(2_FIDELITY_LOGOS)FIDELITY'S
BROADLY DIVERSIFIED INTERNATIONAL EQUITY
FUNDS
Fidelity Global Balanced Fund
Fidelity International Growth & Income Fund
Fidelity Diversified International Fund
Fidelity International Value Fund
Fidelity Overseas Fund
Fidelity Worldwide Fund
ANNUAL REPORT
FOR THE YEAR ENDING
OCTOBER 31, 1999
AND
PROSPECTUS
DATED DECEMBER 29, 1999
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET RECAP A-3 A REVIEW OF WHAT HAPPENED IN
WORLD MARKETS DURING THE
PAST 12 MONTHS.
GLOBAL BALANCED FUND A-4 A-5 A-6 A-7 A-15 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
INTERNATIONAL GROWTH & INCOME A-17 A-18 A-20 A-21 A-26 PERFORMANCE FUND TALK: THE
FUND MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
DIVERSIFIED INTERNATIONAL FUND A-28 A-29 A-31 A-32 A-40 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
INTERNATIONAL VALUE FUND A-42 A-43 A-45 A-46 A-50 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
OVERSEAS FUND A-52 A-53 A-55 A-56 A-62 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
WORLDWIDE FUND A-64 A-65 A-67 A-68 A-74 PERFORMANCE FUND TALK: THE
MANAGERS' OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NOTES TO FINANCIAL STATEMENTS A-76 NOTES TO THE FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT A-80 THE AUDITORS' OPINION
ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT A-81 THE AUDITORS' OPINION
DISTRIBUTIONS A-82
PROXY VOTING RESULTS A-84
FIDELITY'S BROADLY P-1
DIVERSIFIED INTERNATIONAL
EQUITY FUNDS PROSPECTUS
</TABLE>
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by
Fidelity Distributors Corporation.
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.
This report is printed on recycled paper using soy-based inks.
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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
MARKET RECAP
It took over 100 interest-rate cuts by central banks around the world
to defuse the powder keg that characterized global equity markets 12
months ago. Those easings sparked a dramatic worldwide recovery and,
in a few cases - particularly in the U.S. - were so powerful that some
of the easings needed to be reversed. The bottom line, however, is
that the world was a much better place to invest in at the conclusion
of the 12 months ending October 31, 1999, than it was at the beginning
of the period.
EUROPE: European markets offered mixed results over the past 12
months. In that time, the Morgan Stanley Capital International Europe
Index returned 12.79%. The U.K. posted the most impressive market
returns, due in large part to the strength of the vibrant
telecommunications industry. Italy and Germany, meanwhile, lagged
behind, mostly due to fears of higher interest rates. The weak
performance of the euro - the new single currency of 11 European
nations that was introduced January 1, 1999 - didn't help matters. An
additional detriment was the subpar performance of many of Europe's
largest pharmaceutical companies, which suffered due to non-compelling
product introductions and slow revenue growth. On a positive note,
cross-border consolidation played a significant role across the
European corporate landscape, as merger, acquisition and takeover bid
announcements were almost daily occurrences.
EMERGING MARKETS: A year ago, the emerging markets' outlook was bleak.
Currency problems were the norm for several regions, and market
volatility reigned supreme. In the fall of 1999, however, the markets
told a different story. Over the past 12 months, the Morgan Stanley
Capital International Emerging Markets Free Index returned 44.63%.
Several factors contributed to this about-face, including lower
interest rates and favorable export and trade data. Sentiment shifts
were evident in markets such as Singapore, Thailand and especially
India, where the strong performance of technology stocks helped propel
that market to phenomenal returns. Latin America was also a comeback
story, as Brazil rebounded nicely from it currency devaluation in
January. Mexico, however, slipped over the past several months due to
concerns about interest rates and fears of a potentially weaker peso.
JAPAN AND THE FAR EAST: For overseas investors, Japan was the place to
be for the 12-month period that ended October 31, 1999. A renewed
emphasis on corporate restructuring and shareholder
Standard & Poor's 500 Index(registered trademark) Morgan Stanley
Capital International Europe, Australasia, Far East Index
* YEAR TO DATE THROUGH OCTOBER 31, 1999.
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: 28.58
Row: 16, Col: 2, Value: 20.27
Row: 17, Col: 1, Value: 12.03
Row: 17, Col: 2, Value: 12.79
%
value - combined with the Japanese government's willingness to create
more of a free-enterprise market system - proved successful. For the
period, the Morgan Stanley Capital International Japan Index returned
58.40% and Japan's TOPIX Index returned 69.97%. Other Asian markets
also received a vicarious boost from Japan: Technology-driven markets
such as South Korea and Taiwan performed well, as worldwide demand for
personal computers translated into positive gains for semiconductor
manufacturers.
U.S. AND CANADA: The U.S. equity market produced solid returns for the
12 months ending October 31, 1999. The Dow Jones Industrial Average
returned 26.84%, while the Standard & Poor's 500 Index - a popular
gauge of U.S. stock market performance - returned 25.67%. Early on,
the Federal Reserve Board tried to stabilize the impact of shaky
global markets on the U.S. by lowering interest rates. In response,
the Dow hit the 10,000 level for the first time in March. Late in the
second quarter, however, concerns over an overheating U.S. economy and
global market recoveries triggered inflation fears. In June and again
in August, the Fed raised rates and the market sold off throughout the
third quarter as investors anticipated additional increases. In the
end, technology stocks were the clear winners as the NASDAQ Index
reeled off a healthy 67.98% return. While Canadian equity markets
didn't get nearly the attention of their neighbors to the south, their
performance was nearly as loud, as the Toronto Stock Exchange (TSE)
300 returned 24.49%.
BONDS: With few exceptions, bond performance either fell flat or
dropped into negative territory for the 12-month period. Concerns
about inflation, higher interest rates and the solid performance of
world equity markets posed the major threats to fixed-income
instruments. For the period, the Lehman Brothers Aggregate Bond Index
- - a widely followed measure of taxable bond performance - posted a
total return of 0.53%. U.S. Treasuries gave back all of their
flight-to-quality gains - and then some - captured during the fall of
1998, as the Lehman Brothers Long-Term Government Index fell 6.10%.
Meanwhile, the Lehman Brothers Corporate Bond Index returned 0.61%,
and the Salomon Brothers Non-U.S. World Government Bond Index fell
2.96%. There were a few bright spots, however. The high-yield market,
as measured by the Merrill Lynch High Yield Master II Index, returned
5.61% during the 12-month period, while the JP Morgan Emerging Markets
Bond Index Plus returned 19.98%.
GLOBAL BALANCED
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 OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY GLOBAL BALANCED 20.13% 70.07% 115.64%
MSCI World 24.91% 114.06% 183.92%
SB World Govt Bond -2.46% 36.73% n/a
Global Flexible Portfolio 16.51% 75.46% n/a
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on February 1, 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 World
Index - a market capitalization-weighted index that is designed to
represent the performance of developed stock markets throughout the
world. As of October 31, 1999, the index included over 1300 equity
securities of companies domiciled in 22 countries. You can also
compare the fund's returns to the performance of the Salomon Brothers
World Government Bond Index - a market value-weighted index of debt
issues traded in 14 world government bond markets. To measure how the
fund's performance stacked up against its peers, you can compare it to
the global flexible portfolio funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past one year average represents a peer group of 105 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 LIFE OF FUND
FIDELITY GLOBAL BALANCED 20.13% 11.21% 12.06%
MSCI World 24.91% 16.44% 16.72%
SB World Govt Bond -2.46% 6.46% n/a
Global Flexible Portfolio 16.51% 11.69% 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
Fidelity Global Balanced MSCI World SB World Govt Bond
00334 MS004 SB006
1993/02/26 10000.00 10000.00 10000.00
1993/03/31 10639.77 10576.83 10153.51
1993/04/30 11203.78 11064.11 10368.08
1993/05/28 11423.65 11316.16 10472.05
1993/06/30 11299.46 11218.32 10449.72
1993/07/30 11501.06 11446.52 10479.38
1993/08/31 12163.48 11968.39 10794.43
1993/09/30 12102.98 11744.40 10922.48
1993/10/29 12649.13 12065.21 10903.98
1993/11/30 12502.84 11379.87 10825.83
1993/12/31 13096.97 11933.93 10917.94
1994/01/31 13743.86 12718.26 11005.86
1994/02/28 13246.25 12550.86 10933.99
1994/03/31 12368.06 12006.96 10918.29
1994/04/29 12198.22 12375.31 10930.85
1994/05/31 12398.03 12404.35 10834.90
1994/06/30 11806.56 12367.06 10991.21
1994/07/29 12027.25 12599.35 11078.78
1994/08/31 12278.02 12975.91 11040.40
1994/09/30 12247.93 12632.10 11120.30
1994/10/31 12087.43 12988.52 11298.58
1994/11/30 11746.38 12422.32 11143.33
1994/12/30 11595.91 12539.70 11174.03
1995/01/31 11284.95 12348.47 11408.49
1995/02/28 11405.32 12525.49 11700.51
1995/03/31 11726.32 13126.17 12395.51
1995/04/28 11906.88 13580.59 12625.08
1995/05/31 11916.91 13693.69 12980.25
1995/06/30 11947.00 13686.40 13056.66
1995/07/31 12438.52 14368.10 13087.36
1995/08/31 12358.27 14044.91 12637.64
1995/09/29 12538.83 14450.95 12919.89
1995/10/31 12418.46 14220.32 13016.19
1995/11/30 12649.17 14710.97 13163.42
1995/12/29 12930.36 15137.97 13301.24
1996/01/31 12940.43 15408.69 13136.91
1996/02/29 12728.95 15499.36 13069.92
1996/03/29 12799.44 15754.07 13051.78
1996/04/30 13161.98 16121.28 12999.79
1996/05/31 13182.12 16131.99 13002.58
1996/06/28 13282.82 16210.32 13104.81
1996/07/31 13000.85 15634.18 13356.01
1996/08/30 13031.06 15810.64 13408.00
1996/09/30 13330.51 16426.40 13462.42
1996/10/31 13392.46 16537.82 13714.33
1996/11/29 13991.35 17461.31 13895.05
1996/12/31 13932.06 17178.39 13782.71
1997/01/31 13900.78 17382.20 13414.28
1997/02/28 14046.77 17578.87 13314.14
1997/03/31 13994.63 17227.87 13212.62
1997/04/30 14140.63 17787.72 13098.18
1997/05/30 14901.89 18882.39 13452.66
1997/06/30 15538.01 19820.92 13613.15
(pound) 1907/ /31/97 16 111.56 207 30.57
13507.08
1997/08/29 15298.16 19340.53 13499.06
1997/09/30 16099.75 20387.98 13786.55
1997/10/31 15482.98 19311.64 14072.64
1997/11/28 15525.52 19650.09 13856.67
1997/12/31 15675.93 19886.29 13814.81
1998/01/30 16008.10 20437.18 13949.13
1998/02/27 16715.28 21816.33 14062.52
1998/03/31 17176.02 22734.20 13923.31
1998/04/30 17497.47 22952.95 14145.91
1998/05/29 17390.32 22661.87 14179.05
1998/06/30 17604.62 23196.25 14199.99
1998/07/31 17808.20 23155.59 14218.83
1998/08/31 15879.52 20064.26 14606.10
1998/09/30 16298.56 20415.67 15382.74
1998/10/30 17111.86 22257.74 15838.39
1998/11/30 17773.35 23577.90 15614.75
1998/12/31 18458.88 24726.22 15929.10
1999/01/29 18818.89 25264.05 15782.92
1999/02/26 18273.42 24588.40 15275.63
1999/03/31 18906.17 25608.58 15314.35
1999/04/30 19309.82 26614.51 15308.07
1999/05/28 18764.34 25638.40 15080.94
1999/06/30 19495.28 26830.62 14786.48
1999/07/30 19658.92 26746.51 15148.98
1999/08/31 19844.39 26695.33 15219.11
1999/09/30 19874.38 26432.85 15456.35
1999/10/29 20557.05 27803.20 15449.03
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Global Balanced Fund on February 28, 1993,
shortly after the fund started. As the chart shows, by October 31,
1999, the value of the investment would have grown to $20,557 - a
105.57% increase on the initial investment. For comparison, look at
how both the Morgan Stanley Capital International World Index and
Salomon Brothers World Government Bond Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment in the Morgan Stanley Capital International World Index
would have grown to $27,803 - a 178.03% increase and the Salomon
Brothers World Government Bond Index would have grown to $15,449 - a
54.49% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
(checkmark)
GLOBAL BALANCED
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Richard Mace, Portfolio Manager of Fidelity Global Balanced Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. The fund recently switched its fiscal year-end from July 31 to
October 31. As such, this discussion only reflects performance for a
three-month period - from July 31, 1999, through October 31, 1999.
During that time, the fund returned 4.57%. The fund typically compares
its performance to three measures: a bond index, an equity index and a
peer group of competitor funds. The fund topped its bond-related
benchmark - the Salomon Brothers World Government Bond Index - which
returned 1.98% during the same time period. The fund's equity-oriented
benchmark - the Morgan Stanley Capital International World Index -
returned 3.95%. The global flexible portfolios average - as tracked by
Lipper Inc. - returned 2.16%.
Q. WHAT WERE SOME OF THE KEY FACTORS BEHIND THE FUND'S PERFORMANCE?
A. Much of the fund's positive performance can be traced to good
representation in the rebounding Japanese market. Our research team
was able to identify several worthwhile opportunities there, including
telephone utilities stocks such as Hikari Tsushin and NTT Mobile
Communication Network. Both of these investments were inexpensive
relative to their global competitors and also appeared to be potential
consolidation candidates. Investors throughout the world also were
drawn to several Japanese Internet-related and business software
providers. As such, the fund's positions in Softbank, Trend Micro,
Fujitsu Support & Service and Hitachi Information Systems benefited.
At the end of the period, Japanese stocks accounted for approximately
11% of the fund's total investments. Telecommunications stocks also
performed well, as wireless demand remained high.
Q. WHAT TYPES OF CHANGES DID YOU MAKE TO THE FUND'S EQUITY
SUBPORTFOLIO, AND HOW DID THIS PORTION OF THE FUND PERFORM?
A. The biggest adjustment I made was to reduce the fund's equity
position from just under 63% three months ago to around 60% at the
close of the period. This was done mainly to bring the fund's equity
exposure more in line with the Morgan Stanley index. In terms of
individual stock performance, the fund's best performers were the
Japanese investments I mentioned. On the flip side, several U.S.
technology-related stocks detracted from performance during the
period, mostly due to weak earnings and revenue growth outlooks. These
included computer services provider Unisys, as well as
Hewlett-Packard, the second-largest computer builder in the U.S.
Another significant laggard was supermarket chain Safeway, which
failed to meet third-quarter profit forecasts due to rising costs and
declining sales.
Q. HOW DID THE FUND'S BOND INVESTMENTS PERFORM DURING THE PERIOD?
A. Not as well as I would have liked. The fund had virtually no bond
positions in Japan, which turned out to be the best-performing market
in local currency terms. I avoided Japanese bonds for several reasons.
First, in allocating fund assets, I focus on how bonds are valued
relative to equities in each country by comparing the cash flow yield
on equities to the yield on bonds. In Japan, bonds tend to offer very
low yields, and these yields can be easily erased by a moderate
weakening of the yen. The fact that Japanese bonds reversed this trend
during the period hurt the fund, particularly relative to the Salomon
Brothers benchmark. Globally, fears of higher interest rates sent
several bond markets - including those in the U.K., France, Germany
and the U.S. - downward.
Q. WHAT'S YOUR OUTLOOK?
A. I think we'll see more consolidation and cross-border merger
activity throughout the world. In Europe, this trend has continued as
the new single currency - the euro - has made it easier for companies
within the same industry to join forces. I'm optimistic that the
progress we've seen in Japan also will continue. Companies there have
followed in the footsteps of their American counterparts in terms of
eliminating unprofitable businesses and looking for ways to
restructure internally. Going forward, these patterns may result in
stock performance being dictated more by company earnings and
fundamentals than influences of local markets.
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.
FUND FACTS
GOAL: seeks income and capital growth with
reasonable risk by investing in a broadly
diversified portfolio of high-yielding equity and
debt securities issued anywhere in the world
FUND NUMBER: 334
TRADING SYMBOL: FGBLX
START DATE: February 1, 1993
SIZE: as of October 31, 1999, more than
$97 million
MANAGER: Richard Mace, since 1996; manager,
Fidelity International Value Fund, since 1994;
Fidelity Overseas Fund, since 1996; Group
Leader, Fidelity international funds; joined
Fidelity in 1987
(checkmark)
GLOBAL BALANCED
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
France 7.7%
Row: 1, Col: 1, Value: 7.7
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 1.9
Row: 1, Col: 4, Value: 11.3
Row: 1, Col: 5, Value: 2.1
Row: 1, Col: 6, Value: 5.9
Row: 1, Col: 7, Value: 2.2
Row: 1, Col: 8, Value: 2.1
Row: 1, Col: 9, Value: 11.4
Row: 1, Col: 10, Value: 49.5
United States 49.5%
Germany 7.0%
Italy 1.9%
Japan 11.3%
Netherlands 2.1%
Other 5.9%
Spain 2.2%
Switzerland 2.1%
United Kingdom 11.4%
GEOGRAPHIC DIVERSIFICATION (%
OF NET ASSETS)
AS OF JULY 31, 1999
France 6.4%
Row: 1, Col: 1, Value: 6.4
Row: 1, Col: 2, Value: 6.3
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 12.9
Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 6.9
Row: 1, Col: 7, Value: 2.3
Row: 1, Col: 8, Value: 2.1
Row: 1, Col: 9, Value: 9.699999999999999
Row: 1, Col: 10, Value: 40.8
United States 49.5%
Germany 6.3%
Italy 2.0%
Japan 12.9%
Netherlands 1.9%
Other 6.9%
Spain 2.3%
Switzerland 2.1%
United Kingdom 9.7%
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS AS OF
JULY 31, 1999
Stocks 60.2 62.6
Bonds 33.2 28.4
Convertible Securities 0.0 0.3
Short-Term Investments and 6.6 8.7
Net Other Assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS AS OF
JULY 31, 1999
MCI WorldCom, Inc. (United 1.7 1.2
States of America)
Microsoft Corp. (United 1.2 1.0
States of America)
General Electric Co. (United 1.2 1.0
States of America)
Total Fina SA Class B (France) 0.7 0.5
Wal-Mart Stores, Inc. 0.7 0.7
(United States of America)
5.5 4.4
TOP FIVE BOND ISSUERS AS OF
OCTOBER 31, 1999
(WITH MATURITIES GREATER THAN % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS AS OF
ONE YEAR) JULY 31, 1999
U.S. Treasury Obligations 9.2 8.1
United Kingdom, Great Britain 5.2 3.9
& Northern Ireland
Federal Home Loan Bank 5.1 4.8
French Government 4.4 3.4
German Federal Republic 3.7 2.7
27.6 22.9
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS AS OF
JULY 31, 1999
FINANCE 11.2 11.5
TECHNOLOGY 10.3 10.5
UTILITIES 9.1 8.8
HEALTH 5.4 5.6
NONDURABLES 3.6 3.9
RETAIL & WHOLESALE 3.5 4.2
ENERGY 3.4 3.9
INDUSTRIAL MACHINERY & 3.4 3.2
EQUIPMENT
MEDIA & LEISURE 2.5 2.3
BASIC INDUSTRIES 2.2 2.3
</TABLE>
GLOBAL BALANCED
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 60.0%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
Bansud SA Class B (a) 2,500 $ 6,153
Importadora y Exportadorade 400 3,542
de la Patagonia SA
Inversiones y Representacions 100 3,019
SA sponsored GDR
Nortel Inversora S A ADR 200 3,025
Perez Companc SA Class B 5,940 35,775
51,514
AUSTRALIA - 0.7%
Amcor Ltd. 2,600 11,362
AMP Ltd. 3,300 33,557
Australia & New Zealand 2,438 16,090
Banking Group Ltd.
Brambles Industries Ltd. 800 22,498
BRL Hardy Ltd. 2,338 10,213
Broken Hill Proprietary Co. 5,812 60,068
Ltd. (The)
Cable & Wireless Optus Ltd. 9,800 22,436
(a)
Coles Myer Ltd. 3,800 18,901
Colonial Ltd. 2,600 9,567
Commonwealth Bank of Australia 800 13,111
CSR Ltd. 3,500 7,856
Fosters Brewing Group Ltd. 5,600 14,884
Goodman Fielder Ltd. 7,800 7,212
Harvey Norman Holdings Ltd. 9,100 18,077
Lend Lease Corp. Ltd. 1,900 21,861
Macquarie Bank Ltd. 800 11,734
National Australia Bank Ltd. 4,700 72,532
News Corp. Ltd. 12,877 93,120
Rio Tinto Ltd. 1,000 16,075
Tabcorp Holdings Ltd. 1,500 9,508
Telstra Corp. Ltd. 19,100 97,160
Telstra Corp. Ltd. 5,800 18,604
(installment receipt) (f)
Westfield Holdings Ltd. 2,700 16,013
Westpac Banking Corp. 3,300 21,175
WMC Ltd. 3,600 15,450
Woodside Petroleum Ltd. 800 4,821
Woolworths Ltd. 3,800 12,916
676,801
AUSTRIA - 0.1%
VA Technologie AG 1,290 86,507
BRAZIL - 0.3%
Aracruz Celulose SA ADR 1,100 22,550
Banco Bradesco SA (Reg. Pfd.) 2,400,000 11,766
Banco Itau SA 362,000 20,813
Brahma Cervejaria (Compagnie):
(PN Reg.) 26,000 16,617
sponsored ADR 1,100 13,750
Centrais Electricas 1,619,000 28,839
Brasileiras SA
Companhia Brasileira de 500 10,938
Distribuicao Grupo Pao de
Acucar sponsored ADR
SHARES VALUE (NOTE 1)
Companhia de Electricidade do 27,000,000 $ 5,544
Estado do Rio de Janeiro
(CERJ) (a)
Companhia Paranaense de 800 5,300
Energia-Copel sponsored ADR
Companhia Vale do Rio Doce:
(ON) 1,100 16,093
(PN-A) 1,500 29,869
Compania Energertica Minas 889,478 12,694
Gerais
Petrobras Distribuidora SA 967,000 8,776
Tele Centro Sul Participacoes 1,657,000 19,828
SA
Tele Norte Leste 1,700 28,688
Participacoes SA ADR
Telesp Participacoes SA (a) 570,500 9,167
Telesp Participacoes SA ADR 600 9,713
(a)
Votorantim Celulose e Papel 591,000 17,293
SA (PN Reg.)
288,238
CANADA - 1.2%
Abitibi-Consolidated, Inc. 1,240 15,082
Air Canada, Inc. (a) 1,340 9,970
Alberta Energy Co. Ltd. 570 17,622
Alcan Aluminium Ltd. 800 26,228
Anderson Exploration Ltd. (a) 1,080 13,906
Bank of Montreal 650 25,020
Bank of Nova Scotia 2,350 53,652
BCE, Inc. 2,540 152,914
Biovail Corp. International 150 8,291
(a)
Bombardier, Inc. Class B 2,560 45,140
Bro-X Minerals Ltd. (a) 600 0
Canada Occidental Petroleum 340 6,654
Ltd.
Canadian Hunter Exploration 270 4,403
Ltd.
Canadian Imperial Bank of 560 12,062
Commerce
Canadian National Railway Co. 720 21,844
Canadian Natural Resources 780 17,172
Ltd. (a)
Canadian Pacific Ltd. 810 18,933
Canadian Tire Corp. Ltd. 370 8,824
Series A
Celestica, Inc. (sub-vtg.) (a) 285 15,686
Crestar Energy, Inc. (a) 320 4,131
Dofasco, Inc. 570 10,167
Domtar, Inc. 580 6,995
Enbridge, Inc. 980 21,109
Falconbridge Ltd. 340 5,036
Franco Nevada Mining Corp. 601 11,149
Ltd.
Hudson's Bay Co. 320 4,349
Imasco Ltd. 810 21,740
Imperial Oil Ltd. 440 10,195
Inco Ltd. 830 16,694
JDS Uniphase Canada Ltd. (a) 63 10,492
Laidlaw, Inc. 3,360 20,776
Newbridge Networks Corp. (a) 710 13,822
Noranda, Inc. 750 9,887
Nortel Networks Corp. 3,360 206,732
NOVA Chemicals Corp. 630 12,393
Petro-Canada 910 13,016
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CANADA - CONTINUED
Placer Dome, Inc. 1,370 $ 17,222
Potash Corp. of Saskatchewan 60 2,691
QLT PhotoTherapeutics, Inc. 250 10,549
(a)
Rogers Communications, Inc. 310 6,277
Class B (non-vtg.) (a)
Royal Bank of Canada 1,090 46,994
Seagram Co. Ltd. 1,130 56,012
Shaw Communications, Inc. 100 3,041
Class B
Suncor Energy, Inc. 470 18,076
Talisman Energy, Inc. (a) 370 9,767
Teleglobe, Inc. 410 9,695
Toronto Dominion Bank 3,220 73,843
Transcanada Pipelines Ltd. 990 11,940
Trimark Financial Corp. 460 5,782
Westcoast Energy, Inc. 600 10,722
1,154,697
CHILE - 0.1%
Compania Cervecerias Unidas 350 7,634
SA sponsored ADR
Compania de 1,150 19,191
Telecomunicaciones de Chile
SA sponsored ADR
Cristalerias de Chile SA 300 3,825
sponsored ADR
Distribucion Y Servicio D&S 900 14,681
SA ADR
Embotelladora Andina 1,100 17,875
sponsored ADR Class A
Enersis SA sponsored ADR 26 585
Madeco SA ADR 500 4,938
Santa Isabel SA sponsored ADR 1,300 10,400
(a)
Supermercados Unimarc SA 1,400 3,063
sponsored ADR
82,192
FINLAND - 0.7%
KCI (Konecranes International) 2,110 54,533
Nokia AB 5,060 584,746
Sampo Insurance Co. Ltd. 1,380 48,040
687,319
FRANCE - 3.3%
AXA SA de CV 1,840 260,290
Banque Nationale de Paris 1,508 132,831
Banque Nationale de Paris 286 1,696
warrants 7/1/02 (a)
Cap Gemini SA 550 83,548
Castorama Dubois 665 199,790
Investissements SA
Clarins SA 1,470 145,146
Clarins SA rights 12/27/99 (a) 1,470 24,237
Compagnie Financiere de 460 48,040
Paribas Class A (Reg.)
France Telecom SA 2,552 247,270
Havas Advertising SA 370 104,018
SHARES VALUE (NOTE 1)
Rhodia SA 5,060 $ 97,949
Sanofi-Synthelabo SA (a) 2,630 116,386
Societe Generale, France 180 39,306
Class A
Suez Lyonnaise des Eaux 1,790 289,850
Television Francaise 1 SA 985 309,645
Total Fina SA Class B 5,148 686,615
Usinor Sacilor 4,870 67,865
Vivendi SA (a) 4,180 317,703
3,172,185
GERMANY - 2.1%
Allianz AG (Reg.) 895 272,005
Bayerische Hypo-und 2,850 185,890
Vereinsbank AG
Beiersdorf AG 1,100 74,230
Boss (Hugo) AG 926 105,498
DaimlerChrysler AG (Reg.) 3,003 233,483
Deutsche Telekom AG 9,470 438,057
Kali Und Salz Beteiligungs AG 5,520 79,077
Mannesmann AG (Reg.) 990 156,548
Munich Reinsurance AG (Reg.) 550 125,728
Primacom AG 2,300 114,035
Siemens AG 2,850 257,203
2,041,754
HONG KONG - 0.7%
Cable & Wireless HKT Ltd. 19,447 44,363
Cheung Kong Holdings Ltd. 8,000 72,606
China Telecom (Hong Kong) 2,000 6,750
Ltd. (a)
CLP Holdings Ltd. 5,000 22,915
Dao Heng Bank Group Ltd. 3,000 13,787
Giordano International Ltd. 20,000 21,241
Great Eagle Holdings Ltd. 8,000 9,887
Hang Seng Bank Ltd. 2,900 31,546
Hong Kong & China Gas Co. 19,216 25,480
Ltd.
Hutchison Whampoa Ltd. 13,000 130,536
JCG Holdings Ltd. 44,000 23,932
Johnson Electric Holdings 6,000 32,441
Ltd.
Li & Fung Ltd. 16,000 27,291
New World Development Co. 8,000 15,139
Ltd.
Pacific Century CyberWorks 16,000 12,049
Ltd. (a)
Sun Hung Kai Properties Ltd. 10,000 80,780
Swire Pacific Ltd. Class A 5,000 24,781
Wharf Holdings Ltd. 7,000 20,230
Wheelock & Co. Ltd. 6,000 6,797
Wing Hang Bank Ltd. 6,000 19,580
642,131
IRELAND - 0.1%
Bank of Ireland, Inc. 10,480 82,141
ITALY - 0.6%
Assicurazioni Generali Spa 1,560 50,439
Banca Nazionale del Lavoro (a) 18,850 64,129
Eni Spa sponsored ADR 29,880 176,231
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ITALY - CONTINUED
San Paolo-IMI Spa 10,760 $ 142,134
Telecom Italia Spa 15,900 137,535
570,468
JAPAN - 11.3%
Acom Co. Ltd. 600 65,690
Aiful Corp. 1,100 171,140
Amada Co. Ltd. 3,000 23,049
Asahi Chemical Industry Co. 6,000 36,303
Ltd.
Bank of Tokyo-Mitsubishi Ltd. 14,000 232,336
Banyu Pharmaceutical Co. Ltd. 5,000 91,669
Coca-Cola West Japan Co. Ltd. 1,232 54,900
CSK Corp. 1,500 69,148
Dai Nippon Printing Co. Ltd. 2,000 36,514
Dai-Ichi Kangyo Bank Ltd. 13,000 178,535
Daiwa Securities Co. Ltd. 14,000 149,647
DDI Corp. 18 197,071
Don Quijote Co. Ltd. 300 74,910
FamilyMart Co. Ltd. 600 41,777
Fuji Bank Ltd. 12,000 164,802
Fuji Coca-Cola Bottling Co. 3,000 57,623
Ltd.
Fuji Heavy Industries Ltd. 5,000 42,545
Fujitsu Ltd. 5,000 150,780
Fujitsu Support & Service, 600 168,836
Inc.
Furukawa Electric Co. Ltd. 22,000 160,576
Hikari Tsushin, Inc. 200 161,152
Hirose Electric Co. Ltd. 500 87,347
Hitachi Information Systems 5,000 193,037
Hitachi Ltd. 12,000 130,500
Honda Motor Co. Ltd. 3,000 126,188
Hosiden Corp. 2,000 75,870
Hoya Corp. 2,000 144,058
Ito En Ltd. 1,000 102,761
Ito-Yokado Co. Ltd. 1,000 80,096
Jafco Co. Ltd. 1,000 112,365
Japan Medical Dynamic 1,000 54,742
Marketing, Inc.
Kaneka Corp. 7,000 91,765
Kao Corp. 2,000 61,080
Kirin Beverage Corp. 2,000 27,102
Koa Denko Co. Ltd. 3,000 52,149
Kokusai Denshin Denwa 1,300 163,553
Kokusai Securities Co. Ltd. 4,000 69,109
Konami Co. Ltd. 1,700 164,898
Koyo Seiko Co. Ltd. 4,000 42,795
Kyocera Corp. 2,500 240,096
Matsushita Communication 1,000 168,259
Industrial Co. Ltd.
Matsushita Electric 3,000 63,544
Industrial Co. Ltd.
Mazda Motor Corp. 8,000 43,563
Mikasa Coca Cola Bottling Co. 3,800 40,144
Mitsubishi Electric Corp. 15,000 83,121
Mitsubishi Trust & Banking 4,000 53,897
Corp.
SHARES VALUE (NOTE 1)
Mitsumi Electric Co. Ltd. 2,000 $ 53,589
Murata Manufacturing Co. Ltd. 1,000 128,691
NEC Corp. 5,000 101,321
New Japan Securities Co. Ltd. 8,000 23,587
(a)
Nichicon Corp. 8,000 173,637
Nichiei Co. Ltd. 600 31,116
Nidec Corp. 700 136,134
Nihon Unisys Ltd. 2,000 70,300
Nintendo Co. Ltd. 600 95,366
Nippon Computer Systems Corp. 3,000 58,776
Nippon Paper Industries Co. 10,000 77,791
Ltd.
Nippon Sheet Glass Co. Ltd. 9,000 56,010
Nippon Steel Corp. 12,000 30,540
Nippon System Development Co. 1,500 128,211
Ltd.
Nippon Telegraph & Telephone 8 122,929
Corp.
Nippon Zeon Co. Ltd. 6,000 51,861
Nissin Co. Ltd. 2,300 141,148
Nitto Denko Corp. 2,000 79,136
NTT Mobile Communication 1 26,603
Network, Inc.
NTT Mobile Communication 15 399,040
Network, Inc. (c)
Olympus Optical Co. Ltd. 3,000 40,624
Omron Corp. 9,000 188,427
Oracle Corp. Japan 400 81,441
ORIX Corp. 600 80,672
Paris Miki, Inc. 1,000 80,672
Ricoh Co. Ltd. 6,000 98,017
Rohm Co. Ltd. 1,200 269,676
Ryohin Keikaku Co. Ltd. 400 77,061
Sakura Bank Ltd. 12,000 103,261
Sankyo Co. Ltd. (Gunma) 2,000 158,463
Sanwa Bank Ltd. 10,000 148,956
Senshukai Co. Ltd. 3,000 57,594
Sharp Corp. 5,000 79,712
Shikoku Coca-Cola Bottling 1,300 16,168
Co. Ltd.
Shin-Etsu Chemical Co. Ltd. 2,000 82,593
Shohkoh Fund & Co. Ltd. 110 67,400
SMC Corp. 500 84,466
Softbank Corp. 700 291,092
Sony Corp. 1,700 271,575
Square Co. Ltd. 1,200 86,896
Sumitomo Trust & Banking Ltd. 5,000 51,188
Takeda Chemical Industries 4,000 230,108
Ltd.
Terumo Corp. 3,000 91,333
THK Co. Ltd. 2,300 75,323
Toko, Inc. 33,000 163,217
Tokyo Broadcasting System, 2,000 52,917
Inc.
Tokyo Seimitsu Co. Ltd. 1,500 183,097
Toyoda Gosei Co. Ltd. 5,000 215,606
Toyota Motor Corp. 4,000 138,679
Trend Micro, Inc. 1,500 298,199
Tsubaki Nakashima Co. Ltd. 7,000 100,840
World Co. Ltd. 400 40,528
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Yakult Honsha Co. Ltd. 4,000 $ 40,951
Yamaha Motor Co. Ltd. 4,000 32,576
Yamanouchi Pharmaceutical Co. 1,000 45,426
Ltd.
Yokogawa Electric Corp. 7,000 49,076
Yoshitomi Pharmaceutical 3,000 40,912
Industries Ltd.
11,001,570
LUXEMBOURG - 0.0%
Quilmes Industrial SA 1,200 12,525
sponsored ADR
MEXICO - 0.4%
Alfa SA de CV 3,000 11,544
Apasco SA de CV 1,000 5,311
Banacci SA de CV Class O (a) 10,000 25,098
Cemex SA de CV sponsored ADR 1,600 36,000
(a)
Cifra SA de CV Series C (a) 36,000 55,711
Coca Cola Femsa SA de CV ADR 1,300 18,038
Corporacion Interamericana de 2,000 5,415
Entretenimiento SA de CV
(Series B) (a)
El Puerto de Liverpool SA 6,000 9,110
Class C
Grupo Carso SA de CV Series 5,000 21,036
A-1 (a)
Grupo Elektra SA de CV Unit 11,000 5,258
Grupo Financiero Bancomer SA 86,000 22,659
de CV Series A
Grupo Modelo SA de CV Class C 11,600 28,328
Grupo Televisa SA de CV 1,000 42,500
sponsored ADR (a)
Telefonos de Mexico SA 1,595 136,373
sponsored ADR representing
Class L shares
Tubos de Acero de Mexico SA 950 10,391
sponsored ADR
432,772
NETHERLANDS - 2.1%
Aegon NV 1,560 144,405
Akzo Nobel NV 3,220 139,064
Equant NV (a) 640 62,450
Fortis Amev NV 4,410 152,264
GTI Holding NV 6,890 139,914
ING Groep NV 3,136 185,522
Koninklijke Ahold NV 5,259 161,993
Koninklijke KPN NV 3,490 179,625
Numico NV 4,795 196,007
Nutreco Holding NV 2,020 69,254
Unilever NV 3,877 257,660
Vendex KBB NV 11,670 341,621
2,029,779
NETHERLANDS ANTILLES - 0.0%
Schlumberger Ltd. 800 48,450
NEW ZEALAND - 0.0%
Lion Nathan Ltd. 3,900 8,415
Telecom Corp. of New Zealand 7,200 29,024
Ltd.
37,439
SHARES VALUE (NOTE 1)
PAPUA NEW GUINEA - 0.0%
Oil Search Ltd. (a) 6,800 $ 7,936
PERU - 0.1%
Cementos Lima S.A. 319 5,039
Compania de Minas 1,700 28,900
Buenaventura SA sponsored
ADR Class B
Telefonica del Peru SA ADR 1,300 15,031
48,970
SINGAPORE - 0.3%
Chartered Semiconductor 10,000 20,188
Manufacturing Ltd.
City Developments Ltd. 3,000 15,528
Datacraft Asia Ltd. 2,000 9,200
DBS Group Holdings Ltd. 2,652 30,008
DBS Land Ltd. 5,000 9,269
Natsteel Electronics Ltd. 3,000 11,736
Oversea-Chinese Banking Corp. 4,300 32,350
Ltd.
Overseas Union Bank Ltd. 4,281 18,551
Singapore Airlines Ltd. 4,000 42,371
Singapore Press Holdings Ltd. 2,000 34,306
Singapore Telecommunications 16,000 30,430
Ltd.
United Overseas Bank Ltd. 5,000 37,918
(For. Reg.)
Venture Manufacturing 3,000 26,723
Singapore Ltd.
318,578
SPAIN - 1.1%
Banco Santander Central 30,788 320,560
Hispano SA
Cortefiel SA 5,880 154,016
Tabacalera SA Series A 11,220 185,233
Telefonica SA (a) 25,560 421,705
1,081,514
SWEDEN - 0.4%
Ericsson (L.M.) Telefon AB:
Class B 5,330 227,858
sponsored ADR Class B 1,650 70,538
Skandinaviska Enskilda Banken 9,840 101,403
Class A
399,799
SWITZERLAND - 2.1%
Credit Suisse Group (Reg.) 919 177,045
Julius Baer Holding AG 47 141,689
Kuoni Reisen Holding AG Class 24 102,571
B (Reg.)
Nestle SA (Reg.) 154 297,692
Novartis AG (Reg.) 189 283,332
PubliGroupe SA 263 193,329
Richemont Compagnie Financier 66 126,367
Class A Unit
Roche Holding AG 32 385,035
participation certificates
UBS AG 686 200,040
Zurich Allied AG (Reg.) 326 184,981
2,092,081
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - 6.2%
Abbey National PLC 9,560 $ 187,074
Allied Zurich PLC 3,590 43,390
Amvescap PLC 21,330 190,808
Arcadia Group PLC 24,820 62,547
AstraZeneca Group PLC:
(Reg.) 3,490 159,668
(Sweden) 583 26,414
Autonomy Corp. PLC (a) 6,070 131,416
Barclays PLC 2,760 84,553
BP Amoco PLC 63,270 608,974
British Aerospace PLC 19,271 112,655
British Telecommunications PLC 17,010 306,180
British Vita PLC Ord. 23,530 94,797
Carillion PLC 284 591
Diageo PLC 11,950 120,851
Glaxo Wellcome PLC 12,230 366,136
HSBC Holdings PLC:
(Reg.) 18,382 226,328
(Hong Kong) (Reg.) 3,004 36,987
Kingfisher PLC 7,006 76,555
Lloyds TSB Group PLC 16,479 228,030
MFI Furniture Group PLC 46,980 31,481
Morgan Crucible Co. PLC 29,230 116,800
Orange PLC (a) 5,090 126,973
Prudential Corp. PLC 6,300 98,884
Reuters Group PLC 15,800 146,926
Royal & Sun Alliance 10,443 71,094
Insurance Group PLC
Royal Bank of Scotland Group 7,080 163,226
PLC
Scottish & Newcastle PLC 18,020 168,014
Shell Transport & Trading Co. 65,090 497,667
PLC (Reg.)
Smith & Nephew PLC 33,460 107,842
Smith (David S.) Holdings PLC 28,040 88,068
SmithKline Beecham PLC 18,414 235,699
Sun Life & Provincial Holding 14,250 106,443
PLC
Tarmac PLC 284 2,391
Unigate PLC 22,520 104,430
Vodafone AirTouch PLC 125,225 600,298
WPP Group PLC 29,880 324,535
6,054,725
UNITED STATES OF AMERICA -
26.0%
Abbott Laboratories 5,100 205,913
Abercrombie & Fitch Co. Class 3,100 84,475
A (a)
ADC Telecommunications, Inc. 900 42,919
(a)
AES Corp. (a) 900 50,794
Affiliated Computer Services, 1,800 68,400
Inc. Class A (a)
AFLAC, Inc. 2,300 117,588
AK Steel Holding Corp. 3,000 51,938
Alcoa, Inc. 3,014 183,101
Ambac Financial Group, Inc. 2,300 137,425
Amerada Hess Corp. 900 51,638
SHARES VALUE (NOTE 1)
American Express Co. 1,800 $ 277,200
American International Group, 3,725 383,442
Inc.
AMFM, Inc. (a) 900 63,000
Amgen, Inc. (a) 3,700 295,075
Associates First Capital 5,548 202,502
Corp. Class A
At Home Corp. Series A (a) 1,800 67,275
AT&T Corp. 11,262 526,499
AT&T Corp. (Liberty Media 1,800 71,438
Group) Class A (a)
Automatic Data Processing, 1,800 86,738
Inc.
AutoZone, Inc. (a) 900 23,906
Avon Products, Inc. 2,800 90,300
Baker Hughes, Inc. 4,600 128,513
Bank of America Corp. 2,000 128,750
Bank of New York Co., Inc. 12,200 510,875
Baxter International, Inc. 1,800 116,775
Becton, Dickinson & Co. 1,800 45,675
Bed Bath & Beyond, Inc. (a) 1,400 46,638
Bemis Co., Inc. 1,400 48,913
Biomet, Inc. 1,400 42,175
Boeing Co. 2,800 128,975
Bristol-Myers Squibb Co. 4,900 376,381
Burlington Northern Santa Fe 7,700 245,438
Corp.
Calpine Corp. (a) 3,000 172,875
Cardinal Health, Inc. 1,400 60,375
CBS Corp. (a) 4,600 224,538
Cendant Corp. (a) 3,700 61,050
Ceridian Corp. (a) 7,000 153,563
Chase Manhattan Corp. 3,700 323,288
Chevron Corp. 1,400 127,838
Cisco Systems, Inc. (a) 6,400 473,600
Citigroup, Inc. 11,475 621,084
Clear Channel Communications, 1,800 144,675
Inc. (a)
Clorox Co. 1,500 61,406
Coca-Cola Co. (The) 2,300 135,700
Colgate-Palmolive Co. 3,000 181,500
Comcast Corp. Class A 5,500 231,688
(special)
Comstock Resources, Inc. (a) 9,200 36,225
Cooper Cameron Corp. (a) 2,500 96,719
Cox Communications, Inc. 1,800 81,788
Class A (a)
CVS Corp. 2,500 108,594
Dell Computer Corp. (a) 5,200 208,650
DoubleClick, Inc. (a) 1,000 140,000
DST Systems, Inc. (a) 2,300 146,481
Dynegy, Inc. 4,600 105,225
Eli Lilly & Co. 2,200 151,525
EMC Corp. (a) 5,500 401,500
EOG Resources, Inc. 1,800 37,463
Exxon Corp. 6,500 481,406
Fannie Mae 4,000 283,000
Fluor Corp. 1,000 39,875
Ford Motor Co. 2,800 153,650
Freddie Mac 4,600 248,688
Gaylord Container Corp. Class 9,200 51,750
A (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
General Electric Co. 8,300 $ 1,125,169
Gillette Co. 2,100 75,994
Guidant Corp. 2,300 113,563
Halliburton Co. 3,600 135,675
Hewlett-Packard Co. 1,700 125,906
Home Depot, Inc. 6,900 520,950
Household International, Inc. 3,093 138,025
Howmet International, Inc. (a) 1,400 20,650
Illinova Corp. 2,000 63,625
IMS Health, Inc. 1,800 52,200
Ingersoll-Rand Co. 3,300 172,425
Inktomi Corp. (a) 1,500 152,156
Intel Corp. 3,700 286,519
International Business 3,000 295,125
Machines Corp.
Interpublic Group of 2,800 113,750
Companies, Inc.
Johnson & Johnson 3,200 335,200
Kroger Co. (a) 2,500 52,031
Leggett & Platt, Inc. 5,700 126,469
Lexmark International Group, 1,500 117,094
Inc. Class A (a)
Limited, Inc. (The) 900 37,013
Lowe's Companies, Inc. 1,800 99,000
Lucent Technologies, Inc. 4,300 276,275
Lycos, Inc. (a) 1,000 53,500
M&T Bank Corp. 200 99,100
Masco Corp. 3,700 112,850
MBIA, Inc. 2,000 114,125
McDermott International, Inc. 1,800 32,625
McDonald's Corp. 2,800 115,500
MCI WorldCom, Inc. (a) 18,804 1,613,618
McLeodUSA, Inc. Class A (a) 5,500 245,438
Medimmune, Inc. (a) 1,400 156,800
Merck & Co., Inc. 6,500 517,156
Meredith Corp. 1,800 64,238
Merrill Lynch & Co., Inc. 700 54,950
Micron Technology, Inc. (a) 500 35,656
Microsoft Corp. (a) 12,500 1,157,031
Mobil Corp. 1,800 173,700
Motorola, Inc. 2,300 224,106
Nabisco Group Holdings Corp. 7,000 89,688
Nabisco Holdings Corp. Class A 2,800 104,650
Newport News Shipbuilding, 1,800 54,675
Inc.
Nextel Communications, Inc. 2,100 180,994
Class A (a)
Noble Drilling Corp. (a) 2,800 62,125
Omnicom Group, Inc. 2,800 246,400
Owens-Illinois, Inc. (a) 2,800 67,025
Parker-Hannifin Corp. 3,300 151,181
Phelps Dodge Corp. 2,000 112,750
Philip Morris Companies, Inc. 6,500 163,719
Praxair, Inc. 1,500 70,125
Procter & Gamble Co. 2,600 272,675
Providian Financial Corp. 600 65,400
SHARES VALUE (NOTE 1)
Rowan Companies, Inc. (a) 2,800 $ 43,575
Sabre Group Holdings, Inc. 2,000 88,875
Class A (a)
Safeway, Inc. (a) 1,700 60,031
SBC Communications, Inc. 12,580 640,794
Schering-Plough Corp. 7,800 386,100
Schwab (Charles) Corp. 2,000 77,875
Sealed Air Corp. (a) 900 49,838
Smurfit-Stone Container Corp. 2,800 60,550
(a)
Sprint Corp. Series 1 (PCS 900 74,644
Group)
Swift Energy Co. (a) 3,700 38,388
Texas Instruments, Inc. 900 80,775
Textron, Inc. 900 69,469
Time Warner, Inc. 4,901 341,538
TJX Companies, Inc. 1,400 37,975
Tricon Global Restaurants, 3,100 124,581
Inc. (a)
Tyco International Ltd. 1,000 39,938
Union Pacific Resources 900 13,050
Group, Inc.
Unisys Corp. (a) 6,300 152,775
United Technologies Corp. 1,800 108,900
Viacom, Inc. Class B 1,800 80,550
(non-vtg.) (a)
VoiceStream Wireless Corp. (a) 1,400 138,250
Wal-Mart Stores, Inc. 12,000 680,250
Walgreen Co. 2,800 70,525
Warner-Lambert Co. 2,300 183,569
Waters Corp. (a) 1,000 53,125
Wells Fargo & Co. 2,000 95,750
WinStar Communications, Inc. 1,800 69,863
(a)
25,354,560
TOTAL COMMON STOCKS 58,456,645
(Cost $43,616,751)
PREFERRED STOCKS - 0.2%
CONVERTIBLE PREFERRED STOCKS
- - 0.0%
AUSTRALIA - 0.0%
WBK STRYPES Trust (Westpac 1,100 33,000
Banking Corp.) $3.135
NONCONVERTIBLE PREFERRED
STOCKS - 0.2%
GERMANY - 0.2%
SAP AG (Systeme Anwendungen 90 39,875
Produkte)
Wella AG 4,384 122,554
162,429
TOTAL PREFERRED STOCKS 195,429
(Cost $193,696)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS (D) -
33.2%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (E) VALUE (NOTE 1)
FRANCE - 4.4%
French Government:
OAT 5.5% 4/25/04 Aaa EUR 2,200,000 $ 2,405,721
4% 4/25/09 Aaa EUR 2,000,000 1,909,158
4,314,879
GERMANY - 4.7%
German Federal Republic:
3.75% 8/26/03 Aaa EUR 900,000 925,390
3.75% 1/4/09 Aaa EUR 2,000,000 1,900,508
7.375% 1/3/05 Aaa EUR 625,000 733,683
Treuhandanstalt 6.625% 7/9/03 Aaa EUR 877,507 987,888
4,547,469
ITALY - 1.3%
Italian Republic:
6.75% 2/1/07 Aa3 EUR 700,000 801,197
10.5% 9/1/05 Aa3 EUR 361,519 481,094
1,282,291
SPAIN - 1.1%
Spanish Kingdom 4.5% 7/30/04 Aa2 EUR 1,000,000 1,039,604
SWEDEN - 0.7%
Swedish Kingdom 10.25% 5/5/03 Aaa SEK 5,000,000 703,406
UNITED KINGDOM - 5.2%
United Kingdom, Great
Britain & Northern Ireland:
6.75% 11/26/04 Aaa GBP 600,000 1,015,055
9% 10/13/08 Aaa GBP 2,000,000 4,028,768
5,043,823
UNITED STATES OF AMERICA -
15.8%
Federal Home Loan Bank:
4.875% 1/22/02 Aaa 1,500,000 1,456,875
5.125% 9/15/03 Aaa 1,495,000 1,431,702
5.19% 10/20/03 Aaa 650,000 620,952
5.28% 1/6/04 Aaa 1,515,000 1,447,295
Freddie Mac 5.75% 7/15/03 Aaa 1,480,000 1,447,588
U.S. Treasury Bond stripped Aaa 11,530,000 2,047,613
principal 0% 11/15/27
U.S. Treasury Bonds:
7.125% 2/15/23 Aaa 1,350,000 1,456,947
8.125% 8/15/19 Aaa 1,300,000 1,531,153
12.75% 11/15/10 (callable) Aaa 880,000 1,160,914
13.875% 5/15/11 (callable) Aaa 980,000 1,369,550
U.S. Treasury Notes:
5.5% 1/31/03 Aaa 640,000 632,102
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (E) VALUE (NOTE 1)
6.5% 10/15/06 Aaa $ 400,000 $ 407,064
7% 7/15/06 Aaa 425,000 443,993
15,453,748
TOTAL GOVERNMENT OBLIGATIONS 32,385,220
(Cost $34,575,082)
</TABLE>
CASH EQUIVALENTS - 5.9%
SHARES
Central Cash Collateral Fund, 196,000 196,000
5.26% (b)
Taxable Central Cash Fund, 5,565,866 5,565,866
5.21% (b)
TOTAL CASH EQUIVALENTS 5,761,866
(Cost $5,761,866)
TOTAL INVESTMENT PORTFOLIO - 96,799,160
99.3%
(Cost $84,147,395)
NET OTHER ASSETS - 0.7% 669,221
NET ASSETS - 100% $ 97,468,381
SECURITY TYPE ABBREVIATIONS
STRYPES - Structured Yield Product
Exchangeable for Common Stock
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
GBP - British pound
SEK - Swedish krona
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $399,040
or 0.4% of net assets.
(d) 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 advisor, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
(e) Principal amount is stated in United States dollars unless
otherwise noted.
(f) Purchased on an installment basis. Market value reflects only
those payments made through October 31, 1999. The remaining
installments aggregating AUD 16,820 are due November 2, 2000.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $18,842,516 and $24,883,950, respectively, of which U.S.
government and government agency obligations aggregated $1,664,528 and
$661,950, 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 $474 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $184,228. The fund received
cash collateral of $196,000 which was invested in the Central Cash
Collateral Fund.
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 33.5% AAA, AA, A 29.0%
Baa 0.0% BBB 0.0%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
AEROSPACE & DEFENSE 0.6%
BASIC INDUSTRIES 2.2
CASH EQUIVALENTS 5.9
CONSTRUCTION & REAL ESTATE 0.8
DURABLES 1.7
ENERGY 3.4
FINANCE 11.2
GOVERNMENT OBLIGATIONS 33.2
HEALTH 5.4
HOLDING COMPANIES 0.1
INDUSTRIAL MACHINERY & 3.4
EQUIPMENT
MEDIA & LEISURE 2.5
NONDURABLES 3.6
PRECIOUS METALS 0.1
RETAIL & WHOLESALE 3.5
SERVICES 1.8
TECHNOLOGY 10.3
TRANSPORTATION 0.5
UTILITIES 9.1
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $84,383,166. Net unrealized appreciation
aggregated $12,415,994, of which $16,444,692 related to appreciated
investment securities and $4,028,698 related to depreciated investment
securities.
The fund hereby designates approximately $234,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
GLOBAL BALANCED
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 96,799,160
value (cost $84,147,395) -
See accompanying schedule
Foreign currency held at 89,743
value (cost $88,038)
Receivable for investments 567,333
sold
Receivable for fund shares 954,294
sold
Dividends receivable 120,476
Interest receivable 659,256
Other receivables 247
TOTAL ASSETS 99,190,509
LIABILITIES
Payable to custodian bank $ 16,736
Payable for investments 937,296
purchased
Payable for fund shares 454,840
redeemed
Accrued management fee 59,398
Other payables and accrued 57,858
expenses
Collateral on securities 196,000
loaned, at value
TOTAL LIABILITIES 1,722,128
NET ASSETS $ 97,468,381
Net Assets consist of:
Paid in capital $ 83,179,073
Undistributed net investment 403,390
income
Accumulated undistributed net 1,234,471
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 12,651,447
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 5,220,714 $ 97,468,381
shares outstanding
NET ASSET VALUE, offering $18.67
price and redemption price
per share ($97,468,381
(divided by) 5,220,714
shares)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED OCTOBER YEAR ENDED JULY 31, 1999
31, 1999
INVESTMENT INCOME $ 195,779 $ 850,739
Dividends
Interest 577,499 2,177,247
Security lending 265 -
773,543 3,027,986
Less foreign taxes withheld (14,061) (67,250)
TOTAL INCOME 759,482 2,960,736
EXPENSES
Management fee $ 185,757 $ 695,700
Transfer agent fees 65,261 244,826
Accounting and security 15,195 63,887
lending fees
Non-interested trustees' 403 1,235
compensation
Custodian fees and expenses 32,250 141,456
Registration fees 8,628 30,040
Audit 2,529 56,948
Legal 190 238
Reports to shareholders - 8,397
Miscellaneous 489 1,838
Total expenses before 310,702 1,244,565
reductions
Expense reductions (2,783) (11,605)
307,919 1,232,960
NET INVESTMENT INCOME 451,563 1,727,776
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 3,697,991 4,224,401
Foreign currency transactions 1,772 (81,933)
Futures contracts - 517,574
3,699,763 4,660,042
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 408,246 3,024,866
Assets and liabilities in (4,826) 11,584
foreign currencies
Futures contracts - (56,767)
403,420 2,979,683
NET GAIN (LOSS) 4,103,183 7,639,725
NET INCREASE (DECREASE) IN $ 4,554,746 $ 9,367,501
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 2,666 $ 10,520
Expense reductions Directed
brokerage arrangements
Transfer agent credits 117 1,085
$ 2,783 $ 11,605
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET THREE MONTHS ENDED OCTOBER YEAR ENDED JULY 31, 1999 YEAR ENDED JULY 31, 1998
ASSETS 31, 1999
Operations Net investment $ 451,563 $ 1,727,776 $ 1,467,414
income
Net realized gain (loss) 3,699,763 4,660,042 6,633,711
Change in net unrealized 403,420 2,979,683 (725,159)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 4,554,746 9,367,501 7,375,966
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (973,940) (1,574,612) (1,895,825)
from net investment income
Share transactions Net 12,762,394 45,697,691 66,298,210
proceeds from sales of shares
Reinvestment of distributions 910,684 1,484,276 1,827,302
Cost of shares redeemed (21,541,440) (48,179,432) (53,263,687)
NET INCREASE (DECREASE) IN (7,868,362) (997,465) 14,861,825
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (4,287,556) 6,795,424 20,341,966
IN NET ASSETS
NET ASSETS
Beginning of period 101,755,937 94,960,513 74,618,547
End of period (including $ 97,468,381 $ 101,755,937 $ 94,960,513
undistributed net investment
income of $403,390, $989,733
and $742,283, respectively)
OTHER INFORMATION Shares
Sold 703,403 2,735,365 4,236,702
Issued in reinvestment of 49,710 95,920 124,912
distributions
Redeemed (1,180,075) (2,898,880) (3,475,772)
Net increase (decrease) (426,962) (67,595) 885,842
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED OCTOBER 31, YEARS ENDED JULY 31,
1999 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning
of $ 18.02 $ 16.62 $ 15.45 $ 12.91 $ 12.40 $ 11.99
period
Income from Investment
Operations
Net investment income .08 D .31 D .30 D .31 D .31 .28
Net realized and unrealized .74 1.37 1.27 2.68 .25 .13
gain (loss)
Total from investment .82 1.68 1.57 2.99 .56 .41
operations
Less Distributions
From net investment income (.17) (.28) (.40) (.45) (.05) -
Net asset value, end of
period $ 18.67 $ 18.02 $ 16.62 $ 15.45 $ 12.91 $ 12.40
TOTAL RETURN B, C 4.57% 10.39% 10.53% 23.93% 4.52% 3.42%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,468 $ 101,756 $ 94,961 $ 74,619 $ 87,785 $ 148,831
(000 omitted)
Ratio of expenses to average 1.20% A 1.32% 1.39% 1.51% 1.39% 1.34%
net assets
Ratio of expenses to average 1.19% A, E 1.30% E 1.37% E 1.49% E 1.36% E 1.33% E
net assets after expense
reductions
Ratio of net investment 1.74% A 1.83% 1.95% 2.28% 2.94% 4.68%
income to average net assets
Portfolio turnover rate 80% A 100% 81% 57% 189% 242%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
E FMR 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 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).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY INTL GROWTH & INCOME 36.51% 80.39% 168.27%
MSCI EAFE 23.29% 56.31% 91.41%
International Funds Average 25.53% 58.85% 152.13%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
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 October 31, 1999, the index included
over 900 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 one year average represents a peer group of 589 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 36.51% 12.52% 10.37%
MSCI EAFE 23.29% 9.35% 6.71%
International Funds Average 25.53% 9.50% 9.42%
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
1989/10/31 10000.00 10000.00
1989/11/30 10372.96 10502.70
1989/12/31 10912.50 10890.22
1990/01/31 10723.81 10485.01
1990/02/28 10346.43 9753.21
1990/03/31 10338.57 8737.16
1990/04/30 10314.98 8667.82
1990/05/31 10983.25 9656.83
1990/06/30 11329.18 9571.78
1990/07/31 11855.94 9706.60
1990/08/31 10841.74 8764.01
1990/09/30 9796.09 7542.62
1990/10/31 10778.84 8717.90
1990/11/30 10535.12 8203.65
1990/12/31 10560.27 8336.54
1991/01/31 10933.94 8606.19
1991/02/28 11551.31 9528.76
1991/03/31 11137.03 8956.73
1991/04/30 11307.61 9044.68
1991/05/31 11291.37 9139.06
1991/06/30 10747.11 8467.51
1991/07/31 11120.78 8883.54
1991/08/31 11080.16 8703.13
1991/09/30 11437.59 9193.63
1991/10/31 11364.48 9323.96
1991/11/30 11047.67 8888.67
1991/12/31 11409.09 9347.71
1992/01/31 11392.64 9148.05
1992/02/29 11409.09 8820.62
1992/03/31 11038.93 8238.32
1992/04/30 11524.25 8277.48
1992/05/31 12042.47 8831.54
1992/06/30 11927.31 8412.63
1992/07/31 11540.70 8197.33
1992/08/31 11746.34 8711.47
1992/09/30 11548.93 8539.45
1992/10/31 10932.00 8091.51
1992/11/30 10907.32 8167.66
1992/12/31 11027.92 8209.90
1993/01/31 11129.02 8208.89
1993/02/28 11432.31 8456.86
1993/03/31 12283.20 9194.00
1993/04/30 12965.60 10066.54
1993/05/31 13268.89 10279.14
1993/06/30 13091.97 10118.77
1993/07/31 13530.05 10472.97
1993/08/31 14237.73 11038.33
1993/09/30 14145.06 10789.87
1993/10/31 14532.59 11122.39
1993/11/30 14035.53 10150.17
1993/12/31 14896.52 10883.09
1994/01/31 15676.53 11803.20
1994/02/28 15396.74 11770.51
1994/03/31 14574.34 11263.54
1994/04/30 14769.34 11741.44
1994/05/31 15040.65 11674.03
1994/06/30 14676.08 11839.01
1994/07/31 14921.95 11952.86
1994/08/31 15066.09 12235.85
1994/09/30 14718.47 11850.48
1994/10/31 14871.08 12245.10
1994/11/30 14413.25 11656.59
1994/12/31 14468.79 11729.58
1995/01/31 13978.62 11278.99
1995/02/28 14074.90 11246.62
1995/03/31 14880.18 11948.08
1995/04/30 15151.53 12397.43
1995/05/31 14958.96 12249.65
1995/06/30 14993.97 12034.83
1995/07/31 15878.03 12784.07
1995/08/31 15694.22 12296.40
1995/09/30 15808.01 12536.56
1995/10/31 15606.69 12199.57
1995/11/30 15843.02 12539.01
1995/12/31 16238.67 13044.21
1996/01/31 16283.90 13097.76
1996/02/29 16247.71 13142.04
1996/03/31 16519.11 13421.12
1996/04/30 16935.26 13811.32
1996/05/31 16953.35 13557.16
1996/06/30 17070.95 13633.47
1996/07/31 16672.90 13235.00
1996/08/31 16880.98 13264.00
1996/09/30 17288.07 13616.36
1996/10/31 17269.98 13477.03
1996/11/30 18129.41 14013.26
1996/12/31 18298.87 13832.99
1997/01/31 18158.47 13351.61
1997/02/28 18373.75 13573.24
1997/03/31 18373.75 13624.82
1997/04/30 18392.47 13699.76
1997/05/31 19309.76 14593.94
1997/06/30 20161.52 15400.98
1997/07/31 20676.32 15652.33
1997/08/31 19431.44 14485.45
1997/09/30 20676.32 15299.10
1997/10/31 19543.76 14127.04
1997/11/30 19468.88 13985.77
1997/12/31 19602.19 14110.38
1998/01/31 19781.30 14758.33
1998/02/28 20865.89 15708.03
1998/03/31 21980.33 16194.66
1998/04/30 22527.60 16325.51
1998/05/31 22477.84 16249.27
1998/06/30 22408.19 16375.21
1998/07/31 22826.11 16544.20
1998/08/31 18666.86 14497.52
1998/09/30 18507.65 14056.21
1998/10/31 19651.94 15524.66
1998/11/30 20826.09 16323.09
1998/12/31 21558.22 16970.14
1999/01/31 21888.14 16923.13
1999/02/28 21321.09 16522.90
1999/03/31 22228.37 17215.87
1999/04/30 23084.10 17916.21
1999/05/31 22053.10 16996.58
1999/06/30 23372.78 17662.17
1999/07/31 24259.44 18190.27
1999/08/31 24919.28 18259.76
1999/09/30 25610.05 18446.74
1999/10/29 26826.63 19140.70
IMATRL PRASUN SHR__CHT 19991031 19991123 084816 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity International Growth & Income Fund on October 31,
1989. As the chart shows, by October 31, 1999, the value of the
investment would have grown to $26,827 - a 168.27% 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 would have grown to $19,141 - a 91.41% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
(checkmark)
INTERNATIONAL GROWTH & INCOME
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Bill Bower, Portfolio
Manager of Fidelity
International Growth
& Income Fund
Q. HOW DID THE FUND PERFORM, BILL?
A. The fund performed very well. For the 12-month period that ended
October 31, 1999, the fund posted a total return of 36.51%. In
comparison, the Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index returned 23.29%. The fund also
compares its performance against the international funds average,
tracked by Lipper Inc., which returned 25.53% during the same period.
Q. WHAT FACTORS LED TO THE FUND'S STRONG PERFORMANCE AGAINST THE INDEX
AND ITS LIPPER PEER GROUP?
A. Most of the fund's favorable performance can be attributed to
strong stock selection within the recovering Japanese market. While
the fund remained marginally underweighted in Japanese securities
versus the EAFE index, the stocks we picked performed exceptionally
well. Specifically, the fund's holdings in Japanese
telecommunications, business services, specialty finance companies and
electronic components posted strong gains as industry consolidation
and improving global economies boosted sales. With the exception of
Telecom Italia, European telephone companies and telecommunications
equipment manufacturers also were particularly positive contributors
as stock prices were lifted by continued accelerating earnings
forecasts and a robust mergers-and-acquisitions environment.
Q. JAPAN REPLACED THE U.K. AS THE FUND'S LARGEST GEOGRAPHIC
CONCENTRATION, INCREASING FROM APPROXIMATELY 18% OF THE FUND'S NET
ASSETS SIX MONTHS AGO TO ROUGHLY 26% AT THE END OF THE PERIOD. WHAT
FACTORS ACCOUNTED FOR THE SIGNIFICANT INCREASE?
A. My views regarding Japanese banks and the general market became
increasingly positive during the period because many companies were
beating earnings estimates and becoming more serious about
restructuring. Following the announcement of a three-way bank merger
between Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of
Japan, I became more enthusiastic about the prospects for growth in
the Japanese market. These mergers, which were coordinated by the
Japanese government, signaled a critical and necessary change in the
way Japanese companies and the government were approaching corporate
restructuring and reforms.
Q. DID YOU MAKE ANY OTHER SIGNIFICANT CHANGES TO THE PORTFOLIO DURING
THE PERIOD? WHAT TYPES OF STOCKS AND INDUSTRIES DID YOU FOCUS ON?
A. I didn't make many significant changes. However, as some of the
fund's Japanese holdings blew through their price targets, I started
to look for alternatives within the Japanese market and other regions
of the world. While Japan will probably remain the fund's largest
geographical weighting in the short term, some of the areas I looked
at were the European mid-cap growth stocks, which appeared to be
undervalued relative to large-cap stocks. An example of mid-cap stock
I purchased during the period was Dutch software company Epchos,
which, in my opinions was undervalued relative to its earnings and
sales growth outlook.
Q. WHICH STOCKS PROVIDED THE STRONGEST RESULTS FOR THE FUND?
A. Japanese and European telecommunications companies such as DDI
Corp., Kokusai Denshin Denwa (KDD) and Nokia were among the fund's top
holdings and provided a significant boost to fund performance. As I
mentioned earlier, telecommunications companies benefited from a
robust mergers-and-acquisitions environment, favorable fundamental
business outlooks and strong earnings momentum. Another strong
contributor to performance was Toyoda Gosei, an auto parts
manufacturer that is a major supplier to Toyota Motor. Its shares
rallied during the period as auto sales picked up and the company was
viewed as undervalued relative to its competition.
Q. WE'VE TALKED A LOT ABOUT STRATEGIES AND STOCKS THAT WORKED WELL FOR
THE FUND. THERE MUST HAVE BEEN SOME HOLDINGS THAT HURT PERFORMANCE . .
.
A. The fund's overweighted position in Telecom Italia detracted from
relative performance after it was taken over by Technost. Later in the
period, Technost made an offer to buy out Telecom Italia, offering no
premium to the underlying market value, resulting in further weakness
in the share price. Another disappointment for the fund was Arcadia
Group. The British retailer suffered from a difficult pricing
environment that we thought would improve during the period, but
remained weak. Shares of Rentokil also were punished after the British
pest control and cleaning services firm missed earnings estimates and
experienced slower sales growth. The fund's holdings in Nestle and
Unilever also hurt performance due to slower-than-expected earnings
growth for these companies and the food sector overall.
Q. WHAT'S YOUR OUTLOOK OVER THE NEXT SIX MONTHS, BILL?
A. While the short-term global market environment poses a number of
risks due to Year 2000 (Y2K) concerns and uncertainty around the
interest-rate outlook in the U.S. and Europe, I don't run the fund
based on potential short-term events. Consequently, I don't anticipate
making major changes to the portfolio at this time. In addition, due
to some recent changes I made to the portfolio and the asset
allocation shifts we've already discussed, I feel the fund is
well-positioned to benefit from the anticipated ongoing recovery in
the Japanese market, yet is still protected from potential weakness in
certain sectors. For example, I recently reduced the fund's exposure
to Japanese specialty-finance companies, or non-bank lenders, because
I felt their valuations were getting expensive and Japanese banks were
beginning to encroach upon their business. Another area I've been
keeping a close eye on is Europe, especially the European banks, which
have been hard hit due to interest-rate hikes by central banks. I've
become less negative on European financial issues because I think the
positives of low valuations, earnings improvement and industry
consolidation outweigh the negatives of potentially higher interest
rates.
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.
BILL BOWER COMMENTS ON HIS INVESTMENT STYLE
AND HOW IT SHAPES THE STRATEGY AND HOLDINGS
OF THE FUND:
"The first things I ask when I look at a stock are: `Is this a good
business? Is it stable? Is the company's cash flow growing?'
Because of my focus on these areas, the fund's dividend
yield is lower than similar overseas funds and the Morgan
Stanley EAFE index. In other words, I'm a firm believer in a
company's free cash-flow generation as a catalyst for growth;
my focus on dividend yield is secondary. My investment style
also is highly dependent upon fundamental and technical
analysis of individual companies, industries and market
trends. An example of this research is a recent study that my
team of analysts and I completed, which investigated the
correlation between stock performance and dividend yields
of stocks that have made up the EAFE index over the past
three years. Our results showed that if you invested solely
on the basis of higher dividend yield, you would've
significantly underperformed the market. Accordingly, the
fund has concentrated more on companies with stable free
cash flow, favorable growth outlooks and accelerating
earnings versus stocks with merely high dividend yields.
"Another area I tend to focus on is the track record of
corporate managements and what types of incentives they
receive. This approach has subsequently led me to successful
companies whose managements have a high level of stock
ownership. Often, these companies tend to be younger
businesses that have smaller stock capitalizations and whose
management teams have a large stake in the success of their
company. These are the types of companies that I believe
have the best prospects to outperform the broader market
over the long term. While these types of investments present
interesting opportunities for the fund, this is not to say that
there aren't any large-cap stocks that meet my investment
criteria. In fact, there are many large-cap holdings in the
portfolio that exhibit strong growth prospects, healthy
dividend yields, and provide the current income the
fund seeks."
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 October 31, 1999, more than
$1.0 billion
MANAGER: Bill Bower, since 1998;
international equity analyst, 1996-1998;
manager, Fidelity Select Construction & Housing
Portfolio, 1994-1996; joined Fidelity in 1994
(checkmark)
INTERNATIONAL GROWTH & INCOME
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Australia 2.4%
United States 8.8%
Row: 1, Col: 1, Value: 2.4
Row: 1, Col: 2, Value: 2.2
Row: 1, Col: 3, Value: 9.1
Row: 1, Col: 4, Value: 6.9
Row: 1, Col: 5, Value: 25.8
Row: 1, Col: 6, Value: 7.2
Row: 1, Col: 7, Value: 14.6
Row: 1, Col: 8, Value: 5.0
Row: 1, Col: 9, Value: 18.0
Row: 1, Col: 10, Value: 8.800000000000001
Finland 2.2%
France 9.1%
United Kingdom 18.0%
Germany 6.9%
Switzerland 5.0%
Japan 25.8%
Other 14.6%
Netherlands 7.2%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 3.8%
Australia 3.3%
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: 7.1
Row: 1, Col: 7, Value: 16.2
Row: 1, Col: 8, Value: 6.3
Row: 1, Col: 9, Value: 23.3
Row: 1, Col: 10, Value: 3.8
France 10.4%
United Kingdom 23.3%
Germany 7.3%
Italy 3.8%
Switzerland 6.3%
Japan 18.5%
Other 16.2%
Netherlands 7.1%
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 91.9 97.3
Bonds 0.3 0.5
Short-term investments and 7.8 2.2
net other assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
DDI Corp. (Japan, Telephone 2.1 1.1
Services)
Kokusai Denshin Denwa 2.0 0.3
(Japan, Telephone Services)
Total Fina SA Class B 1.8 2.6
(France, Oil & Gas)
Nokia AB sponsored ADR 1.6 1.7
(Finland, Communications
Equipment)
BP Amoco PLC (United 1.5 2.0
Kingdom, Oil & Gas)
Kyocera Corp. (Japan, 1.3 0.3
Electronics))
Shell Transport & Trading Co. 1.3 1.3
PLC (Reg.) (United
Kingdom, Oil & Gas)
Takeda Chemical Industries 1.2 1.2
Ltd. (Japan, Drugs &
Pharmaceuticals)
Mannesmann AG (Reg.) 1.1 1.2
(Germany, Cellular)
Nestle SA (Reg.) 1.0 1.1
(Switzerland, Foods)
14.9 12.8
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 19.6 24.0
UTILITIES 16.0 16.3
TECHNOLOGY 11.4 8.1
HEALTH 6.8 8.3
MEDIA & LEISURE 5.5 4.2
ENERGY 5.5 6.1
INDUSTRIAL MACHINERY & 4.9 3.3
EQUIPMENT
SERVICES 4.6 6.7
DURABLES 4.2 5.2
RETAIL & WHOLESALE 3.8 4.8
</TABLE>
INTERNATIONAL GROWTH & INCOME
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 91.0%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.8%
Australia & New Zealand 425,308 $ 2,806,845
Banking Group Ltd.
Brambles Industries Ltd. 100,800 2,834,755
Cable & Wireless Optus Ltd. 1,200,700 2,748,814
(a)
Coles Myer Ltd. 290,300 1,443,970
Lend Lease Corp. Ltd. 152,000 1,748,915
National Australia Bank Ltd. 29,400 453,711
News Corp. Ltd. sponsored ADR 119,500 3,540,188
Perpetual Trustees Australia 17,900 230,580
Ltd.
Telstra Corp. Ltd. 557,700 2,836,982
Westfield Holdings Ltd. 130,100 771,572
19,416,332
BELGIUM - 0.2%
Electrabel SA 6,000 1,984,900
BRITISH VIRGIN ISLANDS - 0.4%
MIH Ltd. 102,600 4,591,350
CANADA - 1.7%
Barrick Gold Corp. 41,400 760,936
Celestica, Inc. (sub. vtg.) 47,400 2,608,820
(a)
CGI Group, Inc. Class A (sub. 119,200 2,672,827
vtg.) (a)
Cinar Films, Inc. Class B 273,300 4,748,588
(sub. vtg.) (a)
Clarica Life Insurance Co. (d) 80,700 1,305,062
Placer Dome, Inc. 65,000 817,082
Toronto Dominion Bank 159,300 3,653,173
Videotron Group Ltd. (sub. 144,900 2,067,609
vtg.)
18,634,097
DENMARK - 0.5%
Carlsberg AS Class B 41,800 1,618,983
Damgaard AS (a) 2,700 143,648
Falck AS 20,000 1,844,364
Unidanmark AS Class A 21,500 1,677,662
5,284,657
FINLAND - 2.2%
Metso Oyj (a) 75,000 850,513
Nokia AB sponsored ADR 147,300 17,022,356
Pohjola Group Insurance Corp. 35,200 1,893,756
Class B
Sampo Insurance Co. Ltd. 61,800 2,151,363
Sonera Group PLC 41,000 1,234,813
Tietoenator Oyj Abp 29,400 1,023,464
24,176,265
FRANCE - 9.1%
AXA SA de CV 55,000 7,780,415
Banque Nationale de Paris 101,715 8,959,479
Banque Nationale de Paris 12,155 72,061
warrants 7/1/02 (a)
Castorama Dubois 15,000 4,506,533
Investissements SA
Clarins SA 19,500 1,925,403
Clarins SA rights 12/27/99 (a) 19,500 321,518
SHARES VALUE (NOTE 1)
France Telecom SA 95,100 $ 9,214,483
Havas Advertising SA 7,000 1,967,916
NRJ SA 10,100 3,153,729
Rhodia SA 94,900 1,837,019
Rhone-Poulenc SA Class A 11,800 654,900
Sanofi-Synthelabo SA (a) 77,600 3,434,037
Schneider SA (a) 13,600 939,705
Societe Generale, France 12,200 2,664,044
Class A
Suez Lyonnaise des Eaux 46,100 7,464,842
Television Francaise 1 SA 22,500 7,073,105
Total Fina SA:
Class B 149,661 19,961,037
sponsored ADR 101,900 6,795,456
Vivendi SA (a) 129,554 9,846,822
98,572,504
GERMANY - 6.9%
Allianz AG (Reg.) 27,000 8,205,751
Apcoa Parking AG 13,370 987,281
BASF AG 80,200 3,574,476
Boss (Hugo) AG 19,690 2,243,266
Celanese AG (a) 14,240 225,327
DaimlerChrysler AG (Reg.) 41,425 3,220,794
Deutsche Telekom AG 174,275 8,061,502
ELMOS Semiconductor AG (a) 72,000 1,822,867
EPCOS AG (a) 125,400 5,155,125
GFK AG (a) 40,787 1,135,892
Hannover Rueckversicherungs AG 23,000 1,732,357
Hoechst AG 142,400 6,307,644
Kali Und Salz Beteiligungs AG 10,300 147,553
Mannesmann AG (Reg.) 78,760 12,454,280
Munich Reinsurance AG (Reg.) 11,300 2,583,144
Primacom AG 100,800 4,997,694
Siemens AG 78,500 7,084,366
Veba AG 57,800 3,139,511
Viag AG 90,896 1,673,214
74,752,044
HONG KONG - 1.9%
China Telecom (Hong Kong) 616,000 2,079,000
Ltd. (a)
Dah Sing Financial Holdings 510,000 2,035,273
Ltd.
Giordano International Ltd. 1,022,000 1,085,415
Great Eagle Holdings Ltd. 744,000 919,464
Hong Kong & China Gas Co. 696,000 922,863
Ltd.
Hutchison Whampoa Ltd. 175,000 1,757,209
Johnson Electric Holdings 925,600 5,004,531
Ltd.
Li & Fung Ltd. 820,000 1,398,687
South China Morning Post 1,986,000 1,444,503
Holdings
Wing Hang Bank Ltd. 326,500 1,065,496
Yue Yuen Industrial Holdings 1,224,000 3,104,119
Ltd.
20,816,560
HUNGARY - 0.1%
Matav RT sponsored ADR (a) 35,700 1,028,606
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
IRELAND - 0.6%
Bank of Ireland, Inc. 287,400 $ 2,252,614
CRH PLC 34,800 658,954
Elan Corp. PLC sponsored ADR 113,600 2,925,200
(a)
Irish Life & Permanent PLC 106,426 1,101,459
6,938,227
ISRAEL - 0.2%
Bezeq Israeli 290,000 1,183,408
Telecommunication Corp.
Ltd. (a)
Teva Pharmaceutical 21,400 1,035,225
Industries Ltd. ADR
2,218,633
ITALY - 1.6%
Assicurazioni Generali Spa 98,200 3,175,070
Banca di Roma 558,400 756,348
Eni Spa sponsored ADR 490,800 2,894,712
Olivetti & Co. Spa 1,527,316 2,953,267
San Paolo-IMI Spa 178,300 2,355,246
Telecom Italia Spa 454,240 3,929,176
Unicredito Italiano Spa 326,500 1,531,313
17,595,132
JAPAN - 25.8%
Advan Co. Ltd. 42,700 1,263,059
Aiful Corp. 14,100 2,193,710
Banyu Pharmaceutical Co. Ltd. 166,000 3,043,400
CSK Corp. 47,900 2,208,115
Dai-Ichi Kangyo Bank Ltd. 361,000 4,957,791
Daiwa Securities Co. Ltd. 472,000 5,045,244
DDI Corp. 2,116 23,166,765
Digicube Co. Ltd. 22 756,399
Fancl Corp. 12,100 3,486,195
Fuji Heavy Industries Ltd. 396,000 3,369,566
Fujisawa Pharmaceutical Co. 65,000 1,629,292
Ltd.
Fujitec Co. Ltd. 229,000 2,553,364
Fujitsu Ltd. 242,000 7,297,767
Fujitsu Support & Service, 4,000 1,125,570
Inc.
Furukawa Electric Co. Ltd. 1,049,000 7,656,567
Hirose Electric Co. Ltd. 3,900 681,306
Hitachi Information Systems 60,000 2,316,447
Hitachi Ltd. 283,000 3,077,625
Honda Motor Co. Ltd. 124,000 5,215,750
Hoya Corp. 34,000 2,448,980
Ito-Yokado Co. Ltd. 60,000 4,805,763
Jafco Co. Ltd. 13,000 1,460,744
Japan Business Computer Co. 62,000 1,554,094
Ltd.
Kaneka Corp. 73,000 956,975
Kansai Maintenance Corp. 39,000 419,870
Kao Corp. 81,000 2,473,758
Kirin Brewery Co. Ltd. 109,000 1,249,902
SHARES VALUE (NOTE 1)
Kokusai Denshin Denwa 171,800 $ 21,614,215
Kyocera Corp. 147,800 14,194,478
Matsushita Electric 94,000 1,991,038
Industrial Co. Ltd.
Meiji Seika Kaisha Ltd. 348,000 2,536,682
Mitsubishi Electric Corp. 250,000 1,385,354
Mitsumi Electric Co. Ltd. 57,000 1,527,299
New Japan Securities Co. Ltd. 710,000 2,093,349
(a)
Nichicon Corp. 479,000 10,396,543
Nichiei Co. Ltd. 6,200 321,537
Nidec Corp. 19,000 3,695,078
Nihon Unisys Ltd. 172,000 6,045,811
Nikko Securities Co. Ltd. 260,000 2,447,059
Nintendo Co. Ltd. 15,300 2,431,837
Nippon Sheet Glass Co. Ltd. 166,000 1,033,066
Nippon System Development Co. 20,100 1,718,031
Ltd.
Nippon Telegraph & Telephone 160 2,458,584
Corp.
Nippon Zeon Co. Ltd. 489,000 4,226,651
Nissin Co. Ltd. 26,900 1,650,814
Nomura Securities Co. Ltd. 187,000 3,090,776
NTT Mobile Communication 364 9,683,362
Network, Inc. (d)
Olympus Optical Co. Ltd. 144,000 1,949,964
Omron Corp. 364,000 7,620,841
ORIX Corp. 54,400 7,314,286
Ricoh Co. Ltd. 116,000 1,894,992
Riso Kagaku Corp. 10,000 432,173
Ryohin Keikaku Co. Ltd. 1,800 346,776
Sakura Bank Ltd. 758,000 6,522,622
Sanyo Shinpan Finance Co. 15,500 742,809
Ltd.
Secom Co. Ltd. 25,000 2,684,274
Secom Co. Ltd. (RFD) 36,000 3,837,695
Senshukai Co. Ltd. 71,000 1,363,064
Shohkoh Fund & Co. Ltd. 3,020 1,850,430
Sony Corp. 47,000 7,508,250
Takasago Electric Industry 23,000 1,745,018
Co.
Takeda Chemical Industries 222,000 12,770,997
Ltd.
Terumo Corp. 61,000 1,857,095
Toko, Inc. 200,000 989,196
Tokyo Seimitsu Co. Ltd. 27,000 3,295,750
Tokyo Tomin Bank Ltd. (a) 201,800 6,686,291
Toyoda Gosei Co. Ltd. 154,000 6,640,673
Union Tool Co. 8,200 877,292
Yakult Honsha Co. Ltd. 97,000 993,056
Yamaha Motor Co. Ltd. 409,000 3,330,920
Yokogawa Electric Corp. 297,000 2,082,209
Yoshitomi Pharmaceutical 179,000 2,441,105
Industries Ltd.
278,733,360
KOREA (SOUTH) - 0.5%
Samsung Electronics Co. Ltd. 30,857 5,144,979
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
LUXEMBOURG - 0.6%
Audiofina 21,600 $ 1,089,163
Stolt Comex Seaway SA (a) 486,770 5,202,354
6,291,517
MEXICO - 0.3%
Grupo Financiero Bancomer SA 6,446,000 1,698,347
de CV Series A
Grupo Televisa SA de CV 29,200 1,241,000
sponsored ADR (a)
2,939,347
NETHERLANDS - 6.9%
ABN AMRO Holding NV 156,500 3,795,462
Akzo Nobel NV 111,500 4,815,418
Beter Bed Holding NV 106,600 3,058,704
Exact Holdings NV (a) 168,350 6,357,808
Exact Holdings NV (d) 6,500 245,475
Fortis Amev NV 249,500 8,614,456
Fugro NV 60,300 2,035,535
Grand Hotel Krasnapolsky NV 31,500 2,051,912
Gucci Group NV (NY Shares) 40,000 3,230,000
ING Groep NV 178,822 10,578,894
Koninklijke Ahold NV 76,955 2,370,451
Koninklijke KPN NV 64,600 3,324,870
Koninklijke Philips 70,292 7,305,975
Electronics NV (NY shares)
Numico NV 50,000 2,043,869
Nutreco Holding NV 94,400 3,236,433
Samas Groep NV 143,900 1,958,221
Vedior NV 78,038 1,317,157
Vendex KBB NV 153,800 4,502,260
Vnu NV 62,700 2,126,473
Wolters Kluwer NV 30,100 1,008,777
73,978,150
NEW ZEALAND - 0.1%
Telecom Corp. of New Zealand 244,300 984,807
Ltd.
PERU - 0.1%
Compania de Minas 66,500 1,130,500
Buenaventura SA sponsored
ADR Class B
PORTUGAL - 0.2%
Electricidade de Portugal SA 105,500 1,644,895
SINGAPORE - 0.3%
Chartered Semiconductor 5,800 192,488
Manufacturing Ltd. ADR
Oversea-Chinese Banking Corp. 136,500 1,026,933
Ltd.
Overseas Union Bank Ltd. 244,959 1,061,514
United Overseas Bank Ltd. 128,000 970,689
(For. Reg.)
3,251,624
SOUTH AFRICA - 0.4%
Anglogold Ltd. 8,100 457,359
SHARES VALUE (NOTE 1)
Gold Fields Ltd. 123,000 $ 588,431
Impala Platinum Holdings Ltd. 85,500 2,960,605
4,006,395
SPAIN - 1.6%
Banco Santander Central 444,760 4,630,780
Hispano SA
Cortefiel SA 75,500 1,977,584
Tabacalera SA Series A 24,300 401,173
Telefonica SA (a) 608,600 10,041,070
17,050,607
SWEDEN - 2.1%
A-Com AB (a) 30,000 347,572
ABB Ltd. (Sweden) (a) 39,900 3,985,256
Ericsson (L.M.) Telefon AB 251,400 10,747,350
Class B
Hennes & Mauritz AB Class B 92,400 2,462,197
Nobel Biocare AB 16,700 232,178
Saab AB (B shares) 127,300 993,591
Securitas AB Class B 67,500 1,004,299
Svenska Handelsbanken AB (A 144,000 2,002,012
shares)
TV 4 AB Class A 100,000 1,365,895
23,140,350
SWITZERLAND - 5.0%
Ares Serono SA Class B 2,258 3,518,614
(Bearer)
Bank Sarasin & Compagnie 2,281 4,244,349
Class B (Reg.)
Credit Suisse Group (Reg.) 39,700 7,648,169
Julius Baer Holding AG 1,000 3,014,662
Nestle SA (Reg.) 5,981 11,561,667
Novartis AG (Reg.) 4,850 7,270,695
PubliGroupe SA 2,770 2,036,202
Roche Holding AG 612 7,363,798
participation certificates
Selecta Group (Reg.) 5,870 2,080,301
UBS AG 18,750 5,467,569
54,206,026
TAIWAN - 0.7%
Hon Hai Precision Industries 155,000 1,060,372
Co. Ltd.
Ritek Corp. 350,000 2,295,082
Taiwan Semiconductor 953,250 4,237,334
Manufacturing Co. Ltd.
7,592,788
TURKEY - 0.2%
Hurriyet Gazetecilik ve 252,511,900 1,917,070
Matbaacilik AS
UNITED KINGDOM - 18.0%
Abbey National PLC 207,100 4,052,607
Alliance & Leicester PLC 331,500 4,840,653
Allied Domecq PLC 149,300 839,641
Allied Zurich PLC 449,000 5,426,767
Amvescap PLC 173,900 1,555,629
Ashtead Group PLC 1,873,500 5,345,159
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
AstraZeneca Group PLC (Reg.) 88,700 $ 4,058,025
BBA Group PLC 33,500 234,121
Bodycote International PLC 317,250 1,293,781
Boots Co. PLC 130,200 1,338,131
BP Amoco PLC 1,646,674 15,849,241
British Aerospace PLC 286,200 1,673,080
British American Tobacco PLC 232,500 1,540,762
British Telecommunications PLC 630,700 11,352,598
British Vita PLC Ord. 332,100 1,337,958
Capital Radio PLC 78,700 1,292,849
Centrica PLC 688,700 2,001,691
Computacenter PLC 553,200 5,776,481
Davis Service Group 64,800 440,880
EMAP PLC 153,300 2,004,444
Geest PLC 122,800 926,365
Glaxo Wellcome PLC 221,200 6,622,176
Granada Group PLC 409,900 3,242,130
Hays PLC 206,100 2,360,514
HSBC Holdings PLC (Reg.) 195,600 2,408,324
Iceland Group PLC 1,369,100 6,517,653
Independent Insurance PLC 417,600 1,902,163
Informa Group PLC 311,700 2,080,991
Invensys PLC 202,100 993,676
Kingfisher PLC 157,500 1,721,008
Kingston Communications PLC 55,000 403,371
(a)(d)
Laporte PLC 87,000 715,314
Laporte PLC Class B (a) 783,000 6,438
Lloyds TSB Group PLC 566,800 7,843,166
Misys PLC 152,000 1,269,740
National Grid Group PLC 137,800 1,029,889
National Westminster Bank PLC 57,800 1,305,936
Pizzaexpress PLC 82,400 1,094,151
Prudential Corp. PLC 228,100 3,580,212
Rentokil Initial PLC 1,424,400 4,748,980
Reuters Group PLC 219,400 2,040,219
Royal & Sun Alliance 467,090 3,179,863
Insurance Group PLC
Royal Bank of Scotland Group 140,700 3,243,766
PLC
Safeway PLC 314,100 986,527
Scottish Radio Holdings PLC 65,900 975,294
Shell Transport & Trading Co. 1,826,100 13,962,060
PLC (Reg.)
Smith & Nephew PLC 1,130,600 3,643,951
SmithKline Beecham PLC 542,100 6,938,876
SSL International PLC 47,200 504,890
Standard Chartered PLC 154,900 2,174,014
Taylor Nelson Sofres PLC 674,400 2,034,984
Unilever PLC 828,189 7,699,573
Vodafone AirTouch PLC 2,030,000 9,731,322
Vodafone AirTouch PLC 183,000 8,772,563
sponsored ADR
WPP Group PLC 472,100 5,127,602
194,042,199
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA - 1.0%
AES Corp. (a) 50,000 $ 2,821,875
AFLAC, Inc. 70,900 3,624,763
Newmont Mining Corp. 36,000 789,750
Polycom, Inc. (a) 20,000 1,000,000
Synthes-Stratec, Inc. (a) 1,600 595,437
UnitedGlobalCom, Inc. (a) 21,600 1,879,200
10,711,025
TOTAL COMMON STOCKS 982,774,946
(Cost $753,644,505)
PREFERRED STOCKS - 0.9%
CONVERTIBLE PREFERRED STOCKS
- - 0.6%
AUSTRALIA - 0.6%
National Australia Bank Ltd. 76,800 2,164,800
$1.9687 EXCAPS
Village Roadshow Ltd. $3.25 60,000 2,527,500
PRIDES (d)
WBK STRYPES Trust (Westpac 55,000 1,650,000
Banking Corp.) $3.135
6,342,300
NONCONVERTIBLE PREFERRED
STOCKS - 0.3%
ITALY - 0.3%
Telecom Italia Spa Risp 737,700 3,645,866
TOTAL PREFERRED STOCKS 9,988,166
(Cost $8,129,747)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (C)
NETHERLANDS - 0.3%
Koninklijke Ahold NV 3% Baa1 NLG 4,810,000 2,601,369
9/30/03 (Cost $3,045,512)
</TABLE>
CASH EQUIVALENTS - 9.9%
SHARES
Central Cash Collateral Fund, 8,038,987 8,038,987
5.26% (b)
Taxable Central Cash Fund, 98,978,707 98,978,707
5.21% (b)
TOTAL CASH EQUIVALENTS 107,017,694
(Cost $107,017,694)
TOTAL INVESTMENT PORTFOLIO - 1,102,382,175
102.1%
(Cost $871,837,458)
NET OTHER ASSETS - (2.1)% (22,326,839)
NET ASSETS - 100% $ 1,080,055,336
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) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Principal amount is stated in United States dollars unless
otherwise noted.
(d) 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 $14,164,770 or 1.3% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $816,194,057 and $858,011,797, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $7,466,135. The fund
received
cash collateral of $8,038,987 which was invested in the Central Cash
Collateral Fund.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $2,816,000. The weighted average interest rate was 5.2%.
Interest expense includes $2,427 paid under the bank borrowing
program.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $874,029,546. Net unrealized appreciation
aggregated $228,352,629, of which $265,296,979 related to appreciated
investment securities and $36,944,350 related to depreciated
investment securities.
The fund hereby designates approximately $38,760,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
AEROSPACE & DEFENSE 0.3%
BASIC INDUSTRIES 3.2
CASH EQUIVALENTS 9.9
CONSTRUCTION & REAL ESTATE 1.8
DURABLES 4.2
ENERGY 5.5
FINANCE 19.6
HEALTH 6.8
HOLDING COMPANIES 0.1
INDUSTRIAL MACHINERY & 4.9
EQUIPMENT
MEDIA & LEISURE 5.5
NONDURABLES 3.7
PRECIOUS METALS 0.5
RETAIL & WHOLESALE 3.8
SERVICES 4.6
TECHNOLOGY 11.4
TRANSPORTATION 0.3
UTILITIES 16.0
INTERNATIONAL GROWTH & INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 1,102,382,175
value (cost $871,837,458) -
See accompanying schedule
Foreign currency held at 2,326,099
value (cost $2,316,323)
Receivable for investments 16,854,379
sold
Receivable for fund shares 8,401,090
sold
Dividends receivable 2,090,426
Interest receivable 275,620
Other receivables 10,242
TOTAL ASSETS 1,132,340,031
LIABILITIES
Payable for investments $ 35,617,819
purchased
Payable for fund shares 7,606,983
redeemed
Accrued management fee 617,130
Other payables and accrued 403,776
expenses
Collateral on securities 8,038,987
loaned, at value
TOTAL LIABILITIES 52,284,695
NET ASSETS $ 1,080,055,336
Net Assets consist of:
Paid in capital $ 756,385,267
Undistributed net investment 12,563,275
income
Accumulated undistributed net 80,742,438
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 230,364,356
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 41,515,452 $ 1,080,055,336
shares outstanding
NET ASSET VALUE, offering $26.02
price and redemption price
per share ($1,080,055,336
(divided by) 41,515,452
shares)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 16,097,662
Dividends
Interest 1,673,312
Security lending 21,132
17,792,106
Less foreign taxes withheld (1,778,492)
TOTAL INCOME 16,013,614
EXPENSES
Management fee $ 6,581,003
Transfer agent fees 2,552,627
Accounting and security 463,219
lending fees
Non-interested trustees' 3,221
compensation
Custodian fees and expenses 444,258
Registration fees 47,806
Audit 59,430
Legal 3,675
Interest 2,427
Miscellaneous 776
Total expenses before 10,158,442
reductions
Expense reductions (321,403) 9,837,039
NET INVESTMENT INCOME 6,176,575
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 93,653,585
Foreign currency transactions (120,709) 93,532,876
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 185,757,323
Assets and liabilities in (51,633) 185,705,690
foreign currencies
NET GAIN (LOSS) 279,238,566
NET INCREASE (DECREASE) IN $ 285,415,141
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 7,315
Deferred sales charges
Withheld by FDC
Expense reductions $ 274,497
Directed brokerage
arrangements
Custodian credits 1,281
Transfer agent credits 45,625
$ 321,403
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 6,176,575 $ 15,664,243
income
Net realized gain (loss) 93,532,876 56,252,297
Change in net unrealized 185,705,690 (50,786,245)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 285,415,141 21,130,295
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (3,606,738) (18,064,755)
From net investment income
From net realized gain (25,246,859) (42,970,040)
TOTAL DISTRIBUTIONS (28,853,597) (61,034,795)
Share transactions Net 1,147,448,319 1,025,290,014
proceeds from sales of shares
Reinvestment of distributions 27,912,115 59,414,450
Cost of shares redeemed (1,169,631,401) (1,294,204,233)
NET INCREASE (DECREASE) IN 5,729,033 (209,499,769)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 262,290,577 (249,404,269)
IN NET ASSETS
NET ASSETS
Beginning of period 817,764,759 1,067,169,028
End of period (including $ 1,080,055,336 $ 817,764,759
undistributed net investment
income of $12,563,275 and
$7,030,622, respectively)
OTHER INFORMATION
Shares
Sold 51,495,526 49,300,775
Issued in reinvestment of 1,401,210 2,997,727
distributions
Redeemed (52,786,044) (62,013,953)
Net increase (decrease) 110,692 (9,715,451)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.75 $ 20.88 $ 19.09 $ 17.83 $ 17.54
period
Income from Investment
Operations
Net investment income .15 B .34 B .48 B, D .54 .54
Net realized and unrealized 6.84 (.22) E 1.97 1.32 .28
gain (loss)
Total from investment 6.99 .12 2.45 1.86 .82
operations
Less Distributions
From net investment income (.09) (.37) (.29) (.60) (.21)
From net realized gain (.63) (.88) (.37) - (.32)
Total distributions (.72) (1.25) (.66) (.60) (.53)
Net asset value, end of period $ 26.02 $ 19.75 $ 20.88 $ 19.09 $ 17.83
TOTAL RETURN A 36.51% .55% 13.17% 10.66% 4.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,080,055 $ 817,765 $ 1,067,169 $ 1,007,076 $ 903,235
(000 omitted)
Ratio of expenses to average 1.13% 1.17% 1.17% 1.16% 1.18%
net assets
Ratio of expenses to average 1.10% C 1.13% C 1.15% C 1.14% C 1.18%
net assets after expense
reductions
Ratio of net investment .69% 1.62% 2.33% 2.76% 2.98%
income to average net assets
Portfolio turnover rate 94% 143% 70% 95% 141%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
D INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
E 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.
</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
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY DIVERSIFIED 29.12% 108.76% 165.73%
INTERNATIONAL
MSCI EAFE 23.29% 56.31% 109.68%
MSCI GDP-Wtd EAFE 26.40% 79.18% 146.89%
International Funds Average 25.53% 58.85% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on December 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 October 31, 1999,
the index included over 900 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 GDP-Weighted
Europe, Australasia, Far East (EAFE) Index - a gross domestic product
weighted, unmanaged index of over 900 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 one year average represents a peer group of 589 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 LIFE OF FUND
FIDELITY DIVERSIFIED 29.12% 15.86% 13.26%
INTERNATIONAL
MSCI EAFE 23.29% 9.35% 9.89%
MSCI GDP-Wtd EAFE 26.40% 12.37% 12.20%
International Funds Average 25.53% 9.50% 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)
00325 MS001
1991/12/27 10000.00 10000.00
1991/12/31 10060.00 10240.13
1992/01/31 9860.00 10021.41
1992/02/29 9680.00 9662.72
1992/03/31 9140.00 9024.82
1992/04/30 9240.00 9067.72
1992/05/31 9750.00 9674.68
1992/06/30 9540.00 9215.78
1992/07/31 9190.00 8979.92
1992/08/31 9350.00 9543.15
1992/09/30 9140.00 9354.70
1992/10/31 8460.00 8864.00
1992/11/30 8460.00 8947.42
1992/12/31 8671.06 8993.69
1993/01/31 8873.42 8992.59
1993/02/28 9176.96 9264.23
1993/03/31 9915.57 10071.75
1993/04/30 10522.64 11027.58
1993/05/31 10785.71 11260.48
1993/06/30 10482.17 11084.80
1993/07/31 10805.94 11472.82
1993/08/31 11362.43 12092.16
1993/09/30 11210.66 11819.97
1993/10/31 11453.49 12184.23
1993/11/30 11028.54 11119.20
1993/12/31 11850.64 11922.09
1994/01/31 12739.44 12930.05
1994/02/28 12484.04 12894.23
1994/03/31 12085.61 12338.86
1994/04/30 12320.58 12862.39
1994/05/31 12300.15 12788.54
1994/06/30 12136.69 12969.27
1994/07/31 12555.55 13093.99
1994/08/31 12872.25 13404.00
1994/09/30 12504.47 12981.83
1994/10/31 12729.22 13414.13
1994/11/30 12044.75 12769.44
1994/12/31 11979.79 12849.40
1995/01/31 11428.51 12355.78
1995/02/28 11566.33 12320.32
1995/03/31 12128.21 13088.75
1995/04/30 12509.87 13581.01
1995/05/31 12615.88 13419.11
1995/06/30 12806.71 13183.79
1995/07/31 13633.63 14004.56
1995/08/31 13421.60 13470.33
1995/09/30 13676.04 13733.41
1995/10/31 13495.81 13364.25
1995/11/30 13633.63 13736.10
1995/12/31 14132.55 14289.53
1996/01/31 14555.74 14348.19
1996/02/29 14566.88 14396.70
1996/03/31 14856.44 14702.43
1996/04/30 15391.00 15129.88
1996/05/31 15546.91 14851.46
1996/06/30 15691.69 14935.05
1996/07/31 15190.54 14498.53
1996/08/31 15446.68 14530.30
1996/09/30 15914.43 14916.31
1996/10/31 16014.66 14763.67
1996/11/30 16905.60 15351.09
1996/12/31 16961.57 15153.62
1997/01/31 17076.88 14626.27
1997/02/28 17365.14 14869.07
1997/03/31 17388.20 14925.57
1997/04/30 17445.86 15007.66
1997/05/31 18541.27 15987.21
1997/06/30 19486.78 16871.30
1997/07/31 20040.25 17146.65
1997/08/31 18852.59 15868.37
1997/09/30 20155.56 16759.69
1997/10/31 19106.27 15475.73
1997/11/30 18944.84 15320.98
1997/12/31 19289.47 15457.49
1998/01/31 19851.53 16167.29
1998/02/28 20891.95 17207.66
1998/03/31 21860.61 17740.75
1998/04/30 22506.38 17884.10
1998/05/31 22530.30 17800.58
1998/06/30 22386.79 17938.53
1998/07/31 22637.92 18123.66
1998/08/31 19325.35 15881.58
1998/09/30 19145.97 15398.14
1998/10/31 20581.02 17006.79
1998/11/30 21442.05 17881.45
1998/12/31 22065.54 18590.27
1999/01/31 22339.49 18538.77
1999/02/28 21691.97 18100.33
1999/03/31 22663.25 18859.46
1999/04/30 23746.61 19626.66
1999/05/31 22899.85 18619.24
1999/06/30 24194.89 19348.37
1999/07/31 24730.34 19926.89
1999/08/31 25103.91 20003.00
1999/09/30 25489.93 20207.83
1999/10/29 26573.29 20968.05
IMATRL PRASUN SHR__CHT 19991031 19991207 094455 R00000000000098
$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 October 31, 1999,
the value of the investment would have grown to $26,573 - a 165.73%
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 in the EAFE index would have grown to $20,968 - a 109.68%
increase. Beginning with this report, the fund will only compare its
performance to that of the Morgan Stanley Capital International EAFE
Index. The change in benchmark will align the fund's benchmark with
that of other broadly diversified international funds in its
comparative universe.
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.
(checkmark)
DIVERSIFIED INTERNATIONAL
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Greg Fraser, Portfolio Manager of Fidelity Diversified International
Fund
Q. HOW DID THE FUND PERFORM, GREG?
A. For the 12-month period that ended October 31, 1999, the fund
returned 29.12%. During the same period, the capitalization-weighted
Morgan Stanley Capital International EAFE Index and the Morgan Stanley
Capital International GDP-Weighted EAFE Index - two broad measures of
stock performance in Europe, Australasia and the Far East - were up
23.29% and 26.40%, respectively. The fund also compares its
performance against the international funds average, tracked by Lipper
Inc., which was up 25.53%, during the same period.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE EAFE INDEXES AND ITS
LIPPER PEER GROUP DURING THE PERIOD?
A. There were a variety of factors that contributed to the fund's
strong performance. The two primary contributors, however, appeared to
be strong stock selection across a wide range of global markets and
the fund's overweighting in the technology and telecommunications
sectors. Although the fund was underweighted relative to the index in
the recovering Japanese market, superior stock selection in this
country aided the fund's total return. Japanese telecommunications and
non-bank financial services holdings staged impressive gains on strong
earnings growth, as did electronic components manufacturers in both
Japan and Europe. Other factors that helped push the fund's
performance ahead of its benchmarks were underweighted positions in
the weak German and Swiss markets.
Q. WHY DOES THE FUND COMPARE ITS PERFORMANCE AGAINST TWO INDEXES?
A. 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 1991, Japan accounted for more
than 50% of the capitalization-weighted index. In order to reduce 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. In general, it
was beneficial for shareholders over the past seven years or so not to
be heavily invested in Japan. Over time, however, the differences
between the two indexes have lessened. In order to be consistent with
other funds, and to make comparisons simpler, the fund's board of
trustees recommended that we switch our primary benchmark to the
capitalization-weighted EAFE index. On July 14, 1999, shareholders
approved the benchmark change. However, because the GDP-weighted index
was used during part of the reporting period, we're required to
provide performance results for both indexes. In the next report, only
the Morgan-Stanley Capital International EAFE Index will be used.
Q. COULD YOU TELL US ABOUT THE PARTICULAR STOCKS THAT HELPED THE
FUND'S PERFORMANCE?
A. Sure. On the telecommunications side, DDI, a leading Japanese
cellular provider, and Nippon Telegraph and Telephone, the dominant
telephone services provider in Japan and one of the most highly valued
companies in the world, provided a major boost to the fund's
performance. In other parts of the world, stocks such as BCE Inc. -
the leading telecommunications provider in Canada and owner of a major
portion of Nortel Networks, a leading telecommunications equipment
supplier - turned in solid results. Mannesmann AG, a German cellular
provider with a variety of manufacturing businesses, also aided the
fund's performance. Other telecommunications equipment companies that
contributed to total return were Nokia, Ericsson and Kyocera, as they
benefited from strong sales and positive earnings momentum. Another
sector that produced favorable gains for the fund was technology. Some
of the important contributors here were Omron, Sharp, Hitachi and
Rohm, all Japanese electronics companies with bright business
prospects. In other regions, Philips, the Dutch electronics giant, and
Celestica, a fast growing Canadian contract manufacturer, also were
important contributors.
Q. WHICH HOLDINGS AND INDUSTRIES HURT THE FUND'S PERFORMANCE?
A. Some of the consumer products companies and pharmaceutical firms
were generally under pressure during the period. Names in this group
included Unilever, the Anglo-Dutch giant, and Pharmacia & Upjohn, the
Swedish-American drug company. Another noticeable restraint on fund
performance was its underweighting in Japanese banks, such as
Industrial Bank of Japan, Fuji Bank and Asahi Bank. These banks did
very well as a group because of the moves by the Japanese government
to restructure and support the banking system. The fund owned modest
positions in several of these stocks, but in hindsight, I could have
been more aggressive in buying them as the restructuring story
unfolded.
Q. DID CURRENCY MOVEMENTS HAVE ANY EFFECT ON THE FUND'S PERFORMANCE
DURING THE PERIOD?
A. As many shareholders are probably aware, this fund generally does
not hedge foreign currency exposure. As a result, currency movements
may be reflected in the fund's share price. That said, currency
movements were relatively moderate during the period, although the
strong Japanese yen marginally helped performance in dollar terms.
Q. GREG, WHAT'S YOUR OUTLOOK FOR THE FUND?
A. Market leadership around the world seems to have returned to
large-capitalization growth stocks, especially those related to
telecommunications products and services. The fund has built sizable
holdings in these areas and should benefit if their present momentum
continues. However, there has been an incredible proliferation of new
public companies in these areas, so I'll be watching closely for signs
of excess capacity. Other technology companies also appear promising
and remain important holdings for the fund. Finally, as company
restructurings, in the form of consolidation and cost-cutting measures
appear to gain momentum in Japan, the fund's holdings there may
continue to increase.
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.
GREG FRASER DISCUSSES THE POTENTIAL EFFECT OF
INTERNATIONAL INTERNET COMPANIES ON THE FUND'S
INVESTMENT STRATEGY:
"Due to the fund's disciplined approach to international
investing, the fund's exposure to Internet companies has
been limited. However, because the Internet has quickly
become a worldwide phenomenon, I have spent an increasing
amount of my time researching these companies, speaking
with different companies' management teams, and trying
to gain a full understanding of this industry. While many
Internet stock valuations are difficult to justify using
traditional techniques, a fund manager who disregards
these stocks can be at a significant competitive disadvantage
because of their favorable business prospects and potential
to outperform the broader market.
"As a result, some of the companies I've been keeping a
close eye on are Internet service providers, such as
Internet Initative and InterQ in Japan, Freeserve in the
United Kingdom, and Pacific Internet in Singapore. Internet
portals and search engine companies such as Yahoo!
Japan and China.Com also appear worth investigating.
Softbank, the dominant Internet venture capital business in
Japan, produced amazing performance during the period due
to positive investor sentiment and the impressive growth in
demand for Internet services. Internet software providers
such as Intershop and Brokat Infosystems in Germany and
Jacada in Israel are potential leaders in this group. Swedish
Internet consulting firms, such as Framtidsfabriken, Icon
Medialab and A-Com, also seem to be benefiting from the
huge demand in Internet business.
"Many of these companies exhibit growth prospects and
business characteristics similar to their U.S. counterparts.
In some cases, however, their valuations are not as pricey
given the relatively early stage of Internet usage and
development overseas. While these companies are likely to
remain a modest portion of the overall portfolio due to their
volatile and uncertain long-term outlooks, they should help
differentiate the fund's performance from time to time."
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 October 31, 1999, more than
$3.5 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
DIVERSIFIED INTERNATIONAL
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Canada 3.9%
Finland 3.6%
United States 9.2%
Row: 1, Col: 1, Value: 3.9
Row: 1, Col: 2, Value: 3.6
Row: 1, Col: 3, Value: 7.6
Row: 1, Col: 4, Value: 6.4
Row: 1, Col: 5, Value: 26.1
Row: 1, Col: 6, Value: 6.3
Row: 1, Col: 7, Value: 19.1
Row: 1, Col: 8, Value: 6.3
Row: 1, Col: 9, Value: 11.5
Row: 1, Col: 10, Value: 9.199999999999999
France 7.6%
United Kingdom 11.5%
Germany 6.4%
Switzerland 6.3%
Japan 26.1%
Other 19.1%
Netherlands 6.3%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 5.5%
Canada 4.4%
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
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%
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks and investment companies 91.9 95.4
Bonds 0.3 0.7
Short-term investments and 7.8 3.9
net other assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nokia AB sponsored ADR 1.9 0.9
(Finland, Communications
Equipment)
BCE, Inc. (Canada, Telephone 1.5 1.5
Services)
Kyocera Corp. (Japan, 1.3 0.2
Electronics)
Mannesmann AG (Reg.) 1.3 1.3
(Germany, Cellular)
ING Groep NV (Netherlands, 1.2 1.0
Insurance)
Eni Spa sponsored ADR 1.2 1.0
(Italy, Oil & Gas)
DDI Corp. (Japan, Telephone 1.2 0.1
Services)
Vodafone AirTouch PLC 1.2 0.6
sponsored ADR (United
Kingdom, Cellular)
BP Amoco PLC sponsored ADR 1.2 1.8
(United Kingdom, Oil & Gas)
Rhone-Poulenc SA Class A 1.1 0.4
(France, Drugs &
Pharmaceuticals)
13.1 7.5
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 16.0 21.2
TECHNOLOGY 13.4 8.7
UTILITIES 13.0 13.9
HEALTH 6.9 5.5
ENERGY 6.3 7.7
NONDURABLES 6.0 8.4
BASIC INDUSTRIES 5.7 5.1
DURABLES 5.4 4.2
INDUSTRIAL MACHINERY & 4.7 2.5
EQUIPMENT
MEDIA & LEISURE 3.9 4.3
</TABLE>
DIVERSIFIED INTERNATIONAL
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 88.3%
SHARES VALUE (NOTE 1)
AUSTRALIA - 2.2%
AAPT Ltd. (a) 2,500,000 $ 8,082,848
Australia & New Zealand 500,000 3,299,779
Banking Group Ltd.
Broken Hill Proprietary Co. 250,000 2,583,801
Ltd. (The)
Cable & Wireless Optus Ltd. 2,500,000 5,723,358
(a)
Commonwealth Bank of Australia 900,000 14,750,001
CSR Ltd. 2,000,000 4,489,408
Goodman Fielder Ltd. 1,000,000 924,665
Keycorp Ltd. 500,000 2,671,963
Macquarie Bank Ltd. 250,000 3,666,775
National Australia Bank Ltd. 200,000 3,086,468
News Corp. Ltd. sponsored ADR 550,000 15,159,375
(preferred ltd. vtg.)
Orbital Engine Co. Ltd. 50,000 200,000
sponsored ADR (a)
Pacific Dunlop Ltd. 500,000 704,659
Reinsurance Australia Corp. 419,766 230,209
Ltd.
Solution 6 Holdings Ltd. (a) 150,000 658,106
WMC Ltd. 3,000,000 12,875,163
79,106,578
AUSTRIA - 0.4%
Austria Tabak AG 100,000 4,509,698
RHI AG 203,000 5,717,663
RHI AG New 87,000 2,427,483
12,654,844
BELGIUM - 0.0%
Telinfo SA (strip VVPR) 11,111 117
BERMUDA - 0.4%
ESG Re Ltd. 200,000 1,550,000
Lasalle Re Holdings Ltd. 218,000 2,820,375
RenaissanceRe Holdings Ltd. 100,000 3,643,750
Sea Containers Ltd. Class A 150,000 4,387,500
Terra Nova (Bermuda) Holdings 100,000 3,156,250
Ltd. Class A
15,557,875
BRAZIL - 0.2%
Brahma Cervejaria (Compagnie):
warrants 4/30/03 (a) 188,529 19,356
(PN Reg.) 3,000,000 1,917,351
Telebras sponsored:
ADR 50,000 2,344
ADR (PFD) 50,000 3,893,750
5,832,801
CANADA - 3.7%
Alberta Energy Co. Ltd. 300,000 9,274,988
BCE, Inc. 900,000 54,182,238
Canadian Imperial Bank of 75,000 1,615,479
Commerce
Canadian Natural Resources 300,000 6,604,607
Ltd. (a)
Canadian Pacific Ltd. 200,000 4,674,866
SHARES VALUE (NOTE 1)
Celestica, Inc. (sub-vtg.) (a) 300,000 $ 16,511,517
Co-Steel, Inc 25,000 263,301
Falconbridge Ltd. 100,000 1,481,280
Gulf Canada Resources Ltd. (a) 2,500,000 10,022,423
Harrowston, Inc. Class A (a) 400,000 1,345,383
Marsulex, Inc. (a) 65,000 136,916
Newbridge Networks Corp. (a) 100,000 1,946,728
Noranda, Inc. 125,000 1,647,754
OCI Communications, Inc. 106,500 868,384
Class B (non-vtg.) (a)
Petro-Canada 200,000 2,860,637
Suncor Energy, Inc. 100,000 3,845,893
Thomson Corp. 150,000 4,382,687
TLC The Laser Center, Inc. (a) 100,000 1,742,882
Toronto Dominion Bank 450,000 10,319,698
133,727,661
CHINA - 0.0%
Huaneng Power International, 125,000 1,515,625
Inc. Series N sponsored ADR
Shandong Huaneng Power 25,000 103,125
Development Co. Ltd.
sponsored ADR
1,618,750
DENMARK - 1.0%
Falck AS 35,000 3,227,637
Novo-Nordisk AS Class B 150,000 18,046,393
Ratin AS Class B 34,395 3,586,625
Sydbank AS 100,000 4,469,036
Unidanmark AS Class A 100,000 7,803,079
37,132,770
FINLAND - 3.6%
JOT Automation Group Oyj 500,000 2,584,505
KCI (Konecranes International) 56,200 1,452,492
Kesko OY (a) 100,000 1,141,402
Merita Ltd. Series A 300,000 1,743,750
Metsa Tissue PLC 626,100 8,057,769
Metsa-Serla Oyj Class B Free 200,000 1,816,538
Shares
Metso Oyj (a) 300,000 3,402,053
Nokia AB sponsored ADR 600,000 69,337,482
Nokian Tyres Ltd. 100,000 3,375,680
Perlos Oyj (a) 50,000 822,822
Sampo Insurance Co. Ltd. 500,000 17,405,850
Stora Enso Oyj 300,000 3,955,875
Talentum OY Class B 60,000 784,846
UPM-Kymmene Corp. 400,000 12,658,800
128,539,864
FRANCE - 7.4%
Atos SA (a) 30,000 3,854,605
AXA SA de CV 100,000 14,146,209
Banque Nationale de Paris 72,500 6,386,101
Banque Nationale de Paris 32,500 192,677
warrants 7/1/02 (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - CONTINUED
Cap Gemini SA 40,000 $ 6,076,224
Christian Dior SA 115,577 20,751,155
CNP Assurances 250,000 7,384,300
Compagnie Generale de 100,000 1,075,000
Geophysique SA sponsored ADR
(a)
Credit Commercial de France 75,000 8,663,366
Dexia France 40,000 5,654,264
Eramet SA 100,000 5,105,716
Eurafrance (Societe) 28,000 16,954,353
Fi SYSTEM (a) 10,000 1,002,155
France Telecom SA 100,000 9,689,257
GrandVision SA 150,000 4,652,109
Groupe Danone 30,000 7,674,398
Havas Advertising SA 612 172,052
Isis SA 100,000 6,719,713
Lafarge SA 50,000 4,826,168
LVMH (Louis Vuitton Moet 36,000 10,899,227
Hennessy)
Natexis Banques Populaires 1,900 146,359
Pechiney SA Class A 65,000 3,647,844
Pernod-Ricard 100,000 6,772,458
Rhone-Poulenc SA Class A 700,000 38,849,999
Scor SA 175,000 8,768,856
Seita SA 50,000 2,795,485
Seita SA New 35,500 2,067,182
SR Teleperformance SA 5,000 690,960
Total Fina SA:
Class B 150,000 20,006,251
sponsored ADR 292,307 19,493,223
Unilog SA 4,515 312,271
Union Assurances Federales SA 70,000 9,038,383
Vivendi SA (a) 140,000 10,640,776
265,109,096
GERMANY - 6.2%
Aixtron AG 15,000 1,677,291
Allianz AG (Reg.) 30,000 9,117,501
BASF AG 400,000 17,827,810
Bayer AG 400,000 16,338,291
Buderus AG 275,000 4,656,065
Celanese AG (a) 30,000 474,705
Commerzbank AG 100,000 3,833,507
DaimlerChrysler AG (Reg.) 50,000 3,887,500
Deutsche Bank AG 100,010 7,171,927
Deutsche Telekom AG 250,000 11,564,341
DIS Deutscher Industrie 100,000 6,329,400
Service AG
EPCOS AG (a) 84,200 3,461,416
Fresenius Medical Care AG 400,000 9,325,000
sponsored ADR
GFK AG (a) 3,800 105,828
Heidelberger Druckmaschinen AG 150,000 8,861,160
Hoechst AG 300,000 13,288,575
Mannesmann AG (Reg.) 300,000 47,438,853
Metallgesellschaft AG 500,000 10,417,138
SHARES VALUE (NOTE 1)
MobilCom AG 85,000 $ 4,487,808
Primacom AG 75,000 3,718,523
RWE AG 175,000 7,033,546
Siemens AG 100,000 9,024,670
Stinnes AG (a) 45,340 870,491
Veba AG 300,000 16,295,040
Viag AG 78,000 1,435,824
Zapf Creation AG (a) 80,000 2,806,034
221,448,244
HONG KONG - 0.4%
Amway Asia Pacific Ltd. (a) 50,000 643,750
China Telecom (Hong Kong) 2,000,000 6,750,000
Ltd. (a)
Hutchison Whampoa Ltd. 300,000 3,012,358
Johnson Electric Holdings 800,000 4,325,438
Ltd.
14,731,546
IRELAND - 0.7%
Anglo-Irish Bank Corp. PLC 2,000,000 4,661,874
Bank of Ireland, Inc. 200,000 1,567,581
Elan Corp. PLC sponsored ADR 200,000 5,150,000
(a)
Hibernian Group PLC 225,300 1,461,664
Independent Newspapers PLC 400,000 2,122,459
(Ireland)
Irish Life & Permanent PLC 600,000 6,209,715
Ryanair Holdings PLC 125,000 5,156,250
sponsored ADR (a)
26,329,543
ISRAEL - 0.9%
AudioCodes Ltd. 50,000 3,025,000
Bezeq Israeli 600,000 2,448,431
Telecommunication Corp. Ltd.
(a)
ECI Telecom Ltd. 100,000 2,912,500
Internet Gold 150,000 1,125,000
Koor Industries Ltd. 175,000 2,953,125
sponsored ADR
Partner Communication Co. 216,400 3,408,300
Ltd. ADR
Teva Pharmaceutical 350,000 16,931,250
Industries Ltd. ADR
32,803,606
ITALY - 1.7%
Assicurazioni Generali Spa 100,000 3,233,269
Eni Spa sponsored ADR 750,000 44,062,500
Istituto Nazionale Delle 400,000 1,218,199
Assicurazioni Spa
SAES Getters Spa sponsored ADR 175,000 831,250
Seat Pagine Gialle Spa 1,000,000 1,428,335
Telecom Italia Mobile Spa 400,000 2,512,772
Telecom Italia Spa 400,000 3,460,000
Tiscali Spa (a)(e) 5,200 358,805
Unione Immobiliare Spa 6,000,000 3,091,912
60,197,042
JAPAN - 26.1%
Advantest Corp. 100,000 15,078,032
Amway Japan Ltd. sponsored ADR 400,000 1,950,000
Asahi Bank Ltd. 500,000 4,446,579
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Bank of Tokyo-Mitsubishi Ltd. 525,000 $ 8,662,500
ADR
Bank of Yokohama Ltd. 300,000 1,685,474
BellSystem24, Inc. 10,000 9,603,842
Canon, Inc. 250,000 7,082,833
Chiba Bank 150,000 821,128
Chiyoda Fire & Marine 350,000 1,327,731
Insurance Co. Ltd.
Chukyo Coca-Cola Bottling Co. 200,000 2,379,832
Ltd.
Coca-Cola West Japan Co. Ltd. 50,000 2,228,091
CSK Corp. 182,000 8,389,916
Dai Nippon Printing Co. Ltd. 200,000 3,651,381
Dai-Ichi Kangyo Bank Ltd. 300,000 4,120,048
Daiwa Securities Co. Ltd. 300,000 3,206,723
DDI Corp. 4,000 43,793,520
Diamond Computer Service Co. 80,000 2,097,479
Ltd.
FamilyMart Co. Ltd. 25,000 1,740,696
Fanuc Ltd. 100,000 7,779,112
Fuji Bank Ltd. 700,000 9,613,446
Fuji Coca-Cola Bottling Co. 300,000 5,762,305
Ltd.
Fuji Heavy Industries Ltd. 1,500,000 12,763,506
Fuji Photo Film Co. Ltd. 100,000 3,217,287
Fuji Soft ABC, Inc. 80,000 7,337,335
Fuji Television Network, Inc. 200 1,728,692
Fujisawa Pharmaceutical Co. 200,000 5,013,206
Ltd.
Fujitec Co. Ltd. 150,000 1,672,509
Fujitsu Business Systems Ltd. 80,000 3,841,537
Fujitsu Ltd. 500,000 15,078,032
Furukawa Electric Co. Ltd. 2,323,000 16,955,391
Hirose Electric Co. Ltd. 30,000 5,240,817
Hitachi Information Systems 150,000 5,791,117
Hitachi Ltd. 2,000,000 21,750,001
Hitachi Software Engineerng 50,000 4,605,042
Co. Ltd.
Hokkaido Coca-Cola Bottling 300,000 4,065,306
Co. Ltd.
Honda Motor Co. Ltd. 350,000 14,721,876
Hosiden Corp. 50,000 1,896,759
Hoya Corp. 100,000 7,202,881
Industrial Bank of Japan Ltd. 250,000 3,385,354
(The)
Ines Corp. 100,000 1,612,485
Internet Initiative Japan, 30,000 1,612,500
Inc. sponsored ADR
Isewan Terminal Service Co. 200,000 566,627
Ltd.
Ito-Yokado Co. Ltd. 200,000 16,019,208
Itoki Crebio Corp. 80,000 199,760
Jafco Co. Ltd. 150,000 16,854,743
Japan Telecom Co. Ltd. 200 6,876,351
Japan Tobacco, Inc. 500 5,522,209
Jichodo Co. Ltd. 88,000 612,725
Joyo Bank Ltd. 100,000 489,796
Kaneka Corp. 150,000 1,966,387
Kao Corp. 350,000 10,689,076
Kawagishi Bridge Works Co. 200,000 729,892
Ltd.
Keiiyu Co. Ltd. 44,100 385,412
Kinki Coca-Cola Bottling Co. 300,000 5,186,075
Ltd.
SHARES VALUE (NOTE 1)
Koa Denko Co. Ltd. 300,000 $ 5,214,886
Kojima Co. Ltd. 50,000 2,429,772
Kokusai Denshin Denwa 225,000 28,307,324
Kokusai Securities Co. Ltd. 300,000 5,183,194
Kubota Corp. 500,000 1,992,797
Kyocera Corp. 500,000 48,019,210
Levi Strauss Japan 525,000 5,344,538
Mabuchi Motor Co. Ltd. 100,000 14,789,917
Matsushita Communication 125,000 21,032,414
Industrial Co. Ltd.
Matsushita Electric 700,000 14,826,876
Industrial Co. Ltd.
Mikasa Coca Cola Bottling Co. 150,000 1,584,634
Minebea Co. Ltd. 200,000 2,698,680
Mitsubishi Electric Corp. 1,000,000 5,541,417
Mitsui Chemicals, Inc. 200,000 1,997,599
Mitsui Marine & Fire 300,000 1,990,876
Insurance Co. Ltd.
Morinaga & Co. Ltd. (a) 500,000 1,176,471
Murata Manufacturing Co. Ltd. 50,000 6,434,574
NEC Corp. 300,000 6,079,232
Nichicon Corp. 400,000 8,681,873
Nihon Unisys Ltd. 150,000 5,272,509
Nikko Securities Co. Ltd. 300,000 2,823,530
Nikon Corp. 250,000 5,954,382
Nintendo Co. Ltd. 130,000 20,662,666
Nippon Computer Systems Corp. 200,000 3,918,368
Nippon System Development Co. 100,000 8,547,419
Ltd.
Nippon Telegraph & Telephone 1,300 19,975,991
Corp.
Nippon Television Network 15,000 13,541,417
Corp.
Nitto Denko Corp. 250,000 9,891,957
Nomura Securities Co. Ltd. 1,000,000 16,528,212
NTT Mobile Communication 250 6,650,661
Network, Inc.
NTT Mobile Communication 500 13,301,321
Network, Inc. (e)
Oki Electric Industry Co. 200,000 1,286,915
Ltd. (a)
Omron Corp. 1,300,000 27,217,288
Oracle Corp. Japan 50,000 10,180,073
ORIX Corp. 100,000 13,445,379
Ricoh Co. Ltd. 350,000 5,717,647
Ricoh Elemex Corp. 60,000 554,334
Riken Vitamin Oil Co. Ltd. 150,000 2,016,807
Rohm Co. Ltd. 100,000 22,472,990
Sakura Bank Ltd. 500,000 4,302,521
Sanwa Bank Ltd. 400,000 5,958,224
Secom Co. Ltd. 70,000 7,515,967
Secom Co. Ltd. (RFD) 70,000 7,462,185
Senshukai Co. Ltd. 300,000 5,759,424
Sharp Corp. 1,100,000 17,536,615
Shikoku Coca-Cola Bottling 306,400 3,810,689
Co. Ltd.
Softbank Corp. 40,000 16,633,854
Sony Corp. 50,000 7,987,500
Star Micronics Co. Ltd. 200,000 2,833,133
Taisho Pharmaceutical Co. 50,000 2,084,034
Ltd.
Taito Corp. 4,070 4,143,290
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Takeda Chemical Industries 300,000 $ 17,258,104
Ltd.
TDK Corp. 35,000 3,431,933
Terumo Corp. 80,000 2,435,534
The Suruga Bank Ltd. 100,000 1,469,388
THK Co. Ltd. 150,000 4,912,365
Tokai Bank Ltd. 350,000 3,058,824
Tokio Marine & Fire Insurance 500,000 6,554,622
Co. Ltd. (The)
Tokyo Electron Ltd. 90,000 7,485,234
Tokyo Seimitsu Co. Ltd. 100,000 12,206,483
Toshiba Corp. 1,000,000 6,300,120
Tosoh Corp. 100,000 447,539
Toyo Communication Equipment 50,000 627,945
Co. Ltd.
Toyo Information System Co. 75,000 3,795,919
Ltd.
Toyoda Automatic Loom Works 500,000 9,747,900
Ltd.
Toyota Motor Corp. 400,000 13,867,948
Trans Cosmos, Inc. 25,000 3,181,273
Trend Micro, Inc. sponsored 25,000 493,750
ADR (a)
Yamaha Motor Co. Ltd. 500,000 4,072,029
Yaskawa Electric Corp. (a) 50,000 337,575
Yokogawa Electric Corp. 200,000 1,402,161
933,410,794
LUXEMBOURG - 0.6%
Espirito Santo Financial 300,000 4,800,000
Holding SA ADR
Millicom International 175,000 5,906,250
Cellular SA (a)
Quilmes Industrial SA 400,000 4,175,000
sponsored ADR
Societe Europeene de
Communication SA sponsored
ADR:
Class A (a) 40,000 610,000
Class B (a) 400,000 6,600,000
22,091,250
MEXICO - 0.3%
Elamex SA de CV (a)(d) 367,000 1,330,375
Grupo Radio Centro SA de CV 328,300 1,538,906
sponsored ADR
Industrias Penoles SA 1,000,000 3,155,428
Telefonos de Mexico SA 50,000 4,275,000
sponsored ADR representing
Class L shares
10,299,709
NETHERLANDS - 6.3%
ABN AMRO Holding NV 750,000 18,189,113
Aegon NV 50,000 4,628,374
Akzo Nobel NV 350,000 15,115,662
Core Laboratories NV (a) 100,000 1,837,500
De Telegraaf Holding NV 70,000 1,292,253
(Certificaten Van Aandelen)
Fortis Amev NV 100,000 3,452,688
Heineken Holding NV 300,000 10,918,215
ING Groep NV 750,000 44,369,094
Koninklijke Ahold NV 200,000 6,160,616
Koninklijke KPN NV 100,000 5,146,857
SHARES VALUE (NOTE 1)
Koninklijke Philips 200,000 $ 20,570,550
Electronics NV
Laurus NV 50,000 1,115,557
Norit NV 225,000 1,661,468
Pakhoed NV, Koninklijke 50,000 1,400,380
Samas Groep NV 30,250 411,648
Scala Business Solutions NV 200,000 717,332
(a)
Smit International NV 200,000 4,662,658
(Certificaten Van Aandelen)
STMicroelectronics NV 135,000 12,268,125
TNT Post Group NV 250,000 6,382,145
Unilever NV (NY shares) 400,000 26,675,000
United Pan-Europe 75,000 5,783,489
Communications NV
Van Melle NV 60,000 3,259,641
Vedior NV 400,000 6,751,360
Vendex KBB NV 550,000 16,100,411
Wolters Kluwer NV 250,000 8,378,543
227,248,679
NEW ZEALAND - 0.6%
CDL Hotels New Zealand Ltd. 2,000,000 345,236
Contact Energy Ltd. 1,000,000 1,741,411
Fletcher Challenge Ltd.:
Forestry Division (a) 10,000,000 4,112,370
Paper Division 5,000,000 3,274,665
Building Division 1,000,000 1,238,788
Sky City Ltd. 1,200,000 2,400,406
Telecom Corp. of New Zealand 1,500,000 6,046,707
Ltd.
Tranz Rail Holdings Ltd. 247,000 1,296,750
sponsored ADR
20,456,333
NORWAY - 0.5%
Bergensbanken ASA 38,700 583,610
Den Norske Bank ASA Class A 500,000 1,942,554
Free shares
Merkantildata (e) 150,000 1,274,801
NetCom ASA (a) 50,000 1,757,245
Norsk Hydro AS 100,000 4,000,128
Smedvig AS 26,000 259,178
Sparebanken NOR primary 300,000 6,632,800
shares certificates
16,450,316
PANAMA - 0.3%
Banco Latinamericano de 450,000 10,771,875
Exporaciones SA Class E
PAPUA NEW GUINEA - 0.1%
Oil Search Ltd. (a) 2,500,000 2,917,478
PORTUGAL - 0.1%
Electricidade de Portugal SA 100,000 1,559,142
Portugal Telecom SA 40,000 1,789,110
3,348,252
SINGAPORE - 0.4%
Chartered Semiconductor 19,200 637,200
Manufacturing Ltd. ADR
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SINGAPORE - CONTINUED
Datacraft Asia Ltd. 250,000 $ 1,150,000
Delgro Corp. Ltd. 700,000 2,422,510
Fraser & Neave Ltd. 1,500,000 6,409,871
Haw Par Corp. Ltd. 1,000,000 1,709,299
Times Publishing Ltd. 1,500,000 2,762,564
15,091,444
SOUTH AFRICA - 0.6%
Anglo American Platinum Corp. 200,000 5,760,312
Ltd.
Anglogold Ltd. 100,000 5,646,408
Gold Fields Ltd. 100,000 478,399
Gold Fields of South Africa 500,000 1,163,453
Ltd.
Impala Platinum Holdings Ltd. 200,000 6,925,393
Standard Bank Investment 500,000 1,708,567
Corp. Ltd.
21,682,532
SPAIN - 1.7%
Amadeus Global Travel 430,700 2,585,226
Distribution SA (a)
Banco Santander Central 1,700,000 17,318,750
Hispano SA ADR
Repsol SA sponsored ADR 450,000 9,225,000
Telefonica SA sponsored ADR 600,000 29,962,500
(a)
59,091,476
SWEDEN - 3.1%
A-Com AB (a) 99,400 1,151,620
Atlas Copco AB Series B 57,142 1,491,312
Atle AB 50,000 771,365
Avesta Sheffield AB (a) 500,000 2,372,024
Bure Investment AB 100,000 542,699
Electrolux AB 400,000 8,000,244
Ericsson (L.M.) Telefon AB 700,000 29,925,000
sponsored ADR Class B
ForeningsSparbanken AB Series 250,000 3,994,024
A
Information Highway AB (a) 150,000 4,957,468
Investor AB Class B Free 1,200,000 15,439,495
shares
Kinnevik Investment AB Series 500,000 9,939,327
B
Kungsleden AB (a) 100,000 774,414
Linne Group AB (a) 20,000 357,328
Mo Och Domsjoe AB Series B 100,000 2,951,309
Modern Times Group AB Series 200,000 6,488,003
B (a)
Net Insight AB (B shares) (a) 4,166 134,637
Netcom AB Series B (a) 125,000 5,205,951
Rottneros AB 100,000 109,150
SKF AB 150,000 3,054,971
Svedala Industri AB (Free 300,000 5,305,040
shares)
Swedish Match Co. 2,500,000 9,177,109
TV 4 AB Class A 25,220 344,479
112,486,969
SWITZERLAND - 6.1%
ABB Ltd. (Reg) (Switzerland) 100,000 10,092,708
(a)
Bank for International 712 4,531,633
Settlements
SHARES VALUE (NOTE 1)
Credit Suisse Group (Reg.) 80,000 $ 15,411,927
Disetronic Holding AG 1,805 6,883,424
Edipresse SA (Bearer) 35,000 14,428,957
Gretag Imaging Holding AG 118,000 14,974,029
(Reg.)
Julius Baer Holding AG 1,000 3,014,662
Mikron Holding AG 10,000 3,110,001
Mikron Holding AG warrants 7,425 39,495
12/15/99 (a)
Nestle SA (Reg.) 18,000 34,795,187
Novartis AG (Reg.) 14,000 20,987,573
Phonak Holding AG 1,000 1,545,138
PubliGroupe SA 25,000 18,377,277
Richemont Compagnie Financier 6,000 11,487,935
Class A Unit
Roche Holding AG 2,000 24,064,699
participation certificates
Swatch Group AG (The) (Reg.) 100,000 16,437,636
Swiss Reinsurance Co. (Reg.) 4,000 8,310,869
UBS AG 30,000 8,748,110
ZZ Holding AG 1,000 1,052,009
218,293,269
UNITED KINGDOM - 11.5%
Aggreko PLC 1,000,000 5,023,642
Allied Domecq PLC 1,500,000 8,435,772
Allied Zurich PLC 1,000,000 12,086,340
Antofagasta Holdings PLC 800,000 5,498,874
Barclays PLC 350,000 10,722,310
BICC PLC 1,500,000 2,688,594
Billiton PLC 700,000 3,027,340
Biocompatibles International 244,444 976,772
PLC (a)
Bodycote International PLC 300,000 1,223,434
BP Amoco PLC sponsored ADR 720,000 41,580,000
British American Tobacco PLC 600,000 3,976,159
British Telecommunications PLC 1,000,000 17,999,997
British Vita PLC Ord. 600,000 2,417,268
Capital Radio PLC 50,000 821,378
CGU PLC 750,000 10,933,205
CMG PLC 50,000 1,945,325
Diageo PLC 1,000,000 10,113,060
Dialog Semiconductor PLC 225,000 5,810,389
Ellis & Everard PLC 1,000,000 3,568,348
Energis PLC (a) 100,000 3,191,780
F.I. Group PLC 166,300 1,403,741
Future Networks Ltd. 400,000 4,676,674
Glaxo Wellcome PLC sponsored 200,000 11,975,000
ADR
Guinness Peat Group PLC 102,500 82,590
Hanson PLC 1,000,000 7,737,494
House of Fraser PLC 2,000,000 2,203,496
HSBC Holdings PLC (Reg.) 1,200,000 14,774,993
Invensys PLC 600,000 2,950,054
ITNET PLC 13,800 129,311
Johnson Matthey PLC 300,000 2,779,858
Kewill Systems PLC 200,000 2,234,569
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Kingston Communications 196,800 $ 1,465,747
(HULL) PLC (a)
Lloyds TSB Group PLC 650,000 8,994,457
Logica PLC 250,000 3,825,286
Lonmin PLC 300,000 3,019,118
Man (E D & F) Group PLC 500,000 2,910,588
MG PLC (a) 800,000 2,302,160
National Westminster Bank PLC 600,000 13,556,434
Norwich Union PLC 500,000 3,837,619
Nycomed Amersham PLC 1,200,000 7,311,002
Paterson Zochonis PLC Class A 300,000 1,331,964
(non-vtg.)
Professional Staff PLC 804,000 4,070,250
sponsored ADR (a)(d)
Prudential Corp. PLC 200,000 3,139,160
Reckitt & Colman PLC 400,000 4,857,558
Reed International PLC 500,000 2,918,810
Rio Tinto PLC (Reg.) 500,000 8,559,102
Royal & Sun Alliance 800,000 5,446,253
Insurance Group PLC
Severn Trent PLC 400,000 5,745,534
Shell Transport & Trading Co. 5,000,000 38,229,176
PLC (Reg.)
Smith & Nephew PLC 1,000,000 3,223,024
SmithKline Beecham PLC 250,000 16,000,000
sponsored ADR
South African Breweries PLC 600,000 5,252,624
Tomkins PLC 850,000 2,882,839
Unilever PLC ADR 300,000 11,156,250
United Biscuits Holdings PLC 150,000 529,086
Vodafone AirTouch PLC 900,000 43,143,750
sponsored ADR
Wetherspoon (JD) PLC 350,000 1,968,347
WPP Group PLC 300,000 3,258,379
411,922,284
UNITED STATES OF AMERICA - 1.2%
Akamai Technologies, Inc. 1,300 188,744
Autoliv, Inc. 175,000 5,589,063
Hollinger International, Inc. 408,800 4,241,300
Class A
JDS Uniphase Corp. (a) 25,426 4,242,964
Orthofix International NV (a) 635,000 8,890,000
Pharmacia & Upjohn, Inc. 200,000 10,787,500
Plug Power, Inc. 1,900 30,400
UnitedGlobalCom, Inc. (a) 85,000 7,395,000
41,364,971
TOTAL COMMON STOCKS 3,161,717,968
(Cost $2,530,777,139)
NONCONVERTIBLE PREFERRED
STOCKS - 0.1%
GERMANY - 0.1%
Marschollek Lautenschlaeger 18,000 3,807,134
und Partner AG (Cost
$3,038,675)
INVESTMENT COMPANIES - 3.5%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.0%
Argentina Fund, Inc. 175,000 $ 1,870,313
BRAZIL - 0.1%
Brazil Fund, Inc. 150,000 2,006,250
CANADA - 0.2%
Economic Investment Trust 61,673 3,708,677
Ltd.
United Corporations Ltd. 86,921 2,569,181
6,277,858
CHILE - 0.2%
Chile Fund, Inc. 420,000 4,226,250
Five Arrows Chile Investment 750,000 1,530,000
Trust Ltd.
Genesis Chile Fund 35,000 923,125
6,679,375
CHINA - 0.0%
China Fund, Inc. 100,000 993,750
EMERGING MARKETS - 0.6%
Asia Tigers Fund, Inc. 525,000 4,528,125
Central European Equity Fund, 175,000 2,187,500
Inc.
Emerging Markets 354,568 3,058,149
Infrastructure Fund, Inc.
Emerging Markets 250,000 2,687,500
Telecommunication Fund, Inc.
Southern Africa Fund, Inc. 17,076 199,576
Templeton Dragon Fund, Inc. 1,000,000 8,437,500
21,098,350
FRANCE - 0.2%
France Growth Fund, Inc. 440,000 6,132,500
GERMANY - 0.1%
New Germany Fund, Inc. (The) 252,800 3,049,400
HONG KONG - 0.1%
Asia Pacific Fund, Inc. 400,000 3,750,000
Greater China Fund, Inc. 90,000 686,250
4,436,250
INDIA - 0.3%
India Fund 450,000 5,568,750
India Growth Fund (a) 200,000 2,337,500
Jardine Fleming India Fund, 250,000 2,234,375
Inc. (a)
10,140,625
ISRAEL - 0.0%
First Israel Fund, Inc. 125,000 1,781,250
ITALY - 0.1%
Italy Fund, Inc. (The) 285,000 3,990,000
KOREA (SOUTH) - 0.2%
Korea Equity Fund (a) 200,000 862,500
Korea Fund, Inc. (The) (a) 375,000 4,781,250
Korean Investment Fund, Inc. 200,000 1,312,500
(a)
6,956,250
INVESTMENT COMPANIES -
CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - 0.4%
Mexico Fund, Inc. (The) 1,000,000 $ 14,312,500
MULTI-NATIONAL - 0.5%
Blackrock North American 450,000 4,359,375
Government Income Trust,
Inc.
MFS Government Markets Income 1,000,000 5,937,500
Trust
Morgan Stanley Asia-Pacific 600,000 5,812,500
Fund, Inc.
RCM Strategic Global 100,000 900,000
Government Fund, Inc.
Strategic Global Income Fund, 250,000 2,593,750
Inc.
19,603,125
PHILIPPINES - 0.0%
First Philippine Fund, Inc. 250,000 1,546,875
(a)
PORTUGAL - 0.1%
Portugal Fund, Inc. 158,900 1,956,456
SINGAPORE - 0.1%
Singapore Fund, Inc. 275,000 2,457,813
WEBS Index Fund, Inc. 99,000 804,375
3,262,188
SPAIN - 0.1%
Kemper Global Growth Fund of 145,747 3,027,173
Spain Class A
SWITZERLAND - 0.2%
Swiss Helvetia Fund, Inc. 400,000 5,725,000
THAILAND - 0.0%
Thai Euro Fund Ltd. 50,000 300,000
Thai Prime Fund (a) 200,000 860,000
1,160,000
TOTAL INVESTMENT COMPANIES 126,005,488
(Cost $121,136,018)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT
ISRAEL - 0.1%
Tecnomatix Tech Ltd. 5.25% - $ 5,857,000 4,400,071
8/15/04
UNITED STATES OF AMERICA - 0.2%
Nestle Holdings, Inc. 3% AAA 4,000,000 4,900,000
6/17/02
TOTAL CONVERTIBLE BONDS 9,300,071
(Cost $9,467,285)
</TABLE>
CASH EQUIVALENTS - 9.5%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 31,979,519 $ 31,979,519
5.26% (c)
Taxable Central Cash Fund, 306,268,706 306,268,706
5.21% (c)
TOTAL CASH EQUIVALENTS 338,248,225
(Cost $338,248,225)
TOTAL INVESTMENT PORTFOLIO - 3,639,078,886
101.7%
(Cost $3,002,667,342)
NET OTHER ASSETS - (1.7)% (59,492,869)
NET ASSETS - 100% $ 3,579,586,017
LEGEND
(a) Non-income producing
(b) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(c) The rate quoted is the annualized seven-day yield of the fund at
period end.
(d) Affiliated company
(e) 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 $14,934,927 or 0.4% of
net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $2,666,429,196 and $1,786,144,404, 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 $37,383 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $30,743,368. The fund
received
cash collateral of $31,979,519 which was invested in the Central Cash
Collateral Fund.
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Elamex SA de CV $ - $ - $ - $ 1,330,375
Professional Staff PLC
Sponsored ADR 1,830,231 - - 4,070,250
Professional Staff
PLC Sponsored ADR - 218,291 - -
TOTALS $ 1,830,231 $ 218,291 $ - $ 5,400,625
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $3,009,602,809. Net unrealized appreciation
aggregated $629,476,077, of which $728,473,696 related to appreciated
investment securities and $98,997,619 related to depreciated
investment securities.
The fund hereby designates approximately $67,262,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 5.7%
CASH EQUIVALENTS 9.5
CONSTRUCTION & REAL ESTATE 1.0
DURABLES 5.4
ENERGY 6.3
FINANCE 16.0
HEALTH 6.9
HOLDING COMPANIES 0.7
INDUSTRIAL MACHINERY & 4.7
EQUIPMENT
INVESTMENT COMPANIES 3.5
MEDIA & LEISURE 3.9
NONDURABLES 6.0
PRECIOUS METALS 0.8
RETAIL & WHOLESALE 1.5
SERVICES 2.6
TECHNOLOGY 13.4
TRANSPORTATION 0.8
UTILITIES 13.0
DIVERSIFIED INTERNATIONAL
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 3,639,078,886
value (cost $3,002,667,342)
- - See accompanying schedule
Foreign currency held at 327,377
value (cost $324,651)
Receivable for investments 38,694,568
sold
Receivable for fund shares 16,160,806
sold
Dividends receivable 6,311,688
Interest receivable 1,417,476
Other receivables 123,273
TOTAL ASSETS 3,702,114,074
LIABILITIES
Payable to custodian bank $ 282,056
Payable for investments 72,604,520
purchased
Payable for fund shares 14,036,197
redeemed
Accrued management fee 2,249,379
Other payables and accrued 1,376,386
expenses
Collateral on securities 31,979,519
loaned, at value
TOTAL LIABILITIES 122,528,057
NET ASSETS $ 3,579,586,017
Net Assets consist of:
Paid in capital $ 2,774,332,529
Undistributed net investment 28,734,752
income
Accumulated undistributed net 140,088,611
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 636,430,125
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 167,755,792 $ 3,579,586,017
shares outstanding
NET ASSET VALUE, offering $21.34
price and redemption price
per share ($3,579,586,017
(divided by) 167,755,792
shares)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 52,736,749
Dividends
Interest 8,049,893
Security lending 174,418
60,961,060
Less foreign taxes withheld (5,642,700)
TOTAL INCOME 55,318,360
EXPENSES
Management fee Basic fee $ 19,062,217
Performance adjustment 2,531,329
Transfer agent fees 7,147,989
Accounting and security 1,134,709
lending fees
Non-interested trustees' 8,242
compensation
Custodian fees and expenses 946,516
Registration fees 415,942
Audit 47,476
Legal 21,044
Reports to shareholders 187,637
Miscellaneous 5,433
Total expenses before 31,508,534
reductions
Expense reductions (719,086) 30,789,448
NET INVESTMENT INCOME 24,528,912
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 168,151,747
(including realized gain
(loss) of $102,901 on
sales of investments in
affiliated issuers)
Foreign currency transactions (315,228) 167,836,519
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 481,662,284
Assets and liabilities in (43,558) 481,618,726
foreign currencies
NET GAIN (LOSS) 649,455,245
NET INCREASE (DECREASE) IN $ 673,984,157
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 554,377
Expense reductions
Directed brokerage
arrangements
Custodian credits 13,034
Transfer agent credits 151,675
$ 719,086
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 24,528,912 $ 27,052,311
income
Net realized gain (loss) 167,836,519 74,228,503
Change in net unrealized 481,618,726 (350,064)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 673,984,157 100,930,750
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (26,414,796) (17,340,499)
From net investment income
From net realized gain (53,970,908) (37,418,194)
TOTAL DISTRIBUTIONS (80,385,704) (54,758,693)
Share transactions Net 2,707,434,686 1,769,510,488
proceeds from sales of shares
Reinvestment of distributions 75,587,611 53,307,005
Cost of shares redeemed (1,741,849,904) (1,438,501,445)
NET INCREASE (DECREASE) IN 1,041,172,393 384,316,048
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 1,634,770,846 430,488,105
IN NET ASSETS
NET ASSETS
Beginning of period 1,944,815,171 1,514,327,066
End of period (including $ 3,579,586,017 $ 1,944,815,171
undistributed net investment
income of $28,734,752 and
$23,593,280, respectively)
OTHER INFORMATION
Shares
Sold 142,411,837 100,969,939
Issued in reinvestment of 4,456,615 3,298,675
distributions
Redeemed (92,138,799) (82,605,831)
Net increase (decrease) 54,729,653 21,662,783
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 17.21 $ 16.57 $ 14.38 $ 12.73 $ 12.46
period
Income from Investment
Operations
Net investment income .18 B .26 B .24 B, C .15 .22
Net realized and unrealized 4.65 .98 2.46 2.13 .47
gain (loss)
Total from investment 4.83 1.24 2.70 2.28 .69
operations
Less Distributions
From net investment income (.23) (.19) (.15) (.22) (.03)
From net realized gain (.47) (.41) (.36) (.41) (.39)
Total distributions (.70) (.60) (.51) (.63) (.42)
Net asset value, end of period $ 21.34 $ 17.21 $ 16.57 $ 14.38 $ 12.73
TOTAL RETURN A 29.12% 7.72% 19.30% 18.66% 6.02%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,579,586 $ 1,944,815 $ 1,514,327 $ 665,492 $ 295,017
(000 omitted)
Ratio of expenses to average 1.21% 1.22% 1.25% 1.29% 1.13%
net assets
Ratio of expenses to average 1.18% D 1.19% D 1.23% D 1.27% D 1.12% D
net assets after expense
reductions
Ratio of net investment .94% 1.46% 1.49% 1.53% 1.55%
income to average net assets
Portfolio turnover rate 73% 95% 81% 94% 101%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
C INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.05 PER
SHARE.
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.
</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 OCTOBER 31, 1994 PAST 1 YEAR LIFE OF FUND
FIDELITY INTL VALUE 35.47% 82.22%
MSCI EAFE 23.29% 56.54%
International Funds Average 25.53% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 October 31, 1999,
the index included over 900 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 one year average represents
a peer group of 589 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 LIFE OF FUND
FIDELITY INTL VALUE 35.47% 12.75%
MSCI EAFE 23.29% 9.38%
International Funds Average 25.53% 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
1999/05/31 15283.30 13900.18
1999/06/30 16299.28 14444.52
1999/07/31 16845.50 14876.41
1999/08/31 17020.29 14933.23
1999/09/30 17348.02 15086.15
1999/10/29 18221.98 15653.69
IMATRL PRASUN SHR__CHT 19991031 19991111 112218 R00000000000063
$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 October 31, 1999, the
value of the investment would have grown to $18,222 - an 82.22%
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 $15,654 - a 56.54% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
(checkmark)
INTERNATIONAL VALUE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace, Portfolio Manager of Fidelity
International Value Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. Very well. For the 12 months that ended October 31, 1999, the fund
returned 35.47%. The Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index returned 23.29% during the same
period, while the international funds average - as tracked by Lipper
Inc. - returned 25.53%.
Q. CAN YOU HIGHLIGHT SOME OF THE FACTORS THAT HELPED THE FUND PERFORM
SO WELL?
A. Good stock picking in Japan and strong performance from several of
the fund's energy services positions helped. After enduring years of
sputtering capital markets and economic doldrums, the Japanese market
experienced a nice rebound during the period and the fund was able to
take advantage. While the fund was underweighted in Japan relative to
the Morgan Stanley index, good stock selection in that market helped.
In particular, positions in software and network servicing companies
produced great results. Chief among these were Softbank, a large
Internet venture capital firm, as well as Hitachi Information Systems
and Nippon Systems Development. The fund's positions in Japanese
telecommunications stocks also performed well, including DDI Corp. and
Kokusai Denshin Denwa. At the end of the period, just over 25% of the
fund's total assets were in Japan, compared to 17% six months ago.
Q. WHAT ABOUT THE FUND'S ENERGY SERVICES AND OIL-RELATED HOLDINGS?
A. The fund realized strong returns from several of its larger stakes
in this area, most notably Elf Aquitaine, Total, BP Amoco and Shell
Transport & Trading. Each of these stocks benefited from rebounding
oil prices during the period, as well as reduced production and
increased demand. That being said, it's important to note that my
strategy with oil stocks involves looking for sustainable earnings
growth rather than trying to forecast the direction of oil prices. I
added to the fund's position in Elf Aquitaine mainly because I was
drawn to the company's projected production growth rates. Total,
meanwhile, attracted my interest for its current production growth
rates. Interestingly, these large French oil companies merged with one
another during the period, a move that I feel will prove advantageous
to both down the road.
Q. IT SEEMS EVERYWHERE YOU GO TODAY, PEOPLE HAVE CELLULAR PHONES IN
THEIR HANDS. HAS THE SAME BEEN TRUE OVERSEAS AND HAS THE FUND BEEN
ABLE TO TAKE ADVANTAGE?
A. The power of wireless communications is indeed becoming more
global. One of the fund's strongest performers in this area was U.K.
telecommunications stock Vodafone AirTouch. Vodafone benefited from a
strong presence in its home market, and also was boosted after the
company announced it was merging its mobile business with Bell
Atlantic in the U.S. Another wireless-related position that fared well
was Finland's Nokia. This has been a longstanding stock within the
portfolio, and it continued to reflect many of the things I look for
in a promising investment: strong management execution, accelerating
market share and solid returns. Not all telecom stocks did well,
however. Telecom Italia was one of the fund's biggest disappointments,
as several company decisions seemed to go against the best interests
of shareholders.
Q. CAN YOU HIGHLIGHT SOME OTHER INVESTMENTS THAT DIDN'T PERFORM AS
WELL AS YOU WOULD HAVE LIKED?
A. Ah, there's always a few of those. One disappointment was Olivetti,
the Italian office equipment/telecommunications company. Over the
years, Olivetti has gradually moved more into the telecom industry.
During this particular period, the company made several questionable
investment decisions and the market seemed to punish them for it.
Switzerland-based Nestle, the world's largest foodmaker, was another
detractor. Depressed economies around the world diminished the
company's earnings power, particularly in the emerging markets, where
Nestle realizes close to 33% of its total sales. Nestle's earnings
also were hindered by the strengthening of the Swiss franc relative to
the dollar. The company generates around 50% of its sales in dollar or
dollar-related currencies.
Q. HOW DID THE FUND'S FINANCE-RELATED POSITIONS PERFORM?
A. Bank stocks contributed positively. Specifically, the fund's
investments in French banking giants Societe Generale and Banque
Nationale de Paris posted strong gains as the country's largest banks
sought to combine their operations and further strengthen their global
competitiveness. British banks Standard Chartered and HSBC Holdings
also fared well, as investors viewed Asian economic recoveries as
favorable for banks with high exposure to that region. Britain's
Lloyds TSB continued to produce healthy gains as well, as did the
fund's positions in Mexican banks such as Banacci.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT FEW MONTHS?
A. Consolidation and cross-border mergers have become the norm
throughout the world. With 11 countries in Europe operating under a
single currency - the euro - it has become much simpler to complete
such deals. Going forward, I think we'll see this trend continue, if
not accelerate. As big companies become bigger, many smaller firms may
continue to acquire assets just to keep up. Japanese companies have
followed in the footsteps of their U.S. counterparts in terms of
restructuring from within, and this bodes well for that market. As a
result, stock valuations may be influenced more by competitive trends
within various industries rather than by local market fluctuations.
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.
RICK MACE TALKS ABOUT THE GROWING WORLDWIDE
EMPHASIS ON SHAREHOLDER VALUE:
"Traditionally, European and Japanese companies have
focused on the needs of customers and employees, and in
doing so have paid scant attention to the needs of
shareholders. In recent years, however, company managers
have begun to look for ways to reward the people who buy the
firm's shares.
"The trend may be strongest in Europe, where companies
have been working to boost their share values by shedding
unprofitable product lines, becoming more efficient and
finding more profitable uses for their cash. This new emphasis
on shareholder value reflects a number of factors.
Increasingly, corporate managers at European firms have
accepted pay packages with stock options that tie their
compensation to the performance of their firm's shares. Even
in Japan, companies such as Sony and Matsushita Electric
have been making similar use of options to motivate
managers. In fact, we're seeing a revolution of sorts in the
executive suites of many of the world's major businesses.
Managers of companies like these are now beginning to care
about their firm's share price.
"At the same time, a wave of mergers, acquisitions and
other restructuring moves in Europe has served as a
warning to managers. The message is that weak or inefficient
companies with lagging stock prices could be absorbed by
stronger competitors. Changing government regulations
also have helped fuel the financial markets' transformation.
For example, until recently Japan and most European
countries prohibited firms from repurchasing shares directly
from stockholders. That deprived them of a tool that U.S.
companies have long used to return excess earnings and
cash to their investors. Now, however, such buybacks are
legal in Japan and in European markets such as the United
Kingdom, France and Sweden. While this practice is still
relatively unusual in Japan, some leading firms such as
Toyota have conducted large stock-buyback programs to make
more efficient use of their cash and enhance shareholder
value.
"These changes come as a welcome development to U.S.
investors who are accustomed to more shareholder friendly
corporate managements at home. Such trends can only serve
to advance the relative attractiveness of investing overseas."
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 October 31, 1999, more than
$535 million
MANAGER: Richard Mace, since inception;
manager, Fidelity Overseas Fund, since 1996;
Fidelity Global Balanced Fund, since 1996;
joined Fidelity in 1987
INTERNATIONAL VALUE
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 7.7%
Row: 1, Col: 1, Value: 12.2
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 3, Value: 25.5
Row: 1, Col: 4, Value: 2.7
Row: 1, Col: 5, Value: 5.7
Row: 1, Col: 6, Value: 15.4
Row: 1, Col: 7, Value: 3.1
Row: 1, Col: 8, Value: 4.4
Row: 1, Col: 9, Value: 15.8
Row: 1, Col: 10, Value: 7.7
France 12.2%
United Kingdom 15.8%
Germany 7.5%
Switzerland 4.4%
Spain 3.1%
Japan 25.5%
Other 15.4%
Netherlands 5.7%
Mexico 2.7%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 10.1%
France 16.0%
Row: 1, Col: 1, Value: 16.0
Row: 1, Col: 2, Value: 8.0
Row: 1, Col: 3, Value: 8.5
Row: 1, Col: 4, Value: 17.0
Row: 1, Col: 5, Value: 7.7
Row: 1, Col: 6, Value: 12.2
Row: 1, Col: 7, Value: 4.3
Row: 1, Col: 8, Value: 4.2
Row: 1, Col: 9, Value: 12.0
Row: 1, Col: 10, Value: 10.1
United Kingdom
12.0%
Germany 8.0%
Switzerland 4.2%
Italy 8.5%
Spain 4.3%
Other 12.2%
Japan 17.0%
Netherlands 7.7%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks, investment companies 90.5 93.9
and equity futures
Bonds 2.5 0.0
Short-term investments and 7.0 6.1
net other assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Total Fina SA Class B 4.0 6.2
(France, Oil & Gas)
Vodafone AirTouch PLC 3.4 0.0
sponsored ADR (United
Kingdom, Cellular)
DDI Corp. (Japan, Telephone 3.0 2.3
Services)
Telefonica SA (Spain, 2.5 3.5
Telephone Services)
Nokia AB (Finland, 2.5 3.1
Communications Equipment)
Kyocera Corp. (Japan, 2.5 1.3
Electronics)
Kokusai Denshin Denwa 2.4 0.0
(Japan, Telephone Services)
Mannesmann AG (Reg.) 2.4 4.4
(Germany, Cellular)
Nestle SA (Reg.) 2.4 2.9
(Switzerland, Foods)
British Telecommunications 2.0 0.0
PLC (United Kingdom,
Telephone Services)
27.1 13.1
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 20.4 21.4
UTILITIES 20.3 22.5
TECHNOLOGY 8.8 7.4
ENERGY 6.4 8.2
NONDURABLES 5.1 5.2
HEALTH 4.6 6.1
BASIC INDUSTRIES 4.5 4.1
RETAIL & WHOLESALE 3.5 1.9
INDUSTRIAL MACHINERY & 2.9 1.4
EQUIPMENT
SERVICES 2.7 2.0
INTERNATIONAL VALUE
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 84.2%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.9%
Australia & New Zealand 406,000 $ 2,679,420
Banking Group Ltd.
News Corp. Ltd. sponsored ADR 69,600 2,061,900
4,741,320
CANADA - 0.9%
Alcan Aluminium Ltd. 60,400 1,980,227
Inco Ltd. 93,600 1,882,558
Toronto Dominion Bank 46,000 1,054,902
4,917,687
FINLAND - 2.5%
Nokia AB 116,800 13,497,700
FRANCE - 11.5%
AXA SA de CV 44,600 6,309,209
Banque Nationale de Paris 54,800 4,827,011
Cap Gemini SA 5,800 881,052
Compagnie Generale de 200,000 2,150,000
Geophysique SA sponsored ADR
(a)
France Telecom SA 90,000 8,720,331
Groupe Danone 11,200 2,865,108
Rhodia SA 65,900 1,275,654
Sanofi-Synthelabo SA (a) 124,800 5,522,781
Societe Generale, France 10,000 2,183,643
Class A
Suez Lyonnaise des Eaux 11,100 1,797,391
Total Fina SA Class B 158,892 21,192,220
Vivendi SA (a) 51,130 3,886,164
61,610,564
GERMANY - 6.4%
Allianz AG (Reg.) 13,800 4,194,050
BASF AG 60,800 2,709,827
Bayer AG 47,700 1,948,341
Deutsche Bank AG 74,100 5,313,867
Deutsche Telekom AG 22,400 1,036,165
EPCOS AG (a) 12,500 513,868
Kali Und Salz Beteiligungs AG 197,000 2,822,132
Mannesmann AG (Reg.) 82,100 12,982,433
Munich Reinsurance AG (Reg.) 5,200 1,188,704
Veba AG 30,300 1,645,799
34,355,186
HONG KONG - 1.9%
China Telecom (Hong Kong) 616,000 2,079,000
Ltd. (a)
Dah Sing Financial Holdings 802,000 3,200,566
Ltd.
Dao Heng Bank Group Ltd. 464,000 2,132,441
Wing Hang Bank Ltd. 801,000 2,613,974
10,025,981
SHARES VALUE (NOTE 1)
IRELAND - 1.2%
Bank of Ireland, Inc. 786,170 $ 6,161,927
Esat Telecom Group PLC 5,900 264,025
sponsored ADR (a)
6,425,952
ITALY - 2.1%
Assicurazioni Generali Spa 66,700 2,156,590
Banca Commerciale Italiana Spa 316,200 1,915,632
Eni Spa sponsored ADR 338,100 1,994,096
Olivetti & Co. Spa 520,700 1,006,842
San Paolo-IMI Spa 65,300 862,578
Telecom Italia Spa 372,000 3,217,800
11,153,538
JAPAN - 22.8%
Aiful Corp. 11,000 1,711,405
CSK Corp. 26,900 1,240,048
Dai Nippon Printing Co. Ltd. 60,000 1,095,414
Daiwa Securities Co. Ltd. 418,000 4,468,034
DDI Corp. 1,467 16,061,273
Furukawa Electric Co. Ltd. 536,000 3,912,221
Heiwa Corp. 33,000 906,411
Hitachi Information Systems 12,000 463,289
Honda Motor Co. Ltd. 59,000 2,481,688
Hoya Corp. 29,000 2,088,836
Ito-Yokado Co. Ltd. 120,000 9,611,525
Jafco Co. Ltd. 13,000 1,460,744
Kirin Brewery Co. Ltd. 196,000 2,247,530
Kokusai Denshin Denwa 103,600 13,033,950
Kyocera Corp. 139,000 13,349,340
Matsushita Electric 144,000 3,050,100
Industrial Co. Ltd.
Mitsumi Electric Co. Ltd. 34,000 911,020
Nichicon Corp. 239,000 5,187,419
Nikko Securities Co. Ltd. 116,000 1,091,765
Nintendo Co. Ltd. 17,000 2,702,041
Nippon System Development Co. 6,600 564,130
Ltd.
Nomura Securities Co. Ltd. 415,000 6,859,208
Omron Corp. 326,000 6,825,258
Sakura Bank Ltd. 628,000 5,403,967
Sankyo Co. Ltd. (Gunma) 13,700 1,085,474
Softbank Corp. 13,500 5,613,926
Takeda Chemical Industries 80,000 4,602,161
Ltd.
Yokogawa Electric Corp. 480,000 3,365,186
Yoshitomi Pharmaceutical 71,000 968,259
Industries Ltd.
122,361,622
KOREA (SOUTH) - 0.4%
Samsung Electronics Co. Ltd. 13,200 2,200,918
LUXEMBOURG - 0.2%
Stolt Comex Seaway SA (a) 120,000 1,282,500
MEXICO - 2.7%
Banacci SA de CV Class O (a) 2,919,000 7,325,998
Cifra SA de CV Series V (a) 650,000 1,022,130
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - CONTINUED
Empresas ICA Sociedad 10,600 $ 27,163
Controladora SA de CV
sponsored ADR
Grupo Financiero Bancomer SA 4,400,000 1,159,281
de CV Series A
Telefonos de Mexico SA 23,600 2,017,800
sponsored ADR representing
Class L shares
Tubos de Acero de Mexico SA 244,700 2,676,406
sponsored ADR
14,228,778
NETHERLANDS - 5.7%
Akzo Nobel NV 114,800 4,957,937
Beter Bed Holding NV 51,100 1,466,227
Fortis Amev NV 126,400 4,364,197
ING Groep NV 104,269 6,168,428
Koninklijke Philips 30,232 3,109,444
Electronics NV
Numico NV 25,300 1,034,198
Samas Groep NV 92,500 1,258,759
Vedior NV 88,400 1,492,051
Vendex KBB NV 203,200 5,948,370
Vnu NV 18,500 627,428
30,427,039
NORWAY - 0.3%
Bergesen d.y. AS:
(B shares) 43,400 671,127
Class A 66,700 1,078,316
1,749,443
SINGAPORE - 0.7%
Chartered Semiconductor 32,900 1,091,869
Manufacturing Ltd. ADR
DBS Group Holdings Ltd. 236,089 2,671,365
3,763,234
SPAIN - 3.1%
Banco Santander Central 303,800 3,163,124
Hispano SA
Telefonica SA (a) 830,100 13,695,518
16,858,642
SWITZERLAND - 4.4%
ABB Ltd. (Reg) (Switzerland) 20,800 2,099,283
(a)
Credit Suisse Group (Reg.) 18,300 3,525,478
Nestle SA (Reg.) 6,700 12,951,542
Roche Holding AG 184 2,213,952
participation certificates
UBS AG 8,700 2,536,952
23,327,207
SHARES VALUE (NOTE 1)
TAIWAN - 1.1%
Ritek Corp. 812,000 $ 5,324,590
Taiwan Semiconductor 173,420 770,877
Manufacturing Co. Ltd.
6,095,467
UNITED KINGDOM - 15.1%
Allied Zurich PLC 148,350 1,793,009
Arcadia Group PLC 756,500 1,906,413
BP Amoco PLC 214,800 2,067,450
British Telecommunications PLC 607,700 10,938,598
Caradon PLC 1,653,200 3,856,495
Computacenter PLC 74,400 776,880
Glaxo Wellcome PLC 77,800 2,329,138
Lloyds TSB Group PLC 296,500 4,102,856
MFI Furniture Group PLC 2,644,200 1,771,860
Morgan Crucible Co. PLC 24,100 96,301
Rentokil Initial PLC 2,696,400 8,989,854
Reuters Group PLC 75,200 699,291
Royal & Sun Alliance 195,181 1,328,756
Insurance Group PLC
Shell Transport & Trading Co. 834,600 6,381,214
PLC (Reg.)
SmithKline Beecham PLC 569,100 7,284,476
Standard Chartered PLC 151,300 2,123,489
Thorntons PLC 147,118 472,955
Unigate PLC 384,800 1,784,398
Unilever PLC 462,321 4,298,142
Vodafone AirTouch PLC 377,000 18,072,438
sponsored ADR
81,074,013
UNITED STATES OF AMERICA - 0.3%
OMI Corp. (a) 210,500 394,688
Overseas Shipholding Group, 76,900 990,088
Inc.
1,384,776
TOTAL COMMON STOCKS 451,481,567
(Cost $364,382,930)
NONCONVERTIBLE PREFERRED
STOCKS - 0.8%
GERMANY - 0.4%
Wella AG 75,400 2,107,796
ITALY - 0.4%
Telecom Italia Spa Risp 390,800 1,931,414
TOTAL NONCONVERTIBLE 4,039,210
PREFERRED STOCKS
(Cost $4,037,959)
INVESTMENT COMPANIES - 2.8%
EMERGING MARKETS - 1.6%
Asia Tigers Fund, Inc. 434,700 3,749,288
Templeton Dragon Fund, Inc. 554,100 4,675,219
8,424,507
INVESTMENT COMPANIES -
CONTINUED
SHARES VALUE (NOTE 1)
HONG KONG - 0.3%
Asia Pacific Fund, Inc. 203,500 $ 1,907,813
INDIA - 0.3%
India Fund 113,800 1,408,275
MULTI-NATIONAL - 0.6%
European Warrant Fund, Inc. 56,500 872,219
Morgan Stanley Asia-Pacific 218,100 2,112,844
Fund, Inc.
2,985,063
TOTAL INVESTMENT COMPANIES 14,725,658
(Cost $15,259,691)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS (E) -
2.9%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (C)
FRANCE - 0.7%
French Government OAT 5.5% Aaa EUR 3,500,000 3,827,283
4/25/04
GERMANY - 0.7%
German Federal Republic 3.75% Aaa EUR 3,800,000 3,907,202
8/26/03
UNITED KINGDOM - 0.7%
United Kingdom, Great Britain Aaa GBP 2,300,000 3,891,045
& Northern Ireland 6.75%
11/26/04
UNITED STATES OF AMERICA - 0.8%
U.S. Treasury Bills, yield at - 2,000,000 1,984,791
date of purchase 4.71%
12/30/99 (d)
U.S. Treasury Bond stripped Aaa 11,900,000 2,113,321
principal 0% 11/15/27
4,098,112
TOTAL GOVERNMENT OBLIGATIONS 15,723,642
(Cost $15,790,870)
</TABLE>
CASH EQUIVALENTS - 15.9%
SHARES
Central Cash Collateral Fund, 8,086,061 8,086,061
5.26% (b)
Taxable Central Cash Fund, 77,295,377 77,295,377
5.21% (b)
TOTAL CASH EQUIVALENTS 85,381,438
(Cost $85,381,438)
TOTAL INVESTMENT PORTFOLIO - 571,351,515
106.6%
(Cost $484,852,888)
NET OTHER ASSETS - (6.6)% (35,411,011)
NET ASSETS - 100% $ 535,940,504
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/LOSS
PURCHASED
97 Nikkei 225 Index Contracts Dec. 1999 $ 8,734,850 $ 175,618
(Japan)
38 Topix Index Contracts Dec. 1999 5,429,903 279,731
(Japan)
$ 14,164,753 $ 455,349
</TABLE>
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS -
2.7%.
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
GBP - British pound
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Principal amount is stated in United States dollars unless
otherwise noted.
(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 $1,885,560.
(e) 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 $697,935,029 and $736,046,476, respectively, of which U.S.
government and government agency obligations aggregated $1,999,054 and
$0, respectively.
The market value of futures contracts opened and closed during the
period amounted to $75,919,383 and $64,892,380, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $7,649,743. The fund
received cash collateral of $8,086,061 which was invested in the
Central Cash Collateral Fund.
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 5.2%.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $485,923,226. Net unrealized appreciation
aggregated $85,428,289, of which $104,890,562 related to appreciated
investment securities and $19,462,273 related to depreciated
investment securities.
The fund hereby designates approximately $14,258,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 4.5%
CASH EQUIVALENTS 15.9
CONSTRUCTION & REAL ESTATE 0.9
DURABLES 2.3
ENERGY 6.4
FINANCE 20.4
GOVERNMENT OBLIGATIONS 2.9
HEALTH 4.6
INDUSTRIAL MACHINERY & 2.9
EQUIPMENT
INVESTMENT COMPANIES 2.8
MEDIA & LEISURE 2.0
NONDURABLES 5.1
RETAIL & WHOLESALE 3.5
SERVICES 2.7
TECHNOLOGY 8.8
TRANSPORTATION 0.6
UTILITIES 20.3
INTERNATIONAL VALUE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 571,351,515
value (cost $484,852,888) -
See accompanying schedule
Cash 1,428,817
Foreign currency held at 4,066,026
value (cost $4,031,295)
Receivable for investments 3,746,022
sold
Receivable for fund shares 2,775,515
sold
Dividends receivable 1,048,191
Interest receivable 564,864
Receivable for daily 306,044
variation on futures
contracts
Other receivables 14,305
TOTAL ASSETS 585,301,299
LIABILITIES
Payable for investments $ 35,235,688
purchased
Payable for fund shares 5,463,984
redeemed
Accrued management fee 373,649
Other payables and accrued 201,413
expenses
Collateral on securities 8,086,061
loaned, at value
TOTAL LIABILITIES 49,360,795
NET ASSETS $ 535,940,504
Net Assets consist of:
Paid in capital $ 402,795,412
Undistributed net investment 3,735,473
income
Accumulated undistributed net 42,421,775
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 86,987,844
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 32,123,131 $ 535,940,504
shares outstanding
NET ASSET VALUE, offering $16.68
price and redemption price
per share ($535,940,504
(divided by) 32,123,131
shares)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 7,128,600
Dividends
Interest 1,988,063
Security lending 5,888
9,122,551
Less foreign taxes withheld (771,185)
TOTAL INCOME 8,351,366
EXPENSES
Management fee Basic fee $ 3,238,254
Performance adjustment 443,140
Transfer agent fees 1,061,162
Accounting and security 259,436
lending fees
Non-interested trustees' 1,329
compensation
Custodian fees and expenses 240,642
Registration fees 46,301
Audit 41,825
Legal 1,758
Interest 1,067
Miscellaneous 3,024
Total expenses before 5,337,938
reductions
Expense reductions (300,513) 5,037,425
NET INVESTMENT INCOME 3,313,941
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 63,247,838
Foreign currency transactions (106,444)
Futures contracts 2,334,563 65,475,957
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 67,750,260
Assets and liabilities in (7,996)
foreign currencies
Futures contracts 455,349 68,197,613
NET GAIN (LOSS) 133,673,570
NET INCREASE (DECREASE) IN $ 136,987,511
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 299,070
Expense Reductions
Directed brokerage
arrangements
Transfer agent credits 1,443
$ 300,513
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 3,313,941 $ 3,233,365
income
Net realized gain (loss) 65,475,957 (19,725,721)
Change in net unrealized 68,197,613 7,859,169
appreciation (depreciation)
NET INCREASE (DECREASE) IN 136,987,511 (8,633,187)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,595,857) (1,833,828)
From net investment income
From net realized gain - (8,557,828)
TOTAL DISTRIBUTIONS (1,595,857) (10,391,656)
Share transactions Net 690,679,399 689,788,871
proceeds from sales of shares
Reinvestment of distributions 1,458,882 9,766,146
Cost of shares redeemed (700,344,477) (674,521,648)
NET INCREASE (DECREASE) IN (8,206,196) 25,033,369
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 127,185,458 6,008,526
IN NET ASSETS
NET ASSETS
Beginning of period 408,755,046 402,746,520
End of period (including $ 535,940,504 $ 408,755,046
undistributed net investment
income of $3,735,473 and
$3,827,529, respectively)
OTHER INFORMATION
Shares
Sold 47,825,870 53,050,043
Issued in reinvestment of 112,655 821,375
distributions
Redeemed (48,889,094) (53,089,578)
Net increase (decrease) (950,569) 781,840
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.36 $ 12.47 $ 11.33 $ 10.63 $ 10.00
period
Income from Investment
Operations
Net investment income .11 B .09 B .13 B .16 C .11 B
Net realized and unrealized 4.26 .14 D 1.33 .85 .52
gain (loss)
Total from investment 4.37 .23 1.46 1.01 .63
operations
Less Distributions
From net investment income (.05) (.06) (.10) (.01) -
From net realized gain - (.28) (.22) (.30) -
Total distributions (.05) (.34) (.32) (.31) -
Net asset value, end of period $ 16.68 $ 12.36 $ 12.47 $ 11.33 $ 10.63
TOTAL RETURN A 35.47% 1.95% 13.20% 9.64% 6.30%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 535,941 $ 408,755 $ 402,747 $ 270,865 $ 56,828
(000 omitted)
Ratio of expenses to average 1.21% 1.23% 1.30% 1.28% 1.72%
net assets
Ratio of expenses to average 1.14% F 1.21% F 1.28% F 1.26% F 1.72%
net assets after expense
reductions
Ratio of net investment .75% .71% 1.03% 1.74% 1.08%
income to average net assets
Portfolio turnover rate 173% 137% 86% 71% 109%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
C INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.04 PER
SHARE.
D 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.
E FOR THE PERIOD NOVEMBER 1,
1994 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1995.
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>
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
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY OVERSEAS 28.77% 75.04% 163.40%
MSCI EAFE 23.29% 56.31% 91.41%
International Funds Average 25.53% 58.85% 152.13%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
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 October 31, 1999 the index included
over 900 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 one year average represents a peer group of 589 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 OVERSEAS 28.77% 11.85% 10.17%
MSCI EAFE 23.29% 9.35% 6.71%
International Funds Average 25.53% 9.50% 9.42%
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
1989/10/31 10000.00 10000.00
1989/11/30 10566.54 10502.70
1989/12/31 11248.74 10890.22
1990/01/31 10993.45 10485.01
1990/02/28 10766.08 9753.21
1990/03/31 11121.09 8737.16
1990/04/30 11093.17 8667.82
1990/05/31 11847.07 9656.83
1990/06/30 12058.49 9571.78
1990/07/31 12652.83 9706.60
1990/08/31 11252.72 8764.01
1990/09/30 10004.20 7542.62
1990/10/31 10957.55 8717.90
1990/11/30 10594.55 8203.65
1990/12/31 10506.05 8336.54
1991/01/31 10739.14 8606.19
1991/02/28 11129.04 9528.76
1991/03/31 10764.57 8956.73
1991/04/30 10917.14 9044.68
1991/05/31 10938.33 9139.06
1991/06/30 10251.77 8467.51
1991/07/31 10811.18 8883.54
1991/08/31 10891.71 8703.13
1991/09/30 11370.60 9193.63
1991/10/31 11408.75 9323.96
1991/11/30 10997.66 8888.67
1991/12/31 11410.98 9347.71
1992/01/31 11541.98 9148.05
1992/02/29 11302.56 8820.62
1992/03/31 11067.65 8238.32
1992/04/30 11740.75 8277.48
1992/05/31 12246.70 8831.54
1992/06/30 11957.58 8412.63
1992/07/31 11198.66 8197.33
1992/08/31 11103.79 8711.47
1992/09/30 10643.02 8539.45
1992/10/31 9920.23 8091.51
1992/11/30 9870.54 8167.66
1992/12/31 10103.77 8209.90
1993/01/31 10398.25 8208.89
1993/02/28 10611.49 8456.86
1993/03/31 11332.47 9194.00
1993/04/30 12119.44 10066.54
1993/05/31 12398.69 10279.14
1993/06/30 12104.21 10118.77
1993/07/31 12657.63 10472.97
1993/08/31 13373.53 11038.33
1993/09/30 13256.75 10789.87
1993/10/31 13789.86 11122.39
1993/11/30 13160.28 10150.17
1993/12/31 14150.74 10883.09
1994/01/31 15156.72 11803.20
1994/02/28 14872.98 11770.51
1994/03/31 14444.79 11263.54
1994/04/30 14929.73 11741.44
1994/05/31 14738.85 11674.03
1994/06/30 14542.81 11839.01
1994/07/31 14950.36 11952.86
1994/08/31 15167.03 12235.85
1994/09/30 14749.17 11850.48
1994/10/31 15048.38 12245.10
1994/11/30 14429.32 11656.59
1994/12/31 14330.57 11729.58
1995/01/31 13716.40 11278.99
1995/02/28 13726.90 11246.62
1995/03/31 14136.35 11948.08
1995/04/30 14540.54 12397.43
1995/05/31 14745.27 12249.65
1995/06/30 14855.50 12034.83
1995/07/31 15522.16 12784.07
1995/08/31 15091.72 12296.40
1995/09/30 15301.69 12536.56
1995/10/31 14997.23 12199.57
1995/11/30 15165.21 12539.01
1995/12/31 15628.24 13044.21
1996/01/31 15923.92 13097.76
1996/02/29 15956.18 13142.04
1996/03/31 16192.72 13421.12
1996/04/30 16633.56 13811.32
1996/05/31 16638.94 13557.16
1996/06/30 16762.59 13633.47
1996/07/31 16294.87 13235.00
1996/08/31 16413.14 13264.00
1996/09/30 16886.24 13616.36
1996/10/31 16708.83 13477.03
1996/11/30 17590.50 14013.26
1996/12/31 17675.26 13832.99
1997/01/31 17686.72 13351.61
1997/02/28 18082.18 13573.24
1997/03/31 18242.66 13624.82
1997/04/30 18380.21 13699.76
1997/05/31 19503.54 14593.94
1997/06/30 20517.98 15400.98
1997/07/31 21200.00 15652.33
1997/08/31 19623.90 14485.45
1997/09/30 21028.06 15299.10
1997/10/31 19555.12 14127.04
1997/11/30 19463.42 13985.77
1997/12/31 19605.38 14110.38
1998/01/31 20231.99 14758.33
1998/02/28 21370.71 15708.03
1998/03/31 22346.76 16194.66
1998/04/30 22973.37 16325.51
1998/05/31 22937.22 16249.27
1998/06/30 22714.29 16375.21
1998/07/31 22907.09 16544.20
1998/08/31 18773.93 14497.52
1998/09/30 18761.88 14056.21
1998/10/31 20454.91 15524.66
1998/11/30 21653.89 16323.09
1998/12/31 22122.31 16970.14
1999/01/31 22435.89 16923.13
1999/02/28 21827.18 16522.90
1999/03/31 22743.31 17215.87
1999/04/30 23745.52 17916.21
1999/05/31 22669.53 16996.58
1999/06/30 23905.38 17662.17
1999/07/31 24600.16 18190.27
1999/08/31 24944.47 18259.76
1999/09/30 25276.49 18446.74
1999/10/29 26340.18 19140.70
IMATRL PRASUN SHR__CHT 19991031 19991111 150552 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Overseas Fund on October 31, 1989. As the chart
shows, by October 31, 1999, the value of the investment would have
grown to $26,340 - a 163.40% 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 $19,141 -
a 91.41% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
(checkmark)
OVERSEAS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace,
Portfolio Manager of Fidelity Overseas Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. Pretty well. For the 12 months that ended October 31, 1999, the
fund returned 28.77%. The Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index returned 23.29% during the same
period, while the international funds average - as tracked by Lipper
Inc. - returned 25.53%.
Q. WHAT KEY FACTORS HELPED THE FUND BEAT BOTH ITS INDEX AND PEER GROUP
DURING THE PERIOD?
A. Most of the fund's outperformance can be traced to a relatively
strong commitment to the high-performing Japanese market, as well as
good individual stock picking in that market. Though the fund was
moderately underweighted in Japanese investments relative to the
index, its weighting was larger than that of the average of the Lipper
peer group. The fund also received a healthy performance boost from
its energy services positions.
Q. WHAT TRIGGERED THE JAPANESE MARKET'S REBOUND DURING THE PERIOD AND
HOW DID THE FUND TAKE ADVANTAGE?
A. The Japanese market became somewhat more "Americanized" over the
past year. The government has allowed some barriers to come down to
create more of a free-enterprise market system, and Japanese
corporations - following in the footsteps of their U.S. counterparts -
have begun to implement share buyback programs, cut unprofitable
businesses and consider effective restructuring programs. Japanese
investors, in fact, can now buy mutual funds. All of this has
translated into a more confident market and economy, and the fund took
advantage. Several of the fund's Japanese telephone utilities
positions fared well, particularly DDI Corp., which was among the
fund's top-10 holdings through much of the period. Japanese non-bank
financial positions also performed well, including brokerage-related
holdings such as Nomura Securities and Nikko Securities.
Q. CAN YOU ELABORATE ON THE ENERGY SERVICES POSITIONS YOU MENTIONED?
A. The fund's best performers here were the two large French
companies, Elf Aquitaine and Total. Both suited my philosophy that
it's better to look for energy stocks with good long-term
characteristics rather than to focus on trying to guess the direction
of oil prices. In particular, I was attracted to Elf Aquitaine's
growing oil reserve base, which should kick into production growth in
the year 2001. Total - the fund's largest holding at the end of the
period - intrigued me because of its rapid 10% production growth rate.
I looked at both stocks as a package: One had current production
growth, while the other had future production growth. In addition,
both companies were engaged in a fierce takeover battle during the
period, when each company made takeover bids for the other.
Eventually, the issue was resolved and a merger was approved. Overall,
I think the merger - which makes Total the fourth-largest oil company
in the world - will be beneficial for both companies. Elf Aquitane is
no longer a publicly traded stock.
Q. THE FUND ALSO GOT GOOD RESULTS FROM SEVERAL OF ITS
TELECOMMUNICATIONS-RELATED STOCKS, MOST NOTABLY FINLAND'S NOKIA AND
THE U.K.'S VODAFONE AIRTOUCH . . .
A. Both companies were beneficiaries of the worldwide wireless
communications boom. Nokia - a longstanding position in the fund -
displayed many of the characteristics I look for in a good stock. The
company showed strong management execution during the period and
generated strong financial returns in the process. Nokia was a classic
example of the maxim "share price follows earnings." Vodafone
Airtouch, meanwhile, benefited from its strong presence in the
burgeoning U.K. market as well as its announcement that it will be
merging its mobile communications business with U.S.-based Bell
Atlantic. The Vodafone-Bell Atlantic partnership is but another
example of the cross-border alliances that have fueled telecom
business around the globe.
Q. WHERE DID THE FUND'S DISAPPOINTMENTS LIE?
A. Rentokil - which provides a variety of industrial-related services
for corporations - detracted significantly from performance due to a
strong British pound. A slump in sales growth, particularly in Asia,
also hurt. Nippon Telegraph & Telephone was another disappointment, as
cellular phone providers eroded the company's local phone service
revenues. The company was also under considerable cost pressures
within its industry. The fund's Italian positions also proved to be a
weak link. Telecom Italia turned in negative results, as several
corporate actions were detrimental to the interests of the company's
shareholders. The fund's positions in several Italian banks -
including Banca di Roma and San Paolo-IMI - tumbled due to concerns
over the possibility of higher interest rates.
Q. WHAT'S YOUR OUTLOOK?
A. I expect to see more of the same in terms of increased
consolidation and cross-border mergers. The euro - the new single
currency in Europe - has made it much easier to complete such
transactions. As big companies have become bigger, many smaller firms
have jumped into the consolidation fray just to keep pace. We may also
see continued restructuring efforts in Europe and Japan. As a result,
there should be greater differentiation of stocks away from the
influences of their local markets and more towards the earnings and
underlying fundamentals of the company itself.
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.
RICK MACE DISCUSSES THE INCREASED GLOBALIZATION
OF INDUSTRIES:
"It used to be enough for investors in international markets to
rely on `top-down' analysis to find countries that would deliver
the best return potential. Twenty years ago, for instance -
when foreign stock markets were less developed and the world's
information network was still in the dark ages - investors
could capture most of the strong returns by being in the right
country at the right time. But speeding globalization has
changed all that.
"Over the past decade, the borders between countries,
companies and currencies have been coming down. The
result: Most companies are now much less constrained by
international borders than they were in the past. Leading
firms in an industry must now compete worldwide for the
same customer. Today, the relationship between a stock's
performance and the performance of its respective market
has weakened, while the links between a company and its
industry group have become stronger. Over time, companies
with good business prospects and reasonable stock prices
can have superior growth potential, no matter what country
they are in.
"This shift can have important implications for investors. In
the past, a company's stock price typically moved along with
the overall stock market in its home country. Now, however,
the stock's price might move with the stock prices of its
foreign competitors. Pharmaceutical companies, the majority
of which are headquartered in Europe and the U.S., have in
recent years provided some of the best examples of how
stocks are more closely related to their industry's
performance than to home markets. A case in point is British
pharmaceutical company Glaxo Wellcome, which competes
worldwide with U.S.-based Merck. Over the past 10 years, the
performance of both companies' stocks almost have moved in
tandem.
"The stock market performance of Japanese automaker
Honda offers another excellent example of this trend. During
the past decade, Honda's stock price has had relatively little
to do with the fluctuations of Japan's stock market. Instead,
Honda shares have closely tracked shares of its U.S. competitor,
Ford. That fact is all the more striking when you consider
that the overall performance of the Japanese and U.S. stock
markets have been almost diametrically opposed during that
period. By looking at the stock performance of several of
Japan's large companies in 1998, one can measure the
importance of selecting stocks on the company's merits
first and its home country's merits second. Companies such
as Sony, Fuji Photo Film and Ito Yokodo, for example, all
performed well in 1998, while Japan's TOPIX Index declined."
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 October 31, 1999, more than
$4.4 billion
MANAGER: Richard Mace, since 1996; manager,
Fidelity International Value Fund, since 1996;
Fidelity Global Balanced Fund, since 1996;
joined Fidelity in 1987
(checkmark)
OVERSEAS
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 9.2%
Finland 2.5%
Row: 1, Col: 1, Value: 2.5
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 7.5
Row: 1, Col: 4, Value: 3.1
Row: 1, Col: 5, Value: 24.9
Row: 1, Col: 6, Value: 6.1
Row: 1, Col: 7, Value: 11.7
Row: 1, Col: 8, Value: 5.1
Row: 1, Col: 9, Value: 17.9
Row: 1, Col: 10, Value: 9.199999999999999
France 12.0%
United Kingdom 17.9%
Germany 7.5%
Italy 3.1%
Switzerland 5.1%
Other 11.7%
Japan 24.9%
Netherlands 6.1%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 6.3%
Australia 3.2%
Row: 1, Col: 1, Value: 3.2
Row: 1, Col: 2, Value: 12.9
Row: 1, Col: 3, Value: 8.199999999999999
Row: 1, Col: 4, Value: 4.6
Row: 1, Col: 5, Value: 17.3
Row: 1, Col: 6, Value: 7.4
Row: 1, Col: 7, Value: 12.8
Row: 1, Col: 8, Value: 6.2
Row: 1, Col: 9, Value: 21.1
Row: 1, Col: 10, Value: 6.3
France 12.9%
United Kingdom 21.1%
Germany 8.2%
Italy 4.6%
Switzerland 6.2%
Japan 17.3%
Other 12.8%
Netherlands 7.4%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks, investment companies 90.2 93.9
and equity futures
Bonds 1.7 1.0
Short-term investments and 8.1 5.1
net other assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Total Fina SA Class B 2.9 3.2
(France, Oil & Gas)
Vodafone AirTouch PLC 1.7 1.1
(United Kingdom, Cellular)
Nokia AB (Finland, 1.6 1.4
Communcations Equipment)
DDI Corp. (Japan, Telephone 1.6 0.8
Services)
Ito-Yokado Co. Ltd. (Japan, 1.5 0.5
General Merchandise Stores)
Kyocera Corp. (Japan, 1.3 0.2
Electronics)
BP Amoco PLC (United 1.3 1.8
Kingdom, Oil & Gas)
Shell Transport & Trading 1.3 1.7
Co. PLC (Reg.) (United
Kingdom, Oil & Gas)
SmithKline Beecham PLC 1.2 1.4
(United Kingdom, Drugs &
Pharmaceuticals)
Omron Corp. (Japan, 1.2 0.6
Electrical Equipment)
15.6 12.7
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 20.6 23.8
UTILITIES 16.3 15.5
TECHNOLOGY 8.7 5.7
HEALTH 7.9 8.0
ENERGY 6.8 7.9
NONDURABLES 5.1 5.6
INDUSTRIAL MACHINERY & 4.9 3.7
EQUIPMENT
BASIC INDUSTRIES 4.5 3.8
RETAIL & WHOLESALE 3.6 3.2
DURABLES 3.1 4.9
OVERSEAS
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 88.3%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.9%
AMP Ltd. 404,000 $ 4,108,181
Australia & New Zealand 1,940,297 12,805,101
Banking Group Ltd.
Brambles Industries Ltd. 90,600 2,547,905
Broken Hill Proprietary Co. 910,658 9,411,836
Ltd. (The)
Cable & Wireless Optus Ltd. 3,757,100 8,601,291
(a)
Coles Myer Ltd. 785,526 3,907,253
CSR Ltd. 452,517 1,015,767
Fosters Brewing Group Ltd. 993,700 2,641,189
National Australia Bank Ltd. 892,400 13,771,820
News Corp. Ltd. 1,192,617 8,624,431
News Corp. Ltd. sponsored:
ADR 70,500 2,088,563
ADR (preferred ltd. vtg.) 82,300 2,268,394
Rio Tinto Ltd. 408,000 6,558,398
Westpac Banking Corp. 325,200 2,086,658
Woolworths Ltd. 1,067,800 3,629,389
84,066,176
BELGIUM - 0.4%
Electrabel SA 23,500 7,774,191
Fortis B 235,800 7,984,728
15,758,919
CANADA - 0.6%
Alcan Aluminium Ltd. 151,200 4,957,124
Barrick Gold Corp. 84,000 1,543,929
Celestica, Inc. (sub-vtg.) (a) 92,500 5,091,051
Cinar Films, Inc. Class B 251,800 4,375,025
(sub. vtg.) (a)
Inco Ltd. 465,100 9,354,461
Placer Dome, Inc. 65,900 828,396
26,149,986
DENMARK - 0.4%
Carlsberg AS Class B 109,300 4,233,369
Novo-Nordisk AS Class B 25,300 3,043,825
Ratin AS Class B 28,700 2,992,764
Unidanmark AS Class A 70,100 5,469,958
15,739,916
FINLAND - 2.5%
Asko OY Class A 61,100 999,043
Helsinki Telephone Corp. 99,200 4,724,771
Class E
KCI (Konecranes International) 39,100 1,010,541
Metsa-Serla Oyj Class B Free 103,800 942,783
Shares
Metso Oyj (a) 252,600 2,864,528
Nokia AB 623,200 72,018,551
Sampo Insurance Co. Ltd. 177,300 6,172,114
Sonera Group PLC (c) 134,800 4,059,825
UPM-Kymmene Corp. 533,000 16,867,851
109,660,007
SHARES VALUE (NOTE 1)
FRANCE - 11.5%
Alcatel Alsthom Compagnie 72,100 $ 11,062,844
Generale d'Electricite SA
(RFD)
AXA SA de CV 250,765 35,473,741
Banque Nationale de Paris 334,005 29,420,547
Banque Nationale de Paris 30,485 180,731
warrants 7/1/02 (a)
Canal Plus SA 64,400 4,483,747
Cap Gemini SA 63,222 9,603,776
Castorama Dubois 42,200 12,678,379
Investissements SA
Club Mediterranee SA (a) 40,000 4,017,059
Coflexip SA sponsored ADR 149,100 5,908,088
Compagnie de St. Gobain 43,600 7,588,951
Compagnie Financiere de 46,900 4,898,006
Paribas Class A (Reg.)
France Telecom SA 425,000 41,179,340
Groupe Danone 69,500 17,779,021
L'Oreal SA 9,030 6,044,086
Lafarge SA 75,900 7,326,122
Lagardere S.C.A. (Reg.) 72,000 2,924,183
Michelin SA (Compagnie 124,689 5,445,525
Generale des
Etablissements) Class B (a)
Pinault Printemps SA 30,900 5,909,729
Rhodia SA 505,000 9,775,495
Rhone-Poulenc SA Class A 274,625 15,241,687
Sanofi-Synthelabo SA (a) 480,400 21,259,168
Schneider SA (a) 65,200 4,505,056
Scor SA 89,900 4,504,687
Seita SA 87,320 4,882,035
Societe Generale, France 99,300 21,683,575
Class A
Suez Lyonnaise des Eaux 133,800 21,665,853
Television Francaise 1 SA 66,300 20,842,081
Total Fina SA Class B 969,874 129,356,942
Union Assurances Federales SA 46,700 6,029,893
Valeo SA 26,000 1,873,291
Vivendi SA (a) 542,100 41,202,606
514,746,244
GERMANY - 6.7%
Allianz AG (Reg.) 109,900 33,400,444
BASF AG 367,200 16,365,930
Bayer AG 378,100 15,443,770
Bayerische Hypo-und 101,500 6,620,283
Vereinsbank AG
Celanese AG (a) 13,790 218,206
Deutsche Bank AG 182,000 13,051,603
Deutsche Lufthansa AG (Reg.) 203,900 4,301,882
Deutsche Telekom AG 1,064,300 49,231,714
Dresdner Bank AG 21,100 1,089,548
EPCOS AG (a) 106,100 4,361,713
FAG Kugelfischer Georg 244,758 2,078,471
Schaefer AG
Fresenius Medical Care AG 57,800 4,115,692
Hoechst AG 137,900 6,108,315
Kali Und Salz Beteiligungs AG 925,100 13,252,559
Mannesmann AG (Reg.) 331,900 52,483,184
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - CONTINUED
Metro AG 85,700 $ 4,565,449
Munich Reinsurance AG (Reg.) 92,400 21,122,347
RWE AG 184,400 7,411,348
Siemens AG 232,700 21,000,406
Veba AG 307,450 16,699,700
Viag AG 370,500 6,820,166
299,742,730
HONG KONG - 0.5%
Cheung Kong Holdings Ltd. 502,000 4,555,999
China Telecom (Hong Kong) 2,326,000 7,850,250
Ltd. (a)
Dah Sing Financial Holdings 1,026,800 4,097,683
Ltd.
Wing Hang Bank Ltd. 1,546,000 5,045,198
21,549,130
IRELAND - 0.5%
Bank of Ireland, Inc. 2,088,298 16,367,886
CRH PLC 223,361 4,229,442
Esat Telecom Group PLC 49,700 2,224,075
sponsored ADR (a)
22,821,403
ITALY - 2.8%
Assicurazioni Generali Spa 541,400 17,504,916
Banca Commerciale Italiana Spa 1,393,900 8,444,651
Banca di Roma 2,788,400 3,776,864
Eni Spa sponsored ADR 5,576,000 32,886,946
Italgas Spa 620,800 2,582,854
Olivetti & Co. Spa 3,512,700 6,792,268
San Paolo-IMI Spa 876,700 11,580,732
Telecom Italia Mobile Spa 2,465,100 15,485,584
Telecom Italia Spa 2,186,470 18,912,967
Unicredito Italiano Spa 1,950,200 9,146,605
127,114,387
JAPAN - 24.3%
Aiful Corp. (c) 59,200 9,210,469
Aiwa Co. Ltd. 79,500 1,939,304
Asahi Chemical Industry Co. 610,000 3,690,756
Ltd.
Bank of Tokyo-Mitsubishi Ltd. 183,000 3,036,965
Banyu Pharmaceutical Co. Ltd. 395,000 7,241,825
Canon, Inc. 292,000 8,272,750
CSK Corp. 181,200 8,353,038
Dai Nippon Printing Co. Ltd. 388,000 7,083,679
Dai-Ichi Kangyo Bank Ltd. 1,711,000 23,498,008
Daiwa Securities Co. Ltd. 2,132,000 22,789,110
DDI Corp. 6,369 69,730,231
Fuji Bank Ltd. 1,719,000 23,607,876
Fuji Photo Film Co. Ltd. 260,000 8,364,946
Fujisawa Pharmaceutical Co. 349,000 8,748,044
Ltd.
Fujitsu Ltd. 574,000 17,309,581
SHARES VALUE (NOTE 1)
Furukawa Electric Co. Ltd. 5,002,000 $ 36,509,197
Heiwa Corp. 66,000 1,812,821
Hirose Electric Co. Ltd. 23,700 4,140,245
Hitachi Chemical Co. Ltd. 197,000 3,651,477
Hitachi Information Systems 37,000 1,428,475
Hitachi Ltd. 2,867,000 31,178,627
Honda Motor Co. Ltd. 504,000 21,199,501
Hoya Corp. 125,000 9,003,602
Ito-Yokado Co. Ltd. 849,000 68,001,540
Jafco Co. Ltd. 54,000 6,067,707
Kaneka Corp. 237,000 3,106,891
Kao Corp. 305,000 9,314,766
Kirin Brewery Co. Ltd. 814,000 9,334,128
Koa Denko Co. Ltd. 412,000 7,161,777
Kokusai Denshin Denwa 268,100 33,729,750
Kyocera Corp. 625,500 60,072,032
Matsushita Electric 645,000 13,661,907
Industrial Co. Ltd.
Minolta Co. Ltd. 714,000 2,928,000
Mitsubishi Electric Corp. 3,087,000 17,106,354
Mitsubishi Estate Co. Ltd. 1,153,000 11,571,525
Mitsubishi Trust & Banking 813,000 10,954,517
Corp.
Mitsui Fudosan Co. Ltd. 515,000 3,852,917
Mitsumi Electric Co. Ltd. 68,000 1,822,041
NEC Corp. 550,000 11,145,259
Nichicon Corp. 1,177,000 25,546,412
Nikko Securities Co. Ltd. 3,445,000 32,423,531
Nintendo Co. Ltd. 74,700 11,873,086
Nippon Computer Systems Corp. 147,000 2,880,000
Nippon Steel Corp. 1,328,000 3,379,784
Nippon System Development Co. 18,100 1,547,083
Ltd.
Nippon Telegraph & Telephone 1,745 26,813,927
Corp.
Nippon Zeon Co. Ltd. 852,000 7,364,226
Nomura Securities Co. Ltd. 1,649,000 27,255,022
NTT Data Corp. 208 3,296,039
NTT Mobile Communication 1,051 27,959,377
Network, Inc.
Omron Corp. 2,605,000 54,539,258
ORIX Corp. 101,000 13,579,833
Ricoh Co. Ltd. 575,000 9,393,278
Rohm Co. Ltd. 24,000 5,393,518
Sakura Bank Ltd. 2,021,000 17,390,791
Sankyo Co. Ltd. 197,000 5,619,112
Sankyo Co. Ltd. (Gunma) 27,700 2,194,718
Secom Co. Ltd. (RFD) 80,000 8,528,212
Sharp Corp. 711,000 11,335,031
Shin-Etsu Chemical Co. Ltd. 254,000 10,489,316
Shohkoh Fund & Co. Ltd. 9,450 5,790,252
Softbank Corp. 72,800 30,273,615
Sony Corp. 204,500 32,668,877
Sumitomo Realty & Development 847,000 2,928,404
Co. Ltd.
Takeda Chemical Industries 874,000 50,278,610
Ltd.
Takefuji Corp. 38,400 4,978,632
Tokyo Seimitsu Co. Ltd. 37,000 4,516,399
Toyota Motor Corp. 506,000 17,542,954
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Yamaha Motor Co. Ltd. 671,000 $ 5,464,663
Yamanouchi Pharmaceutical Co. 259,000 11,765,379
Ltd.
Yokogawa Electric Corp. 906,000 6,351,789
Yoshitomi Pharmaceutical 461,000 6,286,867
Industries Ltd.
1,089,279,633
KOREA (SOUTH) - 0.2%
Samsung Electronics Co. Ltd. 53,000 8,837,019
LUXEMBOURG - 0.0%
Stolt Comex Seaway SA (a) 184,300 1,969,706
MEXICO - 0.5%
Banacci SA de CV Class O (a) 2,258,000 5,667,045
Cifra SA de CV Series V (a) 3,529,000 5,549,378
Empresas ICA Sociedad 16,600 42,538
Controladora SA de CV
sponsored ADR
Grupo Financiero Bancomer SA 20,228,000 5,329,533
de CV Series A
Telefonos de Mexico SA 87,000 7,438,500
sponsored ADR representing
Class L shares
24,026,994
NETHERLANDS - 6.0%
ABN AMRO Holding NV 601,800 14,594,944
Aegon NV 172,700 15,986,403
Ahrend (KON) NV 168,996 2,326,474
Akzo Nobel NV 459,200 19,831,749
Beter Bed Holding NV 34,000 975,572
DSM NV 26,100 991,184
Fortis Amev NV 748,600 25,846,820
Getronics NV 19,500 975,044
Heineken NV 176,200 9,013,000
IHC Caland NV 57,600 2,506,442
ING Groep NV 693,382 41,019,641
Koninklijke Ahold NV 416,049 12,815,591
Koninklijke KPN NV 368,800 18,981,609
Koninklijke Philips 257,964 26,532,307
Electronics NV
NBM-Amstelland NV 184,800 2,378,335
Numico NV 90,154 3,685,259
Nutreco Holding NV 171,022 5,863,361
Samas Groep NV 142,200 1,935,087
TNT Post Group NV 145,700 3,719,514
Unilever NV 321,475 21,364,811
Vedior NV 472,014 7,966,841
Vendex KBB NV 652,900 19,112,652
Vnu NV 153,700 5,212,741
Volker Wessels Stevin NV 111,100 1,898,630
Wolters Kluwer NV 145,800 4,886,366
270,420,377
NEW ZEALAND - 0.1%
Lion Nathan Ltd. 919,700 1,984,460
SHARES VALUE (NOTE 1)
NORWAY - 0.7%
Bergesen d.y. AS:
(B shares) 410,500 $ 6,347,871
Class A 831,400 13,440,953
Den Norske Bank ASA Class A 1,568,400 6,093,404
Free shares
Frontline Ltd. (a) 183,700 795,863
Norsk Hydro AS 120,400 4,816,154
31,494,245
PORTUGAL - 0.1%
Electricidade de Portugal SA 271,800 4,237,749
SINGAPORE - 0.2%
Chartered Semiconductor 81,300 2,698,144
Manufacturing Ltd. ADR
Overseas Union Bank Ltd. 837,771 3,630,425
United Overseas Bank Ltd. 578,000 4,383,268
(For. Reg.)
10,711,837
SOUTH AFRICA - 0.1%
Anglogold Ltd. 32,800 1,852,022
Gold Fields Ltd. 498,900 2,386,732
4,238,754
SPAIN - 2.3%
Argentaria Caja Postal y 226,300 5,037,074
Banco Hipotecario de Espana
SA
Banco Bilbao Vizcaya SA (Reg.) 459,700 6,197,502
Banco Santander Central 2,097,416 21,838,008
Hispano SA
Endesa SA 488,200 9,800,491
Iberdrola SA 702,273 10,267,873
Tabacalera SA Series A 184,500 3,045,945
Telefonica SA (a) 2,792,700 46,075,741
Union Electrica Fenosa SA 127,400 1,869,424
104,132,058
SWEDEN - 1.9%
ABB Ltd. (Sweden) (a) 68,178 6,809,693
Atlas Copco AB Series B 74,800 1,952,157
Electrolux AB 428,700 8,574,261
Ericsson (L.M.) Telefon AB 862,900 36,888,975
Class B
N&T Argonaut AB (B shares) (a) 1,369,300 943,510
Nordbanken Holding AB 962,400 5,633,733
Sandvik AB Series B 73,200 1,901,473
Skandinaviska Enskilda Banken 339,600 3,499,643
Class A
Svenska Handelsbanken AB (A 450,800 6,267,411
shares)
Swedish Match Co. 2,160,300 7,930,124
Volvo AB Class B 187,000 4,846,184
85,247,164
SWITZERLAND - 5.1%
ABB Ltd. (Reg) (Switzerland) 104,518 10,548,697
(a)
Ares Serono SA Class B 4,000 6,233,151
(Bearer)
Credit Suisse Group (Reg.) 145,000 27,934,118
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SWITZERLAND - CONTINUED
Holderbank Financiere Glarus 3,472 $ 4,284,926
AG (Bearer)
Julius Baer Holding AG 2,712 8,175,764
Nestle SA (Reg.) 23,100 44,653,823
Novartis AG (Reg.) 28,289 42,408,390
Roche Holding AG 3,059 36,806,956
participation certificates
Swatch Group AG (The) (Reg.) 33,400 5,490,170
Swiss Reinsurance Co. (Reg.) 4,843 10,062,384
Swisscom AG 21,200 6,474,719
UBS AG 93,511 27,268,149
230,341,247
TAIWAN - 0.8%
Hon Hai Precision Industries 1,758,000 12,026,671
Co. Ltd.
Ritek Corp. 1,532,000 10,045,902
Taiwan Semiconductor 3,070,400 13,648,373
Manufacturing Co. Ltd.
35,720,946
UNITED KINGDOM - 17.6%
Abbey National PLC 595,500 11,652,958
Alliance & Leicester PLC 256,900 3,751,324
Allied Domecq PLC 595,500 3,349,001
Allied Zurich PLC 2,318,050 28,016,740
Amvescap PLC 852,700 7,627,859
Ashtead Group PLC 1,852,900 5,286,387
AstraZeneca Group PLC (Reg.) 321,400 14,704,051
Bass PLC 44,067 484,420
BG PLC 801,500 4,451,500
Booker PLC 2,379,067 4,890,172
Boots Co. PLC 425,900 4,377,187
BP Amoco PLC 6,180,464 59,486,979
British Aerospace PLC 1,954,603 11,426,300
British American Tobacco PLC 975,150 6,462,253
British Telecommunications PLC 2,715,800 48,884,392
British Vita PLC Ord. 453,800 1,828,260
BTP PLC 266,600 1,534,390
Cadbury Schweppes PLC 1,234,800 8,096,639
Caradon PLC 8,989,650 20,970,569
Centrica PLC 1,450,100 4,214,682
CGU PLC 754,500 10,998,804
Cookson Group PLC 1,379,062 4,286,009
Courtaulds Textiles PLC 987,400 1,964,653
Diageo PLC 1,395,400 14,111,764
General Electric Co. PLC 1,007,500 10,959,289
Glaxo Wellcome PLC 1,750,600 52,408,592
Granada Group PLC 266,700 2,109,481
Hanson PLC 1,139,200 8,814,553
Hays PLC 288,100 3,299,680
SHARES VALUE (NOTE 1)
HSBC Holdings PLC:
(Reg.) 566,000 $ 6,968,872
(Hong Kong) (Reg.) 274,869 3,384,325
Imperial Chemical Industries 204,400 2,053,581
PLC
Invensys PLC 817,400 4,018,956
Johnson Matthey PLC 134,600 1,247,230
Kingfisher PLC 1,341,543 14,659,091
Lloyds TSB Group PLC 2,779,100 38,456,146
Marks & Spencer PLC 170,500 785,037
Morgan Crucible Co. PLC 556,000 2,221,716
National Grid Group PLC 1,011,460 7,559,448
National Westminster Bank PLC 269,100 6,080,060
Orange PLC (a) 298,800 7,453,730
Pearson PLC 489,200 10,996,701
Peninsular & Oriental Steam 228,300 3,236,090
Navigation Co.
Prudential Corp. PLC 846,300 13,283,354
Rentokil Initial PLC 5,986,889 19,960,414
Reuters Group PLC 1,091,400 10,149,018
Rio Tinto PLC (Reg.) 368,400 6,306,346
Royal & Sun Alliance 770,920 5,248,282
Insurance Group PLC
Royal Bank of Scotland Group 562,900 12,977,371
PLC
Safeway PLC 1,211,700 3,805,712
Scottish & Newcastle PLC 599,200 5,586,790
Scottish & Southern Energy PLC 646,100 6,135,631
Shell Transport & Trading Co. 7,622,500 58,280,378
PLC (Reg.)
SmithKline Beecham PLC 4,293,744 54,959,894
Standard Chartered PLC 1,022,619 14,352,411
Tomkins PLC 709,500 2,406,322
Unigate PLC 390,500 1,810,830
Unilever PLC 2,756,963 25,631,150
Vodafone AirTouch PLC 15,400,640 73,826,893
WPP Group PLC 580,300 6,302,790
790,593,457
UNITED STATES OF AMERICA - 0.6%
ASA Ltd. 52,700 1,057,294
Baker Hughes, Inc. 129,400 3,615,113
Halliburton Co. 120,700 4,548,881
McDermott International, Inc. 37,800 685,125
Newmont Mining Corp. 335,600 7,362,225
Noble Drilling Corp. (a) 79,400 1,761,688
OMI Corp. (a) 854,000 1,601,250
Overseas Shipholding Group, 156,000 2,008,500
Inc.
Smith International, Inc. (a) 24,400 843,325
Weatherford International, 72,000 2,439,000
Inc. (a)
25,922,401
TOTAL COMMON STOCKS 3,956,506,945
(Cost $2,847,046,218)
PREFERRED STOCKS - 0.9%
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS
- - 0.2%
AUSTRALIA - 0.2%
WBK STRYPES Trust (Westpac 315,800 $ 9,474,000
Banking Corp.) $3.135
NONCONVERTIBLE PREFERRED
STOCKS - 0.7%
GERMANY - 0.4%
SAP AG (Systeme Anwendungen 28,600 12,671,459
Produkte)
Wella AG 219,700 6,141,681
18,813,140
ITALY - 0.3%
Telecom Italia Spa Risp 2,402,500 11,873,651
TOTAL NONCONVERTIBLE 30,686,791
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 40,160,791
(Cost $29,456,348)
INVESTMENT COMPANIES - 0.4%
EMERGING MARKETS - 0.2%
Asia Tigers Fund, Inc. 258,200 2,226,975
Templeton Dragon Fund, Inc. 840,400 7,090,875
9,317,850
GERMANY - 0.1%
New Germany Fund, Inc. (The) 254,200 3,066,288
MULTI-NATIONAL - 0.1%
European Warrant Fund, Inc. 215,200 3,322,150
TOTAL INVESTMENT COMPANIES 15,706,288
(Cost $18,242,074)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.6%
MOODY'S RATINGS (UNAUDITED) (E) PRINCIPAL AMOUNT (D)
FRANCE - 0.2%
Groupe Danone 3% 1/1/02 A1 EUR 18,000 4,633,121
Suez Lyonnaise des Eaux 4% A EUR 25,000 4,058,728
1/1/06
8,691,849
NETHERLANDS - 0.1%
Koninklijke Ahold NV 3% Baa1 NLG 8,640,000 4,672,729
9/30/03
MOODY'S RATINGS (UNAUDITED) (E) PRINCIPAL AMOUNT (D) VALUE (NOTE 1)
UNITED STATES OF AMERICA - 0.3%
Nestle Holdings, Inc. 3% AAA $ 9,860,000 $ 12,078,500
6/17/02
Roche Holdings, Inc. liquid - 5,780,000 3,496,900
yield option note 0% 4/20/10
(c)
15,575,400
TOTAL CONVERTIBLE BONDS 28,939,978
(Cost $32,955,001)
GOVERNMENT OBLIGATIONS (G) -
1.4%
FRANCE - 0.3%
French Government OAT 5.5% Aaa EUR 13,400,000 14,653,025
4/25/04
GERMANY - 0.3%
German Federal Republic 3.75% Aaa EUR 14,200,000 14,600,597
8/26/03
UNITED KINGDOM - 0.3%
United Kingdom, Great Britain Aaa GBP 8,600,000 14,549,125
& Northern Ireland 6.75%
11/26/04
UNITED STATES OF AMERICA - 0.5%
U.S. Treasury Bills, yield at - 11,000,000 10,916,351
date of purchase 4.71%
12/30/99 (f)
U.S. Treasury Bond stripped Aaa 47,775,000 8,484,362
principal 0% 11/15/27
19,400,713
TOTAL GOVERNMENT OBLIGATIONS 63,203,460
(Cost $63,430,680)
</TABLE>
CASH EQUIVALENTS - 9.4%
SHARES
Central Cash Collateral Fund, 32,598,689 32,598,689
5.26% (b)
Taxable Central Cash Fund, 389,395,366 389,395,366
5.21% (b)
TOTAL CASH EQUIVALENTS 421,994,055
(Cost $421,994,055)
TOTAL INVESTMENT PORTFOLIO - 4,526,511,517
101.0%
(Cost $3,413,124,376)
NET OTHER ASSETS - (1.0)% (44,467,382)
NET ASSETS - 100% $ 4,482,044,135
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/LOSS
PURCHASED
157 Nikkei 225 Index Dec. 1999 $ 14,137,850 $ 309,133
Contracts (Japan)
90 Topix Index Contracts Dec. 1999 12,860,751 671,165
(Japan)
$ 26,998,601 $ 980,298
</TABLE>
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS -
0.6%
SECURITY TYPE ABBREVIATIONS
STRYPES - Structured Yield Product
Exchangeable for Common Stock
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
GBP - British pound
NLG - Dutch guilder
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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
$16,767,194 or 0.4% of net assets.
(d) Principal amount is stated in United States dollars unless
otherwise noted.
(e) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(f) 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 $9,427,758.
(g) 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 advisor, based prinicpally 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 $3,084,723,183 and $3,143,607,290, respectively, of which
U.S. government and government agency obligations aggregated
$8,025,767 and $0, respectively.
The market value of futures contracts opened and closed during the
period amounted to $463,626,369 and $657,369,890, 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 $5,276 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $30,729,255. The fund
received cash collateral of $32,598,689 which was invested in the
Central Cash Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $3,426,808,884. Net unrealized appreciation
aggregated $1,099,702,633, of which $1,230,719,249 related to
appreciated investment securities and $131,016,616 related to
depreciated investment securities.
The fund hereby designates approximately $143,107,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
AEROSPACE & DEFENSE 0.3%
BASIC INDUSTRIES 4.5
CASH EQUIVALENTS 9.4
CONSTRUCTION & REAL ESTATE 2.2
DURABLES 3.1
ENERGY 6.8
FINANCE 20.6
GOVERNMENT OBLIGATIONS 1.4
HEALTH 7.9
HOLDING COMPANIES 0.2
INDUSTRIAL MACHINERY & 4.9
EQUIPMENT
Investment Companies 0.4
MEDIA & LEISURE 2.1
NONDURABLES 5.1
PRECIOUS METALS 0.4
RETAIL & WHOLESALE 3.6
SERVICES 2.1
TECHNOLOGY 8.7
TRANSPORTATION 1.0
UTILITIES 16.3
OVERSEAS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 4,526,511,517
value (cost $3,413,124,376)
- - See accompanying schedule
Cash 74,397
Foreign currency held at 16,260,100
value (cost $16,123,771)
Receivable for investments 25,030,337
sold
Receivable for fund shares 16,780,590
sold
Dividends receivable 9,811,265
Interest receivable 2,663,024
Receivable for daily 612,304
variation on futures
contracts
Other receivables 125,078
TOTAL ASSETS 4,597,868,612
LIABILITIES
Payable for investments $ 47,291,480
purchased
Payable for fund shares 31,232,250
redeemed
Accrued management fee 3,245,409
Other payables and accrued 1,456,649
expenses
Collateral on securities 32,598,689
loaned, at value
TOTAL LIABILITIES 115,824,477
NET ASSETS $ 4,482,044,135
Net Assets consist of:
Paid in capital $ 2,939,066,439
Undistributed net investment 45,498,123
income
Accumulated undistributed net 382,957,485
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,114,522,088
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 104,613,848 $ 4,482,044,135
shares outstanding
NET ASSET VALUE, offering $42.84
price and redemption price
per share ($4,482,044,135
(divided by) 104,613,848
shares)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 75,443,850
Dividends
Interest 15,671,889
Security lending 27,938
91,143,677
Less foreign taxes withheld (8,619,843)
TOTAL INCOME 82,523,834
EXPENSES
Management fee Basic fee $ 29,034,894
Performance adjustment 7,248,162
Transfer agent fees 10,812,235
Accounting and security 1,274,894
lending fees
Non-interested trustees' 15,535
compensation
Custodian fees and expenses 1,633,137
Registration fees 230,186
Audit 80,248
Legal 8,460
Miscellaneous 16,571
Total expenses before 50,354,322
reductions
Expense reductions (1,672,307) 48,682,015
NET INVESTMENT INCOME 33,841,819
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 410,211,905
Foreign currency transactions 95,193
Futures contracts 24,336,040 434,643,138
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 553,008,511
Assets and liabilities in (385,905)
foreign currencies
Futures contracts (1,531,372) 551,091,234
NET GAIN (LOSS) 985,734,372
NET INCREASE (DECREASE) IN $ 1,019,576,191
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 1,435,973
Expense reductions
Directed brokerage
arrangements
Transfer agent credits 236,334
$ 1,672,307
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 33,841,819 $ 31,812,695
income
Net realized gain (loss) 434,643,138 85,208,677
Change in net unrealized 551,091,234 69,551,645
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,019,576,191 186,573,017
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (20,938,368) (36,842,102)
From net investment income
From net realized gain (53,392,648) (145,109,412)
TOTAL DISTRIBUTIONS (74,331,016) (181,951,514)
Share transactions Net 4,000,168,797 3,450,931,991
proceeds from sales of shares
Reinvestment of distributions 71,180,520 176,077,752
Cost of shares redeemed (4,137,892,605) (3,805,741,237)
NET INCREASE (DECREASE) IN (66,543,288) (178,731,494)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 878,701,887 (174,109,991)
IN NET ASSETS
NET ASSETS
Beginning of period 3,603,342,248 3,777,452,239
End of period (including $ 4,482,044,135 $ 3,603,342,248
undistributed net investment
income of $45,498,123 and
$17,037,956, respectively)
OTHER INFORMATION
Shares
Sold 105,210,288 98,986,406
Issued in reinvestment of 2,054,834 5,371,501
distributions
Redeemed (108,778,783) (108,950,453)
Net increase (decrease) (1,513,661) (4,592,546)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 33.95 $ 34.12 $ 31.08 $ 28.57 $ 29.17
period
Income from Investment
Operations
Net investment income .32 B .29 B .43 B .48 C .31
Net realized and unrealized 9.28 1.22 4.61 2.72 (.44)
gain (loss)
Total from investment 9.60 1.51 5.04 3.20 (.13)
operations
Less Distributions
From net investment income (.20) (.34) (.37) (.34) (.02)
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 $ 42.84 $ 33.95 $ 34.12 $ 31.08 $ 28.57
TOTAL RETURN A 28.77% 4.60% 17.03% 11.41% (.34)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,482,044 $ 3,603,342 $ 3,777,452 $ 3,114,625 $ 2,276,306
(000 omitted)
Ratio of expenses to average 1.27% 1.26% 1.23% 1.14% 1.05%
net assets
Ratio of expenses to average 1.23% D 1.24% D 1.20% D 1.12% D 1.05%
net assets after expense
reductions
Ratio of net investment .85% .82% 1.28% 1.74% 1.78%
income to average net assets
Portfolio turnover rate 85% 69% 68% 82% 49%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
C INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.08 PER
SHARE.
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.
</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
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY WORLDWIDE 25.18% 67.70% 150.12%
MSCI World 24.91% 114.06% 184.02%
Global Funds Average 28.07% 96.23% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case one year, five years or since
the fund started on 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 October 31, 1999, the index included over 1300 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 one year
average represents a peer group of 238 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 LIFE OF FUND
FIDELITY WORLDWIDE 25.18% 10.89% 10.21%
MSCI World 24.91% 16.44% 11.71%
Global Funds Average 28.07% 14.06% 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
1999/05/31 22572.94 26190.79
1999/06/30 23739.36 27408.70
1999/07/31 23924.93 27322.78
1999/08/31 23977.95 27270.49
1999/09/30 23805.64 27002.36
1999/10/29 25011.83 28402.23
IMATRL PRASUN SHR__CHT 19991031 19991123 151939 R00000000000117
$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 October 31, 1999, the value of the
investment would have grown to $25,012 - a 150.12% 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 $28,402 - a 184.02% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
Past performance is no guarantee of future
results and you may have a gain or loss when
you sell your shares.
(checkmark)
WORLDWIDE
FUND TALK: THE MANAGERS' OVERVIEW
An interview with Penny Dobkin (right), Lead Portfolio Manager of
Fidelity Worldwide Fund, and Doug Chase, who began managing U.S.
equities for the fund on September 1, 1999.
Q. HOW DID THE FUND PERFORM, PENNY?
A. The fund kept pace with its benchmark in a strong market
environment. For the 12 months that ended October 31, 1999, the fund
returned 25.18%. By comparison, the Morgan Stanley Capital
International World Index returned 24.91%, while the global funds
average monitored by Lipper Inc. returned 28.07%.
Q. WHAT ENABLED THE FUND TO SLIGHTLY OUTPERFORM THE INDEX?
A. One positive influence was an overweighting in Japanese equities,
which were extremely strong during the period, especially the past six
months. The fund's stock selection, particularly in Japan and the
United Kingdom, also helped.
Q. WHAT CAUSED JAPANESE STOCKS TO CATCH FIRE?
A. The investment environment in Japan improved dramatically during
the past year for several reasons. First, there was evidence of growth
in the economy, as the Japanese gross domestic product - a measure of
all goods and services produced domestically - actually rose modestly
for two consecutive quarters instead of falling, as had been the case
for quite a while. A second positive influence was the government
bailout of the banking industry, which resulted in recapitalized banks
that were capable of supporting an expanding economy once again. In
addition, across all sectors of the economy, the restructuring efforts
undertaken by many Japanese companies were beginning to be taken more
seriously by an increasing number of investors. Japanese managements
were not simply saying the right things about cost cutting,
concentrating on core businesses and so on. They were actually
"walking the talk" with concrete initiatives. Finally, the Japanese
telecommunications sector was particularly strong, buoyed by
consumers' warm reception of a number of cellular telecommunications
products and services, including an exciting cellular phone with
Internet capabilities.
Q. ON THE OTHER HAND, THE FUND TRAILED THE LIPPER AVERAGE . . .
A. During the first half of the period, the fund had a higher
concentration of defensive stocks - that is, stocks of companies
perceived to be capable of generating consistent earnings and share
price growth in a variety of economic environments - than its peers.
Defensive stocks tend to underperform when prospects for economic
growth are improving, as they were following 1998's credit crunch.
Another negative was the fund's stock selection in Italy, where
government intervention hurt two of the fund's holdings.
Q. HOW WAS THE FUND POSITIONED WITH RESPECT TO EUROPEAN STOCKS?
A. I modestly underweighted European stocks. Growth in the region
slowed, and I didn't expect it to pick up until some of the key
players in Europe made a concerted effort to lower interest rates.
Furthermore, the euro continued to depreciate against the dollar
during the period, which resulted in substantially lower returns from
European stocks in U.S. dollar terms than the returns measured in
local currencies. One sector where I increased holdings in Europe,
however, was insurance, which offered some compelling values, in my
view.
Q. WHAT ABOUT THE REST OF ASIA AND LATIN AMERICA?
A. On balance, the fund's weightings were roughly commensurate with
those of the index with respect to the rest of Asia. Stock markets in
Hong Kong, Singapore, South Korea and Taiwan all enjoyed strong
advances. However, in view of the favorable environment for Japanese
equities and Fidelity's strong research presence there, I concentrated
my efforts in Asia on Japan. I continued to avoid investments in Latin
America, which I felt offered insufficient potential rewards to
compensate for the risks involved.
Q. TURNING TO YOU, DOUG, WHAT DEVELOPMENTS IN THE FUND'S U.S.
SUBPORTFOLIO MERIT MENTION?
D.C. Since I am able to devote all of my efforts to managing the
fund's U.S. holdings, I felt comfortable increasing them from about 90
when I began to roughly 250 at the end of the period. I believe that
owning a greater number of issues allows me to more effectively
leverage Fidelity's stock-picking strengths. I tried to balance
aggressive growth positions with value plays. I don't try to predict
what the economy is going to do, so the subportfolio will generally be
structured using a "bottom-up" approach. That is, I tend not to stray
far from my benchmark in terms of sector weightings, and investment
decisions are made mostly on the basis of a company's basic business
prospects and stock valuation.
Q. PENNY, WHAT STOCKS DID WELL FOR THE FUND?
A. DDI is the largest provider of cellular phone service in Japan and
perhaps the most reasonably valued major provider in the world. The
company benefited from ongoing consolidation in the industry as well
as an extremely strong market for cellular products and services in
Japan. Another cellular play, Orange PLC, occupies a similar position
in the U.K. cellular communications market. Orange benefited from
strong demand, increasing market share and a management initiative to
acquire the company from shareholders. In the case of Oracle, a
provider of enterprise software, I purchased the stock near its fall
1998 lows, and it participated nicely in the rebound in U.S. stocks
that followed.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
A. U.S.-based Philip Morris hurt performance, as the company
encountered further difficulties due to smoking-related lawsuits.
Although the rulings against the company did not detract from earnings
- - and could possibly be overturned - investors were cautious about the
stock's prospects. Raisio Group also hurt performance. The Finnish
biotechnology stock, which I sold near the end of 1998, suffered from
an unfavorable U.S. Food and Drug Administration ruling on one of its
products as well as competitive pressures. Finally, Telecom Italia and
Olivetti, two of the fund's Italian holdings, put a dent in
performance when the Italian government threw its support behind a
merger of the two companies at a price that was disadvantageous to
shareholders. I was skeptical that the merger would go through on
those terms and held on to both stocks, which hurt the funds returns.
Q. WHAT'S YOUR OUTLOOK, PENNY?
A. Not knowing how strong the various world economies that affect the
fund are going to be in the year ahead makes sector allocation
difficult right now. If those economies see modest growth, it would be
good to emphasize defensive stocks. On the other hand, stronger
economic growth would dictate owning more cyclical stocks - those that
are most sensitive to economic changes. Until we get a clearer picture
of where economic growth is headed, our plan is to take a cautious
approach and maintain sector weightings close to our benchmarks. At
the end of the period, the fund was essentially fully invested, which
reflects our overall optimism for worldwide equity markets right now.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER 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.
PENNY DOBKIN ON FACTORS LIKELY TO AFFECT
WORLDWIDE ECONOMIC GROWTH OVER THE SHORT
TERM:
"The two most important factors that will affect our decision-
making over the next six to 12 months are Y2K and interest
rates. In our view, Y2K is important, not because we're
anticipating technological glitches, but because many
companies are stockpiling extra inventory in the fourth
quarter of 1999 as a precaution against disruptions in their
supply lines. If business continues pretty much as usual,
therefore, those companies will be left holding extra
inventory. That means that orders for new products may
suffer temporarily while the existing inventory is being
depleted. In most cases, however, the overstocking amounts
to only a few weeks' worth, so any inventory-related slowdown
should be strictly short term in nature.
"The other important variable is interest rates. The question
is, will the interest-rate increases that have occurred in the
U.S. and abroad have a dampening effect on economic
growth? The ideal scenario, of course, would be a `soft
landing'-a modest slowdown that allows the economy to
maintain a reasonable growth rate while reassuring the
Federal Reserve Board and other monetary authorities that
inflation will remain under control. If, on the other hand,
economic growth continues at its recent vigorous pace, we
will likely see more increases in interest rates, which would
not be conducive to strong share price appreciation. Another
possibility would be a more pronounced slowdown than
anticipated, which would not be favorable for stocks either.
At the moment, though, a recession seems a remote
possibility.
"Although we do not know which of these scenarios will come
to pass, we are generally optimistic about the prospects for
stocks in the year 2000 and are comfortable for now with
sector weightings that closely parallel those of our
benchmarks. Given the high volatility that currently
characterizes world equity markets, patience is a virtue, and
it often pays to simply wait for an appropriate catalyst to take
a previously ignored sector higher. Pharmaceuticals were a
good example of this recently. Shunned by many investors for
the first eight months of 1999, they suddenly took off in
September and October on several announced merger
proposals. The fund, although neutral on pharmaceutical
stocks with respect to its benchmark, owned more than most
of its peers and was able to capitalize on that opportunity."
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 October 31, 1999, more than
$980 million
MANAGERS: 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;
Doug Chase, U.S. equity investments, since
August 1999; manager, several Fidelity
Select Portfolios; joined Fidelity in 1992.
(checkmark)
WORLDWIDE
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Canada 1.6%
Row: 1, Col: 1, Value: 1.6
Row: 1, Col: 2, Value: 5.4
Row: 1, Col: 3, Value: 3.3
Row: 1, Col: 4, Value: 15.1
Row: 1, Col: 5, Value: 3.5
Row: 1, Col: 6, Value: 8.699999999999999
Row: 1, Col: 7, Value: 1.6
Row: 1, Col: 8, Value: 2.7
Row: 1, Col: 9, Value: 9.4
Row: 1, Col: 10, Value: 48.7
France 5.4%
Germany 3.3%
Japan 15.1%
United States 48.7%
Netherlands 3.5%
Other 8.7%
Sweden 1.6%
Switzerland 2.7%
United Kingdom 9.4%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
Australia 1.8%
France 5.1%
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: 11.1
Row: 1, Col: 6, Value: 3.3
Row: 1, Col: 7, Value: 8.9
Row: 1, Col: 8, Value: 3.6
Row: 1, Col: 9, Value: 11.0
Row: 1, Col: 10, Value: 50.7
Germany 2.5%
Italy 2.0%
Japan 11.1%
United States 50.7%
Netherlands 3.3%
Other 8.9%
Switzerland 3.6%
United Kingdom 11.0%
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks and Investment Companies 95.9 96.2
Bonds 0.0 0.3
Short-term investments and 4.1 3.5
net other assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Microsoft Corp. (United 2.8 1.7
States of America, Computer
Services & Software)
General Electric Co. (United 1.7 1.7
States of America,
Electrical Equipment)
DDI Corp. (Japan, Telephone 1.3 1.2
Services)
Total Fina SA Class B 1.2 0.5
(France, Oil & Gas)
Vodafone AirTouch PLC 1.0 0.6
sponsored ADR (United
Kingdom, Cellular)
Orange PLC (United Kingdom, 1.0 0.7
Cellular)
Avon Products, Inc. (United 0.9 0.3
States of America,
Household Products)
Cisco Systems, Inc. (United 0.9 0.0
States of America,
Communications Equipment)
Citigroup, Inc. (United 0.9 1.7
States of America, Credit &
Other Finance)
Kokusai Denshin Denwa 0.9 0.0
(Japan, Telephone Services)
12.6 8.4
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 19.1 21.0
TECHNOLOGY 14.0 10.3
UTILITIES 12.6 11.7
HEALTH 9.3 11.7
NONDURABLES 6.5 6.7
INDUSTRIAL MACHINERY & 6.3 3.9
EQUIPMENT
RETAIL & WHOLESALE 5.4 4.6
ENERGY 5.3 7.7
MEDIA & LEISURE 4.6 5.3
BASIC INDUSTRIES 3.7 1.8
</TABLE>
WORLDWIDE
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 95.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.0%
Australia & New Zealand 400,000 $ 2,639,823
Banking Group Ltd.
Cable & Wireless Optus Ltd. 892,300 2,042,781
(a)
HIH Insurance Ltd. 1,033,237 981,754
(installment receipt)
National Australia Bank Ltd. 141,600 2,185,219
Telstra Corp. Ltd. 325,000 1,042,480
(installment receipt) (d)
Westpac Banking Corp. 95,900 615,346
Woodside Petroleum Ltd. 91,400 550,801
10,058,204
BELGIUM - 0.3%
Fortis B 50,000 1,693,114
GIB Holdings Ltd. 27,000 1,111,095
2,804,209
CANADA - 1.6%
BCE, Inc. 128,000 7,705,918
Canadian National Railway Co. 101,600 3,082,449
Clarica Life Insurance Co. (c) 85,300 1,379,452
Imasco Ltd. 120,000 3,220,765
15,388,584
DENMARK - 0.2%
Coloplast AS Class B 4,900 483,152
Ratin AS Class B 13,300 1,386,891
1,870,043
FINLAND - 1.1%
Metsa-Serla Oyj Class B Free 66,900 607,632
Shares
Nokia AB sponsored ADR 41,000 4,738,063
Pohjola Group Insurance Corp. 36,600 1,969,076
Class B
Sampo Insurance Co. Ltd. 106,800 3,717,890
11,032,661
FRANCE - 5.4%
AXA SA de CV 40,500 5,729,215
Banque Nationale de Paris 84,478 7,441,173
Banque Nationale de Paris 3,666 21,734
warrants 7/1/02 (a)
Christian Dior SA 4,100 736,130
Compagnie Financiere de 5,660 591,103
Paribas Class A (Reg.)
Euro Disney SCA (a) 1,031,400 1,425,311
Groupe Danone 2,300 588,370
Havas Advertising SA 8,300 2,333,386
Rhodia SA 89,800 1,738,296
Sanofi-Synthelabo SA (a) 44,280 1,959,525
Schneider SA (a) 30,900 2,135,065
Societe Generale, France 30,200 6,594,602
Class A
Television Francaise 1 SA 18,200 5,721,356
Total Fina SA Class B 90,038 12,008,819
Transiciel SA 13,200 764,465
SHARES VALUE (NOTE 1)
Usinor Sacilor 32,600 $ 454,288
Vivendi SA (a) 29,900 2,272,566
52,515,404
GERMANY - 3.0%
Bilfinger & Berger Bau AG 38,800 787,905
Celanese AG (a) 8,100 128,170
DaimlerChrysler AG (Reg.) 35,000 2,721,250
EPCOS AG (a) 23,000 945,517
FAG Kugelfischer Georg 52,400 444,978
Schaefer AG
Fresenius Medical Care AG 36,200 2,577,648
GFK AG (a) 1,100 30,634
Hoechst AG 81,000 3,587,915
Holzmann (Phillip) AG (a) 2,000 293,262
Kali Und Salz Beteiligungs AG 106,000 1,518,507
Mannesmann AG (Reg.) 35,900 5,676,849
Munich Reinsurance AG (Reg.) 18,600 4,251,901
Primacom AG 44,000 2,181,533
Siemens AG 27,800 2,508,858
Veba AG 28,500 1,548,029
29,202,956
HONG KONG - 0.7%
Amoy Properties Ltd. 718,000 619,284
China Telecom (Hong Kong) 462,000 1,559,250
Ltd. (a)
Great Eagle Holdings Ltd. 822,000 1,015,860
Henderson Land Development 257,000 1,171,190
Co. Ltd.
Hong Kong Electric Holdings 372,000 1,137,358
Ltd.
Kerry Properties Ltd. 282,500 280,027
Sun Hung Kai Properties Ltd. 198,000 1,599,446
7,382,415
IRELAND - 0.7%
Bank of Ireland, Inc. 287,400 2,252,614
Independent Newspapers PLC 789,900 4,195,484
(United Kingdom)
6,448,098
ISRAEL - 0.1%
Partner Communication Co. 59,000 929,250
Ltd. ADR
ITALY - 0.8%
Olivetti & Co. Spa 1,000,000 1,933,632
Telecom Italia Spa 703,500 6,085,275
8,018,907
JAPAN - 15.1%
Advan Co. Ltd. 25,900 766,118
Alps Electric Co. Ltd. 19,000 368,595
Amada Co. Ltd. 205,000 1,575,030
Bank of Tokyo-Mitsubishi Ltd. 143,000 2,373,148
Banyu Pharmaceutical Co. Ltd. 183,000 3,355,073
Canon Sales Co., Inc. 103,000 1,631,184
Chukyo Coca-Cola Bottling Co. 44,000 523,563
Ltd.
Citizen Watch Co. Ltd. 132,000 934,300
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Dai-Ichi Kangyo Bank Ltd. 2,000 $ 27,467
Daiwa Securities Co. Ltd. 129,000 1,378,891
DDI Corp. 1,141 12,492,101
Fancl Corp. 1,000 288,115
Fuji Bank Ltd. 195,000 2,678,031
Fuji Coca-Cola Bottling Co. 63,000 1,210,084
Ltd.
Fuji Heavy Industries Ltd. 202,000 1,718,819
Fujikura Ltd. 403,000 2,496,375
Funai Electric Co. Ltd. 1,100 498,631
Furukawa Electric Co. Ltd. 620,000 4,525,330
Heiwa Corp. 24,000 659,208
Hirose Electric Co. Ltd. 5,500 960,816
Hokkaido Coca-Cola Bottling 57,000 772,408
Co. Ltd.
Honda Motor Co. Ltd. 129,000 5,426,063
Ito-Yokado Co. Ltd. 60,000 4,805,763
Kaneka Corp. 163,000 2,136,807
Kirin Brewery Co. Ltd. 431,000 4,942,272
Koa Denko Co. Ltd. 148,000 2,572,677
Kokusai Denshin Denwa 70,900 8,919,952
Kyocera Corp. 70,000 6,722,689
Mikasa Coca Cola Bottling Co. 74,000 781,753
Minolta Co. Ltd. 412,000 1,689,546
Mitsubishi Electric Corp. 570,000 3,158,608
Mitsubishi Estate Co. Ltd. 86,000 863,097
Mitsumi Electric Co. Ltd. 109,000 2,920,624
New Japan Securities Co. Ltd. 397,000 1,170,507
(a)
Nichicon Corp. 135,000 2,930,132
Nihon Unisys Ltd. 32,000 1,124,802
Nikko Securities Co. Ltd. 140,000 1,317,647
Nippon Computer Systems Corp. 150,000 2,938,776
Nomura Securities Co. Ltd. 80,000 1,322,257
NTT Mobile Communication 40 1,064,106
Network, Inc. (c)
Omron Corp. 320,000 6,699,640
ORIX Corp. 29,500 3,966,387
Ricoh Co. Ltd. 121,000 1,976,672
Sanwa Bank Ltd. 139,000 2,070,483
Sanyo Shinpan Finance Co. 16,800 805,109
Ltd.
Senshukai Co. Ltd. 86,000 1,651,035
Shikoku Coca-Cola Bottling 50,000 621,849
Co. Ltd.
Shionogi & Co. Ltd. 175,000 1,611,765
Sony Corp. 35,500 5,671,125
Square Co. Ltd. 10,500 760,336
Sumitomo Electric Industries 87,000 1,170,583
Ltd.
Takeda Chemical Industries 100,000 5,752,701
Ltd.
Tokyo Seimitsu Co. Ltd. 14,000 1,708,908
Toyota Motor Corp. 73,000 2,530,900
Tsubaki Nakashima Co. Ltd. 57,000 821,128
Yamaha Motor Co. Ltd. 182,000 1,482,219
Yamanouchi Pharmaceutical Co. 170,000 7,722,449
Ltd.
Yokogawa Electric Corp. 408,000 2,860,408
147,925,062
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 0.2%
Samsung Electronics Co. Ltd. 13,300 $ 2,217,591
LUXEMBOURG - 0.0%
Audiofina 9,700 489,115
MEXICO - 0.3%
Cifra SA de CV Series C (a) 877,000 1,357,169
Empresas ICA Sociedad 2,200 5,638
Controladora SA de CV
sponsored ADR
Grupo Elektra SA de CV Unit 900,000 430,200
Grupo Financiero Bancomer SA 4,000,000 1,053,892
de CV Series A
2,846,899
NETHERLANDS - 3.5%
ABN AMRO Holding NV 137,000 3,322,545
Fortis Amev NV 94,000 3,245,526
IHC Caland NV 61,400 2,671,798
ING Groep NV 67,900 4,016,882
Koninklijke KPN NV 37,300 1,919,778
Koninklijke Philips 34,100 3,507,279
Electronics NV
Laurus NV 52,900 1,180,259
NBM-Amstelland NV 64,200 826,240
Numico NV 33,300 1,361,217
Samas Groep NV 280,000 3,810,299
United Pan-Europe 21,000 1,619,377
Communications NV
Vendex KBB NV 203,800 5,965,934
Volker Wessels Stevin NV 57,300 979,221
34,426,355
NEW ZEALAND - 0.3%
Lion Nathan Ltd. 730,000 1,575,139
Telecom Corp. of New Zealand 410,000 1,652,767
Ltd.
3,227,906
NORWAY - 0.5%
Bergesen d.y. AS Class A 49,800 805,099
Christiania Bank Og 325,000 1,586,632
Kreditkasse
Den Norske Bank ASA Class A 596,900 2,319,021
Free shares
4,710,752
PORTUGAL - 0.3%
Banco Pinto & Sotto Mayor SA 150,000 3,133,053
SINGAPORE - 0.6%
Chartered Semiconductor 5,200 172,575
Manufacturing Ltd. ADR
Oversea-Chinese Banking Corp. 175,350 1,319,215
Ltd.
Overseas Union Bank Ltd. 456,800 1,979,512
United Overseas Bank Ltd. 323,000 2,449,473
(For. Reg.)
5,920,775
SPAIN - 1.5%
Aguas de Barcelon SA 45,100 722,204
Aguas de Barcelon SA rights 45,100 0
11/16/99 (a)
Banco Santander Central 187,400 1,951,183
Hispano SA
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - CONTINUED
Cortefiel SA 90,600 $ 2,373,101
Endesa SA 58,200 1,168,350
Iberdrola SA 83,100 1,214,998
Sogecable SA (a)(c) 13,200 364,270
Telefonica SA (a) 272,084 4,489,015
Union Electrica Fenosa SA 150,000 2,201,049
14,484,170
SWEDEN - 1.6%
A-Com AB (a) 27,400 317,449
ABB Ltd. (Sweden) (a) 23,966 2,393,750
Atlas Copco AB Series B 15,300 399,305
Avesta Sheffield AB (a) 142,700 676,976
Electrolux AB 65,200 1,304,040
Ericsson (L.M.) Telefon AB:
Class B 30,000 1,282,500
sponsored ADR Class B 155,000 6,626,250
Investor AB Class B Free 156,400 2,012,281
shares
Sandvik AB Series B 37,200 966,322
15,978,873
SWITZERLAND - 2.7%
Credit Suisse Group (Reg.) 28,500 5,490,499
Julius Baer Holding AG 200 602,932
Nestle SA (Reg.) 3,327 6,431,310
Novartis AG (Reg.) 2,900 4,347,426
PubliGroupe SA 3,152 2,317,007
Roche Holding AG 322 3,874,416
participation certificates
Sika Finanz AG 1,300 388,060
UBS AG 10,500 3,061,838
26,513,488
TAIWAN - 0.1%
Taishin International Bank 1,471,680 839,767
UNITED KINGDOM - 9.4%
Abbey National PLC 107,300 2,099,685
Alliance & Leicester PLC 68,800 1,004,636
Allied Domecq PLC 278,200 1,564,555
Allied Zurich PLC 417,700 5,048,464
Amvescap PLC 200,000 1,789,107
Arcadia Group PLC 202,500 510,309
Barclays PLC 71,800 2,199,605
Bass PLC 20,586 226,298
BICC PLC 447,600 802,276
Booker PLC 299,000 614,595
BP Amoco PLC sponsored ADR 142,032 8,202,348
British Aerospace PLC 279,200 1,632,159
British Vita PLC Ord. 148,200 597,065
Cordiant PLC 450,700 1,319,213
SHARES VALUE (NOTE 1)
Glaxo Wellcome PLC 209,800 $ 6,280,888
Iceland Group PLC 487,550 2,321,000
Independent Insurance PLC 533,400 2,429,631
Informa Group PLC 235,700 1,573,595
Morgan Crucible Co. PLC 192,700 770,008
National Westminster Bank PLC 111,300 2,514,718
Nycomed Amersham PLC 113,800 693,327
Orange PLC (a) 377,300 9,411,955
Royal & Sun Alliance 431,727 2,939,118
Insurance Group PLC
Royal Bank of Scotland Group 114,500 2,639,739
PLC
Rugby Group PLC 200,500 375,861
Safeway PLC 310,100 973,963
Scottish & Newcastle PLC 206,900 1,929,083
Shell Transport & Trading Co.
PLC:
ADR 35,000 1,605,625
(Reg.) 763,400 5,836,831
Smith & Nephew PLC 756,100 2,436,928
Smith (David S.) Holdings PLC 179,800 564,717
SmithKline Beecham PLC 70,000 4,480,000
sponsored ADR
Sun Life & Provincial Holding 94,200 703,645
PLC
Tesco PLC 664,000 1,976,306
Unilever PLC 178,571 1,660,153
Vodafone AirTouch PLC 213,000 10,210,688
sponsored ADR
91,938,094
UNITED STATES OF AMERICA -
44.6%
Abbott Laboratories 73,000 2,947,375
Abercrombie & Fitch Co. Class 24,000 654,000
A (a)
ACNielsen Corp. (a) 29,200 642,400
Adaptec, Inc. (a) 25,900 1,165,500
AES Corp. (a) 16,800 948,150
Affiliated Computer Services, 10,000 380,000
Inc. Class A (a)
AFLAC, Inc. 29,000 1,482,625
AHL Services, Inc. (a) 25,800 490,200
Alliant Techsystems, Inc. (a) 10,900 670,350
AlliedSignal, Inc. 38,000 2,163,625
ALLTEL Corp. 34,300 2,855,475
Altera Corp. (a) 24,300 1,181,588
Ambac Financial Group, Inc. 62,800 3,752,300
America Online, Inc. (a) 18,700 2,425,156
American Home Products Corp. 70,196 3,667,741
American Italian Pasta Co. 30,000 753,750
Class A (a)
Ames Department Stores, Inc. 39,500 1,251,656
(a)
Amgen, Inc. (a) 19,100 1,523,225
Apple Computer, Inc. (a) 12,800 1,025,600
Associates First Capital 75,000 2,737,500
Corp. Class A
At Home Corp. Series A (a) 18,000 672,750
AT&T Corp. 32,400 1,514,700
AT&T Corp. (Liberty Media 67,000 2,659,063
Group) Class A (a)
Atlantic Coast Airlines 30,000 697,500
Holdings (a)
Automatic Data Processing, 43,500 2,096,156
Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
Avery Dennison Corp. 29,000 $ 1,812,500
Avon Products, Inc. 288,206 9,294,644
Ball Corp. 9,000 362,813
Bank of America Corp. 81,000 5,214,375
Bank of New York Co., Inc. 46,000 1,926,250
Barrett Resources Corp. (a) 23,000 771,938
BE Aerospace, Inc. (a) 82,000 825,125
BellSouth Corp. 71,200 3,204,000
Bestfoods 19,000 1,116,250
Biomet, Inc. 60,231 1,814,459
BJ Services Co. (a) 33,000 1,132,313
BJ's Wholesale Club, Inc. (a) 27,100 835,019
Block (H&R), Inc. 15,000 638,438
Boeing Co. 37,000 1,704,313
Boise Cascade Corp. 13,000 463,125
Bowater, Inc. 20,000 1,050,000
Bristol-Myers Squibb Co. 114,800 8,818,075
Burlington Northern Santa Fe 115,400 3,678,375
Corp.
Burlington Resources, Inc. 34,800 1,213,650
Calpine Corp. (a) 41,000 2,362,625
Canandaigua Brands, Inc. 15,100 913,550
Class A (a)
Cardinal Health, Inc. 30,800 1,328,250
Case Corp. 26,400 1,399,200
Caterpillar, Inc. 41,100 2,270,775
CBS Corp. (a) 24,000 1,171,500
CDW Computer Centers, Inc. (a) 9,000 555,750
CEC Entertainment, Inc. (a) 26,600 852,863
Centex Corp. 14,400 386,100
CenturyTel, Inc. 35,500 1,435,531
Ceridian Corp. (a) 65,000 1,425,938
Champion International Corp. 30,000 1,734,375
Chase Manhattan Corp. 77,000 6,727,875
CIGNA Corp. 8,900 665,275
Circuit City Stores, Inc. - 38,000 1,622,125
Circuit City Group
Cisco Systems, Inc. (a) 124,668 9,225,432
Citigroup, Inc. 166,808 9,028,483
Citrix Systems, Inc. (a) 15,000 961,875
Clorox Co. 89,138 3,649,087
CMGI, Inc. (a) 8,200 897,388
CNF Transportation, Inc. 20,745 685,882
Computer Sciences Corp. (a) 26,600 1,827,088
Compuware Corp. (a) 40,400 1,123,625
Concord EFS, Inc. (a) 25,500 690,094
Consolidated Papers, Inc. 45,000 1,409,063
Consolidated Stores Corp. (a) 130,500 2,389,781
Convergys Corp. (a) 20,200 395,163
Cordant Technologies, Inc. 34,300 1,069,731
Corn Products International, 13,000 423,313
Inc.
Corning, Inc. 9,100 715,488
CVS Corp. 21,000 912,188
Dayton Hudson Corp. 52,700 3,405,738
SHARES VALUE (NOTE 1)
Dean Foods Co. 12,000 $ 555,000
Dell Computer Corp. (a) 81,000 3,250,125
Dial Corp. 74,100 1,732,088
Donnelley (R.R.) & Sons Co. 42,700 1,035,475
DST Systems, Inc. (a) 13,000 827,938
Dynegy, Inc. 131,000 2,996,625
eBay, Inc. 9,000 1,216,125
Eli Lilly & Co. 81,500 5,613,313
EMC Corp. (a) 40,000 2,920,000
Entergy Corp. 38,000 1,137,625
Express Scripts, Inc. Class A 13,000 638,625
(a)
Exxon Corp. 81,100 6,006,469
Fannie Mae 68,000 4,811,000
Ferro Corp. 34,000 692,750
Financial Security Assurance 9,000 507,375
Holdings Ltd.
Fluor Corp. 18,000 717,750
Fortune Brands, Inc. 37,000 1,311,188
Fox Entertainment Group, Inc. 31,000 670,375
Class A
Freddie Mac 44,500 2,405,781
Fuller (H.B.) Co. 6,700 366,825
Gateway, Inc. (a) 56,000 3,699,500
Gaylord Container Corp. Class 101,000 568,125
A (a)
General Dynamics Corp. 23,000 1,275,063
General Electric Co. 125,000 16,945,313
General Instrument Corp. (a) 35,000 1,883,438
General Mills, Inc. 15,000 1,307,813
Golden West Financial Corp. 6,000 670,500
H.J. Heinz Co. 14,000 668,500
Halliburton Co. 34,000 1,281,375
Harte Hanks Communications, 19,000 376,438
Inc.
Hartford Financial Services 44,600 2,310,838
Group, Inc.
Home Depot, Inc. 74,600 5,632,300
Household International, Inc. 33,000 1,472,625
Illinova Corp. 100 3,181
Ingersoll-Rand Co. 34,700 1,813,075
Intel Corp. 72,200 5,590,988
Interpublic Group of 17,200 698,750
Companies, Inc.
Jabil Circuit, Inc. (a) 16,100 841,225
JDS Uniphase Corp. (a) 6,900 1,151,438
Johnson & Johnson 50,000 5,237,500
Keebler Foods Co. (a) 45,000 1,437,188
Knight/Trimark Group, Inc. 12,000 312,750
Class A (a)
Kroger Co. (a) 80,000 1,665,000
Legato Systems, Inc. (a) 22,300 1,198,625
Lehman Brothers Holdings, 55,700 4,104,394
Inc.
Lexmark International Group, 17,500 1,366,094
Inc. Class A (a)
Limited, Inc. (The) 21,000 863,625
Litton Industries, Inc. (a) 13,700 643,044
Liz Claiborne, Inc. 18,300 732,000
Lowe's Companies, Inc. 17,600 968,000
LSI Logic Corp. (a) 19,200 1,021,200
Lucent Technologies, Inc. 33,900 2,178,075
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
Lycos, Inc. (a) 15,900 $ 850,650
MapInfo Corp. (a) 32,900 610,706
Marshall & Ilsley Corp. 27,000 1,812,375
MBIA, Inc. 47,900 2,733,294
McDonald's Corp. 52,000 2,145,000
McGraw-Hill Companies, Inc. 32,000 1,908,000
MCI WorldCom, Inc. (a) 101,300 8,692,806
McLeodUSA, Inc. Class A (a) 38,000 1,695,750
Mead Corp. 29,000 1,044,000
MediaOne Group, Inc. 80,406 5,713,851
Merck & Co., Inc. 51,000 4,057,688
Meredith Corp. 39,000 1,391,813
Michaels Stores, Inc. (a) 19,500 654,469
Microchip Technology, Inc. (a) 14,100 939,413
Microsoft Corp. (a) 292,709 27,093,856
Millipore Corp. 30,000 956,250
Mobil Corp. 57,000 5,500,500
Mohawk Industries, Inc. (a) 19,000 435,813
MotivePower Industries, Inc. 141,000 1,683,188
(a)
Motorola, Inc. 11,000 1,071,813
Nabisco Group Holdings Corp. 68,200 873,813
National Instrument Corp. (a) 21,000 631,313
Navistar International Corp. 23,700 987,994
(a)
NCO Group, Inc. (a) 4,600 194,925
NCR Corp. (a) 22,500 745,313
Network Appliance, Inc. (a) 3,500 259,000
Newport News Shipbuilding, 67,000 2,035,125
Inc.
Nextel Communications, Inc. 22,000 1,896,125
Class A (a)
Noble Drilling Corp. (a) 20,000 443,750
Ogden Corp. 35,000 317,188
Olin Corp. 191,000 2,638,188
Omnicom Group, Inc. 11,000 968,000
Parker-Hannifin Corp. 20,800 952,900
Payless ShoeSource, Inc. (a) 13,000 595,563
PG&E Corp. 39,400 903,738
Philip Morris Companies, Inc. 172,800 4,352,400
Pittway Corp. Class A 21,300 702,900
Polymer Group, Inc. (a) 42,900 839,231
Praxair, Inc. 18,000 841,500
Procter & Gamble Co. 30,700 3,219,663
Profit Recovery Group 15,200 626,050
International, Inc. (a)
Providian Financial Corp. 22,015 2,399,635
Quaker Oats Co. 25,400 1,778,000
QUALCOMM, Inc. (a) 8,000 1,782,000
Quixote Corp. 44,300 658,963
Reader's Digest Association, 84,000 2,709,000
Inc. Class A (non-vtg.)
Republic Services, Inc. Class 25,000 306,250
A (a)
RJ Reynolds Tobacco Holdings, 50,700 1,099,556
Inc.
Rohm & Haas Co. 27,800 1,063,350
SHARES VALUE (NOTE 1)
Ryder System, Inc. 30,000 $ 641,250
Sabre Group Holdings, Inc. 7,000 311,063
Class A (a)
Safeway, Inc. (a) 52,000 1,836,250
SBC Communications, Inc. 124,064 6,319,510
Schering-Plough Corp. 20,000 990,000
Seagate Technology, Inc. (a) 26,200 771,263
Siebel Systems, Inc. (a) 16,000 1,757,000
Solutia, Inc. 47,000 807,813
SPX Corp. (a) 12,800 1,084,800
Starwood Hotels & Resorts 40,000 917,500
Worldwide, Inc. unit
Steel Dynamics, Inc. (a) 47,000 643,313
Sunoco, Inc. 92,000 2,219,500
Syncor International Corp. (a) 27,300 999,863
Tanning Technology Corp. 16,200 569,025
TCF Financial Corp. 18,000 531,000
Texas Instruments, Inc. 29,200 2,620,700
Textron, Inc. 17,000 1,312,188
Time Warner, Inc. 50,100 3,491,344
Tosco Corp. 30,000 759,375
Trex Co., Inc. (a) 29,200 691,675
Tricon Global Restaurants, 60,340 2,424,914
Inc. (a)
True North Communications 32,000 1,290,000
TSI International Software 26,100 626,400
Ltd. (a)
U.S. Bancorp 96,000 3,558,000
U.S. Foodservice (a) 33,000 633,188
Ultramar Diamond Shamrock 50,000 1,225,000
Corp.
Union Pacific Corp. 22,000 1,226,500
Unisys Corp. (a) 100,022 2,425,534
UnitedGlobalCom, Inc. (a) 13,000 1,131,000
USA Networks, Inc. (a) 15,000 675,938
USFreightways Corp. 8,700 394,219
USX-Marathon Group 41,000 1,194,125
Vastar Resources, Inc. 10,100 596,531
VERITAS Software Corp. (a) 11,000 1,186,625
Viacom, Inc. Class B 49,000 2,192,750
(non-vtg.) (a)
Visual Networks, Inc. (a) 15,000 624,375
VoiceStream Wireless Corp. (a) 14,000 1,382,500
Walgreen Co. 119,600 3,012,425
Warner-Lambert Co. 70,255 5,607,227
Washington Mutual, Inc. 28,800 1,035,000
Weatherford International, 28,000 948,500
Inc. (a)
Wells Fargo & Co. 90,000 4,308,750
Westvaco Corp. 30,000 890,625
WinStar Communications, Inc. 11,000 426,938
(a)
Yahoo!, Inc. (a) 11,000 1,969,688
437,299,482
TOTAL COMMON STOCKS 937,602,113
(Cost $808,666,633)
NONCONVERTIBLE PREFERRED
STOCKS - 0.3%
SHARES VALUE (NOTE 1)
GERMANY - 0.3%
Wella AG (Cost $3,672,093) 101,842 $ 2,846,978
CASH EQUIVALENTS - 6.0%
Central Cash Collateral Fund, 17,016,747 17,016,747
5.26% (b)
Taxable Central Cash Fund, 42,224,898 42,224,898
5.21% (b)
TOTAL CASH EQUIVALENTS 59,241,645
(Cost $59,241,645)
TOTAL INVESTMENT PORTFOLIO - 999,690,736
101.9%
(Cost $871,580,371)
NET OTHER ASSETS - (1.9)% (18,855,744)
NET ASSETS - 100% $ 980,834,992
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $2,807,828 or 0.3% of net assets.
(d) Purchased on an installment basis. Market value reflects only
those payments made through October 31, 1999. The remaining
installments aggregating AUD 942,500 are due November 2, 2000.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,499,033,371 and $1,625,576,706, 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 $131,555 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $16,155,465. The fund
received cash collateral of $17,016,747 which was invested in the
Central Cash Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $874,571,662. Net unrealized appreciation
aggregated $125,119,074, of which $158,910,238 related to appreciated
investment securities and $33,791,164 related to depreciated
investment securities.
The fund hereby designates approximately $41,255,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
AEROSPACE & DEFENSE 1.4%
BASIC INDUSTRIES 3.7
CASH EQUIVALENTS 6.0
CONSTRUCTION & REAL ESTATE 1.7
DURABLES 3.3
ENERGY 5.3
FINANCE 19.1
HEALTH 9.3
INDUSTRIAL MACHINERY & 6.3
EQUIPMENT
MEDIA & LEISURE 4.6
NONDURABLES 6.5
RETAIL & WHOLESALE 5.4
SERVICES 1.4
TECHNOLOGY 14.0
TRANSPORTATION 1.3
UTILITIES 12.6
WORLDWIDE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 999,690,736
value (cost $871,580,371) -
See accompanying schedule
Cash 1,380,764
Foreign currency held at 1,170,635
value (cost $1,169,855)
Receivable for investments 8,330,179
sold
Receivable for fund shares 2,830,963
sold
Dividends receivable 1,701,984
Interest receivable 172,196
Other receivables 42,056
TOTAL ASSETS 1,015,319,513
LIABILITIES
Payable for investments $ 14,226,533
purchased
Payable for fund shares 2,380,013
redeemed
Accrued management fee 569,776
Other payables and accrued 291,452
expenses
Collateral on securities 17,016,747
loaned, at value
TOTAL LIABILITIES 34,484,521
NET ASSETS $ 980,834,992
Net Assets consist of:
Paid in capital $ 756,709,095
Undistributed net investment 4,445,154
income
Accumulated undistributed net 91,570,426
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 128,110,317
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 51,978,114 $ 980,834,992
shares outstanding
NET ASSET VALUE, offering $18.87
price and redemption price
per share ($980,834,992
(divided by) 51,978,114
shares)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 13,904,527
Dividends
Interest 1,917,546
Security lending 16,230
15,838,303
Less foreign taxes withheld (1,037,118)
TOTAL INCOME 14,801,185
EXPENSES
Management fee $ 7,059,622
Transfer agent fees 2,907,774
Accounting and security 489,303
lending fees
Non-interested trustees' 3,612
compensation
Custodian fees and expenses 281,285
Registration fees 27,596
Audit 38,834
Legal 4,317
Miscellaneous 2,455
Total expenses before 10,814,798
reductions
Expense reductions (543,236) 10,271,562
NET INVESTMENT INCOME 4,529,623
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 93,756,980
Foreign currency transactions (72,226) 93,684,754
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 120,653,228
Assets and liabilities in (87,296) 120,565,932
foreign currencies
NET GAIN (LOSS) 214,250,686
NET INCREASE (DECREASE) IN $ 218,780,309
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 496,961
Expense reductions Directed
brokerage arrangements
Custodian credits 1,360
Transfer agent credits 44,915
$ 543,236
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 4,529,623 $ 10,606,399
income
Net realized gain (loss) 93,684,754 54,276,462
Change in net unrealized 120,565,932 (97,262,806)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 218,780,309 (32,379,945)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (6,008,790) (7,179,216)
From net investment income
From net realized gain (26,442,347) (75,708,622)
TOTAL DISTRIBUTIONS (32,451,137) (82,887,838)
Share transactions Net 565,425,727 1,176,690,836
proceeds from sales of shares
Reinvestment of distributions 31,563,831 81,441,133
Cost of shares redeemed (774,588,535) (1,331,950,770)
NET INCREASE (DECREASE) IN (177,598,977) (73,818,801)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 8,730,195 (189,086,584)
IN NET ASSETS
NET ASSETS
Beginning of period 972,104,797 1,161,191,381
End of period (including $ 980,834,992 $ 972,104,797
undistributed net investment
income of $4,445,154 and
$12,289,760, respectively)
OTHER INFORMATION
Shares
Sold 32,894,318 67,640,582
Issued in reinvestment of 2,000,226 5,220,585
distributions
Redeemed (45,257,975) (77,774,326)
Net increase (decrease) (10,363,431) (4,913,159)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 15.59 $ 17.27 $ 15.18 $ 13.32 $ 13.96
period
Income from Investment
Operations
Net investment income .08 B .16 B .21 B, D .22 .17
Net realized and unrealized 3.74 (.57) 2.43 1.79 (.08)
gain (loss)
Total from investment 3.82 (.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 $ 18.87 $ 15.59 $ 17.27 $ 15.18 $ 13.32
TOTAL RETURN A 25.18% (2.38)% 17.95% 15.25% .95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 980,835 $ 972,105 $ 1,161,191 $ 877,218 $ 659,045
(000 omitted)
Ratio of expenses to average 1.12% 1.15% 1.18% 1.19% 1.17%
net assets
Ratio of expenses to average 1.07% C 1.12% C 1.16% C 1.18% C 1.16% C
net assets after expense
reductions
Ratio of net investment .47% .91% 1.24% 1.71% 2.05%
income to average net assets
Portfolio turnover rate 164% 100% 85% 49% 70%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
D INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Global Balanced Fund is a fund of Fidelity Puritan Trust.
Fidelity International Growth & Income Fund, Fidelity Diversified
International Fund, Fidelity International Value Fund, Fidelity
Overseas Fund and Fidelity Worldwide Fund are funds of Fidelity
Investment Trust. Each 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. At a special meeting of the shareholders of Fidelity Global
Balanced Fund, held on July 14, 1999, shareholders approved an
agreement and Plan of Reorganization of the fund into Fidelity
Investment Trust, effective on or about December 29, 1999. 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. Equity 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. Debt securities for which quotations are readily
available are valued by a pricing service at their market values as
determined by their most recent bid prices in the principal market
(sales prices if the principal market is an exchange) in which such
securities are normally traded. Securities (including restricted
securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations or at their fair value.
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.
Foreign governments may also impose taxes on other payments or
transactions with respect to foreign securities. 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.
DEFERRED TRUSTEE COMPENSATION. 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,
non-taxable dividends 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the funds may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund(the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the funds are
recorded as either interest income or security lending 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. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments. At the end of the period, no funds had
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), 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 .2167% 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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 fees was equivalent to the following annual rates expressed
as a percentage of average net assets after the performance
adjustment, if applicable:
Global Balanced* .73%**
International Growth & Income .73%
Diversified International .83%
International Value .83%
Overseas .92%
Worldwide .73%
* FOR THE PERIOD AUGUST 1, 1999 TO OCTOBER 31, 1999. THE MANAGEMENT
FEE RATE FOR THE FISCAL YEAR
ENDED JULY 31, 1999 WAS .74%.
** ANNUALIZED
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.
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. The amounts received by FDC
for deferred sales charges are shown under the caption "Other
Information" on the 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, each fund's transfer
agent fees was equivalent to an annual rate expressed as a percentage
of average net assets:
Global Balanced* .25%**
International Growth & Income .28%
Diversified International .27%
International Value .24%
Overseas .27%
Worldwide .30%
* FOR THE PERIOD AUGUST 1, 1999 TO OCTOBER 31, 1999. THE TRANSFER
AGENT FEE RATE FOR THE FISCAL YEAR ENDED JULY 31, 1999
WAS .26%.
** ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains each fund's
accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting 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 lend portfolio securities from time to time in order to
earn additional income. Each applicable fund receives collateral (in
the form of U.S. Treasury obligations, letters of credit and/or cash)
against the loaned securities and maintains collateral in an amount
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 funds and any additional
required collateral is delivered to the funds on the next business
day. If the borrower defaults on its obligation to return the
securities loaned because of insolvency or other reasons, a fund could
experience delays and costs in recovering the securities loaned or in
gaining access to the collateral. 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 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. 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.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and Fidelity Investment
Trust and the Shareholders of Fidelity Global Balanced Fund, Fidelity
International Growth & Income Fund, Fidelity International Value Fund
and Fidelity Overseas Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Global Balanced Fund (a fund of Fidelity Puritan Trust),
Fidelity International Growth & Income Fund, Fidelity International
Value Fund and Fidelity Overseas Fund (funds of Fidelity Investment
Trust) at October 31, 1999, and the results of their operations, the
changes in their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Puritan Trust's and the Fidelity
Investment Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at October
31, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 15, 1999
INDEPENDENT AUDITORS' REPORT
To the Trustees of Fidelity Investment Trust and Shareholders of
Fidelity Diversified International Fund and Fidelity Worldwide Fund:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Fidelity Investment Trust:
Fidelity Diversified International Fund and Fidelity Worldwide Fund as
of October 31, 1999, and the related statements of operations, changes
in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended
October 31, 1998, and the financial highlights for each of the years
in the four-year period ended October 31, 1998, were audited by other
auditors whose report, dated December 14, 1998, expressed an
unqualified opinion on those statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of the securities owned at October 31, 1999, by
correspondence with the custodian and brokers; where replies were not
received from brokers, we performed other auditing procedures. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Fidelity Investment Trust: Fidelity Diversified International Fund and
Fidelity Worldwide Fund at October 31, 1999, the results of its
operations, the changes in its net assets, and its financial
highlights for the year then ended in conformity with generally
accepted accounting principles.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 3, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Investment Trust voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales
of portfolio securities, and dividends derived from net investment
income:
Fidelity Global Balanced Fund
Pay Date 12/06/99
Record Date 12/03/99
Dividends .15
Capital Gains .25
Fidelity International Growth & Income Fund
Pay Date 12/06/99
Record Date 12/03/99
Dividends .33
Capital Gains 1.50
Fidelity Diversified International Fund
Pay Date 12/06/99
Record Date 12/03/99
Dividends .25
Capital Gains .70
Fidelity International Value Fund
Pay Date 12/13/99
Record Date 12/10/99
Dividends
Capital Gains
Fidelity Overseas Fund
Pay Date 12/06/99
Record Date 12/03/99
Dividends .44
Capital Gains 2.64
Fidelity Worldwide Fund
Pay Date 12/13/99
Record Date 12/10/99
Dividends
Capital Gains
Each fund hereby designates 100% of the long-term capital gain
dividends distributed during the fiscal year as 20%-rate capital gain
dividends.
A percentage of the dividends distributed during the fiscal year for
the following funds was derived from interest on U.S. Government
securities which is generally exempt from state income tax:
Global Balanced 0%
International Growth & Income 0%
Diversified International 0%
International Value 0%
Overseas 0%
Worldwide 0%
A percentage of the dividends distributed during the fiscal year for
the following funds qualifies for the dividends-received deduction for
corporate shareholders:
Global Balanced 13%
International Growth & Income 3%
Diversified International 4%
International Value 3%
Overseas 5%
Worldwide 39%
The amounts per share which represent income derived from sources
within, and taxes paid to, foreign countries or possessions of the
United States are as follows:
FUND PAY DATE INCOME TAXES
International Growth & Income 12/07/98 $.128 $.038
Diversified International 12/07/98 $.271 $.041
International Value 12/14/98 $.077 $.027
Overseas 12/07/98 $.277 $.077
Worldwide 12/14/98 $.137 $.037
The funds will notify shareholders in January 2000 of amounts for use
in preparing 1999 income tax returns.
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on July 14,
1999. The results of votes taken among shareholders on proposals
before them are reported below. Each vote reported represents one
dollar of net asset value held on the record date for the meeting.
PROPOSAL 1
To approve an amended management contract for the fund.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 983,747,960.03 77.767
Against 68,186,327.88 5.390
Abstain 213,060,851.88 16.843
TOTAL 1,264,995,139.79 100.000
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
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
Ned C. Lautenbach
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 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST SM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(registered trademark)
BULK RATE
U.S. Postage
PAID
Fidelity
Investments
P.O. Box 193
Boston, MA 02101
(2_FIDELITY_LOGOS)FIDELITY'S(REGISTERED TRADEMARK)
TARGETED INTERNATIONAL EQUITY
FUNDS
Fidelity France Fund
Fidelity Germany Fund
Fidelity United Kingdom Fund
ANNUAL REPORT
FOR THE YEAR ENDING
OCTOBER 31, 1999
AND
PROSPECTUS
DATED DECEMBER 29, 1999
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET RECAP A-3 A REVIEW OF WHAT HAPPENED IN
WORLD MARKETS DURING THE
PAST 12 MONTHS.
FRANCE FUND A-4 A-5 A-6 A-7 A-9 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
GERMANY FUND A-11 A-12 A-13 A-14 A-16 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
UNITED KINGDOM FUND A-18 A-19 A-20 A-21 A-23 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NOTES TO FINANCIAL STATEMENTS A-25 NOTES TO THE FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT A-28 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS A-29
PROSPECTUS P-1
</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.
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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
MARKET RECAP
It took over 100 interest-rate cuts by central banks around the world
to defuse the powder keg that characterized global equity markets 12
months ago. Those easings sparked a dramatic worldwide recovery and,
in a few cases - particularly in the U.S. - were so powerful that some
of the easings needed to be reversed. The bottom line, however, is
that the world was a much better place to invest in at the conclusion
of the 12 months ending October 31, 1999, than it was at the beginning
of the period.
EUROPE: European markets offered mixed results over the past 12
months. In that time, the Morgan Stanley Capital International Europe
Index returned 12.79%. The U.K. posted the most impressive market
returns, due in large part to the strength of the vibrant
telecommunications industry. Italy and Germany, meanwhile, lagged
behind, mostly due to fears of higher interest rates. The weak
performance of the euro - the new single currency of 11 European
nations that was introduced January 1, 1999 - didn't help matters. An
additional detriment was the subpar performance of many of Europe's
largest pharmaceutical companies, which suffered due to non-compelling
product introductions and slow revenue growth. On a positive note,
cross-border consolidation played a significant role across the
European corporate landscape, as merger, acquisition and takeover bid
announcements were almost daily occurrences.
EMERGING MARKETS: A year ago, the emerging markets' outlook was bleak.
Currency problems were the norm for several regions, and market
volatility reigned supreme. In the fall of 1999, however, the markets
told a different story. Over the past 12 months, the Morgan Stanley
Capital International Emerging Markets Free Index returned 44.63%.
Several factors contributed to this about-face, including lower
interest rates and favorable export and trade data. Sentiment shifts
were evident in markets such as Singapore, Thailand and especially
India, where the strong performance of technology stocks helped propel
that market to phenomenal returns. Latin America was also a comeback
story, as Brazil rebounded nicely from it currency devaluation in
January. Mexico, however, slipped over the past several months due to
concerns about interest rates and fears of a potentially weaker peso.
JAPAN AND THE FAR EAST: For overseas investors, Japan was the place to
be for the 12-month period that ended October 31, 1999. A renewed
emphasis on corporate restructuring and shareholder
Standard & Poor's 500 Index(registered trademark) Morgan Stanley
Capital International Europe, Australasia, Far East Index
* YEAR TO DATE THROUGH OCTOBER 31, 1999.
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: 28.58
Row: 16, Col: 2, Value: 20.27
Row: 17, Col: 1, Value: 12.03
Row: 17, Col: 2, Value: 12.79
%
value - combined with the Japanese government's willingness to create
more of a free-enterprise market system - proved successful. For the
period, the Morgan Stanley Capital International Japan Index returned
58.40% and Japan's TOPIX Index returned 69.97%. Other Asian markets
also received a vicarious boost from Japan: Technology-driven markets
such as South Korea and Taiwan performed well, as worldwide demand for
personal computers translated into positive gains for semiconductor
manufacturers.
U.S. AND CANADA: The U.S. equity market produced solid returns for the
12 months ending October 31, 1999. The Dow Jones Industrial Average
returned 26.84%, while the Standard & Poor's 500 Index - a popular
gauge of U.S. stock market performance - returned 25.67%. Early on,
the Federal Reserve Board tried to stabilize the impact of shaky
global markets on the U.S. by lowering interest rates. In response,
the Dow hit the 10,000 level for the first time in March. Late in the
second quarter, however, concerns over an overheating U.S. economy and
global market recoveries triggered inflation fears. In June and again
in August, the Fed raised rates and the market sold off throughout the
third quarter as investors anticipated additional increases. In the
end, technology stocks were the clear winners as the NASDAQ Index
reeled off a healthy 67.98% return. While Canadian equity markets
didn't get nearly the attention of their neighbors to the south, their
performance was nearly as loud, as the Toronto Stock Exchange (TSE)
300 returned 24.49%.
BONDS: With few exceptions, bond performance either fell flat or
dropped into negative territory for the 12-month period. Concerns
about inflation, higher interest rates and the solid performance of
world equity markets posed the major threats to fixed-income
instruments. For the period, the Lehman Brothers Aggregate Bond Index
- - a widely followed measure of taxable bond performance - posted a
total return of 0.53%. U.S. Treasuries gave back all of their
flight-to-quality gains - and then some - captured during the fall of
1998, as the Lehman Brothers Long-Term Government Index fell 6.10%.
Meanwhile, the Lehman Brothers Corporate Bond Index returned 0.61%,
and the Salomon Brothers Non-U.S. World Government Bond Index fell
2.96%. There were a few bright spots, however. The high-yield market,
as measured by the Merrill Lynch High Yield Master II Index, returned
5.61% during the 12-month period, while the JP Morgan Emerging Markets
Bond Index Plus returned 19.98%.
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 OCTOBER 31, 1994 PAST 1 YEAR LIFE OF FUND
FIDELITY FRANCE 21.69% 110.71%
FIDELITY FRANCE (INCL. 18.04% 104.39%
3.00% SALES CHARGE)
SBF 250 25.37% 126.06%
European Region Funds Average 10.72% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 Socirty des Bourses Francaises 250 Index (SBF 250)
- - a market capitalization-weighted index of the 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
one year average represents a peer group of 138 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 LIFE OF FUND
FIDELITY FRANCE 21.69% 20.48%
FIDELITY FRANCE (INCL. 18.04% 19.57%
3.00% SALES CHARGE)
SBF 250 25.37% 22.62%
European Region Funds Average 10.72% 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
1999/05/31 17763.04 19663.45
1999/06/30 18662.58 20588.65
1999/07/31 18639.80 20857.23
1999/08/31 19083.88 21553.07
1999/09/30 19562.11 21781.13
1999/10/29 20438.88 22606.15
IMATRL PRASUN SHR__CHT 19991031 19991109 144248 R00000000000051
$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 October 31, 1999, the value of the investment would have
grown to $20,439 - a 104.39% increase on the initial investment. For
comparison, look at how the Society des Bourses Francaises 250 Index
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,606 - a 126.06%
increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
FRANCE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Alexandra Hartmann, Portfolio Manager of Fidelity
France Fund
Q. HOW DID THE FUND PERFORM, ALEXANDRA?
A. For the 12-month period that ended October 31, 1999, the fund
returned 21.69%, compared to the 25.37% return of the Societe des
Bourses Francaises (SBF) 250 Index and the 10.72% European region
funds average return, as measured by Lipper Inc.
Q. WHILE THE FUND SOUNDLY OUTPERFORMED ITS PEER GROUP, IT TRAILED ITS
BENCHMARK INDEX. WHAT FACTORS ACCOUNTED FOR THIS PERFORMANCE OVER THE
PAST YEAR?
A. Supported by high consumer confidence and growing household income,
the French equity market showed strong gains during the fiscal year,
particularly in the final three months of the period. While this
scenario helped the fund outperform the European funds average,
problems in several of the fund's larger holdings held back
performance relative to the SBF 250 index. I'll discuss these in more
detail later in the report.
Q. WHAT WERE YOUR PRINCIPAL STRATEGIES WITHIN THIS ENVIRONMENT OF
FAVORABLE CONSUMER SENTIMENT?
A. During most of the year, I took advantage of strong consumer
spending by emphasizing the companies in the retailing, personal care
and media industries, as well as growth companies in the
telecommunications and business services industries. In general, I
sought out companies with clear business strategies and proactive
managements, and I was alert to opportunities presented in industries
where I anticipated merger-and-acquisition activity. I tended to
de-emphasize cyclical industries such as chemicals, automobiles and
general industries.
Q. WHAT WERE SOME OF THE INVESTMENTS THAT HELPED THE FUND'S
PERFORMANCE?
A. Among the best performing sectors were retailers and media
companies. TF-1, a media company, benefited from strong increases in
advertising rates and effective cost controls. NRJ, which owns radio
stations, proved to be an excellent performer. Retailers Castorama and
Carrefour also helped, driven by strong consumer demand. Within the
telecommunications sector, France Telecom, the fund's largest holding,
outperformed the broad market. Other contributors included Equant, a
global data service provider, and STMicroelectronics.
Q. WHAT WERE SOME OF THE DISAPPOINTMENTS?
A. Large holdings in Vivendi and Suez Lyonnaise des Eaux performed
poorly as utilities and other defensive stocks fell into disfavor with
investors. Toward the end of the period, stock selection in the energy
sector hurt performance. The fund had a relatively large investment in
oil giant Total Fina, whose share price fell during the third quarter
of 1999. An underweighted position in Elf Aquitaine another oil
company, hurt as its share price rose after Total Fina announced its
intention to acquire Elf Aquitaine. Fund performance also was held
back by not holding some of the strong-performing cyclical companies
in industries such as construction, electronics, metals and materials.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND DURING THE NEXT SEVERAL MONTHS?
A. The earnings outlook for French companies appears favorable,
particularly relative to expectations for European companies in
general. Consumer confidence remains very high, and economic growth is
expected to continue to be higher than Europe as a whole.
Unemployment, while high, is declining. Despite these favorable
factors, I am somewhat concerned about the relatively high valuations
of many French stocks. However, high valuation levels are partly
justified by strong volume growth in sectors such as
telecommunications and information technology, which I continued to
emphasize at the end of the period. The pace of global economic growth
will be an important factor influencing French stock performance, as
many of the largest companies in France are focused on international
markets.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-2.
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 October 31, 1999, more than
$11 million
MANAGER: Alexandra Hartmann, since 1998;
manager, Fidelity Germany Fund, since 1996;
joined Fidelity in 1994
(checkmark)
FRANCE
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Austria 0.8%
United States 4.9%
Netherlands 5.8%
Row: 1, Col: 1, Value: 0.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 87.40000000000001
Row: 1, Col: 4, Value: 1.1
Row: 1, Col: 5, Value: 5.8
Row: 1, Col: 6, Value: 4.9
Luxembourg 1.1%
France 87.4%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
Austria 0.6%
United States 0.5%
Belgium 0.9%
Netherlands 5.8%
Row: 1, Col: 1, Value: 0.6000000000000001
Row: 1, Col: 2, Value: 0.9
Row: 1, Col: 3, Value: 92.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 5.8
Row: 1, Col: 6, Value: 0.5
France 92.2%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 95.1 99.5
Short-Term Investments and 4.9 0.5
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
France Telecom SA (Telephone 9.2 9.0
Services)
Total Fina SA Class B (Oil & 8.8 8.6
Gas)
Carrefour SA (SUPERMARCHE) 4.9 3.9
(General Merchandise Stores)
AXA SA de CV (Insurance) 4.4 4.9
L'Oreal SA (Household Products) 3.9 5.7
Banque Nationale de Paris 3.6 2.3
(Banks)
Rhone-Poulenc SA Class A 3.6 2.0
(Drugs & Pharmaceuticals)
Suez Lyonnaise des Eaux 3.1 4.3
(Services)
STMicroelectronics NV 3.0 1.8
(Electronics)
Television Francaise 1 SA 2.7 1.3
(Broadcasting)
47.2 43.8
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 11.5 11.4
RETAIL & WHOLESALE 11.0 9.7
UTILITIES 10.9 15.6
FINANCE 10.2 14.2
ENERGY 8.8 8.6
SERVICES 8.0 6.4
MEDIA & LEISURE 7.5 3.3
CONSTRUCTION & REAL ESTATE 7.1 3.2
NONDURABLES 6.9 11.7
DURABLES 5.1 6.4
</TABLE>
FRANCE
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 95.1%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 2.7%
CHEMICALS & PLASTICS - 2.7%
Rhodia SA 16,410 $ 317,655
CONSTRUCTION & REAL ESTATE -
7.1%
BUILDING MATERIALS - 3.1%
Ciments Francais SA 1,783 114,358
Lafarge SA 2,590 249,995
364,353
CONSTRUCTION - 1.4%
Alstom SA 5,412 164,423
ENGINEERING - 2.6%
Bouygues 601 209,852
VA Technologie AG 1,390 93,213
303,065
TOTAL CONSTRUCTION & REAL 831,841
ESTATE
DURABLES - 5.1%
AUTOS, TIRES, & ACCESSORIES -
1.7%
Peugeot SA 1,047 201,568
TEXTILES & APPAREL - 3.4%
Christian Dior SA 1,363 244,718
Hermes International SA 1,348 147,889
392,607
TOTAL DURABLES 594,175
ENERGY - 8.8%
OIL & GAS - 8.8%
Total Fina SA Class B 7,723 1,030,055
FINANCE - 10.2%
BANKS - 5.8%
Banque Nationale de Paris 4,844 426,680
Banque Nationale de Paris 1,079 6,397
warrants 7/1/02 (a)
Societe Generale, France 1,135 247,843
Class A
680,920
INSURANCE - 4.4%
AXA SA de CV 3,609 510,537
TOTAL FINANCE 1,191,457
HEALTH - 3.6%
DRUGS & PHARMACEUTICALS - 3.6%
Rhone-Poulenc SA Class A 7,673 425,851
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.8%
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.6%
Compagnie de Fives-Lille 186 17,070
Sidel SA 1,734 173,774
190,844
SHARES VALUE (NOTE 1)
POLLUTION CONTROL - 0.2%
Serp Recyclage (a) 212 $ 24,332
TOTAL INDUSTRIAL MACHINERY & 215,176
EQUIPMENT
MEDIA & LEISURE - 7.5%
BROADCASTING - 5.6%
Audiofina 2,654 133,826
NRJ SA 662 206,710
Television Francaise 1 SA 1,023 321,590
662,126
ENTERTAINMENT - 0.9%
Europeene de Casinos SA 802 101,524
LODGING & GAMING - 1.0%
Club Mediterranee SA (a) 1,159 116,394
TOTAL MEDIA & LEISURE 880,044
NONDURABLES - 6.9%
BEVERAGES - 1.5%
LVMH (Louis Vuitton Moet 585 177,112
Hennessy)
HOUSEHOLD PRODUCTS - 5.1%
Clarins SA 1,164 114,932
Clarins SA rights 12/27/99 (a) 1,164 19,192
L'Oreal SA 692 463,179
597,303
TOBACCO - 0.3%
Seita SA 544 30,415
TOTAL NONDURABLES 804,830
RETAIL & WHOLESALE - 11.0%
APPAREL STORES - 1.5%
Brice SA 1,970 129,261
DU Pareil AU Meme AS 567 45,458
174,719
GENERAL MERCHANDISE STORES -
4.9%
Carrefour SA (SUPERMARCHE) 3,074 570,726
GROCERY STORES - 1.2%
Casino Guichard Perrachon et 780 88,865
Compagnie
Guyenne Et Gascogne SA 111 57,142
146,007
RETAIL & WHOLESALE,
MISCELLANEOUS - 3.4%
Castorama Dubois 345 103,650
Investissements SA
Pinault Printemps SA 1,555 297,399
401,049
TOTAL RETAIL & WHOLESALE 1,292,501
SERVICES - 8.0%
ADVERTISING - 2.3%
Havas Advertising SA 985 276,914
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - CONTINUED
SERVICES - 5.7%
ALTEN (a) 945 $ 103,576
Cegedim SA 1,075 61,237
Ipsos SA 2,692 137,304
Suez Lyonnaise des Eaux 2,236 362,069
664,186
TOTAL SERVICES 941,100
TECHNOLOGY - 11.5%
COMPUTER SERVICES & SOFTWARE
- - 5.3%
Cap Gemini SA 1,259 191,249
Equant NV (a) 3,290 321,032
Transiciel SA 1,874 108,531
620,812
COMPUTERS & OFFICE EQUIPMENT
- - 0.6%
Neopost SA (a) 1,782 61,846
ELECTRONICS - 5.6%
Schneider SA (a) 4,403 304,229
STMicroelectronics NV 4,030 354,979
659,208
TOTAL TECHNOLOGY 1,341,866
UTILITIES - 10.9%
TELEPHONE SERVICES - 9.2%
France Telecom SA 11,124 1,077,836
WATER - 1.7%
Vivendi SA (a) 2,698 205,063
TOTAL UTILITIES 1,282,899
TOTAL COMMON STOCKS 11,149,450
(Cost $8,715,841)
CASH EQUIVALENTS - 6.8%
Central Cash Collateral Fund, 272,600 272,600
5.26% (b)
Taxable Central Cash Fund, 521,437 521,437
5.21% (b)
TOTAL CASH EQUIVALENTS 794,037
(Cost $794,037)
TOTAL INVESTMENT PORTFOLIO - 11,943,487
101.9%
(Cost $9,509,878)
NET OTHER ASSETS - (1.9)% (217,969)
NET ASSETS - 100% $ 11,725,518
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $14,797,886 and $21,823,472, respectively.
The fund participated in the security lending program. The fund
received cash collateral of $272,600 which was invested in the Central
Cash Collateral Fund. Cash collateral includes $272,600 received for
unsettled security loans.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $9,619,732. Net unrealized appreciation
aggregated $2,323,755, of which $2,460,744 related to appreciated
investment securities and $136,989 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $694,000, all of which will expire on October 31, 2006.
FRANCE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 11,943,487
value (cost $9,509,878) -
See accompanying schedule
Foreign currency held at 173,105
value (cost $173,356)
Receivable for investments 96,538
sold
Receivable for fund shares 46,230
sold
Dividends receivable 46,835
Interest receivable 2,733
Other receivables 461
TOTAL ASSETS 12,309,389
LIABILITIES
Payable for investments $ 254,410
purchased
Payable for fund shares 10,922
redeemed
Accrued management fee 8,491
Other payables and accrued 37,448
expenses
Collateral on securities 272,600
loaned, at value
TOTAL LIABILITIES 583,871
NET ASSETS $ 11,725,518
Net Assets consist of:
Paid in capital $ 10,037,048
Accumulated undistributed net (753,205)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 2,441,675
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 653,378 $ 11,725,518
shares outstanding
NET ASSET VALUE and $17.95
redemption price per share
($11,725,518 (divided by)
653,378 shares)
Maximum offering price per $18.51
share (100/97.00 of $17.95)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 191,509
Dividends
Interest 14,233
Security lending 5
205,747
Less foreign taxes withheld (33,199)
TOTAL INCOME 172,548
EXPENSES
Management fee $ 94,267
Transfer agent fees 47,037
Accounting and security 60,354
lending fees
Non-interested trustees' 42
compensation
Custodian fees and expenses 111,694
Registration fees 18,568
Audit 33,278
Legal 23
Miscellaneous 24
Total expenses before 365,287
reductions
Expense reductions (112,226) 253,061
NET INVESTMENT INCOME (LOSS) (80,513)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,557,528
Foreign currency transactions (11,725) 1,545,803
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 1,016,037
Assets and liabilities in 4,601 1,020,638
foreign currencies
NET GAIN (LOSS) 2,566,441
NET INCREASE (DECREASE) IN $ 2,485,928
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 18,605
charges paid to FDC
Sales charges - Retained by $ 18,605
FDC
Expense reductions
Directed brokerage $ 2,693
arrangements
FMR reimbursement 109,533
$ 112,226
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (80,513) $ 49,705
income (loss)
Net realized gain (loss) 1,545,803 (2,314,802)
Change in net unrealized 1,020,638 977,565
appreciation (depreciation)
NET INCREASE (DECREASE) IN 2,485,928 (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 6,925,778 27,069,838
proceeds from sales of shares
Reinvestment of distributions - 487,606
Cost of shares redeemed (14,139,720) (15,052,615)
NET INCREASE (DECREASE) IN (7,213,942) 12,504,829
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 23,371 125,407
TOTAL INCREASE (DECREASE) (4,704,643) 10,851,786
IN NET ASSETS
NET ASSETS
Beginning of period 16,430,161 5,578,375
End of period (including $ 11,725,518 $ 16,430,161
undistributed net investment
income of $0 and $37,763,
respectively)
OTHER INFORMATION
Shares
Sold 418,188 1,626,364
Issued in reinvestment of - 39,450
distributions
Redeemed (878,342) (972,730)
Net increase (decrease) (460,154) 693,084
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.75 $ 13.27 $ 12.24 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.10) C .06 C .10 C .23
Net realized and unrealized 3.27 2.46 G 1.66 1.98
gain (loss)
Total from investment 3.17 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 .03 .15 .04 .07
in capital
Net asset value, end of period $ 17.95 $ 14.75 $ 13.27 $ 12.24
TOTAL RETURN A, B 21.69% 21.85% 15.63% 22.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 11,726 $ 16,430 $ 5,578 $ 5,542
(000 omitted)
Ratio of expenses to average 2.00% D 2.12% D 2.00% D 2.00% D
net assets
Ratio of expenses to average 1.98% E 2.12% 2.00% 2.00%
net assets after expense
reductions
Ratio of net investment (.63)% .40% .78% 1.74%
income (loss) to average net
assets
Portfolio turnover rate 118% 182% 150% 129%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
D FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E 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.
G 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.
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 OCTOBER 31, PAST 1 YEAR LIFE OF FUND
1994
FIDELITY GERMANY 1.28% 69.93%
FIDELITY GERMANY (INCL. -1.75% 64.83%
3.00% SALES CHARGE)
DAX 100 3.58% 80.60%
European Region Funds Average 10.72% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 one year average represents a peer group of 138 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, PAST 1 YEAR LIFE OF FUND
1994
FIDELITY GERMANY 1.28% 14.17%
FIDELITY GERMANY (INCL. -1.75% 13.31%
3.00% SALES CHARGE)
DAX 100 3.58% 15.93%
European Region Funds Average 10.72% 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
1999/05/31 15118.90 16576.94
1999/06/30 15900.15 17283.48
1999/07/31 15900.15 17016.61
1999/08/31 15955.17 17451.52
1999/09/30 15889.15 17232.00
1999/10/29 16483.34 18059.77
IMATRL PRASUN SHR__CHT 19991031 19991111 111347 R00000000000051
$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 October 31, 1999, the value of the investment would have
grown to $16,483 - a 64.83% 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 $18,060 - a 80.60% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
GERMANY
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Alexandra Hartmann, Portfolio Manager of Fidelity
Germany Fund
Q. HOW DID THE FUND PERFORM, ALEXANDRA?
A. For the 12-month period that ended October 31, 1999, the fund
returned 1.28%, compared to the 3.58% return of the Deutscher
Aktienindex 100 (DAX 100) and the 10.72% European region funds average
return, as tracked by Lipper Inc.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL ITS BENCHMARK INDEX AND ITS
PEER GROUP?
A. The German stock market was one of the weaker performers in Europe
during the 12-month period, as economic growth in Germany trailed that
of most other countries on the Continent. This was the primary reason
for the fund's underperformance relative to the broader peer group
average. Performance relative to the DAX 100 was hurt by the fund's
underemphasis during most of the year on banking and cyclical stocks,
both of which performed relatively well. However, performance was
helped by investments in telecommunications and insurance, as well as
by a de-emphasis on automobile stocks, which performed poorly.
Q. WHAT WERE YOUR PRINCIPAL STRATEGIES DURING THE YEAR?
A. I focused on companies that I felt had the ability to grow
independently of the German economy, including many internationally
focused companies in the telecommunications, business services and
chemicals industries. Despite this emphasis on companies with
international operations, I underweighted automobile companies
relative to the DAX 100 index because I was concerned about their lack
of pricing power - or ability to raise prices. I also tended to
de-emphasize banking and pharmaceutical stocks. After de-emphasizing
cyclical companies, I increased the fund's exposure to the sector at
the end of the period because I believed a global recovery had
increased the pricing power of companies in industries such as
chemicals.
Q. WHAT WERE SOME OF THE INVESTMENTS THAT HELPED PERFORMANCE?
A. Mannesmann, the wireless phone giant and the fund's second-largest
holding, continued to do well, helped by cheap acquisitions and
industry consolidation. Several small-cap investments added to
performance, including: Kamps, a bakery chain; DIS, a temporary
employment agency; and Intershop, a software developer for e-commerce.
A large holding in chemical company BASF helped, as did holdings in
Linde, a high-quality fork-lift, truck and industrial gas company, and
Preussag, which changed from a shipbuilding and steel-rolling company
to become a travel agency. Another contributor was Siemens, the
electronics and technology company.
Q. WHAT WERE SOME OF THE DISAPPOINTMENTS?
A. Several specific investments hurt, including an overweighted
position in Hannover Re, a specialty insurance company. Underweighting
banks such as Deutsche Bank held back performance as banks tended to
do well, partly because of industry consolidation. Performance also
was hurt because I was not aggressive enough in cyclicals such as
steel companies and engineering firms, which performed well over the
period.
Q. WHAT IS YOUR OUTLOOK?
A. Economic growth in Germany has tended to lag that of growth
elsewhere in Europe, and I expect this trend to continue during the
next year. However, I do see some signs of economic improvement.
German business confidence has risen, and the 10% decline in the euro
currency, relative to the dollar, early in 1999 should help exporting
industries. Moreover, German stocks appear attractively valued
relative to other European stocks. At the end of the fiscal year,
German stocks were selling at about 5% below their 10-year average,
based on price-to-earnings ratios, while European stocks were selling
above their 10-year averages. I tend to emphasize companies that can
grow independently of the German economy, so performance is likely to
be affected by the pace of global growth as well as by conditions
within Germany.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-2.
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 October 31, 1999, more than
$22 million
MANAGER: Alexandra Hartmann, since 1996;
manager, Fidelity France Fund, since 1998;
joined Fidelity in 1994
(checkmark)
GERMANY
INVESTMENT CHANGES
AS OF OCTOBER 31,1999
United States 2.6%
United Kingdom 1.5%
France 3.2%
Row: 1, Col: 1, Value: 3.2
Row: 1, Col: 2, Value: 87.7
Row: 1, Col: 3, Value: 1.0
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 2.5
Row: 1, Col: 6, Value: 1.5
Row: 1, Col: 7, Value: 2.6
Switzerland 2.5%
Netherlands 1.5%
Luxembourg 1.0%
Germany 87.7%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 0.9%
France 2.8%
Switzerland 3.4%
Netherlands 1.2%
Row: 1, Col: 1, Value: 2.8
Row: 1, Col: 2, Value: 91.7
Row: 1, Col: 3, Value: 1.2
Row: 1, Col: 4, Value: 3.4
Row: 1, Col: 5, Value: 0.9
Germany 91.7%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 97.4 99.1
Short-Term Investments and 2.6 0.9
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Deutsche Telekom AG 9.8 4.5
(Telephone Services)
Mannesmann AG (Reg.) (Cellular) 9.6 9.6
Allianz AG (Reg.) (Insurance) 7.8 8.6
Siemens AG (Electrical 6.8 4.7
Equipment)
BASF AG (Chemicals & Plastics) 5.3 6.6
Munich Reinsurance AG (Reg.) 5.1 2.7
(Insurance)
DaimlerChrysler AG (Reg.) 4.9 9.8
(Autos, Tires, & Accessories)
Veba AG (Electric Utility) 3.7 4.8
Dresdner Bank AG (Banks) 3.0 0.0
Marschollek Lautenschlaeger 2.8 2.8
und Partner AG (Insurance)
58.8 54.1
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
UTILITIES 25.7 20.2
FINANCE 22.9 27.6
BASIC INDUSTRIES 11.7 8.7
INDUSTRIAL MACHINERY & 10.7 7.0
EQUIPMENT
DURABLES 9.8 18.0
TECHNOLOGY 6.2 6.2
MEDIA & LEISURE 2.6 0.3
SERVICES 2.3 1.6
HEALTH 1.8 2.7
RETAIL & WHOLESALE 1.7 3.9
</TABLE>
GERMANY
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 89.7%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 11.7%
CHEMICALS & PLASTICS - 8.2%
BASF AG 27,273 $ 1,215,545
Bayer AG 8,227 336,038
Kali und Salz Beteiligungs AG 14,160 202,850
Rhodia SA 6,034 116,803
1,871,236
METALS & MINING - 3.5%
Metallgesellschaft AG 9,866 205,551
Preussag AG 9,660 524,802
Vossloh AG 4,068 84,539
814,892
TOTAL BASIC INDUSTRIES 2,686,128
CONSTRUCTION & REAL ESTATE -
0.5%
BUILDING MATERIALS - 0.5%
Ciments Francais SA 1,647 105,635
DURABLES - 6.1%
AUTOS, TIRES, & ACCESSORIES -
4.9%
DaimlerChrysler AG (Reg.) 14,524 1,129,241
TEXTILES & APPAREL - 1.2%
Boss (Hugo) AG 2,463 280,608
TOTAL DURABLES 1,409,849
FINANCE - 20.1%
BANKS - 6.6%
Deutsche Bank AG 8,188 587,179
Dresdner Bank AG 13,164 679,754
Julius Baer Holding AG 81 244,188
1,511,121
INSURANCE - 13.5%
Allianz AG (Reg.) 5,932 1,802,834
Hannover Rueckversicherungs AG 1,847 139,116
Munich Reinsurance AG (Reg.) 5,086 1,162,643
3,104,593
TOTAL FINANCE 4,615,714
HEALTH - 1.8%
MEDICAL FACILITIES MANAGEMENT
- - 1.8%
Fresenius Medical Care AG 5,691 405,232
INDUSTRIAL MACHINERY &
EQUIPMENT - 10.7%
ELECTRICAL EQUIPMENT - 8.2%
ABB Ltd. (Reg) (Switzerland) 3,259 328,921
(a)
Siemens AG 17,295 1,560,817
1,889,738
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.5%
Heidelberger Druckmaschinen AG 6,026 $ 355,982
Linde AG 4,050 215,540
571,522
TOTAL INDUSTRIAL MACHINERY & 2,461,260
EQUIPMENT
MEDIA & LEISURE - 2.6%
BROADCASTING - 2.6%
Audiofina 4,650 234,473
Primacom AG 2,345 116,266
Television Francaise 1 SA 757 237,971
588,710
RETAIL & WHOLESALE - 1.7%
APPAREL STORES - 0.2%
Ludwig Beck Am Rathausec AG 3,500 49,844
GENERAL MERCHANDISE STORES -
1.5%
Vendex KBB NV 11,504 336,762
TOTAL RETAIL & WHOLESALE 386,606
SERVICES - 2.3%
LEASING & RENTAL - 0.9%
Apcoa Parking AG 2,857 210,969
SERVICES - 1.4%
GFK AG (a) 2,800 77,978
Suez Lyonnaise des Eaux 1,491 241,433
319,411
TOTAL SERVICES 530,380
TECHNOLOGY - 6.2%
COMPUTER SERVICES & SOFTWARE
- - 4.8%
Intershop Communication AG (a) 2,523 318,051
SAP AG (Systeme Anwendungen 1,488 554,258
Produkte)
Utimaco Safeware AG (a) 1,980 223,909
1,096,218
ELECTRONICS - 1.4%
ELMOS Semiconductor AG (a) 2,300 58,230
EPCOS AG (a) 6,340 260,634
318,864
TOTAL TECHNOLOGY 1,415,082
TRANSPORTATION - 0.3%
TRUCKING & FREIGHT - 0.3%
Stinnes AG (a) 3,821 73,360
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - 25.7%
CELLULAR - 11.1%
Mannesmann AG (Reg.) 13,958 $ 2,207,172
Orange PLC (a) 14,140 352,730
2,559,902
ELECTRIC UTILITY - 4.8%
Veba AG 15,410 837,022
Viag AG 14,257 262,443
1,099,465
TELEPHONE SERVICES - 9.8%
Deutsche Telekom AG 48,714 2,253,379
TOTAL UTILITIES 5,912,746
TOTAL COMMON STOCKS 20,590,702
(Cost $17,001,726)
NONCONVERTIBLE PREFERRED
STOCKS - 7.7%
DURABLES - 3.7%
AUTOS, TIRES, & ACCESSORIES -
3.7%
Bayerische Motoren Werke 36,890 564,271
(BMW) AG (non-vtg.)
Porsche AG (non-vtg.) 101 277,017
841,288
FINANCE - 2.8%
INSURANCE - 2.8%
Marschollek Lautenschlaeger 3,053 645,732
und Partner AG
NONDURABLES - 1.2%
HOUSEHOLD PRODUCTS - 1.2%
Wella AG 10,154 283,854
TOTAL NONCONVERTIBLE 1,770,874
PREFERRED STOCKS
(Cost $1,515,514)
CASH EQUIVALENTS - 2.0%
Central Cash Collateral Fund, 129,250 129,250
5.26% (b)
Taxable Central Cash Fund, 321,019 321,019
5.21% (b)
TOTAL CASH EQUIVALENTS 450,269
(Cost $450,269)
TOTAL INVESTMENT PORTFOLIO - 22,811,845
99.4%
(Cost $18,967,509)
NET OTHER ASSETS - 0.6% 147,292
NET ASSETS - 100% $ 22,959,137
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $32,155,232 and $43,678,320, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $106,077. The fund received
cash collateral of $129,250 which was invested in the Central Cash
Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $19,172,650. Net unrealized appreciation
aggregated $3,639,195, of which $4,083,109 related to appreciated
investment securities and $443,914 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $5,231,000 of which $2,136,000 and $3,095,000 will
expire on October 31, 2006 and 2007, respectively.
GERMANY
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 22,811,845
value (cost $18,967,509) -
See accompanying schedule
Foreign currency held at 6,409
value (cost $6,409)
Receivable for investments 1,661,820
sold
Receivable for fund shares 11,881
sold
Dividends receivable 34,058
Interest receivable 4,721
Redemption fees receivable 36
Other receivables 28
TOTAL ASSETS 24,530,798
LIABILITIES
Payable to custodian bank $ 3,650
Payable for investments 1,328,064
purchased
Payable for fund shares 52,356
redeemed
Accrued management fee 13,715
Other payables and accrued 44,626
expenses
Collateral on securities 129,250
loaned, at value
TOTAL LIABILITIES 1,571,661
NET ASSETS $ 22,959,137
Net Assets consist of:
Paid in capital $ 24,553,230
Accumulated undistributed net (5,437,961)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 3,843,868
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 1,532,381 $ 22,959,137
shares outstanding
NET ASSET VALUE and $14.98
redemption price per share
($22,959,137 (divided by)
1,532,381 shares)
Maximum offering price per $15.44
share (100/97.00 of $14.98)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 359,259
Dividends
Interest 32,431
Security lending 28
391,718
Less foreign taxes withheld (35,765)
TOTAL INCOME 355,953
EXPENSES
Management fee $ 181,310
Transfer agent fees 98,318
Accounting and security 60,413
lending fees
Non-interested trustees' 81
compensation
Custodian fees and expenses 73,856
Registration fees 20,774
Audit 33,370
Legal 109
Miscellaneous 76
Total expenses before 468,307
reductions
Expense reductions (27,723) 440,584
NET INVESTMENT INCOME (LOSS) (84,631)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (2,179,459)
Foreign currency transactions (5,912) (2,185,371)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 2,402,057
Assets and liabilities in (4,105) 2,397,952
foreign currencies
NET GAIN (LOSS) 212,581
NET INCREASE (DECREASE) IN $ 127,950
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 52,463
Sales charges paid to FDC
Sales charges - Retained by $ 52,463
FDC
Expense Reductions $ 27,723
Directed brokerage
arrangements
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ (84,631) $ 48,103
income (loss)
Net realized gain (loss) (2,185,371) (3,233,307)
Change in net unrealized 2,397,952 827,872
appreciation (depreciation)
NET INCREASE (DECREASE) IN 127,950 (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 17,443,225 46,714,688
proceeds from sales of shares
Reinvestment of distributions - 1,171,719
Cost of shares redeemed (29,483,918) (22,470,888)
NET INCREASE (DECREASE) IN (12,040,693) 25,415,519
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 76,837 180,382
TOTAL INCREASE (DECREASE) (11,835,906) 22,062,810
IN NET ASSETS
NET ASSETS
Beginning of period 34,795,043 12,732,233
End of period (including $ 22,959,137 $ 34,795,043
undistributed net investment
income of $0 and $16,792,
respectively)
OTHER INFORMATION
Shares
Sold 1,168,030 2,771,374
Issued in reinvestment of - 93,141
distributions
Redeemed (1,987,640) (1,474,029)
Net increase (decrease) (819,610) 1,390,486
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.79 $ 13.24 $ 11.34 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.05) C .03 C, I (.02) C .01
Net realized and unrealized .19 2.65 D 2.21 1.31
gain (loss)
Total from investment .14 2.68 2.19 1.32
operations
Less Distributions
From net investment income - (.01) F (.01) -
From net realized gain - (1.24) F (.35) -
Total distributions - (1.25) (.36) -
Redemption fees added to paid .05 .12 .07 .02
in capital
Net asset value, end of period $ 14.98 $ 14.79 $ 13.24 $ 11.34
TOTAL RETURN A, B 1.28% 22.81% 20.47% 13.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 22,959 $ 34,795 $ 12,732 $ 7,178
(000 omitted)
Ratio of expenses to average 1.90% 1.76% 2.00% G 2.00% G
net assets
Ratio of expenses to average 1.79% H 1.74% H 2.00% 2.00%
net assets after expense
reductions
Ratio of net investment (.34)% .20% (.18)% .12%
income (loss) to average net
assets
Portfolio turnover rate 132% 139% 120% 133%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
D 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.
E FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
F THE AMOUNTS SHOWN REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX
DIFFERENCES.
G 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.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
I INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.08 PER
SHARE.
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 OCTOBER 31, 1994 PAST 1 YEAR LIFE OF FUND
FIDELITY UNITED KINGDOM 12.49% 73.79%
FIDELITY UNITED KINGDOM 9.11% 68.58%
(INCL. 3.00% SALES CHARGE)
FT-All-Shares 16.52% 98.87%
European Region Funds Average 10.72% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 one year average
represents a peer group of 138 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 LIFE OF FUND
FIDELITY UNITED KINGDOM 12.49% 14.82%
FIDELITY UNITED KINGDOM 9.11% 13.95%
(INCL. 3.00% SALES CHARGE)
FT-All-Shares 16.52% 18.75%
European Region Funds Average 10.72% 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
1999/05/31 16903.99 19140.07
1999/06/30 16834.90 19232.10
1999/07/31 17111.26 19639.91
1999/08/31 17088.23 19666.90
1999/09/30 16719.75 19405.59
1999/10/29 16857.93 19887.49
IMATRL PRASUN SHR__CHT 19991031 19991111 124750 R00000000000051
$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 October 31, 1999, the value of the investment would
have grown to $16,858 - a 68.58% 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 $19,887 - a 98.87% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
UNITED KINGDOM
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Frederic Gautier, Portfolio Manager of Fidelity
United Kingdom Fund
Q. HOW DID THE FUND PERFORM, FREDERIC?
A. For the 12-month period that ended October 31, 1999, the fund
posted a total return of 12.49%, compared to 16.52% for the
FT-All-Shares Index and 10.72% for the European region funds average
tracked by Lipper Inc.
Q. WHY DID THE FUND LAG ITS BENCHMARK DURING THE PERIOD?
A. The fund's limited exposure to cyclicals - or, companies whose
prospects rise and fall with the economy - and value-oriented
companies detracted from relative performance as both groups rose
during the period. The fund's slight overweighting in banks relative
to the benchmark hurt as well, as concerns over higher interest rates
overshadowed many strong earnings stories. All in all, strong stock
picking, as well as some good exposure to the recovery in oil and the
rally in telecommunications, limited the fund's downside.
Q. WHAT OTHER FACTORS INFLUENCED PERFORMANCE?
A. Our positioning within the building and construction industry,
which benefited from historically low interest-rate levels, paid off
for the fund. I propped up the fund's position in telecommunications
by adding appreciably to its stake in Vodafone AirTouch - the fund's
top holding at the close of the period. I gained exposure to the
Internet by way of advertising firms such as Saatchi & Saatchi,
beneficiaries of the emerging Net culture. Riding a generally strong
period for technology stocks, the fund's position in accounting and
business-software solutions provider Sage Group, as well the inclusion
of Sema Group - a company that provides information technology systems
solutions - contributed to fund returns. Additionally, the fund
benefited relative to the benchmark from not owning key components
Sainsbury and Marks & Spencer, which did poorly during the period.
Conversely, the exposure we did have to clothing retailers - although
limited - hurt performance, as local players recoiled in response to
Wal-Mart's impending arrival in the U.K. Some of the fund's holdings
among food manufacturers also dragged on performance.
Q. WHICH STOCKS LIFTED PERFORMANCE?
A. Vodafone AirTouch emerged as one of the most influential wireless
players in the global arena. Its stock rose steadily during the period
on the back of increased subscriber growth and the company's optimal
positioning with respect to rising data traffic. British
Telecommunications also added meaningfully to performance. Royal Bank
of Scotland benefited from strong earnings growth and some new
ventures that looked to add significant value to the firm. Shares of
BP Amoco rose along side the price of oil.
Q. WHICH STOCKS DETRACTED?
A. Brewer and pub retailer Scottish & Newcastle suffered from
depressed earnings levels amid a negative pricing environment.
Scottish & Southern Energy, an electric utility provider, fell in line
with a weak utility sector in response to rising interest rates,
despite gaining cost efficiencies from the merger of Scottish
Hydro-Electric and Southern Electric, which occurred during the
period. Although fundamentally sound, shares of Bank of Ireland were
beaten down, as were many large-cap Irish stocks during this time
frame. The stock responded to intense selling pressures from investors
looking to further reallocate their portfolios away from domestic
players to comparable firms among the euro member states.
Q. WHAT'S YOUR OUTLOOK?
A. It remains positive. If you look at the makeup of the fund at the
close of the period, you would see approximately the same level of
earnings growth as the market looking forward, as well as from a
historical standpoint. Yet, the aggregate price-to-earnings ratio of
the fund was about 10% lower overall. So, shareholders have a fund
with similar earnings dynamics to the market, but it's around 10%
cheaper in a sense. On top of that, I don't plan to emphasize any
particular sector over another, and instead will aim to add value
through individual security selection.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-2.
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 October 31, 1999, more than
$6 million
MANAGER: Frederic Gautier, since 1998;
manager, various Fidelity funds through Fidelity
International Limited, since 1995; joined Fidelity
in 1994
(checkmark)
UNITED KINGDOM
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Ireland 5.7%
United States 0.7%
Row: 1, Col: 1, Value: 5.7
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 93.59999999999999
Row: 1, Col: 4, Value: 0.7000000000000001
United Kingdom 93.6%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
Ireland 5.0%
United States 1.7%
South Africa 0.2%
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 0.2
Row: 1, Col: 3, Value: 93.09999999999999
Row: 1, Col: 4, Value: 1.7
United Kingdom 93.1%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 99.3 98.3
Short-Term Investments and 0.7 1.7
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Vodafone AirTouch PLC 8.0 4.9
(Cellular)
BP Amoco PLC (Oil & Gas) 6.1 7.0
British Telecommunications 5.0 5.0
PLC (Telephone Services)
Glaxo Wellcome PLC (Drugs & 4.5 4.0
Pharmaceuticals)
Shell Transport & Trading Co. 3.8 3.4
PLC (Reg.) (Oil & Gas)
SmithKline Beecham PLC 3.7 4.2
(Drugs & Pharmaceuticals)
Lloyds TSB Group PLC (Banks) 3.5 4.0
National Westminster Bank PLC 2.5 3.3
(Banks)
Royal Bank of Scotland Group 2.5 2.3
PLC (Banks)
General Electric Co. PLC 2.3 1.7
(Electrical Equipment)
41.9 39.8
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 26.4 27.6
UTILITIES 17.1 14.2
HEALTH 11.6 10.1
ENERGY 9.9 10.4
NONDURABLES 6.2 8.9
RETAIL & WHOLESALE 5.3 6.9
MEDIA & LEISURE 4.2 2.7
SERVICES 3.5 4.0
CONSTRUCTION & REAL ESTATE 3.4 5.5
INDUSTRIAL MACHINERY & 3.2 2.3
EQUIPMENT
</TABLE>
UNITED KINGDOM
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 99.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.8%
British Aerospace PLC 8,700 $ 50,859
BASIC INDUSTRIES - 2.4%
CHEMICALS & PLASTICS - 0.1%
Wardle Storeys PLC 1,900 9,842
METALS & MINING - 1.1%
Johnson Matthey PLC 7,500 69,496
PAPER & FOREST PRODUCTS - 1.2%
Jefferson Smurfit Group PLC 29,300 76,429
TOTAL BASIC INDUSTRIES 155,767
CONSTRUCTION & REAL ESTATE -
3.4%
BUILDING MATERIALS - 1.8%
CRH PLC 5,050 95,624
Meyer International PLC 4,400 24,709
120,333
CONSTRUCTION - 0.8%
George Wimpey PLC 12,000 23,482
Persimmon PLC 7,990 27,066
50,548
REAL ESTATE - 0.8%
Minerva PLC 13,750 50,195
TOTAL CONSTRUCTION & REAL 221,076
ESTATE
DURABLES - 0.6%
HOME FURNISHINGS - 0.6%
Carpetright PLC 4,600 34,644
ENERGY - 9.9%
OIL & GAS - 9.9%
BP Amoco PLC 40,286 387,753
Shell Transport & Trading Co. 32,150 245,814
PLC (Reg.)
633,567
FINANCE - 26.4%
BANKS - 14.6%
Bank of Ireland, Inc. 18,500 145,001
HSBC Holdings PLC (Reg.) 11,900 146,519
Lloyds TSB Group PLC 16,191 224,045
National Westminster Bank PLC 7,150 161,548
Royal Bank of Scotland Group 7,000 161,381
PLC
Standard Chartered PLC 7,150 100,350
938,844
CREDIT & OTHER FINANCE - 1.6%
Alliance & Leicester PLC 7,200 105,136
INSURANCE - 6.3%
Domestic & General Group PLC 5,250 47,482
Hogg Robinson PLC 12,700 58,005
Independent Insurance PLC 13,500 61,492
SHARES VALUE (NOTE 1)
Irish Life & Permanent PLC 5,000 $ 51,748
Norwich Union PLC 11,100 85,195
Royal & Sun Alliance 7,909 53,843
Insurance Group PLC
Sun Life & Provincial Holding 6,600 49,300
PLC
407,065
INVESTMENT COMPANIES - 1.2%
3I Group PLC 6,100 76,134
SECURITIES INDUSTRY - 2.7%
Amvescap PLC 11,600 103,768
Man (E D & F) Group PLC 11,650 67,817
171,585
TOTAL FINANCE 1,698,764
HEALTH - 11.6%
DRUGS & PHARMACEUTICALS - 10.9%
AstraZeneca Group PLC (Reg.) 1,800 82,350
Glaxo Wellcome PLC 9,772 292,549
Nycomed Amersham PLC 5,400 32,900
SmithKline Beecham PLC 18,839 241,139
SSL International PLC 5,213 55,763
704,701
MEDICAL EQUIPMENT & SUPPLIES
- - 0.7%
Smith & Nephew PLC 13,300 42,866
TOTAL HEALTH 747,567
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.2%
ELECTRICAL EQUIPMENT - 2.3%
General Electric Co. PLC 13,700 149,025
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.9%
FKI PLC 20,250 53,112
TOTAL INDUSTRIAL MACHINERY & 202,137
EQUIPMENT
MEDIA & LEISURE - 4.2%
BROADCASTING - 1.2%
Capital Radio PLC 4,500 73,924
ENTERTAINMENT - 1.1%
Granada Group PLC 8,600 68,022
PUBLISHING - 0.9%
Daily Mail & General Trust 1,150 59,190
PLC Class A
RESTAURANTS - 1.0%
Enterprise Inns PLC 9,600 66,302
TOTAL MEDIA & LEISURE 267,438
NONDURABLES - 6.2%
BEVERAGES - 2.5%
Allied Domecq PLC 10,000 56,238
Scottish & Newcastle PLC 11,500 107,223
163,461
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - 1.5%
Hazlewood Foods PLC 23,850 $ 37,258
Matthews (Bernard) PLC 11,150 21,269
Tomkins PLC 11,609 39,373
97,900
HOUSEHOLD PRODUCTS - 1.1%
Unilever PLC 7,600 70,656
TOBACCO - 1.1%
British American Tobacco PLC 10,326 68,430
TOTAL NONDURABLES 400,447
RETAIL & WHOLESALE - 5.3%
APPAREL STORES - 0.6%
Arcadia Group PLC 6,600 16,632
New Look Group PLC 6,700 18,840
35,472
GENERAL MERCHANDISE STORES -
1.5%
Kingfisher PLC 9,100 99,436
GROCERY STORES - 2.1%
Safeway PLC 2,900 9,108
Tesco PLC 43,000 127,984
137,092
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.1%
Dixons Group PLC 2,150 38,112
Great Universal Stores PLC 4,300 32,668
Class A
70,780
TOTAL RETAIL & WHOLESALE 342,780
SERVICES - 3.5%
ADVERTISING - 1.7%
Saatchi & Saatchi PLC 28,650 110,713
SERVICES - 1.8%
Reuters Group PLC 6,900 64,164
Taylor Nelson Sofres PLC 3,800 11,466
Thomson Travel Group PLC 25,200 39,160
114,790
TOTAL SERVICES 225,503
TECHNOLOGY - 2.4%
COMPUTER SERVICES & SOFTWARE
- - 2.4%
Informa Group PLC 5,300 35,384
Sage Group PLC 1,600 82,115
Sema Group PLC 2,900 37,912
155,411
TRANSPORTATION - 2.3%
AIR TRANSPORTATION - 0.8%
BAA PLC 6,750 49,560
SHARES VALUE (NOTE 1)
TRUCKING & FREIGHT - 1.5%
NFC PLC 14,200 $ 45,767
Stagecoach Holdings PLC 17,800 50,638
96,405
TOTAL TRANSPORTATION 145,965
UTILITIES - 17.1%
CELLULAR - 8.0%
Vodafone AirTouch PLC 106,675 511,374
ELECTRIC UTILITY - 3.3%
Independent Energy Holdings 1,100 29,394
PLC (a)
National Grid Group PLC 10,283 76,853
Scottish & Southern Energy PLC 11,400 108,259
214,506
TELEPHONE SERVICES - 5.0%
British Telecommunications PLC 17,900 322,200
WATER - 0.8%
Severn Trent PLC 3,700 53,146
TOTAL UTILITIES 1,101,226
TOTAL COMMON STOCKS 6,383,151
(Cost $5,639,485)
CASH EQUIVALENTS - 0.5%
Taxable Central Cash Fund, 33,945 33,945
5.21% (b) (Cost $33,945)
TOTAL INVESTMENT PORTFOLIO - 6,417,096
99.8%
(Cost $5,673,430)
NET OTHER ASSETS - 0.2% 12,412
NET ASSETS - 100% $ 6,429,508
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $5,183,473 and $6,266,946, respectively.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $5,696,664. Net unrealized appreciation
aggregated $720,432, of which $1,083,067 related to appreciated
investment securities and $362,635 related to depreciated investment
securities.
The fund hereby designates approximately $239,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $2,000, all of which will expire on October 31, 2007.
UNITED KINGDOM
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 6,417,096
value (cost $5,673,430) -
See accompanying schedule
Cash 20,249
Receivable for investments 171,541
sold
Receivable for fund shares 1,862
sold
Dividends receivable 12,047
Interest receivable 322
Receivable from investment 13,896
adviser for expense
reductions
TOTAL ASSETS 6,637,013
LIABILITIES
Payable for investments $ 161,079
purchased
Payable for fund shares 4,651
redeemed
Other payables and accrued 41,775
expenses
TOTAL LIABILITIES 207,505
NET ASSETS $ 6,429,508
Net Assets consist of:
Paid in capital $ 5,677,367
Undistributed net investment 33,638
income
Accumulated undistributed net (25,058)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 743,561
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 439,189 $ 6,429,508
shares outstanding
NET ASSET VALUE and $14.64
redemption price per share
($6,429,508 (divided by)
439,189 shares)
Maximum offering price per $15.09
share (100/97.00 of $14.64)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 184,475
Dividends
Interest 5,041
189,516
Less foreign taxes withheld (18,713)
TOTAL INCOME 170,803
EXPENSES
Management fee $ 49,300
Transfer agent fees 21,017
Accounting fees and expenses 60,031
Non-interested trustees' 25
compensation
Custodian fees and expenses 56,962
Registration fees 18,555
Audit 33,694
Legal 29
Miscellaneous 16
Total expenses before 239,629
reductions
Expense reductions (106,168) 133,461
NET INVESTMENT INCOME 37,342
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 61,258
Foreign currency transactions (212) 61,046
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 703,694
Assets and liabilities in (61) 703,633
foreign currencies
NET GAIN (LOSS) 764,679
NET INCREASE (DECREASE) IN $ 802,021
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 5,957
Sales charges paid to FDC
Sales charges - Retained by $ 5,957
FDC
Expense Reductions $ 105,032
FMR reimbursement
Directed brokerage 1,136
arrangements
$ 106,168
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 37,342 $ 94,463
income
Net realized gain (loss) 61,046 574,852
Change in net unrealized 703,633 (519,997)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 802,021 149,318
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (69,464) (115,006)
From net investment income
From net realized gain (411,822) (484,235)
TOTAL DISTRIBUTIONS (481,286) (599,241)
Share transactions Net 1,697,930 6,741,898
proceeds from sales of shares
Reinvestment of distributions 460,462 598,563
Cost of shares redeemed (2,968,242) (5,731,991)
NET INCREASE (DECREASE) IN (809,850) 1,608,470
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 3,189 48,025
TOTAL INCREASE (DECREASE) (485,926) 1,206,572
IN NET ASSETS
NET ASSETS
Beginning of period 6,915,434 5,708,862
End of period (including $ 6,429,508 $ 6,915,434
undistributed net investment
income of $33,638 and
$99,432, respectively)
OTHER INFORMATION
Shares
Sold 114,788 455,368
Issued in reinvestment of 34,466 43,658
distributions
Redeemed (205,450) (405,257)
Net increase (decrease) (56,196) 93,769
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 D
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.96 $ 14.21 $ 11.89 $ 10.00
period
Income from Investment
Operations
Net investment income .08 C .19 C .31 C .16
Net realized and unrealized 1.56 .46 2.31 1.75
gain (loss)
Total from investment 1.64 .65 2.62 1.91
operations
Less Distributions
From net investment income (.14) (.19) (.13) (.04)
From net realized gain (.83) (.80) (.20) -
Total distributions (.97) (.99) (.33) (.04)
Redemption fees added to paid .01 .09 .03 .02
in capital
Net asset value, end of period $ 14.64 $ 13.96 $ 14.21 $ 11.89
TOTAL RETURN A, B 12.49% 5.33% 22.87% 19.38%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 6,430 $ 6,915 $ 5,709 $ 2,656
(000 omitted)
Ratio of expenses to average 2.00% E 2.02% E 2.00% E 2.00% E
net assets
Ratio of expenses to average 1.98% F 2.01% F 1.99% F 1.97% F
net assets after expense
reductions
Ratio of net investment .55% 1.26% 2.36% 1.62%
income to average net assets
Portfolio turnover rate 78% 191% 96% 50%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity France Fund, Fidelity Germany 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. Foreign governments may also impose taxes on other
payments or transactions with respect to foreign securities. 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 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 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.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in France, Germany,
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.
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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the funds may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc. (FIMM), an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the funds are
recorded as either interest income or security lending income in the
accompanying financial statements.
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, no funds had investments in
restricted securities.
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 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 .2167% 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. For the
period, each fund's management fee was equivalent to the following
annual rates expressed as a percentage of average net assets:
France .74%
Germany .74%
United Kingdom .73%
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. and Fidelity
International Investment Advisors (FIIA). 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 funds. FDC receives a sales
charge of up to 3% for selling shares of each fund. The amounts
received and retained by FDC for 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 annual rates as a percentage of the
average net assets:
France .37%
Germany .40%
United Kingdom .31%
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains each fund's
accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. SECURITY LENDING.
Certain funds lend portfolio securities from time to time in order to
earn additional income. Each applicable fund receives collateral (in
the form of U.S. Treasury obligations, letters of credit and/or cash)
against the loaned securities and maintains collateral in an amount
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 funds and any additional
required collateral is delivered to the funds on the next business
day. If the borrower defaults on its obligation to return the
securities loaned because of insolvency or other reasons, a fund could
experience delays and costs in recovering the securities loaned or in
gaining access to the collateral. 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. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse each fund's operating expenses
(excluding interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) 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, through arrangements with certain funds custodian and
transfer agent, credits realized on uninvested cash balances were used
to reduce 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. 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:
FUND % OWNERSHIP
France 18%
United Kingdom 27%
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Investment Trust and the Shareholders of:
Fidelity France Fund,
Fidelity Germany Fund,
Fidelity United Kingdom Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity France Fund, Fidelity Germany Fund and Fidelity United
Kingdom Fund (funds of Fidelity Investment Trust) at October 31, 1999,
and the results of their operations, the changes in their net assets
and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 15, 1999
DISTRIBUTIONS
Each fund hereby designates 100% of the long-term capital gain
dividends distributed during the fiscal year as 20%-rate capital gain
dividends.
The amounts per share which represent income derived from sources
within, and taxes paid to, foreign countries or possessions of the
United States are as follows:
FUND PAY DATE INCOME TAXES
United Kingdom 12/07/98 $.463 $.055
The funds will notify shareholders in January 2000 of amounts for use
in preparing 1999 income tax returns.
[This page left intentionally blank.]
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.,
London, England
Fidelity Management & Research (Far East) Inc.,
Tokyo, Japan
Fidelity International Investment Advisors
Fidelity International Investment Advisors
(U.K.) Limited
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
Richard A. Spillane, Jr., VICE PRESIDENT
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
Matthew N. Karstetter, DEPUTY TREASURER
John H. Costello, 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
Ned C. Lautenbach
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIANS
Brown Brothers Harriman & Co.
Boston, MA
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 Smaller 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
www.fidelity.com
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST SM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(registered trademark)
BULK RATE
U.S. Postage
PAID
Fidelity
Investments
P.O. Box 193
Boston, MA 02101
(2_FIDELITY_LOGOS)FIDELITY'S(REGISTERED TRADEMARK)
TARGETED INTERNATIONAL EQUITY
FUNDS
Fidelity Canada Fund
Fidelity Emerging Markets Fund
Fidelity Europe Fund
Fidelity Europe Capital Appreciation Fund
Fidelity Hong Kong and China Fund
Fidelity Japan Fund
Fidelity Japan Smaller Companies Fund
Fidelity Latin America Fund
Fidelity Nordic Fund
Fidelity Pacific Basin Fund
Fidelity Southeast Asia Fund
ANNUAL REPORT
FOR THE YEAR ENDING
OCTOBER 31, 1999
AND
PROSPECTUS
DATED DECEMBER 29, 1999
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET RECAP A-4 A REVIEW OF WHAT HAPPENED IN
WORLD MARKETS DURING THE
PAST 12 MONTHS.
CANADA FUND A-5 A-6 A-7 A-8 A-12 PERFORMANCE FUND TALK: THE
MANAGERS' OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EMERGING MARKETS FUND A-14 A-15 A-16 A-17 A-20 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EUROPE FUND A-22 A-23 A-24 A-25 A-28 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
EUROPE CAPITAL APPRECIATION A-30 A-31 A-32 A-33 A-36 PERFORMANCE FUND TALK: THE
FUND MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
HONG KONG AND CHINA FUND A-38 A-39 A-40 A-41 A-44 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
JAPAN FUND A-46 A-47 A-48 A-49 A-52 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
JAPAN SMALLER COMPANIES FUND A-54 A-55 A-56 A-57 A-60 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
LATIN AMERICA FUND A-62 A-63 A-64 A-65 A-67 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NORDIC FUND A-69 A-70 A-71 A-72 A-74 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
PACIFIC BASIN FUND A-76 A-77 A-78 A-79 A-83 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
SOUTHEAST ASIA FUND A-85 A-86 A-87 A-88 A-91 PERFORMANCE FUND TALK: THE
MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS FINANCIAL
STATEMENTS
NOTES TO FINANCIAL STATEMENTS A-93 NOTES TO THE FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT A-97 THE AUDITORS' OPINION
ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT A-98 THE AUDITORS' OPINION
DISTRIBUTIONS A-99
PROSPECTUS P-1
</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.
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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
MARKET RECAP
It took over 100 interest-rate cuts by central banks around the world
to defuse the powder keg that characterized global equity markets 12
months ago. Those easings sparked a dramatic worldwide recovery and,
in a few cases - particularly in the U.S. - were so powerful that some
of the easings needed to be reversed. The bottom line, however, is
that the world was a much better place to invest in at the conclusion
of the 12 months ending October 31, 1999, than it was at the beginning
of the period.
EUROPE: European markets offered mixed results over the past 12
months. In that time, the Morgan Stanley Capital International Europe
Index returned 12.79%. The U.K. posted the most impressive market
returns, due in large part to the strength of the vibrant
telecommunications industry. Italy and Germany, meanwhile, lagged
behind, mostly due to fears of higher interest rates. The weak
performance of the euro - the new single currency of 11 European
nations that was introduced January 1, 1999 - didn't help matters. An
additional detriment was the subpar performance of many of Europe's
largest pharmaceutical companies, which suffered due to non-compelling
product introductions and slow revenue growth. On a positive note,
cross-border consolidation played a significant role across the
European corporate landscape, as merger, acquisition and takeover bid
announcements were almost daily occurrences.
EMERGING MARKETS: A year ago, the emerging markets' outlook was bleak.
Currency problems were the norm for several regions, and market
volatility reigned supreme. In the fall of 1999, however, the markets
tell a different story. Over the past 12 months, the Morgan Stanley
Capital International Emerging Markets Free Index returned 44.63%.
Several factors contributed to this about-face, including lower
interest rates and favorable export and trade data. Sentiment shifts
were evident in markets such as Singapore, Thailand and especially
India, where the strong performance of technology stocks helped propel
that market to phenomenal returns. Latin America was also a comeback
story, as Brazil rebounded nicely from it currency devaluation in
January. Mexico, however, slipped over the past several months due to
concerns about interest rates and fears of a potentially weaker peso.
JAPAN AND THE FAR EAST: For overseas investors, Japan was the place to
be for the 12-month period that ended October 31, 1999. A renewed
emphasis on corporate restructuring and shareholder
Standard & Poor's 500 Index(registered trademark) Morgan Stanley
Capital International Europe, Australasia, Far East Index
* YEAR TO DATE THROUGH OCTOBER 31, 1999.
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: 21.99
Row: 16, Col: 2, Value: -30.99
Row: 17, Col: 1, Value: 25.67
Row: 17, Col: 2, Value: 44.63
%
value - combined with the Japanese government's willingness to create
more of a free-enterprise market system - proved successful. For the
period, the Morgan Stanley Capital International Japan Index returned
58.40% and Japan's TOPIX Index returned 69.97%. Other Asian markets
also received a vicarious boost from Japan: Technology-driven markets
such as South Korea and Taiwan performed well, as worldwide demand for
personal computers translated into positive gains for semiconductor
manufacturers.
U.S. AND CANADA: The U.S. equity market produced solid returns for the
12 months ending October 31, 1999. The Dow Jones Industrial Average
returned 26.84%, while the Standard & Poor's 500 Index - a popular
gauge of U.S. stock market performance - returned 25.67%. Early on,
the Federal Reserve Board tried to stabilize the impact of shaky
global markets on the U.S. by lowering interest rates. In response,
the Dow hit the 10,000 level for the first time in March. Late in the
second quarter, however, concerns over an overheating U.S. economy and
global market recoveries triggered inflation fears. In June and again
in August, the Fed raised rates and the market sold off throughout the
third quarter as investors anticipated additional increases. In the
end, technology stocks were the clear winners as the NASDAQ Index
reeled off a healthy 67.98% return. While Canadian equity markets
didn't get nearly the attention of their neighbors to the south, their
performance was nearly as loud, as the Toronto Stock Exchange (TSE)
300 returned 24.49%.
BONDS: With few exceptions, bond performance either fell flat or
dropped into negative territory for the 12-month period. Concerns
about inflation, higher interest rates and the solid performance of
world equity markets posed the major threats to fixed-income
instruments. For the period, the Lehman Brothers Aggregate Bond Index
- - a widely followed measure of taxable bond performance - posted a
total return of 0.53%. U.S. Treasuries gave back all of their
flight-to-quality gains - and then some - captured during the fall of
1998, as the Lehman Brothers Long-Term Government Index returned
- -6.10%. Meanwhile, the Lehman Brothers Corporate Bond Index returned
0.61%, and the Salomon Brothers Non-U.S. World Government Bond Index
fell 2.96%. There were a few bright spots, however. The high-yield
market, as measured by the Merrill Lynch High Yield Master II Index,
returned 5.61% during the 12-month period, while the JP Morgan
Emerging Markets Bond Index Plus returned 19.98%.
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
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CANADA 21.71% 32.46% 75.48%
FIDELITY CANADA (INCL. 18.06% 28.49% 70.21%
3.00% SALES CHARGE)
Toronto Stock Exchange 300 24.49% 71.01% 90.74%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Toronto Stock Exchange 300 Index - a market capitalization-weighted
index of 300 stocks traded in the Canadian market.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CANADA 21.71% 5.78% 5.78%
FIDELITY CANADA (INCL. 3.00% 18.06% 5.14% 5.46%
SALES CHARGE)
Toronto Stock Exchange 300 24.49% 11.33% 6.67%
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
1989/10/31 9700.00 10000.00
1989/11/30 9756.50 10159.22
1989/12/31 10037.62 10324.90
1990/01/31 9223.58 9424.68
1990/02/28 9276.10 9359.48
1990/03/31 9433.66 9455.51
1990/04/30 8980.68 8737.68
1990/05/31 9571.52 9333.01
1990/06/30 9794.72 9349.17
1990/07/31 9873.50 9509.40
1990/08/31 9302.36 8934.09
1990/09/30 9151.37 8477.35
1990/10/31 8908.47 8200.27
1990/11/30 9197.32 8429.18
1990/12/31 9486.31 8795.12
1991/01/31 9528.38 8829.55
1991/02/28 10404.79 9477.95
1991/03/31 10860.53 9541.18
1991/04/30 10944.66 9531.07
1991/05/31 11428.44 9854.44
1991/06/30 11442.47 9705.74
1991/07/31 11407.41 9847.86
1991/08/31 11309.25 9892.63
1991/09/30 10930.64 9650.41
1991/10/31 11414.42 10105.50
1991/11/30 10986.73 9840.20
1991/12/31 11163.87 9887.67
1992/01/31 11365.09 9974.34
1992/02/29 11432.16 9894.96
1992/03/31 11111.71 9411.08
1992/04/30 10977.56 9243.88
1992/05/31 11074.44 9269.83
1992/06/30 11014.82 9349.10
1992/07/31 11298.02 9627.16
1992/08/31 11126.61 9455.05
1992/09/30 10649.65 8822.25
1992/10/31 10604.93 8990.55
1992/11/30 10575.12 8539.60
1992/12/31 10843.45 8860.34
1993/01/31 10783.74 8774.65
1993/02/28 11455.40 9307.37
1993/03/31 12082.27 9688.00
1993/04/30 12395.71 10096.02
1993/05/31 12567.35 10386.52
1993/06/30 13209.15 10550.83
1993/07/31 12731.53 10540.89
1993/08/31 13052.43 10733.31
1993/09/30 12410.63 10272.23
1993/10/31 13298.71 11074.49
1993/11/30 12992.73 10775.49
1993/12/31 13605.37 11293.69
1994/01/31 14203.74 11846.66
1994/02/28 13597.89 11353.63
1994/03/31 13096.76 10870.93
1994/04/30 12999.52 10730.42
1994/05/31 13059.36 10905.92
1994/06/30 12341.32 10172.05
1994/07/31 12580.67 10546.58
1994/08/31 13051.88 11125.63
1994/09/30 13119.20 11389.67
1994/10/31 12849.93 11154.22
1994/11/30 11914.98 10485.90
1994/12/31 11974.87 10629.22
1995/01/31 11136.63 10105.92
1995/02/28 11593.17 10524.37
1995/03/31 12319.14 10967.82
1995/04/30 12693.36 11237.54
1995/05/31 13090.03 11586.11
1995/06/30 13269.65 11806.79
1995/07/31 13726.19 12120.11
1995/08/31 13554.05 12061.93
1995/09/30 13748.64 12152.36
1995/10/31 13134.93 11947.51
1995/11/30 13673.80 12365.14
1995/12/31 14297.01 12508.62
1996/01/31 14537.55 13108.50
1996/02/29 14665.34 13068.17
1996/03/31 14890.84 13310.89
1996/04/30 15176.48 13764.21
1996/05/31 15537.29 13989.05
1996/06/30 15033.66 13540.33
1996/07/31 14597.69 13134.36
1996/08/31 15221.58 13791.92
1996/09/30 15635.01 14288.60
1996/10/31 16416.76 15399.92
1996/11/30 16890.32 16439.48
1996/12/31 16578.45 15978.23
1997/01/31 17886.28 16775.75
1997/02/28 17444.07 16671.02
1997/03/31 16258.55 15687.99
1997/04/30 16371.45 15889.10
1997/05/31 17848.65 17231.50
1997/06/30 17538.16 17404.21
1997/07/31 18356.73 18622.78
1997/08/31 17660.47 17803.01
1997/09/30 18845.99 19083.93
1997/10/31 17763.97 18200.38
1997/11/30 16964.21 17157.35
1997/12/31 17592.76 17617.02
1998/01/31 17220.26 17318.57
1998/02/28 18124.91 18763.82
1998/03/31 18933.77 20089.25
1998/04/30 19433.99 20226.97
1998/05/31 18752.84 19694.03
1998/06/30 18284.55 19012.78
1998/07/31 16453.97 17379.64
1998/08/31 12739.59 13383.85
1998/09/30 13144.02 13949.53
1998/10/31 13984.81 15321.62
1998/11/30 14282.81 15776.71
1998/12/31 14967.35 16194.35
1999/01/31 15876.74 17026.62
1999/02/28 14913.86 16025.29
1999/03/31 15363.20 16776.29
1999/04/30 16112.11 18481.96
1999/05/31 15759.05 17851.21
1999/06/30 16358.17 18454.60
1999/07/31 16154.90 18118.01
1999/08/31 15812.54 18020.73
1999/09/30 15983.72 18320.90
1999/10/29 17021.49 19074.48
IMATRL PRASUN SHR__CHT 19991031 19991129 085908 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Canada Fund on October 31, 1989, and the current
3.00% sales charge was paid. As the chart shows, by October 31, 1999,
the value of the investment would have grown to $17,021 - a 70.21%
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 $19,074 - a 90.74% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
CANADA
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: On October 1, 1999, Stephen Binder (right)
became Portfolio Manager of Fidelity Canada Fund. The following is an
interview with Robert Haber, who managed the fund during most of the
period covered by this report, with comments from Stephen Binder on
his outlook.
Q. HOW DID THE FUND PERFORM, ROBERT?
R.H. For the 12 months that ended October 31, 1999, the fund had a
total return of 21.71%. In comparison, the Toronto Stock Exchange
(TSE) 300 returned 24.49% during the same period.
Q. WHY DID THE FUND TRAIL ITS BENCHMARK DURING THE PAST 12 MONTHS?
R.H. The real story behind why the fund fell short of its benchmark
over the past 12 months had a lot to do with our relative
underweighting of Nortel Networks. Nortel, a global communications
equipment concern, soared during the period, nearly tripling in price.
My strategy for much of the period was to gain exposure to Nortel
through the fund's market weighting in BCE - a diversified
telecommunications company, and incidentally, the largest company in
Canada - which owns about 41% of Nortel, and was selling at a more
attractive valuation. Regrettably, this strategy failed me during the
sharp rise in Nortel's share price as the period progressed. At the
same time, the broader market, as reflected in the TSE 300, saw Nortel
and BCE ascend to 13% and 9%, respectively, of the index. On the other
side of the Nortel equation, BCE was trading at a wider discount to
the aggregate value of its underlying businesses than it had
previously. Simply put, BCE could not keep up with Nortel in terms of
share price, and the fund was inadequately compensated because of it.
We added to the fund's position in Nortel during the period, but we
simply didn't add it fast enough to make up for the fund's lost
performance versus the benchmark.
Q. BESIDES THE NORTEL STORY, WHAT ELSE INFLUENCED PERFORMANCE?
R.H. Overall, the fund's gains from strong stock picking within oil,
gas, industrial products and merchandising were tempered by
disappointing performance from several holdings in the financial
services and precious metals sectors. On the other hand, it's
important to note that while we were losing by underweighting Nortel,
we were winning elsewhere with technology names such as JDS Uniphase
and Celestica. The fund also benefited from its modest underweighting
in finance during the period on the back of rising interest rates. The
fund was rewarded, however, for holding on to some of the better
banking names such as Toronto Dominion, which had a strong period.
Amid a sharp recovery in cyclicals - or, economically sensitive stocks
such as paper and base metals - during the first two-thirds of the
period, the fund's underweighting in many of the natural resource
sectors relative to the benchmark detracted from performance.
Q. WHICH STOCKS CONTRIBUTED TO THE FUND'S RETURNS?
R.H. BCE continued to benefit from its rich collection of
telecommunications, media and technology assets. Investors rallied
around Nortel and its contributions to further developing the
Internet's infrastructure. JDS Fitel, a maker of fiber-optic
communications products, also benefited from the race for higher
bandwidth - or, speed of data transfer - rising even further after
merging into JDS Uniphase in the summer. Toronto Dominion Bank
performed well relative to other banks, riding the success of its
online discount brokerage division. Information technology systems
solutions provider CGI Group also added meaningfully to performance
during the 12-month period. The fund no longer held CGI Group at the
close of the period.
Q. WHICH STOCKS WERE A DRAG ON PERFORMANCE?
R.H. Barrick Gold suffered during a generally poor period for gold.
Bank of Nova Scotia fell, as most banks did during the period, on
concerns over rising interest rates. Insurance carrier Great West
Life's shares traded lower in response to weakened fundamentals and
the overall downtrend in the financial services sector. I sold off the
fund's position in Great West Life during the period.
Q. TURNING TO YOU, STEPHEN, WHAT'S YOUR OUTLOOK?
S.B. I'm optimistic in general about the Canadian equity market. The
Toronto market has rebounded quite nicely from the sharp decline of
last autumn, and, in my opinion, has yet to reach its high. The
overall economy is doing well, and interest rates, although higher,
aren't at hostile levels. I feel that as world economies continue to
improve and demand picks up steam, Canada, as a natural resource-based
economy, should reap the rewards. I will continue to pursue only the
best stocks within each industry, adding value from the bottom up, in
lieu of making massive top-down sector bets.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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 October 31, 1999, more than
$43 million
MANAGER: Stephen Binder, since October
1999; associate portfolio manager, Fidelity
Canada Fund, 1998-1999; manager, various
Fidelity Select Portfolios, 1990-1997;
research analyst, 1989-present; joined
Fidelity in 1989
(checkmark)
CANADA
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 8.1%
Row: 1, Col: 1, Value: 91.90000000000001
Row: 1, Col: 2, Value: 8.1
Canada 91.9%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 15.5%
Row: 1, Col: 1, Value: 84.5
Row: 1, Col: 2, Value: 15.5
Canada 84.5%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 97.3 92.4
Short-Term Investments and 2.7 7.6
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
BCE, Inc. (Telephone Services) 13.9 11.5
Nortel Networks Corp. 8.0 1.8
(Communications Equipment)
Toronto Dominion Bank (Banks) 4.4 5.1
Seagram Co. Ltd. (Beverages) 3.6 2.0
Bank of Nova Scotia (Banks) 2.7 4.0
JDS Uniphase Canada Ltd. 2.3 2.0
(Electronic Instruments)
Rogers Communications, Inc. 2.2 0.0
Class B (non-vtg.) (Cellular)
Canadian Pacific Ltd. 2.0 0.5
(Railroads)
Bombardier, Inc. Class B 1.9 2.7
(Aerospace & Defense)
Barrick Gold Corp. 1.9 1.1
(Precious Metals)
42.9 30.7
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
UTILITIES 19.5 19.7
TECHNOLOGY 14.6 7.4
FINANCE 12.8 16.7
BASIC INDUSTRIES 11.0 5.5
ENERGY 9.4 10.2
NONDURABLES 6.0 6.2
TRANSPORTATION 4.4 4.3
MEDIA & LEISURE 4.2 6.5
PRECIOUS METALS 3.8 3.2
RETAIL & WHOLESALE 3.6 1.0
</TABLE>
CANADA
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 97.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 2.0%
Bombardier, Inc. Class B 46,600 $ 821,682
Textron, Inc. 770 59,434
881,116
BASIC INDUSTRIES - 11.0%
CHEMICALS & PLASTICS - 2.8%
Intertape Polymer Group, Inc. 14,600 394,340
NOVA Chemicals Corp. 41,300 812,418
1,206,758
IRON & STEEL - 0.8%
Dofasco, Inc. 10,000 178,365
Stelco, Inc. Series A 26,600 171,706
350,071
METALS & MINING - 4.5%
Alcan Aluminium Ltd. 6,050 198,351
Breakwater Resources Ltd. (a) 140,000 299,653
Falconbridge Ltd. 44,440 658,281
Inco Ltd. 40,200 808,534
Phelps Dodge Corp. 370 20,859
1,985,678
PACKAGING & CONTAINERS - 0.0%
Gaylord Container Corp. Class 1,960 11,025
A (a)
PAPER & FOREST PRODUCTS - 2.9%
Abitibi-Consolidated, Inc. 16,800 204,335
Boise Cascade Corp. 840 29,925
Canfor Corp. (a) 12,600 109,588
Domtar, Inc. 59,200 714,004
Smurfit-Stone Container Corp. 2,485 53,738
(a)
Tembec, Inc. Class A (a) 13,800 138,309
1,249,899
TOTAL BASIC INDUSTRIES 4,803,431
CONSTRUCTION & REAL ESTATE -
0.7%
BUILDING MATERIALS - 0.6%
Richelieu Hardware Ltd. (a) 27,000 194,469
United Dominion Industries 3,400 73,928
Ltd.
268,397
CONSTRUCTION - 0.1%
Lennar Corp. 1,990 32,711
ENGINEERING - 0.0%
PerkinElmer, Inc. 130 5,306
TOTAL CONSTRUCTION & REAL 306,414
ESTATE
DURABLES - 1.3%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Airboss of America Corp. (a) 69,100 206,591
SHARES VALUE (NOTE 1)
Canadian Tire Corp. Ltd. 3,900 $ 93,015
Series A
Navistar International Corp. 800 33,350
(a)
332,956
CONSUMER ELECTRONICS - 0.0%
Maytag Corp. 300 12,019
TEXTILES & APPAREL - 0.5%
Gildan Activewear, Inc. Class 11,800 224,938
A (a)
TOTAL DURABLES 569,913
ENERGY - 9.4%
ENERGY SERVICES - 1.4%
Bonus Resource Services Corp. 43,200 70,449
(a)
Ensign Resource Service 19,700 412,954
Group, Inc.
Halliburton Co. 173 6,520
Peak Energy Services Ltd. (a) 36,000 51,369
Plains Energy Services Ltd. 11,400 69,715
(a)
Weatherford International, 100 3,388
Inc. (a)
614,395
OIL & GAS - 8.0%
Alberta Energy Co. Ltd. 5,800 179,316
Bellator Exploration, Inc. (a) 134,200 162,313
Bonavista Petroleum Ltd. (a) 16,200 183,828
Canadian Hunter Exploration 12,500 203,846
Ltd.
Canadian Natural Resources 12,400 272,990
Ltd. (a)
Crestar Energy, Inc. (a) 44,200 570,633
Merit Energy Ltd. (a) 35,400 38,486
Ocean Energy, Inc. (a) 1,000 9,188
Poco Petroleums Ltd. (a) 10,600 94,353
Post Energy Corp. (a) 18,800 89,420
Rio Alto Exploration Ltd. (a) 42,500 626,656
Santa Fe Snyder Corp. (a) 2,421 20,881
Storm Energy, Inc. (a) 20,500 31,341
Suncor Energy, Inc. 20,800 799,946
Swift Energy Co. (a) 693 7,190
Talisman Energy, Inc. (a) 6,800 179,507
Triton Energy Ltd. (a) 2,500 41,406
3,511,300
TOTAL ENERGY 4,125,695
FINANCE - 12.8%
BANKS - 9.8%
Bank of Montreal 10,500 404,175
Bank of Nova Scotia 50,500 1,152,952
Royal Bank of Canada 18,400 793,287
Toronto Dominion Bank 84,600 1,940,103
4,290,517
CREDIT & OTHER FINANCE - 0.2%
Home Capital Group Class B 10,000 27,044
(sub-vtg.)
Providian Financial Corp. 697 75,973
103,017
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
FEDERAL SPONSORED CREDIT - 0.2%
Freddie Mac 1,550 $ 83,797
INSURANCE - 1.1%
Canada Life Financial Corp. 15,200 199,851
(a)
Clarica Life Insurance Co. 12,700 205,382
MGIC Investment Corp. 1,450 86,638
491,871
SECURITIES INDUSTRY - 1.5%
AGF Management Ltd. Class B 4,000 58,436
Lehman Brothers Holdings, 940 69,266
Inc.
Mackenzie Financial Corp. 19,200 226,350
Schwab (Charles) Corp. 2,020 78,654
Trimark Financial Corp. 16,000 201,128
633,834
TOTAL FINANCE 5,603,036
HEALTH - 2.4%
DRUGS & PHARMACEUTICALS - 2.3%
Amgen, Inc. (a) 360 28,710
Biovail Corp. International 10,400 574,873
(a)
Medimmune, Inc. (a) 350 39,200
Millennium Pharmaceuticals, 600 42,075
Inc. (a)
QLT PhotoTherapeutics, Inc. 7,400 312,251
(a)
997,109
MEDICAL EQUIPMENT & SUPPLIES
- - 0.1%
VISX, Inc. (a) 710 44,419
MEDICAL FACILITIES MANAGEMENT
- - 0.0%
Syncor International Corp. (a) 380 13,918
TOTAL HEALTH 1,055,446
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.5%
ELECTRICAL EQUIPMENT - 1.4%
Research in Motion Ltd. (a) 3,200 99,259
Teklogix International, Inc. 30,500 507,746
(a)
607,005
POLLUTION CONTROL - 0.1%
Bennett Environmental, Inc. 7,100 48,244
(a)
Tetra Tech, Inc. (a) 1,000 15,875
64,119
TOTAL INDUSTRIAL MACHINERY & 671,124
EQUIPMENT
MEDIA & LEISURE - 4.2%
BROADCASTING - 1.6%
AMFM, Inc. (a) 2,433 170,310
Cogeco Cable, Inc. 13,000 192,125
Cogeco, Inc. (sub. vtg.) 11,600 169,464
Comcast Corp. Class A 2,270 95,624
(special)
SHARES VALUE (NOTE 1)
CTC Communications Group, 400 $ 7,050
Inc. (a)
Time Warner, Inc. 420 29,269
USA Networks, Inc. (a) 40 1,803
665,645
ENTERTAINMENT - 0.5%
Cinar Films, Inc. Class B 12,400 215,450
(sub. vtg.) (a)
LODGING & GAMING - 0.0%
WMS Industries, Inc. (a) 1,000 13,563
PUBLISHING - 1.8%
Thomson Corp. 27,400 800,571
RESTAURANTS - 0.3%
Sportscene Restaurants, Inc. 20,000 110,077
Class A
TOTAL MEDIA & LEISURE 1,805,306
NONDURABLES - 6.0%
BEVERAGES - 4.1%
Molson, Inc. Class A 11,500 214,888
Seagram Co. Ltd. 32,000 1,586,193
1,801,081
FOODS - 0.5%
Maple Leaf Foods, Inc. 20,600 195,964
TOBACCO - 1.4%
Imasco Ltd. 22,900 614,629
TOTAL NONDURABLES 2,611,674
PRECIOUS METALS - 3.8%
Barrick Gold Corp. 44,500 817,915
Franco Nevada Mining Corp. 19,256 357,198
Ltd.
Meridian Gold, Inc. (a) 5,000 36,183
Placer Dome, Inc. 27,500 345,689
Stillwater Mining Co. (a) 430 8,654
Teck Corp. Class B (sub-vtg.) 10,040 92,780
1,658,419
RETAIL & WHOLESALE - 3.6%
APPAREL STORES - 0.0%
Suzy Shier Ltd. (sub-vtg.) 300 897
DRUG STORES - 0.3%
Jean Coutu Group, Inc. Class A 6,200 133,125
GROCERY STORES - 3.0%
Empire Co. Ltd. Class A 10,000 198,410
(non-vtg.)
Loblaw Companies Ltd. 13,900 323,959
Onex Corp. 42,500 801,369
1,323,738
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.3%
Forzani Group Ltd. (a) 24,900 $ 70,215
Home Depot, Inc. 400 30,200
100,415
TOTAL RETAIL & WHOLESALE 1,558,175
SERVICES - 0.1%
Ecolab, Inc. 1,600 54,100
TECHNOLOGY - 14.6%
COMMUNICATIONS EQUIPMENT - 8.3%
Jabil Circuit, Inc. (a) 2,190 114,428
Nortel Networks Corp. 57,300 3,525,525
3,639,953
COMPUTER SERVICES & SOFTWARE
- - 0.5%
Affymetrix, Inc. (a) 500 44,063
Commerce One, Inc. 380 65,075
Electronics for Imaging, Inc. 1,900 76,594
(a)
185,732
COMPUTERS & OFFICE EQUIPMENT
- - 0.4%
Adaptec, Inc. (a) 1,500 67,500
Comverse Technology, Inc. (a) 970 110,095
ScanSource, Inc. (a) 210 7,114
184,709
ELECTRONIC INSTRUMENTS - 2.3%
JDS Uniphase Canada Ltd. (a) 6,090 1,014,241
ELECTRONICS - 3.1%
Altera Corp. (a) 800 38,900
C-Mac Industries, Inc. (a) 20,400 647,333
Celestica, Inc. (sub-vtg.) (a) 11,500 632,941
Micron Technology, Inc. (a) 470 33,517
1,352,691
TOTAL TECHNOLOGY 6,377,326
TRANSPORTATION - 4.4%
AIR TRANSPORTATION - 0.3%
Air Canada, Inc. (a) 13,200 98,213
Preview Travel, Inc. (a) 200 6,100
SkyWest, Inc. 1,210 30,023
134,336
RAILROADS - 3.3%
Canadian National Railway Co. 18,300 555,205
Canadian Pacific Ltd. 38,000 888,225
1,443,430
SHARES VALUE (NOTE 1)
TRUCKING & FREIGHT - 0.8%
Laidlaw, Inc. 55,800 $ 345,030
Vitran Corp., Inc. Class A 4,600 25,005
370,035
TOTAL TRANSPORTATION 1,947,801
UTILITIES - 19.5%
CELLULAR - 2.5%
ALLTEL Corp. 450 37,463
Nextel Communications, Inc. 1,080 93,083
Class A (a)
Rogers Communications, Inc. 47,200 955,738
Class B (non-vtg.) (a)
1,086,284
ELECTRIC UTILITY - 0.1%
PG&E Corp. 1,524 34,957
GAS - 1.8%
ATCO Ltd. Class I (non-vtg.) 16,000 413,128
Enbridge, Inc. 18,050 388,792
801,920
TELEPHONE SERVICES - 15.1%
Aliant, Inc. 12,500 188,133
AT&T Corp. 920 43,010
BCE, Inc. 100,900 6,074,422
GST Telecommunications, Inc. 22,000 148,500
(a)
MCI WorldCom, Inc. (a) 544 46,682
McLeodUSA, Inc. Class A (a) 900 40,163
OCI Communications, Inc. 2,600 21,200
Class B (non-vtg.) (a)
Time Warner Telecom, Inc. 350 8,816
WinStar Communications, Inc. 1,586 61,557
(a)
6,632,483
TOTAL UTILITIES 8,555,644
TOTAL COMMON STOCKS 42,584,620
(Cost $36,461,570)
CASH EQUIVALENTS - 13.5%
Central Cash Collateral Fund, 4,739,858 4,739,858
5.26% (b)
Taxable Central Cash Fund, 1,182,892 1,182,892
5.21% (b)
TOTAL CASH EQUIVALENTS 5,922,750
(Cost $5,922,750)
TOTAL INVESTMENT PORTFOLIO - 48,507,370
110.8%
(Cost $42,384,320)
NET OTHER ASSETS - (10.8)% (4,737,107)
NET ASSETS - 100% $ 43,770,263
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $119,501,071 and $130,940,783, 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 $1,962 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $4,652,401. The fund
received cash collateral of $4,739,858 which was invested in
investments.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $42,633,180. Net unrealized appreciation
aggregated $5,874,190, of which $7,598,874 related to appreciated
investment securities and $1,724,684 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $4,511,000, all of which will expire on October 31,
2006.
CANADA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 48,507,370
value (cost $42,384,320) -
See accompanying schedule
Foreign currency held at 24,884
value (cost $24,884)
Receivable for investments 966,378
sold
Receivable for fund shares 138,884
sold
Dividends receivable 30,824
Interest receivable 3,865
Redemption fees receivable 4
Other receivables 24,514
TOTAL ASSETS 49,696,723
LIABILITIES
Payable to custodian bank $ 722
Payable for investments 1,033,844
purchased
Payable for fund shares 83,181
redeemed
Accrued management fee 11,563
Other payables and accrued 57,292
expenses
Collateral on securities 4,739,858
loaned, at value
TOTAL LIABILITIES 5,926,460
NET ASSETS $ 43,770,263
Net Assets consist of:
Paid in capital $ 42,289,681
Undistributed net investment 66,029
income
Accumulated undistributed net (4,707,628)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 6,122,181
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 2,751,390 $ 43,770,263
shares outstanding
NET ASSET VALUE and $15.91
redemption price per share
($43,770,263 (divided by)
2,751,390 shares)
Maximum offering price per $16.40
share (100/97.00 of $15.91)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 482,519
Dividends
Interest 179,970
Security lending 4,469
666,958
Less foreign taxes withheld (69,946)
TOTAL INCOME 597,012
EXPENSES
Management fee Basic fee $ 332,751
Performance adjustment (189,641)
Transfer agent fees 175,967
Accounting and security 60,507
lending fees
Custodian fees and expenses 114,267
Registration fees 17,666
Audit 39,678
Legal 285
Total expenses before 551,480
reductions
Expense reductions (71,154) 480,326
NET INVESTMENT INCOME 116,686
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 3,288,483
Foreign currency transactions 32,769 3,321,252
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 5,468,716
Assets and liabilities in (1,633) 5,467,083
foreign currencies
NET GAIN (LOSS) 8,788,335
NET INCREASE (DECREASE) IN $ 8,905,021
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 15,360
charges paid to FDC
Sales charges - Retained by $ 15,360
FDC
Deferred sales charges $ 3,145
withheld by FDC
Expense Reductions $ 71,154
Directed brokerage
arrangements
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 116,686 $ 412,429
income
Net realized gain (loss) 3,321,252 (7,161,849)
Change in net unrealized 5,467,083 (7,122,677)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 8,905,021 (13,872,097)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (248,416) (246,908)
From net investment income
From net realized gain - (10,106,122)
TOTAL DISTRIBUTIONS (248,416) (10,353,030)
Share transactions Net 10,888,952 7,142,290
proceeds from sales of shares
Reinvestment of distributions 237,716 10,182,688
Cost of shares redeemed (23,488,113) (42,155,827)
NET INCREASE (DECREASE) IN (12,361,445) (24,830,849)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 53,318 20,258
TOTAL INCREASE (DECREASE) (3,651,522) (49,035,718)
IN NET ASSETS
NET ASSETS
Beginning of period 47,421,785 96,457,503
End of period (including $ 43,770,263 $ 47,421,785
undistributed net investment
income of $66,029 and
$352,447, respectively)
OTHER INFORMATION
Shares
Sold 743,930 449,694
Issued in reinvestment of 17,767 627,013
distributions
Redeemed (1,618,570) (2,578,744)
Net increase (decrease) (856,873) (1,502,037)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.14 $ 18.88 $ 21.84 $ 17.55 $ 17.18
period
Income from Investment
Operations
Net investment income .04 C .09 C .03 C .08 C .05
Net realized and unrealized 2.78 (3.70) 1.39 4.27 .33
gain (loss)
Total from investment 2.82 (3.61) 1.42 4.35 .38
operations
Less Distributions
From net investment income (.07) (.05) (.13) (.08) (.01)
From net realized gain - (2.08) (4.29) - -
Total distributions (.07) (2.13) (4.42) (.08) (.01)
Redemption fees added to paid .02 - .04 .02 -
in capital
Net asset value, end of period $ 15.91 $ 13.14 $ 18.88 $ 21.84 $ 17.55
TOTAL RETURN A, B 21.71% (21.27)% 8.21% 24.99% 2.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 43,770 $ 47,422 $ 96,458 $ 129,671 $ 326,763
(000 omitted)
Ratio of expenses to average 1.22% .94% .93% 1.01% 1.09% D
net assets
Ratio of expenses to average 1.06% E .80% E .92% E .98% E 1.08% E
net assets after expense
reductions
Ratio of net investment .26% .57% .18% .40% .26%
income to average net assets
Portfolio turnover rate 286% 215% 139% 139% 75%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E 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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EMERGING MARKETS 38.72% -48.41% 4.38%
FIDELITY EMERGING MARKETS 34.56% -49.95% 1.25%
(INCL. 3.00% SALES CHARGE)
MSCI Emerging Markets Free 44.63% -21.63% 157.20%
Emerging Markets Funds 35.76% -18.36% n/a
Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on 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 October 31, 1999, the index
included over 800 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 one year average represents
a peer group of 179 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, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EMERGING MARKETS 38.72% -12.40% 0.48%
FIDELITY EMERGING MARKETS 34.56% -12.93% 0.14%
(INCL. 3.00% SALES CHARGE)
MSCI Emerging Markets Free 44.63% -4.76% 11.06%
Emerging Markets Funds 35.76% -4.20% 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
1999/05/31 9323.41 23845.51
1999/06/30 10590.36 26551.78
1999/07/31 10103.07 25830.49
1999/08/31 10092.24 26065.50
1999/09/30 9756.56 25183.39
1999/10/29 10124.73 25719.61
IMATRL PRASUN SHR__CHT 19991031 19991111 111256 R00000000000111
$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 October 31, 1999, the value of the investment would
have been $10,125 - a 1.25% increase 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 $25,720 - a 157.20% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
EMERGING MARKETS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with David Stewart, Portfolio Manager of Fidelity
Emerging Markets Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. The fund performed well on an absolute basis but trailed its
benchmark. For the 12 months that ended October 31, 1999, the fund
returned 38.72%. By comparison, the Morgan Stanley Capital
International Emerging Markets Free Index returned 44.63%, while the
emerging markets funds average tracked by Lipper Inc. returned 35.76%.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX?
A. Early in the period, I positioned the fund defensively, focusing on
companies with solid management and a reliable cash flow. Following
the extreme volatility in world markets during 1998, there was
widespread fear that further negative surprises were ahead, with
Brazil being the most frequently mentioned possibility. In fact,
Brazil massively devalued its currency in January 1999, but instead of
triggering further weakness, the Brazilian devaluation marked a
significant turning point for emerging-market equities. Interest rates
began to drop, and investors aggressively bought the stocks of
companies poised to benefit from an economic upswing-despite the fact
that many of the highest flyers were mediocre businesses with
excessive levels of debt. I adjusted the portfolio to allow the fund
to participate more fully in the rally, but it was too late to catch
up with the index. Apparently, many of my peers suffered a similar
fate, though to a greater degree, as evidenced by the fact that the
fund outperformed the Lipper average.
Q. WHAT OTHER FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. Overweighting Asia and underweighting Latin America were good
decisions. On the other hand, an underweighting in Greece hurt
relative performance. Stocks in Greece surged in anticipation of that
country's entry into the European Monetary System next year.
Valuations of Greek securities became extreme, and the market appeared
to be at unsustainable levels.
Q. THE FUND OWNED HOLDINGS IN MALAYSIA AND HONG KONG, DESPITE THE FACT
THAT NEITHER COUNTRY WAS REPRESENTED IN THE INDEX. WHAT DID YOU SEE IN
THESE COUNTRIES?
A. After a difficult period that included capital controls - or,
limits on investment capital leaving the country - Malaysia will
again be represented in the index next year, and I felt that there
were some good opportunities there. The country's exports continued to
be strong, and there was an upcoming election, which historically has
been a favorable influence on Malaysian stocks. As for Hong Kong, the
fund's holdings were actually Chinese stocks that were listed in Hong
Kong. These represented not only the best Chinese stocks, in my
opinion, but also offered greater liquidity for executing orders.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Samsung Electronics, the fund's second-largest holding at the end
of the period, did extremely well. This South Korean company is the
world's most efficient producer of computer DRAM (dynamic random
access memory) and was profitable even when DRAM prices were near
their lows. Larsen & Toubro Ltd., an Indian construction company,
benefited from a new CEO who began restructuring the company to
increase the focus on profitable areas of business and to sell
non-performing assets.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
A. The biggest detractor was Real Africa Holdings, a company with
sound underlying assets that was unfortunately damaged by negative
publicity surrounding a competitor. China Resources Beijing Land, a
construction and real estate stock, was the victim of a weak market
for Chinese stocks. In addition, the delay of deregulation in the
property sector hurt the stock.
Q. WHAT'S YOUR OUTLOOK, DAVID?
A. I am looking for improving world economic growth to provide a
reasonably favorable backdrop for emerging-market stocks. As I've
indicated in previous reports, the easy, interest-rate-driven gains
have been realized. Going forward, the companies that continue to see
meaningful share-price growth will probably be limited to those that
deliver on the earnings front. Restructuring should play a big part in
many of the most successful stories. Furthermore, because many
emerging-market economies are experiencing strong growth concurrently,
we may see rising commodity prices - and strong performance from
commodity-sensitive stocks. In addition, I will focus more on
companies positioned to benefit from increasing demand from Europe and
Asia, as opposed to those with strong ties to the U.S. economy.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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
START DATE: November 1, 1990
FUND NUMBER: 322
TRADING SYMBOL: FEMKX
SIZE: as of October 31, 1999, more than
$402 million
MANAGER: David Stewart, since 1997;
manager, Fidelity Emerging Markets Pilot Fund,
since 1995; analyst covering emerging markets,
since 1995; joined Fidelity in 1994
(checkmark)
EMERGING MARKETS
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 5.7%
Brazil 8.2%
Turkey 4.2%
Row: 1, Col: 1, Value: 8.199999999999999
Row: 1, Col: 2, Value: 8.199999999999999
Row: 1, Col: 3, Value: 9.699999999999999
Row: 1, Col: 4, Value: 5.0
Row: 1, Col: 5, Value: 9.6
Row: 1, Col: 6, Value: 26.0
Row: 1, Col: 7, Value: 11.6
Row: 1, Col: 8, Value: 11.8
Row: 1, Col: 9, Value: 4.2
Row: 1, Col: 10, Value: 5.7
India 8.2%
Taiwan 11.8%
Korea (South) 9.7%
South Africa 11.6%
Malaysia 5.0%
Mexico 9.6%
Other 26.0%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 6.7%
Brazil 8.5%
Row: 1, Col: 1, Value: 8.5
Row: 1, Col: 2, Value: 5.8
Row: 1, Col: 3, Value: 10.8
Row: 1, Col: 4, Value: 4.2
Row: 1, Col: 5, Value: 11.4
Row: 1, Col: 6, Value: 31.3
Row: 1, Col: 7, Value: 8.199999999999999
Row: 1, Col: 8, Value: 10.0
Row: 1, Col: 9, Value: 3.1
Row: 1, Col: 10, Value: 6.7
Turkey 3.1%
India 5.8%
Taiwan 10.0%
Korea (South) 10.8%
South Africa 8.2%
Malaysia 4.2%
Mexico 11.4%
Other 31.3%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 94.3 93.3
Short-Term Investments and 5.7 6.7
Net Other Assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Telefonos de Mexico SA 3.5 3.4
sponsored ADR representing
Class L shares (Mexico,
Telephone Services)
Samsung Electronics Co. Ltd. 2.9 2.3
(Korea (South), Electronics)
Reliance Industries Ltd. 2.0 1.6
(India, Chemicals & Plastics)
Johnnies Industrial Corp. 1.8 1.7
Ltd. (Reg.) (South Africa,
Precious Metals)
Far Eastern Textile Ltd. 1.8 1.7
(Taiwan, Textiles & Apparel)
Taiwan Semiconductor 1.8 1.3
Manufacturing Co. Ltd.
(Taiwan, Electronics)
China Trust Co. Ltd. 1.7 1.8
(Taiwan, Banks)
Malayan Banking BHD 1.7 1.0
(Malaysia, Banks)
Hon Hai Precision Industries 1.7 0.8
Co. Ltd. (Taiwan, Electronics)
Haci Omer Sabanci Holding AS 1.7 1.0
(Turkey, Holding Companies)
20.6 16.6
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 18.1 20.9
UTILITIES 17.5 22.0
BASIC INDUSTRIES 13.5 7.8
TECHNOLOGY 9.3 6.3
NONDURABLES 5.7 10.9
PRECIOUS METALS 4.2 3.9
ENERGY 3.4 3.1
DURABLES 3.3 2.4
CONSTRUCTION & REAL ESTATE 3.2 2.0
HOLDING COMPANIES 3.1 2.2
</TABLE>
EMERGING MARKETS
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 93.0%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.6%
Perez Companc SA Class B 427,800 $ 2,576,541
BRAZIL - 8.2%
Aracruz Celulose SA ADR 117,700 2,412,850
Banco Bradesco SA (Reg. Pfd.) 504,058,000 2,471,126
Brahma Cervejaria(Compagnie) 8,118,648 5,188,766
(PN Reg.)
Centrais Electricas 133,101,000 2,370,947
Brasileiras SA
Companhia Vale do Rio Doce 258,000 5,137,485
(PN-A)
Compania Energertica Minas 63,874,173 911,551
Gerais
Souza Cruz Industria Comerico 473,500 2,795,303
Tele Centro Sul Participacoes 25,820 1,542,745
SA sponsored ADR
Tele Norte Leste 257,500 4,345,313
Participacoes SA ADR
Telesp Participacoes SA ADR 199,600 3,231,025
(a)
Votorantim Celulose e Papel 93,761,000 2,743,520
SA (PN Reg.)
33,150,631
CHILE - 2.1%
Compania Cervecerias Unidas 52,400 1,142,975
SA sponsored ADR
Compania de 155,400 2,593,238
Telecomunicaciones de Chile
SA sponsored ADR
Distribucion Y Servicio D&S 141,900 2,314,744
SA ADR
Embotelladora Andina 145,000 2,356,250
sponsored ADR Class A
8,407,207
CHINA - 0.8%
Shanghai Petrochemical Co. 14,698,000 3,008,473
Ltd. Class H
COLOMBIA - 0.2%
Suramericana de Inversiones SA 723,400 745,338
CROATIA - 0.9%
Pliva D.D.:
GDR (c) 133,700 1,423,905
GDR (Reg.S) unit 216,100 2,301,465
3,725,370
CZECH REPUBLIC - 0.6%
Ceske Energeticke Zavody AS 967,800 2,505,931
(a)
EGYPT - 2.1%
Commercial International Bank 550,380 6,594,932
Ltd.
Lakah Group Sae (a) 741,903 1,687,126
8,282,058
GREECE - 3.0%
Alpha Credit Bank 10,980 843,048
Hellenic Telecommunication 256,600 5,459,050
Organization SA (OTE)
Heracles General Cement Co. 33,060 1,077,745
SHARES VALUE (NOTE 1)
Minoan Lines SA 60,700 $ 1,883,646
STET Hellas 120,800 2,597,200
Telecommunications SA ADR
(a)
11,860,689
HONG KONG - 3.2%
Beijing Enterprises Holdings 1,524,000 2,481,797
Ltd.
China Resources Beijing Land 16,866,000 2,496,898
Ltd.
China Telecom (Hong Kong) 992,000 3,348,000
Ltd. (a)
Glorious Sun Enterprises 5,304,000 1,928,914
New World Infrastructure Ltd. 2,093,800 2,398,921
(a)
12,654,530
HUNGARY - 0.9%
Matav RT sponsored ADR (a) 97,000 2,794,813
OTP Bank Rt. 19,800 901,280
3,696,093
INDIA - 8.2%
Dr. Reddy's Laboratories Ltd. 56,300 1,380,919
Gujarat Ambuja Cement Ltd. 246,800 3,069,653
Industrial Credit & 1,589,800 2,892,543
Investment Corp. of India
Ltd.
ITC Ltd. 500 8,015
Larsen & Toubro Ltd. 720,300 6,604,132
Mahanagar Telephone Nigam 3,900 15,395
Ltd.
Pentafour Software & Exports 110,000 1,527,637
Ltd. (a)
Pentafour Software & Exports 110,000 1,527,637
Ltd. New (a)
Ranbaxy Laboratories Ltd. 89,100 1,785,181
Reliance Industries Ltd. 1,473,494 7,925,714
State Bank of India 252,000 1,439,337
Tata Engineering & Locomotive 7,125 39,317
Co. Ltd.
Tata Iron & Steel Co. Ltd. (a) 704,000 2,391,525
Wipro Ltd. 91,880 2,295,730
32,902,735
INDONESIA - 2.3%
PT Bank International 13,570,000 298,241
Indonesia
PT Indah Kiat Pulp & Paper 4,469,000 1,931,654
Corp. (a)
PT Indosat 833,500 1,355,581
PT Telkomunikasi Indonesia 8,179,000 3,894,758
Sampoerna, Hanjaya Mandala (a) 731,000 1,702,987
9,183,221
ISRAEL - 1.2%
Bank Hapoalim BM (Reg.) 569,500 1,355,984
Bezeq Israeli 894,000 3,648,162
Telecommunication Corp.
Ltd. (a)
5,004,146
KOREA (SOUTH) - 9.7%
Cheil Jedang Corp. 30,700 1,765,986
Kookmin Bank 237,600 3,704,145
Kookmin Bank rights 11/4/99 23,865 145,239
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - CONTINUED
Korea Electric Power Corp. 192,400 $ 5,630,048
Korea Telecom 83,000 5,584,079
Lg Chemical Ltd. 94,700 2,865,870
Medison Co. Ltd. 413,670 4,138,426
Pohang Iron & Steel Co. Ltd. 13,600 1,632,681
Samsung Electronics Co. Ltd. 68,845 11,478,954
Shinsegae Department Store 38,200 2,098,692
Shinsegae Department Store 6,677 118,010
rights 12/1/99 (a)
39,162,130
MALAYSIA - 5.0%
AMMB Holdings BHD 1,066,000 2,300,316
Amway Holding BHD 660,000 1,710,789
Genting BHD 1,003,000 3,589,684
Malayan Banking BHD 2,025,000 6,874,342
Rothmans of Pall Mall 352,000 2,454,737
Malaysia BHD
Tenaga Nasional BHD 572,000 1,317,105
YTL Cement BHD 2,584,800 1,782,152
20,029,125
MEXICO - 9.6%
Alfa SA de CV 1,113,000 4,282,775
Cemex SA de CV sponsored ADR 128,200 2,884,500
(a)
Cifra SA de CV Series C (a) 2,306,300 3,569,031
Grupo Financiero Bancomer SA 12,318,900 3,245,698
de CV Series A
Grupo Modelo SA de CV Class C 1,733,000 4,232,111
Grupo Televisa SA de CV 113,400 4,819,500
sponsored ADR (a)
Telefonos de Mexico SA 162,800 13,919,399
sponsored ADR representing
Class L shares
Tubos de Acero de Mexico SA 163,300 1,786,094
sponsored ADR
38,739,108
PAKISTAN - 0.0%
Dandot Cement Co. Ltd. (a) 93,750 1,807
PERU - 1.4%
Cementos Lima S.A. 3,194 50,451
Compania de Minas 240,300 4,085,100
Buenaventura SA sponsored
ADR Class B
Telefonica del Peru SA ADR 122,100 1,411,781
5,547,332
PHILIPPINES - 1.5%
Benpres Holdings Corp. (a) 12,881,000 2,248,554
Manila Electric Co. Class B 1,301,000 3,568,828
QueenBee Resources Corp. 520,000 197,756
warrants 3/24/03 (a)
6,015,138
SHARES VALUE (NOTE 1)
POLAND - 0.6%
KGHM Polska Miedz SA sonsored 177,600 $ 2,193,360
GDR (Reg. S)
RUSSIA - 1.9%
Lukoil Oil Co. sponsored ADR 127,000 4,032,250
Unified Energy Systems 657,700 3,699,563
sponsored ADR
7,731,813
SOUTH AFRICA - 11.6%
Anglo American Platinum Corp. 130,200 3,749,963
Ltd.
Anglogold Ltd. 47,890 2,704,065
De Beers Consolidated Mines 115,700 3,159,134
Ltd./ De Beers Centenary AG
unit
Dimension Data Holdings Ltd. 287,200 1,392,655
Gold Fields Ltd. 606,990 2,903,833
Imperial Holdings Ltd. 239,500 2,221,382
Iscor Ltd. 6,849,700 2,652,719
Johnnies Industrial Corp. 1,069,147 7,306,838
Ltd. (Reg.)
Liberty Life Association of 353,903 3,282,478
Africa Ltd.
Nampak Ltd. 1,871,500 5,024,774
Real Africa Holdings Ltd. (a) 1,821,851 2,193,751
Standard Bank Investment 1,917,695 6,553,022
Corp. Ltd.
Super Group Ltd. 1,848,900 2,707,689
Theta Group Ltd. (a) 460,700 760,899
46,613,202
TAIWAN - 11.8%
Bank Sinopac 3,728,900 2,104,266
Cathay Life Insurance Co. 684,890 1,770,523
Ltd.
China Development Corp. (a) 1,205,000 1,789,265
China Petrochemical 3,964,400 2,187,169
Development Corp. (a)
China Trust Co. Ltd. (a) 7,537,720 6,915,121
Far Eastern Textile Ltd. 5,202,340 7,117,956
Hon Hai Precision Industries 1,001,400 6,850,687
Co. Ltd.
Kindom Construction Co. Ltd. 910,000 547,951
Nan Ya Plastics Corp. 2,305,000 4,033,023
Phoenixtec Power Co. Ltd. 2,462,006 5,006,286
Pou Chen Corp. 1,075,200 2,288,020
Taiwan Semiconductor 1,584,240 7,042,177
Manufacturing Co. Ltd.
47,652,444
THAILAND - 1.4%
Bangkok Bank Ltd. PCL (For. 583,200 1,358,913
Reg.) (a)
Ministry of Finance of the 4,653,200 1,626,361
Kingdom of Thailand (Siam
Commercial Bank PLC)
warrants 5/31/02 (a)
Nithipat Finance PCL:
(For. Reg.) warrants 12/15/99 49,800 0
(a)
(For. Reg.) (a) 2,395,900 1
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
PTT Exploration & Production 246,200 $ 1,797,499
Public Co.Ltd. (For.Reg.) (a)
Siam Cement PCL (For.Reg.) (a) 37,000 957,929
5,740,703
TURKEY - 4.2%
Dogan Sirketler Grubu Holding 219,242,560 2,462,532
AS
Erciyas Biracilik Ve Malt 5,013,200 104,275
Guney Biraciliu 31,258,675 1,089,052
Haci Omer Sabanci Holding AS 227,448,970 6,741,587
Hurriyet Gazetecilik ve 172,658,890 1,310,826
Matbaacilik AS
Koytas Tekstil Sanayi ve 26,770,000 0
Ticaret AS (a)
Sabah Yayincilik AS (a) 303,737,700 773,924
Yapi ve Kredi Bankasi AS 314,585,118 4,580,359
17,062,555
TOTAL COMMON STOCKS 374,191,680
(Cost $338,880,530)
CONVERTIBLE PREFERRED STOCKS
- - 1.3%
PHILIPPINES - 0.1%
PDCP Development Bank 2,252,138 155,010
(non-vtg.) (a)
THAILAND - 1.2%
Siam Commercial Bank PLC 4,386,700 4,968,754
5.25% (a)
TOTAL CONVERTIBLE PREFERRED 5,123,764
STOCKS
(Cost $3,959,085)
CASH EQUIVALENTS - 6.9%
Central Cash Collateral Fund, 5,809,428 5,809,428
5.26% (b)
Taxable Central Cash Fund, 22,022,810 22,022,810
5.21% (b)
TOTAL CASH EQUIVALENTS 27,832,238
(Cost $27,832,238)
TOTAL INVESTMENT PORTFOLIO - 407,147,682
101.2%
(Cost $370,671,853)
NET OTHER ASSETS - (1.2)% (4,755,572)
NET ASSETS - 100% $ 402,392,110
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $1,423,905 or 0.4% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $339,577,219 and $297,292,260, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $5,872,606. The fund
received cash collateral of $5,809,428 which was invested in the
Central Cash Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $372,003,315. Net unrealized appreciation
aggregated $35,144,367, of which $81,968,879 related to appreciated
investment securities and $46,824,512 related to depreciated
investment securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $425,756,000 of which $97,014,000, $19,326,000 and
$309,416,000 will expire on September 30, 2004, 2006 and 2007,
respectively.
The fund intends to elect to defer to its fiscal year ending September
30, 2000 approximately $41,648,000 of losses recognized during the
period November 1, 1998 to September 30, 1999.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 13.5%
CASH EQUIVALENTS 6.9
CONSTRUCTION & REAL ESTATE 3.2
DURABLES 3.3
ENERGY 3.4
FINANCE 18.1
HEALTH 3.0
HOLDING COMPANIES 3.1
INDUSTRIAL MACHINERY & 3.0
EQUIPMENT
MEDIA & LEISURE 2.3
NONDURABLES 5.7
PRECIOUS METALS 4.2
RETAIL & WHOLESALE 2.0
SERVICES 0.3
TECHNOLOGY 9.3
TRANSPORTATION 2.4
UTILITIES 17.5
EMERGING MARKETS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 407,147,682
value (cost $370,671,853) -
See accompanying schedule
Foreign currency held at 469,080
value (cost $471,970)
Receivable for investments 3,689,463
sold
Receivable for fund shares 765,368
sold
Dividends receivable 425,171
Interest receivable 90,174
Redemption fees receivable 2,370
Other receivables 3,431
TOTAL ASSETS 412,592,739
LIABILITIES
Payable for investments $ 2,290,414
purchased
Payable for fund shares 1,482,637
redeemed
Accrued management fee 240,285
Other payables and accrued 377,865
expenses
Collateral on securities 5,809,428
loaned, at value
TOTAL LIABILITIES 10,200,629
NET ASSETS $ 402,392,110
Net Assets consist of:
Paid in capital $ 840,246,031
Accumulated net investment (864,668)
loss
Accumulated undistributed net (473,444,142)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,454,889
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 43,035,100 $ 402,392,110
shares outstanding
NET ASSET VALUE and $9.35
redemption price per share
($402,392,110 (divided by)
43,035,100 shares)
Maximum offering price per $9.64
share (100/97.00 of $9.35)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 7,660,949
Dividends
Interest 809,261
Security lending 3,330
8,473,540
Less foreign taxes withheld (527,561)
TOTAL INCOME 7,945,979
EXPENSES
Management fee $ 2,504,496
Transfer agent fees 1,629,934
Accounting and security 199,079
lending fees
Custodian fees and expenses 526,160
Registration fees 31,792
Audit 59,804
Legal 1,238
Miscellaneous 21,111
Total expenses before 4,973,614
reductions
Expense reductions (107,662) 4,865,952
NET INVESTMENT INCOME 3,080,027
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (46,886,970)
Foreign currency transactions (74,467) (46,961,437)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 141,272,322
Assets and liabilities in 16,806 141,289,128
foreign currencies
NET GAIN (LOSS) 94,327,691
NET INCREASE (DECREASE) IN $ 97,407,718
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 377,395
charges paid to FDC
Sales charges - Retained by $ 377,019
FDC
Expense Reductions $ 101,912
Directed brokerage
arrangements
Custodian credits 1,956
Transfer agent credits 3,794
$ 107,662
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 3,080,027 $ 3,929,378
income
Net realized gain (loss) (46,961,437) (312,486,391)
Change in net unrealized 141,289,128 156,845,961
appreciation (depreciation)
NET INCREASE (DECREASE) IN 97,407,718 (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 186,390,654 99,292,935
proceeds from sales of shares
Reinvestment of distributions - 10,654,699
Cost of shares redeemed (152,695,597) (176,082,060)
NET INCREASE (DECREASE) IN 33,695,057 (66,134,426)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 580,285 206,513
TOTAL INCREASE (DECREASE) 131,683,060 (228,459,013)
IN NET ASSETS
NET ASSETS
Beginning of period 270,709,050 499,168,063
End of period (including $ 402,392,110 $ 270,709,050
accumulated net investment
loss and distributions in
excess of net investment
income of $864,668 and
$19,246,778, respectively)
OTHER INFORMATION
Shares
Sold 21,355,004 11,211,119
Issued in reinvestment of - 1,174,708
distributions
Redeemed (18,514,233) (20,409,357)
Net increase (decrease) 2,840,771 (8,023,530)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 6.74 $ 10.35 $ 16.61 $ 15.14 $ 19.25
period
Income from Investment
Operations
Net investment income .07 C .09 C .15 C .12 C .05
Net realized and unrealized 2.53 (3.47) (6.17) 1.60 (4.13)
gain (loss)
Total from investment 2.60 (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 - .01 .02 .01
in capital
Net asset value, end of period $ 9.35 $ 6.74 $ 10.35 $ 16.61 $ 15.14
TOTAL RETURN A, B 38.72% (33.23)% (36.74)% 11.69% (21.17)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 402,392 $ 270,709 $ 499,168 $ 1,263,164 $ 1,095,583
(000 omitted)
Ratio of expenses to average 1.45% 1.59% 1.36% 1.30% 1.28%
net assets
Ratio of expenses to average 1.42% D 1.56% D 1.35% D 1.29% D 1.28%
net assets after expense
reductions
Ratio of net investment .90% 1.01% .89% .74% .46%
income to average net assets
Portfolio turnover rate 94% 87% 69% 77% 78%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
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.
</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 OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY EUROPE 12.18% 116.40% 233.87%
FIDELITY EUROPE (INCL. 8.82% 109.91% 223.85%
3.00% SALES CHARGE)
MSCI Europe 12.79% 133.76% 287.28%
European Region Funds Average 10.72% 109.13% 185.68%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
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 October 31,
1999, the index included over 560 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
one year average represents a peer group of 138 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, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY EUROPE 12.18% 16.69% 12.81%
FIDELITY EUROPE (INCL. 8.82% 15.99% 12.47%
3.00% SALES CHARGE)
MSCI Europe 12.79% 18.51% 14.50%
European Region Funds Average 10.72% 15.72% 10.65%
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
1989/10/31 9700.00 10000.00
1989/11/30 10267.55 10555.22
1989/12/31 10967.16 11691.34
1990/01/31 11104.17 11660.01
1990/02/28 10817.10 11380.61
1990/03/31 11143.31 11541.18
1990/04/30 10921.49 11234.90
1990/05/31 11593.48 12149.26
1990/06/30 12076.27 12575.96
1990/07/31 12806.98 13105.55
1990/08/31 11280.32 11806.15
1990/09/30 10164.68 10415.73
1990/10/31 10621.38 11293.47
1990/11/30 10608.33 11406.96
1990/12/31 10463.65 11242.22
1991/01/31 10670.66 11620.50
1991/02/28 11318.38 12636.97
1991/03/31 10710.72 11788.90
1991/04/30 10684.01 11665.65
1991/05/31 10730.76 12009.76
1991/06/30 9789.23 11001.83
1991/07/31 10283.36 11763.27
1991/08/31 10490.37 11978.04
1991/09/30 10870.98 12338.01
1991/10/31 10637.27 12078.10
1991/11/30 10316.75 11793.78
1991/12/31 10898.96 12716.29
1992/01/31 10947.28 12712.63
1992/02/29 11078.42 12761.44
1992/03/31 10698.79 12314.83
1992/04/30 11402.84 12994.51
1992/05/31 11961.94 13733.98
1992/06/30 11851.50 13478.22
1992/07/31 11423.54 12996.68
1992/08/31 11458.06 12954.30
1992/09/30 11278.59 12740.05
1992/10/31 10436.50 11851.13
1992/11/30 10429.59 11845.34
1992/12/31 10623.93 12117.08
1993/01/31 10567.64 12137.44
1993/02/28 10630.96 12276.30
1993/03/31 11327.50 12907.83
1993/04/30 11700.39 13192.52
1993/05/31 11841.11 13334.45
1993/06/30 11510.43 13139.65
1993/07/31 11517.46 13184.75
1993/08/31 12453.21 14341.72
1993/09/30 12439.14 14297.17
1993/10/31 12966.82 14892.79
1993/11/30 12713.53 14571.31
1993/12/31 13509.90 15665.30
1994/01/31 14484.98 16463.06
1994/02/28 14145.82 15880.04
1994/03/31 13750.13 15430.58
1994/04/30 14145.82 16069.54
1994/05/31 13601.75 15386.46
1994/06/30 13439.24 15224.91
1994/07/31 14053.97 16022.84
1994/08/31 14499.11 16531.04
1994/09/30 14301.27 15875.53
1994/10/31 14965.46 16567.13
1994/11/30 14407.26 15932.53
1994/12/31 14355.09 16023.10
1995/01/31 14046.45 15897.66
1995/02/28 14297.67 16257.85
1995/03/31 14642.19 17012.30
1995/04/30 15137.44 17556.35
1995/05/31 15438.90 17915.81
1995/06/30 15876.73 18084.71
1995/07/31 16587.30 19027.36
1995/08/31 16271.49 18291.80
1995/09/30 16989.25 18844.37
1995/10/31 16874.41 18755.36
1995/11/30 16766.74 18888.72
1995/12/31 17058.88 19487.31
1996/01/31 17111.21 19614.70
1996/02/29 17739.14 19972.03
1996/03/31 18172.71 20210.85
1996/04/30 18449.30 20357.08
1996/05/31 18980.06 20514.39
1996/06/30 19181.89 20740.27
1996/07/31 18815.60 20480.48
1996/08/31 19451.01 21088.22
1996/09/30 19779.93 21531.95
1996/10/31 20273.30 22031.82
1996/11/30 21050.75 23148.27
1996/12/31 21430.63 23596.67
1997/01/31 21342.04 23666.75
1997/02/28 21801.09 23986.25
1997/03/31 22211.83 24768.20
1997/04/30 22131.29 24651.30
1997/05/31 23162.15 25710.57
1997/06/30 24289.65 27003.29
1997/07/31 25054.75 28273.53
1997/08/31 23886.97 26663.08
1997/09/30 26101.71 29253.92
1997/10/31 25006.42 27826.04
1997/11/30 25497.69 28260.40
1997/12/31 26335.50 29299.82
1998/01/31 27347.05 30526.31
1998/02/28 29220.61 32919.88
1998/03/31 31331.68 35271.68
1998/04/30 32105.73 35963.71
1998/05/31 32396.00 36699.89
1998/06/30 32730.25 37109.82
1998/07/31 33636.25 37850.91
1998/08/31 27514.17 33097.97
1998/09/30 27047.98 31782.99
1998/10/31 28868.77 34335.49
1998/11/30 30522.44 36170.37
1998/12/31 31805.63 37760.06
1999/01/31 32242.62 37524.82
1999/02/28 30979.14 36580.32
1999/03/31 31017.14 36987.82
1999/04/30 31207.14 38096.72
1999/05/31 29696.65 36273.79
1999/06/30 30846.14 36892.98
1999/07/31 30855.64 37242.73
1999/08/31 31026.64 37628.57
1999/09/30 31017.14 37345.98
1999/10/29 32385.12 38727.79
IMATRL PRASUN SHR__CHT 19991031 19991109 144544 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Europe Fund on October 31, 1989, and the current
3.00% sales charge was paid. As the chart shows, by October 31, 1999,
the value of the investment would have grown to $32,385 - a 223.85%
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 $38,728 - a 287.28% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
EUROPE
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Thierry Serero,
Portfolio Manager
of Fidelity Europe Fund
Q. HOW DID THE FUND PERFORM, THIERRY?
A. For the 12 months ending October 31, 1999, the fund returned
12.18%, while the Morgan Stanley Capital International Europe Index
returned 12.79%. Meanwhile, the European region funds average, as
tracked by Lipper Inc., returned 10.72%.
Q. WHAT FACTORS INFLUENCED THE PERFORMANCE OF EUROPEAN STOCK MARKETS
DURING THE PAST 12 MONTHS?
A. European stock markets rose during much of the period after
interest-rate cuts in the U.S. and most other major countries helped
restore investor confidence. The successful introduction of the
European single currency - the euro - and strengthening economic
growth in Europe provided a positive backdrop for equity investors.
Increased merger and acquisition activity and upward revisions of
corporate profit growth also helped the investment environment.
Against this backdrop, the emergence of fears in the summer of 1999
that interest rates in Europe and the U.K. could rise had a relatively
limited impact on stock markets.
Q. THE FUND OUTPERFORMED ITS PEER GROUP AVERAGE, BUT SLIGHTLY TRAILED
ITS BENCHMARK RETURN. WHY?
A. During certain times within the 12-month period, the fund suffered
from its heavy bias toward growth stocks and performed significantly
worse than the index, particularly in the early spring of 1999 and
again in July and August when many investors favored value stocks over
growth. My investment style favors growth rather than value. This
proved beneficial when interest rate-sensitive growth stocks reversed
some of their earlier relative losses against the market, particularly
in early summer and early autumn when the fund performed significantly
better than the market.
Q. WHICH FUND HOLDINGS PERFORMED PARTICULARLY WELL?
A. Shares in manufacturers of mobile phone equipment, such as Nokia;
operators of mobile phone networks, such as Vodafone AirTouch and
Mannesmann; and operators of data networks, such as Equant, were
strong contributors to performance. These companies benefited from the
rapid expansion of mobile and data traffic. This is expected to
continue for some time and should lead to increased growth in
corporate profits. Another factor driving share prices was the ongoing
merger and acquisition activity among telecommunications companies.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The fund's two largest pharmaceutical holdings proved
disappointing. Swiss company Novartis and U.K.-based Glaxo Wellcome
suffered when these companies - the world's third- and fourth-largest
pharmaceutical manufacturers, respectively - warned that 1999's
profits would be lower than anticipated. Furthermore, they were
affected, along with other pharmaceutical shares, by the preference
investors had for cyclical stocks.
Q. DID YOU MAKE MAJOR CHANGES TO THE PORTFOLIO?
A. The main change I carried out this year was to increase those
holdings where I had the strongest conviction. This resulted in a
reduction of holdings in the fund and sharpened the focus on the most
attractive companies within each sector. Overall, the emphasis
continues to be on growth stocks, but the type of growth stocks held
has changed. A year ago the majority of the holdings were
restructuring stories, but now the fund contains many long-term growth
stories that are not dependent on a strong economy to grow their
business. Examples are Equant and Synthes-Stratec. A second group
includes companies that have implemented their restructuring programs
and are poised to benefit in terms of long-term growth in revenues and
profits. Examples of this are Mannesmann or Preussag.
Q. WHAT IS YOUR OUTLOOK FOR THE EUROPEAN MARKET?
A. Improving economic growth prospects have resulted in increased
inflationary expectations as shown by the rise in bond yields earlier
this year. While smaller and cyclical companies performed better than
growth companies in this environment, I believe these conditions will
not continue. In my opinion, the low-inflation environment, in place
through much of the 1990s, will re-emerge as the dominant influence on
the stock market over the longer term. Such an environment restricts
the ability of companies to increase prices and, consequently, forces
them to continue to improve profitability by controlling costs,
increasing market share and becoming more competitive. The portfolio
is positioned to benefit from companies' long-term growth in revenues
and profits against a background of low inflation, and I believe that
we have identified those companies that should perform relatively well
in this environment.
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 October 31, 1999, more
than $1.3 billion
MANAGER: Thierry Serero, since 1998; manager,
several funds for Fidelity International Limited,
since 1994; research analyst, Fidelity
International Services Limited, 1991-1994;
joined Fidelity in 1991
(checkmark)
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
EUROPE
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 2.4%
Finland 4.7%
Row: 1, Col: 1, Value: 4.7
Row: 1, Col: 2, Value: 19.7
Row: 1, Col: 3, Value: 15.9
Row: 1, Col: 4, Value: 5.9
Row: 1, Col: 5, Value: 5.6
Row: 1, Col: 6, Value: 3.7
Row: 1, Col: 7, Value: 2.9
Row: 1, Col: 8, Value: 6.9
Row: 1, Col: 9, Value: 32.3
Row: 1, Col: 10, Value: 2.4
United Kingdom 32.3%
France 19.7%
Germany 15.9%
Switzerland 6.9%
Netherlands 5.9%
Sweden 2.9%
Other 5.6%
Spain 3.7%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
Finland 2.7%
United States 3.2%
Row: 1, Col: 1, Value: 2.7
Row: 1, Col: 2, Value: 13.3
Row: 1, Col: 3, Value: 14.7
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 5.2
Row: 1, Col: 6, Value: 9.9
Row: 1, Col: 7, Value: 3.9
Row: 1, Col: 8, Value: 3.7
Row: 1, Col: 9, Value: 10.5
Row: 1, Col: 10, Value: 30.9
Row: 1, Col: 11, Value: 3.2
France 13.3%
United Kingdom 30.9%
Germany 14.7%
Ireland 2.0%
Switzerland 10.5%
Italy 5.2%
Netherlands 9.9%
Spain 3.7%
Other 3.9%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 97.5 93.1
Bonds 2.5 5.2
Short-Term Investments and 0.0 1.7
Net Other Assets
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nokia AB (Finland, 3.5 2.1
Communications Equipment)
Vodafone AirTouch PLC 3.4 2.8
(United Kingdom, Cellular)
Novartis AG (Reg.) 3.1 3.3
(Switzerland, Drugs &
Pharmaceuticals)
BP Amoco PLC (United 2.9 2.8
Kingdom, Oil & Gas)
Glaxo Wellcome PLC (United 2.9 4.1
Kingdom, Drugs &
Pharmaceuticals)
France Telecom SA (France, 2.8 0.0
Telephone Services)
Ericsson (L.M.) Telefon AB 2.0 0.0
Class B (Sweden, Electrical
Equipment)
Lloyds TSB Group PLC (United 2.0 2.3
Kingdom, Banks)
Munich Reinsurance AG (Reg.) 1.9 1.5
(Germany, Insurance)
Siemens AG (Germany, 1.9 1.8
Electrical Equipment)
26.4 20.7
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 21.2 30.1
UTILITIES 15.8 19.4
HEALTH 12.1 10.6
TECHNOLOGY 11.6 8.6
RETAIL & WHOLESALE 7.7 4.3
INDUSTRIAL MACHINERY & 6.6 6.3
EQUIPMENT
SERVICES 6.5 4.2
ENERGY 4.6 5.1
BASIC INDUSTRIES 4.2 1.0
CONSTRUCTION & REAL ESTATE 4.0 3.4
</TABLE>
EUROPE
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 95.8%
SHARES VALUE (NOTE 1)
BELGIUM - 1.0%
GIB Holdings Ltd. 45,100 $ 1,855,939
Mobistar SA (a) 203,338 8,365,549
Telinfo SA 35,150 3,337,176
Telinfo SA (strip VVPR) 28,500 301
13,558,965
FINLAND - 4.7%
Nokia AB 397,705 45,959,783
Sampo Insurance Co. Ltd. 230,202 8,013,723
Sonera Group PLC 241,070 7,260,400
61,233,906
FRANCE - 19.1%
Banque Nationale de Paris 228,629 20,138,591
Bouygues 54,813 19,139,159
Castorama Dubois 36,550 10,980,918
Investissements SA
Club Mediterranee SA (a) 110,900 11,137,297
Dassault Systemes SA 319,650 13,295,748
France Telecom SA 375,147 36,348,955
Galeries Lafayette SA 64,480 9,522,793
Genset SA (a) 58,000 1,523,487
L'Air Liquide 76,463 11,816,810
Legrand SA 44,939 10,784,899
Neopost SA (a) 628,334 21,807,092
Pinault Printemps SA 85,300 16,313,912
Rhodia SA 677,889 13,122,179
Rhone-Poulenc SA Class A 182,000 10,101,000
Suez Lyonnaise des Eaux 124,497 20,159,444
Total Fina SA Class B 169,324 22,583,589
TRANSGENE SA sponsored ADR 409,380 3,326,213
(a)(e)
252,102,086
GERMANY - 14.2%
Aachener & Muenchener 58,964 4,946,233
Beteiligungs AG
Bewag 265,350 3,652,926
Celanese AG (a) 16,960 268,367
Deutsche Bank AG 215,286 15,438,612
Deutsche Telekom AG 526,567 24,357,602
EPCOS AG (a) 21,090 866,998
Hoechst AG 309,100 13,691,662
Kali Und Salz Beteiligungs AG 194,500 2,786,318
Karstadt AG 356,820 16,185,605
Mannesmann AG (Reg.) 146,783 23,210,724
Munich Reinsurance AG (Reg.) 111,805 25,558,269
NSE Software AG 178,790 2,847,944
Preussag AG 263,803 14,331,718
Siemens AG 278,642 25,146,520
Veba AG 257,450 13,983,860
187,273,358
SHARES VALUE (NOTE 1)
IRELAND - 0.6%
Irish Life & Permanent PLC 709,737 $ 7,262,405
IWP International PLC (United 568,270 1,121,356
Kingdom Reg.)
8,383,761
ITALY - 1.8%
Bulgari Spa 866,330 6,150,490
Interbanca Spa (a) 202,030 2,737,119
Luxottica Group Spa sponsored 399,900 7,673,081
ADR
Rolo Banca 1473 Spa 318,660 6,632,327
23,193,017
LUXEMBOURG - 0.5%
Audiofina 124,090 6,257,141
NETHERLANDS - 4.5%
Equant NV (a) 195,278 19,054,886
Fortis Amev NV 323,200 11,159,087
Heineken Holding NV 246,790 8,981,688
ING Groep NV 315,391 18,658,151
Vnu NV 44,700 1,516,002
59,369,814
NORWAY - 1.2%
Den Norske Bank ASA Class A 1,694,940 6,585,025
Free shares
Kvaerner ASA (a) 370,780 7,013,060
Kvaerner ASA (B shares) (a) 133,070 2,023,749
15,621,834
SPAIN - 3.7%
Argentaria Caja Postal y 428,483 9,537,342
Banco Hipotecario de Espana
SA
Centros Comerciales 252,720 6,073,019
Continente SA
Centros Comerciales Pryca SA 343,630 6,477,791
Grupo Acciona SA 302,137 14,597,574
Prosegur Comp Securidad SA 865,859 7,124,478
Tabacalera SA Series A 313,109 5,169,174
48,979,378
SWEDEN - 2.9%
Ericsson (L.M.) Telefon AB 634,400 27,120,600
Class B
Industri-Matematik 671,270 1,426,449
International Corp. (a)
Mandamus AB 21,355 113,289
Securitas AB Class B 683,321 10,166,793
38,827,131
SWITZERLAND - 6.9%
Kudelski SA (a) 3,667 15,286,199
Lindt & Spruengli AG 2,905 6,857,091
Novartis AG (Reg.) 27,118 40,652,929
Richemont Compagnie Financier 6,389 12,232,736
Class A Unit
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SWITZERLAND - CONTINUED
Swatch Group AG (The) (Bearer) 4,855 $ 3,875,317
UBS AG 39,200 11,430,863
90,335,135
UNITED KINGDOM - 32.3%
Allied Zurich PLC 1,659,916 20,062,309
AstraZeneca Group PLC (Reg.) 546,680 25,010,612
Axis Shield PLC (a) 438,283 3,124,289
Babcock International Group 2,932,777 4,533,299
PLC
BP Amoco PLC 3,986,052 38,365,759
British Land Co. PLC 1,244,751 8,955,050
Capita Group PLC 1,213,095 16,058,248
Financial Objects PLC 628,030 3,459,654
General Electric Co. PLC 1,832,638 19,934,897
Glaxo Wellcome PLC 1,264,726 37,862,738
Go-Ahead Group (The) PLC 391,774 3,994,246
Informa Group PLC 606,710 4,050,556
Kingfisher PLC 867,677 9,481,140
Lloyds TSB Group PLC 1,906,791 26,385,461
Misys PLC 1,669,266 13,944,300
Nycomed Amersham PLC 1,364,310 8,312,061
Orange PLC (a) 613,160 15,295,612
Prudential Corp. PLC 1,539,993 24,171,419
Royal & Sun Alliance 872,686 5,941,086
Insurance Group PLC
Royal Bank of Scotland Group 795,183 18,332,537
PLC
Safeway PLC 2,370,550 7,445,433
Scottish & Southern Energy PLC 717,070 6,809,591
Sema Group PLC 527,918 6,901,461
Serco Group PLC 511,017 14,705,536
Stagecoach Holdings PLC 3,894,491 11,079,095
Tesco PLC 4,164,990 12,396,526
Thomson Travel Group PLC 3,000,940 4,663,335
Vodafone AirTouch PLC 9,464,665 45,371,284
WPP Group PLC 800,780 8,697,481
425,345,015
UNITED STATES OF AMERICA - 2.4%
LHS Group, Inc. (a) 103,600 2,952,600
Pharmacia & Upjohn, Inc. unit 226,955 12,302,997
Synthes-Stratec, Inc. (a) 44,681 16,627,948
31,883,545
TOTAL COMMON STOCKS 1,262,364,086
(Cost $1,034,099,850)
NONCONVERTIBLE PREFERRED
STOCKS - 1.7%
GERMANY - 1.7%
Marschollek Lautenschlaeger 105,882 22,394,832
und Partner AG (Cost
$20,457,715)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 2.5%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (C) VALUE (NOTE 1)
CONVERTIBLE BONDS - 1.9%
ITALY - 0.5%
Mediobanca International Ltd. - ITL 8,000,000 $ 6,509,467
3.5% 1/2/01 (d)
NETHERLANDS - 1.4%
Telefonica Europe BV 2% A2 11,535,000 19,061,588
7/15/02
TOTAL CONVERTIBLE BONDS 25,571,055
NONCONVERTIBLE BONDS - 0.6%
FRANCE - 0.6%
Eurotunnel Finance Ltd. euro:
0% 4/30/40 (f) - EUR 1,355 1,972,558
0% 4/30/40 (f) - EUR 3,885 5,655,635
7,628,193
TOTAL CORPORATE BONDS 33,199,248
(Cost $33,766,198)
</TABLE>
CASH EQUIVALENTS - 3.2%
SHARES
Central Cash Collateral Fund, 26,174,468 26,174,468
5.26% (b)
Taxable Central Cash Fund, 15,625,613 15,625,613
5.21% (b)
TOTAL CASH EQUIVALENTS 41,800,081
(Cost $41,800,081)
TOTAL INVESTMENT PORTFOLIO - 1,359,758,247
103.2%
(Cost $1,130,123,844)
NET OTHER ASSETS - (3.2)% (42,356,113)
NET ASSETS - 100% $ 1,317,402,134
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
ITL - Italian lira
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Principal amount is stated in United States dollars unless
otherwise noted.
(d) Principal amount in thousands.
(e) Affiliated company
(f) 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 $1,531,668,182 and $1,927,056,256, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $25,310,758. The fund
received
cash collateral of $26,174,468 which was invested in the Central Cash
Collateral Fund.
The fund participated in the interfund lending program as a borrower.
The average daily loan balance during the period for which loans were
outstanding amounted to $17,053,444. The weighted average interest
rate was 5.09%. Interest expense includes $43,402 paid under the
interfund lending program.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $7,535,869. The weighted average interest rate was 5.11%.
Interest expense includes $65,272 paid under the bank borrowing
program.
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
TRANSGENE SA sponsored ADR $ 1,503,613 $ 79,800 $ - $ 3,326,213
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $1,133,071,253. Net unrealized appreciation
aggregated $226,686,994, of which $284,849,175 related to appreciated
investment securities and $58,162,181 related to depreciated
investment securities.
The fund hereby designates approximately $133,877,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 4.2%
CASH EQUIVALENTS 3.2
CONSTRUCTION & REAL ESTATE 4.0
DURABLES 0.3
ENERGY 4.6
FINANCE 21.2
HEALTH 12.1
HOLDING COMPANIES 0.9
INDUSTRIAL MACHINERY & 6.6
EQUIPMENT
MEDIA & LEISURE 1.4
NONDURABLES 2.3
RETAIL & WHOLESALE 7.7
SERVICES 6.5
TECHNOLOGY 11.6
TRANSPORTATION 0.8
UTILITIES 15.8
EUROPE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 1,359,758,247
value (cost $1,130,123,844)
- - See accompanying schedule
Cash 1,636,533
Receivable for investments 12,559,474
sold
Receivable for fund shares 1,213,032
sold
Dividends receivable 2,308,952
Interest receivable 54,559
Redemption fees receivable 925
Other receivables 104,208
TOTAL ASSETS 1,377,635,930
LIABILITIES
Payable for investments $ 31,289,859
purchased
Payable for fund shares 1,782,051
redeemed
Accrued management fee 577,666
Other payables and accrued 409,752
expenses
Collateral on securities 26,174,468
loaned, at value
TOTAL LIABILITIES 60,233,796
NET ASSETS $ 1,317,402,134
Net Assets consist of:
Paid in capital $ 981,316,365
Undistributed net investment 9,182,220
income
Accumulated undistributed net 97,292,769
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 229,610,780
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 38,641,105 $ 1,317,402,134
shares outstanding
NET ASSET VALUE and $34.09
redemption price per share
($1,317,402,134 (divided by)
38,641,105 shares)
Maximum offering price per $35.14
share (100/97.00 of $34.09)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 24,845,617
Dividends
Interest 2,055,131
Security lending 29,071
26,929,819
Less foreign taxes withheld (2,629,293)
TOTAL INCOME 24,300,526
EXPENSES
Management fee Basic fee $ 10,777,278
Performance adjustment (2,043,853)
Transfer agent fees 3,683,342
Accounting and security 700,824
lending fees
Non-interested trustees' 4,298
compensation
Custodian fees and expenses 708,560
Registration fees 35,853
Audit 55,558
Legal 6,208
Interest 108,674
Miscellaneous 301
Total expenses before 14,037,043
reductions
Expense reductions (910,620) 13,126,423
NET INVESTMENT INCOME 11,174,103
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 104,209,184
(including realized loss of
$29,262 on sales of
investments in affiliated
issuers)
Foreign currency transactions (584,632) 103,624,552
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 59,466,142
Assets and liabilities in (181,566) 59,284,576
foreign currencies
NET GAIN (LOSS) 162,909,128
NET INCREASE (DECREASE) IN $ 174,083,231
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 513,062
charges paid to FDC
Sales charges - Retained by $ 512,932
FDC
Deferred sales charges $ 52,904
withheld by FDC
Expense Reductions $ 853,284
Directed brokerage
arrangements
Transfer agent credits 57,336
$ 910,620
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 11,174,103 $ 16,048,867
income
Net realized gain (loss) 103,624,552 128,972,621
Change in net unrealized 59,284,576 (74,276,909)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 174,083,231 70,744,579
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (13,415,761) (11,392,134)
From net investment income
From net realized gain (107,821,453) (68,664,194)
TOTAL DISTRIBUTIONS (121,237,214) (80,056,328)
Share transactions Net 350,466,714 1,112,727,257
proceeds from sales of shares
Reinvestment of distributions 118,737,898 78,862,444
Cost of shares redeemed (791,339,602) (512,978,219)
NET INCREASE (DECREASE) IN (322,134,990) 678,611,482
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 333,409 949,915
TOTAL INCREASE (DECREASE) (268,955,564) 670,249,648
IN NET ASSETS
NET ASSETS
Beginning of period 1,586,357,698 916,108,050
End of period (including $ 1,317,402,134 $ 1,586,357,698
undistributed net investment
income of $9,182,220 and
$15,517,755, respectively)
OTHER INFORMATION
Shares
Sold 10,550,858 31,701,697
Issued in reinvestment of 3,755,163 2,653,514
distributions
Redeemed (23,998,640) (15,522,060)
Net increase (decrease) (9,692,619) 18,833,151
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 32.82 $ 31.05 $ 27.12 $ 23.51 $ 21.18
period
Income from Investment
Operations
Net investment income .25 C .39 C .44 C .30 C .27
Net realized and unrealized 3.54 4.10 5.44 4.23 2.37
gain (loss)
Total from investment 3.79 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 $ 34.09 $ 32.82 $ 31.05 $ 27.12 $ 23.51
TOTAL RETURN A, B 12.18% 15.45% 23.35% 20.14% 12.76%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,317,402 $ 1,586,358 $ 916,108 $ 691,762 $ 492,867
(000 omitted)
Ratio of expenses to average .96% 1.10% 1.19% 1.27% 1.18% D
net assets
Ratio of expenses to average .89% E 1.09% E 1.18% E 1.27% 1.18%
net assets after expense
reductions
Ratio of net investment .76% 1.15% 1.53% 1.20% 1.12%
income to average net assets
Portfolio turnover rate 106% 114% 57% 45% 38%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E 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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EUROPE CAPITAL APP 14.50% 116.38% 145.59%
FIDELITY EUROPE CAPITAL APP 11.06% 109.89% 138.22%
(INCL. 3.00% SALES CHARGE)
MSCI Europe 12.79% 133.76% 149.38%
European Region Funds Average 10.72% 109.13% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on December 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 October 31, 1999, the index included over 560 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 one year average represents a peer group of 138 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, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY EUROPE CAPITAL APP 14.50% 16.69% 16.56%
FIDELITY EUROPE CAPITAL APP 11.06% 15.98% 15.96%
(INCL. 3.00% SALES CHARGE)
MSCI Europe 12.79% 18.51% 16.87%
European Region Funds Average 10.72% 15.72% 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
1999/05/31 22045.60 23357.58
1999/06/30 22633.49 23756.30
1999/07/31 23042.45 23981.51
1999/08/31 23195.81 24229.96
1999/09/30 22952.99 24047.99
1999/10/29 23822.03 24937.77
IMATRL PRASUN SHR__CHT 19991031 19991111 111326 R00000000000074
$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 October 31, 1999, the value of the
investment would have grown to $23,822 - a 138.22% 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 $24,938 - a 149.38% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
EUROPE CAPITAL APPRECIATION
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Kevin McCarey, Portfolio Manager of Fidelity Europe
Capital Appreciation Fund
Q. HOW DID THE FUND PERFORM, KEVIN?
A. For the 12 months that ended October 31, 1999, the fund returned
14.50%. This topped the Morgan Stanley Capital International Europe
Index, which returned 12.79% during the same period. The European
region funds average, as tracked by Lipper Inc., returned 10.72%.
Q. WHAT FACTORS INFLUENCED THE PERFORMANCE OF EUROPEAN MARKETS DURING
THE PERIOD?
A. Economic developments in both Europe and Russia served as catalysts
for positive market performance. When the period began, most European
economies were struggling. Several interest-rate cuts followed shortly
thereafter, though, and we began to see an economic revival -
particularly in the United Kingdom - in April and May. This improved
climate led to a higher level of corporate restructuring, as well as a
rash of merger and acquisition activity. Russia, meanwhile, recovered
from its currency problems of last year. Since many European companies
rely on Russia as a market for their goods and services, this righting
of the ship proved beneficial. On another front, market performance -
as measured in U.S. dollar returns - was suppressed somewhat during
the initial stages of the period due to the slow start of the euro,
the new single currency of 11 European nations.
Q. WITH THESE ECONOMIC SHIFTS IN MIND, DID YOU FOLLOW ANY SPECIFIC
INVESTMENT STRATEGIES?
A. My decision to add to several of the fund's positions in
smaller-sized U.K. stocks worked out well. Small-cap stocks typically
perform well at the beginning of an economic rebound, and the fund's
stakes in building materials retailer Wickes, and de la Rue - a
company that makes cash-handling equipment for banks - performed well.
Several holdings in France also contributed positively, as favorable
economic conditions resulted in more consolidation activity during the
period, especially among larger firms. One example was the merger
between France's two largest oil companies, Total and Elf Aquitaine.
Q. SEVEN OF THE FUND'S TOP-20 INVESTMENTS AT THE END OF THE PERIOD
WERE TELECOMMUNICATIONS-RELATED. WHAT WAS THE ATTRACTION?
A. These companies continued to reap the benefits from both fixed-line
and wireless demand. On the fixed side, more phone lines were
installed for Internet usage. Unlike their U.S. counterparts, European
phone companies charge per-minute fees for local calls. While consumer
pressure may change this fee structure in the future, increased
Internet usage has helped to propel revenues. Wireless demand, on the
other hand, was extremely strong. Consolidation activity was popular
within this group as well, as companies such as Vodafone AirTouch,
Deutsche Telekom and Mannesmann looked to join forces with other
business partners. The fund's positions in Nokia, British
Telecommunications and Ericsson also fared nicely.
Q. FINANCE STOCKS ACCOUNTED FOR MORE THAN A QUARTER OF THE FUND'S NET
ASSETS AT THE END OF THE PERIOD. HOW DID THIS GROUP PERFORM?
A. Finance stocks performed fairly well early, but declined through
most of the period as long-term interest rates rose. These higher
rates in the U.S. and Europe put pressure on stocks, and the fund's
positions in Italian bank San Paolo-IMI and insurance stocks Allied
Zurich suffered accordingly. While the fund's finance exposure was
considerable, its weighting was still lower than that of the Morgan
Stanley index through much of the period.
Q. WERE THERE ANY OTHER POSITIONS THAT DIDN'T PERFORM AS WELL AS YOU
WOULD HAVE LIKED?
A. The fund's investment in Telecom Italia was a source of
frustration. Telecom Italia was bought at a premium during the period
by Olivetti, a fellow Italian telecom firm. Olivetti paid a premium
for Telecom Italia, but the fund owned "savings class" shares and the
takeover bid recognized only ordinary shares. In Italy, there is less
protection for minority shareholders of stock. In the U.S., a bid
would most likely have included both classes of shares. The fund also
was hurt by not owning enough economically sensitive stocks,
particularly those in the non-consumer commodity areas such as metals.
Q. WHAT'S YOUR OUTLOOK?
A. I'm reasonably optimistic. For the most part, European companies
have been paying attention to shareholder interests. While valuations
aren't as low as they have been in recent years, I think better
economies, calmer currency situations and increased merger activity
can be positive drivers of European market performance over the next
year or so.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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 October 31, 1999, more than
$474 million
MANAGER: Kevin McCarey, since inception;
manager, Fidelity Select Financial Services
Portfolio and Fidelity Select Automotive
Portfolio, 1989-1990; Fidelity Select
Regional Banks Portfolio, 1986-1990; joined
Fidelity in 1986
(checkmark)
EUROPE CAPITAL APPRECIATION
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 2.5%
Finland 4.3%
Row: 1, Col: 1, Value: 4.3
Row: 1, Col: 2, Value: 18.6
Row: 1, Col: 3, Value: 11.5
Row: 1, Col: 4, Value: 8.800000000000001
Row: 1, Col: 5, Value: 3.9
Row: 1, Col: 6, Value: 3.2
Row: 1, Col: 7, Value: 3.2
Row: 1, Col: 8, Value: 11.5
Row: 1, Col: 9, Value: 32.5
Row: 1, Col: 10, Value: 2.5
France 18.6%
United Kingdom 32.5%
Germany 11.5%
Switzerland 11.5%
Netherlands 8.8%
Sweden 3.2%
Other 3.9%
Spain 3.2%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 3.2%
Finland 3.7%
Row: 1, Col: 1, Value: 3.7
Row: 1, Col: 2, Value: 18.4
Row: 1, Col: 3, Value: 12.6
Row: 1, Col: 4, Value: 5.3
Row: 1, Col: 5, Value: 7.6
Row: 1, Col: 6, Value: 2.6
Row: 1, Col: 7, Value: 2.8
Row: 1, Col: 8, Value: 2.2
Row: 1, Col: 9, Value: 7.2
Row: 1, Col: 10, Value: 32.4
Row: 1, Col: 11, Value: 3.2
United Kingdom 32.4%
France 18.4%
Germany 12.6%
Switzerland 7.2%
Italy 5.3%
Sweden 2.2%
Netherlands 7.6%
Spain 4.8%
Other 2.6%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
<TABLE>
<CAPTION>
<S> <C> <C>
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks and investment companies 97.5 97.7
Short-Term Investments and 2.5 2.3
Net Other Assets
</TABLE>
PRIOR TO THIS REPORT CERTAIN INFORMATION RELATED TO PORTFOLIO HOLDINGS
WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Total Fina SA Class B 3.7 2.8
(France, Oil & Gas)
Nokia AB sponsored ADR 3.7 2.8
(Finland, Communications
Equipment)
Vodafone AirTouch PLC 2.6 0.8
(United Kingdom, Cellular)
ING Groep NV (Netherlands, 2.2 1.3
Insurance)
Nestle SA (Reg.) 2.2 0.7
(Switzerland, Foods)
BP Amoco PLC (United 2.2 2.4
Kingdom, Oil & Gas)
British Telecommunications 2.0 2.4
PLC (United Kingdom,
Telephone Services)
Shell Transport & Trading Co. 2.0 1.8
PLC (Reg.) (United Kingdom,
Oil & Gas)
Deutsche Telekom AG 1.9 1.8
(Germany, Telephone Services)
Roche Holding AG 1.7 2.1
participation certificates
(Switzerland, Drugs &
Pharmaceuticals)
24.2 18.9
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 28.6 25.1
UTILITIES 14.9 20.1
ENERGY 8.8 7.1
HEALTH 7.4 8.0
TECHNOLOGY 7.3 6.1
NONDURABLES 5.4 4.8
SERVICES 5.3 3.8
RETAIL & WHOLESALE 4.3 9.5
DURABLES 4.1 5.1
INDUSTRIAL MACHINERY & 4.0 2.2
EQUIPMENT
</TABLE>
EUROPE CAPITAL APPRECIATION
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 97.1%
SHARES VALUE (NOTE 1)
AUSTRIA - 0.4%
Bank Austria AG 40,000 $ 1,994,605
BELGIUM - 0.3%
Electrabel SA 4,400 1,455,593
DENMARK - 0.0%
Damgaard A/S (a) 1,200 63,843
FINLAND - 4.3%
Nokia AB sponsored ADR 150,500 17,392,156
Sonera Group PLC 50,000 1,505,870
UPM-Kymmene Corp. 50,000 1,582,350
20,480,376
FRANCE - 18.6%
AXA SA de CV 40,800 5,771,653
Banque Nationale de Paris 14,000 1,233,178
Bouygues 6,000 2,095,031
Cap Gemini SA 10,000 1,519,056
Carrefour SA (SUPERMARCHE) 10,400 1,930,889
Castorama Dubois 13,500 4,055,880
Investissements SA
Compagnie de St. Gobain 10,000 1,740,585
Dassault Systemes SA 17,100 711,269
France Telecom SA 79,900 7,741,716
Groupe Danone 5,000 1,279,066
Havas Advertising SA 15,000 4,216,963
Hermes International SA 23,100 2,534,292
Lafarge SA 13,500 1,303,065
Rhodia SA 115,500 2,235,781
Sanofi-Synthelabo SA (a) 60,000 2,655,183
Schneider SA (a) 13,200 912,067
Societe Generale, France 30,000 6,550,929
Class A
Suez Lyonnaise des Eaux 40,000 6,477,086
Television Francaise 1 SA 20,500 6,444,384
Total Fina SA Class B 131,538 17,543,882
Transiciel SA 23,400 1,355,188
Vivendi SA (a) 103,000 7,828,571
88,135,714
GERMANY - 11.2%
Allianz AG (Reg.) 18,000 5,470,500
Celanese AG (a) 3,870 61,237
DaimlerChrysler AG (Reg.) 45,000 3,498,750
Deutsche Bank AG 53,000 3,800,741
Deutsche Telekom AG 197,200 9,121,952
Dresdner Bank AG 68,000 3,511,340
Fresenius Medical Care AG 95,000 2,214,688
sponsored ADR
Hoechst AG 38,700 1,714,226
Kali Und Salz Beteiligungs AG 55,200 790,770
Mannesmann AG (Reg.) 42,000 6,641,439
Munich Reinsurance AG (Reg.) 13,000 2,971,759
Primacom AG 57,000 2,826,077
Siemens AG 20,000 1,804,934
SHARES VALUE (NOTE 1)
Veba AG 74,600 $ 4,052,033
Wella AG 190,000 4,649,999
53,130,445
IRELAND - 0.2%
CRH PLC 45,000 852,095
ITALY - 2.5%
Assicurazioni Generali Spa 50,000 1,616,634
Eni Spa sponsored ADR 430,000 2,536,117
Mondadori (Arnoldo) Editore 88,100 1,657,154
Spa
San Paolo-IMI Spa 110,000 1,453,040
TECNOST Spa (a) 1,500,000 2,914,689
Unicredito Italiano Spa 314,800 1,476,439
11,654,073
LUXEMBOURG - 0.0%
Audiofina 3,066 154,601
NETHERLANDS - 8.8%
ABN AMRO Holding NV 120,000 2,910,258
Aegon NV 45,000 4,165,536
Equant NV (a) 25,100 2,449,214
Fortis Amev NV 130,000 4,488,494
Getronics NV 17,500 875,040
Gucci Group NV (NY Shares) 15,000 1,211,250
ING Groep NV 180,000 10,648,583
Koninklijke Ahold NV 139,077 4,284,000
Koninklijke KPN NV 45,000 2,316,086
Libertel NV (a) 55,000 1,044,351
Numico NV 38,349 1,567,606
STMicroelectronics NV 100 9,088
Vendex KBB NV 160,000 4,683,756
Vnu NV 38,500 1,305,729
41,958,991
NORWAY - 0.4%
Norsk Hydro AS 50,000 2,000,064
SPAIN - 3.2%
Argentaria Caja Postal y 168,500 3,750,539
Banco Hipotecario de Espana
SA
Banco Santander Central 520,000 5,414,169
Hispano SA
Telefonica SA (a) 360,000 5,939,509
15,104,217
SWEDEN - 3.2%
A-Com AB (a) 13,400 155,249
Electrolux AB 180,000 3,600,110
Ericsson (L.M.) Telefon AB 175,000 7,481,250
Class B
Swedish Match Co. 750,000 2,753,133
Volvo AB Class B 46,000 1,192,110
15,181,852
SWITZERLAND - 11.5%
ABB Ltd. (Reg) (a) 45,000 4,541,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SWITZERLAND - CONTINUED
Ares Serono SA Class B 1,725 $ 2,688,047
(Bearer)
Credit Suisse Group (Reg.) 38,000 7,320,665
Holderbank Financiere Glarus 1,700 2,098,034
AG (Bearer)
Julius Baer Holding AG 500 1,507,331
Kuoni Reisen Holding AG Class 345 1,474,456
B (Reg.)
Nestle SA (Reg.) 5,500 10,631,863
Novartis AG (Reg.) 2,100 3,148,136
PubliGroupe SA 2,600 1,911,237
Roche Holding AG 680 8,181,998
participation certificates
Swatch Group AG (The) (Bearer) 4,800 3,831,416
UBS AG 25,000 7,290,091
54,624,993
UNITED KINGDOM - 32.5%
Abbey National PLC 188,700 3,692,550
Alliance & Leicester PLC 181,000 2,643,011
Allied Zurich PLC 400,000 4,834,536
Amvescap PLC 425,000 3,801,853
Arcadia Group PLC 850,000 2,142,037
AstraZeneca Group PLC (Sweden) 69,700 3,157,846
Bank of Scotland 300,000 3,744,299
BG PLC 300,000 1,666,188
BP Amoco PLC 1,090,000 10,491,252
British Telecommunications PLC 540,000 9,719,998
CGU PLC 250,000 3,644,402
Computacenter PLC 199,800 2,086,300
de la Rue PLC 520,000 2,631,533
Diageo PLC 200,000 2,022,612
General Electric Co. PLC 436,700 4,750,294
GKN PLC 65,000 1,041,070
Glaxo Wellcome PLC 160,000 4,790,000
HSBC Holdings PLC (Reg.) 380,000 4,678,748
Kingfisher PLC 170,000 1,857,596
Lloyds TSB Group PLC 550,000 7,610,694
MERANT PLC (a) 540,000 2,175,541
Misys PLC 270,000 2,255,459
Pearson PLC 129,900 2,920,015
Prudential Corp. PLC 258,200 4,052,655
Rentokil Initial PLC 1,400,000 4,667,629
Reuters Group PLC 500,000 4,649,541
Royal Bank of Scotland Group 310,000 7,146,891
PLC
Safeway PLC 100 314
Shell Transport & Trading Co. 1,265,000 9,671,981
PLC (Reg.)
Smith (David S.) Holdings PLC 416,100 1,306,889
SmithKline Beecham PLC 600,000 7,679,996
Standard Chartered PLC 475,000 6,666,603
Unilever PLC 630,000 5,857,033
SHARES VALUE (NOTE 1)
Vodafone AirTouch PLC 2,600,000 $ 12,463,763
Wickes PLC 300,000 1,568,758
154,089,887
TOTAL COMMON STOCKS 460,881,349
(Cost $383,534,002)
NONCONVERTIBLE PREFERRED
STOCKS - 0.3%
GERMANY - 0.3%
Dyckerhoff AG (Cost 45,684 1,363,835
$1,458,505)
INVESTMENT COMPANIES - 0.1%
MULTI-NATIONAL - 0.1%
European Warrant Fund, Inc. 20,000 308,750
(Cost $326,000)
CASH EQUIVALENTS - 4.2%
Central Cash Collateral Fund, 3,585,000 3,585,000
5.26% (b)
Taxable Central Cash Fund, 16,561,038 16,561,038
5.21% (b)
TOTAL CASH EQUIVALENTS 20,146,038
(Cost $20,146,038)
TOTAL INVESTMENT PORTFOLIO - 482,699,972
101.7%
(Cost $405,464,545)
NET OTHER ASSETS - (1.7)% (7,945,429)
NET ASSETS - 100% $ 474,754,543
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $830,459,776 and $1,071,624,077, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $3,410,867. The fund
received cash collateral of $3,585,000 which was invested in the
Central Cash Collateral Fund.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $9,152,370. The weighted average interest rate was 5.69%.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $407,248,206. Net unrealized appreciation
aggregated $75,451,766, of which $83,700,738 related to appreciated
investment securities and $8,248,972 related to depreciated investment
securities.
The fund hereby designates approximately $1,528,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 1.7%
CASH EQUIVALENTS 4.2
CONSTRUCTION & REAL ESTATE 2.0
DURABLES 4.1
ENERGY 8.8
FINANCE 28.6
HEALTH 7.4
INDUSTRIAL MACHINERY & 4.0
EQUIPMENT
INVESTMENT COMPANIES 0.1
MEDIA & LEISURE 3.6
NONDURABLES 5.4
RETAIL & WHOLESALE 4.3
SERVICES 5.3
TECHNOLOGY 7.3
UTILITIES 14.9
EUROPE CAPITAL APPRECIATION
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 482,699,972
value (cost $405,464,545) -
See accompanying schedule
Receivable for investments 29,935,525
sold
Receivable for fund shares 376,763
sold
Dividends receivable 1,353,737
Interest receivable 37,636
Redemption fees receivable 52
Other receivables 23,573
TOTAL ASSETS 514,427,258
LIABILITIES
Payable for investments $ 34,866,889
purchased
Payable for fund shares 773,246
redeemed
Accrued management fee 242,595
Other payables and accrued 204,985
expenses
Collateral on securities 3,585,000
loaned, at value
TOTAL LIABILITIES 39,672,715
NET ASSETS $ 474,754,543
Net Assets consist of:
Paid in capital $ 378,696,752
Undistributed net investment 4,567,063
income
Accumulated undistributed net 14,267,585
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 77,223,143
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 25,476,199 $ 474,754,543
shares outstanding
NET ASSET VALUE and $18.64
redemption price per share
($474,754,543 (divided by)
25,476,199 shares)
Maximum offering price per $19.22
share (100/97.00 of $18.64)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 11,183,391
Dividends
Interest 550,771
Security lending 6,881
11,741,043
Less foreign taxes withheld (1,331,449)
TOTAL INCOME 10,409,594
EXPENSES
Management fee Basic fee $ 4,186,170
Performance adjustment (428,477)
Transfer agent fees 1,478,053
Accounting and security 322,595
lending fees
Non-interested trustees' 1,775
compensation
Custodian fees and expenses 391,266
Registration fees 30,041
Audit 43,109
Legal 1,104
Interest 66,521
Miscellaneous 635
Total expenses before 6,092,792
reductions
Expense reductions (557,665) 5,535,127
NET INVESTMENT INCOME 4,874,467
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 38,307,029
Foreign currency transactions (157,088) 38,149,941
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 35,677,787
Assets and liabilities in (81,703) 35,596,084
foreign currencies
NET GAIN (LOSS) 73,746,025
NET INCREASE (DECREASE) IN $ 78,620,492
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 299,716
charges paid to FDC
Sales charges - Retained by $ 299,687
FDC
Expense Reductions $ 551,470
Directed brokerage
arrangements
Transfer agent credits 6,195
$ 557,665
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 4,874,467 $ 5,311,907
income
Net realized gain (loss) 38,149,941 (23,544,162)
Change in net unrealized 35,596,084 11,533,145
appreciation (depreciation)
NET INCREASE (DECREASE) IN 78,620,492 (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 134,939,446 619,171,673
proceeds from sales of shares
Reinvestment of distributions - 48,775,275
Cost of shares redeemed (389,794,618) (333,641,119)
NET INCREASE (DECREASE) IN (254,855,172) 334,305,829
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 182,122 800,051
TOTAL INCREASE (DECREASE) (176,052,558) 278,757,726
IN NET ASSETS
NET ASSETS
Beginning of period 650,807,101 372,049,375
End of period (including $ 474,754,543 $ 650,807,101
undistributed net investment
income of $4,567,063 and
$5,124,361, respectively)
OTHER INFORMATION
Shares
Sold 7,566,679 34,085,254
Issued in reinvestment of - 3,398,974
distributions
Redeemed (22,059,597) (19,973,021)
Net increase (decrease) (14,492,918) 17,511,207
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.28 $ 16.57 $ 14.07 $ 12.08 $ 11.35
period
Income from Investment
Operations
Net investment income .15 C .15 C .20 C .22 D .23
Net realized and unrealized 2.20 1.79 E 3.81 2.00 .50
gain (loss)
Total from investment 2.35 1.94 4.01 2.22 .73
operations
Less Distributions
From net investment income - (.17) F (.23) (.23) -
From net realized gain - (2.08) F (1.29) - -
Total distributions - (2.25) (1.52) (.23) -
Redemption fees added to paid .01 .02 .01 - -
in capital
Net asset value, end of period $ 18.64 $ 16.28 $ 16.57 $ 14.07 $ 12.08
TOTAL RETURN A, B 14.50% 13.65% 31.57% 18.74% 6.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 474,755 $ 650,807 $ 372,049 $ 170,192 $ 194,433
(000 omitted)
Ratio of expenses to average 1.07% 1.12% 1.10% 1.33% 1.36%
net assets
Ratio of expenses to average .97% G 1.08% G 1.07% G 1.30% G 1.36%
net assets after expense
reductions
Ratio of net investment .86% .89% 1.33% 1.66% 1.45%
income to average net assets
Portfolio turnover rate 150% 179% 189% 155% 176%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.04 PER
SHARE.
E 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.
F THE AMOUNTS SHOWN REFLECT
CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX
DIFFERENCES.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE FUND'S
EXPENSES.
</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 OCTOBER 31, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY HONG KONG AND CHINA 42.44% 49.24%
FIDELITY HONG KONG AND CHINA 38.17% 44.76%
(INCL. 3.00% SALES CHARGE)
Hang Seng 30.15% 47.41%
China Region Funds Average 23.25% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 one year
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 OCTOBER 31, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY HONG KONG AND CHINA 42.44% 10.53%
FIDELITY HONG KONG AND CHINA 38.17% 9.69%
(INCL. 3.00% SALES CHARGE)
Hang Seng 30.15% 10.19%
China Region Funds Average 23.25% 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
1999/05/31 12409.54 13434.96
1999/06/30 14118.02 15067.86
1999/07/31 14015.72 14677.98
1999/08/31 14210.09 15000.69
1999/09/30 13841.80 14161.97
1999/10/29 14476.09 14740.74
IMATRL PRASUN SHR__CHT 19991031 19991109 144717 R00000000000051
$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 October 31, 1999, the value of the investment
would have grown to $14,476 - a 44.76% 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 $14,741 - a 47.41% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
HONG KONG AND CHINA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Joseph Tse, Portfolio Manager of Fidelity Hong Kong
and China Fund
Q. HOW DID THE FUND PERFORM, JOSEPH?
A. For the 12 months ending October 31, 1999, the fund returned
42.44%, compared to 30.15% for the Hang Seng Index and 23.25% for the
China region funds average tracked by Lipper Inc.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG SHOWING OVER THE PAST
12 MONTHS?
A. Simply put, we had some good stock picks and overweighted these
positions relative to the index. We added further to the fund's return
by investing in some strong, smaller companies not included in the
Hang Seng Index. Also, I substantially underweighted Hang Seng Bank
and Cable & Wireless HKT Ltd. - which made up about 6% and 7% of the
index, respectively - which was a good choice, as these stocks lagged
during the period. A similar stance with regard to poorly performing
electric utilities, Hong Kong Electric and CLP Holdings Ltd. helped as
well. Further, the fund's very limited exposure to China-based
companies boosted relative performance, as these firms failed to meet
our quality criteria and performed poorly. Some timely trading into
and out of conglomerate Wharf Holdings - a strong performer during the
period - also added to returns. Some smaller stocks that lifted
performance included telecommunications concerns City Telecom and Asia
Satellite.
Q. WHICH OF YOUR STRATEGIES WORKED OUT WELL FOR THE FUND?
A. To begin with, I maintained a bottom-up approach and an industry
focus in contrast to many of my competitors, whose scope was
restricted to more of a top-down country focus. I felt it increasingly
important to apply globalization to investing - that is, search for
companies that add value on a global scale - for the world is,
theoretically speaking, getting smaller by the minute. Looking at
industry allocation during the period, I broadened the fund's exposure
to retail stocks with well-recognized brands - namely, Giordano,
Esprit and Glorious Sun - accumulating shares at attractive levels to
benefit from the recovery in retail consumption. Elsewhere, I
positioned the fund to capitalize on the recovering industrial sector,
adding to names like ASM Pacific Technology - a leading provider of
semiconductor assembly equipment - a stock that doubled in price over
the course of the period. In terms of limiting the fund's downside, I
pulled back on property stocks, a group that fell sharply out of favor
during this time frame. Hong Kong investors moved from heavy
speculation in real estate to more of an emphasis on companies from
the world of telecommunications.
Q. WHICH STOCKS HELPED PERFORMANCE?
A. A property firm that benefited from its diversified investments,
Cheung Kong Holdings, took advantage of its exposure to
telecommunications through its stake in Hutchison Whampoa, itself a
strong contributor to the fund during the period. Johnson Electric -
one of the fund's sizable holdings not included in the benchmark, and
one of the world's largest micro-motor manufacturers - rose sharply,
riding stronger sales and earnings growth. China Telecom benefited
from worldwide enthusiasm surrounding cellular stocks in general.
Q. WHICH STOCKS HURT?
A. CLP Holdings Ltd. suffered in response to deregulation in Hong
Kong. Real-estate firms Henderson Land Development and New World
Development were simply in the wrong sector over the past 12 months as
property prices, along with sales, plummeted. Hong Kong Electric
further detracted from performance, as utilities in general
underperformed the market during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I feel there's still some upside left, as many of Hong Kong's
largest stocks remain reasonably priced. I expect the theme of
globalization to continue, and the market to be further driven by
developments specifically related to the individual sectors. I'll
continue to take positions in the strongest market names, all the
while searching for the best investment opportunities outside of the
index.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
NOTE TO SHAREHOLDERS: On December 15, 1999, shareholders of Fidelity
Hong Kong & China Fund voted to amend the fund's investment policies
to permit the fund to invest up to 35% of its total assets in any
industry that represents more than 20% of the Hong Kong and Chinese
market. As of October 31, 1999, banks accounted for approximately 35%
of the Hong Kong and Chinese market as represented by the Hang Seng
Index.
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 October 31, 1999, more than
$161 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
(checkmark)
HONG KONG AND CHINA
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 1.3%
China 0.7%
Row: 1, Col: 1, Value: 0.7000000000000001
Row: 1, Col: 2, Value: 81.40000000000001
Row: 1, Col: 3, Value: 0.4
Row: 1, Col: 4, Value: 3.9
Row: 1, Col: 5, Value: 12.3
Row: 1, Col: 6, Value: 1.3
United Kingdom 12.3%
Taiwan 3.9%
Singapore 0.4%
Hong Kong 81.4%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 5.2%
United Kingdom 13.2%
Row: 1, Col: 1, Value: 5.2
Row: 1, Col: 2, Value: 75.8
Row: 1, Col: 3, Value: 1.5
Row: 1, Col: 4, Value: 2.6
Row: 1, Col: 5, Value: 1.7
Row: 1, Col: 6, Value: 13.2
Taiwan 1.7%
Singapore 2.6%
Other 1.5%
Hong Kong 75.8%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 98.9 94.8
Short-Term Investments and 1.1 5.2
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
HSBC Holdings PLC (Hong Kong) 10.7 10.9
(Reg.) (Banks)
Hutchison Whampoa Ltd. 9.7 9.3
(Electrical Equipment)
China Telecom (Hong Kong) 8.5 4.4
Ltd. (Cellular)
Sun Hung Kai Properties Ltd. 6.8 7.5
(Real Estate)
Cheung Kong Holdings Ltd. 6.1 6.7
(Real Estate)
Johnson Electric Holdings 4.1 3.2
Ltd. (Electrical Equipment)
Television Broadcasts Ltd. 3.7 1.1
(Broadcasting)
Henderson Land Development 3.4 4.4
Co. Ltd. (Real Estate)
Smartone Telecommunications 3.1 2.1
Holdings Ltd. (Cellular)
Hong Kong & China Gas Co. 2.6 3.4
Ltd. (Gas)
58.7 53.0
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
CONSTRUCTION & REAL ESTATE 21.4 25.6
FINANCE 19.6 23.3
UTILITIES 18.1 15.9
INDUSTRIAL MACHINERY & 14.3 12.7
EQUIPMENT
TECHNOLOGY 7.8 5.2
MEDIA & LEISURE 7.5 4.5
TRANSPORTATION 3.4 2.7
RETAIL & WHOLESALE 2.6 0.5
DURABLES 2.1 1.5
HOLDING COMPANIES 1.5 2.2
</TABLE>
HONG KONG AND CHINA
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 98.9%
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
21.4%
BUILDING MATERIALS - 0.4%
Companion Building Material 6,242,000 $ 118,926
(Holdings) Ltd. (a)
Companion Marble (Holdings) 2,690,000 533,290
Ltd. (a)
652,216
CONSTRUCTION - 0.4%
Cheung Kong Infrastructure 342,000 647,194
Holdings Ltd.
REAL ESTATE - 20.6%
Amoy Properties Ltd. 2,204,000 1,900,978
Cheung Kong Holdings Ltd. 1,081,000 9,810,827
Great Eagle Holdings Ltd. 992,000 1,225,953
Henderson Land Development 1,210,000 5,514,161
Co. Ltd.
HKR International Ltd. 287,200 218,136
Hongkong Land Holdings Ltd. 341,000 439,890
Kerry Properties Ltd. 414,000 410,376
New World Development Co. 300,738 569,110
Ltd.
Pacific Century Region 110,000 635,570
Developments Ltd. (a)
Paliburg Holdings Ltd. (a) 1,248,000 94,789
Sun Hung Kai Properties Ltd. 1,359,021 10,978,188
Wharf Holdings Ltd. 506,485 1,463,773
33,261,751
TOTAL CONSTRUCTION & REAL 34,561,161
ESTATE
DURABLES - 2.1%
AUTOS, TIRES, & ACCESSORIES -
0.1%
Denway Investment Ltd. (a) 1,036,000 113,363
TEXTILES & APPAREL - 2.0%
Far Eastern Textile Ltd. 665,540 910,606
Glorious Sun Enterprises 6,446,000 2,344,226
3,254,832
TOTAL DURABLES 3,368,195
FINANCE - 19.6%
BANKS - 18.8%
Dah Sing Financial Holdings 263,744 1,052,531
Ltd.
Dao Heng Bank Group Ltd. 400,000 1,838,311
Hang Seng Bank Ltd. 270,000 2,937,049
HSBC Holdings PLC (Hong Kong) 1,408,325 17,340,000
(Reg.)
Liu Chong Hing Bank Ltd. 2,149,000 2,227,015
Standard Chartered PLC 182,092 2,555,653
Wing Hang Bank Ltd. 576,000 1,879,712
Wing Lung Bank Ltd. 122,000 471,164
30,301,435
CREDIT & OTHER FINANCE - 0.4%
Aeon Credit Service (ASIA) 1,476,000 608,033
Co. Ltd.
SHARES VALUE (NOTE 1)
INSURANCE - 0.0%
Pacific Century Insurance 26,000 $ 13,974
Holdings Ltd.
SECURITIES INDUSTRY - 0.4%
Guoco Group Ltd. 272,000 728,321
TOTAL FINANCE 31,651,763
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.2%
China Pharmaceutical 1,666,000 304,547
Enterprise and Investment
Corp. Ltd.
China Pharmaceutical 166,600 7,292
Enterprise and Investment
Corp. Ltd. warrants 10/20/01
(a)
311,839
HOLDING COMPANIES - 1.5%
First Pacific Co. Ltd. 1,000 579
Jardine Matheson Holdings 159,000 683,700
Ltd.
Jardine Strategic Holdings 474,000 1,047,540
Ltd.
Wheelock & Co. Ltd. 650,000 736,354
2,468,173
INDUSTRIAL MACHINERY &
EQUIPMENT - 14.3%
ELECTRICAL EQUIPMENT - 14.3%
Chen Hsong Holdings Ltd. 3,870,000 757,261
Hutchison Whampoa Ltd. 1,569,000 15,754,634
Johnson Electric Holdings 1,217,080 6,580,505
Ltd.
23,092,400
MEDIA & LEISURE - 7.5%
BROADCASTING - 5.0%
Asia Satellite 894,000 2,106,102
Telecommunications Holdings
Ltd.
Television Broadcasts Ltd. 1,119,000 5,978,180
8,084,282
ENTERTAINMENT - 0.2%
e-New Media Co. Ltd. (a) 1,602,000 391,838
PUBLISHING - 0.4%
Culturecom Holdings Ltd. (a) 8,106,000 448,710
Oriental Press Group Ltd. (a) 786,000 105,232
553,942
RESTAURANTS - 1.9%
Cafe de Coral Holdings Ltd. 7,070,000 2,980,722
TOTAL MEDIA & LEISURE 12,010,784
NONDURABLES - 0.4%
BEVERAGES - 0.4%
Vitasoy International 2,091,000 612,387
Holdings Ltd.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - 2.6%
APPAREL STORES - 2.3%
Esprit Asia Holdings Ltd. 1,524,000 $ 1,441,993
Giordano International Ltd. 2,144,000 2,277,034
3,719,027
GENERAL MERCHANDISE STORES -
0.3%
China Everbright Ltd. 746,000 532,994
TOTAL RETAIL & WHOLESALE 4,252,021
TECHNOLOGY - 7.8%
COMMUNICATIONS EQUIPMENT - 2.6%
CCT Telecom Holdings Ltd. (a) 7,732,000 2,488,414
Champion Technology Holdings 5,168,000 302,709
Ltd.
Pacific Century CyberWorks 1,832,000 1,379,660
Ltd. (a)
4,170,783
COMPUTER SERVICES & SOFTWARE
- - 0.4%
MyWeb Inc.com (a) 14,500 288,188
New World CyberBase Ltd. (a) 1,200,000 312,822
601,010
COMPUTERS & OFFICE EQUIPMENT
- - 0.7%
Asustek Computer, Inc. 38,000 398,928
Compal Electronics, Inc. 30,926 103,834
D-Link Corp. 393,600 657,654
1,160,416
ELECTRONICS - 4.1%
ASM Pacific Technology Ltd. 1,098,000 1,293,344
Chartered Semiconduct 1,000 33,188
Manufacturing Ltd. ADR
Hon Hai Precision Industries 84,000 574,653
Co. Ltd.
Phoenixtec Power Co. Ltd. 311,970 634,365
Siliconware Precision 129,150 232,079
Industries Co. Ltd.
Taiwan Semiconductor 248,460 1,104,441
Manufacturing Co. Ltd.
United Microelectronics Corp. 254,000 660,624
Varitronix International Ltd. 492,000 1,060,891
Winbond Electronics Corp. (a) 321,000 586,948
Winbond Electronics Corp. 29,300 523,005
sponsored GDR (a)(c)
6,703,538
TOTAL TECHNOLOGY 12,635,747
TRANSPORTATION - 3.4%
AIR TRANSPORTATION - 2.1%
Cathay Pacific Airways Ltd. 924,000 1,879,403
Swire Pacific Ltd.:
Class A 206,000 1,020,984
Class B 730,500 540,728
3,441,115
SHARES VALUE (NOTE 1)
SHIPPING - 0.8%
IMC Holdings Ltd. (a) 4,096,000 $ 369,104
Shun Tak Holdings Ltd. 5,280,000 917,611
1,286,715
TRUCKING & FREIGHT - 0.5%
New World Infrastructure Ltd. 146,000 167,276
(a)
Shenzhen Expressway Co. Ltd. 4,288,000 640,330
Class H
807,606
TOTAL TRANSPORTATION 5,535,436
UTILITIES - 18.1%
CELLULAR - 11.6%
China Telecom (Hong Kong) 4,080,000 13,770,000
Ltd. (a)
Smartone Telecommunications 1,416,000 4,994,645
Holdings Ltd.
18,764,645
ELECTRIC UTILITY - 1.2%
Beijing Datang Power 1,320,000 275,283
Generation Co. Ltd.
CLP Holdings Ltd. 285,000 1,306,128
Hong Kong Electric Holdings 22,871 69,926
Ltd.
Huaneng Power International, 612,000 183,175
Inc. Class H
1,834,512
GAS - 2.6%
Hong Kong & China Gas Co. 3,189,800 4,229,524
Ltd.
TELEPHONE SERVICES - 2.7%
Cable & Wireless HKT Ltd. 604,708 1,379,490
City Telecom (HK) Ltd. 4,208,000 2,952,317
4,331,807
TOTAL UTILITIES 29,160,488
TOTAL COMMON STOCKS 159,660,394
(Cost $116,065,051)
CASH EQUIVALENTS - 0.7%
Taxable Central Cash Fund, 1,194,990 1,194,990
5.21% (b) (Cost $1,194,990)
TOTAL INVESTMENT PORTFOLIO - 160,855,384
99.6%
(Cost $117,260,041)
NET OTHER ASSETS - 0.4% 662,220
NET ASSETS - 100% $ 161,517,604
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $523,005 or 0.3%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $120,385,352 and $129,771,899, respectively.
The fund participated in the security lending program. At period end
there were no loans outstanding.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $2,386,286. The weighted average interest rate was 5.36%.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $119,816,817. Net unrealized appreciation
aggregated $41,038,567, of which $45,230,391 related to appreciated
investment securities and $4,191,824 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $50,478,000, all of which will expire on October 31,
2006.
HONG KONG AND CHINA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 160,855,384
value (cost $117,260,041) -
See accompanying schedule
Cash 33,906
Foreign currency held at 445,143
value (cost $444,909)
Receivable for investments 594,754
sold
Receivable for fund shares 113,416
sold
Dividends receivable 225,281
Interest receivable 1,516
Redemption fees receivable 1,874
TOTAL ASSETS 162,271,274
LIABILITIES
Payable for investments $ 169,469
purchased
Payable for fund shares 369,862
redeemed
Accrued management fee 95,641
Other payables and accrued 118,698
expenses
TOTAL LIABILITIES 753,670
NET ASSETS $ 161,517,604
Net Assets consist of:
Paid in capital $ 169,429,983
Undistributed net investment 1,848,938
income
Accumulated undistributed net (53,356,934)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 43,595,617
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 11,414,483 $ 161,517,604
shares outstanding
NET ASSET VALUE and $14.15
redemption price per share
($161,517,604 (divided by)
11,414,483 shares)
Maximum offering price per $14.59
share (100/97.00 of $14.15)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 3,837,969
Dividends
Interest 213,992
Security lending 324,121
4,376,082
Less foreign taxes withheld (48,122)
TOTAL INCOME 4,327,960
EXPENSES
Management fee $ 1,088,415
Transfer agent fees 542,873
Accounting and security 91,586
lending fees
Non-interested trustees' 453
compensation
Custodian fees and expenses 181,428
Registration fees 25,502
Audit 46,372
Legal 534
Interest 2,489
Miscellaneous 13,136
Total expenses before 1,992,788
reductions
Expense reductions (27,324) 1,965,464
NET INVESTMENT INCOME 2,362,496
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 9,831,268
Foreign currency transactions 284 9,831,552
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 35,814,998
Assets and liabilities in (2,476) 35,812,522
foreign currencies
NET GAIN (LOSS) 45,644,074
NET INCREASE (DECREASE) IN $ 48,006,570
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 216,345
charges paid to FDC
Sales charges - Retained by $ 216,270
FDC
Expense Reductions $ 27,063
Directed brokerage
arrangements
Transfer agent credits 261
$ 27,324
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 2,362,496 $ 4,741,212
income
Net realized gain (loss) 9,831,552 (61,779,009)
Change in net unrealized 35,812,522 41,852,376
appreciation (depreciation)
NET INCREASE (DECREASE) IN 48,006,570 (15,185,421)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (4,312,427) (968,977)
from net investment income
Share transactions Net 89,140,338 103,918,242
proceeds from sales of shares
Reinvestment of distributions 4,182,802 960,768
Cost of shares redeemed (116,955,228) (125,865,511)
NET INCREASE (DECREASE) IN (23,632,088) (20,986,501)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 631,730 548,707
TOTAL INCREASE (DECREASE) 20,693,785 (36,592,192)
IN NET ASSETS
NET ASSETS
Beginning of period 140,823,819 177,416,011
End of period (including $ 161,517,604 $ 140,823,819
undistributed net investment
income of $1,848,938 and
$3,798,587, respectively)
OTHER INFORMATION
Shares
Sold 7,169,572 10,103,475
Issued in reinvestment of 415,738 81,433
distributions
Redeemed (9,914,200) (12,481,967)
Net increase (decrease) (2,328,890) (2,297,059)
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.25 $ 11.06 $ 12.97 $ 10.00
period
Income from Investment
Operations
Net investment income C .19 .31 .17 .29
Net realized and unrealized 3.98 (1.10) (1.95) 2.64
gain (loss)
Total from investment 4.17 (.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 .05 .04 .09 .05
in capital
Net asset value, end of period $ 14.15 $ 10.25 $ 11.06 $ 12.97
TOTAL RETURN A, B 42.44% (6.85)% (13.36)% 29.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 161,518 $ 140,824 $ 177,416 $ 109,880
(000 omitted)
Ratio of expenses to average 1.34% 1.41% 1.31% 1.62%
net assets
Ratio of expenses to average 1.32% D 1.40% D 1.31% 1.62%
net assets after expense
reductions
Ratio of net investment 1.59% 3.07% 1.18% 2.53%
income to average net assets
Portfolio turnover rate 84% 109% 174% 118%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
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 FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY JAPAN 116.35% 60.16% 136.17%
FIDELITY JAPAN (INCL. 3.00% 109.86% 55.36% 129.08%
SALES CHARGE)
TOPIX 69.97% -4.37% 42.85%
Japanese Funds Average 95.57% 31.32% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on 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 one year 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 OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY JAPAN 116.35% 9.88% 12.81%
FIDELITY JAPAN (INCL. 3.00% 109.86% 9.21% 12.33%
SALES CHARGE)
TOPIX 69.97% -0.89% 5.13%
Japanese Funds Average 95.57% 4.61% 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
1999/05/31 13795.57 10165.67
1999/06/30 16100.09 11129.49
1999/07/31 18141.54 12264.80
1999/08/31 19793.64 12654.46
1999/09/30 21287.90 13484.72
1999/10/29 22908.43 14285.26
IMATRL PRASUN SHR__CHT 19991031 19991111 112208 R00000000000089
$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 October 31, 1999, the value of the investment would have
grown to $22,908 - a 129.08% 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 $14,285 - a 42.85% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
JAPAN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Brenda Reed, Portfolio Manager of Fidelity Japan
Fund
Q. HOW DID THE FUND PERFORM, BRENDA?
A. Both absolute and relative performance were quite good - the fund
soundly beat its benchmark against the backdrop of a very strong
overall market. For the 12 months that ended October 31, 1999, the
fund returned 116.35%, compared to 69.97% for the Tokyo Stock Exchange
Index (TOPIX) and 95.57% for the Japanese funds average monitored by
Lipper Inc.
Q. WHAT ACCOUNTED FOR THE FUND'S EXTRAORDINARILY
STRONG PERFORMANCE?
A. The fund benefited from great stock selection virtually across the
board. Overweightings in telecommunications and technology also
helped, as these sectors were buoyed by the restructuring trends
unfolding in Japan. The wireless telecommunications industry was
particularly vibrant during the period. In contrast to the situation
in the United States, wireless - or cellular - phones are much more
common in Japan than personal computers. Consequently, a lot of
investors concentrated their buying on companies offering products and
services for the wireless telecommunications market, and the fund
benefited substantially from its numerous investments in that
industry. Finally, the yen continued to appreciate against the dollar
during the period, which increased the value of Japanese stocks in
U.S. dollar terms.
Q. THE BIGGEST SECTOR CHANGES IN THE PAST SIX MONTHS WERE AN INCREASE
IN UTILITIES FROM 7.9% TO 13.5% AS A PERCENTAGE OF NET ASSETS AND A
DECREASE IN FINANCE STOCKS FROM 17.6% TO 12.8% OF NET ASSETS. CAN YOU
COMMENT ON THOSE CHANGES?
A. Utilities showed a big increase because of my decision to increase
the fund's investments in growth-oriented telecommunications stocks,
which are classified as utilities. In the finance area, I cut back on
non-bank finance companies, which were subject to increased
competitive pressures from banks and, after a vigorous third-quarter
advance, were no longer attractively valued.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Hikari Tsushin was a standout performer. With its dynamic business
model, which involves both one-time payments and ongoing compensation
for each wireless phone the company sells, Hikari Tsushin positioned
itself as a key player in the wireless communications industry.
Furthermore, the company revealed plans to use a similar business
model for the Internet market. NTT Mobile Communication is Japan's
largest provider of wireless phone service. The stock benefited from
investors' enthusiasm about the introduction of a new wireless phone
with Internet capabilities. Another strong holding, Softbank Corp.,
appeared to have successfully remade itself. A few years ago, it was
known for owning computer magazines and selling software in the retail
market. Now Softbank is essentially a venture capital firm, with
stakes in a number of well-known Internet companies such as Yahoo!
Japan and eBay Japan.
Q. WHAT STOCKS DETRACTED FROM THE FUND'S PERFORMANCE?
A. The worst offender was Nichiei Co., one of the non-bank finance
companies I sold for reasons mentioned earlier. Riso Kagaku - the
industrial-printer manufacturer mentioned in the semiannual report six
month ago - again detracted from performance. The stock suffered from
earnings downgrades as business from Southeast Asia and Latin America
fell off. However, the company had a great cash flow, its new products
were selling well and the stock price was extremely cheap as the
period came to an end. As a result, I held on to the stock.
Q. WHAT'S YOUR OUTLOOK, BRENDA?
A. Overall, my outlook is very positive. One short-term bump in the
road, though, could be Y2K. Many companies have built up excess
inventory as insurance against supply disruptions. If business
continues as usual, new orders could suffer while that excess
inventory is being depleted. In most cases, however, the excess
amounts to only a few weeks' worth, so I don't see this as anything
more than a very short-term potential problem. Going forward, I will
be looking carefully for continuing evidence of the commitment to
restructuring that many companies have expressed. One possibility, now
that the economy is recovering and the stock market is rising again,
is that some managements will slack off and fail to follow through on
their restructuring plans. With Fidelity's strong research presence in
Japan, I anticipate staying on the cutting edge of these developments,
and I am confident that we can continue to identify promising
investment opportunities for our shareholders.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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 October 31, 1999, more than
$891 million
MANAGER: Brenda Reed, since 1998; associate
manager, Fidelity Japan Fund, October-December
1998; manager, Fidelity Select Automotive
Portfolio, 1994-1996; Fidelity Select Air
Transportation Portfolio, 1993-1994; joined
Fidelity in 1992
(checkmark)
JAPAN
INVESTMENT CHANGES
AS OF OCTOBER 31,1999
United States 4.5%
Row: 1, Col: 1, Value: 95.5
Row: 1, Col: 2, Value: 4.5
Japan 95.5%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 3.1%
Row: 1, Col: 1, Value: 96.90000000000001
Row: 1, Col: 2, Value: 3.1
Japan 96.9%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND' NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 95.5 96.2
Bonds 0.0 1.6
Short-Term Investments and 4.5 2.2
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
NTT Mobile Communication 4.1 2.9
Network, Inc. (Cellular)
Kokusai Denshin Denwa 2.5 0.7
(Telephone Services)
Takeda Chemical Industries 2.3 2.5
Ltd. (Drugs &
Pharmaceuticals)
Toyota Motor Corp. (Autos, 2.2 2.9
Tires, & Accessories)
Softbank Corp. (Computers & 2.2 1.2
Office Equipment)
Hikari Tsushin, Inc. 2.1 1.4
(Cellular)
Bank of Tokyo-Mitsubishi Ltd. 2.0 2.8
(Banks)
Toyoda Gosei Co. Ltd. 1.9 0.0
(Autos, Tires, & Accessories)
Kyocera Corp. (Electronics) 1.9 0.7
Omron Corp. (Electrical 1.8 1.5
Equipment)
23.0 16.6
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 23.9 23.4
UTILITIES 13.5 7.9
FINANCE 12.8 17.6
DURABLES 12.6 13.6
HEALTH 6.9 7.4
BASIC INDUSTRIES 6.7 4.9
INDUSTRIAL MACHINERY & 6.3 6.8
EQUIPMENT
RETAIL & WHOLESALE 4.5 4.6
NONDURABLES 2.9 5.3
MEDIA & LEISURE 2.5 1.6
</TABLE>
JAPAN
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 95.5%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 6.7%
CHEMICALS & PLASTICS - 4.4%
Asahi Chemical Industry Co. 600,000 $ 3,630,252
Ltd.
Hitachi Chemical Co. Ltd. 223,000 4,133,398
Kaneka Corp. 590,000 7,734,454
Mitsubishi Chemical Corp. 1,400,000 6,359,664
Nippon Zeon Co. Ltd. 560,000 4,840,336
Nissan Chemical Industries 470,000 3,042,305
Co. Ltd.
Shin-Etsu Chemical Co. Ltd. 224,000 9,250,421
38,990,830
IRON & STEEL - 0.5%
Nippon Steel Corp. 1,740,000 4,428,332
METALS & MINING - 1.1%
Furukawa Electric Co. Ltd. 1,414,000 10,320,673
PAPER & FOREST PRODUCTS - 0.7%
Hokuetsu Paper Mills Ltd. 390,000 3,153,710
Nippon Paper Industries Co. 370,000 2,878,271
Ltd.
6,031,981
TOTAL BASIC INDUSTRIES 59,771,816
CONSTRUCTION & REAL ESTATE -
1.1%
BUILDING MATERIALS - 0.5%
Nippon Sheet Glass Co. Ltd. 760,000 4,729,700
ENGINEERING - 0.6%
Nippon Computer Systems Corp. 255,000 4,995,919
TOTAL CONSTRUCTION & REAL 9,725,619
ESTATE
DURABLES - 12.6%
AUTOS, TIRES, & ACCESSORIES -
7.8%
Bridgestone Corp. 160,000 4,410,084
Denso Corp. 180,000 3,854,982
Fuji Heavy Industries Ltd. 250,000 2,127,251
Hino Motors Ltd. (a) 830,000 3,021,081
Honda Motor Co. Ltd. 108,000 4,542,750
Koyo Seiko Co. Ltd. 355,000 3,798,031
Mazda Motor Corp. 600,000 3,267,227
Toyoda Automatic Loom Works 220,000 4,289,076
Ltd.
Toyoda Gosei Co. Ltd. 391,000 16,860,409
Toyota Motor Corp. 572,000 19,831,165
Yamaha Motor Co. Ltd. 380,000 3,094,742
69,096,798
CONSUMER DURABLES - 1.1%
Sankyo Co. Ltd. (Gunma) 128,500 10,181,273
CONSUMER ELECTRONICS - 3.3%
Citizen Watch Co. Ltd. 343,000 2,427,765
Matsushita Electric 296,000 6,269,650
Industrial Co. Ltd.
Sharp Corp. 440,000 7,014,646
Sony Corp. 84,700 13,530,826
29,242,887
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 0.4%
Otsuka Kagu Ltd. 12,000 $ 3,572,629
TOTAL DURABLES 112,093,587
FINANCE - 12.8%
BANKS - 7.6%
Bank of Tokyo-Mitsubishi Ltd. 1,061,000 17,607,761
Dai-Ichi Kangyo Bank Ltd. 680,000 9,338,776
Fuji Bank Ltd. 600,000 8,240,096
Sakura Bank Ltd. 1,534,000 13,200,135
Sanwa Bank Ltd. 938,000 13,972,034
The Suruga Bank Ltd. 35,000 514,286
Toyo Trust & Banking Co. Ltd. 740,000 4,690,516
67,563,604
CREDIT & OTHER FINANCE - 2.6%
Aeon Credit Service Ltd. 90 13,138
Aiful Corp. 59,600 9,272,702
Jafco Co. Ltd. 45,000 5,056,423
Shohkoh Fund & Co. Ltd. 7,800 4,779,256
Takefuji Corp. 36,300 4,706,363
23,827,882
SECURITIES INDUSTRY - 2.6%
Daiwa Securities Co. Ltd. 1,237,000 13,222,387
New Japan Securities Co. Ltd. 597,000 1,760,183
(a)
Nikko Securities Co. Ltd. 855,000 8,047,059
23,029,629
TOTAL FINANCE 114,421,115
HEALTH - 6.9%
DRUGS & PHARMACEUTICALS - 5.3%
Banyu Pharmaceutical Co. Ltd. 180,000 3,300,072
Fujisawa Pharmaceutical Co. 423,000 10,602,930
Ltd.
Takeda Chemical Industries 350,000 20,134,455
Ltd.
Yamanouchi Pharmaceutical Co. 148,000 6,723,074
Ltd.
Yoshitomi Pharmaceutical 480,000 6,545,979
Industries Ltd.
47,306,510
MEDICAL EQUIPMENT & SUPPLIES
- - 1.6%
Hoya Corp. 167,000 12,028,812
Japan Medical Dynamic 26,500 1,450,660
Marketing, Inc.
Terumo Corp. 39,000 1,187,323
14,666,795
TOTAL HEALTH 61,973,305
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.3%
ELECTRICAL EQUIPMENT - 2.9%
Mitsubishi Electric Corp. 1,140,000 6,317,215
Omron Corp. 772,000 16,162,882
Yokogawa Electric Corp. 515,000 3,610,564
26,090,661
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.4%
Amada Co. Ltd. 1,200,000 $ 9,219,688
Daifuku Co. Ltd. 179,000 1,167,261
Fuji Machine Manufacturing 41,000 1,909,724
Co. Ltd.
Hitachi Metals Ltd. 440,000 2,167,779
SMC Corp. 44,000 7,432,990
THK Co. Ltd. 259,000 8,482,017
30,379,459
TOTAL INDUSTRIAL MACHINERY & 56,470,120
EQUIPMENT
MEDIA & LEISURE - 2.5%
BROADCASTING - 0.5%
Tokyo Broadcasting System, 160,000 4,233,374
Inc.
ENTERTAINMENT - 0.8%
Sony Music Entertainment Ltd. 50,800 6,630,224
LEISURE DURABLES & TOYS - 0.9%
Namco Ltd. 95,000 4,488,836
Nintendo Co. Ltd. 22,300 3,544,442
8,033,278
PUBLISHING - 0.3%
Kadokawa Shoten Publish Co. 12,000 2,997,551
Ltd.
TOTAL MEDIA & LEISURE 21,894,427
NONDURABLES - 2.9%
BEVERAGES - 1.9%
Coca-Cola West Japan Co. Ltd. 60,000 2,673,710
Fuji Coca-Cola Bottling Co. 200,000 3,841,537
Ltd.
Ito En Ltd. 51,000 5,240,817
Kinki Coca-Cola Bottling Co. 104,000 1,797,839
Ltd.
Kirin Brewery Co. Ltd. 276,000 3,164,888
16,718,791
FOODS - 0.6%
Yakult Honsha Co. Ltd. 310,000 3,173,686
Yonekyu Corp. 170,000 2,610,612
5,784,298
HOUSEHOLD PRODUCTS - 0.4%
Kao Corp. 114,000 3,481,585
TOTAL NONDURABLES 25,984,674
RETAIL & WHOLESALE - 4.5%
APPAREL STORES - 0.4%
World Co. Ltd. 32,000 3,242,257
GENERAL MERCHANDISE STORES -
3.2%
FamilyMart Co. Ltd. 70,000 4,873,950
Ito-Yokado Co. Ltd. 183,000 14,657,576
Seven Eleven Japan Co. Ltd. 94,000 8,621,369
28,152,895
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.9%
Paris Miki, Inc. 50,400 $ 4,065,883
Senshukai Co. Ltd. 233,000 4,473,153
8,539,036
TOTAL RETAIL & WHOLESALE 39,934,188
SERVICES - 1.8%
PRINTING - 0.9%
Dai Nippon Printing Co. Ltd. 150,000 2,738,536
Riso Kagaku Corp. 72,600 3,137,575
Toppan Forms Co. Ltd. 90,000 2,381,273
8,257,384
SERVICES - 0.9%
Nippon System Development Co. 91,000 7,778,152
Ltd.
TOTAL SERVICES 16,035,536
TECHNOLOGY - 23.9%
COMMUNICATIONS EQUIPMENT - 1.3%
Matsushita Communication 40,000 6,730,372
Industrial Co. Ltd.
NEC Corp. 227,000 4,599,952
11,330,324
COMPUTER SERVICES & SOFTWARE
- - 3.8%
CSK Corp. 60,000 2,765,907
Hitachi Information Systems 215,000 8,300,601
Konami Co. Ltd. 95,000 9,214,886
Oracle Corp. Japan 15,500 3,155,822
Square Co. Ltd. 34,000 2,462,041
Trend Micro, Inc. 39,000 7,753,182
33,652,439
COMPUTERS & OFFICE EQUIPMENT
- - 7.2%
Canon, Inc. 77,000 2,181,513
Fujitsu Ltd. 403,000 12,152,894
Fujitsu Support & Service, 21,000 5,909,244
Inc.
Hitachi Ltd. 906,000 9,852,751
Nihon Unisys Ltd. 160,000 5,624,010
Ricoh Co. Ltd. 572,000 9,344,269
Softbank Corp. 46,900 19,503,194
64,567,875
ELECTRONIC INSTRUMENTS - 2.0%
Advantest Corp. 36,000 5,428,092
Tokyo Seimitsu Co. Ltd. 100,000 12,206,483
17,634,575
ELECTRONICS - 9.1%
Hirose Electric Co. Ltd. 55,600 9,712,980
Hosiden Corp. 115,000 4,362,545
Koa Denko Co. Ltd. 135,000 2,346,699
Kyocera Corp. 173,000 16,614,647
Mitsumi Electric Co. Ltd. 120,000 3,215,366
Nichicon Corp. 527,000 11,438,368
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Nidec Corp. 28,000 $ 5,445,378
Nitto Denko Corp. 195,000 7,715,727
Rohm Co. Ltd. 58,000 13,034,334
TDK Corp. 78,000 7,648,308
81,534,352
PHOTOGRAPHIC EQUIPMENT - 0.5%
Olympus Optical Co. Ltd. 305,000 4,130,132
TOTAL TECHNOLOGY 212,849,697
UTILITIES - 13.5%
CELLULAR - 7.6%
Hikari Tsushin, Inc. 23,700 19,096,568
NTT Mobile Communication 1,356 36,073,179
Network, Inc.
NTT Mobile Communication 472 12,556,447
Network, Inc. (c)
67,726,194
TELEPHONE SERVICES - 5.9%
DDI Corp. 1,420 15,546,699
Kokusai Denshin Denwa 180,000 22,645,859
Nippon Telegraph & Telephone 915 14,060,025
Corp.
52,252,583
TOTAL UTILITIES 119,978,777
TOTAL COMMON STOCKS 851,132,861
(Cost $538,701,887)
CASH EQUIVALENTS - 11.1%
Central Cash Collateral Fund, 53,557,619 53,557,619
5.26% (b)
Taxable Central Cash Fund, 45,335,264 45,335,264
5.21% (b)
TOTAL CASH EQUIVALENTS 98,892,883
(Cost $98,892,883)
TOTAL INVESTMENT PORTFOLIO - 950,025,744
106.6%
(Cost $637,594,770)
NET OTHER ASSETS - (6.6)% (58,784,697)
NET ASSETS - 100% $ 891,241,047
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $12,556,447 or
1.4% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $587,695,928 and $349,308,848, 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 $3,655 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $50,853,059. The fund
received cash collateral of $53,557,619 which was invested in the
Central Cash Collateral Fund. Cash collateral includes $282,600
received for unsettled security loans.
The fund participated in the bank borrowing program. The average daily
loan balance 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 October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $637,806,232. Net unrealized appreciation
aggregated $312,219,512, of which $317,439,843 related to appreciated
investment securities and $5,220,331 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $44,939,000 of which $11,008,000 and $33,931,000 will
expire on October 31, 2005 and 2006, respectively.
JAPAN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 950,025,744
value (cost $637,594,770) -
See accompanying schedule
Receivable for investments 18,863,016
sold
Receivable for fund shares 5,040,935
sold
Dividends receivable 1,271,230
Interest receivable 128,696
Redemption fees receivable 15,504
Other receivables 27,027
TOTAL ASSETS 975,372,152
LIABILITIES
Payable for investments $ 28,074,797
purchased
Payable for fund shares 1,679,830
redeemed
Accrued management fee 555,237
Other payables and accrued 263,622
expenses
Collateral on securities 53,557,619
loaned, at value
TOTAL LIABILITIES 84,131,105
NET ASSETS $ 891,241,047
Net Assets consist of:
Paid in capital $ 610,734,718
Undistributed net investment 13,253,040
income
Accumulated undistributed net (45,150,065)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 312,403,354
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 40,946,589 $ 891,241,047
shares outstanding
NET ASSET VALUE and $21.77
redemption price per share
($891,241,047 (divided by)
40,946,589 shares)
Maximum offering price per $22.44
share (100/97.00 of $21.77)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 2,523,306
Dividends
Interest 1,206,842
Security lending 56,746
3,786,894
Less foreign taxes withheld (378,496)
TOTAL INCOME 3,408,398
EXPENSES
Management fee Basic fee $ 3,283,457
Performance adjustment 595,599
Transfer agent fees 1,166,036
Accounting and security 250,625
lending fees
Non-interested trustees' 1,941
compensation
Custodian fees and expenses 163,437
Registration fees 87,482
Audit 32,733
Legal 1,192
Interest 5,154
Total expenses before 5,587,656
reductions
Expense reductions (59,100) 5,528,556
NET INVESTMENT INCOME (LOSS) (2,120,158)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 63,450,396
Foreign currency transactions (443,642) 63,006,754
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 309,070,924
Assets and liabilities in (104,034) 308,966,890
foreign currencies
NET GAIN (LOSS) 371,973,644
NET INCREASE (DECREASE) IN $ 369,853,486
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 1,800,232
charges paid to FDC
Sales charges - Retained by $ 1,799,715
FDC
Expense Reductions $ 54,682
Directed brokerage
arrangements
Custodian credits 1,969
Transfer agent credits 2,449
$ 59,100
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ (2,120,158) $ (886,023)
income (loss)
Net realized gain (loss) 63,006,754 (33,687,055)
Change in net unrealized 308,966,890 15,140,754
appreciation (depreciation)
NET INCREASE (DECREASE) IN 369,853,486 (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 547,523,917 166,701,599
proceeds from sales of shares
Reinvestment of distributions 804,286 3,837,897
Cost of shares redeemed (292,716,488) (137,739,104)
NET INCREASE (DECREASE) IN 255,611,715 32,800,392
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 1,215,013 375,918
TOTAL INCREASE (DECREASE) 625,846,532 9,839,708
IN NET ASSETS
NET ASSETS
Beginning of period 265,394,515 255,554,807
End of period (including $ 891,241,047 $ 265,394,515
under (over) distribution of
net investment income of
$13,253,040 and
$(4,689,993), respectively)
OTHER INFORMATION
Shares
Sold 34,652,174 16,601,342
Issued in reinvestment of 73,856 370,453
distributions
Redeemed (20,092,286) (13,676,838)
Net increase (decrease) 14,633,744 3,294,957
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.09 $ 11.10 $ 11.68 $ 12.08 $ 14.27
period
Income from Investment
Operations
Net investment income (loss) (.07) C (.04) C (.06) C (.02) C (.02)
Net realized and unrealized 11.74 (.81) (.55) (.40) (1.89)
gain (loss)
Total from investment 11.67 (.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 .04 .02 .04 .02 .08
in capital
Net asset value, end of period $ 21.77 $ 10.09 $ 11.10 $ 11.68 $ 12.08
TOTAL RETURN A, B 116.35% (7.52)% (4.89)% (3.31)% (12.96)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 891,241 $ 265,395 $ 255,555 $ 290,495 $ 343,981
(000 omitted)
Ratio of expenses to average 1.24% 1.49% 1.42% 1.15% 1.15%
net assets
Ratio of expenses to average 1.23% D 1.48% D 1.40% D 1.14% D 1.15%
net assets after expense
reductions
Ratio of net investment (.47)% (.37)% (.54)% (.12)% (.06)%
income (loss) to average net
assets
Portfolio turnover rate 79% 62% 70% 83% 86%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
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.
</TABLE>
JAPAN SMALLER 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 OCTOBER 31, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY JAPAN SMALLER 242.10% 106.95%
COMPANIES
FIDELITY JAPAN SMALLER 231.83% 100.74%
COMPANIES (INCL. 3.00%
SALES CHARGE)
TOPIX Second Section 164.91% 37.66%
Japanese Funds Average 95.57% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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 one year 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 OCTOBER 31, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY JAPAN SMALLER 242.10% 19.94%
COMPANIES
FIDELITY JAPAN SMALLER 231.83% 19.03%
COMPANIES (INCL. 3.00%
SALES CHARGE)
TOPIX Second Section 164.91% 8.32%
Japanese Funds Average 95.57% 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
1999/05/31 10554.71 8063.28
1999/06/30 13923.24 10038.60
1999/07/31 15504.98 11213.77
1999/08/31 17623.73 12577.28
1999/09/30 19371.46 13567.61
1999/10/29 20074.46 13766.00
IMATRL PRASUN SHR__CHT 19991031 19991129 100922 R00000000000051
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Japan Smaller Companies Fund on November 1, 1995,
when the fund started, and the current 3.00% sales charge was paid. As
the chart shows, by October 31, 1999, the value of the investment
would have been $20,074 - a 100.74% 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 $13,766 - a 37.66% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
JAPAN SMALLER COMPANIES
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Kenichi Mizushita, Portfolio Manager of Fidelity
Japan Smaller Companies Fund
Q. HOW DID THE FUND PERFORM, KENICHI?
A. The fund had an exceptional year, turning in a total return of
242.10% for the 12 months that ended October 31, 1999. By comparison,
the Japanese funds average returned 95.57%, according to Lipper Inc.,
and the Tokyo Stock Exchange Second Section Stock Index returned
164.91% during the same time period.
Q. WHAT FACTORS HELPED YOU DELIVER SUCH GOOD PERFORMANCE?
A. Several factors helped. First, through careful stock selection
among small-cap names, I was able to add some very strong performers
to the fund's portfolio. Second, the fund's investment parameters were
changed earlier this year, giving me a broader range of stocks from
which to choose. Third, a significant improvement in investor
sentiment in Japan - spurred by the government's fiscal and monetary
policies - created a more favorable environment for small stocks, and
helped boost the fund's return.
Q. RECENTLY, THE FUND CHANGED ITS NAME FROM JAPAN SMALL COMPANIES TO
JAPAN SMALLER COMPANIES. WHY?
A. The rapid appreciation of Japanese small-capitalization stocks
caused their market caps to grow beyond levels commonly thought of as
"small cap" by investors in the United States. Between June 1 and
October 29, 1999, the average weighted market cap of the TSE Second
Section Index - the fund's benchmark - increased approximately 71%
from $2.0 billion to $3.4 billion. Changing the fund's name to Japan
Smaller Companies gives it a name that's descriptive of the fund's
investment universe, and differentiates the fund from those that have
the ability to invest in larger capitalization stocks found in the
Nikkei, TOPIX and other Japanese indexes.
Q. WHAT KINDS OF STOCKS ARE YOU ALLOWED TO PURCHASE FOR THE FUND NOW?
A. Earlier in the year, we changed the fund's investment parameters to
allow the fund to purchase stocks of companies with market
capitalizations above $1 billion. These companies are among the
largest of the small-cap stocks, and they did extremely well during
the past year, given their strong positions in their respective
industries. By Japanese standards, though, they're still considered
small-cap stocks. Adding these companies, with a focus on such
technology names as Oracle Japan and Trend Micro, beefed up the fund's
investments in industry leaders.
Q. WHICH STOCKS TURNED OUT TO BE THE STARS DURING THE PAST YEAR?
A. Hikari Tsushin, the fund's largest holding and Japan's largest
wholesaler of mobile telephones, successfully increased its market
share and its stock performed very well. Fund holding Don Quijote's
chain of discount stores, featuring late-night operation, continued to
deliver strong earnings. Funai Electric is Japan's largest maker of
TV/VCRs, supplying the worldwide market, and has a very innovative and
sophisticated production system in China. Funai began to diversify its
product line, branching into laser printers and DVD players, which
helped improve its competitiveness and profitability. Obic Co., an
information technology software development company, focuses on
small-to-medium companies. Since other IT software firms focus only on
the largest companies, Obic's unique positioning and strong growth
helped it perform well.
Q. WHAT ABOUT DISAPPOINTMENTS?
A. There were very few stocks that disappointed. Riso Kagaku, a
manufacturer of printers, experienced lower demand from its South
American markets as they encountered economic troubles as well as
lower demand in Japan for its products. The company's earnings growth
slowed as a result. Idec Izumi makes switches for machines used in
factories. With the manufacturing sector in Japan still sluggish,
demand for the company's products was weak.
Q. WHAT'S YOUR OUTLOOK, KENICHI?
A. The good news is that the Japanese economy has been showing signs
of recovery, and demonstrated positive Gross Domestic Product growth
during the first and second quarters of 1999, backed by an increase in
public spending and housing starts. Although consumption and capital
expenditure activity are still weak, I believe that the economy is
gradually improving. As for small-cap stocks, with a new NASDAQ Japan
exchange opening next year and another exchange, MOTHERS - an offshoot
of the Tokyo Stock Exchange - opening this year, I anticipate that
more investors will join in the growing interest in small-cap stocks.
This positive sentiment should continue to build, assuming no major
interference with the economic recovery in Japan.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
FUND FACTS
GOAL: long-term growth of capital by investing
mainly in equity securities of Japanese issuers
with smaller market capitalizations
FUND NUMBER: 360
TRADING SYMBOL: FJSCX
START DATE: November 1, 1995
SIZE: as of October 31, 1999, more than
$1.7 billion
MANAGER: Kenichi Mizushita, since 1996;
manager, several Fidelity Investments Japan,
Ltd., and institutional funds; joined Fidelity in
1985
(checkmark)
JAPAN SMALLER COMPANIES
INVESTMENT CHANGES
AS OF OCTOBER 31,1999
United States 5.9%
Row: 1, Col: 1, Value: 94.09999999999999
Row: 1, Col: 2, Value: 5.9
Japan 94.1%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 6.7%
Row: 1, Col: 1, Value: 93.3
Row: 1, Col: 2, Value: 6.7
Japan 93.3%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 94.1 93.3
Short-Term Investments and 5.9 6.7
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Hikari Tsushin, Inc. 3.4 2.5
(Cellular)
Funai Electric Co. Ltd. 3.0 0.8
(Consumer Electronics)
Tokyo Seimitsu Co. Ltd. 2.7 0.8
(Electronic Instruments)
Fancl Corp. (Household 2.4 2.1
Products)
Obic Co. Ltd. (Computer 2.4 1.1
Services & Software)
Aiful Corp. (Credit & Other 2.2 0.6
Finance)
Trend Micro, Inc. (Computer 2.0 0.7
Services & Software)
Takasago Electric Industry 2.0 1.7
Co. (Leisure Durables & Toys)
Oracle Corp. Japan 1.9 0.0
(Computer Services & Software)
Sony Music Entertainment Ltd. 1.9 2.2
(Entertainment)
23.9 12.5
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 23.0 18.6
RETAIL & WHOLESALE 11.0 12.4
MEDIA & LEISURE 10.7 8.1
NONDURABLES 7.8 9.3
DURABLES 7.6 4.8
SERVICES 7.2 6.2
INDUSTRIAL MACHINERY & 7.0 7.6
EQUIPMENT
UTILITIES 5.9 3.0
CONSTRUCTION & REAL ESTATE 5.3 10.2
FINANCE 5.2 6.4
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 94.1%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.2%
Canon Chemicals, Inc. 77,000 $ 701,782
Ferrotec Corp. 179,000 4,091,429
4,793,211
METALS & MINING - 0.1%
Toami Corp. 182,000 1,328,403
PAPER & FOREST PRODUCTS - 0.3%
Rengo Co. Ltd. 910,000 4,806,723
TOTAL BASIC INDUSTRIES 10,928,337
CONSTRUCTION & REAL ESTATE -
5.3%
BUILDING MATERIALS - 3.1%
Advan Co. Ltd. 179,400 5,306,622
Arc Land Sakamoto Co. Ltd. 662,000 11,126,051
Fujimi, Inc. 323,900 14,931,285
Hitachi Metals Techno Ltd. 485,000 2,654,982
Kondotec, Inc. 456,500 2,630,492
Nichiha Corp. 507,000 5,112,605
Nippon Sheet Glass Co. Ltd. 700,000 4,356,303
Noritz Corp. 538,000 8,499,496
54,617,836
ENGINEERING - 0.2%
Daimei Telecom Engineering 348,000 4,130,881
Corp.
REAL ESTATE - 2.0%
Able, Inc. 123,000 11,340,217
Meiwa Estate Co. Ltd. 135,000 4,472,989
Nagawa Co. Ltd. 138,000 1,457,863
Sumitomo Real Estate Sales 397,000 18,529,845
Co. Ltd.
35,800,914
TOTAL CONSTRUCTION & REAL 94,549,631
ESTATE
DURABLES - 7.6%
AUTOS, TIRES, & ACCESSORIES -
1.8%
FCC Co. Ltd. 261,000 4,938,007
Toyoda Gosei Co. Ltd. 591,000 25,484,659
Toyoda Machine Works Ltd. 250,000 1,810,324
32,232,990
CONSUMER DURABLES - 2.8%
Aderans Co. Ltd. 262,000 13,134,598
Heiwa Corp. 261,000 7,168,884
Sankyo Co. Ltd. (Gunma) 378,000 29,949,581
50,253,063
CONSUMER ELECTRONICS - 3.0%
Funai Electric Co. Ltd. 116,000 52,582,956
TOTAL DURABLES 135,069,009
SHARES VALUE (NOTE 1)
FINANCE - 5.2%
BANKS - 0.3%
The Suruga Bank Ltd. 165,000 $ 2,424,490
Tokyo Tomin Bank Ltd. (a) 103,400 3,425,979
5,850,469
CREDIT & OTHER FINANCE - 4.9%
Aiful Corp. 255,000 39,673,471
Jafco Co. Ltd. 164,000 18,427,852
Mycal Card, Inc. 223,000 9,851,621
Shohkoh Fund & Co. Ltd. 29,600 18,136,664
86,089,608
TOTAL FINANCE 91,940,077
HEALTH - 2.8%
DRUGS & PHARMACEUTICALS - 0.7%
JCR Pharmaceuticals Co. Ltd. 535,000 5,651,861
Sysmex Corp. 202,000 6,207,923
11,859,784
MEDICAL EQUIPMENT & SUPPLIES
- - 2.1%
Hogy Medical Co. 294,000 19,764,707
Japan Medical Dynamic 336,000 18,393,278
Marketing, Inc.
38,157,985
TOTAL HEALTH 50,017,769
INDUSTRIAL MACHINERY &
EQUIPMENT - 7.0%
ELECTRICAL EQUIPMENT - 1.5%
Hakuto Co. Ltd. 532,000 12,568,740
Icom, Inc. 323,000 5,118,368
Idec Izumi Corp. 357,000 3,946,286
Mirai Industry Co. Ltd. 322,000 5,195,294
26,828,688
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.5%
Iuchi Seieido Co. Ltd. 118,000 3,411,093
Misumi Corp. 290,000 21,027,612
Nitto Kohki Co. Ltd. 527,000 11,742,041
Star Micronics Co. Ltd. 814,000 11,530,853
THK Co. Ltd. 455,000 14,900,841
Tsubaki Nakashima Co. Ltd. 702,500 10,120,048
Union Tool Co. 237,000 25,355,872
98,088,360
TOTAL INDUSTRIAL MACHINERY & 124,917,048
EQUIPMENT
MEDIA & LEISURE - 10.7%
ENTERTAINMENT - 3.1%
Avex, Inc. 98,000 20,705,883
Sony Music Entertainment Ltd. 261,000 34,064,732
54,770,615
LEISURE DURABLES & TOYS - 2.0%
Takasago Electric Industry 465,000 35,279,714
Co.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 1.7%
Asia Securities Printing Co. 390,000 $ 6,554,622
Ltd.
Asia Securities Printing Co. 374,000 6,142,041
Ltd. (a)
Shobunsha Publications, Inc. 176,000 8,197,840
Takara Printing Co. Ltd. 362,000 9,039,136
29,933,639
RESTAURANTS - 3.9%
Anrakutei Co. Ltd. 293,000 5,205,763
Kappa Create Co. Ltd. 350,000 11,092,438
Maysuya Foods Co. 273,000 18,824,875
Resorttrust, Inc. 271,000 7,807,924
Saizeriya Co. Ltd. 245,700 19,585,211
Zensho Co. Ltd. 130,000 7,865,547
70,381,758
TOTAL MEDIA & LEISURE 190,365,726
NONDURABLES - 7.8%
AGRICULTURE - 0.9%
Hokuto Corp. 291,000 17,187,516
BEVERAGES - 0.8%
Chukyo Coca-Cola Bottling Co. 250,000 2,974,790
Ltd.
Fuji Coca-Cola Bottling Co. 200,000 3,841,537
Ltd.
Kinki Coca-Cola Bottling Co. 136,000 2,351,021
Ltd.
Mikasa Coca Cola Bottling Co. 254,000 2,683,313
Shikoku Coca-Cola Bottling 152,300 1,894,151
Co. Ltd.
13,744,812
FOODS - 3.0%
Ariake Japan 154,000 9,909,244
Bourbon Corp. 48,000 433,325
Q'Sai Co. Ltd. 378,000 26,101,514
Rock Field Co. Ltd. 333,000 16,502,090
52,946,173
HOUSEHOLD PRODUCTS - 3.1%
Fancl Corp. 150,000 43,217,289
Mandom Corp. 408,000 12,342,858
55,560,147
TOTAL NONDURABLES 139,438,648
RETAIL & WHOLESALE - 11.0%
APPAREL STORES - 1.7%
Fast Retailing Co. Ltd. 36,000 8,643,458
Kyoto Kimono Yuzen Co. Ltd. 300 2,463,385
(a)
United Arrows Ltd. 77,000 9,835,295
World Co. Ltd. 100,000 10,132,053
31,074,191
GENERAL MERCHANDISE STORES -
1.5%
Ryohin Keikaku Co. Ltd. 135,000 26,008,165
SHARES VALUE (NOTE 1)
GROCERY STORES - 1.0%
C Two-Network Co. Ltd. 70,800 $ 18,018,728
RETAIL & WHOLESALE,
MISCELLANEOUS - 6.8%
Daiichikosho Co. Ltd. 90,000 3,370,949
Don Quijote Co. Ltd. 115,800 28,915,248
Jac Co. Ltd. 53,000 18,578,632
Paris Miki, Inc. 246,000 19,845,379
Shaddy Co. Ltd. 640,000 19,545,739
Yamada Denki Co. Ltd. 426,000 30,397,889
120,653,836
TOTAL RETAIL & WHOLESALE 195,754,920
SERVICES - 7.2%
PRINTING - 0.5%
Riso Kagaku Corp. 203,000 8,773,110
SERVICES - 6.7%
Aucnet, Inc. 228,000 19,510,013
BellSystem24, Inc. 20,000 19,207,684
Kansai Maintenance Corp. 281,000 3,025,220
NIC Corp. 232,000 11,474,670
Nichii Gakkan Co. 161,000 26,285,716
Nippon System Development Co. 194,000 16,581,994
Ltd.
Pasona Softbank, Inc. 300,000 19,591,838
Universal Home, Inc. (a) 97 3,633,133
119,310,268
TOTAL SERVICES 128,083,378
TECHNOLOGY - 23.0%
COMPUTER SERVICES & SOFTWARE
- - 9.0%
Fuji Soft ABC, Inc. 76,000 6,970,469
InterQ, Inc. (a) 60,000 18,439,377
KOEI Co. Ltd. 184,000 7,121,441
Obic Co. Ltd. 91,300 42,964,708
Oracle Corp. Japan 170,000 34,612,247
Square Co. Ltd. 87,000 6,299,928
Tomy Co. Ltd. 125,000 8,295,319
Trend Micro, Inc. 180,000 35,783,915
160,487,404
COMPUTERS & OFFICE EQUIPMENT
- - 1.3%
Argotechnos 21Corp. 103,200 5,163,717
Japan Business Computer Co. 174,000 4,361,489
Ltd.
Melco Inc. 166,800 4,485,378
Softbank Corp. 10,000 4,158,464
Toyo Information System Co. 108,000 5,466,123
Ltd.
23,635,171
ELECTRONIC INSTRUMENTS - 5.2%
Cosel Co. Ltd. 750,000 21,032,414
Nagano Keiki Co. Ltd. 200,200 5,095,126
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS -
CONTINUED
Sony Chemicals Corp. 203,000 $ 18,033,614
Tokyo Seimitsu Co. Ltd. 390,000 47,605,284
91,766,438
ELECTRONICS - 7.4%
Citizen Electronics Co. Ltd. 208,400 20,014,407
Doshisha Co. Ltd. 232,000 6,684,274
Hirose Electric Co. Ltd. 38,000 6,638,368
Koa Denko Co. Ltd. 714,000 12,411,429
Kuroda Electric Co. Ltd. 350,000 20,100,841
Kyocera Corp. 116,000 11,140,457
Nidec Corp. 92,000 17,891,958
Satori Electric Co. Ltd. 160,000 1,859,304
Sumida Electric Co. Ltd. 412,000 19,150,829
Toko, Inc. 677,000 3,348,428
Tokyo Denpa Co. Ltd. (c) 340,000 11,787,756
131,028,051
PHOTOGRAPHIC EQUIPMENT - 0.1%
Daito Chemix Corp. 215,000 2,374,550
TOTAL TECHNOLOGY 409,291,614
TRANSPORTATION - 0.0%
TRUCKING & FREIGHT - 0.0%
Miroku Jyoho Service Co., 21,500 388,394
Ltd.
UTILITIES - 5.9%
CELLULAR - 3.7%
Hikari Tsushin, Inc. 75,000 60,432,172
NTT Mobile Communication 200 5,320,528
Network, Inc. (d)
65,752,700
TELEPHONE SERVICES - 2.2%
DDI Corp. 1,630 17,845,859
Kokusai Denshin Denwa 164,000 20,632,894
38,478,753
TOTAL UTILITIES 104,231,453
TOTAL COMMON STOCKS 1,674,976,004
(Cost $977,502,800)
CASH EQUIVALENTS - 12.1%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 106,876,253 $ 106,876,253
5.26% (b)
Taxable Central Cash Fund, 108,487,630 108,487,630
5.21% (b)
TOTAL CASH EQUIVALENTS 215,363,883
(Cost $215,363,883)
TOTAL INVESTMENT PORTFOLIO - 1,890,339,887
106.2%
(Cost $1,192,866,683)
NET OTHER ASSETS - (6.2)% (110,327,569)
NET ASSETS - 100% $ 1,780,012,318
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
(d) 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 $5,320,528 or
0.3% of
net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,094,772,051 and $244,943,603, 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 $3,523 for the
period.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $98,220,575. The fund
received cash collateral of $106,876,253 which was invested in the
Central Cash Collateral Fund. Cash collateral includes $3,485,750
received for unsettled securities loans.
The fund participated in the interfund lending program as a lender.
The average daily loan balance during the period for which loans were
outstanding amounted to $9,915,000. The weighted average interest rate
was 4.81%. Interest earned from the interfund lending program amounted
to $1,324 and is included in interest income on the Statement of
Operations.
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Tokyo Denpa Co. Ltd. $ 353,977 $ 826,984 $ - $ 11,787,756
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $1,196,068,348. Net unrealized appreciation
aggregated $694,271,539, of which $712,752,240 related to appreciated
investment securities and $18,480,701 related to depreciated
investment securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $21,197,000 of which $5,580,000 and $15,617,000
will expire on October 31, 2005 and 2006, respectively.
JAPAN SMALLER COMPANIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 1,890,339,887
value (cost $1,192,866,683)
- - See accompanying schedule
Foreign currency held at 1,182,865
value (cost $1,182,865)
Receivable for investments 7,610,209
sold
Receivable for fund shares 8,465,949
sold
Dividends receivable 1,556,331
Interest receivable 471,121
Redemption fees receivable 14,160
Other receivables 65,158
TOTAL ASSETS 1,909,705,680
LIABILITIES
Payable for investments $ 17,957,490
purchased
Payable for fund shares 3,156,921
redeemed
Accrued management fee 1,043,047
Other payables and accrued 659,651
expenses
Collateral on securities 106,876,253
loaned, at value
TOTAL LIABILITIES 129,693,362
NET ASSETS $ 1,780,012,318
Net Assets consist of:
Paid in capital $ 1,109,862,199
Accumulated net investment (1,879,427)
loss
Accumulated undistributed net (25,468,603)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 697,498,149
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 86,557,508 $ 1,780,012,318
shares outstanding
NET ASSET VALUE and $20.56
redemption price per share
($1,780,012,318 (divided by)
86,557,508 shares)
Maximum offering price per $21.20
share (100/97.00 of $20.56)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 2,963,373
Dividends
Interest 3,096,784
Security lending 78,711
6,138,868
Less foreign taxes withheld (447,133)
TOTAL INCOME 5,691,735
EXPENSES
Management fee $ 4,833,493
Transfer agent fees 1,270,185
Accounting and security 299,027
lending fees
Non-interested trustees' 1,508
compensation
Custodian fees and expenses 261,486
Registration fees 466,407
Audit 33,680
Legal 981
Miscellaneous 1,796
Total expenses before 7,168,563
reductions
Expense reductions (37,014) 7,131,549
NET INVESTMENT INCOME (LOSS) (1,439,814)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 28,938,974
(including realized loss
of $94,722 on sales of
investments in affiliated
issuers)
Foreign currency transactions (253,283) 28,685,691
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 699,999,370
Assets and liabilities in (5,732) 699,993,638
foreign currencies
NET GAIN (LOSS) 728,679,329
NET INCREASE (DECREASE) IN $ 727,239,515
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 6,014,883
charges paid to FDC
Sales charges - Retained by $ 6,010,566
FDC
Expense Reductions $ 32,417
Directed brokerage
arrangements
Custodian credits 847
Transfer agent credits 3,750
$ 37,014
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ (1,439,814) $ (187,068)
income (loss)
Net realized gain (loss) 28,685,691 (15,537,371)
Change in net unrealized 699,993,638 8,665,467
appreciation (depreciation)
NET INCREASE (DECREASE) IN 727,239,515 (7,058,972)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions in excess of - (141,696)
net investment income
Share transactions Net 1,641,046,368 68,052,610
proceeds from sales of shares
Reinvestment of distributions - 141,028
Cost of shares redeemed (694,218,114) (45,513,438)
NET INCREASE (DECREASE) IN 946,828,254 22,680,200
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 5,957,410 233,658
TOTAL INCREASE (DECREASE) 1,680,025,179 15,713,190
IN NET ASSETS
NET ASSETS
Beginning of period 99,987,139 84,273,949
End of period (including $ 1,780,012,318 $ 99,987,139
accumulated net investment
loss and distributions in
excess of net investment
income of $1,879,427 and
$753,057, respectively)
OTHER INFORMATION
Shares
Sold 112,923,444 11,458,260
Issued in reinvestment of - 25,139
distributions
Redeemed (43,003,282) (7,861,499)
Net increase (decrease) 69,920,162 3,621,900
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 D
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 6.01 $ 6.47 $ 9.13 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) C (.03) (.01) (.03) (.03)
Net realized and unrealized 14.45 (.45) (2.63) (.87)
gain (loss)
Total from investment 14.42 (.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 .13 .01 .04 .03
in capital
Net asset value, end of period $ 20.56 $ 6.01 $ 6.47 $ 9.13
TOTAL RETURN A, B 242.10% (6.94)% (28.80)% (8.70)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,780,012 $ 99,987 $ 84,274 $ 105,664
(000 omitted)
Ratio of expenses to average 1.07% 1.23% 1.35% 1.34%
net assets
Ratio of expenses to average 1.07% 1.23% 1.34% E 1.34%
net assets after expense
reductions
Ratio of net investment (.22)% (.20)% (.46)% (.32)%
income (loss) to average net
assets
Portfolio turnover rate 39% 39% 101% 66%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
D FOR THE PERIOD NOVEMBER 1,
1995 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31,
1996.
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.
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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LATIN AMERICA 17.46% -18.95% 32.26%
FIDELITY LATIN AMERICA 13.93% -21.38% 28.29%
(INCL. 3.00% SALES CHARGE)
MSCI EMF - Latin America 21.17% -8.33% 66.11%
Latin American Funds Average 16.19% -19.48% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on 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 160 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 one year 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 OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LATIN AMERICA 17.46% -4.12% 4.37%
FIDELITY LATIN AMERICA 13.93% -4.70% 3.89%
(INCL. 3.00% SALES CHARGE)
MSCI EMF - Latin America 21.17% -1.72% 8.07%
Latin American Funds Average 16.19% -4.58% 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
1999/05/31 13204.60 17042.55
1999/06/30 14069.63 17854.23
1999/07/31 12600.13 16480.24
1999/08/31 12235.36 15983.64
1999/09/30 12339.58 16244.78
1999/10/29 12829.41 16611.05
IMATRL PRASUN SHR__CHT 19991031 19991111 112252 R00000000000082
$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 October 31, 1999, the value of the investment would
have grown to $12,829 - a 28.29% 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 $16,611 - a 66.11% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
LATIN AMERICA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Patti Satterthwaite, Portfolio Manager of Fidelity Latin America Fund
Q. HOW DID THE FUND PERFORM, PATTI?
A. Despite a sell-off during the last four months of the period, it
was a good year for the Latin American equity markets. During the
12-month period that ended October 31, 1999, the fund returned 17.46%.
In comparison, the Morgan Stanley Capital International Emerging
Markets Free-Latin America Index returned 21.17%. To get a sense of
how the fund performed relative to its peers, the Latin American funds
average, tracked by Lipper Inc., returned 16.19% during the same
period.
Q. WHAT FACTORS CAUSED THE FUND TO UNDERPERFORM THE INDEX, YET OUTPACE
THE LIPPER PEER GROUP DURING THE PERIOD?
A. The fund's cash position was the primary detractor from relative
performance. Since most Latin American markets posted strong gains
during the period, the cash the fund held - which it normally does to
meet redemption requirements and to take advantage of buying
opportunities - hurt performance versus the index, which, by
construction, does not hold cash. While it's impossible to say with
certainty how much cash my competitors held during the period, cash
levels are generally similar or higher among these funds; consequently
the fund was able to slightly outperform its peer group. Another
detractor relative to the index was the fund's overweighted position
in Mexico. While Mexico was among the region's strongest performers
during the first half of the period, it led the decline in Latin
America over the past four months, due to concerns about interest
rates, fears of a potentially weaker peso and increased volatility in
the U.S. market.
Q. WERE THERE ANY OTHER FACTORS THAT CAUSED THE MARKET'S DECLINE
DURING THE PAST SIX MONTHS?
A. Not really. The sell-off didn't seem to be driven by any
fundamental changes or problems with the economies or markets. In
addition to investors' perceived problems regarding the peso and
interest rates, the real factors seemed to be nervousness about stock
valuations and profit-taking after a stunning recovery in Latin
America from the fourth quarter of 1998 through the second quarter of
1999.
Q. MEXICO AND BRAZIL COMBINED REPRESENTED ROUGHLY 80% OF THE FUND'S
NET ASSETS AT THE END OF THE PERIOD. HOW DID THE FUND'S HOLDINGS IN
THESE COUNTRIES PERFORM?
A. While I recently reduced the fund's exposure to Mexican banks
because I felt their valuations were getting a bit extended, in
general these holdings produced strong results for the fund. During
the first half of the period, the improved economic environment in
Mexico - characterized by declining interest rates, lower inflation
and a strong peso - helped bank stocks such as Grupo Financiero
Bancomer and Banacci. Other Mexican holdings that provided an
important contribution were Telefonos de Mexico (Telmex) and Grupo
Televisa. Telmex, the fund's largest holding, continued to be one of
our best performers. Its shares rallied strongly on the impressive
growth in demand for wireless, voice and Internet services, which
drove its earnings higher. With the exception of Votorantim Celulose,
a Brazilian pulp producer, and Companhia Vale do Rio Doce, a metals
and mining company - both of which benefited from lower production
costs - the fund's holdings in Brazil and other regions outside Mexico
produced mixed results.
Q. WHICH STOCKS WERE THE PRIMARY DETRACTORS?
A. I can't think of any individual holdings that stand out as
significant detractors. Underperformance relative to the index was
more a matter of being underweighted or overweighted relative to the
index in certain countries and, as I mentioned earlier, the fund's
cash position. Early in the period, the fund's exposure to Brazilian
stocks detracted from absolute returns following the country's
currency crisis in September of 1998. However, the fund's
underweighting in Brazilian stocks versus the index helped relative
performance. A similar example was the fund's underweighted exposure
to Argentina, which hurt performance during the past six months, but
was a contributor during the overall 12-month period.
Q. WHAT'S YOUR OUTLOOK, PATTI?
A. Latin American markets could continue to be volatile over the short
term. Macroeconomic factors - such as fears of higher interest rates
in the U.S. and, despite no indication of higher inflation in Mexico,
fears of a weaker peso - may have an impact on the short-term
direction of the market. Once we get past these short-term hurdles, I
remain optimistic about the outlook for many Latin American markets.
We are seeing improvements in the business fundamentals at many
companies, and my research team and I are finding a lot of interesting
investment opportunities despite the run-up in stock prices over the
past year or so.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
NOTE TO SHAREHOLDERS: On December 15, 1999, shareholders of Fidelity
Latin America Fund voted to amend the fund's investment policies to
permit the fund to invest up to 35% of its total assets in any
industry that represents more than 20% of the Latin American market.
As of October 31, 1999, telephone companies accounted for
approximately 27% of the Latin American market as represented by the
Morgan Stanley Capital International (MSCI) Emerging Markets
Free-Latin America Index.
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 October 31, 1999, more than
$307 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
(checkmark)
LATIN AMERICA
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 4.0%
Argentina 5.0%
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 30.9
Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 1.3
Row: 1, Col: 5, Value: 49.4
Row: 1, Col: 6, Value: 1.7
Row: 1, Col: 7, Value: 4.0
Row: 1, Col: 8, Value: 4.0
Row: 1, Col: 9, Value: 0.0
Peru 4.0%
Other 1.7%
Brazil 30.9%
Mexico 49.4%
Chile 3.7%
Luxembourg 1.3%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30,1999
United States 9.6%
Argentina 11.6%
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 24.3
Row: 1, Col: 3, Value: 2.7
Row: 1, Col: 4, Value: 45.9
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: 9.6
Row: 1, Col: 9, Value: 0.0
Peru 2.0%
Panama 1.5%
Other 2.4%
Brazil 24.3%
Mexico 45.9%
Chile 2.7%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 96.0 90.4
Short-Term Investments and 4.0 9.6
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Telefonos de Mexico SA 14.9 12.4
sponsored ADR
representing Class L shares
(Mexico, Telephone Services)
Cifra SA de CV Series C 4.8 4.8
(Mexico, General Merchandise
Stores)
Tele Norte Leste 4.6 2.9
Participacoes SA ADR
(Brazil, Telephone Services)
Brahma Cervejaria (Compagnie) 4.2 0.0
sponsored ADR (Brazil,
Beverages)
Grupo Televisa SA de CV 4.0 4.9
sponsored ADR (Mexico,
Broadcasting)
Grupo Modelo SA de CV Class C 4.0 4.0
(Mexico, Beverages)
Banacci SA de CV Class O 3.7 3.4
(Mexico, Banks)
Cemex SA de CV sponsored ADR 3.3 0.0
(Mexico, Building Materials)
Companhia Vale do Rio Doce 3.2 1.0
(PN-A) (Brazil, Metals &
Mining)
Grupo Carso SA de CV Series 2.9 2.8
A1 (Mexico, Tobacco)
49.6 36.2
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
UTILITIES 31.7 31.7
NONDURABLES 19.8 19.7
BASIC INDUSTRIES 10.9 5.2
FINANCE 8.7 8.6
RETAIL & WHOLESALE 7.8 6.2
CONSTRUCTION & REAL ESTATE 5.5 2.2
MEDIA & LEISURE 4.3 4.9
ENERGY 3.7 8.3
PRECIOUS METALS 2.7 2.0
HOLDING COMPANIES 0.6 1.3
</TABLE>
LATIN AMERICA
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 96.0%
SHARES VALUE (NOTE 1)
ARGENTINA - 5.0%
Banco de Galicia y Buenos 38,695 $ 817,432
Aires SA ADR Class B
Bansud SA Class B (a) 617,519 1,519,796
Cresud S.A.C.I.F.y A. 111,582 1,143,716
sponsored ADR
Inversiones y Representacions 44,580 1,345,759
SA sponsored GDR
Perez Companc SA Class B 1,412,336 8,506,176
Telefonica de Argentina SA 83,300 2,134,563
sponsored ADR
15,467,442
BRAZIL - 30.9%
Aracruz Celulose SA ADR 173,900 3,564,950
Banco Bradesco SA (Reg. Pfd.) 421,424,000 2,066,016
Banco Itau SA 70,610,000 4,059,713
Brahma Cervejaria(Compagnie):
warrants 4/30/03 (a) 1,895,770 194,638
(Reg.) 117,827 50,808
sponsored ADR 1,041,326 13,016,575
Centrais Electricas 320,445,100 5,708,134
Brasileiras SA
Companhia Brasileira de 113,700 2,487,188
Distribuicao Grupo Pao de
Acucar sponsored ADR
Companhia Brasileira de 321,249,000 2,613,859
Petroleo Ipiranga SA Class B
Companhia de Electricidade do 2,008,714,550 412,467
Estado do Rio de Janeiro
(CERJ) (a)
Companhia de Tecidos Norte de 10,053,310 712,195
Minas
Companhia Vale do Rio Doce 496,000 9,876,715
(PN-A)
Compania Cimento Portland Itau 6,044,000 597,264
Compania Energertica Minas 213,729,329 3,050,141
Gerais
Dixie Toga SA 1,904,400 342,166
Embratel Participacoes SA ADR 436,165 5,615,624
Encorpar Redito e Participa 11,465,310 8,887
SA (a)
Perdigao SA 1,202,539,630 1,666,764
Souza Cruz Industria Comerico 530,500 3,131,802
Tele Centro Sul Participacoes 135,868 8,118,113
SA sponsored ADR
Tele Norte Leste 838,065 14,142,347
Participacoes SA ADR
Telesp Participacoes SA ADR 428,140 6,930,516
(a)
Votorantim Celulose e Papel 225,286,499 6,592,059
SA (PN Reg.)
94,958,941
CHILE - 3.7%
Chilectra SA sponsored ADR 37,500 651,563
Compania Cervecerias Unidas 4,000 87,250
SA sponsored ADR
Cristalerias de Chile SA 124,700 1,589,925
sponsored ADR
Distribucion Y Servicio D&S 204,600 3,337,538
SA ADR
Embotelladora Andina 243,900 3,963,375
sponsored ADR Class A
SHARES VALUE (NOTE 1)
Enersis SA sponsored ADR 42,278 $ 951,255
Vina Concha Stet y Toro SA 27,600 952,200
sponsored ADR
11,533,106
COLOMBIA - 0.9%
Banco Ganadero SA sponsored 79,800 513,713
ADR Class C
Compania Nacional de 136,000 408,708
Chocolates
Noel (Industria Alimenticias) 97,207 157,041
Suramericana de Inversiones SA 1,761,400 1,814,817
2,894,279
LUXEMBOURG - 1.3%
Quilmes Industrial SA 371,600 3,878,575
sponsored ADR
MEXICO - 49.4%
Alfa SA de CV 1,241,000 4,775,314
Apasco SA de CV 925,000 4,912,783
Banacci SA de CV Class O (a) 4,577,000 11,487,186
Cemex SA de CV sponsored ADR 444,400 9,999,000
(a)
Cifra SA de CV Series C (a) 9,553,200 14,783,708
Coca Cola Femsa SA de CV ADR 277,300 3,847,538
Corporacion Interamericana de 323,000 874,564
Entretenimiento SA de CV
(Series A1) (a)
Gruma SA de CV Class B 360,953 1,849,884
sponsored ADR (a)
Grupo Bimbo SA de CV Series A 1,702,070 3,123,194
Grupo Carso SA de CV Series 2,153,100 9,058,603
A1 (a)
Grupo Elektra SA de CV Unit 6,957,300 3,325,593
Grupo Financiero Bancomer SA 24,136,700 6,359,370
de CV Series A
Grupo Modelo SA de CV Class C 5,007,200 12,227,945
Grupo Televisa SA de CV 290,600 12,350,500
sponsored ADR (a)
Kimberly-Clark de Mexico SA 1,739,000 5,577,839
de CV Series A
Telefonos de Mexico SA 537,100 45,922,045
sponsored ADR representing
Class L shares
Tubos de Acero de Mexico SA 110,300 1,206,406
sponsored ADR
151,681,472
PANAMA - 0.8%
Panamerican Beverages, Inc. 153,800 2,470,413
Class A
PERU - 4.0%
Compania de Minas
Buenaventura SA:
Class B 232,618 1,910,648
sponsored ADR Class B 367,200 6,242,400
Telefonica del Peru SA ADR 352,300 4,073,469
12,226,517
TOTAL COMMON STOCKS 295,110,745
(Cost $295,141,676)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NONCONVERTIBLE BONDS - 0.0%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT VALUE (NOTE 1)
BRAZIL - 0.0%
Companhia Vale do Rio Doce 0% - BRL 290,000 $ 0
11/19/00 (Cost $0)
</TABLE>
CASH EQUIVALENTS - 16.1%
SHARES
Central Cash Collateral Fund, 38,376,500 38,376,500
5.26% (b)
Taxable Central Cash Fund, 11,154,035 11,154,035
5.21% (b)
TOTAL CASH EQUIVALENTS 49,530,535
(Cost $49,530,535)
TOTAL INVESTMENT PORTFOLIO - 344,641,280
112.1%
(Cost $344,672,211)
NET OTHER ASSETS - (12.1)% (37,304,845)
NET ASSETS - 100% $ 307,336,435
CURRENCY ABBREVIATIONS
BRL - Brazilian real
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $147,581,971 and $185,968,417, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $37,714,181. The fund
received cash collateral of $38,376,500 which was invested in the
Central Cash Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $345,357,892. Net unrealized depreciation
aggregated $716,612, of which $61,441,807 related to appreciated
investment securities and $62,158,419 related to depreciated
investment securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $97,171,000 of which $36,899,000, $37,615,000 and
$22,657,000 will expire on October 31, 2003 and 2004 and 2007
respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 10.9%
CASH EQUIVALENTS 16.1
CONSTRUCTION & REAL ESTATE 5.5
DURABLES 0.2
ENERGY 3.7
FINANCE 8.7
HOLDING COMPANIES 0.6
MEDIA & LEISURE 4.3
NONDURABLES 19.8
PRECIOUS METALS 2.7
RETAIL & WHOLESALE 7.8
SERVICES 0.1
UTILITIES 31.7
LATIN AMERICA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 344,641,280
value (cost $344,672,211) -
See accompanying schedule
Foreign currency held at 8,410
value (cost $8,410)
Receivable for investments 1,756,120
sold
Receivable for fund shares 523,130
sold
Dividends receivable 1,171,174
Interest receivable 34,398
Redemption fees receivable 44
Other receivables 15,370
TOTAL ASSETS 348,149,926
LIABILITIES
Payable to custodian bank $ 784,848
Payable for investments 553,929
purchased
Payable for fund shares 752,450
redeemed
Accrued management fee 178,256
Other payables and accrued 167,508
expenses
Collateral on securities 38,376,500
loaned, at value
TOTAL LIABILITIES 40,813,491
NET ASSETS $ 307,336,435
Net Assets consist of:
Paid in capital $ 402,767,540
Undistributed net investment 2,896,477
income
Accumulated undistributed net (98,029,008)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation (298,574)
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 24,971,152 $ 307,336,435
shares outstanding
NET ASSET VALUE and $12.31
redemption price per share
($307,336,435 (divided by)
24,971,152 shares)
Maximum offering price per $12.69
share (100/97.00 of $12.31)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 9,079,945
Dividends
Interest 1,032,235
Security lending 16,595
10,128,775
Less foreign taxes withheld (736,622)
TOTAL INCOME 9,392,153
EXPENSES
Management fee $ 2,413,253
Transfer agent fees 1,256,813
Accounting and security 194,144
lending fees
Custodian fees and expenses 269,982
Registration fees 37,851
Audit 68,859
Legal 1,433
Foreign tax expense 68,346
Miscellaneous 26,151
Total expenses before 4,336,832
reductions
Expense reductions (43,962) 4,292,870
NET INVESTMENT INCOME 5,099,283
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (22,577,026)
Foreign currency transactions (1,232,873) (23,809,899)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 59,626,000
Assets and liabilities in (174,834) 59,451,166
foreign currencies
NET GAIN (LOSS) 35,641,267
NET INCREASE (DECREASE) IN $ 40,740,550
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 343,731
Sales charges paid to FDC
Sales charges - Retained by $ 343,725
FDC
Expense reductions Directed $ 42,134
brokerage arrangements
Transfer agent credits 1,828
$ 43,962
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 5,099,283 $ 8,857,496
income
Net realized gain (loss) (23,809,899) 45,290,179
Change in net unrealized 59,451,166 (200,090,681)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 40,740,550 (145,943,006)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (7,666,729) (10,041,240)
from net investment income
Share transactions Net 152,034,795 115,794,938
proceeds from sales of shares
Reinvestment of distributions 7,377,095 9,873,405
Cost of shares redeemed (218,494,512) (446,516,807)
NET INCREASE (DECREASE) IN (59,082,622) (320,848,464)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 1,105,692 530,116
TOTAL INCREASE (DECREASE) (24,903,109) (476,302,594)
IN NET ASSETS
NET ASSETS
Beginning of period 332,239,544 808,542,138
End of period (including $ 307,336,435 $ 332,239,544
undistributed net investment
income of $2,896,477 and
$6,696,796, respectively)
OTHER INFORMATION
Shares
Sold 12,312,091 8,079,774
Issued in reinvestment of 701,738 578,067
distributions
Redeemed (19,009,646) (29,806,543)
Net increase (decrease) (5,995,817) (21,148,702)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.73 $ 15.51 $ 12.59 $ 9.75 $ 16.21
period
Income from Investment
Operations
Net investment income .18 C .22 C, D .20 C .22 .04
Net realized and unrealized 1.61 (4.81) 2.92 2.72 (6.52)
gain (loss)
Total from investment 1.79 (4.59) 3.12 2.94 (6.48)
operations
Less distributions from net (.25) (.20) (.23) (.12) -
investment income
Redemption fees added to paid .04 .01 .03 .02 .02
in capital
Net asset value, end of period $ 12.31 $ 10.73 $ 15.51 $ 12.59 $ 9.75
TOTAL RETURN A, B 17.46% (30.01)% 25.42% 30.69% (39.85)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 307,336 $ 332,240 $ 808,542 $ 557,889 $ 466,289
(000 omitted)
Ratio of expenses to average 1.32% 1.34% 1.30% 1.32% 1.41%
net assets
Ratio of expenses to average 1.30% E 1.33% E 1.29% E 1.32% 1.41%
net assets after expense
reductions
Ratio of net investment 1.55% 1.49% 1.19% 1.48% .97%
income to average net assets
Portfolio turnover rate 49% 31% 64% 70% 57%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.06 PER
SHARE.
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>
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 OCTOBER 31, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY NORDIC 38.31% 147.47%
FIDELITY NORDIC (INCL. 34.17% 140.04%
3.00% SALES CHARGE)
FT-Actuaries World Nordic 48.91% 149.29%
European Region Funds Average 10.72% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year or since the fund
started on 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
one year average represents a peer group of 138 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, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY NORDIC 38.31% 25.42%
FIDELITY NORDIC (INCL. 34.17% 24.47%
3.00% SALES CHARGE)
FT-Actuaries World Nordic 48.91% 25.65%
European Region Funds Average 10.72% 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
1999/05/31 20044.38 19512.81
1999/06/30 22115.00 21352.86
1999/07/31 22296.44 22089.18
1999/08/31 22360.48 22024.51
1999/09/30 22552.60 22346.33
1999/10/29 24004.16 24928.86
IMATRL PRASUN SHR__CHT 19991031 19991111 112315 R00000000000051
$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 October 31, 1999, the value of the investment would have
grown to $24,004 - a 140.04% 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 $24,929 -
a 149.29% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
NORDIC
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Trygve Toraasen, Portfolio Manager of Fidelity
Nordic Fund
Q. HOW DID THE FUND PERFORM, TRYGVE?
A. For the 12 months that ended October 31, 1999, the fund posted a
total return of 38.31%, compared to 48.91% for the FT/S&P-Actuaries
World Nordic Index and 10.72% for the European region funds average
tracked by Lipper Inc.
Q. WHAT FACTORS SHAPED PERFORMANCE DURING THE PERIOD?
A. Nordic markets led the charge in Europe during the period, strongly
outpacing the returns found in much of the rest of the Continent. Most
of the fund's superior returns relative to its Lipper peers came by
way of some strong stock picks in its region. Although representing
about one-quarter combined of the portfolio throughout the period, the
fund's positions in leading wireless names Nokia and Ericsson were
still underweighted relative to the telecommunications-heavy Nordic
index, which impeded performance to a degree. In addition, the fund
was underweighted in cyclicals - or, economically sensitive stocks -
which make up a sizable proportion of the index. This sector rallied
in the first-half of the period, and our underweighting of them
hampered returns.
Q. WHAT WAS THE INVESTMENT CLIMATE LIKE DURING THE PERIOD?
A. The story over the past 12 months was one of recovery, as Nordic
economies - major exporters to the world - ignited, rallying on a
markedly improved global economic picture. Norway, for instance,
reaped the rewards provided by rebounding oil prices, falling interest
rates and stronger growth in key trading partner Germany. The story in
Sweden was strong, thanks in part to the success of homegrown
Ericsson. In Finland, front-runner Nokia set the pace, pushing the
local market higher. Finally, Denmark rebounded from a mild recession
earlier in the period, benefiting from strengthening exports to
Swedish and German markets.
Q. COULD YOU DISCUSS SOME OF THE STRATEGIES YOU EMPLOYED OVER THE PAST
12 MONTHS?
A. Sure. I reduced the fund's exposure to the finance sector - keeping
only those stocks with the strongest internal fundamentals - in
response to rising interest rates in all markets except Norway. In a
rising rate environment, I felt it unlikely that I could find strong
performance among banks. Also, I added to some of the machinery and
engineering names, such as Danish windmill manufacturer Vestas Wind
Systems, which was a big win for the fund. Overall, I pursued the best
companies with the strongest long-term growth prospects regardless of
the industry in which they resided. Also notable given the fund's
growth orientation, I chose not to chase cyclicals amid their rise in
the first half of the period. With the exception of paper stocks,
which benefited from improved capacity discipline among the producers
and a more favorable demand situation, I simply didn't believe in the
overall sustainability of the cyclical wave.
Q. WHICH STOCKS CONTRIBUTED TO PERFORMANCE?
A. Not surprisingly, Nokia, arguably the strongest-performing stock in
Europe over the past two years or so, soared during the period, nearly
tripling in price. The company benefited from robust earnings related
to worldwide handset sales. By successfully reducing the product life
cycle, Nokia made it even more difficult for competitors to play on
the same field. Ericsson, another high-altitude performer, got its
lift from rising expectations for a recovery in margin growth on the
handset side following recent problems, as well as from a strong
cellular infrastructure business. Another positive contributor was
Swedish insurance provider, Skandia Foersaekrings, which enjoyed a
successful period in its life insurance and variable annuity
businesses in the U.S. Hennes & Mauritz, a Swedish apparel retailer,
also added appreciably to fund performance.
Q. WHICH STOCKS DETRACTED?
A. Danish brewer Carlsberg suffered from lost volume in its home
market, as higher taxes in Denmark sent consumers in search of a
substitute, that being German beer. The stock fell further in response
to management's failed cost-cutting initiatives. Swedish banking giant
ForeningsSparbanken fell on unrealized cost efficiencies related to
merger activities. Danish financial conglomerate Den Danske Bank Group
also was a drag on fund performance and was sold off during the
period.
Q. WHAT'S YOUR OUTLOOK?
A. Things look pretty positive overall for the Nordic markets for the
next six to 12 months. On the whole, the outlook for inflation across
the region is benign. Short-term, I intend to stay the course,
maintaining my strong bias toward growth and positive earnings
stories. This strategy should bode well for the fund, as I expect
stronger profit growth from Scandinavian firms that are likely to
respond effectively to economic expansion in Germany and elsewhere in
the world.
NOTE TO SHAREHOLDERS: On December 15, 1999, shareholders of Fidelity
Nordic Fund voted to amend the fund's investment policies to permit
the fund to invest up to 35% of its total assets in any industry that
represents more than 20% of the Nordic market. As of October 31, 1999,
communications companies accounted for approximately 43% of the Nordic
market as represented by the FT/S&P-Actuaries World Nordic Index.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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 October 31, 1999, more than
$111 million
MANAGER: Trygve Toraasen, since 1998;
associate portfolio manager, Fidelity Nordic
Fund, 1997-1998; research analyst,
1994-1998; joined Fidelity in 1994
(checkmark)
NORDIC
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
Denmark 10.5%
United States 11.7%
Row: 1, Col: 1, Value: 10.5
Row: 1, Col: 2, Value: 22.4
Row: 1, Col: 3, Value: 7.9
Row: 1, Col: 4, Value: 47.5
Row: 1, Col: 5, Value: 11.7
Finland 22.4%
Sweden 47.5%
Norway 7.9%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
Denmark 11.2%
United States 8.1%
Row: 1, Col: 1, Value: 11.2
Row: 1, Col: 2, Value: 24.0
Row: 1, Col: 3, Value: 8.300000000000001
Row: 1, Col: 4, Value: 48.4
Row: 1, Col: 5, Value: 8.1
Finland 24.0%
Sweden 48.4%
Norway 8.3%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 89.6 93.5
Short-Term Investments and 10.4 6.5
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nokia AB (Finland, 13.1 12.4
Communications Equipment)
Ericsson (L.M.) Telefon AB 12.7 11.6
Class B (Sweden, Electrical
Equipment)
Skandia Foersaekrings AB 4.9 3.9
(Sweden, Insurance)
Hennes & Mauritz AB Class B 4.3 3.8
(Sweden, Apparel Stores)
ABB Ltd. (Sweden, Electrical 3.6 0.0
Equipment)
Norsk Hydro AS (Norway, Oil 2.7 2.2
& Gas)
Svenska Handelsbanken AB (A 2.6 2.6
shares) (Sweden, Banks)
Investor AB Class B Free 2.5 2.3
shares (Sweden, Credit &
Other Finance)
Tele Danmark AS Class B 2.4 2.5
(Denmark, Telephone Services)
Volvo AB Class B (Sweden, 2.2 2.6
Autos, Tires, & Accessories)
51.0 43.9
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
INDUSTRIAL MACHINERY & 20.0 13.4
EQUIPMENT
FINANCE 16.3 19.7
TECHNOLOGY 14.6 15.0
BASIC INDUSTRIES 6.3 6.8
UTILITIES 5.8 5.1
RETAIL & WHOLESALE 4.3 4.1
MEDIA & LEISURE 4.0 4.0
SERVICES 3.9 5.5
DURABLES 3.8 5.8
HEALTH 3.6 3.1
</TABLE>
NORDIC
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 89.6%
SHARES VALUE (NOTE 1)
DENMARK - 10.5%
Carlsberg AS Class B 14,620 $ 566,257
Coloplast AS Class B 5,000 493,013
Falck AS 16,360 1,508,690
GN Store Nordic AS 37,680 1,288,342
International Service Systems 9,200 494,687
AS Class B (a)
Novo-Nordisk AS Class B 9,989 1,201,769
Sondagsavisen AS (Reg.) 8,870 490,785
Sydbank AS 21,730 971,122
Tele Danmark AS Class B 43,800 2,665,844
Vestas Wind Systems AS (a) 15,300 2,007,874
11,688,383
FINLAND - 22.4%
America Group Ltd. Class A 56,800 1,084,522
Eimo Oyj (a) 23,600 479,241
Hackman OY AB Class A 1,000 15,032
Helsinki Telephone Corp. 9,800 466,762
Class E
KCI (Konecranes International) 6,390 165,150
Merita Ltd. Series A 91,900 534,169
Metra OY Series B 8,600 163,299
Nokia AB 126,200 14,583,985
Okobank Class A 23,180 216,405
Pohjola Group Insurance Corp. 18,781 1,010,416
Class B
Sampo Insurance Co. Ltd. 11,210 390,239
Sonera Group PLC 62,300 1,876,314
Stora Enso Oyj 147,170 1,940,620
UPM-Kymmene Corp. 64,110 2,028,889
24,955,043
NORWAY - 7.9%
Bergesen d.y. AS Class A 7,600 122,867
Den Norske Bank ASA Class A 400,300 1,555,209
Free shares
Kvaerner ASA (a) 42,700 807,642
Kvaerner ASA (B shares) (a) 35,300 536,848
NCL Holdings AS (a) 875,517 2,226,626
NetCom ASA (a) 9,100 319,819
Norsk Hydro AS 73,200 2,928,094
Norske Skogindustrier AS 6,300 245,567
Class A
8,742,672
SWEDEN - 47.5%
ABB Ltd. (a) 40,219 4,017,118
Assa Abloy AB Class B 51,400 573,566
Atlas Copco AB Series B 31,400 819,488
Avesta Sheffield AB (a) 58,000 275,155
Connecta AB (a) 14,600 213,665
Electrolux AB 90,200 1,804,055
Ericsson (L.M.) Telefon AB 331,100 14,154,525
Class B
Europolitan Holdings AB 96,800 1,115,595
SHARES VALUE (NOTE 1)
Forenings Sparbanken AB 115,575 $ 1,846,437
Series A
Gambro AB Series B 42,100 438,983
Hennes & Mauritz AB Class B 180,900 4,820,470
Investor AB Class B Free 217,200 2,794,549
shares
Modern Times Group AB Series 32,000 1,038,080
B (a)
Munksjo AB 29,000 224,580
Munters AB 50,850 601,537
Munters AB (c) 8,300 98,186
NCC AB Series B 25,500 261,227
Nobel Biocare AB 34,920 485,488
OM Gruppen AB 23,600 305,082
Readsoft AB (B shares) (a) 31,100 326,181
Sandvik AB Series B 10,300 267,557
Scandic Hotels AB 76,980 722,883
Securitas AB Class B 107,400 1,597,951
Skandia Foersaekrings AB 242,200 5,405,360
Skanska AB Class B 17,800 653,410
SKF AB 40,000 814,659
SSAB Swedish Steel Series A 44,100 543,200
Svenska Cellulosa AB (SCA) 48,900 1,323,918
Class B
Svenska Handelsbanken AB (A 209,196 2,908,423
shares)
Volvo AB Class B 95,418 2,472,798
52,924,126
UNITED STATES OF AMERICA - 1.3%
Pharmacia & Upjohn, Inc. unit 27,400 1,485,326
TOTAL COMMON STOCKS 99,795,550
(Cost $66,184,188)
CASH EQUIVALENTS - 9.7%
Central Cash Collateral Fund, 1,813,105 1,813,105
5.26% (b)
Taxable Central Cash Fund, 8,998,362 8,998,362
5.21% (b)
TOTAL CASH EQUIVALENTS 10,811,467
(Cost $10,811,467)
TOTAL INVESTMENT PORTFOLIO - 110,607,017
99.3%
(Cost $76,995,655)
NET OTHER ASSETS - 0.7% 780,598
NET ASSETS - 100% $ 111,387,615
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $98,186 or 0.1%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $70,697,418 and $102,294,354, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $1,673,005. The fund
received cash collateral of $1,813,105 which was invested in the
Central Cash Collateral Fund.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $1,469,818. The weighted average interest rate was 5.16%.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $77,698,085. Net unrealized appreciation
aggregated $32,908,932, of which $35,145,669 related to appreciated
investment securities and $2,236,737 related to depreciated investment
securities.
The fund hereby designates approximately $234,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
AEROSPACE & DEFENSE 0.1%
BASIC INDUSTRIES 6.3
CASH EQUIVALENTS 9.7
CONSTRUCTION & REAL ESTATE 2.6
DURABLES 3.8
ENERGY 2.7
FINANCE 16.3
HEALTH 3.6
HOLDING COMPANIES 1.0
INDUSTRIAL MACHINERY & 20.0
EQUIPMENT
MEDIA & LEISURE 4.0
NONDURABLES 0.5
RETAIL & WHOLESALE 4.3
SERVICES 3.9
TECHNOLOGY 14.6
TRANSPORTATION 0.1
UTILITIES 5.8
NORDIC
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 110,607,017
value (cost $76,995,655) -
See accompanying schedule
Foreign currency held at 22,241
value (cost $22,258)
Receivable for investments 893,507
sold
Receivable for fund shares 1,874,232
sold
Dividends receivable 8,908
Interest receivable 40,628
Redemption fees receivable 69
Other receivables 1,923
TOTAL ASSETS 113,448,525
LIABILITIES
Payable for investments $ 60,422
purchased
Payable for fund shares 49,374
redeemed
Accrued management fee 62,582
Other payables and accrued 75,427
expenses
Collateral on securities 1,813,105
loaned, at value
TOTAL LIABILITIES 2,060,910
NET ASSETS $ 111,387,615
Net Assets consist of:
Paid in capital $ 75,440,141
Undistributed net investment 367,863
income
Accumulated undistributed net 1,972,264
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 33,607,347
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 4,952,374 $ 111,387,615
shares outstanding
NET ASSET VALUE and $22.49
redemption price per share
($111,387,615 (divided by)
4,952,374 shares)
Maximum offering price per $23.19
share (100/97.00 of $22.49)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 1,759,359
Dividends
Interest 164,031
Security lending 3,854
1,927,244
Less foreign taxes withheld (255,621)
TOTAL INCOME 1,671,623
EXPENSES
Management fee $ 769,457
Transfer agent fees 329,410
Accounting and security 64,666
lending fees
Non-interested trustees' 323
compensation
Custodian fees and expenses 95,683
Registration fees 28,691
Audit 33,509
Legal 450
Interest 6,969
Miscellaneous 6,586
Total expenses before 1,335,744
reductions
Expense reductions (50,484) 1,285,260
NET INVESTMENT INCOME 386,363
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 11,024,662
Foreign currency transactions (18,591) 11,006,071
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 21,508,516
Assets and liabilities in (1,381) 21,507,135
foreign currencies
NET GAIN (LOSS) 32,513,206
NET INCREASE (DECREASE) IN $ 32,899,569
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 123,563
charges paid to FDC
Sales charges - Retained by $ 123,293
FDC
Expense Reductions $ 49,810
Directed brokerage
arrangements
Transfer agent credits 674
$ 50,484
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 386,363 $ 204,042
income
Net realized gain (loss) 11,006,071 (9,029,156)
Change in net unrealized 21,507,135 4,055,394
appreciation (depreciation)
NET INCREASE (DECREASE) IN 32,899,569 (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 41,593,918 137,620,320
proceeds from sales of shares
Reinvestment of distributions - 5,325,815
Cost of shares redeemed (65,061,644) (104,656,126)
NET INCREASE (DECREASE) IN (23,467,726) 38,290,009
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 97,415 471,151
TOTAL INCREASE (DECREASE) 9,529,258 28,580,617
IN NET ASSETS
NET ASSETS
Beginning of period 101,858,357 73,277,740
End of period (including $ 111,387,615 $ 101,858,357
undistributed net investment
income of $367,863 and
$178,966, respectively)
OTHER INFORMATION
Shares
Sold 2,122,892 7,537,796
Issued in reinvestment of - 375,060
distributions
Redeemed (3,436,188) (6,243,438)
Net increase (decrease) (1,313,296) 1,669,418
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.26 $ 15.94 $ 12.77 $ 10.00
period
Income from Investment
Operations
Net investment income C .07 .03 .10 .17 D
Net realized and unrealized 6.14 1.46 H 3.19 2.57
gain (loss)
Total from investment 6.21 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 .02 .08 .03 .03
in capital
Net asset value, end of period $ 22.49 $ 16.26 $ 15.94 $ 12.77
TOTAL RETURN A, B 38.31% 10.99% 26.24% 27.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 111,388 $ 101,858 $ 73,278 $ 30,871
(000 omitted)
Ratio of expenses to average 1.27% 1.35% 1.42% 2.00% F
net assets
Ratio of expenses to average 1.23% G 1.35% 1.42% 2.00%
net assets after expense
reductions
Ratio of net investment .37% .20% .67% 1.52%
income to average net assets
Portfolio turnover rate 70% 69% 74% 35%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.16 PER
SHARE.
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.
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.
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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PACIFIC BASIN 89.36% 30.61% 80.03%
FIDELITY PACIFIC BASIN 83.68% 26.69% 74.63%
(INCL. 3.00% SALES CHARGE)
MSCI Pacific 51.73% -3.58% -2.99%
Pacific Region Funds Average 67.12% 2.20% 71.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Morgan Stanley Capital International (MSCI) Pacific Index - a market
capitalization-weighted index of over 400 stocks traded in
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 one year average represents
a peer group of 55 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, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PACIFIC BASIN 89.36% 5.49% 6.06%
FIDELITY PACIFIC BASIN 83.68% 4.85% 5.73%
(INCL. 3.00% SALES CHARGE)
MSCI Pacific 51.73% -0.73% -0.30%
Pacific Region Funds Average 67.12% -0.13% 5.21%
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
1989/10/31 9700.00 10000.00
1989/11/30 10013.50 10476.06
1989/12/31 10152.23 10487.45
1990/01/31 9806.79 9894.06
1990/02/28 9192.67 8933.85
1990/03/31 8623.32 7325.04
1990/04/30 8527.36 7374.34
1990/05/31 9352.59 8398.69
1990/06/30 9493.33 8060.32
1990/07/31 9813.19 7999.11
1990/08/31 8508.17 7236.05
1990/09/30 7120.00 6101.57
1990/10/31 8245.89 7419.76
1990/11/30 7491.03 6596.97
1990/12/31 7389.47 6877.79
1991/01/31 7532.08 7092.14
1991/02/28 8212.69 7966.43
1991/03/31 8108.97 7532.47
1991/04/30 8459.00 7726.05
1991/05/31 8400.66 7696.14
1991/06/30 8258.06 7193.22
1991/07/31 8361.77 7435.82
1991/08/31 7797.84 7058.63
1991/09/30 8283.99 7613.89
1991/10/31 8523.82 7937.91
1991/11/30 8121.94 7427.23
1991/12/31 8316.40 7655.16
1992/01/31 8102.49 7358.55
1992/02/29 8024.71 6843.17
1992/03/31 7519.11 6192.36
1992/04/30 7441.33 5908.50
1992/05/31 8037.67 6369.33
1992/06/30 7869.14 5868.47
1992/07/31 7519.11 5786.90
1992/08/31 7739.50 6579.67
1992/09/30 7687.64 6428.91
1992/10/31 7778.39 6201.92
1992/11/30 7745.98 6318.88
1992/12/31 7682.84 6246.56
1993/01/31 7761.37 6234.93
1993/02/28 8212.92 6537.22
1993/03/31 8769.17 7326.95
1993/04/30 9659.18 8494.29
1993/05/31 10130.36 8741.40
1993/06/30 9606.82 8598.09
1993/07/31 10117.27 9106.43
1993/08/31 10581.90 9375.77
1993/09/30 10608.08 9025.12
1993/10/31 11439.19 9225.48
1993/11/30 10876.39 7923.83
1993/12/31 12592.84 8476.20
1994/01/31 12934.45 9457.36
1994/02/28 13061.72 9701.17
1994/03/31 12083.77 9165.65
1994/04/30 12418.68 9561.98
1994/05/31 12787.09 9789.45
1994/06/30 12733.50 10109.69
1994/07/31 12706.71 9892.79
1994/08/31 13309.56 10064.72
1994/09/30 13135.40 9812.81
1994/10/31 13369.84 10061.02
1994/11/30 12271.32 9499.59
1994/12/31 12238.59 9563.51
1995/01/31 11104.69 8959.55
1995/02/28 10923.26 8737.65
1995/03/31 11270.99 9408.49
1995/04/30 11399.50 9808.64
1995/05/31 11331.47 9416.31
1995/06/30 11225.64 9017.25
1995/07/31 11958.89 9667.38
1995/08/31 11830.38 9303.23
1995/09/30 11694.32 9389.40
1995/10/31 11248.31 8932.84
1995/11/30 11150.04 9372.05
1995/12/31 11490.21 9829.49
1996/01/31 11664.08 9846.16
1996/02/29 11414.62 9735.05
1996/03/31 11716.99 10033.63
1996/04/30 12336.86 10544.55
1996/05/31 11989.13 10086.98
1996/06/30 12147.88 10089.06
1996/07/31 11528.01 9625.47
1996/08/31 11301.23 9372.06
1996/09/30 11633.84 9677.91
1996/10/31 11074.45 9228.67
1996/11/30 11497.77 9479.25
1996/12/31 11172.60 8986.54
1997/01/31 10480.96 8230.77
1997/02/28 10701.37 8402.79
1997/03/31 10412.56 8095.25
1997/04/30 10746.97 8264.20
1997/05/31 11849.03 9073.35
1997/06/30 12403.86 9635.89
1997/07/31 12723.08 9406.18
1997/08/31 11180.20 8473.83
1997/09/30 11453.81 8441.89
1997/10/31 10192.14 7417.47
1997/11/30 9842.53 7009.73
1997/12/31 9485.62 6702.28
1998/01/31 9935.47 7066.15
1998/02/28 9958.74 7320.25
1998/03/31 9485.62 6917.34
1998/04/30 9671.76 6780.86
1998/05/31 9260.69 6320.85
1998/06/30 9105.57 6308.90
1998/07/31 9268.45 6199.44
1998/08/31 8182.61 5466.98
1998/09/30 8446.31 5449.54
1998/10/31 9221.91 6393.73
1998/11/30 9857.91 6687.84
1998/12/31 10269.34 6874.70
1999/01/31 10284.87 6924.74
1999/02/28 10160.58 6789.99
1999/03/31 11543.29 7646.34
1999/04/30 12506.53 8158.11
1999/05/31 11861.78 7672.54
1999/06/30 13617.36 8379.03
1999/07/31 14922.39 9017.60
1999/08/31 15528.29 8926.52
1999/09/30 16398.31 9338.92
1999/10/29 17462.53 9700.99
IMATRL PRASUN SHR__CHT 19991031 19991129 103500 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Pacific Basin Fund on October 31, 1989, and the
current 3.00% sales charge was paid. As the chart shows, by October
31, 1999, the value of the investment would have grown to $17,463 - a
74.63% 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 $9,701 - a 2.99% decrease.
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.
(checkmark)
PACIFIC BASIN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
William Kennedy, Portfolio Manager of Fidelity Pacific Basin Fund
Q. HOW DID THE FUND PERFORM, BILL?
A. The fund did extremely well in a surging market. For the 12 months
that ended October 31, 1999, the fund returned 89.36%, compared to
51.73% for the Morgan Stanley Capital International Pacific Index and
67.12% for the Pacific region funds average monitored by Lipper Inc.
Q. WHY WAS THE FUND ABLE TO OUTPERFORM THE INDEX BY SUCH A WIDE
MARGIN?
A. Stock selection in Japan, the fund's largest country allocation,
was the most important factor. Fidelity has a strong research presence
in Japan, enabling the fund to identify many promising opportunities
before other investors got wind of them. An overweighting in the
technology sector also helped - mainly existing technology holdings in
Japan as well as new holdings in Taiwan and South Korea. As part of
the region's general restructuring trend, more Japanese companies are
outsourcing the production of various products and components,
benefiting technology companies in Taiwan and South Korea.
Q. WHAT WAS THE FUND'S SECOND-LARGEST SECTOR WEIGHTING, AFTER
TECHNOLOGY?
A. Finance was next, at 19.6% of net assets. I added to the fund's
finance holdings, mainly through the purchase of Japanese bank stocks.
During the period, three prominent Japanese banks merged to form the
world's largest bank. This merger is likely to trigger more
consolidation, both within the banking industry and outside of it.
Consolidation should result in further cost-cutting, revenue growth
and share price appreciation. The other positive factor is that when
Japanese banks were recapitalized earlier in the year, the government
made itself a shareholder, but provided a buyout option through which
the banks, if profitable enough, could buy back the government's
shares. Since banks do not want the government as a long-term business
associate, there is a strong incentive for them to earn enough money
to buy the government out.
Q. YOU REDUCED THE FUND'S HOLDINGS IN AUSTRALIA FROM 9.6% OF NET
ASSETS SIX MONTHS AGO TO 5.3% AT THE END OF THE PERIOD, AND IN HONG
KONG FROM 7.8% TO 5.4% OF NET ASSETS. CAN YOU COMMENT ON THOSE
CHANGES?
A. Australia's growth prospects are still good, but I reduced holdings
there to make room for what seemed to be better opportunities in
Taiwan and South Korea. In Hong Kong, I did not see the aggressive
restructuring that was occurring elsewhere. In addition, the
fixed-rate currency link with the U.S. dollar was limiting the
attractiveness of Hong Kong investments compared with those of other
countries in the region.
Q. WHAT STOCKS HELPED THE FUND'S PERFORMANCE?
A. DDI Corp. was a key contributor. A large Japanese
telecommunications company, DDI was fairly cheap relative to its
global peers and also was a potential merger target. In addition, the
company recently launched CDMA, a wireless, or cellular, technology
superior to that of DDI's competitors. Hikari Tsushin - which I sold
for valuation reasons - was another strong holding. The company sells
wireless handsets and continued to benefit from a favorable business
model, as well as the prospect of healthy sales from a new generation
of handsets with advanced Internet capabilities. Softbank Corp., an
Internet conglomerate, mirrored the strength of Internet stocks
generally and was priced relatively cheaply in view of its holdings.
Q. WHAT STOCKS WERE DISAPPOINTING?
A. South Korea-based Hanvit Bank underperformed. The company was a
victim of the failure of Daewoo, a large South Korean conglomerate
that had extensive dealings with Hanvit. Another underperformer was
Matsushita Kotobuki, a Japanese manufacturer of hard-disk drives. The
stock encountered difficulties because prices for hard drives
continued to plummet. I sold both stocks by the end of the period.
Q. WHAT'S YOUR OUTLOOK, BILL?
A. The resumption of economic growth in Japan and a strong yen would
dictate sticking with the fund's current strategy of investing in
stocks positioned to benefit from an improving domestic economy there.
On the other hand, a strong yen hurts companies, like Honda and
Toyota, that derive most of their revenues from exports. As Japan
recovers, other economies in the region, such as those in Taiwan and
South Korea, are experiencing increased demand for their products and
services, and I will continue to look for other ways to play the
unfolding revival of the Pacific Basin.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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 October 31, 1999, more than
$659 million
MANAGER: William Kennedy, since 1998;
Hong Kong research director, 1996-1998;
analyst, regional power sector and Indian
companies, 1994-1996; joined Fidelity in
1994
(checkmark)
PACIFIC BASIN
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 4.9%
Australia 5.3%
Thailand 0.7%
Row: 1, Col: 1, Value: 5.3
Row: 1, Col: 2, Value: 5.4
Row: 1, Col: 3, Value: 0.7000000000000001
Row: 1, Col: 4, Value: 72.59999999999999
Row: 1, Col: 5, Value: 3.5
Row: 1, Col: 6, Value: 1.4
Row: 1, Col: 7, Value: 2.5
Row: 1, Col: 8, Value: 3.0
Row: 1, Col: 9, Value: 0.7000000000000001
Row: 1, Col: 10, Value: 4.9
Hong Kong 5.4%
Taiwan 3.0%
Singapore 2.5%
India 0.7%
Other 1.4%
Korea (South) 3.5%
Japan 72.6%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 4.9%
Australia 9.6%
Singapore 2.8%
Row: 1, Col: 1, Value: 9.6
Row: 1, Col: 2, Value: 7.8
Row: 1, Col: 3, Value: 72.59999999999999
Row: 1, Col: 4, Value: 2.3
Row: 1, Col: 5, Value: 2.8
Row: 1, Col: 6, Value: 4.9
Other 2.3%
Hong Kong 7.8%
Japan 72.6%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 95.1 95.1
Short-Term Investments and 4.9 4.9
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nippon Telegraph & Telephone 2.5 3.7
Corp. (Japan, Telephone
Services)
DDI Corp. (Japan, Telephone 2.0 0.9
Services)
Fujitsu Ltd. (Japan, 1.9 1.3
Computers & Office Equipment)
Sony Corp. (Japan, Consumer 1.9 0.9
Electronics)
Kokusai Denshin Denwa 1.8 1.1
(Japan, Telephone Services)
Toyota Motor Corp. (Japan, 1.8 2.5
Autos, Tires, & Accessories)
Softbank Corp. (Japan, 1.7 0.5
Computers & Office Equipment)
Takeda Chemical Industries 1.6 1.9
Ltd. (Japan, Drugs &
Pharmaceuticals)
Murata Manufacturing Co. Ltd. 1.5 0.0
(Japan, Electrical Equipment)
Fuji Bank Ltd. (Japan, Banks) 1.4 1.2
18.1 14.0
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 22.7 17.3
FINANCE 19.6 17.8
UTILITIES 10.1 12.1
DURABLES 8.9 11.1
INDUSTRIAL MACHINERY & 8.3 6.0
EQUIPMENT
BASIC INDUSTRIES 5.8 5.8
HEALTH 3.7 3.9
CONSTRUCTION & REAL ESTATE 3.4 4.1
RETAIL & WHOLESALE 3.4 4.5
NONDURABLES 3.1 4.3
</TABLE>
PACIFIC BASIN
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 95.0%
SHARES VALUE (NOTE 1)
AUSTRALIA - 5.3%
Amcor Ltd. 121,500 $ 530,974
Austar United Communications 31,400 102,121
Ltd. (a)
Australia & New Zealand 177,808 1,173,454
Banking Group Ltd.
Brambles Industries Ltd. 26,553 746,739
Broken Hill Proprietary Co. 463,432 4,789,664
Ltd. (The)
Cable & Wireless Optus Ltd. 682,800 1,563,163
(a)
Cochlear Ltd. 106,500 1,161,347
Coles Myer Ltd. 126,900 631,208
F.H. Faulding & Co. Ltd. 116,044 709,672
Lend Lease Corp. Ltd. 103,700 1,193,174
Macquarie Bank Ltd. 88,500 1,298,038
National Australia Bank Ltd. 231,858 3,578,111
News Corp. Ltd. 588,279 4,254,150
Perpetual Trustees Australia 146,300 1,884,569
Ltd.
Rio Tinto Ltd. 60,200 967,685
Smith (Howard) Ltd. 55,888 400,734
Tabcorp Holdings Ltd. 135,000 855,730
Telstra Corp. Ltd. 852,400 4,336,102
Westfield Holdings Ltd. 98,000 581,200
Westpac Banking Corp. 322,694 2,070,578
WMC Ltd. 317,000 1,360,476
Woolworths Ltd. 145,000 492,846
34,681,735
HONG KONG - 5.4%
Cable & Wireless HKT Ltd. 670,000 1,528,438
Cheung Kong Holdings Ltd. 389,000 3,530,445
China Telecom (Hong Kong) 500,000 1,687,500
Ltd. (a)
Dao Heng Bank Group Ltd. 200,000 919,156
Giordano International Ltd. 2,326,000 2,470,327
Great Eagle Holdings Ltd. 552,000 682,183
Hang Seng Bank Ltd. 126,200 1,372,799
Hong Kong & China Gas Co. 945,000 1,253,025
Ltd.
Hongkong Land Holdings Ltd. 373,000 481,170
Hutchison Whampoa Ltd. 919,000 9,227,858
Johnson Electric Holdings 717,000 3,876,674
Ltd.
Li & Fung Ltd. 1,072,000 1,828,527
New World Development Co. 334,000 632,055
Ltd.
South China Morning Post 1,512,000 1,099,743
Holdings
Sun Hung Kai Properties Ltd. 360,000 2,908,084
Swire Pacific Ltd. Class A 314,000 1,556,256
Wing Hang Bank Ltd. 158,500 517,247
35,571,487
INDIA - 0.7%
Infosys Technologies Ltd. 17,110 2,737,915
Pentafour Software & Exports 72,900 1,012,407
Ltd. (new) (a)
Pentafour Software & Exports 72,900 1,012,407
Ltd. (a)
4,762,729
INDONESIA - 0.4%
Gudang Garam PT Perusahaan 164,500 424,205
SHARES VALUE (NOTE 1)
PT Bank PAN Indonesia Tbk (a) 1,382,500 $ 162,051
PT Indofood Sukses Makmur (a) 383,000 454,549
PT Matahari Putra Prima Tbk 3,561,000 443,494
(a)
PT Telkomunikasi Indonesia 1,029,000 490,000
Sampoerna, Hanjaya Mandala (a) 343,000 799,076
2,773,375
JAPAN - 72.6%
Acom Co. Ltd. 15,200 1,664,154
Aderans Co. Ltd. 19,000 952,509
Advan Co. Ltd. 29,500 872,605
Advantest Corp. 22,000 3,317,167
Aiful Corp. 25,800 4,014,022
Aiwa Co. Ltd. 72,000 1,756,351
Asahi Bank Ltd. 540,000 4,802,305
Asahi Chemical Industry Co. 195,000 1,179,832
Ltd.
Asahi Glass Co. Ltd. 237,000 1,886,896
Bank of Tokyo-Mitsubishi Ltd. 471,000 7,816,452
Bank of Yokohama Ltd. 361,000 2,028,187
BellSystem24, Inc. 1,200 1,152,461
Canon, Inc. 73,000 2,068,187
Chiba Bank 377,000 2,063,770
CSK Corp. 33,300 1,535,078
Dai Nippon Printing Co. Ltd. 118,000 2,154,315
Dai-Ichi Kangyo Bank Ltd. 197,000 2,705,498
Daiwa Securities Co. Ltd. 685,000 7,322,017
DDI Corp. 1,223 13,389,869
Diamond Computer Service Co. 119,000 3,120,000
Ltd.
Fanuc Ltd. 46,000 3,578,392
Fuji Bank Ltd. 691,000 9,489,844
Fuji Coca-Cola Bottling Co. 120,000 2,304,922
Ltd.
Fuji Heavy Industries Ltd. 449,000 3,820,543
Fuji Machine Manufacturing 16,900 787,179
Co. Ltd.
Fujitsu Ltd. 422,000 12,725,859
Furukawa Electric Co. Ltd. 1,041,000 7,598,176
Heiwa Corp. 23,000 631,741
Hino Motors Ltd. (a) 290,000 1,055,558
Hirose Electric Co. Ltd. 11,000 1,921,633
Hitachi Information Systems 118,000 4,555,678
Hitachi Ltd. 844,000 9,178,500
Honda Motor Co. Ltd. 193,000 8,118,063
Hoya Corp. 90,000 6,482,593
Industrial Bank of Japan Ltd. 513,000 6,946,747
(The)
Ito En Ltd. 40,000 4,110,444
Ito-Yokado Co. Ltd. 95,000 7,609,124
Jafco Co. Ltd. 58,000 6,517,167
Japan Business Computer Co. 39,400 987,601
Ltd.
Japan Medical Dynamic 6,000 328,451
Marketing, Inc.
Japan Tobacco, Inc. 217 2,396,639
Kadokawa Shoten Publish Co. 6,300 1,573,714
Ltd.
Kaneka Corp. 227,000 2,975,798
Kao Corp. 134,000 4,092,389
Kawasaki Steel Corp. 375,000 849,940
Kirin Brewery Co. Ltd. 109,000 1,249,902
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Koa Denko Co. Ltd. 219,000 $ 3,806,867
Kokusai Denshin Denwa 94,100 11,838,752
Konami Co. Ltd. 24,000 2,327,971
Kyocera Corp. 73,000 7,010,805
Matsushita Communication 30,000 5,047,779
Industrial Co. Ltd.
Matsushita Electric 98,000 2,075,763
Industrial Co. Ltd.
Mikasa Coca Cola Bottling Co. 114,000 1,204,322
Mikuni Coca Cola Bottling Co. 46,000 971,909
Mirai Industry Co. Ltd. 41,000 661,513
Misumi Corp. 20,000 1,450,180
Mitsubishi Electric Corp. 1,394,000 7,724,735
Mitsubishi Estate Co. Ltd. 260,000 2,609,364
Mitsui Trust & Banking Co. 947,000 2,946,728
Ltd.
Mitsumi Electric Co. Ltd. 85,000 2,277,551
Murata Manufacturing Co. Ltd. 78,000 10,037,936
Namco Ltd. 60,100 2,839,779
NEC Corp. 368,000 7,457,191
NIC Corp. 19,000 939,736
Nichicon Corp. 199,000 4,319,232
Nidec Corp. 11,000 2,139,256
Nikko Securities Co. Ltd. 397,000 3,736,471
Nintendo Co. Ltd. 26,400 4,196,111
Nippon Computer Systems Corp. 207,000 4,055,510
Nippon Paper Industries Co. 260,000 2,022,569
Ltd.
Nippon Steel Corp. 1,401,000 3,565,570
Nippon Telegraph & Telephone 1,068 16,411,044
Corp.
Nippon Zeon Co. Ltd. 404,000 3,491,957
Nissin Co. Ltd. 19,000 1,166,002
Nitto Denko Corp. 115,000 4,550,300
Nomura Securities Co. Ltd. 161,000 2,661,042
NTT Mobile Communication 246 6,544,250
Network, Inc.
Oki Electric Industry Co. 521,000 3,352,413
Ltd. (a)
Omron Corp. 278,000 5,820,312
Oracle Corp. Japan 9,000 1,832,413
ORIX Corp. 37,800 5,082,353
Otsuka Kagu Ltd. 5,200 1,548,139
Q'Sai Co. Ltd. 17,000 1,173,878
Ricoh Co. Ltd. 213,000 3,479,597
Rohm Co. Ltd. 29,000 6,517,167
Sakura Bank Ltd. 815,000 7,013,110
Sankyo Co. Ltd. (Gunma) 17,500 1,386,555
Secom Co. Ltd. 35,000 3,757,983
Secom Co. Ltd. (RFD) 35,000 3,731,093
Senshukai Co. Ltd. 235,000 4,511,549
Sharp Corp. 246,000 3,921,825
Shin-Etsu Chemical Co. Ltd. 124,000 5,120,769
Shohkoh Fund & Co. Ltd. 7,450 4,564,802
Skylark Co. Ltd. 65,000 1,822,809
SMC Corp. 15,000 2,533,974
Softbank Corp. 27,700 11,518,944
SHARES VALUE (NOTE 1)
Sony Corp. 77,500 $ 12,380,626
Sumitomo Bank Ltd. Japan 578,000 9,314,613
Sumitomo Metal Industries 557,000 545,633
Ltd. (a)
Sumitomo Trust & Banking Ltd. 285,000 2,917,743
Takasago Electric Industry 4,000 303,481
Co.
Takeda Chemical Industries 183,000 10,527,443
Ltd.
Takefuji Corp. 8,500 1,102,041
Takefuji Corp. (c) 20,000 2,593,037
THK Co. Ltd. 133,600 4,375,280
Tokai Bank Ltd. 432,000 3,775,462
Toko, Inc. 561,000 2,774,694
Tokyo Electron Ltd. 14,000 1,164,370
Tokyo Seimitsu Co. Ltd. 60,000 7,323,890
Toyoda Gosei Co. Ltd. 141,000 6,080,096
Toyota Motor Corp. 336,000 11,649,076
Tsubaki Nakashima Co. Ltd. 82,000 1,181,273
Union Tool Co. 11,300 1,208,951
World Co. Ltd. 22,200 2,249,316
Yamaha Motor Co. Ltd. 241,000 1,962,718
Yamanouchi Pharmaceutical Co. 69,000 3,134,406
Ltd.
Yamato Transport Co. Ltd. 81,000 2,333,734
Yoshitomi Pharmaceutical 146,000 1,991,069
Industries Ltd.
479,355,104
KOREA (SOUTH) - 3.5%
Housing & Commercial Bank (a) 42,400 1,120,534
Korea Electric Power Corp. 114,400 3,347,596
Korea Telecom Sponsored ADR 42,000 1,480,500
Korea Tobacco & Ginseng Co. 37,600 1,025,027
Ltd.
Lg Chemical Ltd. 24,850 752,026
Lg Electronics, Inc. 22,000 720,801
Medison Co. Ltd. 25,800 258,108
Pohang Iron & Steel Co. Ltd. 10,500 1,260,526
Samsung Corp. 34,400 544,894
Samsung Electro-Mechanics Co. 36,900 1,784,244
Samsung Electronics Co. Ltd. 48,100 8,020,011
Samsung Securities Co. Ltd. 20,800 728,304
Shinhan Bank 82,500 873,489
Shinsegae Department Store 9,950 546,649
Shinsegae Department Store 1,739 30,735
rights 12/1/99 (a)
SK Telecom Co. Ltd. 720 831,347
23,324,791
MALAYSIA - 0.1%
Amway Holding BHD 144,000 373,263
NEW ZEALAND - 0.3%
Fletcher Challenge Ltd. 129,700 160,671
Building Division
Lion Nathan Ltd. 216,100 466,284
Telecom Corp. of New Zealand 212,000 854,601
Ltd.
Warehouse Group Ltd. (The) 90,100 349,940
1,831,496
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PHILIPPINES - 0.0%
Oriental Petroleum & Mineral 7,771,657 $ 775
Corp. Class B (a)
SINGAPORE - 2.5%
Chartered Semiconduct 3,500 116,156
Manufacturing Ltd. ADR
City Developments Ltd. 104,000 538,309
Datacraft Asia Ltd. 403,000 1,853,800
DBS Group Holdings Ltd. 147,239 1,666,021
DBS Land Ltd. 237,000 439,338
Natsteel Electronics Ltd. 243,000 950,647
Overseas Union Bank Ltd. 386,452 1,674,664
Singapore Airlines Ltd. 274,000 2,902,438
Singapore Press Holdings Ltd. 86,694 1,487,077
Singapore Technologies 529,000 767,313
Engineering Ltd.
Singapore Telecommunications 772,000 1,468,264
Ltd.
United Overseas Bank Ltd. 217,000 1,645,621
(For. Reg.)
Venture Manufacturing 145,000 1,291,604
Singapore Ltd.
16,801,252
TAIWAN - 3.0%
Advanced Semiconductor 492,000 1,512,295
Engineering, Inc. (a)
Asustek Computer, Inc. 184,000 1,931,652
China Steel Corp. 1,027,000 790,000
Far Eastern Textile Ltd. 963,000 1,317,598
Formosa Plastic 428,000 856,810
Hon Hai Precision Industries 317,000 2,168,632
Co. Ltd.
Nan Ya Plastics Corp. 522,000 913,335
Ritek Corp. 75,000 491,803
Siliconware Precision 407,000 731,368
Industries Co. Ltd.
Taishin International Bank 2,464,000 1,406,003
Taiwan Semiconductor 1,080,130 4,801,334
Manufacturing Co. Ltd.
United Microelectronics Corp. 1,103,000 2,868,774
19,789,604
THAILAND - 0.6%
Advanced Info Service PCL 85,700 998,447
(For. Reg.) (a)
BEC World PCL (For.Reg.) (a) 111,600 693,437
PTT Exploration & Production 83,900 612,551
Public Co.Ltd. (For.Reg.) (a)
Siam Cement PCL (For.Reg.) (a) 45,500 1,177,994
Siam Makro PCL (For.Reg.) 200,100 334,148
3,816,577
UNITED KINGDOM - 0.6%
HSBC Holdings PLC (Hong Kong) 293,184 3,609,828
(Reg.)
TOTAL COMMON STOCKS 626,692,016
(Cost $442,859,620)
PREFERRED STOCKS - 0.1%
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS
- - 0.1%
THAILAND - 0.1%
Siam Commercial Bank PLC 631,100 $ 714,838
5.25% (a)
NONCONVERTIBLE PREFERRED
STOCKS - 0.0%
TAIWAN - 0.0%
Taishin International Bank (a) 363,000 114,439
TOTAL PREFERRED STOCKS 829,277
(Cost $684,817)
CASH EQUIVALENTS - 6.5%
Central Cash Collateral Fund, 12,996,138 12,996,138
5.26% (b)
Taxable Central Cash Fund, 29,603,427 29,603,427
5.21% (b)
TOTAL CASH EQUIVALENTS 42,599,565
(Cost $42,599,565)
TOTAL INVESTMENT PORTFOLIO - 670,120,858
101.6%
(Cost $486,144,002)
NET OTHER ASSETS - (1.6)% (10,240,012)
NET ASSETS - 100% $ 659,880,846
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $2,593,037 or
0.4% of
net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $557,505,583 and $344,592,705, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $12,355,928. The fund
received
cash collateral of $12,996,138 which was invested in the Central Cash
Collateral Fund.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $487,010,408. Net unrealized appreciation
aggregated $183,110,450, of which $191,597,264 related to appreciated
investment securities and $8,486,814 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $45,130,000 of which $12,149,000 and $32,981,000
will expire on October 31, 2005 and 2006, respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 5.8%
CASH EQUIVALENTS 6.5
CONSTRUCTION & REAL ESTATE 3.4
DURABLES 8.9
ENERGY 0.1
FINANCE 19.6
HEALTH 3.7
INDUSTRIAL MACHINERY & 8.3
EQUIPMENT
MEDIA & LEISURE 2.8
NONDURABLES 3.1
PRECIOUS METALS 0.2
RETAIL & WHOLESALE 3.4
SERVICES 1.8
TECHNOLOGY 22.7
TRANSPORTATION 1.2
UTILITIES 10.1
PACIFIC BASIN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 670,120,858
value (cost $486,144,002) -
See accompanying schedule
Foreign currency held at 4,631,618
value (cost $4,631,618)
Receivable for investments 4,043,421
sold
Receivable for fund shares 5,564,156
sold
Dividends receivable 1,036,745
Interest receivable 106,512
Redemption fees receivable 1,036
Other receivables 10,146
TOTAL ASSETS 685,514,492
LIABILITIES
Payable for investments $ 10,826,822
purchased
Payable for fund shares 1,131,647
redeemed
Accrued management fee 423,496
Other payables and accrued 255,543
expenses
Collateral on securities 12,996,138
loaned, at value
TOTAL LIABILITIES 25,633,646
NET ASSETS $ 659,880,846
Net Assets consist of:
Paid in capital $ 521,918,337
Distributions in excess of (43,795)
net investment income
Accumulated undistributed net (45,996,431)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 184,002,735
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 29,359,366 $ 659,880,846
shares outstanding
NET ASSET VALUE and $22.48
redemption price per share
($659,880,846 (divided by)
29,359,366 shares)
Maximum offering price per $23.18
share (100/97.00 of $22.48)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 3,527,645
Dividends
Interest 723,262
Security lending 28,870
4,279,777
Less foreign taxes withheld (340,415)
TOTAL INCOME 3,939,362
EXPENSES
Management fee Basic fee $ 2,565,004
Performance adjustment 670,293
Transfer agent fees 1,133,920
Accounting and security 199,333
lending fees
Non-interested trustees' 2,271
compensation
Custodian fees and expenses 163,157
Registration fees 49,219
Audit 44,178
Legal 958
Miscellaneous 118
Total expenses before 4,828,451
reductions
Expense reductions (56,246) 4,772,205
NET INVESTMENT INCOME (LOSS) (832,843)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 54,887,737
Foreign currency transactions (77,941) 54,809,796
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 177,132,699
Assets and liabilities in 36,519 177,169,218
foreign currencies
NET GAIN (LOSS) 231,979,014
NET INCREASE (DECREASE) IN $ 231,146,171
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION Sales $ 534,718
charges paid to FDC
Sales charges - Retained by $ 533,043
FDC
Deferred sales charge $ 9,916
witheld by FDC
Expense Reductions $ 45,152
Directed brokerage
arrangements
Custodian credits 1,230
Transfer agent credits 9,864
$ 56,246
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ (832,843) $ (321,268)
income (loss)
Net realized gain (loss) 54,809,796 (31,836,550)
Change in net unrealized 177,169,218 9,227,120
appreciation (depreciation)
NET INCREASE (DECREASE) IN 231,146,171 (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 388,881,157 63,798,234
proceeds from sales of shares
Reinvestment of distributions 338,512 4,301,574
Cost of shares redeemed (156,304,703) (84,998,801)
NET INCREASE (DECREASE) IN 232,914,966 (16,898,993)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 701,135 127,081
TOTAL INCREASE (DECREASE) 464,416,869 (44,053,449)
IN NET ASSETS
NET ASSETS
Beginning of period 195,463,977 239,517,426
End of period (including $ 659,880,846 $ 195,463,977
distributions in excess of
net investment income of
$43,795 and $3,862,332,
respectively)
OTHER INFORMATION
Shares
Sold 21,838,288 5,220,379
Issued in reinvestment of 26,201 352,299
distributions
Redeemed (8,941,281) (7,003,769)
Net increase (decrease) 12,923,208 (1,431,091)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.89 $ 13.41 $ 14.65 $ 14.88 $ 19.96
period
Income from Investment
Operations
Net investment income (loss) C (.04) (.02) (.01) .05 .07
Net realized and unrealized 10.62 (1.26) (1.16) (.29) (3.12)
gain (loss)
Total from investment 10.58 (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 .03 .01 .01 .01 .01
in capital
Net asset value, end of period $ 22.48 $ 11.89 $ 13.41 $ 14.65 $ 14.88
TOTAL RETURN A, B 89.36% (9.52)% (7.97)% (1.55)% (15.87)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 659,881 $ 195,464 $ 239,517 $ 572,150 $ 317,635
(000 omitted)
Ratio of expenses to average 1.37% 1.73% 1.32% 1.26% 1.32% D
net assets
Ratio of expenses to average 1.36% E 1.72% E 1.31% E 1.24% E 1.32%
net assets after expense
reductions
Ratio of net investment (.24)% (.16)% (.04)% .30% .44%
income (loss) to average net
assets
Portfolio turnover rate 101% 57% 42% 85% 65%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
D FMR AGREED TO REIMBURSE A
PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E 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
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SOUTHEAST ASIA 49.80% -11.56% 29.83%
FIDELITY SOUTHEAST ASIA 45.31% -14.21% 25.93%
(INCL. 3.00% SALES CHARGE)
MSCI Far East Free ex-Japan 52.06% -22.24% 27.31%
Pacific Region ex-Japan 48.33% -17.64% n/a
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on 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
stocks traded in 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 one year average represents a peer group of 86 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, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SOUTHEAST ASIA 49.80% -2.43% 4.07%
FIDELITY SOUTHEAST ASIA 45.31% -3.02% 3.59%
(INCL. 3.00% SALES CHARGE)
MSCI Far East Free ex-Japan 52.06% -4.91% 3.76%
Pacific Region ex-Japan 48.33% -4.14% 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
1999/05/31 10738.08 11510.53
1999/06/30 12790.34 13507.32
1999/07/31 12634.86 12989.96
1999/08/31 12925.08 13202.48
1999/09/30 11909.32 12145.78
1999/10/29 12593.40 12730.66
IMATRL PRASUN SHR__CHT 19991031 19991111 124720 R00000000000082
$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 October 31, 1999, the value of the investment would
have been $12,593 - a 25.93% 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 $12,731 - a 27.31% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time; however,
investing in foreign markets means assuming greater
risks than investing in the United States. Factors like
changes in a country's financial markets, its local
political and economic climate, and the fluctuating
value of its currency create these risks. For these
reasons an international fund's performance may
be more volatile than a fund that invests exclusively
in the United States. Past performance is no
guarantee of future results and you may have a
gain or loss when you sell your shares.
(checkmark)
SOUTHEAST ASIA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Allan Liu, Portfolio Manager of Fidelity Southeast
Asia Fund
Q. HOW DID THE FUND PERFORM, ALLAN?
A. The fund did very well on an absolute basis but slightly trailed
its benchmark during the period. For the 12 months that ended October
31, 1999, the fund returned 49.80%, compared to 52.06% for the Morgan
Stanley Capital International AC Far East Free ex-Japan Index and
48.33% for the Pacific region ex-Japan funds average tracked by Lipper
Inc.
Q. WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
A. The underperformance occurred during the first six months of the
period, when I positioned the fund defensively due to the instability
and increased risk I perceived in Southeast Asian equity markets. At
that time, in addition to an emphasis on earnings and share-price
growth, I also focused on companies with the best survival capability.
When Southeast Asian stocks rallied strongly late in 1998 and early in
1999 - particularly in South Korea - the fund fell behind the index.
However, the fund soundly beat the index during the last six months of
the period, narrowing the performance gap from 11.79% as of April 30,
1999, to 2.26% at the end of the period.
Q. WHAT DID YOU DO DIFFERENTLY IN THE SECOND HALF OF THE PERIOD?
A. I invested more in companies that were positioned to benefit from
the domestic recoveries occurring in many Southeast Asian countries
and in manufacturers with strong export businesses. These included the
stocks of domestic consumer, technology and electronics companies in
Hong Kong, Korea, Taiwan and Singapore. I particularly favored
companies that I felt could compete successfully on a global level.
Q. THE FINANCE COMPONENT OF THE FUND DECREASED FROM 28.6% OF NET
ASSETS AT THE END OF APRIL TO 20.1% AT THE END OF THE PERIOD. WHY WAS
THAT?
A. Early in the year, the fund had a heavier weighting of finance
stocks because interest rates were dropping sharply, which tends to
benefit companies in this sector. Once most of the drop in interest
rates had occurred, however, I lightened up on the fund's finance
holdings. As a result of the precarious financial condition of the
region, many banks had badly damaged balance sheets requiring massive
recapitalization - that is, issuing more shares of stock. When more
shares of a stock are issued, there is dilution of earnings per share,
which I felt did not bode well for those companies' stock prices.
Q. AFTER OVERWEIGHTING HONG KONG RELATIVE TO THE INDEX 12 MONTHS AGO,
YOU SUBSEQUENTLY UNDERWEIGHTED THAT COUNTRY. CAN YOU EXPLAIN YOUR
RATIONALE?
A. When the region began to recover, I felt that Hong Kong's
fixed-rate currency system would inhibit its recovery. Currency
depreciation - painful though it is in many respects - is one way a
country can make itself more competitive, with cheaper asset prices
that will attract foreign investors. Since Hong Kong has chosen to
maintain a fixed-rate link to the U.S. dollar, currency depreciation
is not a possible avenue of recovery. Instead, investors must wait for
domestic asset prices in Hong Kong to fall to levels that seem
attractive.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Samsung Electronics, the fund's largest holding at the end of the
period, did extremely well. The company is the world's most efficient
producer of computer DRAM (dynamic random access memory) and was able
to survive comfortably even when DRAM prices were at their lowest
point. Another helpful holding was Taiwan Semiconductor, one of the
most efficient manufacturers of semiconductors. The stock benefited
from improved demand in the semiconductor market.
Q. WHAT STOCKS DISAPPOINTED YOU?
A. Swire Pacific weighed down the fund's return, based on the
disappointing performance of its investments in office property. CLP
Holdings, a Hong Kong utility, suffered when investors began to
allocate more capital to non-defensive stocks. I sold both stocks.
Q. WHAT'S YOUR OUTLOOK, ALLAN?
A. Now that interest rates have fallen so dramatically, further gains
in Southeast Asian share prices will be primarily earnings-driven. I
will be watching to see which companies continue to put a high
priority on decreasing debt and increasing operating efficiency and
overall shareholder value. With better times may come a certain
complacency on the part of some managements about implementing needed
restructuring. I intend to emphasize the companies that are serious
about continuing to improve.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE A-3.
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
START DATE: April 19, 1993
FUND NUMBER: 351
TRADING SYMBOL: FSEAX
SIZE: as of October 31, 1999, more than
$360 million
MANAGER: Allan Liu, since inception; manager,
various funds for non-U.S. investors; analyst,
Southeast Asian markets, 1987-1990; joined
Fidelity in 1987
(checkmark)
SOUTHEAST ASIA
INVESTMENT CHANGES
AS OF OCTOBER 31, 1999
United States 2.8%
United Kingdom 5.2%
Row: 1, Col: 1, Value: 28.1
Row: 1, Col: 2, Value: 1.6
Row: 1, Col: 3, Value: 19.7
Row: 1, Col: 4, Value: 8.5
Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 12.8
Row: 1, Col: 7, Value: 17.0
Row: 1, Col: 8, Value: 2.4
Row: 1, Col: 9, Value: 5.2
Row: 1, Col: 10, Value: 2.8
Thailand 2.4%
Hong Kong 28.1%
Taiwan 17.0%
Indonesia 1.6%
Singapore 12.8%
Other 1.9%
Korea (South) 19.7%
Malaysia 8.5%
GEOGRAPHIC DIVERSIFICATION (%
OF FUND'S NET ASSETS)
AS OF APRIL 30, 1999
United States 5.8%
Row: 1, Col: 1, Value: 35.7
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: 2.9
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: 7.6
Row: 1, Col: 10, Value: 5.8
United Kingdom 7.6%
Thailand 3.8%
Hong Kong 35.7%
Taiwan 13.3%
Singapore 13.0%
Indonesia 1.5%
Other 1.2%
Malaysia 2.9%
Korea (South) 15.2%
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Stocks 97.2 94.2
Short-Term Investments and 2.8 5.8
Net Other Assets
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS
A PERCENTAGE OF THE FUND'S INVESTMENTS.
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Samsung Electronics Co. Ltd. 8.4 3.4
(Korea (South), Electronics)
Hutchison Whampoa Ltd. (Hong 6.6 7.2
Kong, Electrical Equipment)
HSBC Holdings PLC (Hong Kong) 5.2 7.6
(Reg.) (United Kingdom, Banks)
Taiwan Semiconductor 4.7 3.0
Manufacturing Co. Ltd.
(Taiwan, Electronics)
Cheung Kong Holdings Ltd. 4.2 5.4
(Hong Kong, Real Estate)
China Telecom (Hong Kong) 3.8 2.9
Ltd. (Hong Kong, Cellular)
Sun Hung Kai Properties Ltd. 3.2 4.1
(Hong Kong, Real Estate)
Korea Electric Power Corp. 2.4 3.1
(Korea (South), Electric
Utility)
Cable & Wireless HKT Ltd. 2.2 3.3
(Hong Kong, Telephone
Services)
Hang Seng Bank Ltd. (Hong 2.1 2.7
Kong, Banks)
42.8 42.7
TOP TEN MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 31.1 16.7
FINANCE 20.1 28.6
UTILITIES 12.0 15.0
CONSTRUCTION & REAL ESTATE 9.8 15.0
INDUSTRIAL MACHINERY & 8.3 8.1
EQUIPMENT
MEDIA & LEISURE 4.1 2.4
BASIC INDUSTRIES 3.0 2.2
NONDURABLES 2.6 2.5
DURABLES 2.5 1.5
TRANSPORTATION 2.0 1.2
</TABLE>
SOUTHEAST ASIA
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 96.8%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.6%
LibertyOne Ltd. 1,800,000 $ 2,226,848
CHINA - 0.7%
China Southern Airlines Ltd. 1,600,000 319,259
(a)
Great Wall Technology Co. (H 2,460,000 1,504,248
Shares)
Shanghai Petrochemical Co. 2,400,000 491,246
Ltd. Class H
Shenzhen Expressway Co. Ltd. 1,000,000 149,331
Class H
2,464,084
HONG KONG - 28.1%
Cable & Wireless HKT Ltd. 3,448,000 7,865,750
Cheung Kong Holdings Ltd. 1,685,000 15,292,546
China Telecom (Hong Kong) 4,068,000 13,729,500
Ltd. (a)
Dah Sing Financial Holdings 760,000 3,032,956
Ltd.
Dao Heng Bank Group Ltd. 850,000 3,906,411
Denway Investment Ltd. (a) 8,370,000 915,873
Giordano International Ltd. 1,000,000 1,062,049
Hang Seng Bank Ltd. 706,000 7,679,840
Hutchison Whampoa Ltd. 2,367,000 23,767,508
Johnson Electric Holdings 874,000 4,725,541
Ltd.
Smartone Telecommunications 10,000 35,273
Holdings Ltd.
Sun Hung Kai Properties Ltd. 1,410,310 11,392,502
Television Broadcasts Ltd. 620,000 3,312,307
Wharf Holdings Ltd. 325,942 941,993
Wing Hang Bank Ltd. 1,079,000 3,521,196
101,181,245
INDIA - 0.5%
Infosys Technologies Ltd. 5,850 936,108
Pentafour Software & Exports 73,000 1,013,795
Ltd. (a)
1,949,903
INDONESIA - 1.6%
Gudang Garam PT Perusahaan 780,000 2,011,427
PT Lippo Bank Tbk (a) 46,000,000 1,516,482
PT Lippo Bank Tbk:
rights 12/31/99 (a) 36,000,000 0
warrants 5/1/02 (a) 36,000,000 0
PT Telkomunikasi Indonesia 1,076,060 512,409
Sampoerna, Hanjaya Mandala (a) 700,000 1,630,768
5,671,086
KOREA (SOUTH) - 19.7%
Cheil Jedang Corp. 45,000 2,588,580
Daelim Industrial Co. 99,945 1,258,166
Dongwon Securities Co. Ltd. 20,000 600,250
Hanwha Chemical Corp. 140,000 1,266,361
Honam Petrochemical Corp. 16,000 309,462
Housing & Commercial Bank (a) 95,300 2,518,559
Hyundai Electronics 120,000 1,995,832
Industries Co. Ltd. (a)
Hyundai Engineering & 8 47
Construction Co. Ltd. (a)
SHARES VALUE (NOTE 1)
Kookmin Bank 58,000 $ 904,210
Kookmin Bank rights 11/04/99 8,839 53,793
(a)
Korea Chemical Co. Ltd. 8,500 566,903
Korea Electric Power Corp. 300,000 8,778,661
Korea Telecom 80,100 5,388,972
Korea Tobacco & Ginseng Co. 27,000 736,057
Ltd.
Lg Chemical Ltd. 52,000 1,573,656
Lg Electronics, Inc. 90,000 2,948,730
Pohang Iron & Steel Co. Ltd. 27,000 3,241,352
Samsung Corp. sponsored GDR 21 123
Unit (a)
Samsung Electronics Co. Ltd. 180,834 30,151,573
Samsung Fire & Marine 26,220 1,158,533
Insurance
Shinsegae Department Store 57,000 3,131,556
Shinsegae Department Store 9,964 176,104
rights 12/1/99 (a)
SK Telecom Co. Ltd. 1,526 1,761,993
71,109,473
MALAYSIA - 8.5%
AMMB Holdings BHD 200,000 431,579
Berjaya Sports Toto BHD 708,833 1,538,914
Commerce Asset Holding BHD 760,000 1,680,000
Genting BHD 500,000 1,789,474
Hong Leong Industries BHD 100,000 119,474
Jaya Tiasa Holdings BHD 715,000 1,307,697
Lingui Development BHD 329,000 337,658
Magnum Corp. BHD 1,000,000 789,474
Malayan Banking BHD 1,067,000 3,622,184
Malaysian Pacific Industries 275,000 1,194,079
New Straits Times Press BHD 300,000 667,105
(a)
PhileoAllied BHD (a) 1,200,000 862,105
Public Bank BHD (For. Reg.) 1,354,000 1,432,389
Resorts World BHD 880,000 2,524,211
Rothmans of Pall Mall 227,000 1,583,026
Malaysia BHD
Sungei Way Holdings BHD (a) 949,000 609,358
Telekom Malaysia BHD 806,000 2,481,632
Tenaga Nasional BHD 744,000 1,713,158
UMW Holdings BHD 100,000 177,632
Unisem (M) BHD 895,000 3,650,658
United Engineers BHD (a) 850,000 1,442,763
United Engineers BHD warrants 170,000 44,737
10/28/02 (a)
WTK Holdings BHD 283,000 796,868
30,796,175
PHILIPPINES - 0.1%
Philippine Long Distance 24,000 499,751
Telephone
SINGAPORE - 12.8%
Chartered Semiconduct 1,900 63,056
Manufacturing Ltd. ADR
City Developments Ltd. 238,000 1,231,899
Datacraft Asia Ltd. 1,430,000 6,578,000
DBS Group Holdings Ltd. 389,605 4,408,410
Delgro Corp. Ltd. 200,000 692,146
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SINGAPORE - CONTINUED
Gul Technologies Singapore 1,400,000 $ 1,280,770
Ltd.
JIT Holdings Ltd. 1,230,000 2,028,408
Natsteel Electronics Ltd. 697,000 2,726,753
Oversea-Chinese Banking Corp. 529,200 3,981,342
Ltd.
Pacific Century Region 160,000 924,466
Developments Ltd. (a)
Pacific Internet Ltd. 100 3,125
Singapore Airlines Ltd. 547,000 5,794,282
Singapore Press Holdings Ltd. 230,076 3,946,534
Singapore Technologies 1,106,175 1,604,503
Engineering Ltd.
United Overseas Bank Ltd. 485,500 3,681,794
(For. Reg.)
Venture Manufacturing 803,000 7,152,814
Singapore Ltd.
46,098,302
TAIWAN - 17.0%
Advanced Semiconductor 410,000 1,260,246
Engineering, Inc. (a)
Asustek Computer, Inc. 452,759 4,753,113
Bank Sinopac 4,324,113 2,440,152
China Trust Co. Ltd. (a) 2,982,280 2,735,950
Compal Electronics, Inc. 989,599 3,322,582
Compeq Manufacturing Co. Ltd. 23,400 119,508
(a)
CTCI Corp. 460,000 390,101
Eten Information System Co. 424,000 1,022,573
Ltd.
Far Eastern Textile Ltd. 3,511,430 4,804,416
Hon Hai Precision Industries 999,880 6,840,289
Co. Ltd.
Kindom Construction Co. Ltd. 610,000 367,308
Nan Ya Plastics Corp. 500,000 874,842
Phoenixtec Power Co. Ltd. 494,480 1,005,484
Siliconware Precision 1,464,000 2,630,769
Industries Co. Ltd.
Systex Corp. 899,000 2,848,345
Taishin International Bank 600,000 342,371
Taiwan Semiconductor 3,832,677 17,036,805
Manufacturing Co. Ltd.
Ulead Systems, Inc. 506,000 1,611,160
United Microelectronics Corp. 2,727,950 7,095,078
61,501,092
THAILAND - 2.0%
Advanced Info Service PCL 58,000 675,728
(For. Reg.) (a)
Kiatnakin Finance & 600,000 722,330
Securities PCL (a)
Ministry of Finance of the 2,866,600 1,001,918
Kingdom of Thailand (Siam
Commercial Bank PLC)
warrants 5/31/02 (a)
Shin Satellite PCL (a) 875,000 475,728
Siam Cement PCL (For. Reg.) 90,000 2,330,097
(a)
Siam Makro PCL (a) 39,800 66,462
Siam Makro PCL (For. Reg.) 610,200 1,018,975
Thai Farmers Bank PCL (For. 650,000 917,152
Reg.) (a)
7,208,390
SHARES VALUE (NOTE 1)
UNITED KINGDOM - 5.2%
HSBC Holdings PLC (Hong Kong) 1,513,550 $ 18,635,584
(Reg.)
TOTAL COMMON STOCKS 349,341,933
(Cost $249,503,647)
CONVERTIBLE PREFERRED STOCKS
- - 0.4%
THAILAND - 0.4%
Siam Commercial Bank PLC 1,166,600 1,321,392
5.25% (a) (Cost $824,305)
CASH EQUIVALENTS - 2.4%
Central Cash Collateral Fund, 2,784,950 2,784,950
5.26% (b)
Taxable Central Cash Fund, 5,753,920 5,753,920
5.21% (b)
TOTAL CASH EQUIVALENTS 8,538,870
(Cost $8,538,870)
TOTAL INVESTMENT PORTFOLIO - 359,202,195
99.6%
(Cost $258,866,822)
NET OTHER ASSETS - 0.4% 1,479,689
NET ASSETS - 100% $ 360,681,884
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $309,135,892 and $269,182,012, respectively.
The fund participated in the security lending program. At period end,
the value of securities loaned amounted to $2,688,354. The fund
received cash collateral of $2,784,950 which was invested in the
Central Cash Collateral Fund.
The fund participated in the bank borrowing program. The average daily
loan balance during the period for which loans were outstanding
amounted to $2,017,000. The weighted average interest rate was 5.48%.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost of investment securities for
income tax purposes was $259,789,342. Net unrealized appreciation
aggregated $99,412,853, of which $106,628,237 related to appreciated
investment securities and $7,215,384 related to depreciated investment
securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $143,548,000 of which $32,651,000, $110,573,000 and
$324,000 will expire on October 31, 2005, 2006 and 2007, respectively.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Net Assets
BASIC INDUSTRIES 3.0%
CASH EQUIVALENTS 2.4
CONSTRUCTION & REAL ESTATE 9.8
DURABLES 2.5
ENERGY 0.1
FINANCE 20.1
HOLDING COMPANIES 0.1
INDUSTRIAL MACHINERY & 8.3
EQUIPMENT
MEDIA & LEISURE 4.1
NONDURABLES 2.6
RETAIL & WHOLESALE 1.5
TECHNOLOGY 31.1
TRANSPORTATION 2.0
UTILITIES 12.0
SOUTHEAST ASIA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 359,202,195
value (cost $258,866,822) -
See accompanying schedule
Foreign currency held at 4,877,351
value (cost $4,843,050)
Receivable for investments 2,414,091
sold
Receivable for fund shares 359,542
sold
Dividends receivable 502,004
Interest receivable 18,827
Redemption fees receivable 902
Other receivables 5,871
TOTAL ASSETS 367,380,783
LIABILITIES
Payable for investments $ 1,915,282
purchased
Payable for fund shares 1,475,627
redeemed
Accrued management fee 277,128
Other payables and accrued 245,912
expenses
Collateral on securities 2,784,950
loaned, at value
TOTAL LIABILITIES 6,698,899
NET ASSETS $ 360,681,884
Net Assets consist of:
Paid in capital $ 404,233,757
Undistributed net investment 566,245
income
Accumulated undistributed net (144,491,480)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 100,373,362
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 29,687,778 $ 360,681,884
shares outstanding
NET ASSET VALUE and $12.15
redemption price per share
($360,681,884 (divided by)
29,687,778 shares)
Maximum offering price per $12.53
share (100/97.00 of $12.15)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME $ 5,012,805
Dividends
Interest 344,027
Security lending 31,593
5,388,425
Less foreign taxes withheld (240,264)
TOTAL INCOME 5,148,161
EXPENSES
Management fee Basic fee $ 2,190,265
Performance adjustment 474,579
Transfer agent fees 1,001,891
Accounting and security 173,892
lending fees
Non-interested trustees' 1,054
compensation
Custodian fees and expenses 407,562
Registration fees 47,786
Audit 70,090
Legal 944
Interest 307
Miscellaneous 924
Total expenses before 4,369,294
reductions
Expense reductions (64,296) 4,304,998
NET INVESTMENT INCOME 843,163
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 699,202
Foreign currency transactions (164,872) 534,330
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 103,806,641
Assets and liabilities in (2,959) 103,803,682
foreign currencies
NET GAIN (LOSS) 104,338,012
NET INCREASE (DECREASE) IN $ 105,181,175
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION $ 537,360
Sales charges paid to FDC
Sales charges - Retained by $ 536,707
FDC
Expense reductions Directed $ 62,950
brokerage arrangements
Custodian credits 1,064
Transfer agent credits 282
$ 64,296
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
ASSETS
Operations Net investment $ 843,163 $ 2,515,337
income
Net realized gain (loss) 534,330 (112,465,494)
Change in net unrealized 103,803,682 71,238,265
appreciation (depreciation)
NET INCREASE (DECREASE) IN 105,181,175 (38,711,892)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (562,063) (1,459,446)
from net investment income
Share transactions Net 212,535,353 131,309,522
proceeds from sales of shares
Reinvestment of distributions 540,135 1,428,081
Cost of shares redeemed (181,366,771) (148,622,010)
NET INCREASE (DECREASE) IN 31,708,717 (15,884,407)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 1,014,716 548,119
TOTAL INCREASE (DECREASE) 137,342,545 (55,507,626)
IN NET ASSETS
NET ASSETS
Beginning of period 223,339,339 278,846,965
End of period (including $ 360,681,884 $ 223,339,339
undistributed net investment
income of $566,245 and
$347,773, respectively)
OTHER INFORMATION
Shares
Sold 19,445,097 15,599,765
Issued in reinvestment of 63,997 142,524
distributions
Redeemed (17,300,454) (17,461,859)
Net increase (decrease) 2,208,640 (1,719,570)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 8.13 $ 9.55 $ 14.69 $ 13.88 $ 14.61
period
Income from Investment
Operations
Net investment income .03 C .09 C .04 C, E .14 C .15
Net realized and unrealized 3.97 (1.48) (4.62) .87 (.91)
gain (loss)
Total from investment 4.00 (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 .04 .02 .01 .03 .03
in capital
Net asset value, end of period $ 12.15 $ 8.13 $ 9.55 $ 14.69 $ 13.88
TOTAL RETURN A, B 49.80% (14.44)% (32.48)% 7.59% (5.00)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 360,682 $ 223,339 $ 278,847 $ 755,346 $ 649,868
(000 omitted)
Ratio of expenses to average 1.46% 1.83% 1.32% 1.13% 1.10%
net assets
Ratio of expenses to average 1.43% D 1.79% D 1.32% 1.12% D 1.10%
net assets after expense
reductions
Ratio of net investment .28% 1.07% .22% .95% .90%
income to average net assets
Portfolio turnover rate 93% 95% 141% 102% 94%
A THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT
INCLUDE THE ONE TIME SALES
CHARGE.
C NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
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 INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.02 PER
SHARE.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Canada Fund, Fidelity Emerging Markets Fund, Fidelity Europe
Fund, Fidelity Europe Capital Appreciation 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, and Fidelity Southeast Asia 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. On November 18, 1999, the Board of
Trustees approved a change in the fund's name from Japan Small
Companies to Japan Smaller Companies. 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.
Foreign governments may also impose taxes on other payments or
transactions with respect to foreign securities. 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), market
discount, 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.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in Canada, Emerging
Markets, Hong Kong and China, Japan, Japan Smaller Companies, Latin
America, Nordic, and Southeast Asia less than 90 days are subject to a
short-term trading fee equal to 1.50% of the proceeds of the redeemed
shares (1.00% for shares purchased prior to February 1, 1996 for
Canada and Japan). Shares held in Europe,
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES - CONTINUED
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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the funds may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc. (FIMM), an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the funds are
recorded as either interest income or security lending 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, no funds had 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 .2167% 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. For the period, each fund's
management fee was equivalent to the following annual rates expressed
as a percentage of average net assets after the performance
adjustment, if applicable:
Canada .32%
Emerging Markets .73%
Europe .60%
Europe Capital Appreciation .66%
Hong Kong and China .73%
Japan .86%
Japan Smaller Companies .72%
Latin America .73%
Nordic .73% Pacific Basin .92%
Southeast Asia .89%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 Smaller 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. For the period
July 1, 1998 to December 31, 1998, FDC voluntarily waived the sales
charge on the sale of shares of the Europe Capital Appreciation 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 annual rates as a percentage of the
average net assets:
Canada .39%
Emerging Markets .48%
Europe .25%
Europe Capital Appreciation .26%
Hong Kong and China .36%
Japan .26%
Japan Smaller Companies .19%
Latin America .38%
Nordic .31%
Pacific Basin .32%
Southeast Asia .33%
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains each fund's
accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting 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 lend portfolio securities from time to time in order to
earn additional income. Each applicable fund receives collateral (in
the form of U.S. Treasury obligations, letters of credit and/or cash)
against the loaned securities and maintains collateral in an amount
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 funds and any additional
required collateral is delivered to the funds on the next business
day. If the borrower defaults on its obligation to return the
securities loaned because of insolvency or other reasons, a fund could
experience delays and costs in recovering the securities loaned or in
gaining access to the collateral. 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 fund's operating expenses
(excluding interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) 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, through arrangements with certain funds' custodian and
transfer agent, credits realized on uninvested cash balances were used
to reduce 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:
%
FUND OWNERSHIP
Japan Smaller Companies 7%
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 no longer holds Siderurgica Brasileiras SA debt securities.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Investment Trust
and the Shareholders of:
Fidelity Canada Fund,
Fidelity Emerging Markets Fund,
Fidelity Europe Fund,
Fidelity Hong Kong and China Fund,
Fidelity Japan Fund,
Fidelity Japan Smaller Companies Fund,
Fidelity Latin America Fund,
Fidelity Nordic Fund,
Fidelity Pacific Basin Fund,
Fidelity Southeast Asia Fund,
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Canada Fund, Fidelity Emerging Markets Fund, Fidelity Europe
Fund, Fidelity Hong Kong and China Fund, Fidelity Japan Fund, Fidelity
Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity
Nordic Fund, Fidelity Pacific Basin Fund and Fidelity Southeast Asia
Fund (funds of Fidelity Investment Trust) at October 31, 1999, and the
results of their operations, the changes in their net assets and the
financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fidelity Investment Trust's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 15, 1999
INDEPENDENT AUDITORS' REPORT
To the Trustees of Fidelity Investment Trust and Shareholders
of Fidelity Europe Capital Appreciation Fund:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of Fidelity Europe Capital
Appreciation Fund as of October 31, 1999, and the related statements
of operations, changes in net assets and financial highlights for the
year then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audit. The statement of changes in net assets
for the year ended October 31, 1998, and the financial highlights for
each of the years in the four-year period ended October 31, 1998 were
audited by other auditors whose report, dated December 14, 1998,
expressed an unqualified opinion on those statements and financial
highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of the securities owned at October 31, 1999, by
correspondence with the custodian and brokers; where replies were not
received from brokers, we performed other auditing procedures. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Fidelity Europe Capital Appreciation Fund at October 31, 1999, the
results of its operations, the changes in its net assets, and its
financial highlights for the year then ended in conformity with
generally accepted accounting principles.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 3, 1999
DISTRIBUTIONS
The Board of Trustees of each fund voted to pay to shareholders of
record at the opening of business on record date, the following
distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment
income:
FUND PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Canada 12/06/99 12/03/99 $.03 -
Europe 12/06/99 12/03/99 $.18 $1.94
Europe Capital
Appreciation 12/13/99 12/10/99 $.13 $ .47
Hong Kong and China 12/06/99 12/03/99 $.17 -
Japan 12/06/99 12/03/99 $.39 -
Japan Smaller Companies 12/13/99 12/10/99 $.15 -
Latin America 12/06/99 12/03/99 $.14 -
Nordic 12/13/99 12/10/99 $.06 $ .45
Pacific Basin 12/13/99 12/10/99 $.26 -
Southeast Asia 12/06/99 12/03/99 $.02 -
Each fund hereby designates 100% of the long-term capital gains
dividends distributed during the fiscal year as 20%-rate capital gains
dividend.
A percentage of the dividends distributed during the fiscal year for
the following fund qualifies for the dividends-received deduction for
corporate shareholders:
Canada 39%
The amounts per share which represent income derived from sources
within, and taxes paid to, foreign countries or possessions of the
United States are as follows:
PAY DATE INCOME TAXES
Canada 12/7/98 $.099 $.029
Europe 12/7/98 $.359 $.079
Hong Kong and China 12/7/98 $.336 $.016
Japan 12/7/98 $.039 $.009
Latin America 12/7/98 $.268 $.038
Latin America 1/2/99 $.023 $.003
Pacific Basin 12/14/98 $.034 $.014
Southeast Asia 12/7/98 $.036 $.016
The funds will notify shareholders in January 2000 of amounts for use
in preparing 1999 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.,
London, England
Fidelity Management & Research (Far East) Inc.,
Tokyo, Japan
Fidelity 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
Brenda A. Reed, VICE PRESIDENT, JAPAN 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
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
Ned C. Lautenbach
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, HONG KONG AND CHINA FUND, JAPAN SMALLER COMPANIES FUND,
LATIN AMERICA FUND, NORDIC 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 Smaller 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
www.fidelity.com
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST SM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(registered trademark)
BULK RATE
U.S. Postage
PAID
Fidelity
Investments
P.O. Box 193
Boston, MA 02101
