareholders.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Pacific Basin issuers
FUND NUMBER: 302
TRADING SYMBOL: FPBFX
START DATE: October 1, 1986
SIZE: as of April 30, 1999, more than $327
million
MANAGER: William Kennedy, since December
1998; Hong Kong research director, 1996-1998;
analyst, regional power sector and Indian
companies, 1994-1996; joined Fidelity in 1994
PACIFIC BASIN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 4.8%
Australia 9.6%
Singapore 2.8%
Other 2.2%
Hong Kong 7.9%
Japan 72.7%
Row: 1, Col: 1, Value: 9.6
Row: 1, Col: 2, Value: 7.9
Row: 1, Col: 3, Value: 72.7
Row: 1, Col: 4, Value: 2.2
Row: 1, Col: 5, Value: 2.8
Row: 1, Col: 6, Value: 4.8
AS OF OCTOBER 31, 1998
United States 5.6%
Australia 11.0%
Singapore 1.5%
Other 2.0%
Hong Kong 5.0%
Japan 74.9%
Row: 1, Col: 1, Value: 11.0
Row: 1, Col: 2, Value: 5.0
Row: 1, Col: 3, Value: 74.90000000000001
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 5.6
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 95.2 94.4
Bonds - 0.5
Short-term investments 4.8 5.1
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Nippon Telegraph & Telephone 3.7 0.7
Corp. (Japan, Telephone
Services)
Bank of Tokyo-Mitsubishi Ltd. 3.0 0.3
(Japan, Banks)
Toyota Motor Corp. (Japan, 2.5 3.1
Autos, Tires, & Accessories)
Honda Motor Co. Ltd. (Japan, 2.1 1.6
Autos, Tires, & Accessories)
Takeda Chemical Industries 1.9 1.9
Ltd. (Japan, Drugs &
Pharmaceuticals)
Hutchison Whampoa Ltd. (Hong 1.7 0.4
Kong, Electrical Equipment)
Matsushita Electric 1.5 1.8
Industrial Co. Ltd. (Japan,
Consumer Electronics)
NTT Mobile Communication 1.3 0.8
Network, Inc. (Japan,
Cellular)
Sumitomo Bank Ltd. Japan 1.3 0.0
(Japan, Banks)
Shohkoh Fund & Co. Ltd. 1.3 1.4
(Japan, Credit & Other
Finance)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 17.8 12.0
TECHNOLOGY 17.3 22.0
UTILITIES 12.2 4.6
DURABLES 11.1 14.5
INDUSTRIAL MACHINERY & 6.1 9.0
EQUIPMENT
BASIC INDUSTRIES 5.8 2.4
RETAIL & WHOLESALE 4.5 5.0
NONDURABLES 4.3 3.2
CONSTRUCTION & REAL ESTATE 4.1 1.8
MEDIA & LEISURE 3.9 6.8
</TABLE>
PACIFIC BASIN
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.2%
SHARES VALUE (NOTE 1)
AUSTRALIA - 9.6%
Amcor Ltd. 121,500 $ 654,001
AMP Ltd. 122,400 1,428,754
Australia & New Zealand 93,808 742,618
Banking Group Ltd.
Brambles Industries Ltd. 24,553 721,054
Broken Hill Proprietary Co. 283,676 3,205,114
Ltd. (The)
Cable & Wireless Optus Ltd. 268,800 604,421
(a)
Cochlear Ltd. 82,500 635,640
Coles Myer Ltd. 126,900 673,836
Colonial Ltd. 129,739 488,218
Commonwealth Bank of Australia 31,700 576,846
F.H. Faulding & Co. Ltd. 107,044 601,745
Harvey Norman Holdings Ltd. 57,994 582,986
HIH Insurance Ltd. 274,497 352,185
John Fairfax Holdings Ltd. 242,100 670,873
Lend Lease Corp. Ltd. 103,700 1,397,221
Macquarie Bank Ltd. 65,100 815,871
Mirvac Ltd. 119,700 183,660
National Australia Bank Ltd. 193,333 3,761,664
News Corp. Ltd. 460,879 3,860,017
Perpetual Trustees Australia 39,800 550,124
Ltd.
Rio Tinto Ltd. 38,600 649,690
Smith (Howard) Ltd. 55,888 475,177
Tabcorp Holdings Ltd. 135,000 1,097,279
Telstra Corp. Ltd. 521,700 2,829,216
Westfield Holdings Ltd. 131,000 866,369
Westpac Banking Corp. 293,694 2,240,690
WMC Ltd. 147,000 634,836
31,300,105
HONG KONG - 7.9%
Cheung Kong Holdings Ltd. 307,000 2,792,241
Dairy Farm International 510,000 754,800
Holdings Ltd.
Dao Heng Bank Group Ltd. 400,000 1,625,534
Hang Seng Bank Ltd. 260,000 3,077,548
Hengan International Group 146,000 48,972
Co. Ltd. (a)(c)
Hong Kong & China Gas Co. 578,000 812,793
Ltd.
Hong Kong Telecommunications 1,356,000 3,627,295
Ltd.
Hutchison Whampoa Ltd. 618,000 5,541,135
Johnson Electric Holdings 691,000 2,063,738
Ltd.
Li & Fung Ltd. 400,000 980,481
South China Morning Post 1,012,000 610,362
Holdings
Sun Hung Kai Properties Ltd. 296,000 2,596,726
Varitronix International Ltd. 300,000 514,752
Wing Hang Bank Ltd. 214,000 654,316
25,700,693
INDIA - 0.3%
Infosys Technologies Ltd. ADR 25,900 1,069,994
JAPAN - 72.7%
Acom Co. Ltd. 26,400 1,979,226
Aderans Co. Ltd. 15,000 606,886
SHARES VALUE (NOTE 1)
Aeon Credit Service Ltd. 20,900 $ 1,803,233
Aiful Corp. 34,800 2,848,015
Ajinomoto Co., Inc. 86,000 994,857
Alps Electric Co. Ltd. 56,000 949,908
Aruze Corp. 20,000 1,055,453
Asahi Chemical Industry Co. 185,000 1,077,023
Ltd.
Asahi Glass Co. Ltd. 155,000 1,186,715
Bank of Tokyo-Mitsubishi Ltd. 655,000 9,667,532
Banyu Pharmaceutical Co. Ltd. 139,000 2,561,568
BellSystem24, Inc. 1,200 473,446
Benesse Corp. 12,000 1,001,173
Bridgestone Corp. 68,000 1,822,751
Canon, Inc. 84,000 2,054,615
Citizen Watch Co. Ltd. 206,000 1,708,326
Dai Nippon Printing Co. Ltd. 92,000 1,458,067
Daifuku Co. Ltd. 97,000 654,088
Dainippon Screen 71,000 344,949
Manufacturing Co. Ltd.
Daiwa Securities Co. Ltd. 214,000 1,308,594
DDI Corp. 591 2,935,693
Don Quijote Co. Ltd. 4,500 1,047,914
East Japan Railway Co. 245 1,446,850
Fancl Corp. 13,000 1,851,231
Fuji Bank Ltd. 522,000 4,075,255
Fuji Coca-Cola Bottling Co. 72,000 995,142
Ltd.
Fuji Heavy Industries Ltd. 290,000 1,943,374
Fuji Machine Manufacturing 52,000 1,855,587
Co. Ltd.
Fuji Photo Film Co. Ltd. 88,000 3,324,510
Fuji Soft ABC, Inc. 38,600 2,347,428
Fujitsu Ltd. 240,000 4,111,241
Fujitsu Support & Service, 10,000 1,222,985
Inc.
Furukawa Electric Co. Ltd. 657,000 2,872,793
Futaba Corp. 16,000 675,490
Hakuto Co. Ltd. 22,000 506,785
Heiwa Corp. 47,000 846,457
Hikari Tsushin, Inc. 8,000 1,675,322
Hino Motors Ltd. 290,000 1,382,225
Hirose Electric Co. Ltd. 35,000 3,254,314
Hitachi Information Systems, 100,000 1,272,407
Ltd.
Hitachi Ltd. 258,000 1,883,400
Honda Motor Co. Ltd. 153,000 6,760,687
Hoya Corp. 24,000 1,256,492
Ito-Yokado Co. Ltd. 67,000 4,113,838
Japan Business Computer Co. 64,000 1,007,874
Ltd.
Japan Telecom Co. Ltd. 93 1,316,552
Japan Tobacco, Inc. 106 1,065,505
Kaneka Corp. 125,000 1,010,429
Kao Corp. 140,000 3,553,359
Kawasaki Steel Corp. 375,000 719,342
Kita Kyushu Coca-Cola 26,300 1,282,174
Bottling Co. Ltd.
Kokusai Denshin Denwa 58,200 3,529,636
Kokusai Securities Co. Ltd. 89,000 1,110,823
Konami Co. Ltd. 63,000 2,216,452
Kyocera Corp. 38,000 2,256,827
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Matsushita Communication 21,000 $ 1,507,539
Industrial Co. Ltd.
Matsushita Electric 253,000 4,810,772
Industrial Co. Ltd.
Mikasa Coca-Cola Bottling Co. 35,000 345,661
Mikuni Coca-Cola Bottling Co. 46,000 963,310
Ltd.
Mirai Industry Co. Ltd. 41,000 549,506
Misumi Corp. 20,000 594,739
Mitsubishi Electric Corp. 250,000 873,262
Mitsubishi Estate Co. Ltd. 130,000 1,329,620
Mitsubishi Trust & Banking 111,000 1,218,043
Corp.
Mitsumi Electric Co. Ltd. 65,000 1,241,414
NEC Corp. 310,000 3,702,965
NGK Insulators Ltd. 175,000 2,132,895
NIC Corp. 19,000 421,762
Nichicon Corp. 161,000 2,124,099
Nidec Corp. 11,000 1,428,212
Nihon Unisys Ltd. 33,000 656,517
Nikko Securities Co. Ltd. 141,000 809,055
Nikon Corp. (a) 75,000 1,030,323
Nippon Computer Systems Corp. 92,000 1,286,983
Nippon Paper Industries Co. 110,000 580,499
Ltd.
Nippon Steel Corp. 1,000,000 2,244,932
Nippon System Development Co. 43,000 2,197,185
Nippon Telegraph & Telephone 1,107 12,054,782
Corp.
Nippon Zeon Co. Ltd. 260,000 1,724,912
Nitto Denko Corp. 53,000 1,007,790
Nomura Securities Co. Ltd. 195,000 2,103,870
NTT Mobile Communication 73 4,280,449
Network, Inc. (a)
NTT Mobile Communication 43 2,521,360
Network, Inc. (c)
Oji Paper Co. Ltd. 135,000 808,552
Omron Corp. 100,000 1,377,953
Oracle Corp. Japan 5,000 611,493
Orix Corp. 10,200 821,092
Otsuka Kagu Ltd. 10,500 1,319,316
Paris Miki, Inc. 31,020 1,034,173
Q'Sai Co. Ltd. 17,000 549,673
Ricoh Co. Ltd. 96,000 924,778
Rohm Co. Ltd. 18,000 2,171,218
Ryohin Keikaku Co. Ltd. 6,600 1,202,463
Sankyo Co. Ltd. (Gunma) 27,000 936,338
Secom Ltd. 33,000 3,223,153
Senshukai Co. Ltd. 160,000 1,757,078
Sharp Corp. 169,000 1,981,906
Shikoku Coca-Cola Bottling 22,000 323,421
Co. Ltd.
Shimano, Inc. 16,000 407,438
Shin-Etsu Chemical Co. Ltd. 100,000 3,183,113
Shohkoh Fund & Co. Ltd. 7,150 4,192,494
Skylark Co. Ltd. 65,000 1,358,477
Softbank Corp. 13,400 1,783,598
Sony Chemicals Corp. 12,000 608,142
SHARES VALUE (NOTE 1)
Sony Corp. 31,500 $ 2,913,750
Sony Music Entertainment Ltd. 24,000 1,749,037
Square Co. Ltd. 40,000 1,440,777
Sumitomo Bank Ltd. Japan 314,000 4,250,494
Sumitomo Forestry Co. Ltd. 100,000 745,518
Takasago Thermal Engineering 66,000 586,028
Co. Ltd.
Takeda Chemical Industries 146,000 6,347,294
Ltd.
Takefuji Corp. 15,000 1,243,927
Takefuji Corp. (c) 20,000 1,658,569
THK Co. Ltd. 135,300 2,346,046
Tokyo Electric Power Co. 110,000 2,349,640
Tokyo Electron Ltd. 14,000 797,453
Tokyo Seimitsu Co. Ltd. 45,000 2,491,623
Toyota Motor Corp. 284,000 8,129,500
Uni-Charm Corp. 14,000 634,445
Union Tool Co. 11,300 832,970
World Co. Ltd. 57,000 3,156,056
Yamanouchi Pharmaceutical Co. 37,000 1,171,553
Ltd.
237,445,823
MALAYSIA - 1.0%
Amway Holding BHD 313,000 650,711
Berjaya Sports Toto BHD 352,000 602,105
Malaysian International 430,000 678,947
Shipping BHD (For. Reg.)
Rothmans of Pall Mall 94,000 680,263
Malaysia BHD
Tanjong PLC 405,000 847,303
3,459,329
NEW ZEALAND - 0.6%
Fletcher Challenge Ltd. 129,700 214,741
Building Division
Lion Nathan Ltd. 216,100 543,940
Telecom Corp. of New Zealand 212,000 1,102,814
Ltd.
1,861,495
PHILIPPINES - 0.0%
Oriental Petroleum & Mineral 7,771,657 777
Corp. Class B (a)
SINGAPORE - 2.8%
Allgreen Properties Ltd. 39,000 23,685
Datacraft Asia Ltd. 323,000 1,014,220
Development Bank of Singapore 88,000 933,962
Ltd. (For. Reg.)
Natsteel Electronics Ltd. 195,000 655,366
Oversea-Chinese Banking Corp. 117,000 1,096,875
(For. Reg.)
Overseas Union Bank Ltd. 144,000 738,679
Pacific Internet Ltd. (a) 100 7,938
Singapore Airlines Ltd. (For. 95,000 873,821
Reg.)
Singapore Press Holdings Ltd. 64,694 953,626
Singapore Telecommunications 773,000 1,431,144
Ltd.
United Overseas Bank Ltd. 103,000 795,578
(For. Reg.)
Venture Manufacturing 116,000 636,085
Singapore Ltd.
9,160,979
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN - 0.3%
Taiwan Semiconductor 331,000 $ 1,118,517
Manufacturing Co. Ltd.
UNITED KINGDOM - 0.0%
HSBC Holdings PLC 1,150 43,315
TOTAL COMMON STOCKS 311,161,027
(Cost $240,598,660)
CASH EQUIVALENTS - 4.8%
Taxable Central Cash Fund (b) 15,553,521 15,553,521
(Cost $15,553,521)
TOTAL INVESTMENT IN $ 326,714,548
SECURITIES - 100%
(Cost $256,152,181)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $4,228,901 or 1.3% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $201,164,861 and $146,506,315, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $256,197,034. Net unrealized appreciation
aggregated $70,517,514, of which $73,977,375 related to appreciated
investment securities and $3,459,861 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $95,690,000 of which $10,408,000, $17,259,000,
$35,042,000 and $32,981,000 will expire on October 31, 2003, 2004,
2005 and 2006, respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 5.8%
CASH EQUIVALENTS 4.8
CONSTRUCTION & REAL ESTATE 4.1
DURABLES 11.1
FINANCE 17.8
HEALTH 3.9
INDUSTRIAL MACHINERY & 6.1
EQUIPMENT
MEDIA & LEISURE 3.9
NONDURABLES 4.3
PRECIOUS METALS 0.2
RETAIL & WHOLESALE 4.5
SERVICES 2.8
TECHNOLOGY 17.3
TRANSPORTATION 1.2
UTILITIES 12.2
100.0%
PACIFIC BASIN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 326,714,548
value (cost $256,152,181) -
See accompanying schedule
Foreign currency held at 855,612
value (cost $726,282)
Receivable for investments 2,142,510
sold
Receivable for fund shares 1,748,662
sold
Dividends receivable 562,805
Interest receivable 50,396
Redemption fees receivable 1,244
TOTAL ASSETS 332,075,777
LIABILITIES
Payable for investments $ 3,725,287
purchased
Payable for fund shares 443,025
redeemed
Accrued management fee 237,757
Other payables and accrued 423,364
expenses
TOTAL LIABILITIES 4,829,433
NET ASSETS $ 327,246,344
Net Assets consist of:
Paid in capital $ 347,107,185
Distributions in excess of (4,641,444)
net investment income
Accumulated undistributed net (85,633,095)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 70,413,698
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 20,320,052 $ 327,246,344
shares outstanding
NET ASSET VALUE and $16.10
redemption price per share
($327,246,344 (divided by)
20,320,052 shares)
Maximum offering price per $16.60
share (100/97.00 of $16.10)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 1,225,342
Dividends
Interest 264,683
1,490,025
Less foreign taxes withheld (121,175)
TOTAL INCOME 1,368,850
EXPENSES
Management fee Basic fee $ 862,648
Performance adjustment 360,751
Transfer agent fees 452,204
Accounting fees and expenses 72,411
Custodian fees and expenses 35,392
Registration fees 13,141
Audit 15,563
Legal 451
Total expenses before 1,812,561
reductions
Expense reductions (10,002) 1,802,559
NET INVESTMENT INCOME (LOSS) (433,709)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 10,193,293
Foreign currency transactions (16,943) 10,176,350
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 63,718,210
Assets and liabilities in (138,029) 63,580,181
foreign currencies
NET GAIN (LOSS) 73,756,531
NET INCREASE (DECREASE) IN $ 73,322,822
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 131,428
charges paid to FDC
Sales charges - Retained by $ 130,977
FDC
Deferred sales charges $ 7,296
withheld by FDC
Expense reductions Directed $ 5,095
brokerage arrangements
Custodian credits 1,107
Transfer agent credits 3,800
$ 10,002
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ (433,709) $ (321,268)
income (loss)
Net realized gain (loss) 10,176,350 (31,836,550)
Change in net unrealized 63,580,181 9,227,120
appreciation (depreciation)
NET INCREASE (DECREASE) IN 73,322,822 (22,930,698)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (345,403) (4,350,839)
in excess of net investment
income
Share transactions Net 100,331,302 63,798,234
proceeds from sales of shares
Reinvestment of distributions 338,512 4,301,574
Cost of shares redeemed (41,977,386) (84,998,801)
NET INCREASE (DECREASE) IN 58,692,428 (16,898,993)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 112,520 127,081
TOTAL INCREASE (DECREASE) 131,782,367 (44,053,449)
IN NET ASSETS
NET ASSETS
Beginning of period 195,463,977 239,517,426
End of period (including $ 327,246,344 $ 195,463,977
distributions in excess of
net investment income of
$4,641,444 and $3,862,332,
respectively)
OTHER INFORMATION Shares
Sold 6,952,260 5,220,379
Issued in reinvestment of 26,201 352,299
distributions
Redeemed (3,094,567) (7,003,769)
Net increase (decrease) 3,883,894 (1,431,091)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 11.89 $ 13.41 $ 14.65 $ 14.88 $ 19.96
period
Income from Investment
Operations
Net investment income (loss) (.02) D (.02) D (.01) D .05 D .07 D
Net realized and unrealized 4.24 (1.26) (1.16) (.29) (3.12)
gain (loss)
Total from investment 4.22 (1.28) (1.17) (.24) (3.05)
operations
Less Distributions
From net investment income - - (.01) - -
In excess of net investment (.02) (.25) (.07) - (.02)
income
From net realized gain - - - - (2.02)
Total distributions (.02) (.25) (.08) - (2.04)
Redemption fees added to paid .01 .01 .01 .01 .01
in capital
Net asset value, end of period $ 16.10 $ 11.89 $ 13.41 $ 14.65 $ 14.88
TOTAL RETURN B, C 35.62% (9.52)% (7.97)% (1.55)% (15.87)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 327,246 $ 195,464 $ 239,517 $ 572,150 $ 317,635
(000 omitted)
Ratio of expenses to average 1.56% A 1.73% 1.32% 1.26% 1.32% E
net assets
Ratio of expenses to average 1.55% A, F 1.72% F 1.31% F 1.24% F 1.32%
net assets after expense
reductions
Ratio of net investment (.37)% A (.16)% (.04)% .30% .44%
income (loss) to average net
assets
Portfolio turnover rate 130% A 57% 42% 85% 65%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 17.48
period
Income from Investment
Operations
Net investment income (loss) .10
Net realized and unrealized 2.78
gain (loss)
Total from investment 2.88
operations
Less Distributions
From net investment income (.01)
In excess of net investment (.11)
income
From net realized gain (.28)
Total distributions (.40)
Redemption fees added to paid -
in capital
Net asset value, end of period $ 19.96
TOTAL RETURN B, C 16.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 553,532
(000 omitted)
Ratio of expenses to average 1.54%
net assets
Ratio of expenses to average 1.54%
net assets after expense
reductions
Ratio of net investment .04%
income (loss) to average net
assets
Portfolio turnover rate 88%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
SOUTHEAST ASIA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SOUTHEAST ASIA 32.17% 19.53% -11.35% 14.55%
FIDELITY SOUTHEAST ASIA 28.20% 15.94% -14.01% 11.11%
(INCL. 3.00% SALES CHARGE)
MSCI Far East Free ex-Japan 43.96% 25.68% -16.00% 20.52%
Pacific Region ex-Japan 33.45% 13.35% -21.32% n/a
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on April 19, 1993. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Morgan Stanley Capital
International AC Far East Free ex-Japan Index - a market
capitalization- weighted index of over 380 stocks traded in eight
Asian markets, excluding Japan. To measure how the fund's performance
stacked up against its peers, you can compare it to the Pacific region
ex-Japan funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Inc. The past six months
average represents a peer group of 85 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SOUTHEAST ASIA 19.53% -2.38% 2.28%
FIDELITY SOUTHEAST ASIA 15.94% -2.97% 1.76%
(INCL. 3.00% SALES CHARGE)
MSCI Far East Free ex-Japan 25.68% -3.43% 3.14%
Pacific Region ex-Japan 13.35% -4.94% n/a
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Southeast Asia MS FarEast x-JPN Fr Gross
00351 MS008
1993/04/19 9700.00 10000.00
1993/04/30 9651.50 10334.89
1993/05/31 10078.30 10929.98
1993/06/30 9835.80 10642.82
1993/07/31 9826.10 10715.96
1993/08/31 10543.90 11612.63
1993/09/30 10873.70 11974.11
1993/10/31 12842.80 14179.62
1993/11/30 13240.50 14084.20
1993/12/31 15992.99 17508.06
1994/01/31 14696.78 16312.13
1994/02/28 14004.83 15375.29
1994/03/31 12221.33 13702.83
1994/04/30 12533.20 14348.37
1994/05/31 13069.22 14960.14
1994/06/30 12299.30 14295.10
1994/07/31 12952.27 15093.47
1994/08/31 14141.27 16322.75
1994/09/30 14131.52 16059.95
1994/10/31 14238.73 16372.12
1994/11/30 12845.07 14812.82
1994/12/31 12513.71 14446.91
1995/01/31 11198.01 12897.43
1995/02/28 12162.86 14200.92
1995/03/31 12318.79 14269.05
1995/04/30 12309.04 14134.01
1995/05/31 13712.45 15856.11
1995/06/30 13702.71 15617.68
1995/07/31 14053.56 15864.27
1995/08/31 13507.79 15109.47
1995/09/30 13683.21 15371.66
1995/10/31 13527.28 15138.13
1995/11/30 13293.38 14979.13
1995/12/31 14038.25 15724.49
1996/01/31 15771.98 17165.65
1996/02/29 15425.24 17106.70
1996/03/31 15296.45 17244.40
1996/04/30 15623.38 17726.96
1996/05/31 15682.82 17554.45
1996/06/30 15237.00 17200.74
1996/07/31 14038.25 15961.51
1996/08/31 14672.30 16537.82
1996/09/30 15147.84 16955.48
1996/10/31 14553.42 16635.18
1996/11/30 15603.56 17587.62
1996/12/31 15464.51 17475.63
1997/01/31 15454.22 17729.59
1997/02/28 15690.87 17795.50
1997/03/31 14620.81 16822.86
1997/04/30 14301.84 16393.53
1997/05/31 15124.97 17225.98
1997/06/30 15618.85 17686.50
1997/07/31 16123.01 17772.64
1997/08/31 14013.75 14500.35
1997/09/30 13231.78 14391.39
1997/10/31 9826.09 10880.61
1997/11/30 9754.06 10188.55
1997/12/31 9451.16 9732.57
1998/01/31 8882.44 8912.96
1998/02/28 10226.69 10957.88
1998/03/31 10195.67 10690.41
1998/04/30 9296.05 9589.59
1998/05/31 8044.86 8104.40
1998/06/30 7383.07 7222.25
1998/07/31 7269.33 7021.87
1998/08/31 6349.03 5936.84
1998/09/30 7093.54 6576.50
1998/10/31 8406.78 8372.34
1998/11/30 8944.48 9134.88
1998/12/31 8903.49 9263.54
1999/01/31 8582.17 8960.88
1999/02/28 8447.43 8802.18
1999/03/31 9204.07 9791.62
1999/04/30 11111.22 12052.48
IMATRL PRASUN SHR__CHT 19990430 19990527 143101 R00000000000076
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Southeast Asia Fund on April 19, 1993, when the
fund started, and the current 3.00% sales charge was paid. As the
chart shows, by April 30, 1999, the value of the investment would have
been $11,111 - a 11.11% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International AC
Far East Free-ex Japan Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 would have
been $12,052 - a 20.52% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
SOUTHEAST ASIA
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Allan Liu)
An interview with Allan Liu, Portfolio Manager of Fidelity Southeast
Asia Fund
Q. HOW DID THE FUND PERFORM, ALLAN?
A. The fund did quite well on an absolute basis, although performance
was somewhat disappointing relative to the fund's benchmarks. For the
six months that ended April 30, 1999, the fund had a total return of
32.17%, trailing the 43.96% return of the Morgan Stanley Capital
International Combined Far East Free ex-Japan Index and the 33.45%
return of the Pacific ex-Japan funds average tracked by Lipper Inc.
For the 12 months that ended April 30, 1999, the fund's return was
19.53%, compared to 25.68% for the index and 13.35% for the average.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX BY SUCH A WIDE MARGIN?
A. Early in the period, the fund was heavily biased toward defensive
holdings - that is, companies in industries that tend to be less
sensitive to economic fluctuations. For instance, utility, beverage,
tobacco and telecommunications stocks are regarded as defensive.
However, interest rates in most Southeast Asian countries fell quickly
as investors began to appreciate the efforts of various Asian central
banks to rebuild their balance sheets and implement banking reforms.
Both local and foreign investors were more confident that the
financial crisis was under control. At the same time, many companies
in the region initiated significant restructuring efforts in order to
become more competitive on a worldwide basis. These factors led to a
sharp rally in Southeast Asian equity markets. In a strong rally,
defensive stocks tend to lag stocks in other sectors. In addition,
relative performance was hurt by having a lighter exposure to South
Korean stocks, which were particularly strong during the period.
Q. WHAT CHANGES DID YOU MAKE IN RESPONSE TO THESE DEVELOPMENTS?
A. I sold some defensive holdings and bought stocks in sectors that
were likely to respond to the improving economic conditions. The
biggest sector change occurred in finance stocks, where the fund's
weighting went from 9.8% six months ago to 28.5% at the end of the
period. That's because banks tend to benefit substantially from lower
interest rates. In terms of country weightings, I reduced the fund's
holdings in Hong Kong and Taiwan, while increasing holdings in South
Korea.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. HSBC Holdings - the fund's largest holding at the end of the period
- - was one of the fund's best performers. The bank is well managed and
was a major beneficiary of the region's sharply lower interest rates.
Hutchison Whampoa, a Hong Kong conglomerate and the fund's
second-largest holding at the period's end, continued to perform well
on the basis of its balanced international exposure. Another strong
holding, Taiwan Semiconductor, is one of the largest manufacturers of
integrated circuits in the world. Healthy demand in the technology
sector and the company's strong balance sheet were supportive of the
stock.
Q. WHAT HOLDINGS DETRACTED FROM PERFORMANCE?
A. Swire Pacific - no longer in the fund's portfolio - was a negative
influence on performance. One of this conglomerate's key operations is
an airline, which didn't do well during the period. Phoenixtec Power
Co. was another disappointing holding. The Taiwan-based company, which
manufactures uninterruptable power systems and relies heavily on
exports for its revenues, suffered from reduced profit margins when
the Taiwanese currency strengthened.
Q. WHAT'S YOUR OUTLOOK, ALLAN?
A. We have probably seen the worst for most Southeast Asian economies.
However, I believe it's important to continue to focus on companies
that can compete effectively in a variety of economic environments. We
could see further shocks to the system - for example, another currency
devaluation in Asia or elsewhere. If U.S. interest rates rise
substantially or the stock market goes through another correction, it
could put downward pressure on Southeast Asian stocks. There also is
the concern of whether companies will follow through on their stated
intentions to restructure. So my approach will attempt to capitalize
on the improving business prospects in the region while maintaining
the fund's high standards by selecting companies with strong cash
flows, healthy balance sheets and capable managements.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Southeast Asian
issuers; the fund does not anticipate investing
in Japan
FUND NUMBER: 351
TRADING SYMBOL: FSEAX
START DATE: April 19, 1993
SIZE: as of April 30, 1999, more than $304 million
MANAGER: Allan Liu, since inception; manager,
various funds for non-U.S. investors; analyst,
Southeast Asian markets, 1987-1990; joined
Fidelity in 1987
SOUTHEAST ASIA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
United States 5.3%
United Kingdom 7.7%
Hong Kong 35.9%
Thailand 3.8%
Taiwan 13.3%
Singapore 13.0%
Indonesia 1.5%
Other 1.2%
Korea (South) 15.3%
Malaysia 3.0%
Row: 1, Col: 1, Value: 35.9
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 15.3
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 5, Value: 1.2
Row: 1, Col: 6, Value: 13.0
Row: 1, Col: 7, Value: 13.3
Row: 1, Col: 8, Value: 3.8
Row: 1, Col: 9, Value: 7.7
Row: 1, Col: 10, Value: 5.3
AS OF OCTOBER 31, 1998
China 2.0%
United States 6.9%
United Kingdom 1.5%
Thailand 1.3%
Hong Kong 51.1%
Taiwan 17.2%
Singapore 11.8%
Other 3.1%
Malaysia 2.0%
Korea (South) 3.1%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 51.1
Row: 1, Col: 3, Value: 3.1
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 3.1
Row: 1, Col: 6, Value: 11.8
Row: 1, Col: 7, Value: 17.2
Row: 1, Col: 8, Value: 1.3
Row: 1, Col: 9, Value: 1.5
Row: 1, Col: 10, Value: 6.9
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 94.7 92.9
Bonds 0.0 0.2
Short-term investments 5.3 6.9
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
HSBC Holdings PLC (United 7.7 1.3
Kingdom, Banks)
Hutchison Whampoa Ltd. (Hong 7.2 10.1
Kong, Electrical Equipment)
Cheung Kong Holdings Ltd. 5.4 5.3
(Hong Kong, Real Estate)
Sun Hung Kai Properties Ltd. 4.1 2.3
(Hong Kong, Real Estate)
Samsung Electronics Co. Ltd. 3.5 0.5
(Korea (South), Electronics)
Hong Kong Telecommunications 3.3 7.7
Ltd. (Hong Kong, Telephone
Services)
Korea Electric Power Corp. 3.1 0.0
(Korea (South), Electric
Utility)
Taiwan Semiconductor 3.0 2.0
Manufacturing Co. Ltd.
(Taiwan, Electronics)
China Telecom (Hong Kong) 3.0 3.1
Ltd. (Hong Kong, Cellular)
Hang Seng Bank Ltd. (Hong 2.7 2.7
Kong, Banks)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 28.5 9.8
TECHNOLOGY 16.8 19.4
UTILITIES 15.1 20.1
CONSTRUCTION & REAL ESTATE 15.0 13.6
INDUSTRIAL MACHINERY & 8.1 11.8
EQUIPMENT
NONDURABLES 2.5 2.7
MEDIA & LEISURE 2.5 1.6
BASIC INDUSTRIES 2.2 2.2
DURABLES 1.5 0.5
TRANSPORTATION 1.2 4.6
</TABLE>
SOUTHEAST ASIA
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.0%
SHARES VALUE (NOTE 1)
HONG KONG - 35.9%
Cheung Kong Holdings Ltd. 1,793,000 $ 16,307,781
China Telecom (Hong Kong) 3,918,000 8,962,426
Ltd. (a)
CLP Holdings Ltd. 953,000 5,114,600
Dah Sing Financial Holdings 950,000 2,996,594
Ltd.
Dao Heng Bank Group Ltd. 950,000 3,860,643
First Pacific Co. Ltd. 2,000,000 1,548,127
Hang Seng Bank Ltd. 692,000 8,191,013
Henderson Land Development 1,111,000 6,722,214
Co. Ltd.
Hong Kong & China Gas Co. 1,298,396 1,825,825
Ltd.
Hong Kong Telecommunications 3,710,000 9,924,237
Ltd.
Hutchison Whampoa Ltd. 2,447,000 21,940,384
Johnson Electric Holdings 874,000 2,610,285
Ltd.
Shui On Construction & 362,000 422,652
Materials Ltd.
Smartone Telecommunications 10,000 34,639
Holdings Ltd.
Sun Hung Kai Properties Ltd. 1,424,310 12,495,076
Wharf Holdings Ltd. 1,000,000 2,451,202
Wing Hang Bank Ltd. 1,035,000 3,164,566
108,572,264
INDONESIA - 1.5%
Gudang Garam PT Perusahaan (a) 700,000 1,279,075
PT Indah Kiat Pulp & Paper 2,500,000 1,052,384
Corp. (a)
PT Indosat 300,000 583,722
PT Semen Gresik TBK 381,326 604,033
PT Telkomunikasi Indonesia 2,152,500 966,510
4,485,724
KOREA (SOUTH) - 15.3%
Cheil Jedang Corp. 35,000 1,855,280
Daelim Industrial Co. 80,000 922,171
Hana Bank 104,000 1,356,332
Hanwha Chemical Corp. (a) 140,000 1,147,329
Hite Brewery Co. Ltd. 46,000 1,083,719
Honam Petrochemical Corp. 16,000 296,172
Housing & Commercial Bank (a) 204,000 4,806,060
Hyundai Engineering & 8 75
Construction Co. Ltd. (a)
Kookmin Bank 120,000 1,635,676
Korea Chemical Co. Ltd. 8,500 586,454
Korea Electric Power Corp. 328,000 9,438,455
Korea Telecom 80,100 4,135,412
L.G. Chemical Ltd. 52,000 896,929
Medison Co. Ltd. 36,409 407,438
Pohang Iron & Steel Co. Ltd. 23,300 2,001,036
Samsung Corp. sponsored GDR 21 58
Unit
Samsung Electronics Co. Ltd. 136,348 10,485,664
Samsung Fire & Marine 4,222 1,953,808
Insurance
Shinhan Bank 167,000 1,840,724
Shinsegae Department Store (a) 33,000 1,138,410
SHARES VALUE (NOTE 1)
SK Telecom Co. Ltd. 103 $ 107,788
Youl Chon Chemical Co. 56,000 253,025
46,348,015
MALAYSIA - 3.0%
Berjaya Sports Toto BHD 1,243,833 2,127,609
Malayan Banking BHD 345,000 916,974
Malaysian International 604,000 953,684
Shipping BHD (For. Reg.)
Public Bank BHD (For. Reg.) 504,000 469,516
Rothmans of Pall Mall 287,000 2,076,974
Malaysia BHD
Telekom Malaysia BHD 390,000 1,149,474
Tenaga Nasional BHD 340,000 720,263
UMW Holdings BHD (a) 100,000 143,421
Unisem (M) BHD 195,000 436,184
8,994,099
PHILIPPINES - 1.2%
Bank of the Phillipene Island 150,000 473,373
Manila Electric Co. Class B 302,851 1,154,856
Philippine Long Distance 48,000 1,552,663
Telephone
SM Prime Holdings, Inc. 2,000,000 452,334
3,633,226
SINGAPORE - 13.0%
Allgreen Properties Ltd. 37,000 22,471
City Developments Ltd. 432,000 2,878,302
Datacraft Asia Ltd. 796,000 2,499,440
Development Bank of Singapore 380,000 4,033,019
Ltd. (For. Reg.)
Natsteel Electronics Ltd. 730,000 2,453,420
Oversea-Chinese Banking Corp. 747,000 7,003,125
(For. Reg.)
Pacific Internet Ltd. (a) 100 7,938
Rothmans Industries Ltd. 250,000 1,311,910
Singapore Airlines Ltd. (For. 280,000 2,575,472
Reg.)
Singapore Press Holdings Ltd. 319,076 4,703,361
Singapore Technologies 726,175 779,268
Engineering Ltd.
Singapore Telecommunications 1,200,000 2,221,698
Ltd.
United Overseas Bank Ltd. 580,500 4,483,815
(For. Reg.)
Venture Manufacturing 620,000 3,399,764
Singapore Ltd.
Wing Tai Holdings Ltd. 846,000 1,052,512
39,425,515
TAIWAN - 13.3%
Advanced Semiconductor 1,085,000 2,704,205
Engineering, Inc. (a)
Asustek Computer, Inc. (a) 279,741 2,925,732
Bank Sinopac 3,134,000 2,204,343
Cathay Life Insurance Co. 316,400 1,132,073
Ltd.
China Trust Co. Ltd. (a) 2,213,000 1,935,529
Compal Electronics, Inc. (a) 1,110,074 3,836,036
Compeq Manufacturing Co. Ltd. 18,000 85,321
Far Eastern Textile Ltd. 2,140,000 2,872,966
Hon Hai Precision Industry 583,200 3,174,606
Co.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN - CONTINUED
Phoenixtec Power Co. Ltd. 1,482,000 $ 2,651,284
Pou Chen Corp. 223,000 572,844
Siliconware Precision 1,275,160 2,281,250
Industries Co. Ltd.
Taishin International Bank (a) 3,062,000 2,340,979
Taiwan Semiconductor 2,698,925 9,120,221
Manufacturing Co. Ltd.
Winbond Electronics Corp. (a) 2,350,000 2,558,410
40,395,799
THAILAND - 3.1%
Bangkok Bank Ltd. PCL (For. 867,000 2,593,989
Reg.) (a)
Ministry of Finance of the 2,166,600 846,784
Kingdom of Thailand (Siam
Commercial Bank PLC)
warrants 5/31/02 (a)
Shinawatra Computer & 121,600 439,202
Communications PCL (For.
Reg.) (a)
Shinawatra Satellite PCL 700,000 589,623
Siam Cement PCL (For.Reg.) (a) 50,000 1,477,089
Thai Farmers Bank PCL (For. 845,000 2,345,957
Reg.) (a)
Thai Military Bank PCL 2,000,000 1,118,598
(For.Reg.) (a)
9,411,242
UNITED KINGDOM - 7.7%
HSBC Holdings PLC 617,392 23,254,177
TOTAL COMMON STOCKS 284,520,061
(Cost $215,008,871)
CONVERTIBLE PREFERRED STOCKS
- - 0.7%
THAILAND - 0.7%
Siam Commercial Bank PLC 5.25 2,166,600 2,219,159
% (Cost $1,530,893)
CASH EQUIVALENTS - 5.3%
Taxable Central Cash Fund (b) 16,126,784 16,126,784
(Cost $16,126,784)
TOTAL INVESTMENT IN $ 302,866,004
SECURITIES - 100%
(Cost $232,666,548)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $135,097,539 and $122,315,292, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $232,928,022. Net unrealized appreciation
aggregated $69,937,982, of which $72,920,145 related to appreciated
investment securities and $2,982,163 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $143,224,000 of which $32,651,000 and $110, 573,000 will
expire on October 31, 2005 and 2006, respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 2.2%
CASH EQUIVALENTS 5.3
CONSTRUCTION & REAL ESTATE 15.0
DURABLES 1.5
FINANCE 28.5
GOVERNMENT SECURITIES 0.3
HEALTH 0.1
HOLDING COMPANIES 0.5
INDUSTRIAL MACHINERY & 8.1
EQUIPMENT
MEDIA & LEISURE 2.5
NONDURABLES 2.5
RETAIL & WHOLESALE 0.4
TECHNOLOGY 16.8
TRANSPORTATION 1.2
UTILITIES 15.1
100.0%
SOUTHEAST ASIA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 302,866,004
value (cost $232,666,548) -
See accompanying schedule
Foreign currency held at 3,330,668
value (cost $3,330,522)
Receivable for investments 715,927
sold
Receivable for fund shares 1,261,813
sold
Dividends receivable 270,651
Interest receivable 29,262
Redemption fees receivable 3,059
TOTAL ASSETS 308,477,384
LIABILITIES
Payable for investments $ 2,552,219
purchased
Payable for fund shares 702,113
redeemed
Accrued management fee 183,821
Other payables and accrued 725,919
expenses
TOTAL LIABILITIES 4,164,072
NET ASSETS $ 304,313,312
Net Assets consist of:
Paid in capital $ 385,319,395
Undistributed net investment 238,916
income
Accumulated undistributed net (150,901,882)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 69,656,883
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 28,394,036 $ 304,313,312
shares outstanding
NET ASSET VALUE and $10.72
redemption price per share
($304,313,312 (divided by)
28,394,036 shares)
Maximum offering price per $11.05
share (100/97.00 of $10.72)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 2,162,749
Dividends
Interest 143,018
2,305,767
Less foreign taxes withheld (93,207)
TOTAL INCOME 2,212,560
EXPENSES
Management fee
Basic fee $ 860,320
Performance adjustment 193,649
Transfer agent fees 446,800
Accounting fees and expenses 73,039
Non-interested trustees' 117
compensation
Custodian fees and expenses 138,184
Registration fees 20,312
Audit 35,940
Legal 469
Total expenses before 1,768,830
reductions
Expense reductions (9,476) 1,759,354
NET INVESTMENT INCOME 453,206
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (5,905,213)
Foreign currency transactions 93,682 (5,811,531)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 73,670,724
Assets and liabilities in (583,521) 73,087,203
foreign currencies
NET GAIN (LOSS) 67,275,672
NET INCREASE (DECREASE) IN $ 67,728,878
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 177,672
Charges Paid to FDC
Sales charges - Retained by $ 177,549
FDC
Expense Reductions $ 9,272
Directed brokerage
arrangements
Custodian credits 10
Transfer agent credits 194
$ 9,476
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 453,206 $ 2,515,337
income
Net realized gain (loss) (5,811,531) (112,465,494)
Change in net unrealized 73,087,203 71,238,265
appreciation (depreciation)
NET INCREASE (DECREASE) IN 67,728,878 (38,711,892)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (562,063) (1,459,446)
from net investment income
Share transactions Net 71,505,417 131,309,522
proceeds from sales of shares
Reinvestment of distributions 540,135 1,428,081
Cost of shares redeemed (58,441,313) (148,622,010)
NET INCREASE (DECREASE) IN 13,604,239 (15,884,407)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 202,919 548,119
TOTAL INCREASE (DECREASE) 80,973,973 (55,507,626)
IN NET ASSETS
NET ASSETS
Beginning of period 223,339,339 278,846,965
End of period (including $ 304,313,312 $ 223,339,339
undistributed net investment
income of $238,916 and
$347,773, respectively)
OTHER INFORMATION
Shares
Sold 7,699,641 15,599,765
Issued in reinvestment of 63,997 142,524
distributions
Redeemed (6,848,740) (17,461,859)
Net increase (decrease) 914,898 (1,719,570)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 1995
Net asset value, beginning of $ 8.13 $ 9.55 $ 14.69 $ 13.88 $ 14.61
period
Income from Investment
Operations
Net investment income .02 D .09 D .04 D, F .14 D .15
Net realized and unrealized 2.58 (1.48) (4.62) .87 (.91)
gain (loss)
Total from investment 2.60 (1.39) (4.58) 1.01 (.76)
operations
Less Distributions
From net investment income (.02) (.05) (.10) (.23) -
In excess of net investment - - (.07) - -
income
From net realized gain - - (.40) - -
Total distributions (.02) (.05) (.57) (.23) -
Redemption fees added to paid .01 .02 .01 .03 .03
in capital
Net asset value, end of period $ 10.72 $ 8.13 $ 9.55 $ 14.69 $ 13.88
TOTAL RETURNB, C 32.17% (14.44)% (32.48)% 7.59% (5.00)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 304,313 $ 223,339 $ 278,847 $ 755,346 $ 649,868
(000 omitted)
Ratio of expenses to average 1.53% A 1.83% 1.32% 1.13% 1.10%
net assets
Ratio of expenses to average 1.52% A, E 1.79% E 1.32% 1.12% E 1.10%
net assets after expense
reductions
Ratio of net investment .39% A 1.07% .22% .95% .90%
income to average net assets
Portfolio turnover rate 107% A 95% 141% 102% 94%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
F INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.02 PER
SHARE.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994
Net asset value, beginning of $ 13.24
period
Income from Investment
Operations
Net investment income .04
Net realized and unrealized 1.23
gain (loss)
Total from investment 1.27
operations
Less Distributions
From net investment income (.04)
In excess of net investment (.03)
income
From net realized gain -
Total distributions (.07)
Redemption fees added to paid .17
in capital
Net asset value, end of period $ 14.61
TOTAL RETURNB, C 10.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 825,734
(000 omitted)
Ratio of expenses to average 1.47%
net assets
Ratio of expenses to average 1.47%
net assets after expense
reductions
Ratio of net investment .22%
income to average net assets
Portfolio turnover rate 157%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
F INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.02 PER
SHARE.
</TABLE>
UNITED KINGDOM
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY UNITED KINGDOM 18.63% 4.29% 83.29%
FIDELITY UNITED KINGDOM 15.07% 1.16% 77.79%
(INCL. 3.00% SALES CHARGE)
FT-All-Shares 17.92% 7.41% 101.26%
European Region Funds Average 8.95% -0.20% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 1, 1995. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the FT-All-Shares Index - a market
capitalization-weighted index of over 840 stocks traded in the U.K.
market. To measure how the fund's performance stacked up against its
peers, you can compare the fund's performance to the European region
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Inc. The past six months average
represents a peer group of 142 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY UNITED KINGDOM 4.29% 18.92%
FIDELITY UNITED KINGDOM 1.16% 17.89%
(INCL. 3.00% SALES CHARGE)
FT-All-Shares 7.41% 22.15%
European Region Funds Average -0.20% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
United Kingdom FTSE Actuaries All Shares
00344 FT001
1995/11/01 9700.00 10000.00
1995/11/30 9573.90 10045.63
1995/12/31 9778.19 10332.30
1996/01/31 9729.49 10310.34
1996/02/29 9963.23 10460.66
1996/03/31 10099.58 10580.27
1996/04/30 10411.24 10783.02
1996/05/31 10722.89 10999.14
1996/06/30 10596.28 10897.13
1996/07/31 10430.72 10838.63
1996/08/31 10927.42 11423.97
1996/09/30 11005.33 11641.61
1996/10/31 11579.95 12221.95
1996/11/30 12183.78 12823.08
1996/12/31 12575.73 13285.32
1997/01/31 12205.27 12911.20
1997/02/28 12555.71 13299.67
1997/03/31 12565.72 13420.62
1997/04/30 12665.85 13546.04
1997/05/31 13016.28 14119.45
1997/06/30 13216.53 14307.89
1997/07/31 13526.92 14788.25
1997/08/31 13366.72 14587.42
1997/09/30 14408.03 15706.71
1997/10/31 14227.80 15250.76
1997/11/30 14347.95 15309.01
1997/12/31 14686.21 15781.29
1998/01/31 15115.63 16509.20
1998/02/28 16103.30 17613.50
1998/03/31 17037.29 18678.26
1998/04/30 17048.02 18737.66
1998/05/31 16919.20 18390.36
1998/06/30 16790.37 18462.12
1998/07/31 16146.24 18059.16
1998/08/31 13902.51 16565.85
1998/09/30 14428.55 16189.75
1998/10/31 14986.80 17067.41
1998/11/30 15684.61 17671.51
1998/12/31 16201.58 18175.13
1999/01/31 16109.46 18101.10
1999/02/28 16512.48 18527.57
1999/03/31 17088.23 19246.07
1999/04/30 17779.13 20125.69
IMATRL PRASUN SHR__CHT 19990430 19990514 094300 R00000000000045
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity United Kingdom Fund on November 1, 1995, when the
fund started, and the current 3.00% sales charge was paid. As the
chart shows, by April 30, 1999, the value of the investment would have
grown to $17,779 - a 77.79% increase on the initial investment. For
comparison, look at how the FT-All-Shares Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $20,126 - a 101.26% increase.
(checkmark)
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
UNITED KINGDOM
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Frederic Gautier)
An interview with Frederic Gautier, Portfolio Manager of Fidelity
United Kingdom Fund
Q. HOW DID THE FUND PERFORM, FREDERIC?
A. For the six months that ended April 30, 1999, the fund returned
18.63%, compared to the 17.92% return of the FT-All-Shares Index, and
the European region funds average of 8.95%, as tracked by Lipper Inc.
For the one-year period that ended April 30, 1999, the fund returned
4.29%, compared to the FT-All-Shares Index return of 7.41% and the
Lipper European region funds average return of -0.20%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S SOUND PERFORMANCE RELATIVE
TO ITS BENCHMARK?
A. The fund's performance over the six-month period was driven
primarily by a slight overweighting in banks, which were very strong.
Banks staged a dramatic turnaround, in the midst of falling interest
rates, from their depressed condition during the global shakeup of the
late summer and early fall of 1998. The energy sector also delivered
healthy gains, sparked by a rebound in oil prices. The fund's
overweighting in cyclical industries was helpful as these securities
benefited from an upturn in the economy. The fund was underweighted in
defensive issues - such as utilities and food manufacturers - which
underperformed the index, so that helped performance as well. In a
period where small- to mid-sized companies returned to favor, the fund
secured gains by maintaining a slight overweighting in companies
outside of the market leaders. In this new environment, astute
security selection within each sector - most notably in retailing
where we avoided substantial losses - was also a key to success.
Q. HOW WOULD YOU DESCRIBE THE INVESTMENT ENVIRONMENT DURING THE
PERIOD?
A. During the first half of the period, bank and telecommunication
stocks thrived. Conversely, in the second half, cyclicals took center
stage. The main stories were the recovery in banking stocks and a
historically strong pickup in economically sensitive, or cyclical,
companies. Interest rates fell steadily over the past six months,
reaching their lowest levels in quite some time by the close of the
period, as The Bank of England imposed the last in a series of rate
cuts over the past year in early April. These cuts restored consumer
confidence and alleviated fear of a recession. Inflation fell to
around 2.5%, very low according to historical standards.
Q. WHAT STOCKS HELPED PERFORMANCE?
A. Shell Transport helped, supported by a rise in oil prices and the
perception that its restructuring program would begin to deliver
benefits. BP Amoco - the fund's largest holding - was a strong
performer, responding favorably to the rebound in oil and its merger
with ARCO. Shares in HSBC Holdings, a global banking and financial
services company, almost doubled in value in response to the recovery
in Asia. Another financial holding, Amvescap - a global asset
management firm - surged in the wake of strong stock market returns.
Mobile telephone operator Vodafone and British Telecommunications were
also very strong. Kingfisher - a general retailer - turned in sizable
gains from its successful expansionary efforts into Europe.
Q. WHICH STOCKS PROVED TO BE DETRACTORS?
A. Pharmaceuticals, a defensive growth sector, were hurt as investors
shifted away from defensive stocks into cyclical positions toward the
latter half of the period. Consequently, top fund holdings Glaxo
Wellcome and SmithKline Beecham disappointed. Glaxo's shares fell when
a new influenza drug failed to be approved in the U.S. Other defensive
plays in beverages and tobacco companies performed poorly as well.
Q. WHAT'S YOUR OUTLOOK?
A. Overall, I am reasonably optimistic. Assuming that the U.K. will go
into the euro - the new European currency - eventually, and that the
interest-rate differential narrows between the euro and the Sterling,
there is hope that interest rates could go down further, which should
ultimately boost equities. If interest rates continue to fall, the
Sterling should follow suit. Manufacturers should benefit from this
movement, as should cyclical companies. I expect banks to maintain
their strong performance, as I anticipate economic fundamentals to
remain strong, which would allow for further growth within this
sector.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. FOR
MORE INFORMATION, SEE PAGE 3.
(checkmark)
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of British issuers
FUND NUMBER: 344
TRADING SYMBOL: FUTYF
START DATE: November 1, 1995
SIZE: as of April 30, 1999, more than $7 million
MANAGER: Frederic Gautier, since 1998;
manager, various Fidelity funds through
Fidelity International Limited, since 1995;
joined Fidelity in 1994
UNITED KINGDOM
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1999
Ireland 5.1%
United States 2.2%
South Africa 0.2%
United Kingdom 92.5%
Row: 1, Col: 1, Value: 5.1
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 91.5
Row: 1, Col: 4, Value: 2.2
AS OF OCTOBER 31, 1998
United States 3.1%
Ireland 3.9%
United Kingdom 93.0%
Row: 1, Col: 1, Value: 3.9
Row: 1, Col: 2, Value: 93.0
Row: 1, Col: 3, Value: 3.1
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6
MONTHS AGO
Stocks 97.8 96.9
Short-term investments 2.2 3.1
TOP TEN STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
BP Amoco PLC (Oil & Gas) 7.0 4.5
HSBC Holdings PLC ( Reg.) 5.2 3.8
(Banks)
British Telecommunications 5.0 3.3
PLC (Telephone Services)
Vodafone Group PLC (Cellular) 4.9 4.2
SmithKline Beecham PLC 4.2 4.4
(Drugs & Pharmaceuticals)
Glaxo Wellcome PLC (Drugs & 3.9 5.4
Pharmaceuticals)
Lloyds TSB Group PLC (Banks) 3.9 4.1
Shell Transport & Trading Co. 3.3 2.9
PLC (Reg.) (Oil & Gas)
National Westminster Bank PLC 3.3 2.8
(Banks)
Kingfisher PLC (General 2.4 1.9
Merchandise Stores)
TOP TEN MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 27.5 24.7
UTILITIES 14.2 14.2
ENERGY 10.3 7.4
HEALTH 10.0 11.7
NONDURABLES 8.8 10.9
RETAIL & WHOLESALE 6.9 8.0
CONSTRUCTION & REAL ESTATE 5.5 4.1
SERVICES 4.0 1.9
MEDIA & LEISURE 2.7 5.9
INDUSTRIAL MACHINERY & 2.3 2.1
EQUIPMENT
</TABLE>
UNITED KINGDOM
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.8%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 0.4%
Wardle Storeys PLC 4,600 $ 31,495
PAPER & FOREST PRODUCTS - 1.2%
Smurfit (Jefferson) Group PLC 30,800 82,367
TOTAL BASIC INDUSTRIES 113,862
CONSTRUCTION & REAL ESTATE -
5.5%
BUILDING MATERIALS - 2.6%
CRH PLC 6,750 132,666
Meyer International PLC 6,700 48,841
181,507
CONSTRUCTION - 1.7%
Persimmon PLC 16,890 72,106
Wimpey George PLC 17,300 47,380
119,486
REAL ESTATE - 1.2%
British Land Co. PLC 4,500 41,141
Minerva PLC 13,350 45,164
86,305
TOTAL CONSTRUCTION & REAL 387,298
ESTATE
DURABLES - 0.9%
AUTOS, TIRES, & ACCESSORIES -
0.9%
BBA Group PLC 7,900 63,253
ENERGY - 10.3%
OIL & GAS - 10.3%
BP Amoco PLC 26,143 493,179
Shell Transport & Trading Co. 31,350 237,413
PLC (Reg.)
730,592
FINANCE - 27.5%
BANKS - 16.7%
Bank of Ireland, Inc. (Great 6,800 136,168
Britain)
HSBC Holdings PLC ( Reg.) 9,769 367,951
Lloyds TSB Group PLC 17,191 277,085
National Westminster Bank PLC 9,650 232,726
Royal Bank of Scotland Group 6,900 162,959
PLC
1,176,889
CREDIT & OTHER FINANCE - 2.0%
Alliance & Leicester PLC 7,500 112,367
Cattles Holdings PLC 2,300 28,308
140,675
INSURANCE - 6.5%
Allied Zurich PLC (a) 3,676 48,798
Domestic & General Group PLC 5,250 46,941
Hogg Robinson PLC 12,700 50,126
Independent Insurance PLC 9,200 40,314
SHARES VALUE (NOTE 1)
Norwich Union PLC 8,850 $ 63,089
Royal & Sun Alliance 10,900 94,121
Insurance Group PLC
Sun Life & Provincial Holding 7,700 69,125
PLC
United Assurance Group PLC 6,450 48,630
461,144
SECURITIES INDUSTRY - 2.3%
Amvescap PLC 10,000 106,326
Man (E D & F) Group PLC 11,650 57,806
164,132
TOTAL FINANCE 1,942,840
HEALTH - 10.0%
DRUGS & PHARMACEUTICALS - 10.0%
AstraZeneca Group PLC 800 31,400
Glaxo Wellcome PLC 9,552 278,202
Nycomed Amersham PLC 5,400 44,280
Seton Scholl Healthcare Group 4,613 57,223
PLC
SmithKline Beecham PLC 22,639 297,421
708,526
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 1.7%
General Electric Co. PLC 11,000 116,693
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.6%
FKI PLC 15,950 44,453
TOTAL INDUSTRIAL MACHINERY & 161,146
EQUIPMENT
MEDIA & LEISURE - 2.7%
BROADCASTING - 0.7%
Capital Radio PLC 3,500 48,604
LODGING & GAMING - 0.9%
Ladbroke Group PLC 13,650 66,575
PUBLISHING - 1.1%
Daily Mail & General Trust 1,450 77,600
PLC Class A
TOTAL MEDIA & LEISURE 192,779
NONDURABLES - 8.8%
BEVERAGES - 5.2%
Cadbury Schweppes PLC 6,900 92,206
Diageo PLC 12,700 146,798
Scottish & Newcastle PLC 10,400 130,098
369,102
FOODS - 2.3%
Hazlewood Foods PLC 23,550 47,424
Matthews (Bernard) PLC 11,150 24,250
Tomkins PLC 11,609 49,420
United Biscuits Holdings PLC 12,950 40,369
161,463
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
TOBACCO - 1.3%
British American Tobacco PLC 11,026 $ 92,633
TOTAL NONDURABLES 623,198
PRECIOUS METALS - 0.2%
Anglo American Corp. of 300 15,516
South Africa Ltd.
RETAIL & WHOLESALE - 6.9%
APPAREL STORES - 1.7%
JJB Sports PLC Class L 6,050 35,575
New Look Group PLC 23,000 82,258
117,833
GENERAL MERCHANDISE STORES -
2.4%
Kingfisher PLC 11,500 172,296
GROCERY STORES - 1.8%
Tesco PLC 42,500 126,494
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.0%
Dixons Group PLC 3,250 69,478
TOTAL RETAIL & WHOLESALE 486,101
SERVICES - 4.0%
ADVERTISING - 1.5%
Saatchi & Saatchi PLC 27,550 106,963
SERVICES - 2.5%
Rentokil Initial PLC 10,850 63,931
Reuters Group PLC 7,300 99,022
Taylor Nelson Sofres PLC 3,800 9,611
172,564
TOTAL SERVICES 279,527
TECHNOLOGY - 1.6%
COMPUTER SERVICES & SOFTWARE
- - 1.0%
Sage Group PLC 2,100 71,045
ELECTRONICS - 0.6%
Electrocomponents PLC 5,300 45,253
TOTAL TECHNOLOGY 116,298
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.6%
BAA PLC 3,750 39,268
TRUCKING & FREIGHT - 0.7%
Stagecoach Holdings PLC 15,800 53,389
TOTAL TRANSPORTATION 92,657
UTILITIES - 14.2%
CELLULAR - 4.9%
Vodafone Group PLC 19,485 349,513
SHARES VALUE (NOTE 1)
ELECTRIC UTILITY - 3.4%
British Energy PLC 5,600 $ 47,634
National Grid Group PLC 11,183 77,513
Scottish & Southern Energy PLC 12,000 112,802
237,949
TELEPHONE SERVICES - 5.0%
British Telecommunications PLC 20,900 350,598
WATER - 0.9%
Severn Trent PLC 4,700 61,899
TOTAL UTILITIES 999,959
TOTAL COMMON STOCKS 6,913,552
(Cost $5,711,929)
CASH EQUIVALENTS - 2.2%
Taxable Central Cash Fund (b) 154,452 154,452
(Cost $154,452)
TOTAL INVESTMENT IN $ 7,068,004
SECURITIES - 100%
(Cost $5,866,381)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $2,811,786 and $3,751,700, respectively.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $5,893,247. Net unrealized appreciation
aggregated $1,174,757, of which $1,355,027 related to appreciated
investment securities and $180,270 related to depreciated investment
securities.
UNITED KINGDOM
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 7,068,004
value (cost $5,866,381) -
See accompanying schedule
Foreign currency held at 604
value (cost $606)
Receivable for investments 98,030
sold
Receivable for fund shares 2,111
sold
Dividends receivable 51,657
Interest receivable 678
Receivable from investment 5,322
adviser for expense
reductions
TOTAL ASSETS 7,226,406
LIABILITIES
Payable for investments $ 160,129
purchased
Other payables and accrued 31,644
expenses
TOTAL LIABILITIES 191,773
NET ASSETS $ 7,034,633
Net Assets consist of:
Paid in capital $ 5,910,788
Undistributed net investment 21,728
income
Accumulated undistributed net (99,266)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,201,383
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 455,494 $ 7,034,633
shares outstanding
NET ASSET VALUE and $15.44
redemption price per share
($7,034,633 (divided by)
455,494 shares)
Maximum offering price per $15.92
share (100/97.00 of $15.44)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 98,555
Dividends
Interest 3,131
101,686
Less foreign taxes withheld (10,020)
TOTAL INCOME 91,666
EXPENSES
Management fee $ 24,800
Transfer agent fees 10,293
Accounting fees and expenses 30,014
Non-interested trustees' 15
compensation
Custodian fees and expenses 17,542
Registration fees 7,706
Audit 15,883
Legal 17
Miscellaneous 4
Total expenses before 106,274
reductions
Expense reductions (39,876) 66,398
NET INVESTMENT INCOME 25,268
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (9,857)
Foreign currency transactions (2,556) (12,413)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 1,161,651
Assets and liabilities in (196) 1,161,455
foreign currencies
NET GAIN (LOSS) 1,149,042
NET INCREASE (DECREASE) IN $ 1,174,310
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 4,478
charges paid to FDC
Sales charges - Retained by $ 4,478
FDC
Expense Reductions $ 39,512
FMR reimbursement
Directed brokerage 364
arrangements
$ 39,876
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1998
ASSETS 1999 (UNAUDITED)
Operations Net investment $ 25,268 $ 94,463
income
Net realized gain (loss) (12,413) 574,852
Change in net unrealized 1,161,455 (519,997)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,174,310 149,318
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (69,464) (115,006)
From net investment income
From net realized gain (324,969) (484,235)
In excess of net realized (86,853) -
gain
TOTAL DISTRIBUTIONS (481,286) (599,241)
Share transactions Net 923,157 6,741,898
proceeds from sales of shares
Reinvestment of distributions 460,462 598,563
Cost of shares redeemed (1,958,188) (5,731,991)
NET INCREASE (DECREASE) IN (574,569) 1,608,470
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 744 48,025
TOTAL INCREASE (DECREASE) 119,199 1,206,572
IN NET ASSETS
NET ASSETS
Beginning of period 6,915,434 5,708,862
End of period (including $ 7,034,633 $ 6,915,434
undistributed net investment
income of $21,728 and
$99,432, respectively)
OTHER INFORMATION
Shares
Sold 63,065 455,368
Issued in reinvestment of 34,466 43,658
distributions
Redeemed (137,422) (405,257)
Net increase (decrease) (39,891) 93,769
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED APRIL 30, 1999 YEARS ENDED OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1998 1997 1996 E
Net asset value, beginning of $ 13.96 $ 14.21 $ 11.89 $ 10.00
period
Income from Investment
Operations
Net investment income .05 D .19 D .31 D .16
Net realized and unrealized 2.40 .46 2.31 1.75
gain (loss)
Total from investment 2.45 .65 2.62 1.91
operations
Less Distributions
From net investment income (.14) (.19) (.13) (.04)
From net realized gain (.65) (.80) (.20) -
In excess of net realized gain (.18) - - -
Total distributions (.97) (.99) (.33) (.04)
Redemption fees added to paid - .09 .03 .02
in capital
Net asset value, end of period $ 15.44 $ 13.96 $ 14.21 $ 11.89
TOTAL RETURN B, C 18.63% 5.33% 22.87% 19.38%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 7,035 $ 6,915 $ 5,709 $ 2,656
(000 omitted)
Ratio of expenses to average 2.00% A, F 2.02% F 2.00% F 2.00% F
net assets
Ratio of expenses to average 1.99% A, G 2.01% G 1.99% G 1.97% G
net assets after expense
reductions
Ratio of net investment .76% A 1.26% 2.36% 1.62%
income to average net assets
Portfolio turnover rate 85% A 191% 96% 50%
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
F FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
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 (the
funds) are funds of Fidelity Investment Trust (the trust). The trust
is registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as an open-end management investment company organized
as a Massachusetts business trust. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the funds:
SECURITY VALUATION. Securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price in the principal market in which such securities
are normally traded. If trading or events occurring in other markets
after the close of the principal market in which securities are traded
are expected to materially affect the value of those securities, then
they are valued at their fair value taking this trading or these
events into account. Fair value is determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the funds are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. Each fund
may be subject to foreign taxes on income and gains on investments
which are accrued based upon each fund's understanding of the tax
rules and regulations that exist in the markets in which they invest.
Each fund accrues such taxes as applicable. The schedules of
investments include information regarding income taxes under the
caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the funds
are informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions, foreign currency transactions,
passive foreign investment companies (PFIC), net operating losses,
capital loss carryforwards, and losses deferred due to wash sales.
Certain funds also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income, distributions in excess of net
investment income, accumulated net investment loss and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in Canada, Emerging
Markets, France, Germany, Hong Kong and China, Japan, Japan Small
Companies, Latin America, Nordic, Southeast Asia and United Kingdom
less than 90 days are subject to a short-term trading fee equal to
1.50% of the proceeds of the redeemed shares. Shares held in Europe,
Europe Capital Appreciation, and Pacific Basin less than 90 days are
subject to a short-term trading fee equal to 1.00% of the proceeds of
the redeemed shares. These fees, which are retained by the funds, are
accounted for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. Certain funds use foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the funds may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the funds are recorded
as interest income in the accompanying financial statements.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by
the SEC, the funds, along with other registered investment companies
having management contracts with FMR, may participate in an interfund
lending program. This program provides an alternative credit facility
allowing the funds to borrow from, or lend money to, other
participating funds. Information regarding each fund's participation
in the program is included under the caption "Other Information" at
the end of each applicable fund's schedule of investments.
RESTRICTED SECURITIES. Certain funds are permitted to invest in
securities that are subject to legal or contractual restrictions on
resale. These securities generally may be resold in transactions
exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may
be difficult. At the end of the period, the funds had no investments
in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and sales of securities (other than
short-term securities), is included under the caption "Other
Information" at the end of each applicable fund's schedule of
investments.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of each fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .45% for
each fund. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. The basic fee for Canada, Europe, Europe Capital
Appreciation, Japan, Pacific Basin, and Southeast Asia is subject to a
performance adjustment (up to a maximum of (plus/minus).20% of the
fund's average net assets over the performance period) based on each
fund's investment performance as compared to the appropriate index
over a specified period of time.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
For the period, each fund's management fee was equivalent to the
following annualized rates expressed as a percentage of average net
assets after the performance adjustment, if applicable:
Canada .30%
Emerging Markets .74%
Europe .64%
Europe Capital Appreciation .70%
France .74%
Germany .74%
Hong Kong and China .74%
Japan .94%
Japan Small Companies .73%
Latin America .74%
Nordic .74%
Pacific Basin 1.05%
Southeast Asia .91%
United Kingdom .74%
SUB-ADVISER FEE. FMR, on behalf of the funds, entered into
sub-advisory agreements with Fidelity Management & Research (U.K.)
Inc., Fidelity Management & Research Far East Inc., Fidelity
International Investment Advisors (FIIA), and Fidelity Investments
Japan Limited (FIJ) (Emerging Markets, Hong Kong and China, Japan,
Japan Small Companies, Pacific Basin and Southeast Asia funds only.).
In addition, FIIA entered into a sub-advisory agreement with its
subsidiary, Fidelity International Investment Advisors (U.K.) Limited
(FIIA(U.K.)L). Under the sub-advisory arrangements, FMR may receive
investment advice and research services and may grant the sub-advisers
investment management authority to buy and sell securities. FMR pays
its sub-advisers either a portion of its management fee or a fee based
on costs incurred for these services. FIIA pays FIIA(U.K.)L a fee
based on costs incurred for either service.
SALES LOAD. Fidelity Distributors Corporation (FDC), an affiliate of
FMR, is the general distributor of the fund. FDC receives a sales
charge of up to 3% for selling shares of each fund. Shares of Canada,
Europe, and Pacific Basin purchased prior to October 12, 1990, are
subject to a 1% deferred sales charge upon redemption. The amounts
received and retained by FDC for sales charges and deferred sales
charges are shown under the caption "Other Information" on each fund's
Statement of Operations.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the funds' transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. For the period, the
transfer agent fees were equivalent to the following annualized rates
as a percentage of the average net assets:
Canada .39%
Emerging Markets .55%
Europe .24%
Europe Capital Appreciation .25%
France .34%
Germany .36%
Hong Kong and China .40%
Japan .29%
Japan Small Companies .22%
Latin America .42%
Nordic .31%
Pacific Basin .39%
Southeast Asia .39%
United Kingdom .31%
ACCOUNTING FEES. FSC maintains each fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. Certain funds placed a portion of their
portfolio transactions with brokerage firms which are affiliates of
FMR. The commissions paid to these affiliated firms are shown under
the caption "Other Information" at the end of each applicable fund's
schedule of investments
5. SECURITY LENDING.
Certain funds loaned securities to brokers who paid the funds
negotiated lenders' fees. These fees are included in interest income.
Each applicable fund receives U.S. Treasury obligations and/or cash as
collateral against the loaned securities, in an amount at least equal
to 102% of the market value of the loaned securities at the inception
of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the
loan. The market value of the loaned securities is determined at the
close of business of the fund and any additional required collateral
is delivered to the fund on the next business day. Information
regarding the value of securities loaned and the value of collateral
at period end is included under the caption "Other Information" at the
end of each applicable fund's schedule of investments.
6. BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. Each fund has
established borrowing arrangements with certain banks. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. Information regarding a fund's participation in the program
is included under the caption "Other Information" at the end of each
applicable fund's schedule of investments.
7. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse certain funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of 2.00% of average net assets of each
of the applicable funds.
FMR has directed certain portfolio trades to brokers who paid a
portion of certain funds' expenses.
In addition, certain funds have entered into arrangements with their
custodian and transfer agent whereby credits realized on uninvested
cash balances were used to offset a portion of certain funds'
expenses.
For the period, the reductions under these arrangements are shown
under the caption "Other Information" on each applicable fund's
Statement of Operations.
8. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
more than 5% of the outstanding shares of the following funds:
BENEFICIAL INTEREST
FMR
FUND % OWNERSHIP
France 17
United Kingdom 26
9. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company which the fund has ownership of at
least 5% of the voting securities. Information regarding transactions
with affiliated companies is included in "Other Information" at the
end of each applicable fund's schedule of investments.
10. LITIGATION.
The Latin America Fund is engaged in litigation against the obligor on
the inflation adjusted debt of Siderurgica Brasileiras SA, contesting
the calculation of the principal adjustment. The probability of
success of this litigation cannot be predicted and the amount of
recovery cannot be estimated. Any recovery from this litigation would
inure to the benefit of the fund. As of period end, the Latin America
Fund fund no longer holds Siderurgica Brasileiras SA debt securities.
11. CHANGE IN INDEPENDENT AUDITOR.
Based on the recommendation of the Audit Committee of Europe Capital
Appreciation Fund, the Board of Trustees has determined not to retain
PricewaterhouseCoopers LLP as the fund's independent auditor and voted
to appoint Deloitte & Touche LLP for the fiscal year ended October 31,
1999. For the fiscal years ended October 31, 1998 and October 31,
1997, PricewaterhouseCoopers LLP's audit reports contained no adverse
opinion or disclaimer of opinion; nor were their reports qualified as
to uncertainty, audit scope, or accounting principles. Further, there
were no disagreements between the fund and PricewaterhouseCoopers LLP
on accounting principles, financial statement disclosure or audit
scope, which if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have caused them to make reference to
the disagreement in their report.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)
TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)
FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+X(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.,
London, England
Fidelity Management & Research (Far East) Inc.,
Tokyo, Japan
Fidelity Investments Japan Ltd.
Fidelity International Investment Advisors
Fidelity International Investment Advisors
(U.K.) Limited
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
Richard A. Spillane, Jr., VICE PRESIDENT
Allan Liu, VICE PRESIDENT, SOUTHEAST ASIA FUND
Kevin McCarey, VICE PRESIDENT, EUROPE CAPITAL APPRECIATION FUND
Patricia Satterthwaite, VICE PRESIDENT, LATIN AMERICA FUND
David Stewart, VICE PRESIDENT, EMERGING MARKETS FUND
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
Matthew N. Karstetter, DEPUTY TREASURER
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIANS
The Chase Manhattan Bank
New York, NY
EMERGING MARKETS FUND, EUROPE FUND, EUROPE CAPITAL APPRECIATION FUND,
JAPAN FUND, PACIFIC BASIN FUND, SOUTHEAST ASIA FUND
Brown Brothers Harriman & Co.
Boston, MA
CANADA FUND, FRANCE FUND, GERMANY FUND, HONG KONG AND CHINA FUND,
JAPAN SMALL COMPANIES FUND, LATIN AMERICA FUND, NORDIC FUND, UNITED
KINGDOM FUND
FIDELITY'S INTERNATIONAL EQUITY FUNDS
Canada Fund
Diversified International Fund
Emerging Markets Fund
Europe Fund
Europe Capital Appreciation Fund
France Fund
Germany Fund
Global Balanced Fund
Hong Kong and China Fund
International Growth & Income Fund
International Value Fund
Japan Fund
Japan Small Companies Fund
Latin America Fund
Nordic Fund
Overseas Fund
Pacific Basin Fund
Southeast Asia Fund
United Kingdom Fund
Worldwide Fund
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress (registered trademark)(AUTOMATED GRAPHIC)
1-800-544-5555
(AUTOMATED GRAPHIC) AUTOMATED LINE FOR QUICKEST SERVICE
(Fidelity Logo Graphic)(registered trademark)
P.O. Box 193
Boston, MA 02101
BULK RATE
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P A I D
F I D E L I T Y
INVESTMENTS
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