FIDELITY INVESTMENT TRUST, N-14, 2000-03-28

FIDELITY INVESTMENT TRUST
N-14, 2000-03-28

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As filed with the Securities and Exchange Commission
on March 28, 2000
Registration No. 33-___________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-14

REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. [ ]

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

82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)

Registrant's Telephone Number (617) 563-7000

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

Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective under the
Securities Act of 1933.

The Registrant has registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Section 24(f) under the
Investment Company Act of 1940; accordingly, no fee is payable
herewith because of reliance upon Section 24(f). Pursuant to Rule 429,
this Registration Statement relates to shares previously registered on
Form N-1A.

It is proposed that this filing will become effective on April 28,
2000, pursuant to Rule 488.

Fidelity Europe Fund

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement contains the following papers and
documents:

Facing Page

Contents of Registration Statement

Solicitation Letter to Shareholders

Forms of Proxy Cards

Notice of Special Meeting

Part A - Proxy Statement and Prospectus

Part B- Statement of Additional Information

Part C - Other Information

Signature Page

Exhibits

IMPORTANT PROXY MATERIALS

PLEASE CAST YOUR VOTE NOW!

Dear Shareholder:

I am writing to ask you for your vote on an important proposal to
merge Fidelity France Fund, Fidelity Germany Fund and Fidelity United
Kingdom Fund into Fidelity Europe Fund. A shareholder meeting is
scheduled for July 19, 2000. Votes received in time to be counted at
the meeting will decide whether the merger takes place. This package
contains information about the proposal and includes all the materials
you will need to vote by mail.

The funds' Board of Trustees has reviewed the proposed mergers and has
recommended that the proposed mergers be presented to shareholders.
The Trustees, most of who are not affiliated with Fidelity, are
responsible for protecting your interests as a shareholder. The
Trustees have determined that the proposed mergers are in
shareholders' best interest. However, the final decision is up to
you.

The proposed merger would provide shareholders of the France, Germany
and United Kingdom funds with an opportunity to invest in a fund with
broader investment policies and lower expenses. The investment
objective of each fund is long-term growth of capital. The principal
difference between the funds are the specific regions in which each
normally invests. Fidelity France Fund, Fidelity Germany Fund and
Fidelity United Kingdom Fund normally invest 65% of their total assets
in issuers of their respective countries. The Fidelity Europe Fund
must invest 65% of its assets in securities of issuers in Europe,
which is defined to include 29 different countries (including France,
Germany and the United Kingdom). We have attached a Q&A to assist you
in understanding the proposals. The enclosed proxy statement includes
a detailed description of the proposed mergers.

Please read the enclosed materials and promptly cast your vote on the
proxy card(s). You are entitled to one vote for each dollar of net
asset value you own of each fund on the record date (May 22, 2000).
Your vote is extremely important, no matter how large or small your
holdings may be.

VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card(s) enclosed in this
package. Be sure to sign the card before mailing it in the
postage-paid envelope provided.

If you have any questions before you vote, please call us at
1-800-544-6666. We will be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative for your
funds.

Sincerely,

Edward C. Johnson 3d

Chairman and Chief Executive Officer

Important information to help you understand and vote on the proposals

Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.

WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
Shareholders of the respective funds are being asked to vote on the
following proposals:
1. To approve an Agreement and Plan of Reorganization between Fidelity
France Fund and Fidelity Europe Fund.
2. To approve an Agreement and Plan of Reorganization between Fidelity
Germany Fund and Fidelity Europe Fund.
3. To approve an Agreement and Plan of Reorganization between Fidelity
United Kingdom Fund and Fidelity Europe Fund.

WHAT IS THE REASON FOR AND ADVANTAGES OF THESE MERGERS?
The proposed mergers would allow shareholders in the Fidelity France
Fund, Fidelity Germany Fund and Fidelity United Kingdom Fund to invest
in a fund with a similar investment objective (long-term capital of
growth), and to benefit from the significantly lower annual operating
expenses of Fidelity Europe Fund.

DO THE FUNDS BEING MERGED HAVE SIMILAR INVESTMENT POLICIES?
All of the funds seek long-term growth of capital and invest primarily
in common stocks.

WHO IS THE FUND MANAGER FOR THESE FUNDS?
Alexandra Hartmann currently manages the France and Germany funds,
while Fred Gautier currently manages the United Kingdom Fund. The
Europe Fund is managed by Thierro Serero. It is anticipated that Mr.
Serero will manage the combined fund.

HOW DO THE EXPENSE STRUCTURES OF THE FUNDS COMPARE?
Each fund pays its management fee and other expenses separately. The
management fees and other expenses of the funds vary from year to
year, as a percentage of their respective average net assets. The
total operating expenses (the sum of their respective management fee
and other expenses) of the funds for the 12 months ended October 31,
1999 were: 0.96% for Europe Fund, 2.86% for France Fund, 1.90% for
Germany Fund, and 3.56% for United Kingdom Fund. Fidelity Management
& Research Company (FMR) has voluntarily agreed to reimburse France
Fund, Germany Fund and United Kingdom Fund to the extent that total
operating expenses exceed 2.00%.

France Fund, Germany Fund and United Kingdom Fund also have a 3.00%
front-end sales charge. Europe Fund does not have a sales charge. In
addition, each of the funds has a redemption fee. France Fund,
Germany Fund and United Kingdom Fund each charge a redemption fee of
1.50% on shares held less than 90 days. Europe Fund charges a 1.00%
redemption fee on shares held for less than 30 days.

If the merger is approved by shareholders, the combined fund will
retain Europe Fund's expense structure, requiring payment of a
management fee and other operating expenses, and applying a
performance adjustment to the management fee.

ARE THE MERGERS CONSIDERED TAXABLE EVENTS FOR FEDERAL INCOME TAX
PURPOSES?
Typically, the exchange of shares in a fund merger transaction does
not result in a gain or loss for federal income tax purposes.

WHAT WILL BE THE SIZE OF FIDELITY EUROPE FUND AFTER THE MERGER AND HOW
HAS THE FUND PERFORMED?
If the proposal is approved, the combined fund is anticipated to have
over $1.3 billion in assets.

The table below shows average annual total returns for Fidelity France
Fund, Fidelity Germany Fund, Fidelity United Kingdom Fund, Fidelity
Europe Fund and the Lipper European Region Funds average over the last
1, 3, 5, and 10 year periods. Please keep in mind that past
performance is no guarantee of future results and you may have a gain
or loss when you sell your shares.

AVERAGE ANNUAL TOTAL RETURNS AS OF MARCH 31, 2000*

1 YEAR 3 YEARS 5 YEARS LIFE OF FUND

Fidelity France Fund % % N/A N/A

Fidelity Germany Fund % % N/A N/A

Fidelity United Kingdom Fund % % N/A N/A

Fidelity Europe Fund % % % %

Lipper European Region Funds
average % % % %

HOW WILL YOU DETERMINE THE NUMBER OF SHARES OF FIDELITY EUROPE FUND
THAT I WILL RECEIVE?
As of the close of business of the New York Stock Exchange on the
Closing Dates of the mergers, shareholders will receive the number of
full and fractional shares of Fidelity Europe Fund that is equal in
value to the net asset value of their respective shares of Fidelity
France, Germany, and/or United Kingdom Fund on that date. The
anticipated closing date for France Fund is July 28, 2000. The
anticipated closing date for Germany Fund is July 26, 2000, and the
anticipated closing date for United Kingdom Fund is July 24, 2000.

WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH QUORUM BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
To facilitate receiving sufficient votes, we will need to take further
action. We, or D.F. King & Co., Inc., a proxy solicitation firm, may
contact you by mail or telephone. Therefore, we encourage
shareholders to vote as soon as they review the enclosed proxy
materials to avoid additional mailings or telephone calls.

If there are not sufficient votes to approve the proposals by the time
of the Shareholder Meeting (July 19, 2000), the meeting may be
adjourned to permit further solicitation of proxy votes.

HAS THE FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSAL?
Yes. The Board of Trustees has unanimously approved the proposals and
recommends that you vote to approve each one.

HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of Fidelity France, Germany, and/or United
Kingdom Fund on the record date. The record date is May 22, 2000.

HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposal or
how to vote your shares, please call Fidelity at 800-544-8888.

HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."

* Average annual total returns are historical and include changes in
share price, reinvestment of dividends and capital gains, if any and
do not include the effect of Fidelity France, Germany, and United
Kingdom Fund's 3% sales charge.

** Lipper, Inc. is a nationally recognized organization that reports
on mutual fund total return performance and calculates fund rankings.
Lipper averages are based on universes of funds with the same
investment objective. Peer group averages include reinvested dividends
and capital gains, if any, and exclude sales charges.
Fidelity Distributors Corporation

Shareholders are urged to read the Proxy Statement and Prospectus (the
"Proxy Statement") which contains important information about the
proposed merger. The Proxy Statement will be filed shortly with the
SEC and will be available, without charge, on the SEC's Internet Web
site (http://www.sec.gov). Proxy Statements will be mailed to
investors who are shareholders of the Fund as of May 22, 2000.

Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.

Return the proxy card in the enclosed envelope or mail to:

FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY INVESTMENT TRUST:
FIDELITY FRANCE FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Thomas R. Williams, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Investment Trust: Fidelity France Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at an office of the trust at 27 State Street,
10th Floor, Boston, MA 02109, on July 19, 2000 at 11:00 a.m. Eastern
time and at any adjournments thereof. All powers may be exercised by
a majority of said proxy holders or substitutes voting or acting or,
if only one votes and acts, then by that one. This Proxy shall be
voted on the proposals described in the Proxy Statement as specified
on the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.

NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.

Date _____________

_______________________________________

Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE

cusip # 315910794 fund # 345

Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
- ----------------------------------------------------------------------
______________________________________________________________________
1. (1) To approve an Agreement FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
and Plan of
Reorganization between
Fidelity France Fund and
Fidelity Europe Fund.

FRA-PXC-0700 cusip # 315910794 fund # 345

Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.

Return the proxy card in the enclosed envelope or mail to:

FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY INVESTMENT TRUST:
FIDELITY GERMANY FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Thomas R. Williams, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Investment Trust: Fidelity Germany Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at an office of the trust at 27 State Street,
10th floor, Boston, MA 02109, on July 19, 2000 at 11:00 a.m. Eastern
time and at any adjournments thereof. All powers may be exercised by
a majority of said proxy holders or substitutes voting or acting or,
if only one votes and acts, then by that one. This Proxy shall be
voted on the proposals described in the Proxy Statement as specified
on the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.

Date _____________

_______________________________________

Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE

cusip # 315910786 fund # 346

GER-PXC-0700 cusip # 315910786 fund # 346

Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.

Return the proxy card in the enclosed envelope or mail to:

FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY INVESTMENT TRUST:
FIDELITY UNITED KINGDOM FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Thomas R. WIlliams, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Investment Trust: Fidelity United Kingdom Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at an office of the trust at 27
State Street, 10th floor, Boston, MA 02109, on July 19, 2000 at 11:00
a.m. Eastern time and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.

Date _____________

_______________________________________

Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE

cusip # 315910745 fund# 344

UTY-PXC-0700 cusip # 315910745 fund # 344

FIDELITY FRANCE FUND, FIDELITY GERMANY FUND AND FIDELITY UNITED
KINGDOM FUND
EACH A FUND OF
FIDELITY INVESTMENT TRUST

82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-6666

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of the above funds:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity France Fund (France Fund), Fidelity Germany Fund
(Germany Fund) and Fidelity United Kingdom Fund (United Kingdom Fund)
will be held at an office of Fidelity Investment Trust (the trust), 27
State Street, 10th Floor, Boston, Massachusetts 02109 on July 19,
2000, at 11:15 a.m. Eastern time. The purpose of the Meeting is to
consider and act upon the following proposals, and to transact such
other business as may properly come before the Meeting or any
adjournments thereof. Approval of each reorganization will be
determined solely by approval of the shareholders of the individual
fund affected. It will not be necessary for all three reorganizations
to be approved for any one of them to take place.

(1) To approve an Agreement and Plan of Reorganization between France
Fund and Fidelity Europe Fund (Europe Fund), another fund of the
trust. The Agreement provides for the transfer of all of the assets of
France Fund to Europe Fund in exchange solely for shares of beneficial
interest of Europe Fund and the assumption by Europe Fund of France
Fund's liabilities. Thereupon, Europe Fund's shares will be
distributed to shareholders of France Fund in liquidation of France
Fund.

(2) To approve an Agreement and Plan of Reorganization between
Germany Fund and Europe Fund, another fund of the trust. The Agreement
provides for the transfer of all of the assets of Germany Fund to
Europe Fund in exchange solely for shares of beneficial interest of
Europe Fund and the assumption by Europe Fund of Germany Fund's
liabilities. Thereupon, Europe Fund's shares will be distributed to
shareholders of Germany Fund in liquidation of Germany Fund.

(3) To approve an Agreement and Plan of Reorganization between United
Kingdom Fund and Europe Fund, another fund of the trust. The Agreement
provides for the transfer of all of the assets of United Kingdom Fund
to Europe Fund in exchange solely for shares of beneficial interest of
Europe Fund and the assumption by Europe Fund of United Kingdom Fund's
liabilities. Thereupon, Europe Fund's shares will be distributed to
shareholders of United Kingdom Fund in liquidation of United Kingdom
Fund.

The Board of Trustees has fixed the close of business on May 22, 2000
as the record date for the determination of the shareholders of each
of France Fund, Germany Fund and United Kingdom Fund entitled to
notice of, and to vote at, such Meeting and any adjournments thereof.

By Order of the Board of Trustees,
ERIC D. ROITER, Secretary

May 22, 2000

YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.

SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.

INSTRUCTIONS FOR EXECUTING PROXY CARD

The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.

1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.

2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.

3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:

REGISTRATION VALID SIGNATURE

A. 1) ABC Corp. John Smith, Treasurer

2) ABC Corp. John Smith, Treasurer

c/o John Smith, Treasurer

B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee

2) ABC Trust Ann B. Collins, Trustee

3) Ann B. Collins, Trustee Ann B. Collins, Trustee

u/t/d 12/28/78

C. 1) Anthony B. Craft, Cust. Anthony B. Craft

f/b/o Anthony B. Craft, Jr.

UGMA

FIDELITY FRANCE FUND, FIDELITY GERMANY FUND AND FIDELITY UNITED
KINGDOM FUND
FUNDS OF
FIDELITY INVESTMENT TRUST

82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-6666

PROXY STATEMENT AND PROSPECTUS
MAY 22, 2000

This Proxy Statement and Prospectus (Proxy Statement) is being
furnished to shareholders of Fidelity France Fund (France Fund),
Fidelity Germany Fund (Germany Fund) and Fidelity United Kingdom Fund
(United Kingdom Fund), funds of Fidelity Investment Trust (the trust),
in connection with the solicitation of proxies by the trust's Board of
Trustees for use at the Special Meeting of Shareholders of France
Fund, Germany Fund and United Kingdom Fund and at any adjournments
thereof (the Meeting). The Meeting will be held on Wednesday, July 19,
2000 at 11:15 a.m. Eastern time at 27 State Street,10th Floor, Boston,
Massachusetts 02109, an office of the trust.

As more fully described in the Proxy Statement, the purpose of the
Meeting is to vote on proposed reorganizations (Reorganizations).
Pursuant to each Agreement and Plan of Reorganization (Agreements),
France Fund, Germany Fund and United Kingdom Fund would transfer all
of their assets to Fidelity Europe Fund (Europe Fund), another fund of
the trust, in exchange solely for shares of beneficial interest of
Europe Fund and the assumption by Europe Fund of France Fund's,
Germany Fund's and United Kingdom Fund's liabilities, respectively.
The number of shares to be issued in the proposed Reorganizations will
be based upon the relative net asset values of each of the funds at
the time of the exchange. As provided in the Agreements, each of
France Fund, Germany Fund and United Kingdom Fund will distribute
shares of Europe Fund to its shareholders in liquidation of France
Fund, Germany Fund and United Kingdom Fund, respectively, on July 24,
2000 (United Kingdom Fund), July 26, 2000 (Germany Fund) and July 28,
2000 (France Fund), or such other date as the parties may agree (the
Closing Dates). Approval of each Reorganization will be determined
solely by approval of the shareholders of the individual fund
affected. It will not be necessary for all three Reorganizations to be
approved for any one of them to take place.

Europe Fund, an equity fund, is a diversified fund of the trust, an
open-end management investment company organized as a Massachusetts
business trust on April 20, 1984. Europe Fund's investment objective
is to seek growth of capital over the long-term. Europe Fund normally
invests at least 65% of its total assets in securities of issuers that
have their principal activities in Europe. Europe includes Austria,
Belgium, Belarus, Bulgaria, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal,
Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and
the United Kingdom.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT AND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

This Proxy Statement, which should be retained for future reference,
sets forth concisely the information about the Reorganizations and
Europe Fund that a shareholder should know before voting on the
proposed Reorganizations. The Statement of Additional Information
dated May 22, 2000 relating to this Proxy Statement has been filed
with the Securities and Exchange Commission (SEC) and is incorporated
herein by reference. This Proxy Statement is accompanied by the
Prospectus (dated December 29, 1999 [and supplemented March 1, 2000]),
which offers shares of Europe Fund. The Statement of Additional
Information for Europe Fund (dated December 29, 1999 [and supplemented
March 1, 2000]) is available upon request. Attachment 1 contains
excerpts from the Annual Report of Europe Fund dated October 31, 1999.
The Prospectus and Statement of Additional Information for Europe Fund
have been filed with the SEC and are incorporated herein by reference.
A Prospectus and Statement of Additional Information for France Fund,
Germany Fund and United Kingdom Fund, both dated December 29, 1999
[and supplemented January 29, 2000], have been filed with the SEC and
are incorporated herein by reference. Copies of these documents may be
obtained without charge by contacting Fidelity Investment Trust at
Fidelity Distributors Corporation, 82 Devonshire Street, Boston,
Massachusetts 02109 or by calling 1-800-544-6666. Copies of documents
for France Fund, Germany Fund, United Kingdom Fund and Europe Fund are
also available on the SEC's Internet Web site (http://www.sec.gov) or
by paying a duplicating fee, by writing the Public Reference Section
of the SEC, Washington, D.C. 20549-6009.

TABLE OF CONTENTS

Voting Information

Synopsis

Comparison of Other Policies of The Funds

Comparison of Principal Risk Factors

The Proposed Transactions

Additional Information About Europe Fund

Miscellaneous

Attachment 1. Excerpts from Annual Report of Fidelity Europe Fund
Dated December 29, 1999

Attachment 2. Annual Fund Operating Expenses and Examples
of Fund Expenses for Certain Reorganizations

Exhibit 1. Form of Agreement and Plan of Reorganization
of Fidelity France Fund

Exhibit 2. Form of Agreement and Plan of Reorganization
of Fidelity Germany Fund

Exhibit 3. Form of Agreement and Plan of Reorganization
of Fidelity United Kingdom Fund

PROXY STATEMENT AND PROSPECTUS

SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY FRANCE FUND, FIDELITY GERMANY FUND AND FIDELITY UNITED
KINGDOM FUND
FUNDS OF
FIDELITY INVESTMENT TRUST

82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-6666

_________________________________

VOTING INFORMATION

This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of,
the Board of Trustees of Fidelity Investment Trust (the trust) to be
used at the Special Meeting of Shareholders of Fidelity France Fund
(France Fund), Fidelity Germany Fund (Germany Fund) and Fidelity
United Kingdom Fund (United Kingdom Fund) and at any adjournments
thereof (the Meeting), to be held on July 19, 2000 at 11:15 a.m. at 27
State Street, 10th Floor, Boston, Massachusetts 02109, an office of
the trust and Fidelity Management & Research Company (FMR), the funds'
investment adviser.

The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about May 22, 2000.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, D.F. King & Co., Inc.
and/or Management Information Services Corp. may be paid on a per-call
basis to solicit shareholders on behalf of the funds at an anticipated
cost of approximately $2,000 for France Fund, $3,000 for Germany Fund
and $2,000 for United Kingdom Fund. France Fund, Germany Fund and
United Kingdom Fund may also arrange to have votes recorded by
telephone. D.F. King & Co., Inc. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the funds at an anticipated
cost of approximately $3,000 for France Fund, $4,000 for Germany Fund
and $3,000 for United Kingdom Fund. If a fund records votes by
telephone, it will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to
confirm that their instructions have been properly recorded. Proxies
given by telephone may be revoked at any time before they are voted in
the same manner that proxies voted by mail may be revoked.

The expenses in connection with preparing this Proxy Statement and
its enclosures and of all solicitations, including telephone voting,
will be paid by the funds, provided the expenses for each fund do not
exceed that fund's voluntary expense cap of 2.00%. Expenses exceeding
each fund's voluntary expense cap will be paid by FMR. The funds will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares.

If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, or by attending the Meeting and voting in person.

All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which
are not revoked, will be voted at the Meeting. Shares represented by
such proxies will be voted in accordance with the instructions
thereon. If no specification is made on a proxy card, it will be voted
FOR the matters specified on the proxy card. Only proxies that are
voted will be counted toward establishing a quorum. Broker non-votes
are not considered voted for this purpose. Shareholders should note
that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the Meeting will occur
only if a sufficient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the same
effect in determining whether the proposal is approved. With respect
to fund shares held in Fidelity Individual retirement accounts
(including Traditional, Rollover, SEP, SAR-SEP, Roth and SIMPLE IRAs),
the IRA Custodian will vote those shares for which it has received
instructions from shareholders only in accordance with such
instructions. The Custodian will vote fund shares for which it has not
received such instructions in the same proportion as it votes the
shares held in IRAs for which it has received instructions, but only
to the extent necessary for a fund to reach quorum. Accordingly, if
Fidelity IRA shareholders do not vote their shares, the Custodian will
vote their shares for them, in the same proportion as other Fidelity
IRA shareholders have voted, but only to the extent necessary to reach
quorum at the Meeting.

If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
against the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement or on any other business properly presented at the
Meeting prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate.

Shares of each fund and Fidelity Europe Fund (Europe Fund) issued and
outstanding on February 29, 2000 are listed below.

France Fund 713,167

Germany Fund 2,789,343

United Kingdom Fund 282,142

Europe Fund 39,808,321

Shareholders of record at the close of business on May 22, 2000 will
be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.

As of February 29, 2000, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than 1% of
each fund's total outstanding shares.

To the knowledge of the trust no other shareholder owned of record or
beneficially 5% or more of the outstanding shares of each fund on that
date. It is not anticipated that any of the above shareholders will
own of record or beneficially 5% or more of the outstanding shares of
the combined fund as a result of the Reorganizations.

VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF FRANCE
FUND, GERMANY FUND AND UNITED KINGDOM FUND. UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF A FUND" MEANS THE AFFIRMATIVE VOTE OF
THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES OF THE FUND
PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE
THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT OR
REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING
SECURITIES OF THE FUND. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT"
FOR THIS PURPOSE.

SYNOPSIS

The following is a summary of certain information contained elsewhere
in this Proxy Statement, in the Agreements, and in the Prospectuses of
France Fund, Germany Fund, United Kingdom Fund and Europe Fund, which
are incorporated herein by this reference. Shareholders should read
the entire Proxy Statement and the Prospectus of Europe Fund carefully
for more complete information.

The proposed reorganizations (the Reorganizations) would merge each
of France Fund, Germany Fund and United Kingdom Fund into Europe Fund,
an equity fund also managed by FMR. If the Reorganizations are
approved, France Fund, Germany Fund and United Kingdom Fund will cease
to exist and current shareholders of each fund will become
shareholders of Europe Fund instead. Approval of each Reorganization
will be determined solely by approval of the shareholders of the
individual fund affected. It will not be necessary for all three
Reorganizations to be approved for any one of them to take place.

INVESTMENT OBJECTIVES AND POLICIES

The following summarizes the investment objective and policy
differences, if any, between France Fund, Germany Fund, United Kingdom
Fund and Europe Fund:

France Fund, Germany Fund and United Kingdom Fund each seeks
long-term growth of capital. Europe Fund seeks growth of capital over
the long-term.

The funds normally invest their assets primarily in common stocks.
The main difference among France Fund, Germany Fund, United Kingdom
Fund and Europe Fund are the number of countries in which each
normally invests. France Fund, Germany Fund and United Kingdom Fund
normally invest 65% of their total assets in issuers of their
respective countries. Europe Fund, by contrast, normally invests at
least 65% of its total assets in securities of issuers that have their
principal activities in Europe. Europe includes Austria, Belgium,
Belarus, Bulgaria, the Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, the Netherlands, Norway, Poland, Portugal, Russia,
Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and the United
Kingdom.

EXPENSE STRUCTURES

Each fund pays its management fee and other expenses separately. The
management fees and other expenses of the funds, as a percentage of
their respective average net assets, vary from year to year. The total
operating expenses (the sum of their respective management fee and
other expenses) of the funds for the 12 months ended October 31, 1999
were: 0.96% for Europe Fund, 2.86% for France Fund, 1.90% for Germany
Fund, and 3.56% for United Kingdom Fund. FMR has voluntarily agreed to
reimburse France Fund, Germany Fund and United Kingdom Fund to the
extent that total operating expenses (excluding interest, taxes,
securities lending costs, brokerage commissions and extraordinary
expenses) exceed 2.00%.

France Fund, Germany Fund and United Kingdom Fund also have a 3.00%
front end sales charge. Europe Fund does not have a sales charge. In
addition, each of the funds has a redemption fee. France Fund, Germany
Fund and United Kingdom Fund each charge a redemption fee of 1.50% on
shares held for less than 90 days. Europe Fund charges a 1.00%
redemption fee on shares held for less than 30 days. Fidelity also
reserves the right to deduct an annual maintenance fee of $12.00 from
accounts in each fund with a value of less than $2,500.

In sum, the proposed mergers would provide France Fund, Germany Fund
and United Kingdom Fund with an opportunity to invest in a fund with
broader investment policies and lower expenses.

THE PROPOSED REORGANIZATIONS

Shareholders of each of France Fund, Germany Fund and United Kingdom
Fund will be asked at the Meeting to vote upon and approve the
Reorganization and the Agreement applicable to that fund, which
provides for the acquisition by Europe Fund of all of the assets of
that fund in exchange solely for shares of Europe Fund and the
assumption by Europe Fund of the liabilities of that fund. France
Fund, Germany Fund and United Kingdom Fund will then distribute the
shares of Europe Fund to their shareholders, so that each shareholder
will receive the number of full and fractional shares of Europe Fund
equal in value to the aggregate net asset value of the shareholder's
shares of the applicable fund on the Closing Date (defined below). The
exchange of assets for Europe Fund's shares will occur as of the close
of business of the New York Stock Exchange (NYSE) on July 24, 2000 for
United Kingdom Fund, July 26, 2000 for Germany Fund and July 28, 2000
for France Fund, or such other time and date as the parties may agree
(the Closing Dates). France Fund, Germany Fund and United Kingdom Fund
will then be liquidated as soon as practicable thereafter. Approval of
each Reorganization will be determined solely by approval of the
shareholders of the individual fund affected. It will not be necessary
for all three Reorganizations to be approved for any one of them to
take place.

The funds have received an opinion of counsel that, except with
respect to Section 1256 contracts, the Reorganizations will not result
in any gain or loss for federal income tax purposes to France Fund,
Germany Fund, United Kingdom Fund or Europe Fund or to the
shareholders of these funds. The rights and privileges of the former
shareholders of France Fund, Germany Fund and United Kingdom Fund will
be effectively unchanged by the Reorganizations.

The Board of Trustees believes that the Reorganization of each fund
would benefit France Fund, Germany Fund and United Kingdom Fund
shareholders and recommends that shareholders vote in favor of each
Reorganization.

COMPARATIVE FEE TABLES

Each fund pays a management fee to FMR for managing its investments
and business affairs which is calculated and paid to FMR every month.
In addition to the management fee, each fund pays expenses for other
services such as maintaining shareholder records and furnishing
shareholder statements and financial reports.

France Fund, Germany Fund and United Kingdom Fund's management fee is
calculated by adding a group fee rate to an individual fund fee rate,
and multiplying the result by each funds' average net assets. The
group fee rate is based on the average net assets of all mutual funds
advised by FMR. This rate cannot rise above 0.52%, and it drops as
total assets under management increase. For October 1999, the group
fee rate was 0.2805% for each fund. The individual fund fee rate is
0.45% for each fund. For the 12 months ended October 31, 1999, France
Fund's, Germany Fund's and United Kingdom Fund's total management fee
rates were 0.74%, 0.74% and 0.73%, respectively. France Fund's,
Germany Fund's and United Kingdom Fund's total operating expense ratio
(management fee and other expenses) were 2.86%, 1.90% and 3.56%,
respectively. FMR has voluntarily agreed to limit the total operating
expenses of France Fund, Germany Fund and United Kingdom Fund to 2.00%
of average net assets (excluding interest, taxes, brokerage
commissions and extraordinary expenses).

Europe Fund's management fee, by contrast, is determined by
calculating a basic fee and then applying a performance adjustment.
The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month. The
performance adjustment either increases or decreases the management
fee, depending on how well Europe Fund has performed relative to the
Morgan Stanley Capital International Europe Index. The maximum
annualized performance adjustment rate is (plus/minus)0.20% of the
Europe Fund's average net assets over the performance period. The
performance adjustment rate is calculated monthly by comparing Europe
Fund's performance over the most recent 36-month period. The
performance adjustment rate is divided by twelve and multiplied by the
fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. For
the 12 months ended October 31, 1999, Europe Fund's total management
fee rate and total operating expense ratio were 0.60% and 0.96%,
respectively.

If shareholders approve the Reorganizations, the combined fund will
retain Europe Fund's expense structure, requiring payment of a
management fee and other operating expenses. If any of the proposed
Reorganizations are not approved, the fund not approving the
Reorganization will maintain its current fee structure. For more
information about the funds' current fees, refer to their
Prospectuses.

The following tables show the current fees and expenses of France
Fund, Germany Fund, United Kingdom Fund and Europe Fund for the 12
months ended October 31,1999, adjusted to reflect current fees, and
pro forma fees for the combined fund based on the same period after
giving effect to all three Reorganizations.

ANNUAL FUND OPERATING EXPENSES

Annual fund operating expenses are paid out of each fund's assets.
Expenses are factored into a fund's share price or dividends and are
not charged directly to shareholder accounts. The following figures
are based on historical expenses, adjusted to reflect current fees, of
each fund and are calculated as a percentage of average net assets of
each fund. The annual fund operating expenses provided below for
France Fund, Germany Fund, United Kingdom Fund and Europe Fund do not
reflect the effect of any reduction of certain expenses during the
period. Attachment 2 provides expense information for the combined
fund if one or more of the Reorganizations are not approved.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FRANCE FUND GERMANY FUND UNITED KINGDOM FUND EUROPE FUND COMBINED FUND PRO FORMA

Maximum sales charge (load) 3.00% 3.00% 3.00% none none
on purchases (as a % of
offering price)A

Sales charge (load) on none none none none none
reinvested distributions

Deferred sales charge (load) none none none none none
on reinvested redemptions

Redemption fee (as a % of 1.50%* 1.50%* 1.50%* 1.00%** 1.00%**
amount redeemed)

</TABLE>

A Lower sales charges may be available for accounts over $250,000

* Redemption fee on shares held for less than 90 days (as a % of
amount redeemed)

**Redemption fee on shares held for less than 30 days (as a % of
amount redeemed)

IF ALL THREE REORGANIZATIONS ARE APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FRANCE FUND GERMANY FUND UNITED KINGDOM FUND EUROPE FUND COMBINED FUND PRO FORMA

Management Fees 0.74% 0.74% 0.73% 0.60% 0.60%

Distribution and Service None None None None None
(12b-1) fee

Other expenses 2.12% 1.16% 2.83% 0.36% 0.36%

Total annual fund operating 2.86%A 1.90%A 3.56%A 0.96% 0.96%
expensesB

</TABLE>

A FMR has voluntarily agreed to reimburse the fund to the extent that
total operating expenses (excluding interest, taxes, securities
lending costs, brokerage commissions and extraordinary expenses), as a
percentage of its average net assets, exceed 2.00%. These arrangements
can be discontinued by FMR at any time.

B The total operating expenses provided for each fund do not reflect
the effect of any expense reimbursements or reduction of certain
expenses during the period. Including these reductions, the total fund
operating expenses, after reimbursement, would have been 1.98% for
France Fund, 1.79% for Germany Fund, 1.98% for United Kingdom Fund,
0.89% for Europe Fund and 0.89% for the Combined Fund.

EXAMPLES OF EFFECT OF FUND EXPENSES

The following table illustrates the expenses on a hypothetical
$10,000 investment in each fund under the current and pro forma
(combined fund) expenses calculated at the rates stated above,
assuming a 5% annual return. Attachment 2 provides examples of the
effect of fund expenses for the combined fund if one or more of the
Reorganizations are not approved.

IF ALL THREE REORGANIZATIONS ARE APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AFTER 1 YEAR AFTER 3 YEARS AFTER 5 YEARS AFTER 10 YEARS

France Fund $580 $1,159 $1,763 $3,390

Germany Fund $487 $ 879 $1,296 $2,455

United Kingdom Fund $648 $1,359 $2,090 $4,012

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

</TABLE>

These examples assume that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual
or expected expenses, which may vary. The assumed return of 5% is not
a prediction of, and does not represent, actual or expected
performance of any fund.

COMBINED CAPITALIZATION

The following table shows the capitalization of France Fund, Germany
Fund, United Kingdom Fund and Europe Fund as of October 31, 1999 and
on a pro forma combined basis (unaudited) as of that date giving
effect to the Reorganizations.

NET ASSETS NAV PER SHARE SHARES OUTSTANDING

France Fund $ 11,725,518 $17.95 653,378

Germany Fund $ 22,959,137 $14.98 1,532,381

United Kingdom Fund $ 6,429,508 $14.64 439,189

Europe Fund $1,317,402,134 $34.09 38,641,105

Combined Fund $1,358,516,297 $34.09 39,847,153

FORMS OF ORGANIZATION

France Fund, Germany Fund and United Kingdom Fund are non-diversified
funds of the trust, an open-end management investment company
organized as a Massachusetts business trust on April 20, 1984. Europe
Fund is a diversified fund of the trust. The trust is authorized to
issue an unlimited number of shares of beneficial interest. Because
all of the funds are series of the same Massachusetts business trust,
organized under the same Declaration of Trust, the rights of the
shareholders of France Fund, Germany Fund and United Kingdom Fund
under state law and the governing documents are expected to remain
unchanged after the Reorganizations. For more information regarding
shareholder rights, refer to the section of the funds' Statements of
Additional Information called "Description of the Trust."

INVESTMENT OBJECTIVES AND POLICIES

FRANCE FUND

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

GERMANY FUND

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

UNITED KINGDOM FUND

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

EUROPE FUND

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

The investment objective of each fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the fund, as that term is defined in
the 1940 Act. There can be no assurance that the funds will achieve
their objectives. With the exception of fundamental policies,
investment policies can be changed without shareholder approval. The
differences between the funds discussed above, except as noted, could
be changed without a vote of shareholders.

PERFORMANCE COMPARISONS OF THE FUNDS

The following table compares France Fund, Germany Fund and United
Kingdom Fund's annual total returns for the periods indicated. Please
note that total returns are based on past results and are not an
indication of future performance.

ANNUAL TOTAL RETURNS (periods
ended December 31)

1996 1997 1998 1999 2000**

France Fund* 25.44% 14.46% 28.92% 36.34% 4.53%

Germany Fund* 18.45% 20.33% 23.31% 16.55% 15.62%

United Kingdom Fund* 28.61% 16.78% 10.32% 14.74% -7.25%

Europe Fund 25.63% 22.89% 20.77% 18.69% 5.18%

* Returns do not include the effect of the fund's 3.00% maximum
front-end sales charge.

** Returns are from January 1, 2000 through February 29, 2000.

If FMR had not reimbursed certain expenses, France Fund's, Germany
Fund's and United Kingdom Fund's returns would have been lower.

The following table compares France Fund's, Germany Fund's and United
Kingdom Fund's individual cumulative returns to those of Europe Fund
for the periods indicated. Please note that total returns are based on
past results and are not an indication of future performance.

CUMULATIVE TOTAL RETURN
(periods ended December 31,
1999)

1 YEAR 3 YEARS

France Fund* 36.34% 101.20%

Germany Fund* 16.55% 72.93%

United Kingdom Fund* 14.74% 47.83%

Europe Fund 18.69% 76.15%

* Returns do not include the effect of the fund's 3.00% maximum
front-end sales charge.

If FMR had not reimbursed certain expenses, France Fund's, Germany
Fund's and United Kingdom Fund's returns would have been lower.

The tables above show the funds have experienced similar performance.
While Europe Fund has had slightly higher returns than Germany Fund
and United Kingdom Fund, Europe Fund has slightly underperformed
France Fund during certain periods.

The following graphs show the value of a hypothetical $10,000
investment in France Fund, Germany Fund and United Kingdom Fund
relative to Europe Fund made on November 1, 1995 assuming any
applicable sales charges were paid and all distributions were
reinvested. The graph compares the cumulative returns of the funds on
a monthly basis from November 1, 1995 to October 31, 1999, and
illustrates the relative volatility of their performance over shorter
periods of time.

EUROPE FUND
11/1/95 9700
11/30/95 9667
12/29/95 9835
1/31/96 9865
2/29/96 10228
3/29/96 10478
4/30/96 10637
5/31/96 10943
6/28/96 11059
7/31/96 10848
8/30/96 11215
9/30/96 11404
10/31/96 11689
11/29/96 12137
12/31/96 12356
1/31/97 12305
2/28/97 12569
3/31/97 12806
4/30/97 12760
5/30/97 13354
6/30/97 14004
7/31/97 14445
8/29/97 13772
9/30/97 15049
10/31/97 14417
11/28/97 14701
12/31/97 15184
1/30/98 15767
2/27/98 16847
3/31/98 18064
4/30/98 18511
5/29/98 18678
6/30/98 18871
7/31/98 19393
8/31/98 15863
9/30/98 15595
10/30/98 16644
11/30/98 17598
12/31/98 18338
1/29/99 18590
2/26/99 17861
3/31/99 17883
4/30/99 17993
5/28/99 17122
6/30/99 17784
7/30/99 17790
8/31/99 17888
9/30/99 17883
10/29/99 18672
FRANCE FUND
11/1/95 9700
11/30/95 9516
12/29/95 9953
1/31/96 10381
2/29/96 10800
3/29/96 11151
4/30/96 11404
5/31/96 11647
6/28/96 11803
7/31/96 11560
8/30/96 11394
9/30/96 11618
10/31/96 11920
11/29/96 12300
12/31/96 12485
1/31/97 13046
2/28/97 13181
3/31/97 13586
4/30/97 13077
5/30/97 12890
6/30/97 13856
7/31/97 14126
8/29/97 13388
9/30/97 14707
10/31/97 13783
11/28/97 13814
12/31/97 14290
1/30/98 14666
2/27/98 15725
3/31/98 17410
4/30/98 18059
5/29/98 19357
6/30/98 19528
7/31/98 19619
8/31/98 16488
9/30/98 15486
10/30/98 16795
11/30/98 17706
12/31/98 18423
1/29/99 19232
2/26/99 17968
3/31/99 17866
4/30/99 18219
5/28/99 17763
6/30/99 18663
7/30/99 18640
8/31/99 19084
9/30/99 19562
10/29/99 20439
GERMANY FUND
11/1/95 9700
11/30/95 9622
12/29/95 9836
1/31/96 10321
2/29/96 10369
3/29/96 10495
4/30/96 10195
5/31/96 10573
6/28/96 10651
7/31/96 10525
8/30/96 10660
9/30/96 10748
10/31/96 11000
11/29/96 11524
12/31/96 11651
1/31/97 11570
2/28/97 12001
3/31/97 12631
4/30/97 12341
5/30/97 12952
6/30/97 13352
7/31/97 14473
8/29/97 13222
9/30/97 14243
10/31/97 13252
11/28/97 13642
12/31/97 14019
1/30/98 14635
2/27/98 15350
3/31/98 16560
4/30/98 17705
5/29/98 18750
6/30/98 19256
7/31/98 19960
8/31/98 15944
9/30/98 15669
10/30/98 16274
11/30/98 17133
12/31/98 17287
1/29/99 17342
2/26/99 16032
3/31/99 15262
4/30/99 16021
5/28/99 15119
6/30/99 15900
7/30/99 15900
8/31/99 15955
9/30/99 15889
10/29/99 16483
UNITED KINGDOM FUND
11/1/95 9700
11/30/95 9574
12/29/95 9778
1/31/96 9729
2/29/96 9963
3/29/96 10100
4/30/96 10411
5/31/96 10723
6/28/96 10596
7/31/96 10431
8/30/96 10927
9/30/96 11005
10/31/96 11580
11/29/96 12184
12/31/96 12576
1/31/97 12205
2/28/97 12556
3/31/97 12566
4/30/97 12666
5/30/97 13016
6/30/97 13217
7/31/97 13527
8/29/97 13367
9/30/97 14408
10/31/97 14228
11/28/97 14348
12/31/97 14686
1/30/98 15116
2/27/98 16103
3/31/98 17037
4/30/98 17048
5/29/98 16919
6/30/98 16790
7/31/98 16146
8/31/98 13903
9/30/98 14429
10/30/98 14987
11/30/98 15685
12/31/98 16202
1/29/99 16109
2/26/99 16512
3/31/99 17088
4/30/99 17779
5/28/99 16904
6/30/99 16835
7/30/99 17111
8/31/99 17088
9/30/99 16720
10/29/99 16858

COMPARISON OF OTHER POLICIES OF THE FUNDS

DIVERSIFICATION. France Fund, Germany Fund and United Kingdom Fund
are non-diversified funds and Europe Fund is a diversified fund.
Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result,
changes in the market value of a single issuer can cause greater
fluctuations (both positive and negative) in share value than would
occur in a diversified fund. Generally, France Fund, Germany Fund and
United Kingdom Fund do not invest more than 25% of their total assets
in any one issuer and, with respect to 50% of total assets, do not
invest more than 5% of their total assets in any one issuer. As a
matter of fundamental policy, Europe Fund, with respect to 75% of its
total assets, may not purchase a security if, as a result, more than
5% of its total assets would be invested in the securities of any one
issuer and may not hold more than 10% of the outstanding voting
securities of a single issuer.

BORROWING. Each fund may borrow money from banks or from other funds
advised by FMR, or through reverse repurchase agreements. As a matter
of fundamental policy, each fund may borrow money for temporary or
emergency purposes, but not in an amount exceeding 33-1/3% of its
total assets.

LENDING. Each fund does not currently intend to lend assets, other
than securities, to other parties, except by lending money (up to 15%
of the fund's net assets) to other funds or portfolios advised by FMR
or an affiliate, or by acquiring loans, loan participations, or other
forms of direct debt instruments, and in connection therewith,
assuming any associated unfunded commitments of the seller. As a
matter of fundamental policy, each fund may not lend more than 33-1/3%
of its total assets to other parties, but this limitation does not
apply to purchases of debt securities or to repurchase agreements.

TEMPORARY DEFENSIVE POLICIES. FMR normally invests each fund's assets
according to the fund's investment strategy. Each fund also reserves
the right to invest without limitation in preferred stocks and
investment grade debt instruments for temporary defensive purposes.

For more information about the risks and restrictions associated with
these policies, see the funds' Prospectuses, and for a more detailed
discussion of the funds' investments, see their Statements of
Additional Information, which are incorporated herein by reference.

OPERATIONS OF EUROPE FUND FOLLOWING THE REORGANIZATIONS

FMR does not expect Europe Fund to revise its investment policies as
a result of the Reorganizations. In addition, FMR does not anticipate
significant changes to Europe Fund's management or to agents that
provide the fund with services. Specifically, the Trustees and
officers, the investment adviser, distributor, and other agents will
continue to serve Europe Fund in their current capacities. Thierry
Serero is the current Portfolio Manager of Europe Fund.

All of the current investments of France Fund, Germany Fund and
United Kingdom Fund are permissible investments for Europe Fund.
Nevertheless, if shareholders approve each of the Reorganizations, or
if only some are approved, FMR may sell certain securities held by the
funds and purchase other securities. Transaction costs associated with
such adjustments that occur between shareholder approval and the
Closing Dates will be borne by the fund that incurred them.
Transaction costs associated with such adjustments that occur after
the Closing Dates will be borne by Europe Fund.

PURCHASES AND REDEMPTIONS

The price to buy one share of France Fund, Germany Fund and United
Kingdom Fund is the fund's net asset value per share (NAV), plus a
sales charge of 3.00%. The price to buy one share of Europe Fund is
the fund's NAV. Europe Fund's shares are sold without a sales charge.
Shares for each fund are purchased at the next NAV calculated after an
investment is received and accepted, minus any applicable sales
charges. Each fund's NAV is normally calculated each business day at
4:00 p.m. Eastern time. Refer to each fund's Prospectus for more
information regarding how to buy shares.

The price to sell one share of each fund is the fund's NAV, minus the
fund's redemption fee, as applicable. Shares will be sold at the next
NAV calculated after an order is received and accepted. Each fund's
NAV is normally calculated each business day at 4:00 P.M. Eastern.

On April 19, 2000, France Fund, Germany Fund and United Kingdom Fund
closed to all new investments (except dividend reinvestments), pending
the Reorganizations. Shareholders of France Fund, Germany Fund and
United Kingdom Fund may redeem shares through the Closing Date of that
fund's Reorganization. If the Reorganizations are approved, the
purchase and redemption policies of the combined fund will remain
unchanged.

EXCHANGES

The exchange privilege currently offered by the funds is the same and
is not expected to change after the Reorganizations. Shareholders of
the funds may exchange their shares of a fund for shares of other
Fidelity funds available in a shareholder's state. Exchanges out of
France Fund, Germany Fund and United Kingdom Fund are currently
subject to a 1.50% redemption fee on shares held less than 90 days, as
described above in the "Expense Structures" section. Europe Fund
currently imposes a 1.00% redemption fee on shares held less than 30
days, as described above in the "Expense Structures" section.

DIVIDENDS AND OTHER DISTRIBUTIONS

Each fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions. Each fund normally pays
dividends and capital gain distributions in December. On or before the
Closing Dates, France Fund, Germany Fund and United Kingdom Fund may
declare additional dividends or other distributions in order to
distribute substantially all of their investment company taxable
income and net realized capital gain.

Each of France Fund, Germany Fund and United Kingdom Fund will be
required to recognize gain or loss on Section 1256 contracts held by
the individual fund on the last day of its taxable year which is
October 31, 1999. If the Reorganizations are approved, gains or losses
of Section 1256 contracts held on the Closing Date will be recognized
on the Closing Date.

FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATIONS

Each fund has received an opinion of its counsel, Kirkpatrick &
Lockhart LLP, that the Reorganizations will constitute tax-free
reorganizations within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). Accordingly,
except with respect to Section 1256 contracts, no gain or loss will be
recognized to the funds or their shareholders as a result of the
Reorganizations. Please see the section entitled "Federal Income Tax
Considerations" for more information.

As of October 31, 1999, France Fund, Germany Fund, United Kingdom
Fund and Europe Fund have capital loss carryforwards for federal
income tax purposes of approximately $690,000, $5,231,411, $2,000, and
$0, respectively. Under current federal tax law, Europe Fund may be
limited to using only a portion, if any, of its capital loss
carryforward or the capital loss carryforwards transferred by France
Fund, Germany Fund and United Kingdom Fund at the time of the
Reorganizations ("capital loss carryforwards"). There is no assurance
that Europe Fund will be able to realize sufficient capital gains to
use the capital loss carryforwards before they expire. The capital
loss carryforward attributable to France Fund, Germany Fund and United
Kingdom Fund will expire October 31, 2006.

COMPARISON OF PRINCIPAL RISK FACTORS

Each fund is subject to the risks normally associated with equity
funds. The funds have similar policies and permissible investments.
However, France Fund, Germany Fund and United Kingdom Fund are
non-diversified and may invest a greater percentage of their
investments in their respective countries. Political and economic
conditions and changes in regulatory, tax, or economic policy in a
country could significantly affect the market in that country and in
surrounding or related countries.

Europe includes both developed and emerging markets. Most developed
countries in Western Europe are members of the European Union (EU) and
many are also members of the European Monetary Union (EMU), which
requires compliance with restrictions on inflation rates, deficits and
debt levels. Unemployment in Europe is historically high. Many Eastern
European countries continue to move toward market economies. However,
their markets remain relatively undeveloped and can be particularly
sensitive to political and economic developments. The tight fiscal and
monetary controls necessary to join the EMU can significantly affect
every country in Europe.

Changes in the financial condition of an issuer, changes in specific
economic or political conditions that affect a particular type of
security or issuer, and changes in general economic or political
conditions can affect the value of an issuer's securities. The value
of securities of smaller, less well-known issuers can be more volatile
than that of larger issuers and can react differently to issuer,
political, market and economic developments than the market as a whole
and other types of stocks. Smaller issuers can have more limited
product lines, markets and financial resources. In response to market,
economic, political or other conditions, FMR may temporarily use a
different investment strategy for defensive purposes. If FMR does so,
different factors could affect a fund's performance and the fund may
not achieve its investment objective.

THE PROPOSED TRANSACTIONS

TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN FRANCE FUND
AND EUROPE FUND.

REORGANIZATION PLAN

The terms and conditions under which the proposed transaction may be
consummated are set forth in the Agreement. Significant provisions of
the Agreement are summarized below; however, this summary is qualified
in its entirety by reference to the Agreement, a copy of which is
attached as Exhibit 1 to this Proxy Statement.

The Agreement contemplates (a) Europe Fund acquiring as of the
Closing Date all of the assets of France Fund in exchange solely for
shares of Europe Fund and the assumption by Europe Fund of France
Fund's liabilities; and (b) the distribution of shares of Europe Fund
to the shareholders of France Fund as provided for in the Agreement.

The assets of France Fund to be acquired by Europe Fund include all
cash, cash equivalents, securities, receivables (including interest or
dividends receivables), claims, choses in action, and other property
owned by France Fund, and any deferred or prepaid expenses shown as an
asset on the books of France Fund on the Closing Date. Europe Fund
will assume from France Fund all liabilities, debts, obligations, and
duties of France Fund of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not arising in the
ordinary course of business, whether or not determinable on the
Closing Date, and whether or not specifically referred to in the
Agreement; provided, however, that France Fund will use its best
efforts, to the extent practicable, to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred
in the ordinary course of business. Europe Fund also will deliver to
France Fund the number of full and fractional shares of Europe Fund
having an aggregate net asset value equal to the value of the assets
of France Fund less the liabilities of France Fund as of the Closing
Date. France Fund shall then distribute the Europe Fund shares PRO
RATA to its shareholders.

The value of France Fund's assets to be acquired by Europe Fund and
the amount of its liabilities to be assumed by Europe Fund will be
determined as of the close of business of the NYSE on the Closing
Date, using the valuation procedures set forth in France Fund's
then-current Prospectus and Statement of Additional Information. The
net asset value of a share of Europe Fund will be determined as of the
same time using the valuation procedures set forth in its then-current
Prospectus and Statement of Additional Information.

As of the Closing Date, France Fund will distribute to its
shareholders of record the shares of Europe Fund it received, so that
each France Fund shareholder will receive the number of full and
fractional shares of Europe Fund equal in value to the aggregate net
asset value of shares of France Fund held by such shareholder on the
Closing Date. France Fund will be liquidated as soon as practicable
thereafter. Such distribution will be accomplished by opening accounts
on the books of Europe Fund in the names of the France Fund
shareholders and by transferring thereto shares of Europe Fund. Each
France Fund shareholder's account shall be credited with the
respective PRO RATA number of full and fractional shares (rounded to
the third decimal place) of Europe Fund due that shareholder. Europe
Fund shall not issue certificates representing its shares in
connection with such exchange.

Accordingly, immediately after the Reorganization, each former France
Fund shareholder will own shares of Europe Fund equal to the aggregate
net asset value of that shareholder's shares of France Fund
immediately prior to the Reorganization. The net asset value per share
of Europe Fund will be unchanged by the transaction. Thus, the
Reorganization will not result in a dilution of any shareholder
interest.

Any transfer taxes payable upon issuance of shares of Europe Fund in
a name other than that of the registered holder of the shares on the
books of France Fund as of that time shall be paid by the person to
whom such shares are to be issued as a condition of such transfer. Any
reporting responsibility of France Fund is and will continue to be its
responsibility up to and including the Closing Date and such later
date on which France Fund is liquidated.

Pursuant to its management contract with FMR, France Fund will bear
the cost of the Reorganization, including professional fees, expenses
associated with the filing of registration statements, and the cost of
soliciting proxies for the Meeting, which will consist principally of
printing and mailing prospectuses and proxy statements, together with
the cost of any supplementary solicitation, provided the expenses do
not exceed the fund's voluntary expense cap. Expenses exceeding France
Fund's voluntary expense cap will be paid by FMR. In addition, there
may be some transaction costs associated with portfolio adjustments to
France Fund and Europe Fund due to the Reorganization prior to the
Closing Date which will be borne by France Fund and Europe Fund,
respectively. Any transaction costs associated with portfolio
adjustments to France Fund and Europe Fund due to the Reorganization
which occur after the Closing Date and any additional merger-related
costs attributable to Europe Fund which occur after the Closing Date
will be borne by Europe Fund. The funds may recognize a taxable gain
or loss on the disposition of securities pursuant to these portfolio
adjustments. See the section entitled "Federal Income Tax
Considerations."

The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by
a fund. In addition, the Agreement may be amended in any mutually
agreeable manner, except that no amendment that may have a materially
adverse effect on the shareholders' interests may be made subsequent
to the Meeting.

REASONS FOR THE REORGANIZATION

The Board of Trustees (the Board) of France Fund and Europe Fund have
determined that the Reorganization is in the best interests of the
shareholders of both funds and that the Reorganization will not result
in a dilution of the interests of shareholders of either fund.

In considering the Reorganization, the Board considered a number of
factors, including the following:

(1) the compatibility of the funds' investment objectives and
policies;

(2) the historical performance of the funds;

(3) the relative expense ratios of the funds;

(4) the costs to be incurred by each fund as a result of the
Reorganization;

(5) the tax consequences of the Reorganization;

(6) the relative size of the funds;

(7) the benefit to FMR and to the shareholders of the funds.

FMR recommended the Reorganization to the Board at a meeting of the
Board on January 20, 2000. In recommending the Reorganization, FMR
also advised the Board that the funds have comparable investment
objectives, investment policies, permissible investments, and service
features. In particular, FMR informed the Board that the funds
differed primarily with respect to their expense structures and
investment policies.

The funds will receive an opinion of counsel that, except with
respect to Section 1256 contracts, the Reorganization will not result
in any gain or loss for Federal income tax purposes for France Fund or
Europe Fund.

Finally, the Board considered the proposed Reorganization in the
context of a general goal of eliminating small funds managed by FMR.
While the elimination of small funds potentially would benefit FMR, it
also should benefit shareholders by facilitating increased operational
efficiencies.

DESCRIPTION OF THE SECURITIES TO BE ISSUED

The trust is registered with the SEC as an open-end management
investment company. The trust's Trustees are authorized to issue an
unlimited number of shares of beneficial interest of separate series.
Europe Fund is one of 20 funds of the trust. Each share of Europe Fund
represents an equal proportionate interest with each other share of
the fund, and each such share of Europe Fund is entitled to equal
voting, dividend, liquidation, and redemption rights. Each shareholder
of Europe Fund is entitled to one vote for each dollar value of net
asset value of Europe Fund that a shareholder owns. Shares of Europe
Fund have no preemptive or conversion rights. The voting and dividend
rights, the right of redemption, and the prividege of exchange are
described in the fund's Prospectus. Shares are fully paid and
nonassessable, except as set forth in the fund's Statement of
Additional Information under the heading "Shareholder Liability."

The trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office
have been elected by shareholders, at which time the Trustees then in
office will call a shareholder meeting for the election of Trustees.
Under the 1940 Act, shareholders of record of at least two-thirds of
the outstanding shares of an investment company may remove a Trustee
by votes cast in person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any Trustee
when requested in writing to do so by the shareholders of record
holding at least 10% of the trust's outstanding shares.

FEDERAL INCOME TAX CONSIDERATIONS

The exchange of France Fund's assets for Europe Fund's shares and the
assumption of the liabilities of France Fund by Europe Fund is
intended to qualify for federal income tax purposes as a tax-free
reorganization under the Code. With respect to the Reorganization, the
participating funds have received an opinion from Kirkpatrick &
Lockhart LLP, counsel to France Fund and Europe Fund, substantially to
the effect that:

(i) The acquisition by Europe Fund of all of the assets of France
Fund solely in exchange for Europe Fund shares and the assumption by
Europe Fund of France Fund's liabilities, followed by the distribution
by France Fund of Europe Fund shares to the shareholders of France
Fund pursuant to the liquidation of France Fund and constructively in
exchange for their France Fund shares, will constitute a
reorganization within the meaning of section 368(a)(1)(C) of the Code,
and France Fund and Europe Fund will each be "a party to a
reorganization" within the meaning of section 368(b) of the Code;

(ii) No gain or loss will be recognized by France Fund upon the
transfer of all of its assets to Europe Fund in exchange solely for
Europe Fund shares and Europe Fund's assumption of France Fund's
liabilities, followed by France Fund's subsequent distribution of
those shares to shareholders in liquidation of France Fund;

(iii) No gain or loss will be recognized by Europe Fund upon the
receipt of the assets of France Fund in exchange solely for Europe
Fund shares and its assumption of France Fund's liabilities;

(iv) The shareholders of France Fund will recognize no gain or loss
upon the exchange of their France Fund shares solely for Europe Fund
shares;

(v) The basis of France Fund's assets in the hands of Europe Fund
will be the same as the basis of those assets in the hands of France
Fund immediately prior to the Reorganization, and the holding period
of those assets in the hands of Europe Fund will include the holding
period of those assets in the hands of France Fund;

(vi) The basis of France Fund shareholders in Europe Fund shares will
be the same as their basis in France Fund shares to be surrendered in
exchange therefor; and

(vii) The holding period of the Europe Fund shares to be received by
the France Fund shareholders will include the period during which the
France Fund shares to be surrendered in exchange therefor were held,
provided such France Fund shares were held as capital assets by those
shareholders on the date of the Reorganization.

Shareholders of France Fund should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Because the foregoing discussion
only relates to the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.

CAPITALIZATION

The following table shows the capitalization of France Fund and
Europe Fund as of October 31, 1999 and on a pro forma combined basis
(unaudited) as of that date giving effect to the Reorganization.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET ASSETS NAV PER SHARE SHARES OUTSTANDING

France Fund $ 11,725,518 $17.95 653,378

Europe Fund $1,317,402,134 $34.09 38,641,105

Pro Forma Combined Fund $1,329,127,652 $34.09 38,985,063

</TABLE>

CONCLUSION

The Agreement and Plan of Reorganization and the transactions
provided for therein were approved by the Board at a meeting held on
January 20, 2000. The Board of Trustees of the trust determined that
the proposed Reorganization is in the best interests of shareholders
of each fund and that the interests of existing shareholders of France
Fund and Europe Fund would not be diluted as a result of the
Reorganization. In the event that the Reorganization is not
consummated, France Fund will continue to engage in business as a fund
of a registered investment company and the Board of the trust will
consider other proposals for the reorganization or liquidation of the
fund.

TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN GERMANY
FUND AND EUROPE FUND.

REORGANIZATION PLAN

The Agreement contemplates (a) Europe Fund acquiring as of the
Closing Date all of the assets of Germany Fund in exchange solely for
shares of Europe Fund and the assumption by Europe Fund of Germany
Fund's liabilities; and (b) the distribution of shares of Europe Fund
to the shareholders of Germany Fund as provided for in the Agreement.

The assets of Germany Fund to be acquired by Europe Fund include all
cash, cash equivalents, securities, receivables (including interest or
dividends receivables), claims, choses in action, and other property
owned by Germany Fund, and any deferred or prepaid expenses shown as
an asset on the books of Germany Fund on the Closing Date. Europe Fund
will assume from Germany Fund all liabilities, debts, obligations, and
duties of Germany Fund of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not arising in the
ordinary course of business, whether or not determinable on the
Closing Date, and whether or not specifically referred to in the
Agreement; provided, however, that Germany Fund will use its best
efforts, to the extent practicable, to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred
in the ordinary course of business. Europe Fund also will deliver to
Germany Fund the number of full and fractional shares of Europe Fund
having an aggregate net asset value equal to the value of the assets
of Germany Fund less the liabilities of Germany Fund as of the Closing
Date. Germany Fund shall then distribute the Europe Fund shares PRO
RATA to its shareholders.

The value of Germany Fund's assets to be acquired by Europe Fund and
the amount of its liabilities to be assumed by Europe Fund will be
determined as of the close of business of the NYSE on the Closing
Date, using the valuation procedures set forth in Germany Fund's
then-current Prospectus and Statement of Additional Information. The
net asset value of a share of Europe Fund will be determined as of the
same time using the valuation procedures set forth in its then-current
Prospectus and Statement of Additional Information.

As of the Closing Date, Germany Fund will distribute to its
shareholders of record the shares of Europe Fund it received, so that
each Germany Fund shareholder will receive the number of full and
fractional shares of Europe Fund equal in value to the aggregate net
asset value of shares of Germany Fund held by such shareholder on the
Closing Date. Germany Fund will be liquidated as soon as practicable
thereafter. Such distribution will be accomplished by opening accounts
on the books of Europe Fund in the names of the Germany Fund
shareholders and by transferring thereto shares of Europe Fund. Each
Germany Fund shareholder's account shall be credited with the
respective PRO RATA number of full and fractional shares (rounded to
the third decimal place) of Europe Fund due that shareholder. Europe
Fund shall not issue certificates representing its shares in
connection with such exchange.

Accordingly, immediately after the Reorganization, each former
Germany Fund shareholder will own shares of Europe Fund equal to the
aggregate net asset value of that shareholder's shares of Germany Fund
immediately prior to the Reorganization. The net asset value per share
of Europe Fund will be unchanged by the transaction. Thus, the
Reorganization will not result in a dilution of any shareholder
interest.

Any transfer taxes payable upon issuance of shares of Europe Fund in
a name other than that of the registered holder of the shares on the
books of Germany Fund as of that time shall be paid by the person to
whom such shares are to be issued as a condition of such transfer. Any
reporting responsibility of Germany Fund is and will continue to be
its responsibility up to and including the Closing Date and such later
date on which Germany Fund is liquidated.

Pursuant to its management contract with FMR, Germany Fund will bear
the cost of the Reorganization, including professional fees, expenses
associated with the filing of registration statements, and the cost of
soliciting proxies for the Meeting, which will consist principally of
printing and mailing prospectuses and proxy statements, together with
the cost of any supplementary solicitation, provided the expenses do
not exceed the fund's voluntary expense cap. Expenses exceeding
Germany Fund's voluntary expense cap will be paid by FMR. In addition,
there may be some transaction costs associated with portfolio
adjustments to Germany Fund and Europe Fund due to the Reorganization
prior to the Closing Date which will be borne by Germany Fund and
Europe Fund, respectively. Any transaction costs associated with
portfolio adjustments to Germany Fund and Europe Fund due to the
Reorganization which occur after the Closing Date and any additional
merger-related costs attributable to Europe Fund which occur after the
Closing Date will be borne by Europe Fund. The funds may recognize a
taxable gain or loss on the disposition of securities pursuant to
these portfolio adjustments. See the section entitled "Federal Income
Tax Considerations."

REASONS FOR THE REORGANIZATION

The Board of Trustees (the Board) of Germany Fund and Europe Fund
have determined that the Reorganization is in the best interests of
the shareholders of both funds and that the Reorganization will not
result in a dilution of the interests of shareholders of either fund.

In considering the Reorganization, the Board considered a number of
factors, including the following:

(1) the compatibility of the funds' investment objectives and
policies;

(2) the historical performance of the funds;

(3) the relative expense ratios of the funds;

(4) the costs to be incurred by each fund as a result of the
Reorganization;

(5) the tax consequences of the Reorganization;

(6) the relative size of the funds;

(7) the benefit to FMR and to the shareholders of the funds.

DESCRIPTION OF THE SECURITIES TO BE ISSUED

FEDERAL INCOME TAX CONSIDERATIONS

The exchange of Germany Fund's assets for Europe Fund's shares and
the assumption of the liabilities of Germany Fund by Europe Fund is
intended to qualify for federal income tax purposes as a tax-free
reorganization under the Code. With respect to the Reorganization, the
participating funds have received an opinion from Kirkpatrick &
Lockhart LLP, counsel to Germany Fund and Europe Fund, substantially
to the effect that:

(i) The acquisition by Europe Fund of all of the assets of Germany
Fund solely in exchange for Europe Fund shares and the assumption by
Europe Fund of Germany Fund's liabilities, followed by the
distribution by Germany Fund of Europe Fund shares to the shareholders
of Germany Fund pursuant to the liquidation of Germany Fund and
constructively in exchange for their Germany Fund shares, will
constitute a reorganization within the meaning of section 368(a)(1)(C)
of the Code, and Germany Fund and Europe Fund will each be "a party to
a reorganization" within the meaning of section 368(b) of the Code;

(ii) No gain or loss will be recognized by Germany Fund upon the
transfer of all of its assets to Europe Fund in exchange solely for
Europe Fund shares and Europe Fund's assumption of Germany Fund's
liabilities, followed by Germany Fund's subsequent distribution of
those shares to shareholders in liquidation of Germany Fund;

(iii) No gain or loss will be recognized by Europe Fund upon the
receipt of the assets of Germany Fund in exchange solely for Europe
Fund shares and its assumption of Germany Fund's liabilities;

(iv) The shareholders of Germany Fund will recognize no gain or loss
upon the exchange of their Germany Fund shares solely for Europe Fund
shares;

(v) The basis of Germany Fund's assets in the hands of Europe Fund
will be the same as the basis of those assets in the hands of Germany
Fund immediately prior to the Reorganization, and the holding period
of those assets in the hands of Europe Fund will include the holding
period of those assets in the hands of Germany Fund;

(vi) The basis of Germany Fund shareholders in Europe Fund shares
will be the same as their basis in Germany Fund shares to be
surrendered in exchange therefor; and

(vii) The holding period of the Europe Fund shares to be received by
the Germany Fund shareholders will include the period during which the
Germany Fund shares to be surrendered in exchange therefor were held,
provided such Germany Fund shares were held as capital assets by those
shareholders on the date of the Reorganization.

Shareholders of Germany Fund should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Because the foregoing discussion
only relates to the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.

CAPITALIZATION

The following table shows the capitalization of the Germany Fund and
Europe Fund as of October 31, 1999 and on a pro forma combined basis
(unaudited) as of that date giving effect to the Reorganization.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET ASSETS NAV PER SHARE SHARES OUTSTANDING

Germany Fund $ 22,959,137 $14.98 1,532,381

Europe Fund $1,317,402,134 $34.09 38,641,105

Pro Forma Combined Fund $1,340,361,271 $34.09 39,314,591

</TABLE>

CONCLUSION

The Agreement and Plan of Reorganization and the transactions
provided for therein were approved by the Board at a meeting held on
January 20, 2000. The Board of Trustees of the trust determined that
the proposed Reorganization is in the best interests of shareholders
of each fund and that the interests of existing shareholders of
Germany Fund and Europe Fund would not be diluted as a result of the
Reorganization. In the event that the Reorganization is not
consummated, Germany Fund will continue to engage in business as a
fund of a registered investment company and the Board of the trust
will consider other proposals for the reorganization or liquidation of
the fund.

TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN UNITED
KINGDOM FUND AND EUROPE FUND.

REORGANIZATION PLAN

The Agreement contemplates (a) Europe Fund acquiring as of the
Closing Date all of the assets of United Kingdom Fund in exchange
solely for shares of Europe Fund and the assumption by Europe Fund of
United Kingdom Fund's liabilities; and (b) the distribution of shares
of Europe Fund to the shareholders of United Kingdom Fund as provided
for in the Agreement.

The assets of United Kingdom Fund to be acquired by Europe Fund
include all cash, cash equivalents, securities, receivables (including
interest or dividends receivables), claims, choses in action, and
other property owned by United Kingdom Fund, and any deferred or
prepaid expenses shown as an asset on the books of United Kingdom Fund
on the Closing Date. Europe Fund will assume from United Kingdom Fund
all liabilities, debts, obligations, and duties of United Kingdom Fund
of whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in the Agreement; provided, however, that
United Kingdom Fund will use its best efforts, to the extent
practicable, to discharge all of its known liabilities prior to the
Closing Date, other than liabilities incurred in the ordinary course
of business. Europe Fund also will deliver to United Kingdom Fund the
number of full and fractional shares of Europe Fund having an
aggregate net asset value equal to the value of the assets of United
Kingdom Fund less the liabilities of United Kingdom Fund as of the
Closing Date. United Kingdom Fund shall then distribute the Europe
Fund shares PRO RATA to its shareholders.

The value of United Kingdom Fund's assets to be acquired by Europe
Fund and the amount of its liabilities to be assumed by Europe Fund
will be determined as of the close of business of the NYSE on the
Closing Date, using the valuation procedures set forth in United
Kingdom Fund's then-current Prospectus and Statement of Additional
Information. The net asset value of a share of Europe Fund will be
determined as of the same time using the valuation procedures set
forth in its then-current Prospectus and Statement of Additional
Information.

As of the Closing Date, United Kingdom Fund will distribute to its
shareholders of record the shares of Europe Fund it received, so that
each United Kingdom Fund shareholder will receive the number of full
and fractional shares of Europe Fund equal in value to the aggregate
net asset value of shares of United Kingdom Fund held by such
shareholder on the Closing Date. United Kingdom Fund will be
liquidated as soon as practicable thereafter. Such distribution will
be accomplished by opening accounts on the books of Europe Fund in the
names of the United Kingdom Fund shareholders and by transferring
thereto shares of Europe Fund. Each United Kingdom Fund shareholder's
account shall be credited with the respective PRO RATA number of full
and fractional shares (rounded to the third decimal place) of Europe
Fund due that shareholder. Europe Fund shall not issue certificates
representing its shares in connection with such exchange.

Accordingly, immediately after the Reorganization, each former United
Kingdom Fund shareholder will own shares of Europe Fund equal to the
aggregate net asset value of that shareholder's shares of United
Kingdom Fund immediately prior to the Reorganization. The net asset
value per share of Europe Fund will be unchanged by the transaction.
Thus, the Reorganization will not result in a dilution of any
shareholder interest.

Any transfer taxes payable upon issuance of shares of Europe Fund in
a name other than that of the registered holder of the shares on the
books of United Kingdom Fund as of that time shall be paid by the
person to whom such shares are to be issued as a condition of such
transfer. Any reporting responsibility of United Kingdom Fund is and
will continue to be its responsibility up to and including the Closing
Date and such later date on which United Kingdom Fund is liquidated.

Pursuant to its management contract with FMR, United Kingdom Fund
will bear the cost of the Reorganization, including professional fees,
expenses associated with the filing of registration statements, and
the cost of soliciting proxies for the Meeting, which will consist
principally of printing and mailing prospectuses and proxy statements,
together with the cost of any supplementary solicitation, provided the
expenses do not exceed the fund's voluntary expense cap. Expenses
exceeding United Kingdom Fund's voluntary expense cap will be paid by
FMR. In addition, there may be some transaction costs associated with
portfolio adjustments to United Kingdom Fund and Europe Fund due to
the Reorganization prior to the Closing Date which will be borne by
United Kingdom Fund and Europe Fund, respectively. Any transaction
costs associated with portfolio adjustments to United Kingdom Fund and
Europe Fund due to the Reorganization which occur after the Closing
Date and any additional merger-related costs attributable to Europe
Fund which occur after the Closing Date will be borne by Europe Fund.
The funds may recognize a taxable gain or loss on the disposition of
securities pursuant to these portfolio adjustments. See the section
entitled "Federal Income Tax Considerations."

REASONS FOR THE REORGANIZATION

The Board of Trustees (the Board) of United Kingdom Fund and Europe
Fund have determined that the Reorganization is in the best interests
of the shareholders of both funds and that the Reorganization will not
result in a dilution of the interests of shareholders of either fund.

In considering the Reorganization, the Board considered a number of
factors, including the following:

(1) the compatibility of the funds' investment objectives and
policies;

(2) the historical performance of the funds;

(3) the relative expense ratios of the funds;

(4) the costs to be incurred by each fund as a result of the
Reorganization;

(5) the tax consequences of the Reorganization;

(6) the relative size of the funds;

(7) the benefit to FMR and to the shareholders of the funds.

Furthermore, on January 20, 2000, the Board considered FMR's
representation to the Board that if the Reorganization is approved,

DESCRIPTION OF THE SECURITIES TO BE ISSUED

The trust is registered with the SEC as an open-end management
investment company. The trust's Trustees are authorized to issue an
unlimited number of shares of beneficial interest of separate series.
Europe Fund is one of 20 funds of the trust. Each share of Europe Fund
represents an equal proportionate interest with each other share of
the fund, and each such share of Europe Fund is entitled to equal
voting, dividend, liquidation, and redemption rights. Each shareholder
of Europe Fund is entitled to one vote for each dollar value of net
asset value of Europe Fund that shareholder owns. Shares of Europe
Fund have no preemptive or conversion rights. The voting and dividend
rights, the right of redemption, and the prividege of exchange are
described in the fund's Prospectus. Shares are fully paid and
nonassessable, except as set forth in the fund's Statement of
Additional Information under the heading "Shareholder Liability."

FEDERAL INCOME TAX CONSIDERATIONS

The exchange of United Kingdom Fund's assets for Europe Fund's shares
and the assumption of the liabilities of United Kingdom Fund by Europe
Fund is intended to qualify for federal income tax purposes as a
tax-free reorganization under the Code. With respect to the
Reorganization, the participating funds have received an opinion from
Kirkpatrick & Lockhart LLP, counsel to United Kingdom Fund and Europe
Fund, substantially to the effect that:

(i) The acquisition by Europe Fund of all of the assets of United
Kingdom Fund solely in exchange for Europe Fund shares and the
assumption by Europe Fund of United Kingdom Fund's liabilities,
followed by the distribution by United Kingdom Fund of Europe Fund
shares to the shareholders of United Kingdom Fund pursuant to the
liquidation of United Kingdom Fund and constructively in exchange for
their United Kingdom Fund shares, will constitute a reorganization
within the meaning of section 368(a)(1)(C) of the Code, and United
Kingdom Fund and Europe Fund will each be "a party to a
reorganization" within the meaning of section 368(b) of the Code;

(ii) No gain or loss will be recognized by United Kingdom Fund upon
the transfer of all of its assets to Europe Fund in exchange solely
for Europe Fund shares and Europe Fund's assumption of United Kingdom
Fund's liabilities, followed by United Kingdom Fund's subsequent
distribution of those shares to shareholders in liquidation of United
Kingdom Fund;

(iii) No gain or loss will be recognized by Europe Fund upon the
receipt of the assets of United Kingdom Fund in exchange solely for
Europe Fund shares and its assumption of United Kingdom Fund's
liabilities;

(iv) The shareholders of United Kingdom Fund will recognize no gain
or loss upon the exchange of their United Kingdom Fund shares solely
for Europe Fund shares;

(v) The basis of United Kingdom Fund's assets in the hands of Europe
Fund will be the same as the basis of those assets in the hands of
United Kingdom Fund immediately prior to the Reorganization, and the
holding period of those assets in the hands of Europe Fund will
include the holding period of those assets in the hands of United
Kingdom Fund;

(vi) The basis of United Kingdom Fund shareholders in Europe Fund
shares will be the same as their basis in United Kingdom Fund shares
to be surrendered in exchange therefor; and

(vii) The holding period of the Europe Fund shares to be received by
the United Kingdom Fund shareholders will include the period during
which the United Kingdom Fund shares to be surrendered in exchange
therefor were held, provided such United Kingdom Fund shares were held
as capital assets by those shareholders on the date of the
Reorganization.

Shareholders of United Kingdom Fund should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Because the foregoing discussion
only relates to the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.

CAPITALIZATION

The following table shows the capitalization of the United Kingdom
Fund and Europe Fund as of October 31, 1999 and on a pro forma
combined basis (unaudited) as of that date giving effect to the
Reorganization.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET ASSETS NAV PER SHARE SHARES OUTSTANDING

United Kingdom Fund $ 6,429,508 $14.64 439,189

Europe Fund $1,317,402,134 $34.09 38,641,105

Pro Forma Combined Fund $1,323,831,642 $34.09 38,829,709

</TABLE>

CONCLUSION

The Agreement and Plan of Reorganization and the transactions
provided for therein were approved by the Board at a meeting held on
January 20, 2000. The Board of Trustees of the trust determined that
the proposed Reorganization is in the best interests of shareholders
of each fund and that the interests of existing shareholders of United
Kingdom Fund and Europe Fund would not be diluted as a result of the
Reorganization. In the event that the Reorganization is not
consummated, United Kingdom Fund will continue to engage in business
as a fund of a registered investment company and the Board of the
trust will consider other proposals for the reorganization or
liquidation of the fund.

ADDITIONAL INFORMATION ABOUT EUROPE FUND

Europe Fund's Prospectus dated December 29, 1999 and supplement dated
[March 1, 2000], is enclosed with this Proxy Statement and is
incorporated herein by reference. The Prospectus contains additional
information about the fund including its investment objective and
policies, investment adviser, advisory fees and expenses,
organization, and procedures for purchasing and redeeming shares. The
Prospectus also contains Europe Fund financial highlights for each of
the five fiscal years ended October 31, as shown below:

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

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%

</TABLE>

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.

MISCELLANEOUS

LEGAL MATTERS. Certain legal matters in connection with the issuance
of Europe Fund shares have been passed upon by Kirkpatrick & Lockhart
LLP, counsel to the trust.

EXPERTS. The audited financial statements of France Fund, Germany
Fund, United Kingdom Fund and Europe Fund incorporated by reference
into the Statements of Additional Information, have been examined by
PricewaterhouseCoopers LLP, independent accountants, whose reports
thereon are included in the Annual Report to Shareholders for the
fiscal year ended October 31, 1999. The financial statements audited
by PricewaterhouseCoopers LLP have been incorporated by reference in
reliance on their reports given on their authority as experts in
auditing and accounting.

AVAILABLE INFORMATION. The trust is subject to the informational
requirements of the Securities and Exchange Act of 1934 and the 1940
Act, and in accordance therewith file reports, proxy material, and
other information with the SEC. Such reports, proxy material, and
other information can be inspected and copied at the Public Reference
Room maintained by the SEC at 450 Fifth Street, N.W., Washington D.C.
20549 and 7 World Trade Center, New York, NY 10048. Copies of such
material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington D.C. 20549, at prescribed rates.

NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise Fidelity Investment Trust, in care of Fidelity
Distributors Corporation, 82 Devonshire Street, Boston, Massachusetts
02109, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the
Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.

ATTACHMENT 1

EXCERPTS FROM THE ANNUAL REPORT OF FIDELITY EUROPE FUND DATED OCTOBER
31, 1999.

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.

(photograph of Thierry Serero)

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.

THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH OCTOBER 31, 1999. THE MANAGER'S VIEWS ARE SUBJECT
TO CHANGE AT ANY TIME BASED ON MARKET OR OTHER CONDITIONS.

ATTACHMENT 1

ATTACHMENT 2

ANNUAL FUND OPERATING EXPENSES FOR CERTAIN REORGANIZATIONS (AS OF
10/31/99)

IF JUST THE FRANCE FUND REORGANIZATION IS APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
France Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.74% 0.60% 0.60%

Distribution and Service None None None
(12b-1) fee

Other Expenses 2.12% 0.36% 0.36%

Total Fund Operating ExpensesB 2.86%A 0.96% 0.96%

</TABLE>

EXAMPLE:
After 1 Year After 3 Years After 5 Years After 10 Years

France Fund $580 $1,159 $1,763 $3,390

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

IF JUST THE GERMANY FUND REORGANIZATION IS APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Germany Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.74% 0.60% 0.60%

Distribution and Service None None None
(12b-1) fee

Other Expenses 1.16% 0.36% 0.36%

Total Fund Operating ExpensesB 1.90%A 0.96% 0.96%

</TABLE>

EXAMPLE:
After 1 Year After 3 Years After 5 Years After 10 Years

Germany Fund $487 $879 $1,296 $2,455

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

IF JUST THE UNITED KINGDOM FUND REORGANIZATION IS APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
United Kingdom Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.73% 0.60% 0.60%

Distribution and Service None None None
(12b-1) fee

Other Expenses 2.83% 0.36% 0.36%

Total Fund Operating ExpensesB 3.56%A 0.96% 0.96%

</TABLE>

A FMR HAS VOLUNTARILY AGREED TO REIMBURSE EACH FUND TO THE EXTENT THAT
TOTAL OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, SECURITIES
LENDING COSTS, BROKERAGE COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A
PERCENTAGE OF ITS AVERAGE NET ASSETS, EXCEED 2.00%. THESE ARRANGEMENTS
CAN BE DISCONTINUED BY FMR AT ANY TIME.

B THE TOTAL OPERATING EXPENSES PROVIDED FOR EACH FUND DO NOT REFLECT
THE EFFECT OF ANY EXPENSE REIMBURSEMENTS OR REDUCTION OF CERTAIN
EXPENSES DURING THE PERIOD. INCLUDING THESE REDUCTIONS, THE TOTAL FUND
OPERATING EXPENSES, AFTER REIMBURSEMENT WOULD HAVE BEEN 1.98% FOR
FRANCE FUND, 1.79% FOR GERMANY FUND, 1.98% FOR UNITED KINGDOM FUND,
0.89% FOR EUROPE FUND, AND 0.89% FOR THE COMBINED FUND.

EXAMPLE:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years

United Kingdom Fund $648 $1,359 $2,090 $4,012

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

</TABLE>

IF JUST THE FRANCE FUND AND GERMANY FUND REORGANIZATIONS ARE APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
France Fund Germany Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.74% 0.74% 0.60% 0.60%

Distribution and Service None None None None
(12b-1) fee

Other Expenses 2.12% 1.16% 0.36% 0.36%

Total Fund Operating ExpensesB 2.86%A 1.90%A 0.96% 0.96%

</TABLE>

EXAMPLE:
After 1 Year After 3 Years After 5 Years After 10 Years

France Fund $580 $1,159 $1,763 $3,390

Germany Fund $487 $ 879 $1,296 $2,455

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

IF JUST THE FRANCE FUND AND UNITED KINGDOM FUND REORGANIZATIONS ARE
APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
France Fund United Kingdom Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.74% 0.73% 0.60% 0.60%

Distribution and Service None None None None
(12b-1) fee

Other Expenses 2.12% 2.83% 0.36% 0.36%

Total Fund Operating ExpensesB 2.86%A 3.56%A 0.96% 0.96%

</TABLE>

EXAMPLE:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years

France Fund $580 $1,159 $1,763 $3,390

United Kingdom Fund $648 $1,359 $2,090 $4,012

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

</TABLE>

IF JUST THE GERMANY FUND AND UNITED KINGDOM FUND REORGANIZATIONS ARE
APPROVED:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Germany Fund United Kingdom Fund Europe Fund Pro Forma Expenses Combined
Fund

Management Fees 0.74% 0.73% 0.60% 0.60%

Distribution and Service None None None None
(12b-1) fee

Other Expenses 1.16% 2.83% 0.36% 0.36%

Total Fund Operating ExpensesB 1.90%A 3.56%A 0.96% 0.96%

</TABLE>

EXAMPLE:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years

Germany Fund $487 $ 879 $1,296 $2,455

United Kingdom Fund $648 $1,359 $2,090 $4,012

Europe Fund $ 98 $ 306 $ 531 $1,178

Combined Fund $ 98 $ 306 $ 531 $1,178

</TABLE>

EXHIBIT 1

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of May 22, 2000, by and between Fidelity France Fund (France Fund) and
Fidelity Europe Fund (Europe Fund), funds of Fidelity Investment Trust
(the trust). The trust is a duly organized business trust under the
laws of the Commonwealth of Massachusetts with its principal place of
business at 82 Devonshire Street, Boston, Massachusetts 02109. Europe
Fund and France Fund may be referred to herein collectively as the
"Funds" or each individually as the "Fund."

This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
France Fund to Europe Fund solely in exchange for shares of beneficial
interest in Europe Fund (the Europe Fund Shares) and the assumption by
Europe Fund of France Fund's liabilities; and (b) the constructive
distribution of such shares by France Fund PRO RATA to its
shareholders in complete liquidation and termination of France Fund in
exchange for all of France Fund's outstanding shares. France Fund
shall receive shares of Europe Fund having an aggregate net asset
value equal to the value of the assets of France Fund on the Closing
Date (as defined in Section 6), which France Fund shall then
distribute PRO RATA to its shareholders. The foregoing transactions
are referred to herein as the "Reorganization."

In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF FRANCE FUND. France Fund
represents and warrants to and agrees with Europe Fund that:

(a) France Fund is a series of Fidelity Investment Trust, a business
trust duly organized, validly existing, and in good standing under the
laws of the Commonwealth of Massachusetts, and has the power to own
all of its properties and assets and to carry out its obligations
under this Agreement. It has all necessary federal, state, and local
authorizations to carry on its business as now being conducted and to
carry out this Agreement;

(b) Fidelity Investment Trust is an open-end, management investment
company duly registered under the Investment Company Act of 1940, as
amended (the 1940 Act), and such registration is in full force and
effect;

(c) The Prospectus and Statement of Additional Information of France
Fund dated December 29, 1999, [and supplement dated January 29, 2000],
previously furnished to Europe Fund, did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;

(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of France Fund, threatened against France
Fund which assert liability on the part of France Fund. France Fund
knows of no facts which might form the basis for the institution of
such proceedings;

(e) France Fund is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of France Fund, of any agreement, indenture,
instrument, contract, lease, or other undertaking to which France Fund
is a party or by which France Fund is bound or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which France Fund is a party or
is bound;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of France Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Europe Fund. Said Statement of Assets and Liabilities and
Schedule of Investments fairly present the Fund's financial position
as of such date and said Statement of Operations, Statement of Changes
in Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;

(g) France Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of October 31, 1999 and
those incurred in the ordinary course of France Fund's business as an
investment company since October 31, 1999;

(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Fidelity
Investment Trust on Form N-14 relating to the shares of Europe Fund
issuable hereunder and the proxy statement of France Fund included
therein (Proxy Statement), on the effective date of the Registration
Statement and insofar as they relate to France Fund (i) comply in all
material respects with the provisions of the Securities Act of 1933,
as amended (the 1933 Act), the Securities Exchange Act of 1934, as
amended (the 1934 Act), and the 1940 Act, and the rules and
regulations thereunder, and (ii) do not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and at the time of the shareholders' meeting referred to
in Section 7 and on the Closing Date, the prospectus contained in the
Registration Statement of which the Proxy Statement is a part (the
Prospectus), as amended or supplemented, insofar as it relates to
France Fund, does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;

(i) All material contracts and commitments of France Fund (other than
this Agreement) will be terminated without liability to France Fund
prior to the Closing Date (other than those made in connection with
redemptions of shares and the purchase and sale of portfolio
securities made in the ordinary course of business);

(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by France Fund
of the transactions contemplated by this Agreement, except such as
have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
state securities or blue sky laws (which term as used herein shall
include the District of Columbia and Puerto Rico);

(k) France Fund has filed or will file all federal and state tax
returns which, to the knowledge of France Fund's officers, are
required to be filed by France Fund and has paid or will pay all
federal and state taxes shown to be due on said returns or provision
shall have been made for the payment thereof, and, to the best of
France Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;

(l) France Fund has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company for
all prior taxable years and intends to meet such requirements for its
current taxable year ending on the Closing Date;

(m) All of the issued and outstanding shares of France Fund are, and
at the Closing Date will be, duly and validly issued and outstanding
and fully paid and nonassessable as a matter of Massachusetts law
(except as disclosed in the Fund's Statement of Additional
Information), and have been offered for sale and in conformity with
all applicable federal securities laws. All of the issued and
outstanding shares of France Fund will, at the Closing Date, be held
by the persons and in the amounts set forth in the list of
shareholders submitted to Europe Fund in accordance with this
Agreement;

(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, France Fund will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of France Fund to be transferred to
Europe Fund pursuant to this Agreement. As of the Closing Date,
subject only to the delivery of France Fund's portfolio securities and
any such other assets as contemplated by this Agreement, Europe Fund
will acquire France Fund's portfolio securities and any such other
assets subject to no encumbrances, liens, or security interests
(except for those that may arise in the ordinary course and are
disclosed to Europe Fund) and without any restrictions upon the
transfer thereof; and

(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of France Fund, and this Agreement
constitutes a valid and binding obligation of France Fund enforceable
in accordance with its terms, subject to shareholder approval.

2. REPRESENTATIONS AND WARRANTIES OF EUROPE FUND. Europe Fund
represents and warrants to and agrees with France Fund that:

(a) Europe Fund is a series of Fidelity Investment Trust, a business
trust duly organized, validly existing, and in good standing under the
laws of the Commonwealth of Massachusetts, and has the power to own
all of its properties and assets and to carry out its obligations
under this Agreement. It has all necessary federal, state, and local
authorizations to carry on its business as now being conducted and to
carry out this Agreement;

(b) Fidelity Investment Trust is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;

(c) The Prospectus and Statement of Additional Information of Europe
Fund, dated December 29, 1999 and supplement dated [March 1, 2000],
previously furnished to France Fund did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;

(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Europe Fund, threatened against Europe
Fund which assert liability on the part of Europe Fund. Europe Fund
knows of no facts which might form the basis for the institution of
such proceedings;

(e) Europe Fund is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Europe Fund, of any agreement, indenture,
instrument, contract, lease, or other undertaking to which Europe Fund
is a party or by which Europe Fund is bound or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment, or decree to which Europe Fund is a party or
is bound;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Europe Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to France Fund. Said Statement of Assets and Liabilities and
Schedule of Investments fairly present its financial position as of
such date and said Statement of Operations, Statement of Changes in
Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;

(g) Europe Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of October 31, 1999 and
those incurred in the ordinary course of Europe Fund's business as an
investment company since October 31, 1999;

(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Europe Fund
of the transactions contemplated by this Agreement, except such as
have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
state securities or blue sky laws (which term as used herein shall
include the District of Columbia and Puerto Rico);

(i) Europe Fund has filed or will file all federal and state tax
returns which, to the knowledge of Europe Fund's officers, are
required to be filed by Europe Fund and has paid or will pay all
federal and state taxes shown to be due on said returns or provision
shall have been made for the payment thereof, and, to the best of
Europe Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;

(j) Europe Fund has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company for
all prior taxable years and intends to meet such requirements for its
current taxable year ending on October 31, 2000;

(k) As of the Closing Date, the shares of beneficial interest of
Europe Fund to be issued to France Fund will have been duly authorized
and, when issued and delivered pursuant to this Agreement, will be
legally and validly issued and will be fully paid and nonassessable
(except as disclosed in the Fund's Statement of Additional
Information) by Europe Fund, and no shareholder of Europe Fund will
have any preemptive right of subscription or purchase in respect
thereof;

(l) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Europe Fund, and this Agreement
constitutes a valid and binding obligation of Europe Fund enforceable
in accordance with its terms, subject to approval by the shareholders
of France Fund;

(m) The Registration Statement and the Proxy Statement, on the
effective date of the Registration Statement and insofar as they
relate to Europe Fund, (i) will comply in all material respects with
the provisions of the 1933 Act, the 1934 Act, and the 1940 Act, and
the rules and regulations thereunder, and (ii) will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders' meeting
referred to in Section 7 and on the Closing Date, the Prospectus, as
amended or supplemented, insofar as it relates to Europe Fund, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;

(n) The issuance of the Europe Fund Shares pursuant to this Agreement
will be in compliance with all applicable federal securities laws; and

(o) All of the issued and outstanding shares of beneficial interest
of Europe Fund have been offered for sale and sold in conformity with
the federal securities laws.

3. REORGANIZATION.

(a) Subject to the requisite approval of the shareholders of France
Fund and to the other terms and conditions contained herein, France
Fund agrees to assign, sell, convey, transfer, and deliver to Europe
Fund as of the Closing Date all of the assets of France Fund of every
kind and nature existing on the Closing Date. Europe Fund agrees in
exchange therefor: (i) to assume all of France Fund's liabilities
existing on or after the Closing Date, whether or not determinable on
the Closing Date, and (ii) to issue and deliver to France Fund the
number of full and fractional shares of Europe Fund having an
aggregate net asset value equal to the value of the assets of France
Fund transferred hereunder, less the value of the liabilities of
France Fund, determined as provided for under Section 4.

(b) The assets of France Fund to be acquired by Europe Fund shall
include, without limitation, all cash, cash equivalents, securities,
receivables (including interest or dividends receivables), claims,
choses in action, and other property owned by France Fund, and any
deferred or prepaid expenses shown as an asset on the books of France
Fund on the Closing Date. France Fund will pay or cause to be paid to
Europe Fund any dividend or interest payments received by it on or
after the Closing Date with respect to the assets transferred to
Europe Fund hereunder, and Europe Fund will retain any dividend or
interest payments received by it after the Valuation Time with respect
to the assets transferred hereunder without regard to the payment date
thereof.

(c) The liabilities of France Fund to be assumed by Europe Fund shall
include (except as otherwise provided for herein) all of France Fund's
liabilities, debts, obligations, and duties, of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether
or not arising in the ordinary course of business, whether or not
determinable on the Closing Date, and whether or not specifically
referred to in this Agreement. Notwithstanding the foregoing, France
Fund agrees to use its best efforts to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred
in the ordinary course of business.

(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, France Fund will constructively distribute
PRO RATA to its shareholders of record, determined as of the Valuation
Time on the Closing Date, the Europe Fund Shares in exchange for such
shareholders' shares of beneficial interest in France Fund and France
Fund will be liquidated in accordance with France Fund's Amended and
Restated Declaration of Trust. Such distribution shall be accomplished
by the Funds' transfer agent opening accounts on Europe Fund's share
transfer books in the names of the France Fund shareholders and
transferring the Europe Fund Shares thereto. Each France Fund
shareholder's account shall be credited with the respective PRO RATA
number of full and fractional (rounded to the third decimal place)
Europe Fund Shares due that shareholder. All outstanding France Fund
shares, including any represented by certificates, shall
simultaneously be canceled on France Fund's share transfer records.
Europe Fund shall not issue certificates representing the Europe Fund
Shares in connection with the Reorganization.

(e) Any reporting responsibility of France Fund is and shall remain
its responsibility up to and including the date on which it is
terminated.

(f) Any transfer taxes payable upon issuance of the Europe Fund
Shares in a name other than that of the registered holder on France
Fund's books of the France Fund shares constructively exchanged for
the Europe Fund Shares shall be paid by the person to whom such Europe
Fund Shares are to be issued, as a condition of such transfer.

4. VALUATION.

(a) The Valuation Time shall be as of the close of business of the
New York Stock Exchange on the Closing Date, or such other date as may
be mutually agreed upon in writing by the parties hereto (the
Valuation Time).

(b) As of the Closing Date, Europe Fund will deliver to France Fund
the number of Europe Fund Shares having an aggregate net asset value
equal to the value of the assets of France Fund transferred hereunder
less the liabilities of France Fund, determined as provided in this
Section 4.

(c) The net asset value per share of the Europe Fund Shares to be
delivered to France Fund, the value of the assets of France Fund
transferred hereunder, and the value of the liabilities of France Fund
to be assumed hereunder shall in each case be determined as of the
Valuation Time.

(d) The net asset value per share of the Europe Fund Shares shall be
computed in the manner set forth in the then-current Europe Fund
Prospectus and Statement of Additional Information, and the value of
the assets and liabilities of France Fund shall be computed in the
manner set forth in the then-current France Fund Prospectus and
Statement of Additional Information.

(e) All computations pursuant to this Section shall be made by or
under the direction of Fidelity Service Company, Inc., a wholly-owned
subsidiary of FMR Corp., in accordance with its regular practice as
pricing agent for France Fund and Europe Fund.

5. FEES; EXPENSES.

(a) France Fund shall be responsible for all expenses, fees and other
charges in connection with the transactions contemplated by this
Agreement, provided that they do not exceed the Fund's 2.00% expense
cap. Expenses exceeding the Fund's expense cap will be paid by FMR
(but not including costs incurred in connection with the purchase or
sale of portfolio securities). Any expenses incurred in connection
with the transactions contemplated by this Agreement which may be
attributable to Europe Fund will be borne by Europe Fund.

(b) Each of Europe Fund and France Fund represents that there is no
person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this
Agreement.

6. CLOSING DATE.

(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trust, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on July 28,
2000, or at some other time, date, and place agreed to by France Fund
and Europe Fund (the Closing Date).

(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of France Fund and the net asset value
per share of Europe Fund is impracticable, the Valuation Time and the
Closing Date shall be postponed until the first business day after the
day when such trading shall have been fully resumed and such reporting
shall have been restored, or such other date as the parties may agree.

7. SHAREHOLDER MEETING AND TERMINATION OF FRANCE FUND.

(a) France Fund agrees to call a meeting of its shareholders after
the effective date of the Registration Statement, to consider
transferring its assets to Europe Fund as herein provided, adopting
this Agreement, and authorizing the liquidation of France Fund.

(b) France Fund agrees that as soon as reasonably practicable after
distribution of the Europe Fund Shares, France Fund shall be
terminated as a series of Fidelity Investment Trust pursuant to its
Amended and Restated Declaration of Trust, any further actions shall
be taken in connection therewith as required by applicable law, and on
and after the Closing Date France Fund shall not conduct any business
except in connection with its liquidation and termination.

8. CONDITIONS TO OBLIGATIONS OF EUROPE FUND.

(a) That France Fund furnishes to Europe Fund a statement, dated as
of the Closing Date, signed by an officer of Fidelity Investment
Trust, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of France Fund made in this
Agreement are true and correct in all material respects and that
France Fund has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such dates;

(b) That France Fund furnishes Europe Fund with copies of the
resolutions, certified by an officer of Fidelity Investment Trust,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of France Fund;

(c) That, on or prior to the Closing Date, France Fund will declare
one or more dividends or distributions which, together with all
previous such dividends or distributions attributable to its current
taxable year, shall have the effect of distributing to the
shareholders of France Fund substantially all of France Fund's
investment company taxable income and all of its net realized capital
gain, if any, as of the Closing Date;

(d) That France Fund shall deliver to Europe Fund at the Closing a
statement of its assets and liabilities, together with a list of its
portfolio securities showing each such security's adjusted tax basis
and holding period by lot, with values determined as provided in
Section 4 of this Agreement, all as of the Valuation Time, certified
on France Fund's behalf by its Treasurer or Assistant Treasurer;

(e) That France Fund's custodian shall deliver to Europe Fund a
certificate identifying the assets of France Fund held by such
custodian as of the Valuation Time on the Closing Date and stating
that as of the Valuation Time: (i) the assets held by the custodian
will be transferred to Europe Fund; (ii) France Fund's assets have
been duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;

(f) That France Fund's transfer agent shall deliver to Europe Fund at
the Closing a certificate setting forth the number of shares of France
Fund outstanding as of the Valuation Time and the name and address of
each holder of record of any such shares and the number of shares held
of record by each such shareholder;

(g) That France Fund calls a meeting of its shareholders to be held
after the effective date of the Registration Statement, to consider
transferring its assets to Europe Fund as herein provided, adopting
this Agreement, and authorizing the liquidation and termination of
France Fund;

(h) That France Fund delivers to Europe Fund a certificate of an
officer of Fidelity Investment Trust, dated as of the Closing Date,
that there has been no material adverse change in France Fund's
financial position since October 31, 1999, other than changes in the
market value of its portfolio securities, or changes due to net
redemptions of its shares, dividends paid, or losses from operations;
and

(i) That all of the issued and outstanding shares of beneficial
interest of France Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of France Fund or its transfer
agent by Europe Fund or its agents shall have revealed otherwise,
France Fund shall have taken all actions that in the opinion of Europe
Fund are necessary to remedy any prior failure on the part of France
Fund to have offered for sale and sold such shares in conformity with
such laws.

9. CONDITIONS TO OBLIGATIONS OF FRANCE FUND.

(a) That Europe Fund shall have executed and delivered to France Fund
an Assumption of Liabilities, certified by an officer of Fidelity
Investment Trust, dated as of the Closing Date pursuant to which
Europe Fund will assume all of the liabilities of France Fund existing
at the Valuation Time in connection with the transactions contemplated
by this Agreement;

(b) That Europe Fund furnishes to France Fund a statement, dated as
of the Closing Date, signed by an officer of Fidelity Investment
Trust, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of Europe Fund made in this
Agreement are true and correct in all material respects, and Europe
Fund has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such dates; and

(c) That France Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to France Fund and Europe Fund, to the effect
that the Europe Fund Shares are duly authorized and upon delivery to
France Fund as provided in this Agreement will be validly issued and
will be fully paid and nonassessable by Europe Fund (except as
disclosed in Europe Fund's Statement of Additional Information) and no
shareholder of Europe Fund has any preemptive right of subscription or
purchase in respect thereof.

10. CONDITIONS TO OBLIGATIONS OF EUROPE FUND AND FRANCE FUND.

(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of
the holders of the outstanding shares of beneficial interest of France
Fund;

(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, which term as used herein shall include
the District of Columbia and Puerto Rico, and including "no action"
positions of such federal or state authorities) deemed necessary by
Europe Fund or France Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order, or
permit would not involve a risk of a material adverse effect on the
assets or properties of Europe Fund or France Fund, provided that
either party hereto may for itself waive any of such conditions;

(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be satisfactory in form and substance to it
and its counsel, Kirkpatrick & Lockhart LLP;

(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;

(e) That the Registration Statement shall have become effective under
the 1933 Act, and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of Europe Fund and France
Fund, threatened by the Commission; and

(f) That Europe Fund and France Fund shall have received an opinion
of Kirkpatrick & Lockhart LLP satisfactory to Europe Fund and France
Fund that for federal income tax purposes:

(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and France Fund and Europe Fund will each be
parties to the Reorganization under section 368(b) of the Code;

(ii) No gain or loss will be recognized by France Fund upon the
transfer of all of its assets to Europe Fund in exchange solely for
the Europe Fund Shares and the assumption of France Fund's liabilities
followed by the distribution of those Europe Fund Shares to the
shareholders of France Fund in liquidation of France Fund;

(iii) No gain or loss will be recognized by Europe Fund on the
receipt of France Fund's assets in exchange solely for the Europe Fund
Shares and the assumption of France Fund's liabilities;

(iv) The basis of France Fund's assets in the hands of Europe Fund
will be the same as the basis of such assets in France Fund's hands
immediately prior to the Reorganization;

(v) Europe Fund's holding period in the assets to be received from
France Fund will include France Fund's holding period in such assets;

(vi) A France Fund shareholder will recognize no gain or loss on the
exchange of his or her shares of beneficial interest in France Fund
for the Europe Fund Shares in the Reorganization;

(vii) A France Fund shareholder's basis in the Europe Fund Shares
to be received by him or her will be the same as his or her basis in
the France Fund shares exchanged therefor;

(viii) A France Fund shareholder's holding period for his or her
Europe Fund Shares will include the holding period of France Fund
shares exchanged, provided that those France Fund shares were held as
capital assets on the date of the Reorganization.

Notwithstanding anything herein to the contrary, neither France Fund
nor Europe Fund may waive the conditions set forth in this subsection
10(f).

11. COVENANTS OF EUROPE FUND AND FRANCE FUND.

(a) Europe Fund and France Fund each covenants to operate its
respective business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of
business will include the payment of customary dividends and
distributions;

(b) France Fund covenants that it is not acquiring the Europe Fund
Shares for the purpose of making any distribution other than in
accordance with the terms of this Agreement;

(c) France Fund covenants that it will assist Europe Fund in
obtaining such information as Europe Fund reasonably requests
concerning the beneficial ownership of France Fund's shares; and

(d) France Fund covenants that its liquidation and termination will
be effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and after the
Closing Date, France Fund will not conduct any business except in
connection with its liquidation and termination.

12. TERMINATION; WAIVER.

Europe Fund and France Fund may terminate this Agreement by mutual
agreement. In addition, either Europe Fund or France Fund may at its
option terminate this Agreement at or prior to the Closing Date
because:

(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or

(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.

In the event of any such termination, there shall be no liability for
damages on the part of France Fund or Europe Fund, or their respective
Trustees or officers.

13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.

(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.

(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Europe Fund or France
Fund; provided, however, that following the shareholders' meeting
called by France Fund pursuant to Section 7 of this Agreement, no such
amendment may have the effect of changing the provisions for
determining the number of Europe Fund Shares to be paid to France Fund
shareholders under this Agreement to the detriment of such
shareholders without their further approval.

(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.

The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.

14. DECLARATIONS OF TRUST.

A copy of each Fund's Declaration of Trust, as restated and amended,
is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of each Fund as trustees and not
individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers,
or shareholders individually but are binding only upon the assets and
property of such Fund. Each Fund agrees that its obligations hereunder
apply only to such Fund and not to its shareholders individually or to
the Trustees of such Fund.

15. ASSIGNMENT.

This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other parties. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.

This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.

[SIGNATURE LINES OMITTED]

EXHIBIT 2

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of May 22, 2000, by and between Fidelity Germany Fund (Germany Fund)
and Fidelity Europe Fund (Europe Fund), funds of Fidelity Investment
Trust (the trust). The trust is a duly organized business trust under
the laws of the Commonwealth of Massachusetts with its principal place
of business at 82 Devonshire Street, Boston, Massachusetts 02109.
Europe Fund and Germany Fund may be referred to herein collectively as
the "Funds" or each individually as the "Fund."

This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
Germany Fund to Europe Fund solely in exchange for shares of
beneficial interest in Europe Fund (the Europe Fund Shares) and the
assumption by Europe Fund of Germany Fund's liabilities; and (b) the
constructive distribution of such shares by Germany Fund PRO RATA to
its shareholders in complete liquidation and termination of Germany
Fund in exchange for all of Germany Fund's outstanding shares. Germany
Fund shall receive shares of Europe Fund having an aggregate net asset
value equal to the value of the assets of Germany Fund on the Closing
Date (as defined in Section 6), which Germany Fund shall then
distribute PRO RATA to its shareholders. The foregoing transactions
are referred to herein as the "Reorganization."

In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF GERMANY FUND. Germany Fund
represents and warrants to and agrees with Europe Fund that:

(a) Germany Fund is a series of Fidelity Investment Trust, a business
trust duly organized, validly existing, and in good standing under the
laws of the Commonwealth of Massachusetts, and has the power to own
all of its properties and assets and to carry out its obligations
under this Agreement. It has all necessary federal, state, and local
authorizations to carry on its business as now being conducted and to
carry out this Agreement;

(c) The Prospectus and Statement of Additional Information of Germany
Fund dated December 29, 1999, [and supplement dated January 29, 2000],
previously furnished to Europe Fund, did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;

(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Germany Fund, threatened against
Germany Fund which assert liability on the part of Germany Fund.
Germany Fund knows of no facts which might form the basis for the
institution of such proceedings;

(e) Germany Fund is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Germany Fund, of any agreement, indenture,
instrument, contract, lease, or other undertaking to which Germany
Fund is a party or by which Germany Fund is bound or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which Germany Fund is a party or
is bound;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Germany Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Europe Fund. Said Statement of Assets and Liabilities and
Schedule of Investments fairly present the Fund's financial position
as of such date and said Statement of Operations, Statement of Changes
in Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;

(g) Germany Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of October 31, 1999 and
those incurred in the ordinary course of Germany Fund's business as an
investment company since October 31, 1999;

(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Fidelity
Investment Trust on Form N-14 relating to the shares of Europe Fund
issuable hereunder and the proxy statement of Germany Fund included
therein (Proxy Statement), on the effective date of the Registration
Statement and insofar as they relate to Germany Fund (i) comply in all
material respects with the provisions of the Securities Act of 1933,
as amended (the 1933 Act), the Securities Exchange Act of 1934, as
amended (the 1934 Act), and the 1940 Act, and the rules and
regulations thereunder, and (ii) do not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and at the time of the shareholders' meeting referred to
in Section 7 and on the Closing Date, the prospectus contained in the
Registration Statement of which the Proxy Statement is a part (the
Prospectus), as amended or supplemented, insofar as it relates to
Germany Fund, does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;

(i) All material contracts and commitments of Germany Fund (other
than this Agreement) will be terminated without liability to Germany
Fund prior to the Closing Date (other than those made in connection
with redemptions of shares and the purchase and sale of portfolio
securities made in the ordinary course of business);

(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Germany
Fund of the transactions contemplated by this Agreement, except such
as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act,
and state securities or blue sky laws (which term as used herein shall
include the District of Columbia and Puerto Rico);

(k) Germany Fund has filed or will file all federal and state tax
returns which, to the knowledge of Germany Fund's officers, are
required to be filed by Germany Fund and has paid or will pay all
federal and state taxes shown to be due on said returns or provision
shall have been made for the payment thereof, and, to the best of
Germany Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;

(l) Germany Fund has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company for
all prior taxable years and intends to meet such requirements for its
current taxable year ending on the Closing Date;

(m) All of the issued and outstanding shares of Germany Fund are, and
at the Closing Date will be, duly and validly issued and outstanding
and fully paid and nonassessable as a matter of Massachusetts law
(except as disclosed in the Fund's Statement of Additional
Information), and have been offered for sale and in conformity with
all applicable federal securities laws. All of the issued and
outstanding shares of Germany Fund will, at the Closing Date, be held
by the persons and in the amounts set forth in the list of
shareholders submitted to Europe Fund in accordance with this
Agreement;

(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Germany Fund will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of Germany Fund to be transferred to
Europe Fund pursuant to this Agreement. As of the Closing Date,
subject only to the delivery of Germany Fund's portfolio securities
and any such other assets as contemplated by this Agreement, Europe
Fund will acquire Germany Fund's portfolio securities and any such
other assets subject to no encumbrances, liens, or security interests
(except for those that may arise in the ordinary course and are
disclosed to Europe Fund) and without any restrictions upon the
transfer thereof; and

(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Germany Fund, and this Agreement
constitutes a valid and binding obligation of Germany Fund enforceable
in accordance with its terms, subject to shareholder approval.

2. REPRESENTATIONS AND WARRANTIES OF EUROPE FUND. Europe Fund
represents and warrants to and agrees with Germany Fund that:

(b) Fidelity Investment Trust is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;

(c) The Prospectus and Statement of Additional Information of Europe
Fund, dated December 29, 1999 and supplement dated [March 1, 2000],
previously furnished to Germany Fund did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Europe Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Germany Fund. Said Statement of Assets and Liabilities
and Schedule of Investments fairly present its financial position as
of such date and said Statement of Operations, Statement of Changes in
Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;

(k) As of the Closing Date, the shares of beneficial interest of
Europe Fund to be issued to Germany Fund will have been duly
authorized and, when issued and delivered pursuant to this Agreement,
will be legally and validly issued and will be fully paid and
nonassessable (except as disclosed in the Fund's Statement of
Additional Information) by Europe Fund, and no shareholder of Europe
Fund will have any preemptive right of subscription or purchase in
respect thereof;

(n) The issuance of the Europe Fund Shares pursuant to this Agreement
will be in compliance with all applicable federal securities laws; and

(o) All of the issued and outstanding shares of beneficial interest
of Europe Fund have been offered for sale and sold in conformity with
the federal securities laws.

3. REORGANIZATION.

(a) Subject to the requisite approval of the shareholders of Germany
Fund and to the other terms and conditions contained herein, Germany
Fund agrees to assign, sell, convey, transfer, and deliver to Europe
Fund as of the Closing Date all of the assets of Germany Fund of every
kind and nature existing on the Closing Date. Europe Fund agrees in
exchange therefor: (i) to assume all of Germany Fund's liabilities
existing on or after the Closing Date, whether or not determinable on
the Closing Date, and (ii) to issue and deliver to Germany Fund the
number of full and fractional shares of Europe Fund having an
aggregate net asset value equal to the value of the assets of Germany
Fund transferred hereunder, less the value of the liabilities of
Germany Fund, determined as provided for under Section 4.

(b) The assets of Germany Fund to be acquired by Europe Fund shall
include, without limitation, all cash, cash equivalents, securities,
receivables (including interest or dividends receivables), claims,
choses in action, and other property owned by Germany Fund, and any
deferred or prepaid expenses shown as an asset on the books of Germany
Fund on the Closing Date. Germany Fund will pay or cause to be paid to
Europe Fund any dividend or interest payments received by it on or
after the Closing Date with respect to the assets transferred to
Europe Fund hereunder, and Europe Fund will retain any dividend or
interest payments received by it after the Valuation Time with respect
to the assets transferred hereunder without regard to the payment date
thereof.

(c) The liabilities of Germany Fund to be assumed by Europe Fund
shall include (except as otherwise provided for herein) all of Germany
Fund's liabilities, debts, obligations, and duties, of whatever kind
or nature, whether absolute, accrued, contingent, or otherwise,
whether or not arising in the ordinary course of business, whether or
not determinable on the Closing Date, and whether or not specifically
referred to in this Agreement. Notwithstanding the foregoing, Germany
Fund agrees to use its best efforts to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred
in the ordinary course of business.

(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, Germany Fund will constructively distribute
PRO RATA to its shareholders of record, determined as of the Valuation
Time on the Closing Date, the Europe Fund Shares in exchange for such
shareholders' shares of beneficial interest in Germany Fund and
Germany Fund will be liquidated in accordance with Germany Fund's
Amended and Restated Declaration of Trust. Such distribution shall be
accomplished by the Funds' transfer agent opening accounts on Europe
Fund's share transfer books in the names of the Germany Fund
shareholders and transferring the Europe Fund Shares thereto. Each
Germany Fund shareholder's account shall be credited with the
respective PRO RATA number of full and fractional (rounded to the
third decimal place) Europe Fund Shares due that shareholder. All
outstanding Germany Fund shares, including any represented by
certificates, shall simultaneously be canceled on Germany Fund's share
transfer records. Europe Fund shall not issue certificates
representing the Europe Fund Shares in connection with the
Reorganization.

(e) Any reporting responsibility of Germany Fund is and shall remain
its responsibility up to and including the date on which it is
terminated.

(f) Any transfer taxes payable upon issuance of the Europe Fund
Shares in a name other than that of the registered holder on Germany
Fund's books of the Germany Fund shares constructively exchanged for
the Europe Fund Shares shall be paid by the person to whom such Europe
Fund Shares are to be issued, as a condition of such transfer.

4. VALUATION.

(b) As of the Closing Date, Europe Fund will deliver to Germany Fund
the number of Europe Fund Shares having an aggregate net asset value
equal to the value of the assets of Germany Fund transferred hereunder
less the liabilities of Germany Fund, determined as provided in this
Section 4.

(c) The net asset value per share of the Europe Fund Shares to be
delivered to Germany Fund, the value of the assets of Germany Fund
transferred hereunder, and the value of the liabilities of Germany
Fund to be assumed hereunder shall in each case be determined as of
the Valuation Time.

(d) The net asset value per share of the Europe Fund Shares shall be
computed in the manner set forth in the then-current Europe Fund
Prospectus and Statement of Additional Information, and the value of
the assets and liabilities of Germany Fund shall be computed in the
manner set forth in the then-current Germany Fund Prospectus and
Statement of Additional Information.

5. FEES; EXPENSES.

(a) Germany Fund shall be responsible for all expenses, fees and
other charges in connection with the transactions contemplated by this
Agreement, provided that they do not exceed the Fund's 2.00% expense
cap. Expenses exceeding the Fund's expense cap will be paid by FMR
(but not including costs incurred in connection with the purchase or
sale of portfolio securities). Any expenses incurred in connection
with the transactions contemplated by this Agreement which may be
attributable to Europe Fund will be borne by Europe Fund.

(b) Each of Europe Fund and Germany Fund represents that there is no
person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this
Agreement.

6. CLOSING DATE.

(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trust, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on July 26,
2000, or at some other time, date, and place agreed to by Germany Fund
and Europe Fund (the Closing Date).

(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of Germany Fund and the net asset value
per share of Europe Fund is impracticable, the Valuation Time and the
Closing Date shall be postponed until the first business day after the
day when such trading shall have been fully resumed and such reporting
shall have been restored, or such other date as the parties may agree.

7. SHAREHOLDER MEETING AND TERMINATION OF GERMANY FUND.

(a) Germany Fund agrees to call a meeting of its shareholders after
the effective date of the Registration Statement, to consider
transferring its assets to Europe Fund as herein provided, adopting
this Agreement, and authorizing the liquidation of Germany Fund.

(b) Germany Fund agrees that as soon as reasonably practicable after
distribution of the Europe Fund Shares, Germany Fund shall be
terminated as a series of Fidelity Investment Trust pursuant to its
Amended and Restated Declaration of Trust, any further actions shall
be taken in connection therewith as required by applicable law, and on
and after the Closing Date Germany Fund shall not conduct any business
except in connection with its liquidation and termination.

8. CONDITIONS TO OBLIGATIONS OF EUROPE FUND.

(a) That Germany Fund furnishes to Europe Fund a statement, dated as
of the Closing Date, signed by an officer of Fidelity Investment
Trust, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of Germany Fund made in this
Agreement are true and correct in all material respects and that
Germany Fund has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
such dates;

(b) That Germany Fund furnishes Europe Fund with copies of the
resolutions, certified by an officer of Fidelity Investment Trust,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of Germany Fund;

(c) That, on or prior to the Closing Date, Germany Fund will declare
one or more dividends or distributions which, together with all
previous such dividends or distributions attributable to its current
taxable year, shall have the effect of distributing to the
shareholders of Germany Fund substantially all of Germany Fund's
investment company taxable income and all of its net realized capital
gain, if any, as of the Closing Date;

(d) That Germany Fund shall deliver to Europe Fund at the Closing a
statement of its assets and liabilities, together with a list of its
portfolio securities showing each such security's adjusted tax basis
and holding period by lot, with values determined as provided in
Section 4 of this Agreement, all as of the Valuation Time, certified
on Germany Fund's behalf by its Treasurer or Assistant Treasurer;

(e) That Germany Fund's custodian shall deliver to Europe Fund a
certificate identifying the assets of Germany Fund held by such
custodian as of the Valuation Time on the Closing Date and stating
that as of the Valuation Time: (i) the assets held by the custodian
will be transferred to Europe Fund; (ii) Germany Fund's assets have
been duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;

(f) That Germany Fund's transfer agent shall deliver to Europe Fund
at the Closing a certificate setting forth the number of shares of
Germany Fund outstanding as of the Valuation Time and the name and
address of each holder of record of any such shares and the number of
shares held of record by each such shareholder;

(g) That Germany Fund calls a meeting of its shareholders to be held
after the effective date of the Registration Statement, to consider
transferring its assets to Europe Fund as herein provided, adopting
this Agreement, and authorizing the liquidation and termination of
Germany Fund;

(h) That Germany Fund delivers to Europe Fund a certificate of an
officer of Fidelity Investment Trust, dated as of the Closing Date,
that there has been no material adverse change in Germany Fund's
financial position since October 31, 1999, other than changes in the
market value of its portfolio securities, or changes due to net
redemptions of its shares, dividends paid, or losses from operations;
and

(i) That all of the issued and outstanding shares of beneficial
interest of Germany Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of Germany Fund or its transfer
agent by Europe Fund or its agents shall have revealed otherwise,
Germany Fund shall have taken all actions that in the opinion of
Europe Fund are necessary to remedy any prior failure on the part of
Germany Fund to have offered for sale and sold such shares in
conformity with such laws.

9. CONDITIONS TO OBLIGATIONS OF GERMANY FUND.

(a) That Europe Fund shall have executed and delivered to Germany
Fund an Assumption of Liabilities, certified by an officer of Fidelity
Investment Trust, dated as of the Closing Date pursuant to which
Europe Fund will assume all of the liabilities of Germany Fund
existing at the Valuation Time in connection with the transactions
contemplated by this Agreement;

(b) That Europe Fund furnishes to Germany Fund a statement, dated as
of the Closing Date, signed by an officer of Fidelity Investment
Trust, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of Europe Fund made in this
Agreement are true and correct in all material respects, and Europe
Fund has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such dates; and

(c) That Germany Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to Germany Fund and Europe Fund, to the effect
that the Europe Fund Shares are duly authorized and upon delivery to
Germany Fund as provided in this Agreement will be validly issued and
will be fully paid and nonassessable by Europe Fund (except as
disclosed in Europe Fund's Statement of Additional Information) and no
shareholder of Europe Fund has any preemptive right of subscription or
purchase in respect thereof.

10. CONDITIONS TO OBLIGATIONS OF EUROPE FUND AND GERMANY FUND.

(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, which term as used herein shall include
the District of Columbia and Puerto Rico, and including "no action"
positions of such federal or state authorities) deemed necessary by
Europe Fund or Germany Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order, or
permit would not involve a risk of a material adverse effect on the
assets or properties of Europe Fund or Germany Fund, provided that
either party hereto may for itself waive any of such conditions;

(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;

(f) That Europe Fund and Germany Fund shall have received an opinion
of Kirkpatrick & Lockhart LLP satisfactory to Europe Fund and Germany
Fund that for federal income tax purposes:

(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Germany Fund and Europe Fund will each
be parties to the Reorganization under section 368(b) of the Code;

(ii) No gain or loss will be recognized by Germany Fund upon the
transfer of all of its assets to Europe Fund in exchange solely for
the Europe Fund Shares and the assumption of Germany Fund's
liabilities followed by the distribution of those Europe Fund Shares
to the shareholders of Germany Fund in liquidation of Germany Fund;

(iii) No gain or loss will be recognized by Europe Fund on the
receipt of Germany Fund's assets in exchange solely for the Europe
Fund Shares and the assumption of Germany Fund's liabilities;

(iv) The basis of Germany Fund's assets in the hands of Europe Fund
will be the same as the basis of such assets in Germany Fund's hands
immediately prior to the Reorganization;

(v) Europe Fund's holding period in the assets to be received from
Germany Fund will include Germany Fund's holding period in such
assets;

(vi) A Germany Fund shareholder will recognize no gain or loss on
the exchange of his or her shares of beneficial interest in Germany
Fund for the Europe Fund Shares in the Reorganization;

(vii) A Germany Fund shareholder's basis in the Europe Fund Shares
to be received by him or her will be the same as his or her basis in
the Germany Fund shares exchanged therefor;

(viii) A Germany Fund shareholder's holding period for his or her
Europe Fund Shares will include the holding period of Germany Fund
shares exchanged, provided that those Germany Fund shares were held as
capital assets on the date of the Reorganization.

Notwithstanding anything herein to the contrary, neither Germany Fund
nor Europe Fund may waive the conditions set forth in this subsection
10(f).

11. COVENANTS OF EUROPE FUND AND GERMANY FUND.

(a) Europe Fund and Germany Fund each covenants to operate its
respective business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of
business will include the payment of customary dividends and
distributions;

(b) Germany Fund covenants that it is not acquiring the Europe Fund
Shares for the purpose of making any distribution other than in
accordance with the terms of this Agreement;

(c) Germany Fund covenants that it will assist Europe Fund in
obtaining such information as Europe Fund reasonably requests
concerning the beneficial ownership of Germany Fund's shares; and

(d) Germany Fund covenants that its liquidation and termination will
be effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and after the
Closing Date, Germany Fund will not conduct any business except in
connection with its liquidation and termination.

12. TERMINATION; WAIVER.

Europe Fund and Germany Fund may terminate this Agreement by mutual
agreement. In addition, either Europe Fund or Germany Fund may at its
option terminate this Agreement at or prior to the Closing Date
because:

(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or

(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.

In the event of any such termination, there shall be no liability for
damages on the part of Germany Fund or Europe Fund, or their
respective Trustees or officers.

13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.

(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Europe Fund or Germany
Fund; provided, however, that following the shareholders' meeting
called by Germany Fund pursuant to Section 7 of this Agreement, no
such amendment may have the effect of changing the provisions for
determining the number of Europe Fund Shares to be paid to Germany
Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval.

(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.

14. DECLARATIONS OF TRUST.

15. ASSIGNMENT.

This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.

[SIGNATURE LINES OMITTED]

EXHIBIT 3

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of May 22, 2000, by and between Fidelity United Kingdom Fund (United
Kingdom Fund) and Fidelity Europe Fund (Europe Fund), funds of
Fidelity Investment Trust (the trust). The trust is a duly organized
business trust under the laws of the Commonwealth of Massachusetts
with its principal place of business at 82 Devonshire Street, Boston,
Massachusetts 02109. Europe Fund and United Kingdom Fund may be
referred to herein collectively as the "Funds" or each individually as
the "Fund."

This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
United Kingdom Fund to Europe Fund solely in exchange for shares of
beneficial interest in Europe Fund (the Europe Fund Shares) and the
assumption by Europe Fund of United Kingdom Fund's liabilities; and
(b) the constructive distribution of such shares by United Kingdom
Fund PRO RATA to its shareholders in complete liquidation and
termination of in exchange for all of United Kingdom Fund's
outstanding shares. United Kingdom Fund shall receive shares of Europe
Fund having an aggregate net asset value equal to the value of the
assets of United Kingdom Fund on the Closing Date (as defined in
Section 6), which United Kingdom Fund shall then distribute PRO RATA
to its shareholders. The foregoing transactions are referred to herein
as the "Reorganization."

In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF UNITED KINGDOM FUND. United
Kingdom Fund represents and warrants to and agrees with Europe Fund
that:

(a) United Kingdom Fund is a series of Fidelity Investment Trust, a
business trust duly organized, validly existing, and in good standing
under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state,
and local authorizations to carry on its business as now being
conducted and to carry out this Agreement;

(c) The Prospectus and Statement of Additional Information of United
Kingdom Fund dated December 29, 1999, [and supplement dated January
29, 2000], previously furnished to Europe Fund, did not and do not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;

(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of United Kingdom Fund, threatened
against United Kingdom Fund which assert liability on the part of
United Kingdom Fund. United Kingdom Fund knows of no facts which might
form the basis for the institution of such proceedings;

(e) United Kingdom Fund is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of United Kingdom Fund, of any agreement,
indenture, instrument, contract, lease, or other undertaking to which
United Kingdom Fund is a party or by which United Kingdom Fund is
bound or result in the acceleration of any obligation or the
imposition of any penalty under any agreement, judgment or decree to
which United Kingdom Fund is a party or is bound;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of United Kingdom Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Europe Fund. Said Statement of Assets and Liabilities and
Schedule of Investments fairly present the Fund's financial position
as of such date and said Statement of Operations, Statement of Changes
in Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;

(g) United Kingdom Fund has no known liabilities of a material
nature, contingent or otherwise, other than those shown as belonging
to it on its statement of assets and liabilities as of October 31,
1999 and those incurred in the ordinary course of United Kingdom
Fund's business as an investment company since October 31, 1999;

(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Fidelity
Investment Trust on Form N-14 relating to the shares of Europe Fund
issuable hereunder and the proxy statement of United Kingdom Fund
included therein (Proxy Statement), on the effective date of the
Registration Statement and insofar as they relate to United Kingdom
Fund (i) comply in all material respects with the provisions of the
Securities Act of 1933, as amended (the 1933 Act), the Securities
Exchange Act of 1934, as amended (the 1934 Act), and the 1940 Act, and
the rules and regulations thereunder, and (ii) do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders' meeting
referred to in Section 7 and on the Closing Date, the prospectus
contained in the Registration Statement of which the Proxy Statement
is a part (the Prospectus), as amended or supplemented, insofar as it
relates to United Kingdom Fund, does not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading;

(i) All material contracts and commitments of United Kingdom Fund
(other than this Agreement) will be terminated without liability to
United Kingdom Fund prior to the Closing Date (other than those made
in connection with redemptions of shares and the purchase and sale of
portfolio securities made in the ordinary course of business);

(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by United
Kingdom Fund of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and state securities or blue sky laws (which term as
used herein shall include the District of Columbia and Puerto Rico);

(k) United Kingdom Fund has filed or will file all federal and state
tax returns which, to the knowledge of United Kingdom Fund's officers,
are required to be filed by United Kingdom Fund and has paid or will
pay all federal and state taxes shown to be due on said returns or
provision shall have been made for the payment thereof, and, to the
best of United Kingdom Fund's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to such
returns;

(l) United Kingdom Fund has met the requirements of Subchapter M of
the Code for qualification and treatment as a regulated investment
company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on the Closing Date;

(m) All of the issued and outstanding shares of United Kingdom Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of
Massachusetts law (except as disclosed in the Fund's Statement of
Additional Information), and have been offered for sale and in
conformity with all applicable federal securities laws. All of the
issued and outstanding shares of United Kingdom Fund will, at the
Closing Date, be held by the persons and in the amounts set forth in
the list of shareholders submitted to Europe Fund in accordance with
this Agreement;

(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, United Kingdom Fund will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of United Kingdom Fund to be
transferred to Europe Fund pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of United Kingdom Fund's
portfolio securities and any such other assets as contemplated by this
Agreement, Europe Fund will acquire United Kingdom Fund's portfolio
securities and any such other assets subject to no encumbrances,
liens, or security interests (except for those that may arise in the
ordinary course and are disclosed to Europe Fund) and without any
restrictions upon the transfer thereof; and

(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of United Kingdom Fund, and this
Agreement constitutes a valid and binding obligation of United Kingdom
Fund enforceable in accordance with its terms, subject to shareholder
approval.

2. REPRESENTATIONS AND WARRANTIES OF EUROPE FUND. Europe Fund
represents and warrants to and agrees with United Kingdom Fund that:

(b) Fidelity Investment Trust is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;

(c) The Prospectus and Statement of Additional Information of Europe
Fund, dated December 29, 1999 and supplement dated [March 1, 2000],
previously furnished to United Kingdom Fund did not and do not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading;

(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Europe Fund at October 31, 1999, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to United Kingdom Fund . Said Statement of Assets and
Liabilities and Schedule of Investments fairly present its financial
position as of such date and said Statement of Operations, Statement
of Changes in Net Assets, and Financial Highlights fairly reflect its
results of operations, changes in financial position, and financial
highlights for the periods covered thereby in conformity with
generally accepted accounting principles consistently applied;

(k) As of the Closing Date, the shares of beneficial interest of
Europe Fund to be issued to United Kingdom Fund will have been duly
authorized and, when issued and delivered pursuant to this Agreement,
will be legally and validly issued and will be fully paid and
nonassessable (except as disclosed in the Fund's Statement of
Additional Information) by Europe Fund, and no shareholder of Europe
Fund will have any preemptive right of subscription or purchase in
respect thereof;

(n) The issuance of the Europe Fund Shares pursuant to this Agreement
will be in compliance with all applicable federal securities laws; and

(o) All of the issued and outstanding shares of beneficial interest
of Europe Fund have been offered for sale and sold in conformity with
the federal securities laws.

3. REORGANIZATION.

(a) Subject to the requisite approval of the shareholders of United
Kingdom Fund and to the other terms and conditions contained herein,
United Kingdom Fund agrees to assign, sell, convey, transfer, and
deliver to Europe Fund as of the Closing Date all of the assets of
United Kingdom Fund of every kind and nature existing on the Closing
Date. Europe Fund agrees in exchange therefor: (i) to assume all of
United Kingdom Fund's liabilities existing on or after the Closing
Date, whether or not determinable on the Closing Date, and (ii) to
issue and deliver to United Kingdom Fund the number of full and
fractional shares of Europe Fund having an aggregate net asset value
equal to the value of the assets of United Kingdom Fund transferred
hereunder, less the value of the liabilities of United Kingdom Fund,
determined as provided for under Section 4.

(b) The assets of United Kingdom Fund to be acquired by Europe Fund
shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by United Kingdom
Fund, and any deferred or prepaid expenses shown as an asset on the
books of United Kingdom Fund on the Closing Date. United Kingdom Fund
will pay or cause to be paid to Europe Fund any dividend or interest
payments received by it on or after the Closing Date with respect to
the assets transferred to Europe Fund hereunder, and Europe Fund will
retain any dividend or interest payments received by it after the
Valuation Time with respect to the assets transferred hereunder
without regard to the payment date thereof.

(c) The liabilities of United Kingdom Fund to be assumed by Europe
Fund shall include (except as otherwise provided for herein) all of
United Kingdom Fund's liabilities, debts, obligations, and duties, of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in this Agreement. Notwithstanding the
foregoing, United Kingdom Fund agrees to use its best efforts to
discharge all of its known liabilities prior to the Closing Date,
other than liabilities incurred in the ordinary course of business.

(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, United Kingdom Fund will constructively
distribute PRO RATA to its shareholders of record, determined as of
the Valuation Time on the Closing Date, the Europe Fund Shares in
exchange for such shareholders' shares of beneficial interest in
United Kingdom Fund and United Kingdom Fund will be liquidated in
accordance with United Kingdom Fund's Amended and Restated Declaration
of Trust. Such distribution shall be accomplished by the Funds'
transfer agent opening accounts on Europe Fund's share transfer books
in the names of the United Kingdom Fund shareholders and transferring
the Europe Fund Shares thereto. Each United Kingdom Fund shareholder's
account shall be credited with the respective PRO RATA number of full
and fractional (rounded to the third decimal place) Europe Fund Shares
due that shareholder. All outstanding United Kingdom Fund shares,
including any represented by certificates, shall simultaneously be
canceled on United Kingdom Fund's share transfer records. Europe Fund
shall not issue certificates representing the Europe Fund Shares in
connection with the Reorganization.

(e) Any reporting responsibility of United Kingdom Fund is and shall
remain its responsibility up to and including the date on which it is
terminated.

(f) Any transfer taxes payable upon issuance of the Europe Fund
Shares in a name other than that of the registered holder on United
Kingdom Fund's books of the United Kingdom Fund shares constructively
exchanged for the Europe Fund Shares shall be paid by the person to
whom such Europe Fund Shares are to be issued, as a condition of such
transfer.

4. VALUATION.

(b) As of the Closing Date, Europe Fund will deliver to United
Kingdom Fund the number of Europe Fund Shares having an aggregate net
asset value equal to the value of the assets of United Kingdom Fund
transferred hereunder less the liabilities of United Kingdom Fund,
determined as provided in this Section 4.

(c) The net asset value per share of the Europe Fund Shares to be
delivered to United Kingdom Fund, the value of the assets of United
Kingdom Fund transferred hereunder, and the value of the liabilities
of United Kingdom Fund to be assumed hereunder shall in each case be
determined as of the Valuation Time.

(d) The net asset value per share of the Europe Fund Shares shall be
computed in the manner set forth in the then-current Europe Fund
Prospectus and Statement of Additional Information, and the value of
the assets and liabilities of United Kingdom Fund shall be computed in
the manner set forth in the then-current United Kingdom Fund
Prospectus and Statement of Additional Information.

5. FEES; EXPENSES.

(a) United Kingdom Fund shall be responsible for all expenses, fees
and other charges in connection with the transactions contemplated by
this Agreement, provided that they do not exceed the Fund's 2.00%
expense cap. Expenses exceeding the Fund's expense cap will be paid by
FMR (but not including costs incurred in connection with the purchase
or sale of portfolio securities). Any expenses incurred in connection
with the transactions contemplated by this Agreement which may be
attributable to Europe Fund will be borne by Europe Fund.

(b) Each of Europe Fund and United Kingdom Fund represents that there
is no person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this
Agreement.

6. CLOSING DATE.

(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trust, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on July 24,
2000, or at some other time, date, and place agreed to by United
Kingdom Fund and Europe Fund (the Closing Date).

(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of United Kingdom Fund and the net asset
value per share of Europe Fund is impracticable, the Valuation Time
and the Closing Date shall be postponed until the first business day
after the day when such trading shall have been fully resumed and such
reporting shall have been restored, or such other date as the parties
may agree.

7. SHAREHOLDER MEETING AND TERMINATION OF UNITED KINGDOM FUND.

(a) United Kingdom Fund agrees to call a meeting of its shareholders
after the effective date of the Registration Statement, to consider
transferring its assets to Europe Fund as herein provided, adopting
this Agreement, and authorizing the liquidation of United Kingdom
Fund.

(b) United Kingdom Fund agrees that as soon as reasonably practicable
after distribution of the Europe Fund Shares, United Kingdom Fund
shall be terminated as a series of Fidelity Investment Trust pursuant
to its Amended and Restated Declaration of Trust, any further actions
shall be taken in connection therewith as required by applicable law,
and on and after the Closing Date United Kingdom Fund shall not
conduct any business except in connection with its liquidation and
termination.

8. CONDITIONS TO OBLIGATIONS OF EUROPE FUND.

(a) That United Kingdom Fund furnishes to Europe Fund a statement,
dated as of the Closing Date, signed by an officer of Fidelity
Investment Trust, certifying that as of the Valuation Time and the
Closing Date all representations and warranties of United Kingdom Fund
made in this Agreement are true and correct in all material respects
and that United Kingdom Fund has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such dates;

(b) That United Kingdom Fund furnishes Europe Fund with copies of the
resolutions, certified by an officer of Fidelity Investment Trust,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of United Kingdom
Fund;

(c) That, on or prior to the Closing Date, United Kingdom Fund will
declare one or more dividends or distributions which, together with
all previous such dividends or distributions attributable to its
current taxable year, shall have the effect of distributing to the
shareholders of United Kingdom Fund substantially all of United
Kingdom Fund's investment company taxable income and all of its net
realized capital gain, if any, as of the Closing Date;

(d) That United Kingdom Fund shall deliver to Europe Fund at the
Closing a statement of its assets and liabilities, together with a
list of its portfolio securities showing each such security's adjusted
tax basis and holding period by lot, with values determined as
provided in Section 4 of this Agreement, all as of the Valuation Time,
certified on United Kingdom Fund's behalf by its Treasurer or
Assistant Treasurer;

(e) That United Kingdom Fund's custodian shall deliver to Europe Fund
a certificate identifying the assets of United Kingdom Fund held by
such custodian as of the Valuation Time on the Closing Date and
stating that as of the Valuation Time: (i) the assets held by the
custodian will be transferred to Europe Fund; (ii) United Kingdom
Fund's assets have been duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof; and (iii) to
the best of the custodian's knowledge, all necessary taxes in
conjunction with the delivery of the assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made;

(f) That United Kingdom Fund's transfer agent shall deliver to Europe
Fund at the Closing a certificate setting forth the number of shares
of United Kingdom Fund outstanding as of the Valuation Time and the
name and address of each holder of record of any such shares and the
number of shares held of record by each such shareholder;

(g) That United Kingdom Fund calls a meeting of its shareholders to
be held after the effective date of the Registration Statement, to
consider transferring its assets to Europe Fund as herein provided,
adopting this Agreement, and authorizing the liquidation and
termination of United Kingdom Fund;

(h) That United Kingdom Fund delivers to Europe Fund a certificate of
an officer of Fidelity Investment Trust, dated as of the Closing Date,
that there has been no material adverse change in United Kingdom
Fund's financial position since October 31, 1999, other than changes
in the market value of its portfolio securities, or changes due to net
redemptions of its shares, dividends paid, or losses from operations;
and

(i) That all of the issued and outstanding shares of beneficial
interest of United Kingdom Fund shall have been offered for sale and
sold in conformity with all applicable state securities laws and, to
the extent that any audit of the records of United Kingdom Fund or its
transfer agent by Europe Fund or its agents shall have revealed
otherwise, United Kingdom Fund shall have taken all actions that in
the opinion of Europe Fund are necessary to remedy any prior failure
on the part of United Kingdom Fund to have offered for sale and sold
such shares in conformity with such laws.

9. CONDITIONS TO OBLIGATIONS OF UNITED KINGDOM FUND .

(a) That Europe Fund shall have executed and delivered to United
Kingdom Fund an Assumption of Liabilities, certified by an officer of
Fidelity Investment Trust, dated as of the Closing Date pursuant to
which Europe Fund will assume all of the liabilities of United Kingdom
Fund existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;

(b) That Europe Fund furnishes to United Kingdom Fund a statement,
dated as of the Closing Date, signed by an officer of Fidelity
Investment Trust, certifying that as of the Valuation Time and the
Closing Date all representations and warranties of Europe Fund made in
this Agreement are true and correct in all material respects, and
Europe Fund has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such dates; and

(c) That United Kingdom Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to United Kingdom Fund and Europe
Fund, to the effect that the Europe Fund Shares are duly authorized
and upon delivery to United Kingdom Fund as provided in this Agreement
will be validly issued and will be fully paid and nonassessable by
Europe Fund (except as disclosed in Europe Fund's Statement of
Additional Information) and no shareholder of Europe Fund has any
preemptive right of subscription or purchase in respect thereof.

10. CONDITIONS TO OBLIGATIONS OF EUROPE FUND AND UNITED KINGDOM FUND.

(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, which term as used herein shall include
the District of Columbia and Puerto Rico, and including "no action"
positions of such federal or state authorities) deemed necessary by
Europe Fund or United Kingdom Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order,
or permit would not involve a risk of a material adverse effect on the
assets or properties of Europe Fund or United Kingdom Fund, provided
that either party hereto may for itself waive any of such conditions;

(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;

(f) That Europe Fund and United Kingdom Fund shall have received an
opinion of Kirkpatrick & Lockhart LLP satisfactory to Europe Fund and
United Kingdom Fund that for federal income tax purposes:

(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and United Kingdom Fund and Europe Fund will
each be parties to the Reorganization under section 368(b) of the
Code;

(ii) No gain or loss will be recognized by United Kingdom Fund upon
the transfer of all of its assets to Europe Fund in exchange solely
for the Europe Fund Shares and the assumption of United Kingdom Fund's
liabilities followed by the distribution of those Europe Fund Shares
to the shareholders of United Kingdom Fund in liquidation of United
Kingdom Fund;

(iii) No gain or loss will be recognized by Europe Fund on the
receipt of United Kingdom Fund's assets in exchange solely for the
Europe Fund Shares and the assumption of United Kingdom Fund's
liabilities;

(iv) The basis of United Kingdom Fund's assets in the hands of
Europe Fund will be the same as the basis of such assets in United
Kingdom Fund's hands immediately prior to the Reorganization;

(v) Europe Fund's holding period in the assets to be received from
United Kingdom Fund will include United Kingdom Fund's holding period
in such assets;

(vi) A United Kingdom Fund shareholder will recognize no gain or
loss on the exchange of his or her shares of beneficial interest in
United Kingdom Fund for the Europe Fund Shares in the Reorganization;

(vii) A United Kingdom Fund shareholder's basis in the Europe Fund
Shares to be received by him or her will be the same as his or her
basis in the United Kingdom Fund shares exchanged therefor;

(viii) A United Kingdom Fund shareholder's holding period for his or
her Europe Fund Shares will include the holding period of United
Kingdom Fund shares exchanged, provided that those United Kingdom Fund
shares were held as capital assets on the date of the Reorganization.

Notwithstanding anything herein to the contrary, neither United
Kingdom Fund nor Europe Fund may waive the conditions set forth in
this subsection 10(f).

11. COVENANTS OF EUROPE FUND AND UNITED KINGDOM FUND.

(a) Europe Fund and United Kingdom Fund each covenants to operate its
respective business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of
business will include the payment of customary dividends and
distributions;

(b) United Kingdom Fund covenants that it is not acquiring the Europe
Fund Shares for the purpose of making any distribution other than in
accordance with the terms of this Agreement;

(c) United Kingdom Fund covenants that it will assist Europe Fund in
obtaining such information as Europe Fund reasonably requests
concerning the beneficial ownership of United Kingdom Fund's shares;
and

(d) United Kingdom Fund covenants that its liquidation and
termination will be effected in the manner provided in its Amended and
Restated Declaration of Trust in accordance with applicable law and
after the Closing Date, United Kingdom Fund will not conduct any
business except in connection with its liquidation and termination.

12. TERMINATION; WAIVER.

Europe Fund and United Kingdom Fund may terminate this Agreement by
mutual agreement. In addition, either Europe Fund or United Kingdom
Fund may at its option terminate this Agreement at or prior to the
Closing Date because:

(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or

(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.

In the event of any such termination, there shall be no liability for
damages on the part of United Kingdom Fund or Europe Fund, or their
respective Trustees or officers.

13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.

(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Europe Fund or United
Kingdom Fund; provided, however, that following the shareholders'
meeting called by United Kingdom Fund pursuant to Section 7 of this
Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Europe Fund Shares to be paid
to United Kingdom Fund shareholders under this Agreement to the
detriment of such shareholders without their further approval.

(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.

14. DECLARATIONS OF TRUST.

15. ASSIGNMENT.

This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.

[SIGNATURE LINES OMITTED]

Like securities of all mutual funds, these securities have
not been approved or disapproved by the Securities
and Exchange Commission, and the Securities and
Exchange Commission has not determined if this
prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
FIDELIT Y'S
TARGETED INTERNATIONAL EQUITY
FUNDS
Fund Number TRADING SYMBOL
Fidelity Canada Fund 309 FICDX
Fidelity Emerging Markets Fund 322 FEMKX
Fidelity Europe Fund 301 FIEUX
Fidelity Europe Capital 341 FECAX
Appreciation Fund
Fidelity Hong Kong and China 352 FHKCX
Fund
Fidelity Japan Fund 350 FJPNX
Fidelity Japan Smaller 360 FJSCX
Companies Fund (formerly
Japan Small Companies Fund)
Fidelity Latin America Fund 349 FLATX
Fidelity Nordic Fund 342 FNORX
Fidelity Pacific Basin Fund 302 FPBFX
Fidelity Southeast Asia Fund 351 FSEAX
PROSPECTUS
DECEMBER 29, 1999
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
8 PERFORMANCE
16 FEE TABLE
FUND BASICS 22 INVESTMENT DETAILS
26 VALUING SHARES
SHAREHOLDER INFORMATION 26 BUYING AND SELLING SHARES
34 EXCHANGING SHARES
34 ACCOUNT FEATURES AND POLICIES
37 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
37 TAX CONSEQUENCES
FUND SERVICES 38 FUND MANAGEMENT
40 FUND DISTRIBUTION
APPENDIX 41 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
CANADA FUND seeks growth of capital over the long term.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Canada or are registered in Canadian markets.
(small solid bullet) Potentially investing in securities of U.S.
issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN CANADA. The Canadian
economy can be significantly affected by the U.S. economy and the
price of natural resources. Periodic demands by the Province of
Quebec for sovereignty could significantly affect the Canadian
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
EMERGING MARKETS FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers in emerging markets (countries that have an
emerging stock market as defined by the International Finance
Corporation and countries with low- to middle-income economies
according to the World Bank).
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in countries considered emerging markets as a
whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
EUROPE FUND seeks growth of capital over the long-term.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Europe.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union (EMU).
The markets in Eastern Europe remain relatively undeveloped and can be
particularly sensitive to political and economic developments.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Europe.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the EMU. The markets in Eastern Europe remain
relatively undeveloped and can be particularly sensitive to political
and economic developments.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
HONG KONG AND CHINA FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Hong Kong and Chinese issuers.
(small solid bullet) Investing mostly in securities of Hong Kong
issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Investing up to 35% of total assets in any
industry that accounts for more than 20% of the Hong Kong and Chinese
market.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN HONG KONG AND CHINA.
The Hong Kong and Chinese economies are generally considered emerging
markets and can be significantly affected by general economic and
political conditions in other Asian countries and changes in Chinese
government policy. A small number of companies and industries
represent a large portion of the Hong Kong and Chinese market, and
these companies and industries can be sensitive to adverse political,
economic, or regulatory developments.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
JAPAN SMALL ER COMPANIES FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers with small er market
capitalizations (those with market capitalizations similar to
companies in the Tokyo Stock Exchange Second Section Index or the
JASDAQ Stock Index).
(small solid bullet) Potentially investing in securities of Japanese
issuers with larger market capitalizations and non-Japanese issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
(small solid bullet) SMALL CAP INVESTING. The value of securities of
smaller, less well-known issuers can perform differently from the
market as a whole and other types of stocks and can be more volatile
than that of larger issuers.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Latin American issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Latin America as a whole.
(small solid bullet) Investing up to 35% of total assets in any
industry that accounts for more than 20% of the Latin American market.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN LATIN AMERICA. The
Latin American economies are generally considered emerging markets and
can be significantly affected by currency devaluations. In
addition, the Latin American economies can be particularly sensitive
to fluctuations in commodity prices. A small number of companies
and industries represent a large portion of the Latin American market,
and these companies and industries can be sensitive to adverse
political, economic, or regulatory developments. The markets in Latin
America can be extremely volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
NORDIC FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Danish, Finnish, Norwegian, and Swedish issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in the Nordic region as a whole.
(small solid bullet) Investing up to 35% of total assets in any
industry that accounts for more than 20% of the Nordic market.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN NORDIC REGION. The
Nordic economies can be significantly affected by the price of natural
resources and their governments' efforts to comply with the
restrictions required to join the EMU. A small number of companies and
industries represent a large portion of the Nordic market, and these
companies and industries can be sensitive to adverse political,
economic, or regulatory developments.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
PACIFIC BASIN FUND seeks growth of capital over the long-term.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in the
Pacific Basin.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in the Pacific Basin as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN PACIFIC BASIN. Many
Pacific Basin economies are generally considered emerging markets and
most are currently in recessions. International trade, government
policy, and political and social stability can significantly affect
economic growth. The markets in the Pacific Basin can be extremely
volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
SOUTHEAST ASIA FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in securities of Southeast Asian issuers.
(small solid bullet) Normally investing primarily in common stocks.
(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Southeast Asia as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN SOUTHEAST ASIA. Most
Southeast Asian economies are generally considered emerging markets
and are currently in recessions. International trade, government
policy and political and social stability can significantly affect
economic growth. The markets in Southeast Asia can be extremely
volatile.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates the changes in each fund's
performance from year to year and compares each fund's performance to
the performance of a market index and an average of the performance of
similar funds over various periods of time. 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. Returns are based on past
results and are not an indication of future performance.
YEAR-BY-YEAR-RETURNS
The returns in the chart do not include the effect of the funds'
front-end sales charge. If the effect of the sales charge were
reflected, returns would be lower than those shown.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CANADA FUND
Calendar Years 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
26.99% -5.49% 17.68% -2.87% 25.47% -11.98% 19.39% 15.96% 6.12% -14.92%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 26.99
Row: 2, Col: 1, Value: -5.49
Row: 3, Col: 1, Value: 17.68
Row: 4, Col: 1, Value: -2.87
Row: 5, Col: 1, Value: 25.47
Row: 6, Col: 1, Value: -11.98
Row: 7, Col: 1, Value: 19.39
Row: 8, Col: 1, Value: 15.96
Row: 9, Col: 1, Value: 6.119999999999999
Row: 10, Col: 1, Value: -14.92
DURING T HE PERIODS SHOWN IN THE CHART FOR CANADA FUND, THE HIGHEST
RETURN FOR A QUARTER WAS 14.49% (QUARTER ENDING MARCH 31,
1991 ) AND THE LOWEST RETURN FOR A QUARTER WAS -28.11%
(QUARTER ENDING SEPTEMBER 30, 1998 ).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR CANADA FUND WAS
6.79 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMERGING MARKETS FUND
Calendar Years 1991 1992 1993 1994 1995 1996 1997 1998
6.76% 5.85% 81.76% -17.93% -3.18% 10.00% -40.77% -26.56%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: 6.76
Row: 4, Col: 1, Value: 5.85
Row: 5, Col: 1, Value: 81.76000000000001
Row: 6, Col: 1, Value: -17.93
Row: 7, Col: 1, Value: -3.18
Row: 8, Col: 1, Value: 10.0
Row: 9, Col: 1, Value: -40.77
Row: 10, Col: 1, Value: -26.56
DURING THE PERIODS SHOWN IN THE CHART FOR EMERGING MARKETS FUND,
THE HIGHEST RETURN FOR A QUARTER WAS 39.73% (QUARTER ENDING
DECEMBER 31, 1993 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-24.44% (QUARTER ENDING SEPTEMBER 30, 1998).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR EMERGING MARKETS
FUND WAS 27.80 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EUROPE FUND
Calendar Years 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
32.33% -4.59% 4.16% -2.52% 27.16% 6.26% 18.84% 25.63% 22.89% 20.77%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 32.33
Row: 2, Col: 1, Value: -4.59
Row: 3, Col: 1, Value: 4.159999999999999
Row: 4, Col: 1, Value: -2.52
Row: 5, Col: 1, Value: 27.16
Row: 6, Col: 1, Value: 6.26
Row: 7, Col: 1, Value: 18.84
Row: 8, Col: 1, Value: 25.63
Row: 9, Col: 1, Value: 22.89
Row: 10, Col: 1, Value: 20.77
D URING THE PERIODS SHOWN IN THE CHART FOR EUROPE FUND, THE HIGHEST
RETURN FOR A QUARTER WAS 18.97% (QUARTER ENDING MARCH 31,
1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS -17.36%
(QUARTER ENDING SEPTEMBER 30, 1998 ).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR EUROPE FUND WAS
- - - 2.48 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EUROPE CAPITAL APPRECIATION
FUND
Calendar Years 1994 1995 1996 1997 1998
6.88% 14.69% 25.89% 24.96% 21.66%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: 6.88
Row: 7, Col: 1, Value: 14.69
Row: 8, Col: 1, Value: 25.89
Row: 9, Col: 1, Value: 24.96
Row: 10, Col: 1, Value: 21.66
DURIN G THE PERIODS SHOWN IN THE CHART FOR EUROPE CAPITAL
APPRECIATION FUND, THE HIGHEST RETURN FOR A QUARTER WAS 22.68%
(QUARTER ENDING MARCH 31, 1998 ) AND THE LOWEST RETURN FOR A
QUARTER WAS -19.88% (QUARTER ENDING SEPTEMBER 30, 1998).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR EUROPE CAPITAL
APPRECIATION FUND WAS 0.56 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HONG KONG AND CHINA FUND
Calendar Years 1996 1997 1998
40.99% -22.05% -5.34%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: 40.99
Row: 9, Col: 1, Value: -22.05
Row: 10, Col: 1, Value: -5.34
DURING THE PE RIODS SHOWN IN THE CHART FOR HONG KONG AND CHINA FUND,
THE HIGHEST RETURN FOR A QUARTER WAS 21.58 (QUARTER ENDING
DECEMBER 31, 1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-31.38% (QUARTER ENDING DECEMBER 31, 1997).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR HONG KONG AND
CHINA FUND WAS 33.83 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAPAN FUND
Calendar Years 1993 1994 1995 1996 1997 1998
20.45% 16.46% -2.13% -11.19% -10.73% 13.09%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: 20.45
Row: 6, Col: 1, Value: 16.46
Row: 7, Col: 1, Value: -2.13
Row: 8, Col: 1, Value: -11.19
Row: 9, Col: 1, Value: -10.73
Row: 10, Col: 1, Value: 13.09
DURING THE PERIODS SHOWN IN TH E CHART FOR JAPAN FUND, THE HIGHEST
RETURN FOR A QUARTER WAS 23.45% (QUARTER ENDING JUNE 30,
1997 ) AND THE LOWEST RETURN FOR A QUARTER WAS -15.47%
(QUARTER ENDING DECEMBER 31, 1997 ).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR JAPAN FUND WAS
79.03 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAPAN SMALLER COMPANIES FUND
Calendar Years 1996 1997 1998
-24.59% -30.35% 31.16%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: -24.59
Row: 9, Col: 1, Value: -30.35
Row: 10, Col: 1, Value: 31.16
DURING THE PERIODS SHOWN IN THE CHART FOR JAPAN SMALLER COMPANIES
FUND, THE HIGHEST RETURN FOR A QUARTER WAS 34.82% (QUARTER
ENDING DECEMBER 31, 1998 ) AND THE LOWEST RETURN FOR A QUARTER
WAS -20.10% (QUARTER ENDING SEPTEMBER 30, 1997).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR JAPAN
SMALL ER COMPANIES FUND WAS 174.03 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LATIN AMERICA FUND
Calendar Years 1994 1995 1996 1997 1998
-23.17% -16.46% 30.72% 32.89% -38.34%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: -23.17
Row: 7, Col: 1, Value: -16.46
Row: 8, Col: 1, Value: 30.72
Row: 9, Col: 1, Value: 32.89
Row: 10, Col: 1, Value: -38.34
DURING THE PERIODS SHOWN IN THE CHART FOR LATIN AMERICA FUND, THE
HIGHEST RETURN FOR A QUARTER WAS 29.79% (QUARTER ENDING
SEPTEMBER 30, 1994 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-30.76% (QUARTER ENDING SEPTEMBER 30, 1998).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR LATIN AMERICA
FUND WAS 14.18 %.
NORDIC FUND
Calendar Years 1996 1997 1998
41.69% 12.11% 29.54%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: 41.69000000000001
Row: 9, Col: 1, Value: 12.11
Row: 10, Col: 1, Value: 29.54
DURING THE PERIO DS SHOWN IN THE CHART FOR NORDIC FUND, THE HIGHEST
RETURN FOR A QUARTER WAS 21.26% (QUARTER ENDING DECEMBER
31, 1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS -19.42%
(QUARTER ENDING SEPTEMBER 30, 1998).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR NORDIC FUND WAS
14.71 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PACIFIC BASIN FUND
Calendar Years 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
11.44% -27.21% 12.54% -7.62% 63.91% -2.81% -6.11% -2.76% -15.10% 8.26%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 11.44
Row: 2, Col: 1, Value: -27.21
Row: 3, Col: 1, Value: 12.54
Row: 4, Col: 1, Value: -7.619999999999999
Row: 5, Col: 1, Value: 63.91
Row: 6, Col: 1, Value: -2.81
Row: 7, Col: 1, Value: -6.109999999999999
Row: 8, Col: 1, Value: -2.76
Row: 9, Col: 1, Value: -15.1
Row: 10, Col: 1, Value: 8.26
DURING THE P ERIODS SHOWN IN THE CHART FOR PACIFIC BASIN FUND, THE
HIGHEST RETURN FOR A QUARTER WAS 21.58% (QUARTER ENDING
DECEMBER 31, 1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-25.00% (QUARTER ENDING SEPTEMBER 30, 1990).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR PACIFIC BASIN
FUND WAS 59.68 %.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SOUTHEAST ASIA FUND
Calendar Years 1994 1995 1996 1997 1998
-21.76% 12.18% 10.16% -38.88% -5.79%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: -21.76
Row: 7, Col: 1, Value: 12.18
Row: 8, Col: 1, Value: 10.16
Row: 9, Col: 1, Value: -38.88
Row: 10, Col: 1, Value: -5.79
DURING THE P ERIODS SHOWN IN THE CHART FOR SOUTHEAST ASIA FUND, THE
HIGHEST RETURN FOR A QUARTER WAS 25.52% (QUARTER ENDING
DECEMBER 31, 1998 ) AND THE LOWEST RETURN FOR A QUARTER WAS
-28.57% (QUARTER ENDING DECEMBER 31, 1997).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR SOUTHEAST ASIA
FUND WAS 33.76 %.
AVERAGE ANNUAL RETURNS
The returns in the following table include the effect of each fund's
3.00% maximum applicable front-end sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the periods ended Past 1 year Past 5 years Past 10 years/ Life of fund
December 31, 1998
Canada Fund -17.48% 1.31% 6.27%
TSE 300 Index -1.58% 10.67% 9.65%
Emerging Markets Fund -28.77% -18.09% -3.25%A
MSCI Emerging Markets Free -25.34% -9.27% 8.16%A
Index
Lipper Emerging Markets Funds -26.83% -10.25% n/a
Average
Europe Fund 17.15% 17.96% 14.05%
MSCI Europe Index 28.87% 19.24% 15.29%
Lipper European Region Funds 22.55% 16.05% 11.21%
Average
Europe Capital Appreciation 18.01% 17.88% 17.83%B
Fund
MSCI Europe Index 28.87% 19.24% 19.32%B
Lipper European Region Funds 22.55% 16.05% n/a
Average
Hong Kong and China Fund -8.18% n/a 1.07%C
Hang Seng Index -3.86% n/a 3.66%C
Lipper China Region Funds -17.51% n/a n/a
Average
Japan Fund 9.69% -0.18% 2.79%D
TOPIX Index 7.76% -4.87% -1.44%D
Lipper Japanese Funds Average 8.17% -3.66% n/a
Japan Smaller Companies Fund 27.22% n/a -10.37%C
Tokyo Stock Exchange Second 14.81% n/a -15.50%C
Section Stock Price Index
Lipper Japanese Funds Average 8.17% n/a n/a
Latin America Fund -40.19% -7.79% 1.37%E
MSCI Emerging Markets Free - -35.11% -1.74% 5.57%E
Latin America Index
Lipper Latin America Funds -38.21% -6.81% n/a
Average
Nordic Fund 25.65% n/a 23.79%C
FT- A - Nordic Index 20.02% n/a 21.23%C
Lipper European Region Funds 22.55% n/a n/a
Average
Pacific Basin Fund 5.01% -4.58% 0.90%
MSCI Pacific Index 2.57% -4.10% -3.90%
Lipper Pacific Region Funds -5.99% -6.96% 2.59%
Average
Southeast Asia Fund -8.62% -11.59% -2.02%E
MSCI All Country Far East -4.82% -11.95% -1.33%E
Free ex Japan Index
Lipper Pacific ex Japan Funds -9.05% -11.89% n/a
Average
</TABLE>
A FROM NOVEMBER 1, 1990.
B FROM DECEMBER 2 1 , 1993.
C FROM NOVEMBER 1, 1995.
D FROM SEPTEMBER 15, 1992.
E FROM APRIL 19, 1993.
If FMR had not reimbursed certain fund expenses during these periods,
Canada Fund's, Europe Fund's, Japan Fund's, Nordic Fund's, Pacific
Basin Fund's, and Southeast Asia Fund's returns would have been
lower.
Morgan Stanley Capital International AC (All Country) Far East
Free ex Japan Index is a market capitalization-weighted index of over
350 stocks traded in eight Asian markets, excluding Japan.
Morgan Stanley Capital International Emerging Markets Free Index is a
market capitalization-weighted index that is designed to represent the
performance of emerging stock markets throughout the world. As of
December 31, 1998, the index included over 900 equity
securities of companies domiciled in 25 countries.
Morgan Stanley Capital International Emerging Markets Free - Latin
America Index is a market capitalization-weighted index of
approximately 160 stocks traded in seven Latin American markets.
Morgan Stanley Capital International Europe Index is a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. As of December 31,
1998, the index included over 590 equity securities of
companies domiciled in 15 European countries.
Morgan Stanley Capital International Pacific Index is a market
capitalization-weighted index of approximately 400 stocks traded in
six Pacific-region markets.
Toronto Stock Exchange (TSE) 300 is a market capitalization-weighted
index of 300 stocks traded in the Canadian market.
Hang Seng Index is a market capitalization-weighted index of the
stocks of the 33 largest companies in the Hong Kong market.
Tokyo Stock Exchange Index (TOPIX) is a market capitalization-weighted
index of over 1300 stocks traded in the Japanese market.
Tokyo Stock Exchange Second Section Stock Price Index is a market
capitalization-weighted index that reflects the performance of the
smaller, less established and newly listed companies of the Tokyo
Stock Exchange.
FT - Actuaries World Nordic Index is a market capitalization-weighted
index of over 90 stocks traded in four Scandinavian markets.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of a fund. The annual fund
operating expenses provided below for Canada Fund, Emerging Markets
Fund, Europe Fund, Europe Capital Appreciation Fund, Hong Kong and
China Fund, Japan Fund, Latin America Fund, Nordic Fund, Pacific Basin
Fund, and Southeast Asia Fu nd do not reflect the effect of any
reduction of certain expenses during the period. The annual fund
operating expenses provided below for Japan Smaller Companies Fund
a re based on historical expenses.
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Maximum sales charge (load) 3.00%A
on purchases (as a % of
offering price)
Sales charge (load) on None
reinvested distributions
Deferred sales charge (load) None
on redemptions
Redemption fee on shares held 1.50%
less than 90 days (as a % of
amount redeemed) for Canada
Fund, Emerging Markets Fund,
Hong Kong and China Fund,
Japan Fund, Japan Smaller
Companies Fund, Latin
America Fund, Nordic Fund,
and Southeast Asia Fund only
Redemption fee on shares held 1.00%
less than 90 days (as a % of
amount redeemed) for Europe
Fund, Europe Capital
Appreciation Fund, and
Pacific Basin Fund only
Annual account maintenance $ 12.00
fee (for accounts under
$2,500)
A LOWER SALES CHARGES MAY BE AVAILABLE FOR ACCOUNTS OVER $250,000.
ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)
CANADA FUND Management fee 0.32%
Distribution and Service None
(12b-1) fee
Other expenses 0.90%
Total annual fund operating 1.22%
expenses
EMERGING MARKETS FUND Management fee 0.73%
Distribution and Service None
(12b-1) fee
Other expenses 0.72%
Total annual fund operating 1.45%
expenses
EUROPE FUND Management fee 0.60%
Distribution and Service None
(12b-1) fee
Other expenses 0.36%
Total annual fund operating 0.96%
expenses
EUROPE CAPITAL APPRECIATION Management fee 0.66%
FUND
Distribution and Service None
(12b-1) fee
Other expenses 0.41%
Total annual fund operating 1.07%
expenses
HONG KONG AND CHINA FUND Management fee 0.73%
Distribution and Service None
(12b-1) fee
Other expenses 0.61%
Total annual fund operating 1.34%
expensesA
JAPAN FUND Management fee 0.86%
Distribution and Service None
(12b-1) fee
Other expenses 0.38%
Total annual fund operating 1.24%
expenses
JAPAN SMALLER COMPANIES FUND Management fee 0.72%
Distribution and Service None
(12b-1) fee
Other expenses 0.35%
Total annual fund operating 1.07%
expensesA
LATIN AMERICA FUND Management fee 0.73%
Distribution and Service None
(12b-1) fee
Other expenses 0.59%
Total annual fund operating 1.32%
expenses
NORDIC FUND Management fee 0.73%
Distribution and Service None
(12b-1) fee
Other expenses 0.54%
Total annual fund operating 1.27%
expensesA
PACIFIC BASIN FUND Management fee 0.92%
Distribution and Service None
(12b-1) fee
Other expenses 0.45%
Total annual fund operating 1.37%
expenses
SOUTHEAST ASIA FUND Management fee 0.89%
Distribution and Service None
(12b-1) fee
Other expenses 0.57%
Total annual fund operating 1.46%
expenses
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE HONG KONG AND CHINA FUND,
JAPAN SMALL ER COMPANIES FUND, AND NORDIC FUND TO THE
EXTENT THAT TOTAL OPERATING EXPENSES (EXCLUDING INTEREST, TAXES,
SECURITIES LENDING COSTS , BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF THEIR RESPECTIVE AVERAGE
NET ASSETS, EXCEED 2.00%. THESE ARRANGEMENTS CAN BE DISCONTINUED BY
FMR AT ANY TIME.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, through arrangements with
each fund's custodian and transfer agent, credits realized as a
result of uninvested cash balances are used to reduce custodian and
transfer agent expenses. Including these reductions, the total fund
operating expenses would have been:
CANADA FUND 1.06%
EMERGING MARKETS FUND 1.42%
EUROPE FUND 0.89%
EUROPE CAPITAL APPRECIATION 0.97%
FUND
HONG KONG AND CHINA FUND 1.32%
JAPAN FUND 1.23%
LATIN AMERICA FUND 1.30%
NORDIC FUND 1.23%
PACIFIC BASIN FUND 1.36%
SOUTHEAST ASIA FUND 1.43%
This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.
Let's say, hypothetically, that each fund's annual return is 5% and
that your shareholder fees and each fund's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account after the number of years
indicated:
CANADA FUND 1 year $ 421
3 years $ 676
5 years $ 950
10 years $ 1,733
EMERGING MARKETS FUND 1 year $ 443
3 years $ 745
5 years $ 1,068
10 years $ 1,983
EUROPE FUND 1 year $ 395
3 years $ 597
5 years $ 815
10 years $ 1,443
EUROPE CAPITAL APPRECIATION 1 year $ 406
FUND
3 years $ 630
5 years $ 872
10 years $ 1,566
HONG KONG AND CHINA FUND 1 year $ 432
3 years $ 712
5 years $ 1,012
10 years $ 1,864
JAPAN FUND 1 year $ 423
3 years $ 682
5 years $ 961
10 years $ 1,755
JAPAN SMALLER COMPANIES FUND 1 year $ 406
3 years $ 630
5 years $ 872
10 years $ 1,566
LATIN AMERICA FUND 1 year $ 430
3 years $ 706
5 years $ 1,002
10 years $ 1,843
NORDIC FUND 1 year $ 425
3 years $ 691
5 years $ 976
10 years $ 1,788
PACIFIC BASIN FUND 1 year $ 435
3 years $ 721
5 years $ 1,027
10 years $ 1,897
SOUTHEAST ASIA FUND 1 year $ 444
3 years $ 748
5 years $ 1,073
10 years $ 1,994
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
CANADA FUND seeks growth of capital over the long term.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Canada
or are registered in Canadian markets. FMR may also invest the fund's
assets in U.S. issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
EMERGING MARKETS FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers in emerging markets. Countries with emerging
markets include those that have an emerging stock market as defined by
the International Finance Corporation and those with low- to
middle-income economies according to the World Bank. FMR expects to
emphasize countries with relatively low gross national product per
capita compared to the world's major economies and countries with the
potential for rapid economic growth. FMR normally invests the fund's
assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
emerging market countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in countries considered emerging
markets as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
EUROPE FUND seeks growth of capital over the long term.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
HONG KONG AND CHINA FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Hong Kong and Chinese issuers. Currently, FMR
anticipates that most of the fund's investments will be in Hong Kong
issuers. FMR normally invests the fund's assets primarily in common
stocks.
FMR may invest up to 35% of the fund's total assets in any industry
that accounts for more than 20% of the Hong Kong and Chinese market as
a whole, as represented by an index determined by FMR to be an
appropriate measure of the market. FMR intends to measure the
percentage of the index represented by each industry no less
frequently than once per month. As of October 31, 1999, banks
accounted for approximately 35 % of the Hang Seng Index.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
JAPAN FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
JAPAN SMALL ER COMPANIES FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers with small er market
capitalizations. Small er market capitalization issuers are
those whose market capitalization is similar to the market
capitalization of companies in the Tokyo Stock Exchange (TSE) Second
Section Index or the JASDAQ Stock Index at the time of the fund's
investment. Issuers whose capitalization no longer meets this
definition after purchase continue to be considered to have a
small er market capitalization for purposes of the 65% policy.
As of October 31, 1999, the TSE Second Section Index included
companies with capitalizations between $ 1.9 billion and
$ 93.7 million and the JASDAQ Stock Index included companies
with capitalizations between $ 1.3 billion and $ 13.5
million. The size of companies in these indexes changes with market
conditions and the composition of the indexes. FMR may also invest the
fund's assets in Japanese issuers with larger market capitalizations
and in non-Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
LATIN AMERICA FUND seeks high total investment return.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Latin American issuers. Latin America includes
Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Panama and
Venezuela. FMR normally invests the fund's assets primarily in common
stocks.
FMR normally diversifies the fund's investments across different Latin
American countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Latin America as a whole.
FMR may invest up to 35% of the fund's total assets in any industry
that accounts for more than 20% of the Latin American market as a
whole, as represented by an index determined by FMR to be an
appropriate measure of the market. FMR intends to measure the
percentage of the index represented by each industry no less
frequently than once per month . As of October 31, 1999, telephone
companies accounted for approximately 27 % of the Morgan Stanley
Capital International Emerging Markets Free - Latin America
Index.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
NORDIC FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Danish, Finnish, Norwegian and Swedish issuers. FMR
normally invests the fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
Nordic countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in the Nordic region as a whole.
FMR may invest up to 35% of the fund's total assets in any industry
that accounts for more than 20% of the Nordic market as a whole, as
represented by an index determined by FMR to be an appropriate
measure of the market. FMR intends to measure the percentage of the
index represented by each industry no less frequently than once per
month . As of October 31, 1999, communications companies accounted
for approximately 43 % of the FT/S&P-Actuaries World Nordic
Index.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
PACIFIC BASIN FUND seeks growth of capital over the long-term.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in the
Pacific Basin. The Pacific Basin includes Australia, Hong Kong,
Indonesia, Japan, South Korea, Malaysia, New Zealand, the People's
Republic of China, the Philippines, Singapore, Taiwan, and Thailand.
FMR normally invests the fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
Pacific Basin countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in the Pacific Basin as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
SOUTHEAST ASIA FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
securities of Southeast Asian issuers. Southeast Asia includes Hong
Kong, Indonesia, South Korea, Malaysia, the Philippines, the People's
Republic of China, Singapore, Taiwan, and Thailand. FMR normally
invests the fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
Southeast Asian countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Southeast Asia as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities and
warrants.
PRINCIPAL INVESTMENT RISKS
Many factors affect each fund's performance. A fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political or financial
developments. A fund's reaction to these developments will be affected
by the types of securities in which the fund invests, the financial
condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that
issuer. Because FMR concentrates each fund's investments in a
particular country or group of countries, each fund's performance is
expected to be closely tied to economic and political conditions
within that country or group of countries and to be more volatile than
the performance of more geographically diversified funds. Because FMR
may invest a significant percentage of the assets of each of Hong Kong
and China Fund, Latin America Fund, and Nordic Fund in certain
industries, the fund's performance could be affected to the extent
that the particular industry or industries in which the fund invests
are sensitive to adverse changes in economic or political conditions.
In addition, because FMR may invest a significant percentage of the
assets of each of Hong Kong and China Fund, Japan Small er
Companies Fund, and Nordic Fund in a single issuer, the fund's
performance could be closely tied to the market value of that one
issuer and could be more volatile than the performance of more
diversified funds. When you sell your shares of a fund, they could be
worth more or less than what you paid for them.
The following factors can significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in
response to these developments. Different parts of the market and
different types of equity securities can react differently to these
developments. For example, large cap stocks can react differently from
small cap stocks, and "growth" stocks can react differently from
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. For example, many foreign countries are less prepared
than the United States to properly process and calculate information
related to dates from and after January 1, 2000, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest, or principal. All of these factors
can make foreign investments, especially those in emerging markets,
more volatile and potentially less liquid than U.S. investments. In
addition, foreign markets can perform differently from the U.S.
market.
Investing in emerging markets can involve risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of economic development;
political stability; market depth, infrastructure and capitalization;
and regulatory oversight can be less than in more developed markets.
Emerging market economies can be subject to greater social, economic,
regulatory and political uncertainties. All of these factors can make
emerging market securities more volatile and potentially less liquid
than securities issued in more developed markets.
GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.
ASIA. Asia includes countries in all stages of economic development,
from the highly developed economy of Japan to the emerging market
economy of the People's Republic of China. Most Asian economies are
characterized by over-extension of credit, currency devaluations
and restrictions , rising unemployment, high inflation,
decreased exports, and economic recessions. Currency devaluations
in any one country can have a significant effect on the entire region.
Recently, the markets in each Asian country have suffered significant
downturns as well as significant volatility. Increased political and
social unrest in some or all Asian countries could cause further
economic and market uncertainty.
The AUSTRALIA AND NEW ZEALAND economies are dependent on the economies
of Asian countries and on the price and demand for agricultural
products and natural resources.
The HONG KONG AND CHINESE economies are dependent on the economies of
other Asian countries. The willingness and ability of the Chinese
government to support the Hong Kong and Chinese economies and markets
is uncertain. A small number of companies and industries, including
the banking industry , represent a large portion of the market
in Hong Kong. The banking industry can be significantly
affected by interest rate and currency fluctuations, changes in market
regulation, and political and economic developments in the Asian
region. China has yet to develop comprehensive securities, corporate,
or commercial laws, and its market is relatively new and undeveloped.
Changes in government policy could significantly affect the markets in
both countries.
The JAPANESE economy is currently in a recession. The economy is
characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The United States is Japan's
largest single trading partner, but close to half of Japan's trade is
conducted with developing nations, almost all of which are in
Southeast Asia.
The SOUTHEAST ASIA economies are generally in recessions. Many of
their economies are characterized by high inflation,
undeveloped financial services sectors , and heavy reliance on
international trade. Currency devaluations or restrictions ,
political and social instability, and general economic conditions have
resulted in significant market downturns and volatility. A small
number of companies and industries represent a large portion of the
market in many Southeast Asian countries.
CANADA. The Canadian and U.S. economies are closely integrated. The
United States is Canada's largest trading partner and foreign
investor. Canada is a major producer of forest products, metals,
agricultural products, and energy-related products, such as oil, gas,
and hydroelectricity. The Canadian economy is very dependent on
the demand, supply and price of natural resources , and the
Canadian market is relatively concentrated in issuers involved in the
production and distribution of natural resources. Periodic demands by
the Province of Quebec for sovereignty could significantly affect the
Canadian market.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union (EU) and many are also members of the EMU, which requires
compliance with restrictions on inflation rates, deficits and debt
levels. Unemployment in Europe is historically high. Many
Eastern European countries continue to move toward market economies.
However, their markets remain relatively undeveloped and can be
particularly sensitive to political and economic developments. The
tight fiscal and monetary controls necessary to join the EMU can
significantly affect every country in Europe.
The NORDIC economies are dependent on the export of natural resources
and natural resource products. Efforts to comply with the EMU
restrictions by Finland, Denmark, and Sweden have resulted in reduced
government spending and higher unemployment. Norway has elected not to
join the EU and the EMU and, as a result, has more flexibility to
pursue different fiscal and economic goals. In addition, a small
number of companies and industries, including the communications
industry, represent a large portion of the market in each of Denmark,
Finland, Norway, and Sweden. The communications industry can be
significantly affected by increasing competition, rapid technological
innovation, product obsolescence, acquisitions and business alliances,
and the relative instability of markets in which a significant
percentage of their products are sold.
LATIN AMERICA. The economies of countries in Latin America are all
considered emerging market economies. High interest, inflation, and
unemployment rates generally characterize each economy. Currency
devaluations in any country can have a significant affect on the
entire region. Because commodities such as agricultural products,
minerals, and metals represent a significant percentage of exports of
many Latin American countries, the economies of those countries are
particularly sensitive to fluctuations in commodity prices.
Recently, the markets in many Latin American countries have
experienced significant downturns as well as significant volatility. A
small number of companies and industries, including the telephone
industry, represent a large portion of the market in many Latin
American countries. The telephone industry can be significantly
affected by increasing competition, government regulation, and
financing difficulties.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the value of an issuer's
securities.
SMALL CAP INVESTING. The value of securities of smaller, less
well-known issuers can be more volatile than that of larger issuers
and can react differently to issuer, political, market and economic
developments than the market as a whole and other types of stocks.
Smaller issuers can have more limited product lines, markets and
financial resources.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
CANADA FUND seeks growth of capital over the long term through
investments in securities of issuers that have their principal
activities in Canada or are registered in Canadian markets.
EMERGING MARKETS FUND seeks capital appreciation.
EUROPE FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal
activities in Europe.
EUROPE CAPITAL APPRECIATION FUND seeks long-term capital appreciation.
HONG KONG AND CHINA FUND seeks long-term growth of capital.
JAPAN FUND seeks long-term growth of capital.
JAPAN SMALL ER COMPANIES FUND seeks long-term growth of capital.
LATIN AMERICA FUND seeks high total investment return.
NORDIC FUND seeks long-term growth of capital.
PACIFIC BASIN FUND seeks growth of capital over the long-term through
investments in securities of issuers that have their principal
activities in the Pacific Basin.
SOUTHEAST ASIA FUND seeks capital appreciation.
VALUING SHARES
Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.
Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity(registered trademark) normally calculates each fund's
NAV as of the close of business of the NYSE, normally 4:00 p.m.
Eastern time. However, NAV may be calculated earlier if trading on the
NYSE is restricted or as permitted by the Securities and Exchange
Commission (SEC). Each fund's assets are valued as of this time for
the purpose of computing the fund's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available for a
security or if a security's value has been materially affected by
events occurring after the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or
market), that security may be valued by another method that the Board
of Trustees believes accurately reflects fair value. A security's
valuation may differ depending on the method used for determining
value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
Web site and phone numbers:
(small solid bullet) For information over the Internet, visit
Fidelity's Web site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use Fidelity Automated Service Telephone (FAST SM),
1-800-544-5555.
(small solid bullet) For exchanges, redemptions, and account
assistance, 1-800-544-6666 .
(small solid bullet) For mutual fund an d brokerage information,
1-800-544-6666.
(small solid bullet) For retirement information ,
1-800-544-4774.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
You may buy or sell shares of the funds through a retirement account
or an investment professional. If you invest through a retirement
account or an investment professional, the procedures for buying,
selling, and exchanging shares of a fund and the account features and
policies may differ. Additional fees may also apply to your investment
in a fund, including a transaction fee if you buy or sell shares of
the fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED
PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
(solid bullet) 403(B) CUSTODIAL ACCOUNTS
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of each fund is the fund's offering price
or the fund's NAV, depending on whether you pay a sales charge.
If you pay a sales charge, your price will be the fund's offering
price. When you buy shares of a fund at the offering price, Fidelity
deducts the appropriate sales charge and invests the rest in the fund.
If you qualify for a sales charge waiver, your price will be the
fund's NAV.
The offering price of each fund is its NAV divided by the difference
between one and the applicable sales charge percentage. The maximum
sales charge is 3.00% of the offering price.
Your shares will be bought at the next offering price or NAV, as
applicable, calculated after your investment is received in proper
form.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accountsA $500
TO ADD TO AN ACCOUNT $250
Through regular investment plans $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accountsA $500
A FIDELITY TRADITIONAL IRA, ROTH IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory Services
SM, a qualified state tuition program, certain Fidelity retirement
accounts funded through salary deduction, or accounts opened with the
proceeds of distributions from such retirement accounts.
In addition, each fund may waive or lower purchase minimums in other
circumstances.
KEY INFORMATION
PHONE 1-800-544-6666 TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
(small solid bullet) Use
Fidelity Money
Line(registered trademark)
to transfer from your bank
account.
INTERNET WWW.FIDELITY.COM TO OPEN AN ACCOUNT
(small solid bullet) Complete
and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address
under "Mail" below.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer from your bank
account.
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770001 CINCINNATI, (small solid bullet) Complete
OH 45277-0002 and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address at
left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund.
Indicate your fund account
number on your check and
mail to the address at left.
(small solid bullet) Exchange
from another Fidelity fund.
Send a letter of instruction
to the address at left,
including your name, the
funds' names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to a Fidelity Investor
Center. Call 1-800-544-9797
for the center nearest you.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to set up
your account and to arrange
a wire transaction.
(small solid bullet) Wire
within 24 hours to: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053.
(small solid bullet) Specify
the complete name of the
fund and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00163053.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Automatic Account
Builder(registered
trademark) or Direct Deposit.
(small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from a
Fidelity money market fund.
SELLING SHARES
The price to sell one share of each fund is the fund's NAV, minus the
redemption fee (short-term trading fee), if applicable.
Each fund will deduct a short-term trading fee of 1.50% (1.00% for
Europe Fund, Europe Capital Appreciation Fund and Pacific Basin Fund)
from the redemption amount if you sell your shares after holding them
less than 90 days. This fee is paid to the fund rather than Fidelity,
and is designed to offset the brokerage commissions, market impact,
and other costs associated with fluctuations in fund asset levels and
cash flow caused by short-term shareholder trading.
If you bought shares on different days, the shares you held longest
will be redeemed first for purposes of determining whether the
short-term trading fee applies. The short-term trading fee does not
apply to shares that were acquired through reinvestment of
distributions.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the short-term trading fee, if
applicable.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 15 or 30 days , depending on your account;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it
is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE 1-800-544-6666 (small solid bullet) Call the
phone number at left to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
(small solid bullet) Exchange
to another Fidelity fund.
Call the phone number at left.
INTERNET www.FIDELITY.COM (small solid bullet) Exchange
to another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 660602 DALLAS, TX SOLE PROPRIETORSHIP, UGMA,
75266-0602 UTMA
(small solid bullet) Send a
letter of instruction to the
address at left, including
your name, the fund's name,
your fund account number,
and the dollar amount or
number of shares to be sold.
The letter of instruction
must be signed by all
persons required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request one.
TRUST
(small solid bullet) Send a
letter of instruction to the
address at left, including
the trust's name, the fund's
name, the trust's fund
account number, and the
dollar amount or number of
shares to be sold. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to the
address at left, including
the firm's name, the fund's
name, the firm's fund
account number, and the
dollar amount or number of
shares to be sold. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
1-800-544-6666 for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit a
Fidelity Investor Center to
request one. Call
1-800-544-9797 for the
center nearest you.
TRUST
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit a
Fidelity Investor Center for
instructions. Call
1-800-544-9797 for the
center nearest you.
AUTOMATICALLY (small solid bullet) Use
Personal Withdrawal Service
to set up periodic
redemptions from your account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year. Accounts under
common ownership or control will be counted together for purposes of
the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 3.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC ACCOUNT
BUILDER TO MOVE MONEY FROM
YOUR BANK ACCOUNT TO A
FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (small solid bullet) To set
up for a new account,
complete the appropriate
section on the fund
application.
(small solid bullet) To set
up for existing accounts,
call 1-800-544-6666 or visit
Fidelity's Web site for an
application.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
investment date.
DIRECT DEPOSIT TO SEND ALL OR
A PORTION OF YOUR PAYCHECK
OR GOVERNMENT CHECK TO A
FIDELITY FUND.A
MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (small solid bullet) To set
up for a new account, check
the appropriate box on the
fund application.
(small solid bullet) To set
up for an existing account,
call 1-800-544-6666 or visit
Fidelity's Web site for an
authorization form.
(small solid bullet) To make
changes you will need a new
authorization form. Call
1-800-544-6666 or visit
Fidelity's Web site to
obtain one.
A BECAUSE THEIR SHARE PRICES
FLUCTUATE, THESE FUNDS MAY
NOT BE APPROPRIATE CHOICES
FOR DIRECT DEPOSIT OF YOUR
ENTIRE CHECK.
FIDELITY AUTOMATIC EXCHANGE
SERVICE TO MOVE MONEY FROM A
FIDELITY MONEY MARKET FUND
TO ANOTHER FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or annually up, call 1-800-544-6666
after both accounts are
opened.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
exchange date.
PERSONAL WITHDRAWAL SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM YOUR
ACCOUNT TO YOU OR TO YOUR
BANK ACCOUNT.
FREQUENCY PROCEDURES
Monthly (small solid bullet) To set
up, call 1-800-544-6666.
(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.
(small solid bullet) Because
of the funds' front-end
sales charge, you may not
want to set up a systematic
withdrawal program when you
are buying the funds' shares
on a regular basis.
</TABLE>
OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account, or call 1-800-544-6666 to add the feature after
your account is opened. Call 1-800-544-6666 before your first use to
verify that this feature is set up on your account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
FIDELITY MONEY LINE
TO TRANSFER MONEY BETWEEN YOUR BANK ACCOUNT AND YOUR FUND ACCOUNT.
(small solid bullet) You must sign up for the Money Line feature
before using it. Complete the appropriate section on the application
and then call 1-800-544-6666 or visit Fidelity's Web site before your
first use to verify that this feature is set up on your account.
(small solid bullet) Most transfers are complete within three
business days of your call.
(small solid bullet) Minimum purchase: $100
(small solid bullet) Maximum purchase: $100,000
FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.
CALL 1-800-544-0240 OR VISIT FIDELITY'S WEB SITE FOR MORE
INFORMATION.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) For access to research and analysis tools.
FIDELITY ONLINE TRADING
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S WEB
SITE.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) To obtain quotes;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) To access third-party research on companies,
stocks, mutual funds and the market.
FAST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE USING TOUCH
TONE OR SPEECH RECOGNITION.
CALL 1-800-544-5555.
(small solid bullet) For account balances and holdings;
(small solid bullet) For mutual fund and brokerage trading;
(small solid bullet) To obtain quotes;
(small solid bullet) To review orders and mutual fund activity;
and
(small solid bullet) To change your personal identification number
(PIN).
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity at 1-800-544-8544 if you
need additional copies of financial reports or prospectuses.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's Web
site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500 (including any amount paid as a sales
charge), subject to an annual maximum charge of $24.00 per
shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30
will not be subject to the fee for that year. The fee, which is
payable to Fidelity, is designed to offset in part the relatively
higher costs of servicing smaller accounts. This fee will not be
deducted from Fidelity brokerage accounts, retirement accounts (except
non-prototype retirement accounts), accounts using regular investment
plans, or if total assets with Fidelity exceed $30,000. Eligibility
for the $30,000 waiver is determined by aggregating accounts with
Fidelity maintained by Fidelity Service Company, Inc. or FBSI which
are registered under the same social security number or which list the
same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV, minus the short-term trading fee, if
applicable, on the day your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Each fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
Each fund normally pays dividends and capital gain distributions in
December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gain distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income ,
while each fund's distributions of long-term capital gains are
taxable to you generally as capital gains.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund is the difference between
the cost of your shares and the price you receive when you sell them.
FUND SERVICES
FUND MANAGEMENT
Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is each fund's manager.
As of March 25, 1999 , FMR had approximately $ 521.7
billion in discretionary assets under management.
As the manager, FMR is responsible for choosing each fund's
investments and handling its business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East) serves as a sub-adviser for each fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
Currently, FMR Far East provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for each fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for each fund.
As of September 28, 1999 , FIIA had approximately $ 3.6
billion in discretionary assets under management. Currently, FIIA
is primarily responsible for choosing investments for Southeast Asia
Fund and Hong Kong and China Fund. Currently, FIIA provides investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for Canada Fund, Emerging
Markets Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Japan Small er Companies Fund, Latin America Fund, Nordic
Fund, and Pacific Basin Fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
each fund. As of September 28, 1999 , FIIA(U.K.)L had
approximately $ 2.6 billion in discretionary assets under
management. Currently, FIIA(U.K.)L is primarily responsible for
choosing investments for Emerging Markets Fund, Europe Fund, and
Nordic Fund. Currently, FIIA(U.K.)L provides investment research and
advice on issuers based outside the United States and may also provide
investment advisory services for Canada Fund, Europe Capital
Appreciation Fund, Hong Kong and China Fund, Japan Fund, Japan
Small er Companies Fund, Latin America Fund, Pacific Basin Fund,
and Southeast Asia Fund.
(small solid bullet) Fidelity Investment s Japan L imite d
(FIJ), in Tokyo, Japan, serves as a sub-adviser for each fund .
As of September 28, 1999 , FIJ had approximately $ 16.3
billion in discretionary assets under management. Currently, FIJ
is primarily responsible for choosing investments for Japan Fund and
Japan Small er Companies Fund. Currently, FIJ provides
investment research and advice on issuers based outside the United
States and may also provide investment advisory services for Emerging
Markets Fund, Hong Kong and China Fund, Pacific Basin Fund, and
Southeast Asia Fund. Effective January 1, 2000, FIJ will provide
investment research and advice on issuers based outside the United
States for Canada Fund, Europe Fund, Europe Capital Appreciation Fund,
Latin America Fund, and Nordic Fund.
A fund could be adversely affected if the computer systems used by FMR
and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.
Stephen Binder is manager of Canada Fund, which he has managed since
October 1999. He was associate manager of the fund since July 1998.
Previously, he managed other Fidelity funds. Since joining Fidelity in
1989, Mr. Binder has worked as an analyst and manager.
David Stewart is vice president and manager of Emerging Markets Fund,
which he has managed since November 1997. Since joining Fidelity in
1994, Mr. Stewart has worked as an analyst and manager for Fidelity
International Limited, a sister company of Fidelity Investments.
Previously, he was an analyst with James Capel, based in Hong Kong,
London and Japan, from 1986 to 1994.
Thierry Serero is manager of Europe Fund, which he has managed since
October 1998. He also manages other Fidelity funds. Since joining
Fidelity in 1991, he has worked as an analyst, associate manager and
portfolio manager.
Kevin McCarey is vice president and manager of Europe Capital
Appreciation Fund, which he has managed since December 1993. He also
manages other Fidelity funds. Since joining Fidelity 1986, Mr. McCarey
has worked as analyst and manager.
Joseph Tse is manager of Hong Kong and China Fund , which he has
managed since November 1995. He also manages various funds for
Fidelity International Investment Services, Limited. Since joining
Fidelity in 1990, Mr. Tse has worked as an analyst and manager.
Brenda Reed is vice president and manager of Japan Fund , which
she has held since December 1998. She also manages other
Fidelity funds. Since joining Fidelity in 1992, Ms. Reed has worked as
an analyst and manager.
Kenichi Mizushita is manager of Japan Smaller Companie s Fund,
which he has managed since December 1996. He also manages several
funds for Fidelity International, Limited. Since joining Fidelity in
1985, Mr. Mizushita has worked as a research analyst and manager.
Patricia Satterthwaite is vice president and lead manager of Latin
America Fund, which she has managed since April 1993. She also manages
other Fidelity funds. Since joining Fidelity in 1986, Ms.
Satterthwaite has worked as an analyst and manager.
Trygve Toraasen is manager of Nordic Fund, which he has
managed since June 1998. He had been associate manager for the fund
since October 1997. Mr. Toraasen joined Fidelity in 1994 as research
analyst, after receiving his MSBA from the University of Southern
California.
William Kennedy is manager of Pacific Basin Fund , which he has
managed since December 1998. Previously, he was the associate manager
of the fund. Since joining Fidelity in 1994, Mr. Kennedy has worked as
an analyst and manager.
Allan Liu is vice president and manager of Southeast Asia Fund ,
which he has managed since April 1993. Since joining Fidelity in 1986,
Mr. Liu has worked as an analyst, manager and associate director of
Fidelity Investment Management Ltd.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry ,
or market sector. The views expressed by any such person are the
views of only that individual as of the time expressed 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.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Each fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month.
For Emerging Markets Fund, Hong Kong and China Fund, Japan
Small er Companies Fund, Latin America Fund, and Nordic Fund,
the fee is calculated by adding a group fee rate to an individual fund
fee rate, dividing by twelve, and multiplying the result by the fund's
average net assets throughout the month.
For Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Pacific Basin Fund, and Southeast Asia Fund, the fee is
determined by calculating a basic fee and then applying a performance
adjustment. The performance adjustment either increases or decreases
the management fee, depending on how well Canada Fund has performed
relative to the Toronto Stock Exchange (TSE) 300, Europe Fund has
performed relative to the Morgan Stanley Capital International Europe
Index, Europe Capital Appreciation Fund has performed relative to the
Morgan Stanley Capital International Europe Index, Japan Fund has
performed relative to the Tokyo Stock Exchange Index, Pacific Basin
Fund has performed relative to the Morgan Stanley Capital
International Pacific Index, and Southeast Asia Fund has performed
relative to the Morgan Stanley Capital International AC (All
Country) Far East Free ex Japan Index.
MANAGEMENT FEE = BASIC FEE +/- PERFORMANCE ADJUSTMENT
The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by a fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For October 1999, the group fee rate was 0.2805% for each fund .
The individual fund fee rate is 0.45 % for each fund.
The basic fee for Canada Fund, Europe Fund, Japan Fund, Pacific Basin
Fund, and Southeast Asia Fund for the fiscal year ended October 31,
1999 was 0.73 % of the fund's average net assets. The basic
fee for Europe Capital Appreciation Fund for the fiscal year ended
October 31, 1999 was 0.74% of the fund's average net asse ts.
The performance adjustment rate is calculated monthly by comparing
over the performance period Canada Fund's performance to that of the
Toronto Stock Exchange (TSE) 300, Europe Fund's performance to that of
the Morgan Stanley Capital International Europe Index, Europe Capital
Appreciation Fund's performance to that of the Morgan Stanley Capital
International Europe Index, Japan Fund's performance to that of the
Tokyo Stock Exchange Index, Pacific Basin Fund's performance to that
of the Morgan Stanley Capital International Pacific Index, and
Southeast Asia Fund's performance to that of the Morgan Stanley
Capital International AC (All Country) Far East Free ex Japan
Index.
For Canada Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Pacific Basin Fund, and Southeast Asia Fund, the performance
period is the most recent 36-month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
the fund's average net assets over the performance period.
The total management fee for the fiscal year ended October 31,
1999 , as a percentage of each fund's average net assets, is listed
in the following table:
Fund Management Fee
Canada Fund 0.32%
Emerging Markets Fund 0.73%
Europe Fund 0.60%
Europe Capital Appreciation 0.66%
Fund
Hong Kong and China Fund 0.73%
Japan Fund 0.86%
Japan Smaller Companies Fund 0.72%
Latin America Fund 0.73%
Nordic Fund 0.73%
Pacific Basin Fund 0.92%
Southeast Asia Fund 0.89%
FMR pays FMR U.K., FMR Far East, and FIIA for providing
sub- advisory services, and FIIA in turn pays FIIA(U.K.)L.
FMR or FMR Far East pays FIJ for providing sub-advisory services.
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be discontinued by FMR at any time, can
decrease a fund's expenses and boost its performance.
FUND DISTRIBUTION
FDC distributes each fund's shares.
You may pay a sales charge when you buy your shares.
FDC collects the sales charge.
Each fund's sales charge may be reduced if you buy directly through
Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of
your account, must fall within the ranges shown below. Purchases made
with assistance or intervention from a financial intermediary are not
eligible for a sales charge reduction.
SALES CHARGE
RANGES AS A % OF OFFERING PRICE AS AN APPROXIMATE % OF NET
AMOUNT INVESTED
$0 - 249,999 3.00% 3.09%
$250,000 - 499,999 2.00% 2.04%
$500,000 - 999,999 1.00% 1.01%
$1,000,000 OR MORE NONE NONE
FDC may pay a portion of sales charge proceeds to securities dealers
who have sold a fund's shares, or to others, including banks and other
financial institutions (qualified recipients), under special
arrangements in connection with FDC's sales activities. The sales
charge paid to qualified recipients is 1.50% of a fund's offering
price.
The sales charge will also be reduced by the percentage of any sales
charge you previously paid on investments in other Fidelity funds or
by the percentage of any sales charge you would have paid if the
reductions in the table above had not existed. These sales charge
credits only apply to purchases made in one of the ways listed below,
and only if you continuously owned Fidelity fund shares, maintained a
Fidelity brokerage core account, or participated in The CORPORATEplan
for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds from a transaction in a Fidelity brokerage core
account, including any free credit balance, core money market fund, or
margin availability, to the extent such proceeds were derived from
redemption proceeds from another Fidelity fund.
3. As a participant in The CORPORATEplan for Retirement Program when
shares are bought through plan-qualified loan repayments, and for
exchanges into and out of the Managed Income Portfolio.
A fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more
than 200 eligible employees or a minimum of $3 million in plan assets
invested in Fidelity mutual funds.
2. To shares in a Fidelity account bought with the proceeds of a
distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan
that both qualified for waiver (1) above and had at least some of its
assets invested in Fidelity-managed products. (Distributions
transferred to an IRA account must be transferred within 60 days from
the date of the distribution. All other distributions must be
transferred directly into a Fidelity account).
3. If you are a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more.
4. If you buy shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code).
5. If you are an investor participating in the Fidelity Trust
Portfolios program.
6. To shares bought by a mutual fund or a qualified state tuition
program for which FMR or an affiliate serves as investment manager.
7. To shares bought through Portfolio Advisory Services or Fidelity
Charitable Advisory Services.
8. If you are a current or former trustee or officer of a Fidelity
fund or a current or retired officer, director, or regular employee of
FMR Corp. or Fidelity International Limited or their direct or
indirect subsidiaries (a Fidelity trustee or employee), the spouse of
a Fidelity trustee or employee, a Fidelity trustee or employee acting
as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee.
9. If you are a bank trust officer, registered representative, or
other employee of a qualified recipient, as defined on page 57 .
10. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed
and distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
11. If you invest through a non-prototype pension or profit-sharing
plan that maintains all of its mutual fund assets in Fidelity mutual
funds, provided the plan executes a Fidelity non-prototype sales
charge waiver agreement confirming its qualification.
12. If you are a registered investment adviser (RIA) buying for your
discretionary accounts, provided you execute a Fidelity RIA load
waiver agreement which specifies certain aggregate minimum and
operating provisions. Except for correspondents of National Financial
Services Corporation, this waiver is available only for shares bought
directly from Fidelity, and is unavailable if the RIA is part of an
organization principally engaged in the brokerage business.
13. If you are a trust institution or bank trust department buying for
your non-discretionary, non-retirement fiduciary accounts, provided
you execute a Fidelity Trust load waiver agreement which specifies
certain aggregate minimum and operating provisions. This waiver is
available only for shares bought either directly from Fidelity or
through a bank-affiliated broker, and is unavailable if the trust
department or institution is part of an organization not principally
engaged in banking or trust activities.
More detailed information about waivers: (1), (2), (5), (9), and (10)
is contained in the statement of additional information (SAI). A
representative of your plan or organization should call Fidelity for
more information.
To qualify for a sales charge reduction or waiver, you must notify
Fidelity in advance of your purchase.
To receive sales concessions and waivers, qualified recipients must
sign the appropriate agreement with FDC in advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of a fund, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related SAI,
in connection with the offer contained in this prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell shares of the funds to or to buy shares of the funds from any
person to whom it is unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each fund's financial history for the past 5 years or, if shorter, the
period of the fund's operations. Certain information reflects
financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned (or lost)
on an investment in the fund (assuming reinvestment of all dividends
and distributions). This information has been audited by
P ricewaterhouseCoopers LLP (for Canada Fund, Emerging Markets
Fund, Europe Fund, Hong Kong and China Fund, Japan Fund, Japan
Small er Companies Fund, Latin America Fund, Nordic Fund,
Pacific Basin Fund, and Southeast Asia Fund) and Deloitte & Touche
L LP (1999 annual information only for Europe Capital
Appreciation Fund), independent accountants, whose reports, along with
each fund's financial highlights and financial statements, are
i n c luded in each fund's annual report. Annual
informa t ion prior to 1999 was audited by PricewaterhouseCoopers
LLP. A free copy of the annual report is available upon request.
CANADA FUND
<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%
</TABLE>
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.
EMERGING MARKETS FUND
<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%
</TABLE>
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.
EUROPE FUND
<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%
</TABLE>
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.
EUROPE CAPITAL APPRECIATION FUND
<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 3.81 2.00 .50
gain
Total from investment 2.35 1.94 4.01 2.22 .73
operations
Less Distributions
From net investment income - (.17) E (.23) (.23) -
From net realized gain - (2.08) E (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% F 1.08% F 1.07% F 1.30% F 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%
</TABLE>
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 AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO
BOOK TO TAX DIFFERENCES.
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.
HONG KONG AND CHINA FUND
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 FUND
<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%
</TABLE>
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.
JAPAN SMALLER COMPANIES FUND
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) (.03) (.01) (.03) (.03)
C
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 FUND
<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%
</TABLE>
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.
NORDIC FUND
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 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.
PACIFIC BASIN FUND
<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) (.04) (.02) (.01) .05 .07
C
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%
</TABLE>
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.
SOUTHEAST ASIA FUND
<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%
</TABLE>
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.
You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). Each fund's annual and semi-annual
reports include a discussion of the fund's holdings and recent market
conditions and the fund's investment strategies that affected
performance.
For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8544. In addition, you may visit Fidelity's Web site at
www.fidelity.com for a free copy of a prospectus or an annual or
semi-annual report or to request other information.
The SAI, the funds' annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-4008.
Fidelity Investments & (Pyramid) Design, Fidelity, Fidelity
Investments, Fidelity Money Line, Fidelity Automatic Account Builder,
Fidelity On-Line Xpress+, and Directed Dividends are registered
trademarks of FMR Corp.
FAST and Portfolio Advisory Services are service marks of FMR Corp.
1.538563.102 TIF-pro-1299
FIDELITY'S 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 SMA LLER COMPANIES FUND (FORMERLY, JAPAN SMALL
COMPANIES FUND), FIDELITY LATIN AMERICA FUND, FIDELITY NORDIC FUND,
FIDELITY PACIFIC BASIN FUND, AND FIDELITY SOUTHEAST ASIA FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 29, 1999
This statement of additional information (SAI) is not a prospectus.
Portions of each fund's annual report are incorporated herein. The
annual report is supplied with this SAI.
To obtain a free additional copy of the prospectus, dated December 29,
1999, or an annual report, please call Fidelity(registered trademark)
at 1-800-544-8544 or visit Fidelity's Web site at www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 46
Limitations
Special Considerations 58
Regarding Canada
Special Considerations 58
Regarding Europe
Special Considerations 59
Regarding Japan
Special Considerations 60
Regarding Asia Pacific
Region (ex Japan)
Special Considerations 60
Regarding Latin America
Special Considerations 61
Regarding Russia
Special Considerations 61
Regarding Africa
Portfolio Transactions 61
Valuation 69
Performance 70
Additional Purchase, Exchange 98
and Redemption Information
Distributions and Taxes 99
Trustees and Officers 99
Control of Investment Advisers 104
Management Contracts 105
Distribution Services 113
Transfer and Service Agent 118
Agreements
Description of the Trust 120
Financial Statements 120
Appendix 120
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
TIF-ptb-1299
1.538868.102
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF CANADA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others (except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 86.
For purposes of investing at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Canada
or are registered in Canadian markets, FMR interprets "total assets"
to exclude collateral received for securities lending transactions.
INVESTMENT LIMITATIONS OF EMERGING MARKETS FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in companies whose principal business
activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin;
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 88.
For purposes of investing at least 65% of the fund's total assets in
securities of issuers in emerging markets, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.
INVESTMENT LIMITATIONS OF EUROPE FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of the fund's total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 89.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(iv) of the 1940 Act.
For purposes of investing at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe,
FMR interprets "total assets" to exclude collateral received for
securities lending transactions.
INVESTMENT LIMITATIONS OF EUROPE CAPITAL APPRECIATION FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 90.
For purposes of investing at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe,
FMR interprets "total assets" to exclude collateral received for
securities lending transactions.
INVESTMENT LIMITATIONS OF HONG KONG AND CHINA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund may purchase the securities of any issuer, if as a result, no
more than 35% of the fund's total assets would be invested in any
industry that accounts for more than 20% of the Hong Kong and Chinese
market as a whole, as measured by an index determined by FMR to be an
appropriate measure of the Hong Kong and Chinese market;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 91.
For purposes of investing at least 65% of the fund's total assets in
securities of Hong Kong and Chinese issuers, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.
INVESTMENT LIMITATIONS OF JAPAN FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 92.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(iv) of the 1940 Act.
For purposes of investing at least 65% of the fund's total assets in
securities of Japanese issuers, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
INVESTMENT LIMITATIONS OF JAPAN SMA LLER COMPANIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 94.
For purposes of investing at least 65% of the fund's total assets in
securities of Japanese issuers w ith smaller market
capitalizations, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
INVESTMENT LIMITATIONS OF LATIN AMERICA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund may purchase the securities of any issuer, if as a result, no
more than 35% of the fund's total assets would be invested in any
industry that accounts for more than 20% of the Latin American market
as a whole, as measured by an index determined by FMR to be an
appropriate measure of the Latin American market;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 95.
For purposes of investing at least 65% of the fund's total assets in
securities of Latin American issuers, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
INVESTMENT LIMITATIONS OF NORDIC FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund may purchase the securities of any issuer, if as a result, no
more than 35% of the fund's total assets would be invested in any
industry that accounts for more than 20% of the Nordic market as a
whole, as measured by an index determined by FMR to be an appropriate
measure of the Nordic market;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 96.
For purposes of investing at least 65% of the fund's total assets in
securities of Danish, Finnish, Norwegian, and Swedish issuers, FMR
interprets "total assets" to exclude collateral received for
securities lending transactions.
INVESTMENT LIMITATIONS OF PACIFIC BASIN FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of the fund's total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 97.
For purposes of investing at least 65% of the fund's total assets in
securities of issuers that have their principal activities in the
Pacific Basin, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
INVESTMENT LIMITATIONS OF SOUTHEAST ASIA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements).
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 98.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(iv) of the 1940 Act.
For purposes of investing at least 65% of the fund's total assets in
securities of Southeast Asian issuers, FMR interprets "total assets"
to exclude collateral received for securities lending transactions.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturi ty, and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
COUNTRIES NOT CONSIDERED TO HAVE EMERGING MARKETS. As of October 31,
1999, the following countries are not considered to have emerging
markets: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand,
Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and
the United States.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. For example, many
foreign countries are less prepared than the United States to properly
process and calculate information related to dates from and after
January 1, 2000. As a result, some foreign markets, brokers, banks or
securities depositories could experience at least temporary
disruptions, which could result in difficulty buying and selling
securities in certain foreign markets and pricing foreign investments,
and foreign issuers could fail to pay timely dividends, interest or
principal. In addition, the costs associated with foreign investments,
including withholding taxes, brokerage commissions and custodial
costs, are generally higher than with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements involve
an agreement to purchase a foreign security and to sell that security
back to the original seller at an agreed-upon price in either
U.S. dollars or foreign currency. Unlike typical U.S. repurchase
agreements, foreign repurchase agreements may not be fully
collateralized at all times. The value of a security purchased by a
fund may be more or less than the price at which the counterparty has
agreed to repurchase the security. In the event of default by the
counterparty, the fund may suffer a loss if the value of the security
purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve
higher credit risks than repurchase agreements in U.S. markets, as
well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging
markets may involve issuers or counterparties with lower credit
ratings than typical U.S. repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Futures can be held until their
delivery dates, or can be closed out before then if a liquid secondary
market is available.
Futures may be based on foreign indexes such as the CAC 40 (France),
DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
ISSUER LOCATION. FMR determines where an issuer or its principal
activities are located by looking at such factors as the issuer's
country of organization, the primary trading market for the issuer's
securities, and the location of the issuer's assets, personnel, sales,
and earnings. The issuer of a security is considered to be located in
a particular country if (1) the security is issued or guaranteed by
the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary
trading market in that country; or (3) the issuer is organized under
the laws of that country, derives at least 50% of its revenues or
profits from goods sold, investments made, or services performed in
the country, or has at least 50% of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
PREFERRED STOCK represents an equity or ownership interest in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of bonds
take precedence over the claims of those who own preferred and common
stock.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
( NYSE ) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. 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. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to invest
without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
SPECIAL CONSIDERATIONS REGARDING CANADA
POLITICAL. Canada's parliamentary system of government is, in general,
stable. However, from time to time, some provinces, but particularly
Quebec, have called for a revamping of the legal and financial
relationship between the federal government in Ottawa and the
provinces. To date, referendums on Quebec sovereignty have been
defeated, but the issue remains unresolved. The Supreme Court of
Canada decided in August 1998 that if there was a "clear answer" to a
"clear question" in a referendum, then the federal government would be
obliged to negotiate with Quebec.
ECONOMIC. Canada is a major producer of commodities such as forest
products, metals, agricultural products, and energy related products
like oil, gas, and hydroelectricity. Accordingly, changes in the
supply and demand of industrial and basic materials, both domestically
and internationally, can have a significant effect on Canadian market
performance.
In addition, Canada relies considerably on the health of the United
States' economy, its biggest trading partner and largest foreign
investor. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities market increasingly sensitive to U.S. economic and market
events.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. Since Canada let its currency float in 1970, its
value has been in a steady decline against the U.S. dollar. While the
decline has helped Canada stay competitive in export markets, U.S.
investors have seen their investment returns eroded by the impact of
currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
On January 1, 1999, eleven of the fifteen member countries of the
European Union (EU) fixed their currencies irrevocably to the euro,
the new unit of currency of the European Economic and Monetary Union
(EMU). At that time each member's currency was converted at a fixed
rate to the euro. Initially, use of the euro will be confined mainly
to the wholesale financial markets, while its widespread use in the
retail sector will follow the circulation of euro bank- notes and
coins on January 1, 2002. At that time, the national banknotes and
coins of participating member countries will cease to be legal tender.
In addition to adopting a single currency, member countries will no
longer control their own monetary policies. Instead, the authority to
direct monetary policy will be exercised by the new European Central
Bank.
While economic and monetary convergence in the European Union may
offer new opportunities for those investing in the region, investors
should be aware that the success of the union is not wholly assured.
Europe must grapple with a number of challenges, any one of which
could threaten the survival of this monumental undertaking. Eleven
disparate economies must adjust to a unified monetary system, the
absence of exchange rate flexibility, and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized, and its cultures differ widely. Unemployment is
historically high and could pose political risk. One or more member
countries might exit the union, placing the currency and banking
system in jeopardy.
POLITICAL. For those countries in Western and Eastern Europe that were
not included in the first round of the EU implementation, the
prospects for eventual membership serve as a strong political impetus
for many governments to employ tight fiscal and monetary policies.
Particularly for the Eastern European countries, aspirations to join
the EU are likely to push governments to act decisively.
At the same time, there could become an increasingly widening gap
between rich and poor within the aspiring countries, those countries
who are close to meeting membership criteria, and those who are not
likely to join the EMU. Realigning traditional alliances could alter
trading relationships and potentially provoke divisive socioeconomic
splits. Despite relative calm in Western Europe in recent years, the
risk of regional conflict or targeted terrorist activity could disrupt
European markets.
In the transition to the single economic system, significant political
decisions will be made which will effect the market regulation,
subsidization, and privatization across all industries, from
agricultural products to telecommunications.
ECONOMIC. As economic conditions across member states vary from robust
to dismal, there is continued concern about national-level support for
the currency and the accompanying coordination of fiscal and wage
policy among the eleven EMU member nations. According to the Maastrich
treaty, member countries must maintain inflation below 3.3%, public
debt below 60% of GDP, and a deficit of 3% or less of GDP to qualify
for participation in the euro. These requirements severely limit
member countries' ability to implement monetary policy to address
regional economic conditions. Countries that did not qualify for the
euro, such as Greece, risk being left farther behind.
FOREIGN TRADE. The EU has recently been involved in a number of trade
disputes with major trading partners, including the United States.
Tariffs and embargoes have been levied upon imports of agricultural
products and meat that have resulted in the affected nation levying
retaliatory tariffs upon imports from Europe. These disputes can
adversely affect the valuations of the European companies that export
the targeted products.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. However, investing in euro-denominated securities
entails risk of being exposed to a new currency that may not fully
reflect the strengths and weaknesses of the disparate economies that
make up the Union. This has been the case in the first six months of
1999, when the initial exchange rates of the euro versus many of the
world's major currencies steadily declined. In this environment, U.S.
and other foreign investors experienced erosion of their investment
returns in the region. In addition, many European countries rely
heavily upon export dependent businesses and any strength in the
exchange rate between the euro and the dollar can have either a
positive or a negative effect upon corporate profits.
GERMANY. The German economy is heavily industrialized, with a strong
emphasis on manufacturing and exports. Therefore, Germany's economic
growth is heavily dependent on the prosperity of its trading partners
and on currency exchange rates. Germany is closely tied to a number of
Eastern European emerging market economies and weakness in these
economies will likely dampen demand for German exports. Germany
continues to struggle with its incorporation of former East Germany
and the country as a whole faces high labor costs and high
unemployment.
FRANCE. In recent years, the country's economic growth has been hit by
a series of general strikes. France's strong labor unions reacted
negatively to government cuts driven by the country's effort to meet
EMU membership criteria. Recently, unions have demanded a lower
retirement age and a shorter work week. Economic growth also is
limited by the country's pay-as-you-go pension system; spending on
pensions accounts for about 10% of GDP.
NORDIC COUNTRIES. Faced with stronger global competition, the Nordic
countries - Norway, Finland, Denmark, and Sweden - have had to scale
down their historically generous welfare programs, resulting in drops
in domestic demand and increased unemployment. Major industries in the
region, such as forestry, agriculture, and oil, are heavily resource
dependent and face pressure as a result of high labor costs. Pension
reform, union regulation, and further cuts in liberal social programs
will likely need to be addressed as the Nordic countries face
increased international competition.
The communications industry comprises a major segment of the Nordic
market as a whole, as currently represented by the Financial
Times/S&P-Actuaries World Nordic Index. The communications industry
has been dominated by companies whose principal business is the
development and manufacture of mobile phones, networks and systems for
cellular and fixed networks. These companies have attainted a major
share of the world's wireless phone market in a highly competitive
global marketplace. The pace of technological innovation in the
communications industry has been rapid and communications companies
continually face the risk that their products will be made obsolete.
To maintain their competitive edge, communications equipment companies
have been acquiring companies that offer new technologies, such as
Internet equipment developers, or have allied with other top
information technology businesses. These acquisitions and alliances
can substantially alter the relative competitive position of a
communications company. Multiple digital standards create confusion
and technical difficulties in penetrating markets, which can force
carriers to price their services aggressively and cut profit margins
in an attempt to accelerate demand. Oversupply of handsets has been a
frequent problem in the cellular industry as demand fails to meet
projections or new product innovations make older models less
attractive to buyers. Excess capacity could drive down pricing and
slow revenue growth. Because emerging markets have accounted for 25%
to 30% of the market for cellular handsets, with China accounting for
as much as 15% of the total, the communications industry can be
vulnerable to any economic or currency weakness or political
instability in these countries.
UNITED KINGDOM. The United Kingdom continues to be overtly less
enthusiastic about EMU than other countries in Europe and has not
committed itself to joining the euro. While the UK views independence
from the EMU as a competitive advantage, the country may not benefit
from its independence if economic conditions on the continent improve.
If the continental European stock markets make more compelling
prospects for economic growth, there is concern that the UK market may
lag its European counterparts.
EASTERN EUROPE. Investing in the securities of Eastern European
issuers is highly speculative and involves risks not usually
associated with investing in the more developed markets of Western
Europe.
The economies of the Eastern European nations are embarking on the
transition from communism at different paces with appropriately
different characteristics. Most Eastern European markets suffer from
thin trading activity, dubious investor protections, and often, a
dearth of reliable corporate information. Information and transaction
costs, differential taxes, and sometimes political or transfer risk
give a comparative advantage to the domestic investor rather than the
foreign investor. In addition, these markets are particularly
sensitive to political, economic, and currency events in Russia and
have recently suffered heavy losses as a result of their trading and
investment links to the troubled Russian economy and currency.
SPECIAL CONSIDERATIONS REGARDING JAPAN
Fueled by public investment, protectionist trade policies, and
innovative management styles, the Japanese economy has transformed
itself since World War II into the world's second largest economy.
Despite its impressive history, investors face special risks when
investing in Japan.
ECONOMIC. Since Japan's bubble economy collapsed eight years ago, the
nation has drifted between modest growth and recession. By mid-year
1998, the world's second largest economy had slipped into its deepest
recession since World War II. Much of the blame can be placed on
government inaction in implementing long-neglected structural reforms
despite strong and persistent prodding from the International Monetary
Fund and the G7 member nations. Steps have been taken to deregulate
and liberalize protected areas of the economy, but the pace of change
has been disappointedly slow.
The most pressing need for action is the daunting task of overhauling
the nation's financial institutions and securing public support for
taxpayer-funded bailouts. Banks, in particular, must dispose of their
huge overhang of bad loans and trim their balance sheets in
preparation for greater competition from foreign institutions as more
areas of the financial sector are opened. Successful financial sector
reform would allow Japan's financial institutions to act as a catalyst
for economic recovery at home and across the troubled Asian region.
FOREIGN TRADE. Much of Japan's economy is dependent upon international
trade. The country is a leading exporter of automobiles and industrial
machinery as well as industrial and consumer electronics. While the
United States is Japan's largest single trading partner, close to half
of Japan's trade is conducted with developing nations, almost all of
which are in Southeast Asia. For the past two years, Southeast Asia's
economies have been mired in economic stagnation causing a steep
decline in Japan's exports to the area. Much of Japan's hopes for
economic recovery and renewed export growth is largely dependent upon
the pace of economic recovery in Southeast Asia.
NATURAL RESOURCE DEPENDENCY. An island nation with limited natural
resources, Japan is also heavily dependent upon imports of essential
products such as oil, forest products, and industrial metals.
Accordingly, Japan's industrial sector and domestic economy are highly
sensitive to fluctuations in international commodity prices. In
addition, many of these commodities are traded in U.S. dollars and any
strength in the exchange rate between the yen and the dollar can have
either a positive or a negative effect upon corporate profits.
NATURAL DISASTERS. The Japanese islands have been subjected to
periodic natural disasters including earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industries.
SPECIAL CONSIDERATIONS REGARDING ASIA PACIFIC REGION (EX JAPAN)
Many countries in the region have historically faced political
uncertainty, corruption, military intervention, and social unrest.
Examples include the ethnic, sectarian, and separatist violence found
in Indonesia, and the nuclear arms threats between India and Pakistan.
To the extent that such events continue in the future, they can be
expected to have a negative effect on economic and securities market
conditions in the region.
ECONOMIC. The economic health of the region depends, in great part, on
each country's respective ability to carry out fiscal and monetary
reforms and its ability to address the International Monetary Fund's
mandated benchmarks. The majority of the countries in the region can
be characterized as either developing or newly industrialized
economies, which tend to experience more volatile economic cycles than
developed countries. In addition, a number of countries in the region
have historically faced hyperinflation, a deterrent to productivity
and economic growth.
CURRENCY. For U.S. investors, investing in any currency entails an
additional risk that is not faced when investing in the domestic
market. Some countries in the region may impose restrictions on
converting local currency, effectively preventing foreigners from
selling assets and repatriating funds. While flexible exchange rates
through most of the region should allow greater control of domestic
liquidity conditions, the region's currencies generally face
above-average volatility with potentially negative implications for
economic and security market conditions.
NATURAL DISASTERS. The Asia Pacific region has been subjected to
periodic natural disasters such as earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industry.
CHINA AND HONG KONG. As with all transition economies, China's ability
to develop and sustain a credible legal, regulatory, monetary, and
socioeconomic system could influence the course of outside investment.
Hong Kong is closely tied to China, economically and through China's
1997 acquisition of the country as a Special Autonomous Region (SAR).
Hong Kong's success depends, in large part, on its ability to retain
the legal, financial and monetary systems that allow economic freedom
and market expansion.
The banking industry comprises a major segment of the Hong Kong
and Chinese market as a whole, as currently represented by the Hang
Seng Index. In recent years, Hong Kong has been subjected to
speculative attacks on its currency, which have sent interest rates
soaring and its stock markets into sharp declines. Companies in the
banking industry are particularly sensitive to interest rate
fluctuations, and, if the government continues its U.S. dollar peg
policy, it risks further attacks on its currency and possible upward
pressure on interest rates. While the Hong Kong Stock Exchange has
implemented an electronic order-matching system that has virtually
eliminated front running by brokers, there are still no specific
regulations against insider trading. Small, often family-run
brokerages sometimes wield undue influence or veto power over the
largest overseas investment banks operating in the market, and the
Exchange has been criticized for giving low priority to investor
protection. The banking industry in the Hong Kong and Chinese
market has not been immune to economic and currency turmoil that has
periodically engulfed its Asian neighbors, and any future disruptions
in the Asian region could have a derivative effect on this currency
and interest rate sensitive industry.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
As an emerging market, Latin America has long suffered from political,
economic, and social instability. For investors, this has meant
additional risk caused by periods of regional conflict, political
corruption, totalitarianism, protectionist measures, nationalization,
hyperinflation, debt crises, and currency devaluation. However, much
has changed in the past decade. Democracy is beginning to become well
established in some countries. A move to a more mature and accountable
political environment is well under way. Domestic economies have been
deregulated and have enjoyed sound levels of growth. Privatization of
state-owned companies is almost completed. Foreign trade restrictions
have been relaxed. Large fiscal deficits have been reduced and
inflation controlled. Nonetheless, the volatile stock markets of 1998
have clearly demonstrated that investors in the region continue to
face a number of potential risks.
The telephone company industry comprises a major segment of the Latin
American market, as a whole as currently represented by the MSCI
Emerging Markets Free - Latin America Index. The pace of the
privatization of most of Latin America's telephone companies has been
accelerating and is generally expected to ameliorate the industry's
worsening infrastructure problems and substantially expand and improve
services to the consumer. Following the privatization and breakup of
many of Latin America's telecommunications monopolies, telephone
companies are now faced with an increasingly competitive operating
environment that could substantially affect their profit margins
adversely. In addition, because these companies are regulated
providers of a highly visible basic service, in a sovereign stress
scenario, a company may not be permitted to pass on increased
operating expenses or devaluation-related price increases directly and
immediately to consumers. Attempts by management to undertake
restructuring initiatives, such as cutting employment overhead, could
also meet with strong government and union opposition. Latin American
countries have periodically experienced sharp economic slowdowns, high
interest rates, and spiraling inflation. In this environment, the
earnings and profits of telephone companies could be particularly
vulnerable. Access to capital could be substantially restricted by the
market's reaction to regional or global economic crisis. Because
telephone companies issue among Latin America's largest and most
liquid stocks, they may be among the first companies whose shares will
be sold by foreign investors seeking to repatriate their overseas
investments in times of regional or global crisis. Accordingly, shares
of telephone companies may be subject to a high degree of price
volatility in these situations.
POLITICAL. While investors recently have benefited from friendlier
forms of government, the Latin American political climate is still
vulnerable to sudden changes. Many countries in the region have been
in recession and have faced high unemployment. Corruption remains part
of the political landscape. This could lead to social unrest and
changes in governments that are less favorable to investors. The
investor friendly trends of social, economic, and market reforms seen
over the past several years could be reversed. Also, as has
historically been the case, the stock markets may be subject to
increased volatility as some countries approach elections: Argentina,
Chile, Mexico, and Peru.
SOCIAL UNREST. Latin America continues to suffer from one of the most
inequitable distributions of wealth in the world, as well as rampant
delinquency and street crime. The recent reforms and the move to
democracy, which were initially welcomed by the population, so far
have failed to significantly improve the living conditions of the
majority of people. This could lead to social unrest, occasional labor
strikes, rebellion, or civil war.
ECONOMIC. Many countries in the region have experienced periods of
hyperinflation which adversely impacted and may continue to impact
their economies and local stock markets. Despite signs that inflation
has been tamed, the risk of hyperinflation persists.
FOREIGN TRADE. One key to the recent economic growth in the region has
been the reduction of trade barriers and a series of free-trade
agreements. These are currently under pressure given the recent
macro-economic imbalances between many trading partners. One example
would be Mercosur, which includes Argentina, Brazil, Uruguay, and
Paraguay. As long as the economies perform well and the regimes
maintain similar economic and currency policies, all will benefit from
this agreement. However, the recent devaluation of Brazil's currency,
combined with recessions in the region, has created tension between
the largest trading partners, Brazil and Argentina. This could
threaten the pace of vital trade integration and regional economic
stability.
CURRENCY. For U.S. investors, investing in any foreign market entails
the risk of currency fluctuations; any weakness in the local currency
could erode the investment returns to U.S. investors upon currency
conversion. As is typical of emerging markets, Latin America has a
long history of currency devaluation, evidenced by the Mexican peso
crisis and the more recent Brazilian devaluation. The region remains
exposed to currency speculators, particularly if the economic or
political conditions worsen. Countries where the currency is
artificially pegged to the dollar are most at risk. For example,
predatory speculation may shift to Argentina if the cost of
maintaining the currency board reaches an unsustainable level given
the negative impact of the Brazilian devaluation, the economic
recession, the deterioration of the foreign trade balances, and the
mounting fiscal deficit.
SOVEREIGN DEBT. Although austerity programs in many countries have
significantly reduced fiscal deficits, the region is still facing
significant debt. Interest on the debt is subject to market conditions
and may reach levels that would impair economic activity and create a
difficult and costly environment for borrowers. In addition,
governments may be forced to reschedule or freeze their debt
repayment, which could negatively impact the stock market.
NATURAL RESOURCES DEPENDENCY. Commodities such as agricultural
products, minerals, and metals account for a significant percentage of
exports of many Latin American countries. As a result, these economies
have been particularly sensitive to the fluctuation of commodity
prices. As an example, Chile has been affected by the change in the
prices of copper and pulp, which has adversely affected its economy
and stock market. Similarly, because the U.S. is Mexico's largest
trading partner - accounting for more than four-fifths of its exports
- - - any economic downturn in the U.S. economy could adversely impact the
Mexican economy and stock market.
NATURAL DISASTERS. The region has been subjected to periodic natural
disasters, such as earthquakes and floods. These events have often
inflicted substantial damage upon the populations and the economy.
More recently, weather disorders attributed to the "El Nino" effect
have placed a serious drag on the economy of some countries, such as
Peru and Ecuador.
FINANCIAL REPORTING STANDARDS. As is typical of many emerging markets,
many companies in the region are still controlled by families and
their associates. Accordingly, these owners may not always act in the
best interests of public shareholders. In addition, rules for
disclosing financial information are less stringent, which increases
the difficulty of accessing reliable and viable information.
SPECIAL CONSIDERATIONS REGARDING RUSSIA
Investing in Russian securities is highly speculative and involves
greater risks than generally encountered when investing in the
securities markets of the U.S. and most other developed countries.
Over the past century, Russia has experienced political and economic
turbulence and has endured decades of communist rule under which tens
of millions of its citizens were collectivized into state agricultural
and industrial enterprises. For most of the past decade, Russia's
government has been faced with the daunting task of stabilizing its
domestic economy, while transforming it into a modern and efficient
structure able to compete in international markets and respond to the
needs of its citizens. However, to date, many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other economic assistance have been squandered or stolen. In this
environment, there is always the risk that the nation's government
will abandon the current program of economic reform and replace it
with radically different political and economic policies that would be
detrimental to the interests of foreign investors. This could entail a
return to a centrally planned economy and nationalization of private
enterprises similar to what existed under the old Soviet Union. As
recently as 1998, the government imposed a moratorium on the repayment
of its international debt and the restructuring of the repayment
terms.
Foreign investors also face a high degree of currency risk when
investing in Russian securities. In a surprise move in August 1998,
Russia devalued the ruble, defaulted on short-term domestic bonds, and
declared a moratorium on commercial debt payments. In light of these
and other recent government actions, foreign investors face the
possibility of further devaluations. In addition, there is the risk
the government may impose capital controls on foreign portfolio
investments in the event of extreme financial or political crisis.
Such capital controls would prevent the sale of a portfolio of foreign
assets and the repatriation of proceeds.
Many of Russia's businesses have failed to mobilize the available
factors of production because the country's privatization program
virtually ensured the predominance of the old management teams that
are largely non-market-oriented in their management approach. A
combination of poor accounting standards, inept management, endemic
corruption, and limited shareholder rights pose a significant risk,
particularly to foreign investors.
Compared to most national stock markets, the Russian securities market
suffers from a variety of problems not encountered in more developed
markets. Among these are thin trading activity, inadequate regulatory
protection for the rights of investors, and lax custody procedures.
Additionally, there is a dearth of solid corporate information
available to investors.
The Russian economy is heavily dependent upon the export of a range of
commodities including most industrial metals, forestry products, oil,
and gas. Accordingly, it is strongly affected by international
commodity prices and is particularly vulnerable to any weakening in
global demand for these products.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of over
50 countries and 840 million people. Civil wars, coups, and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, the continent is home to an abundance of natural
resources, including natural gas, aluminum, crude oil, copper, iron,
bauxite, cotton, diamonds, and timber. Wealthier African countries
generally have strong connections to European partners; evidence of
these relationships is seen in the growing market capitalization and
foreign investment. Economic performance remains closely tied to world
commodity markets, particularly oil, as well as agricultural
conditions, such as drought.
Several Northern African countries have substantial oil reserves and,
accordingly, their economies react strongly to world oil prices. They
share a regional and sometimes religious identification with the oil
producing nations of the Middle East and can be strongly affected by
political and economic developments in those countries. As in the
south, weather conditions have a strong impact on many of their
natural resources, as was the case in 1995, when severe drought
adversely affected economic growth.
Several African countries have active equity markets, many established
since 1989. The oldest market, in Egypt, was established in 1883,
while the youngest, in Zambia, was established in 1994. The mean age
for all equity markets is 40 years old. A total of 1,830 firms are
listed on the respective exchanges. With the exception of the
relatively large and liquid South African stock market, sub-Saharan
Africa is probably the riskiest of all the world's emerging markets.
During the past two decades, sub-Saharan Africa has lagged behind
other developing regions in economic growth. The area attracts only a
modest share of foreign direct investment and remains highly dependent
on foreign aid. The financial markets are small and underdeveloped and
offer little regulatory protection for investors. Except for South
Africa, the most fundamental problems in all of the countries in the
region are the absence of an effective court system to ensure the
enforceability of contracts. Investors in the area generally face a
high risk of continuing political and economic instability as well as
currency exchange rate volatility.
SOUTH AFRICA. South Africa has a highly developed and industrialized
economy. It is rich in mineral resources and is the world's largest
producer and exporter of gold. The nation's new government has made
remarkable progress in consolidating the nation's peaceful transition
to democracy and in redressing the socioeconomic disparities created
by apartheid. It has a sophisticated financial structure with a large
and active stock exchange that ranks 19th in the world in terms of
market capitalization. Nevertheless, investors in South Africa face a
number of risks common to other developing regions. The nation's heavy
dependence upon the export of natural resources makes its economy and
stock market vulnerable to weak global demand and declines in
commodity prices. The country's currency reserves have been a constant
problem and its currency can be vulnerable to devaluation. There is
also the risk that ethnic and civic conflict could result in the
abandonment of many of the nation's free market reforms to the
detriment of shareholders.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended October 31, 1999 and 1998, the
portfolio turnover rates for each fund are presented in the table
below. Variations in turnover rate may be due to fluctuating volume of
shareholder purchase and redemption orders, market conditions, or
changes in FMR's investment outlook.
Turnover Rates 1999 1998
Canada Fund 286% 215%
Emerging Markets Fund 94% 87%
Europe Fund 106% 114%
Europe Capital Appreciation 150% 179%
Fund
Hong Kong and China Fund 84% 109%
Japan Fund 79% 62%
Japan Smaller Companies Fund 39% 39%
Latin America Fund 49% 31%
Nordic Fund 70% 69%
Pacific Basin Fund 101% 57%
Southeast Asia Fund 93% 95%
The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.
The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended Total Amount Paid
Canada Fund October 31
1999 $ 321,189
1998 $ 642,482
1997 $ 774,591
Emerging Markets Fund
1999 $ 2,083,618
1998 $ 2,127,160
1997 $ 6,781,007
Europe Fund
1999 $ 5,545,628
1998 $ 6,836,412
1997 $ 2,000,945
Europe Capital Appreciation
Fund
1999 $ 3,429,468
1998 $ 4,457,183
1997 $ 2,281,177
Hong Kong and China Fund
1999 $ 664,969
1998 $ 836,162
1997 $ 1,985,116
Japan Fund October 31
1999 $ 1,174,044
1998 $ 488,421
1997 $ 1,040,186
Japan Smaller Companies Fund
1999 $ 1,641,406
1998 $ 212,834
1997 $ 733,241
Latin America Fund
1999 $ 812,768
1998 $ 1,318,011
1997 $ 2,772,375
Nordic Fund
1999 $ 375,117
1998 $ 439,669
1997 $ 298,910
Pacific Basin Fund
1999 $ 1,500,787
1998 $ 574,842
1997 $ 1,749,948
Southeast Asia Fund
1999 $ 2,185,223
1998 $ 1,580,015
1997 $ 7,465,380
Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund to NFSC, FBS and FBSJ, as
applicable, for the past three fiscal years. The second table shows
the approximate percentage of aggregate brokerage commissions paid by
a fund to NFSC and FBSJ for transactions involving the approximate
percentage of the aggregate dollar amount of transactions for which
the fund paid brokerage commissions for the fiscal year ended 1999.
NFSC, FBS, and FBSJ are paid on a commission basis .
<TABLE>
<CAPTION>
Total Amount Paid
Fiscal Year Ended To NFSC To FBS To FBSJ
<S> <C> <C> <C> <C>
Canada Fund October 31
1999 $ 1,962 $ 0 $ 0
1998 $ 4,611 $ 0 $ 0
1997 $ 2,560 $ 0 $ 0
Emerging Markets Fund
1999 $ 0 $ 0 $ 0
1998 $ 701 $ 0 $ 0
1997 $ 12,752 $ 0 $ 0
Europe Fund October 31
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 2,644 $ 0
1997 $ 0 $ 196,495 $ 0
Europe Capital Appreciation
Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 10,741 $ 0
1997 $ 3,728 $ 150,145 $ 0
Hong Kong and China Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
1997 $ 710 $ 0 $ 0
Japan Fund
1999 $ 0 $ 0 $ 3,655
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Japan Smaller Companies Fund
1999 $ 0 $ 0 $ 3,523
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Latin America Fund
1999 $ 0 $ 0 $ 0
1998 $ 3,776 $ 0 $ 0
1997 $ 10,387 $ 0 $ 0
Nordic Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 2,554 $ 0
1997 $ 0 $ 25,958 $ 0
Pacific Basin Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Southeast Asia Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Ended 1999 % of Aggregate Commissions % of Aggregate Dollar Amount
Paid to NFSC of Transactions Effected
through NFSC
<S> <C> <C> <C>
Canada Fund(dagger) October 31 0.61% 1.97%
Emerging Markets Fund October 31 0% 0%
Europe Fund October 31 0% 0%
Europe Capital Appreciation October 31 0% 0%
Fund
Hong Kong and China Fund October 31 0% 0%
Japan Fund(dagger) October 31 0% 0%
Japan Smaller Companies October 31 0% 0%
Fund(dagger)
Latin America Fund October 31 0% 0%
Nordic Fund October 31 0% 0%
Pacific Basin Fund October 31 0% 0%
Southeast Asia Fund October 31 0% 0%
</TABLE>
<TABLE>
<CAPTION>
% of Aggregate Commissions % of Aggregate Dollar Amount
Paid to FBSJ of Transactions Effected
through FBSJ
<S> <C> <C>
Canada Fund(dagger) 0% 0%
Emerging Markets Fund 0% 0%
Europe Fund 0% 0%
Europe Capital Appreciation 0% 0%
Fund
Hong Kong and China Fund 0% 0%
Japan Fund(dagger) 0.31% 0.58%
Japan Smaller Companies 0.21% 0.40%
Fund(dagger)
Latin America Fund 0% 0%
Nordic Fund 0% 0%
Pacific Basin Fund 0% 0%
Southeast Asia Fund 0% 0%
</TABLE>
(dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar amount of transactions effected through, NFSC and FBSJ is a
result of the low commission rates charged by NFSC and FBSJ.
The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
1999.
<TABLE>
<CAPTION>
Fiscal Year Ended 1999 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*
<S> <C> <C> <C>
Canada Fund October 31 $ 316,944 $ 195,542,963
Emerging Markets Fund October 31 1,352,943 384,612,322
Europe Fund October 31 4,711,445 2,467,647,026
Europe Capital Appreciation October 31 3,049,208 1,577,951,257
Fund
Hong Kong and China Fund October 31 290,426 111,386,606
Japan Fund October 31 983,964 750,051,723
Japan Smaller Companies Fund October 31 1,458,879 1,119,765,711
Latin America Fund October 31 761,787 285,920,286
Nordic Fund October 31 333,724 132,708,487
Pacific Basin Fund October 31 1,019,914 636,473,702
Southeast Asia Fund October 31 1,067,077 273,225,507
</TABLE>
* The provision of research services was not necessarily a factor in
the placement of all this business with such firms.
The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds managed by FMR or investment accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each fund's NAV is the value of a single share. The NAV of each fund
is computed by adding the value of the fund's investments, cash, and
other assets, subtracting its liabilities, and dividing the result by
the number of shares outstanding.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or closing bid price normally is used. Securities of other
open-end investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's share price and
return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than
their original cost.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a fund's NAV over a
stated period. A cumulative return reflects actual performance over a
stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's maximum sales charge,
short-term trading fee, or small account fee. Excluding a fund's sales
charge, short-term trading fee, or small account fee from a return
calculation produces a higher return figure. Returns and other
performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs,
and benchmark indexes may be used to exhibit performance. An adjusted
NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted
NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average. The
13-week and 39-week long-term moving averages for each fund are shown
in the table below.
<TABLE>
<CAPTION>
Fund 13-Week Long-Term Moving 39-Week Long-Term Moving
Average Average
<S> <C> <C>
Canada Fund* $ 15.05 $ 14.90
Emerging Markets Fund* $ 9.21 $ 8.72
Europe Fund* $ 32.78 $ 32.68
Europe Capital Appreciation $ 18.11 $ 17.84
Fund*
Hong Kong and China Fund* $ 13.77 $ 12.58
Japan Fund* $ 19.55 $ 15.55
Japan Smaller Companies Fund* $ 18.83 $ 13.80
Latin America Fund* $ 11.81 $ 12.03
Nordic Fund* $ 21.23 $ 20.07
Pacific Basin Fund* $ 20.76 $ 17.41
Southeast Asia Fund* $ 12.03 $ 10.88
</TABLE>
* On October 29, 1999 .
HISTORICAL FUND RESULTS. The following table shows each fund's returns
for the fiscal periods ended October 31, 1999.
Each fund has a maximum front-end sales charge of 3.00%, which is
included in the average annual and cumulative returns.
Returns do not include the effect of a fund's 525 exchange fee,
which was in effect from December 1, 1987 through October 23, 1989,
the effect of Europe Fund's, Europe Capital Appreciation Fund's, and
Pacific Basin Fund's 1.00% short-term trading fee, or Canada Fund's,
Emerging Markets Fund's, Hong Kong and China Fund's, Japan Fund's,
Japan Smaller Companies Fund's, Latin America Fund's, Nordic Fund's,
and Southeast Asia Fund's 1.50% short-term trading fee, applicable to
shares held less than 90 days.
<TABLE>
<CAPTION>
Average Annual Returns Cumulative Returns
One Year Ten Years/ Life of Fund*
Five Years One Year Five Years
<S> <C> <C> <C> <C> <C>
Canada Fund 18.06% 5.14% 5.46% 18.06% 28.49%
Emerging Markets Fund 34.56% -12.93% 0.14% 34.56% -49.95%
Europe Fund 8.82% 15.99% 12.47% 8.82% 109.91%
Europe Capital Appreciation 11.06% 15.98% 15.96% 11.06% 109.89%
Fund
Hong Kong and China Fund 38.17% N/A 9.69% 38.17% N/A
Japan Fund 109.86% 9.21% 12.33% 109.86% 55.36%
Japan Smaller Companies Fund 231.83% N/A 19.03% 231.83% N/A
Latin America Fund 13.93% -4.70% 3.89% 13.93% -21.38%
Nordic Fund 34.17% N/A 24.47% 34.17% N/A
Pacific Basin Fund 83.68% 4.85% 5.73% 83.68% 26.69%
Southeast Asia Fund 45.31% -3.02% 3.59% 45.31% -14.21%
</TABLE>
<TABLE>
<CAPTION>
Ten Years/ Life of Fund*
<S> <C>
Canada Fund 70.21%
Emerging Markets Fund 1.25%
Europe Fund 223.85%
Europe Capital Appreciation 138.22%
Fund
Hong Kong and China Fund 44.76%
Japan Fund 129.08%
Japan Smaller Companies Fund 100.74%
Latin America Fund 28.29%
Nordic Fund 140.04%
Pacific Basin Fund 74.63%
Southeast Asia Fund 25.93%
</TABLE>
* From November 1, 1990 (commencement of operations) for Emerging
Markets Fund; December 21, 1993 (commencement of operations) for
Europe Capital Appreciation Fund; November 1, 1995 (commencement of
operations) for Hong Kong and China Fund; September 15, 1992
(commencement of operations) for Japan Fund; November 1, 1995
(commencement of operations) for Japan Smaller Companies Fund; April
19, 1993 (commencement of operations) for Latin America Fund; November
1, 1995 (commencement of operations) for Nordic Fund; and April 19,
1993 (commencement of operations) for Southeast Asia Fund.
Note: If FMR had not reimbursed certain fund expenses during these
periods, Canada Fund's, Europe Fund's, Japan Fund's, Nordic Fund's,
Pacific Basin Fund's, and Southeast Asia Fund's returns would have
been lower.
The following tables show the income and capital elements of each
fund's cumulative return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500(registered
trademark)), the Dow Jones Industrial Average (DJIA), and the cost of
living, as measured by the Consumer Price Index (CPI), over the same
period. The S&P 500 and DJIA comparisons are provided to show how each
fund's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Each fund has the ability to invest in securities not included
in either index, and its investment portfolio may or may not be
similar in composition to the indexes. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
October 31, 1999, or life of each fund, as applicable, assuming all
distributions were reinvested. Returns are based on past results and
are not an indication of future performance. Tax consequences of
different investments (with the exception of foreign tax withholdings)
have not been factored into the figures below.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Canada Fund would have grown to $17,021 ,
including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Canada Fund INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,989 $ 352 $ 6,680 $ 17,021 $ 51,536
1998 $ 8,250 $ 218 $ 5,517 $ 13,985 $ 41,009
1997 $ 11,853 $ 259 $ 5,652 $ 17,764 $ 33,617
1996 $ 13,712 $ 177 $ 2,528 $ 16,417 $ 25,445
1995 $ 11,018 $ 86 $ 2,031 $ 13,135 $ 20,505
1994 $ 10,786 $ 76 $ 1,988 $ 12,850 $ 16,217
1993 $ 11,189 $ 77 $ 2,033 $ 13,299 $ 15,613
1992 $ 8,934 $ 48 $ 1,623 $ 10,605 $ 13,583
1991 $ 10,221 $ 54 $ 1,139 $ 11,414 $ 12,351
1990 $ 8,520 $ 5 $ 383 $ 8,908 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Canada Fund
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Canada
Fund on November 1, 1989 , assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 17,18 9. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $ 270 for dividends and $5,563 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days.
During the period from November 1, 1990 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Emerging Markets Fund would have grown to
$ 10,125 , including the effect of the fund's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,070 $ 798 $ 257 $ 10,125 $ 55,154
1998 $ 6,538 $ 575 $ 185 $ 7,298 $ 43,887
1997 $ 10,040 $ 606 $ 284 $ 10,930 $ 35,976
1996 $ 16,112 $ 710 $ 456 $ 17,278 $ 27,231
1995 $ 14,686 $ 367 $ 416 $ 15,469 $ 21,944
1994 $ 18,673 $ 422 $ 529 $ 19,624 $ 17,355
1993 $ 15,695 $ 307 $ 444 $ 16,446 $ 16,709
1992 $ 10,719 $ 127 $ 149 $ 10,995 $ 14,536
1991* $ 10,088 $ 40 $ 0 $ 10,128 $ 13,218
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Emerging Markets Fund
Fiscal Year Ended DJIA Cost of Living**
1999 $ 54,328 $ 12,599
1998 $ 42,831 $ 12,285
1997 $ 36,475 $ 12,105
1996 $ 29,011 $ 11,858
1995 $ 22,394 $ 11,513
1994 $ 17,949 $ 11,199
1993 $ 16,451 $ 10,914
1992 $ 14,007 $ 10,622
1991* $ 12,939 $ 10,292
</TABLE>
* From November 1, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Emerging
Markets Fund on November 1, 1990 , assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $1 1,35 2. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $1,009 for dividends and $281 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days. Prior to February 19, 1993, Emerging
Markets Fund operated under certain different investment policies.
Accordingly, the fund's historical performance may not represent its
current investment policies.
During the 10-year period ended October 31, 1999, a
hypothetical $10,000 investment in Europe Fund would have grown to
$32,385, including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Europe Fund INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 21,986 $ 3,344 $ 7,055 $ 32,385 $ 51,536
1998 $ 21,167 $ 2,964 $ 4,738 $ 28,869 $ 41,009
1997 $ 20,026 $ 2,475 $ 2,505 $ 25,006 $ 33,617
1996 $ 17,491 $ 1,971 $ 811 $ 20,273 $ 25,445
1995 $ 15,163 $ 1,618 $ 93 $ 16,874 $ 20,505
1994 $ 13,660 $ 1,305 $ 0 $ 14,965 $ 16,217
1993 $ 11,886 $ 1,081 $ 0 $ 12,967 $ 15,613
1992 $ 9,752 $ 684 $ 0 $ 10,436 $ 13,583
1991 $ 10,274 $ 363 $ 0 $ 10,637 $ 12,351
1990 $ 10,500 $ 121 $ 0 $ 10,621 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Europe Fund
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Europe
Fund on November 1, 1989 , assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 17,75 9. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $1,728 f or dividends and $4,676
for capital gain distributions. The figures in the table do not
include the effect of the fund's 1.00% short-term trading fee
applicable to shares held less than 90 days.
During the period from December 21, 1993 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Europe Capital Appreciation Fund would have grown to
$2 3,82 2, including the effect of the fund's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Europe Capital Appreciation
Fund
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 18,081 $ 908 $ 4,833 $ 23,822
1998 $ 15,792 $ 793 $ 4,221 $ 20,806
1997 $ 16,073 $ 603 $ 1,630 $ 18,306
1996 $ 13,648 $ 266 $ 0 $ 13,914
1995 $ 11,718 $ 0 $ 0 $ 11,718
1994* $ 11,010 $ 0 $ 0 $ 11,010
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Europe Capital Appreciation INDEXES
Fund
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 33,029 $ 32,336 $ 11,536
1998 $ 26,282 $ 25,493 $ 11,248
1997 $ 21,544 $ 21,710 $ 11,084
1996 $ 16,308 $ 17,267 $ 10,857
1995 $ 13,141 $ 13,329 $ 10,542
1994* $ 10,393 $ 10,683 $ 10,254
</TABLE>
* From December 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Europe
Capital Appreciation Fund on December 21, 1993 , assuming the
maximum sales charge had been in effect, the net amount invested in
fund shares was $ 9,700 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $1 4,21 2. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $601 for
dividends and $ 3,279 for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.00%
short-term trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Hong Kong and China Fund would have grown to
$14,47 6, including the effect of the fund's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
HONG KONG AND CHINA FUND
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 13,726 $ 670 $ 80 $ 14,476
1998 $ 9,943 $ 162 $ 58 $ 10,163
1997 $ 10,728 $ 121 $ 62 $ 10,911
1996* $ 12,581 $ 12 $ 0 $ 12,593
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
HONG KONG AND CHINA FUND INDEXES
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 25,014 $ 24,201 $ 10,931
1998 $ 19,905 $ 19,083 $ 10,677
1997 $ 16,317 $ 16,248 $ 10,521
1996* $ 12,350 $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Hong Kong
and China Fund on November 1, 1995 , assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $10,6 00. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $514 for dividends and $ 78 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days.
During the period from September 15, 1992 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Japan Fund would have grown to $22,908, including
the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
JAPAN FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 21,117 $ 471 $ 1,320 $ 22,908 $ 37,947
1998 $ 9,787 $ 190 $ 611 $ 10,588 $ 30,195
1997 $ 10,767 $ 9 $ 673 $ 11,449 $ 24,752
1996 $ 11,330 $ 0 $ 708 $ 12,038 $ 18,736
1995 $ 11,718 $ 0 $ 732 $ 12,450 $ 15,098
1994 $ 13,842 $ 0 $ 461 $ 14,303 $ 11,941
1993 $ 12,950 $ 0 $ 0 $ 12,950 $ 11,496
1992* $ 9,545 $ 0 $ 0 $ 9,545 $ 10,001
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
JAPAN FUND
Fiscal Year Ended DJIA Cost of Living**
1999 $ 37,749 $ 11,883
1998 $ 29,766 $ 11,607
1997 $ 25,344 $ 11,437
1996 $ 20,158 $ 11,203
1995 $ 15,560 $ 10,878
1994 $ 12,472 $ 10,580
1993 $ 11,431 $ 10,311
1992* $ 9,733 $ 10,035
</TABLE>
* From September 15, 1992 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Japan Fund
on September 15, 1992 , assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted t o $10,967. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $21 3 for dividends and $ 728 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days.
During the period from November 1, 1995 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000 investment
in Japan Smaller Companies Fund would have grown to $20,07 4,
including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
JAPAN SMALLER COMPANIES FUND
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 19,943 $ 35 $ 96 $ 20,074
1998 $ 5,830 $ 10 $ 28 $ 5,868
1997 $ 6,276 $ 0 $ 30 $ 6,306
1996* $ 8,856 $ 0 $ 0 $ 8,856
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
JAPAN SMALLER COMPANIES FUND INDEXES
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 25,014 $ 24,201 $ 10,931
1998 $ 19,905 $ 19,083 $ 10,677
1997 $ 16,317 $ 16,248 $ 10,521
1996* $ 12,350 $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Japan
Smaller Companies Fund on November 1, 1995 , assuming the
maximum sales charge had been in effect, the net amount invested in
fund shares was $ 9,700 . The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $10,049. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 10 for
dividends and $3 9 for capital gain distributions. The figures
in the table do not include the effect of the fund's 1.50% short-term
trading fee applicable to shares held less than 90 days.
During the period from April 19, 1993 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Latin America Fund would have grown t o $12,82 9,
including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Latin America Fund INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 11,941 $ 848 $ 40 $ 12,829 $ 35,028
1998 $ 10,408 $ 480 $ 35 $ 10,923 $ 27,873
1997 $ 15,045 $ 510 $ 51 $ 15,606 $ 22,848
1996 $ 12,212 $ 190 $ 41 $ 12,443 $ 17,295
1995 $ 9,458 $ 31 $ 32 $ 9,521 $ 13,937
1994 $ 15,724 $ 53 $ 53 $ 15,830 $ 11,022
1993* $ 12,882 $ 0 $ 0 $ 12,882 $ 10,612
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Latin America Fund
Fiscal Year Ended DJIA Cost of Living**
1999 $ 35,588 $ 11,660
1998 $ 28,057 $ 11,389
1997 $ 23,893 $ 11,222
1996 $ 19,004 $ 10,993
1995 $ 14,670 $ 10,674
1994 $ 11,758 $ 10,382
1993* $ 10,776 $ 10,118
</TABLE>
* From April 19, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Latin
America Fund on April 19, 1993 , assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $10,89 8. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $ 825 for dividends and $ 49 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days.
During the period from November 1, 1995 (commencement of operations)
to October 31, 1999, a hypothetical $10,000 investment in Nordic Fund
would have grown to $24,00 4, including the effect of the fund's
maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NORDIC FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 21,815 $ 191 $ 1,998 $ 24,004 $ 25,014
1998 $ 15,772 $ 139 $ 1,444 $ 17,355 $ 19,905
1997 $ 15,462 $ 58 $ 117 $ 15,637 $ 16,317
1996* $ 12,387 $ 0 $ 0 $ 12,387 $ 12,350
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NORDIC FUND
Fiscal Year Ended DJIA Cost of Living**
1999 $ 24,201 $ 10,931
1998 $ 19,083 $ 10,677
1997 $ 16,248 $ 10,521
1996* $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Nordic
Fund on November 1, 1995, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $11,372. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $ 116 for dividends and $1,242 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.50% short-term trading fee applicable to
shares held less than 90 days.
During the 10-year period ended October 31, 1999 , a
hypothetical $10,000 investment in Pacific Basin Fund would have grown
to $ 17,463 , including the effect of the fund's maximum sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PACIFIC BASIN FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 13,819 $ 940 $ 2,704 $ 17,463 $ 51,536
1998 $ 7,309 $ 483 $ 1,430 $ 9,222 $ 41,009
1997 $ 8,243 $ 336 $ 1,613 $ 10,192 $ 33,617
1996 $ 9,005 $ 307 $ 1,762 $ 11,074 $ 25,445
1995 $ 9,147 $ 311 $ 1,790 $ 11,248 $ 20,505
1994 $ 12,269 $ 402 $ 699 $ 13,370 $ 16,217
1993 $ 10,745 $ 264 $ 430 $ 11,439 $ 15,613
1992 $ 7,376 $ 107 $ 295 $ 7,778 $ 13,583
1991 $ 8,083 $ 117 $ 324 $ 8,524 $ 12,351
1990 $ 7,924 $ 5 $ 317 $ 8,246 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
PACIFIC BASIN FUND
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,390
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Pacific
Basin Fund on November 1, 1989 , assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$ 9,700. The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $12,461 . If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $ 479 for dividends and $ 1,79 5 for
capital gain distributions. The figures in the table do not include
the effect of the fund's 1.00% short-term trading fee applicable to
shares held less than 90 days.
During the period from April 19, 1993 (commencement of
operations) to October 31, 1999, a hypothetical $10,000
investment in Southeast Asia Fund would have grown to $12 ,593,
including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SOUTHEAST ASIA FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 11,786 $ 481 $ 326 $ 12,593 $ 35,028
1998 $ 7,886 $ 303 $ 218 $ 8,407 $ 27,873
1997 $ 9,264 $ 306 $ 256 $ 9,826 $ 22,848
1996 $ 14,249 $ 304 $ 0 $ 14,553 $ 17,295
1995 $ 13,464 $ 63 $ 0 $ 13,527 $ 13,937
1994 $ 14,172 $ 67 $ 0 $ 14,239 $ 11,022
1993* $ 12,843 $ 0 $ 0 $ 12,843 $ 10,612
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SOUTHEAST ASIA FUND
Fiscal Year Ended DJIA Cost of Living**
1999 $ 35,588 $ 11,660
1998 $ 28,062 $ 11,389
1997 $ 23,893 $ 11,222
1996 $ 19,004 $ 10,993
1995 $ 14,670 $ 10,674
1994 $ 11,758 $ 10,382
1993* $ 10,776 $ 10,118
</TABLE>
* From April 19, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Southeast
Asia Fund on April 19, 1993 , assuming the maximum sales charge
had been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 10,9 29. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $524 for dividends and $388 f or capital
gain distributions. The figures in the table do not include the effect
of the fund's 1.50% short-term trading fee applicable to shares held
less than 90 days.
INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the International Finance Corporation Emerging
Markets database, and the performance of national stock markets as
measured in U.S. dollars by the Morgan Stanley Capital International
stock market indexes for the twelve months ended October 31, 1999. Of
course, these results are not indicative of future stock market
performance or the funds' performance. Market conditions during the
periods measured fluctuated widely. Brokerage commissions and other
fees are not factored into the values of the indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew to $9,147.2 billion in
October 1999 (18,463.2 billion including the U.S.).
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of each market is measured
in billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION
Australia $ 210.6 Malaysia $ 66.8
Austria $ 22.0 Netherlands $ 470.7
Belgium $ 104.2 Norway $ 34.1
Canada $ 372.6 Singapore $ 87.8
Denmark $ 67.9 Spain $ 235.4
France $ 838.7 Sweden $ 201.8
Germany $ 838.1 Switzerland $ 561.0
Hong Kong $ 192.6 United Kingdom $ 1,783.0
Italy $ 334.2 United States $ 9,316.0
Japan $ 2,509.3
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of each market is measured in
billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 22.0
Brazil $ 87.4
Chile $ 32.6
Colombia $ 3.3
Mexico $ 98.7
Venezuela $ 6.8
Peru $ 7.0
Total Latin America $ 257.8
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended October 31, 1999. The second table shows the
same performance as measured in local currency. Each table measures
return based on the period's change in price, dividends paid on stocks
in the index, and the effect of reinvesting dividends net of any
applicable foreign taxes. These are unmanaged indexes composed of a
sampling of selected companies representing an approximation of the
market structure of the designated country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia 11.43% Malaysia 184.38%
Austria -14.33% Netherlands 12.31%
Belgium -5.05% Norway 3.11%
Canada 35.31% Singapore 90.23%
Denmark 7.20% Spain 0.85%
France 24.30% Sweden 47.73%
Germany 7.48% Switzerland -0.59%
Hong Kong 27.24% United Kingdom 13.25%
Italy 1.55% United States 26.21%
Japan 58.40%
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 8.80% Malaysia 99.02%
Austria -3.75% Netherlands 26.08%
Belgium 6.69% Norway 9.71%
Canada 28.65% Singapore 94.38%
Denmark 20.41% Spain 13.13%
France 39.60% Sweden 55.68%
Germany 20.76% Switzerland 11.85%
Hong Kong 27.63% United Kingdom 15.58%
Italy 14.20% United States 26.21%
Japan 41.86%
The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1999.
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
1999 1999
Germany 15.87% 13.41%
Hong Kong 6.06% 18.32%
Japan -0.90% -1.39%
Spain 23.55% 11.99%
United Kingdom 17.59% 15.18%
United States 26.28% 17.59%
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market
mutual fund performance indexes prepared by Lipper or other
organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The return of each index reflects reinvestment of all
dividends and capital gains paid by securities included in each index.
Unlike a fund's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
Latin America Fund may compare its performance to that of the Morgan
Stanley Capital International Emerging Markets Free - Latin America
Index, a market capitalization-weighted index of approximately 160
stocks traded in seven Latin American markets.
Pacific Basin Fund may compare its performance to that of the Morgan
Stanley Capital International Pacific Index, a market
capitalization-weighted index of over 400 stocks traded in six
Pacific-region markets. The index returns for periods after January 1,
1997 are adjusted for tax withholding rates applicable to U.S.-based
mutual funds organized as Massachusetts business trusts.
Southeast Asia Fund may compare its performance to that of the Morgan
Stanley Capital International AC (All Country ) Far East Free ex
Japan Index, a market capitalization-weighted index of over 350 stocks
traded in eight Asian markets, excluding Japan.
Canada Fund may compare its performance to that of the Toronto Stock
Exchange (TSE) 300, a market capitalization-weighted index of 300
stocks traded in the Canadian market.
Hong Kong and China Fund may compare its performance to that of the
Hang Seng Index, a market capitalization-weighted index of the stocks
of the 33 largest companies in the Hong Kong market.
Japan Fund may compare its performance to that of the Tokyo Stock
Exchange Index, a market capitalization-weighted index of over 1300
stocks traded in the Japanese market.
Japan Smaller Companies Fund may compare its performance to
that of the Tokyo Stock Exchange Second Section Stock Price Index is a
market capitalization-weighted index that reflects the performance of
the smaller, less established and newly listed companies of the Tokyo
Stock Exchange.
Nordic Fund may compare its performance to that of the FT - Actuaries
World Nordic Index, a market capitalization-weighted index of over 90
stocks traded in four Scandinavian markets.
Each of Europe Fund and Europe Capital Appreciation Fund may compare
its performance to that of the Morgan Stanley Capital International
Europe Index, a market capitalization-weighted index that is designed
to represent the performance of developed stock markets in Europe. The
index returns for periods after January 1, 1997 are adjusted for tax
withholding rates applicable to U.S.-based mutual funds organized as
Massachusetts business trusts.
Emerging Markets Fund may compare its performance to that of
the Morgan Stanley Capital International Emerging Markets Free Index,
a market capitalization-weighted index that is designed to represent
the performance of emerging stock markets throughout the world.
Effective December 1, 1998, the country of Malaysia was removed from
this index. The index returns reflect the inclusion of Malaysia prior
to December 1, 1998.
Stocks are selected for the Morgan Stanley Capital International
(MSCI) indexes on the basis of industry representation, liquidity,
sufficient float, and avoidance of cross-ownership. The MSCI Free
indexes exclude those stocks that cannot be purchased by foreign
investors in otherwise free markets.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of October 31, 1999 , FMR advised over $33 billion in municipal
fund assets, $136 billion in taxable fixed-income fund assets, $140
billion in money market fund assets, $567 billion in equity fund
assets , $18 billion in international fund assets, and $43 billion
in Spartan fund assets. The funds may reference the growth and variety
of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management
figure represents the largest amount of equity fund assets under
management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive each fund's front-end sales charge on shares acquired through
reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive each fund's
front-end sales charge in certain instances due to sales efficiencies
and competitive considerations. The sales charge will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs
but otherwise as defined in the Employee Retirement Income Security
Act) maintained by a U.S. employer and having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary
group of corporations (within the meaning of Section 1563(a)(1) of the
Internal Revenue Code, with "50%" substituted for "80%") any member of
which maintains an employee benefit plan having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity
mutual funds, the assets of which are held in a bona fide trust for
the exclusive benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used
to fund annuity contracts purchased by employee benefit plans
(including 403(b) programs, but otherwise as defined in the Employee
Retirement Income Security Act), which, in the aggregate, have either
more than 200 eligible employees or a minimum of $3,000,000 in assets
invested in Fidelity funds;
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan provided that: (i) at the time of the distribution, the employer,
or an affiliate (as described in waiver (1) above) of such employer,
maintained at least one employee benefit plan that qualified for
waiver (1) above and that had at least some portion of its assets
invested in one or more mutual funds advised by FMR, or in one or more
investment accounts or pools advised by Fidelity Management Trust
Company; and (ii) either (a) the distribution is transferred from the
plan to a Fidelity IRA account within 60 days from the date of the
distribution or (b) the distribution is transferred directly from the
plan into another Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the Trust Portfolios funds and
must, during the initial six-month period, reach and maintain an
aggregate balance of at least $500,000 in all accounts and subaccounts
purchased through the Trust Portfolios program);
7. to shares purchased by a mutual fund or a qualified state tuition
program for which FMR or an affiliate serves as investment manager;
8. to shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services SM;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited or their
direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a
Fidelity Trustee or employee;
10. to shares purchased by a bank trust officer, registered
representative, or other employee of a qualified recipient. Qualified
recipients are securities dealers or other entities, including banks
and other financial institutions, who have sold the fund's shares
under special arrangements in connection with FDC's sales activities;
11. to shares purchased by contributions and exchanges to the
following prototype or prototype-like retirement plans sponsored by
FMR Corp. or FMR and that are marketed and distributed directly to
plan sponsors or participants without any intervention or assistance
from any intermediary distribution channel: The Fidelity Traditional
IRA, The Fidelity Roth IRA, The Fidelity Rollover IRA, The Fidelity
SEP-IRA and SARSEP, The Fidelity SIMPLE IRA, The Fidelity Retirement
Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The
Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype
Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement
(Profit Sharing and Money Purchase Plan);
12. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains
all of its mutual fund assets in Fidelity mutual funds, provided the
plan executes a Fidelity non-prototype sales charge waiver request
form confirming its qualification;
13. to shares purchased by a registered investment adviser (RIA) for
his or her discretionary accounts, provided he or she executes a
Fidelity RIA load waiver agreement which specifies certain aggregate
minimum and operating provisions. This waiver is available only for
shares purchased directly from Fidelity, without a broker, unless
purchased through a brokerage firm which is a correspondent of
National Financial Services Corporation (NFSC). The waiver is
unavailable, however, if the RIA is part of an organization
principally engaged in the brokerage business, unless the brokerage
firm in the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution or bank trust
department for its non-discretionary, non-retirement fiduciary
accounts, provided it executes a Fidelity Trust load waiver agreement
which specifies certain aggregate minimum and operating provisions.
This waiver is available only for shares purchased either directly
from Fidelity or through a bank-affiliated broker, and is unavailable
if the trust department or institution is part of an organization not
principally engaged in banking or trust activities.
A fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction for
some purchases made directly with Fidelity as noted in the prospectus,
in connection with investments in other Fidelity funds. This includes
reductions for investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed above.
On October 12, 1990, each of Canada Fund, Europe Fund and Pacific
Basin Fund changed its sales charge policy from a 2% sales charge upon
purchase and a 1% deferred sales charge upon redemption, to a 3% sales
charge upon purchase. If you purchased shares prior to that date, when
you redeem those shares a deferred sales charge of 1% of the
redemption amount will be deducted.
A fund may make redemption payments in whole or in part in
readily marketable securities or other property, valued for
this purpose as they are valued in computing each fund's NAV, if
FMR determines it is in the best interests of the fund .
Shareholders that receive securities or other property on
redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund invests significantly in foreign
securities, corporate shareholders should not expect fund dividends to
qualify for the dividends-received deduction. Short-term capital gains
are taxable as dividends, but do not qualify for the
dividends-received deduction.
CAPITAL GAIN DISTRIBUTIONS. Each fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
As of October 31, 1999, Canada Fund had a capital loss carryforward
aggregating approximately $4,511,000. This loss carryforward, all of
which will expire on October 31, 2006, is available to offset future
capital gains.
As of October 31, 1999, Emerging Markets Fund had a capital loss
carryforward aggregating approximately $425,756,000. This loss
carryforward, of which $97,014,000, $19,326,000, and $309,416,000 will
expire on October 31, 2004, 2006, and 2007, respectively, is available
to offset future capital gains.
As of October 31, 1999, Hong Kong and China Fund had a capital loss
carryforward aggregating approximately $50,478,000. This loss
carryforward, all of which expire on October 31, 2006, is available to
offset future capital gains.
As of October 31, 1999, Japan Fund had a capital loss carryforward
aggregating approximately $44,939,000. This loss carryforward, of
which $11,008,000 and $33,931,000 will expire on October 31, 2005 and
2006, respectively, is available to offset future capital gains.
As of October 31, 1999, Japan Smaller Companies Fund had a capital
loss carryforward aggregating approximately $21,197,000. This loss
carryforward, of which $5,580,000 and $15,617,000 will expire on
October 31, 2005 and 2006, respectively, is available to offset future
capital gains.
As of October 31, 1999, Latin America Fund had a capital loss
carryforward aggregating approximately $97,171,000. This loss
carryforward, of which $36,899,000, $37,615,000, and $22,657,000 will
expire on October 31, 2003, 2004, and 2007, respectively, is available
to offset future capital gains.
As of October 31, 1999, Pacific Basin Fund had a capital loss
carryforward aggregating approximately $45,130,000. This loss
carryforward, of which $12,149,000 and $32,981,000 will expire on
October 31, 2005 and 2006, respectively, is available to offset future
capital gains.
As of October 31, 1999, Southeast Asia Fund had a capital loss
carryforward aggregating approximately $143,548,000. This loss
carryforward, of which $32,651,000, $110,573,000, and $324,000 will
expire on October 31, 2005, 2006, and 2007, respectively, is available
to offset future capital gains.
RETURNS OF CAPITAL. If a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may withhold
taxes on dividends and interest earned by a fund with respect to
foreign securities. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. If, at the close
of its fiscal year, more than 50% of a fund's total assets is invested
in securities of foreign issuers, the fund may elect to pass through
eligible foreign taxes paid and thereby allow shareholders to take a
deduction or, if they meet certain holding period requirements with
respect to fund shares, a credit on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments(registered trademark), P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons"
by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (69), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Investment Trust, is Mr.
Johnson's daughter.
ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Investment Trust (1999), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
J. GARY BURKHEAD (58), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (67), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste
Management Inc. (non-hazardous waste, 1993), CH2M Hill
Companies (engineering), and Bonneville Pacific (independent
power and petroleum production ). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (67), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of
U.S. sales, distribution, and manufacturing . She is currently a
Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing), and the TJX Companies, Inc. (retail
stores), and previously served as a Director of Hallmark Cards,
Inc. , Nabisco Brands, Inc. , and Standard Brands, Inc. In
addition, she is a member of the Board of Directors of the
Southhampton Hospital in Southhampton, N.Y. (1998).
ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a director of
Lucas Varity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A&M University (1999-2000). Mr. Gates also is
a Trustee of the Forum for International Policy and of the Endowment
Association of the College of William and Mary. In addition, he is a
member of the National Executive Board of the Boy Scouts of
America.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (automotive, space, defense, and
information technology), CSX Corporation (freight transportation),
Birmingham Steel Corporation (producer of steel and steel products),
and RPM, Inc. (manufacturer of chemical products), and he previously
served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining, 1985-1997), and as a
Trustee of First Union Real Estate Investments (1986-1997). In
addition, he serves as a Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the Executive Committee as well as
Chairman of the Board and President, a Trustee of University School
(Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business . From 1987 to
January 1995, Mr. Kirk was a Professor at Columbia University Graduate
School of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a
Director of Valuation Research Corp. (appraisals and valuations,
1993-1995). He serves as Chairman of the Board of Directors of
National Arts Stabilization Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association, Director of the Yale-New Haven
Health Services Corp. (1998), Vice Chairman of the Public
Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
NED C. LAUTENBACH (55), Member of the Advisory Board (1999), has
been a partner of Clayton, Dubilier & Rice, Inc. (private equity
investment firm) since September 1998. Mr. Lautenbach was Senior Vice
President of IBM Corporation from 1992 until his retirement in July
1998. From 1993 to 1995 he was Chairman of IBM World Trade
Corporation. He also was a member of IBM's Corporate Executive
Committee from 1994 to July 1998. He is a Director of PPG Industries
Inc. (glass, coating and chemical manufacturer), Dynatech Corporation
(global communications equipment), Eaton Corporation (global
manufacturer of highly engineered products) and ChoicePoint Inc. (data
identification, retrieval, storage, and analysis).
*PETER S. LYNCH (56), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan(registered trademark) Fund and FMR
Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was
also Vice President of Fidelity Investments Corporate Services
(1991-1992). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and
Society for the Preservation of New England Antiquities, and as an
Overseer of the Museum of Fine Arts of Boston.
WILLIAM O. McCOY (66), Trustee (1997), is the Interim Chancellor
for the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH (71), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the
Board of York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (hydraulic systems,
building systems, and metal products, 1992), CUNO, Inc. (liquid and
gas filtration products, 1996), and Associated Estates Realty
Corporation (a real estate investment trust, 1993). Mr. McDonough
served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (66), Trustee (1993), is Chairman Emeritus, of
Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. Prior to 1991, he held the positions of
Vice President of International Business Machines Corporation ("IBM")
and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997). He is a
Board member of Dynatech Corporation (electronics, 1999).
*ROBERT C. POZEN (53), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a
Director of National Life Insurance Company of Vermont and American
Software, Inc. Mr. Williams was previously a Director of ConAgra,
Inc. (agricultural products), Georgia Power Company (electric
utility), and Avado, Inc. (restaurants).
RICHARD A. SPILLANE, JR. (48), is Vice President of certain Equity
Funds and Senior Vice President of FMR (1997). Since joining Fidelity,
Mr. Spillane is Chief Investment Officer for Fidelity International,
Limited. Prior to that position, Mr. Spillane served as Director of
Research.
PATRICIA SATTERTHWAITE (40), is Vice President of Fidelity Latin
America Fund (1993). Prior to her current responsibilities, she
managed several Fidelity funds.
KEVIN R. MCCAREY (39), is Vice President of Fidelity Europe Capital
Appreciation Fund (1995). Prior to his current responsibilities, Mr.
McCarey managed a variety of Fidelity funds.
ALLAN LIU (38), is Vice President of Fidelity Southeast Asia Fund
(1995). Mr. Liu is also an investment director of Fidelity Investments
Management Ltd., in Hong Kong, a subsidiary of Fidelity International,
Limited. Prior to his current responsibilities, Mr. Liu managed
several Fidelity funds.
DAVID C. STEWART (39), is Vice President of Fidelity Emerging Markets
Fund. Mr. Stewart is also a director and portfolio manager for
Fidelity International Limited (FIL). Since joining Fidelity in 1994,
he served as an analyst and portfolio manager.
BRENDA A. REED (38), is Vice President of Fidelity Japan Fund (1998)
and another fund managed by FMR. Ms. Reed is also Director of Research
(1997) for FMR in Tokyo. Prior to her current responsibilities,
Ms. Reed managed a variety of Fidelity funds.
ERIC D. ROITER (50), Secret ary (1998), is Vice President (1998)
and General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).
RICHARD A. SILVER (52), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
MATTHEW N. KARSTETTER (38), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
JOHN H. COSTELLO (53), Assistant Treasurer, is an employee of FMR.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended October 31, 1999, or
calendar year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AGGREGATE COMPENSATION FROM A Edward C. Johnson 3d** Abigail P. Johnson ** J. Gary Burkhead** Ralph F. Cox
FUND
Canada Fund B $ 0 $ 0 $ 0 $ 14
Emerging Markets Fund B $ 0 $ 0 $ 0 $ 96
Europe Fund B $ 0 $ 0 $ 0 $ 445
Europe Capital Appreciation $ 0 $ 0 $ 0 $ 176
Fund B
Hong Kong and China Fund B $ 0 $ 0 $ 0 $ 43
Japan Fund B $ 0 $ 0 $ 0 $ 116
Japan Smaller Companies Fund B $ 0 $ 0 $ 0 $ 147
Latin America Fund B $ 0 $ 0 $ 0 $ 98
Nordic Fund B $ 0 $ 0 $ 0 $ 31
Pacific Basin Fund B $ 0 $ 0 $ 0 $ 91
Southeast Asia Fund B $ 0 $ 0 $ 0 $ 83
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 0 $223,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM A Phyllis Burke Davis Robert M. Gates E. Bradley Jones Donald J. Kirk Ned C. Lautenbach ***
FUND
Canada Fund B $ 13 $ 14 $ 13 $ 13 $ 1
Emerging Markets Fund B $ 93 $ 96 $ 96 $ 95 $ 10
Europe Fund B $ 427 $ 441 $ 441 $ 438 $ 31
Europe Capital Appreciation $ 169 $ 174 $ 174 $ 173 $ 11
Fund B
Hong Kong and China Fund B $ 41 $ 43 $ 43 $ 42 $ 4
Japan Fund B $ 112 $ 116 $ 116 $ 115 $ 18
Japan Smaller Companies
Fund B $ 142 $ 146 $ 147 $ 146 $ 40
Latin America Fund B $ 94 $ 97 $ 97 $ 97 $ 7
Nordic Fund B $ 30 $ 31 $ 31 $ 31 $ 2
Pacific Basin Fund B $ 88 $ 91 $ 90 $ 90 $ 14
Southeast Asia Fund B $ 80 $ 83 $ 82 $ 82 $ 9
TOTAL COMPENSATION
FROM THE $220,500 $ 223,500 $222,000 $226,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM A Peter S. Lynch ** William O. McCoy Gerald C. McDonough Marvin L. Mann Robert C. Pozen **
FUND
Canada Fund B $ 0 $ 14 $ 17 $ 14 $ 0
Emerging Markets Fund B $ 0 $ 96 $ 119 $ 96 $ 0
Europe Fund B $ 0 $ 441 $ 545 $ 441 $ 0
Europe Capital Appreciation $ 0 $ 174 $ 215 $ 174 $ 0
Fund B
Hong Kong and China Fund B $ 0 $ 43 $ 53 $ 43 $ 0
Japan Fund B $ 0 $ 116 $ 144 $ 116 $ 0
Japan Smaller Companies
Fund B $ 0 $ 146 $ 184 $ 146 $ 0
Latin America Fund B $ 0 $ 97 $ 120 $ 97 $ 0
Nordic Fund B $ 0 $ 31 $ 38 $ 31 $ 0
Pacific Basin Fund B $ 0 $ 91 $ 113 $ 91 $ 0
Southeast Asia Fund B $ 0 $ 83 $ 103 $ 83 $ 0
TOTAL COMPENSATION FROM THE $ 0 $ 223,500 $ 273,500 $220,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
AGGREGATE COMPENSATION FROM A Thomas R. Williams
FUND
Canada Fund B $ 13
Emerging Markets Fund B $ 94
Europe Fund B $ 433
Europe Capital Appreciation $ 171
Fund B
Hong Kong and China Fund B $ 42
Japan Fund B $ 114
Japan Smaller Companies Fund B $ 143
Latin America Fund B $ 95
Nordic Fund B $ 30
Pacific Basin Fund B $ 89
Southeast Asia Fund B $ 81
TOTAL COMPENSATION FROM THE $223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** Effective October 14, 1999, Mr. Lautenbach serves as a Member
of the Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of October 31, 1999, approximately 7.25% of Japan Smaller
Companies Fund's total outstanding shares was held by an FMR
affiliate. FMR Corp. is the ultimate parent company of this FMR
affiliate. By virtue of their ownership interest in FMR Corp., as
described in the "Control of Investment Advise r s" section on
page 178, Mr. Edward C. Johnson 3d, President and Trustee of the fund,
and Ms. Abigail P. Johnson, Member of the Advisory Board of the fund,
may be deemed to be a beneficial owner of these shares. As of the
above date, with the exception of Mr. Johnson 3d's and Ms. Johnson's
deemed ownership of Japan Smaller Companies Fund's shares, the
Trustees, Members of the Advisory Board, and officers of the funds
owned, in the aggregate, less than 1% of each fund's total outstanding
shares.
As of October 31, 1999, the following owned of record or
beneficially 5% or more (up to and including 25%) of each fund's
outstanding shares:
Japan Smaller Companies Fund: Fidelity Strategic Advisors/Crosby
Advisors, Boston, MA (7.25%)
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
FMR U.K., and FMR Far East. The voting common stock of FMR Corp. is
divided into two classes. Class B is held predominantly by members of
the Edward C. Johnson 3d family and is entitled to 49% of the vote on
any matter acted upon by the voting common stock. Class A is held
predominantly by non-Johnson family member employees of FMR Corp. and
its affiliates and is entitled to 51% of the vote on any such matter.
The Johnson family group and all other Class B shareholders have
entered into a shareholders' voting agreement under which all Class B
shares will be voted in accordance with the majority vote of Class B
shares. Under the 1940 Act, control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the 1940 Act, to
form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of FIIA, Fidelity Investments
Japan Limited (FIJ) , and FIIA(U.K.)L. Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of the
Johnson family own, directly or indirectly, more than 25% of the
voting common stock of FIL. FIL provides investment advisory services
to non-U.S. investment companies and institutional investors investing
in securities throughout the world.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.
MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and the
costs associated with securities lending, as applicable, each fund
pays all of its expenses that are not assumed by those parties. Each
fund pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Each fund's
management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal securities laws and making
necessary filings under state securities laws. Each fund is also
liable for such non-recurring expenses as may arise, including costs
of any litigation to which the fund may be a party, and any obligation
it may have to indemnify its officers and Trustees with respect to
litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, Emerging Markets Fund, Hong Kong and China Fund, Japan
S malle r Companies Fund, Latin America Fund, and Nordic Fund
each pays FMR a monthly management fee which has two components: a
group fee rate and an individual fund fee rate.
For the services of FMR under the management contract, Canada Fund,
Europe Fund, Europe Capital Appreciation Fund, Japan Fund, Pacific
Basin Fund, and Southeast Asia Fund each pays FMR a monthly management
fee which has two components: a basic fee, which is the sum of a group
fee rate and an individual fund fee rate, and a performance adjustment
based on a comparison of Canada Fund's performance to that of the
Toronto Stock Exchange (TSE) 300, Europe Fund's performance to that of
the Morgan Stanley Capital International Europe Index, Europe Capital
Appreciation Fund's performance to that of the Morgan Stanley Capital
International Europe Index, Japan Fund's performance to that of the
Tokyo Stock Exchange Index, Pacific Basin Fund's performance to that
of the Morgan Stanley Capital International Pacific Index, and
Southeast Asia Fund's performance to that of the Morgan Stanley
Capital International All Country Far East Free ex Japan Index.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
over - 1,260 .2167
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 757 billion of group net assets - the approximate
level for October 1999 - was 0.2805%, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 757 billion.
The individual fund fee rate for Emerging Markets Fund, Hong Kong and
China Fund, Japan Small er Companies Fund, Latin America Fund,
and Nordic Fund is 0.45 %. Based on the average group net assets
of the funds advised by FMR for October 1999, each fund's annual
management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
Emerging Markets Fund 0.2805% + 0.45% = 0.7305%
Hong Kong and China Fund 0.2805% + 0.45% = 0.7305%
Japan Smaller Companies Fund 0.2805% + 0.45% = 0.7305%
Latin America Fund 0.2805% + 0.45% 0.7305%
Nordic Fund 0.2805% + 0.45% = 0.7305%
</TABLE>
The individual fund fee rate for Canada Fund, Europe Fund, Europe
Capital Appreciation Fund, Japan Fund, Pacific Basin Fund, and
Southeast Asia Fund is 0.45 %. Based on the average group net
assets of the funds advised by FMR for October 1999, each fund's
annual basic fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
Canada Fund 0.2805% + 0.45% = 0.7305%
Europe Fund 0.2805% + 0.45% = 0.7305%
Europe Capital Appreciation 0.2805% + 0.45% = 0.7305%
Fund
Japan Fund 0.2805% + 0.45% = 0.7305%
Pacific Basin Fund 0.2805% + 0.45% = 0.7305%
Southeast Asia Fund 0.2805% + 0.45% = 0.7305%
</TABLE>
One-twelfth of the management fee rate or the basic fee
rate, as applicable, is applied to each fund's average net assets for
the month, giving a dollar amount which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of Canada
Fund, Europe Fund, Europe Capital Appreciation Fund, Japan Fund,
Pacific Basin Fund, and Southeast Asia Fund is subject to upward or
downward adjustment, depending upon whether, and to what extent, the
fund's investment performance for the performance period exceeds, or
is exceeded by, the record over the same period of the Toronto Stock
Exchange (TSE) 300 for Canada Fund, Morgan Stanley Capital
International Europe Index for Europe Fund, Morgan Stanley Capital
International Europe Index for Europe Capital Appreciation Fund, Tokyo
Stock Exchange Index for Japan Fund, Morgan Stanley Capital
International Pacific Index for Pacific Basin Fund, and Morgan Stanley
Capital International All Country Far East Free ex Japan Index for
Southeast Asia Fund. The performance period consists of the most
recent month plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(up to a maximum difference of (plus/minus)10.00) is multiplied by a
performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee.
The maximum annualized performance adjustment rate is
(plus/minus)0.20% of a fund's average net assets over the performance
period.
A fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's shares at the NAV as of the record date for
payment.
The record of the Index is based on change in value and is adjusted
for any cash distributions from the companies whose securities compose
the Index. Because the adjustment to the basic fee is based on a
fund's performance compared to the investment record of the applicable
Index, the controlling factor is not whether the fund's performance is
up or down per se, but whether it is up or down more or less than the
record of the Index. Moreover, the comparative investment performance
of each fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter
period of time.
For each of Morgan Stanley Capital International Europe Index, and
Morgan Stanley Capital International Pacific Index, the index returns
for periods prior to January 1, 1997 are adjusted for tax withholding
at non-treaty rates. The index returns for periods after January 1,
1997 are adjusted for tax withholding at treaty rates applicable to
U.S.-based mutual funds organized as Massachusetts business trusts.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by Canada Fund, Europe Fund, Europe Capital Appreciation Fund,
Japan Fund, Pacific Basin Fund, and Southeast Asia Fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended October 31 Performance Adjustment Management Fees Paid to FMR
Canada Fund 1999 $ -189,641 $ 143,110*
1998 $ -322,133 $ 212,772*
1997 $ -460,868 $ 498,327*
Emerging Markets Fund 1999 N/A $ 2,504,496
1998 N/A $ 2,908,156
1997 N/A $ 7,910,780
Europe Fund 1999 $ -2,043,853 $ 8,733,425*
1998 $ -88,133 $ 10,211,251*
1997 $ 327,476 $ 6,862,932*
Europe Capital Appreciation 1999 $ -428,477 $ 3,757,693*
Fund
1998 $ -91,978 $ 4,276,089*
1997 $ -301,878 $ 2,196,708*
Hong Kong and China Fund 1999 N/A $ 1,088,415
1998 N/A $ 1,146,603
1997 N/A $ 1,625,465
Japan Fund 1999 $ 595,599 $ 3,879,056*
1998 $ 632,472 $ 2,399,153*
1997 $ 528,549 $ 2,732,904*
Japan Smaller Companies Fund 1999 N/A $ 4,833,493
1998 N/A $ 703,099
1997 N/A $ 702,501
Latin America Fund 1999 N/A $ 2,413,253
1998 N/A $ 4,433,227
1997 N/A $ 6,463,852
Nordic Fund 1999 N/A $ 769,457
1998 N/A $ 766,651
1997 N/A $ 510,905
Pacific Basin Fund 1999 $ 670,293 $ 3,235,297*
1998 $ 765,898 $ 2,293,835*
1997 $ -195,610 $ 2,424,887*
Southeast Asia Fund 1999 $ 474,579 $ 2,664,844*
1998 $ 983,526 $ 2,735,919*
1997 $ 52,908 $ 4,464,710*
</TABLE>
* Including the amount of the performance adjustment.
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, securities
lending cost s, brokerage commissions, and extraordinary
expenses), which is subject to revision or discontinuance. FMR retains
the ability to be repaid for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the
fiscal year.
Expense reimbursements by FMR will increase a fund's returns, and
repayment of the reimbursement by a fund will lower its returns.
FMR voluntarily agreed to reimburse certain of the funds if and to the
extent that the fund's aggregate operating expenses, including
management fees, were in excess of an annual rate of its average net
assets. The table below show s the periods of reimbursement and
levels of expense limitations for the applicable funds; the dollar
amount of management fees incurred under each fund's contract before
reimbursement; and the dollar amount of management fees reimbursed by
FMR under the expense reimbursement for each period.
SUB-ADVISERS. On behalf of the funds, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, and FIIA. FIIA,
in turn, has entered into a sub-advisory agreement with FIIA(U.K.)L.
On behalf of Emerging Markets Fund, Hong Kong and China Fund, Japan
Fund, Japan Smaller Companies Fund, Pacific Basin Fund, and Southeast
Asia Fund, FMR has entered into sub-advisory agreements with FIJ.
Pursuant to the sub-advisory agreements, FMR may receive from the
sub-advisers investment research and advice on issuers outside the
United States and FMR may grant the sub-advisers investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
Effective January 1, 2000, on behalf of each fund, FMR Far East
will enter into a sub-advisory agreement with FIJ, pursuant to which
FMR Far East may receive from FIJ investment research and advice
relating to Japanese issuers (and such other Asian issuers as FMR Far
East may designate).
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by
the sub-adviser on a discretionary basis.
(small solid bullet) FMR pays FIJ and FIIA a fee equal to 57% of its
monthly management fee (including any performance adjustment) with
respect to the fund's average net assets managed by the sub-adviser on
a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For investment advice and research services, no fees were paid to
FMR U.K., FMR Far East, FIIA, FIIA(U.K.)L, or FIJ on behalf of Canada
Fund, Europe Fund, Hong Kong and China Fund, Japan Fund, Japan Smaller
Companies Fund, Latin America Fund, Nordic Fund, Pacific Basin Fund,
and Southeast Asia Fund for the past three fiscal years.
For providing investment advice and research services, fees paid to
FMR U.K. and FMR Far East on behalf of Emerging Markets Fund and
Europe Capital Appreciation Fund for the past three fiscal years are
shown in the table below.
Fiscal Years Ended October 31 FMR U.K. FMR Far East
Emerging Markets Fund
1999 $ 0 $ 0
1998 $ 0 $ 0
1997 $ 442,552 $ 405,858
Europe Capital Appreciation
Fund
1999 $ 0 $ 0
1998 $ 449,444 $ 0
1997 $ 195,609 $ 0
Currently, FIIA is primarily responsible for choosing investments for
Southeast Asia Fund and Hong Kong and China Fund. Currently, FIIA
(U.K.)L is primarily responsible for choosing investments for Emerging
Markets Fund, Europe Fund, and Nordic Fund. Currentl y, FIJ is
primarily responsible for choosing investments for Japan Fund and
Japan Small er Companies Fund.
For discretionary investment management and execution of portfolio
transactions, no fees were paid to FMR U.K., FMR Far East, FIIA,
FIIA(U.K.)L, or FIJ on behalf of Canada Fund and Europe Capital
Appreciation Fund for the past three fiscal years.
For discretionary investment management and execution of portfolio
transactions, fees paid to FIIA, FIIA(U.K.)L, and FIJ on behalf of
Emerging Markets Fund, Europe Fund, Hong Kong and China Fund, Japan
Fund, Japan Small er Companies Fund, Latin America Fund,
Nordic Fund, Pacific Basin Fund, and Southeast Asia Fund for the
past three fiscal years are shown in the table below.
Fiscal Year Ended October 31 FIIA* FIIA(U.K.)L FIJ*
Emerging Markets Fund
1999 $ 1,032,343 $ 271,883 $ 0
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Europe Fund
1999 $ 3,342,771 $ 1,173,702 $ 0
1998 $ 3,337,270 $ 1,841,726 $ 0
1997 $ 3,469,914 $ 1,630,394 $ 0
Hong Kong and China Fund
1999 $ 565,181 $ 0 $ 0
1998 $ 573,302 $ 0 $ 0
1997 $ 812,733 $ 0 $ 0
Japan Fund
1999 $ 232,548 $ 0 $ 1,811,331
1998 $ 1,202,885 $ 0 $ 0
1997 $ 1,337,897 $ 0 $ 0
Japan Smaller Companies Fund
1999 $ 0 $ 0 $ 2,613,937
1998 $ 0 $ 0 $ 351,549
1997 $ 0 $ 0 $ 351,251
Latin America Fund
1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Nordic Fund
1999 $ 313,079 $ 84,643 $ 0
1998 $ 265,220 $ 118,106 $ 0
1997 $ 255,453 $ 149,480 $ 0
Pacific Basin Fund
1999 $ 195,409 $ 0 $ 0
1998 $ 1,127,973 $ 0 $ 0
1997 $ 1,186,431 $ 0 $ 0
Southeast Asia Fund
1999 $ 1,391,758 $ 0 $ 0
1998 $ 1,351,153 $ 0 $ 0
1997 $ 2,191,832 $ 0 $ 0
* Prior to August 1, 1999, FMR paid FIIA and FIJ a fee equal to 50% of
its monthly management fee (including any performance adjustment) with
respect to the fund's average net assets managed by the sub-adviser on
a discretionary basis.
DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the funds, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenues collected by FDC for the fiscal year ended
1997 are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Sales Charge Revenue Deferred Sales Charge Revenue
Fiscal Year Ended October 31 Amount Paid to FDC Amount Paid to FDC
Canada Fund 1997 $ 131,248 $ 3,646
Emerging Markets Fund 1997 $ 756,295 N/A
Europe Fund 1997 $ 729,707 $ 20,431
Europe Capital Appreciation 1997 $ 887,094 N/A
Fund
Hong Kong and China Fund 1997 $ 1,509,043 N/A
Japan Fund 1997 $ 592,638 N/A
Japan Smaller Companies Fund 1997 $ 274,403 N/A
Latin America Fund 1997 $ 2,213,110 N/A
Nordic Fund 1997 $ 348,689 N/A
Pacific Basin Fund 1997 $ 218,156 $ 15,796
Southeast Asia Fund 1997 $ 381,009 N/A
</TABLE>
Sales charge revenues collected and retained by FDC for the
fiscal years ended 1998 and 1999 are shown in the table below.
<TABLE>
<CAPTION>
Sales Charge Revenue Deferred Sales Charge Revenue
Fiscal Year Ended Amount Paid to FDC Amount Retained by FDC Amount Paid to FDC
<S> <C> <C> <C> <C>
Canada Fund October 31,
1999 $ 15,360 $ 15,360 $ 3,145
1998 $ 18,905 $ 18,905 $ 4,018
Emerging Markets Fund October 31,
1999 $ 377,395 $ 377,019 N/A
1998 $ 361,040 $ 359,570 N/A
Europe Fund October 31,
1999 $ 513,062 $ 512,932 $ 52,904
1998 $ 1,670,671 $ 1,668,232 $ 44,535
Europe Capital Appreciation October 31,
Fund
1999 $ 299,716 $ 299,687 N/A
1998 $ 1,074,774 $ 1,068,074 N/A
Hong Kong and China Fund October 31,
1999 $ 216,345 $ 216,270 N/A
1998 $ 420,670 $ 420,487 N/A
Japan Fund October 31,
1999 $ 1,800,232 $ 1,779,715 N/A
1998 $ 397,863 $ 396,298 N/A
Japan Smaller Companies
Fund October 31,
1999 $ 6,014,883 $ 6,010,566 N/A
1998 $ 128,795 $ 128,795 N/A
Latin America Fund October 31,
1999 $ 343,731 $ 343,725 N/A
1998 $ 323,761 $ 323,203 N/A
Nordic Fund October 31,
1999 $ 123,563 $ 123,293 N/A
1998 $ 258,454 $ 257,334 N/A
Pacific Basin Fund October 31,
1999 $ 534,718 $ 533,043 $ 9,916
1998 $ 144,033 $ 142,818 $ 16,130
Southeast Asia Fund October 31,
1999 $ 537,360 $ 536,707 N/A
1998 $ 507,395 $ 506,629 N/A
</TABLE>
<TABLE>
<CAPTION>
Amount Retained by FDC
<S> <C>
Canada Fund
$ 3,145
$ 4,018
Emerging Markets Fund
N/A
N/A
Europe Fund
$ 52,904
$ 44,535
Europe Capital Appreciation
Fund
N/A
N/A
Hong Kong and China Fund
N/A
N/A
Japan Fund
N/A
N/A
Japan Smaller Companies Fund
N/A
N/A
Latin America Fund
N/A
N/A
Nordic Fund
N/A
N/A
Pacific Basin Fund
$ 9,916
$ 16,130
Southeast Asia Fund
N/A
N/A
</TABLE>
FDC may compensate intermediaries (such as banks, broker-dealers and
other service-providers) that satisfy certain criteria established
from time to time by FDC relating to the level or type of services
provided by the intermediary, the sale or expected sale of significant
amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state tuition
program (QSTP), as defined under the Small Business Job Protection Act
of 1996, managed by FMR or an affiliate and in each Fidelity Freedom
Fund and Fidelity Four-in-One Index Fund, funds of funds managed by an
FMR affiliate, according to the percentage of the QSTP's, Freedom
Fund's or Fidelity Four-in-One Index Fund's assets that is invested in
a fund, subject to certain limitations in the case of Fidelity
Four-in-One Index Fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month.
The annual rates for pricing and bookkeeping services for the funds
are 0.0550% of the first $500 million of average net assets, 0.0425%
of average net assets between $500 million and $3 billion, and 0.0010%
of average net assets in excess of $3 billion. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 1999 1998 1997
Canada Fund $ 60,507 $ 62,402 $ 96,809
Emerging Markets Fund $ 199,065 $ 297,918 $ 588,031
Europe Fund $ 700,773 $ 700,120 $ 518,194
Europe Capital Appreciation $ 322,577 $ 396,823 $ 251,788
Fund
Hong Kong and China Fund $ 87,291 $ 117,732 $ 164,562
Japan Fund $ 250,589 $ 180,786 $ 222,118
Japan Smaller Companies Fund $ 299,025 $ 72,061 $ 74,385
Latin America Fund $ 194,140 $ 401,285 $ 514,541
Nordic Fund $ 64,661 $ 82,144 $ 60,492
Pacific Basin Fund $ 199,312 $ 157,269 $ 261,996
Southeast Asia Fund $ 173,873 $ 179,603 $ 401,403
For administering each fund's securities lending program, FSC is
paid based on the number and duration of individual securities
loans.
Payments made by the funds to FSC for securities lending for
the past three fiscal years are shown in the table below.
Fund 1999 1998 1997
Canada Fund $ 0 $ 0 $ 0
Emerging Markets Fund $ 14 $ 0 $ 0
Europe Fund $ 51 $ 0 $ 0
Europe Capital Appreciation $ 18 $ 0 $ 0
Fund
Hong Kong and China Fund $ 4,295 $ 0 $ 0
Japan Fund $ 36 $ 0 $ 0
Japan Smaller Companies Fund $ 2 $ 0 $ 0
Latin America Fund $ 4 $ 0 $ 0
Nordic Fund $ 5 $ 0 $ 0
Pacific Basin Fund $ 21 $ 0 $ 0
Southeast Asia Fund $ 19 $ 0 $ 0
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. 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, and Fidelity Southeast Asia
Fund are funds of Fidelity Investment Trust, an open-end management
investment company organized as a Massachusetts business trust on
April 20, 1984. Currently, there are 20 funds in Fidelity Investment
Trust: Fidelity Canada Fund, Fidelity Diversified International Fund,
Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe
Capital Appreciation Fund, Fidelity France Fund, Fidelity Germany
Fund, Fidelity Global Balanced Fund, Fidelity Hong Kong and China
Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Japan
Smaller Companies Fund, Fidelity Latin America Fund, Fidelity
Nordic Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund,
Fidelity Southeast Asia Fund, Fidelity United Kingdom Fund, and
Fidelity Worldwide Fund. The Trustees are permitted to create
additional funds in the trusts.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust provides that the trust shall not have any
claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust shall include a provision limiting the
obligations created thereby to the trust and its assets.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.
The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or any of its funds may be terminated upon the sale of its
assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by a vote of
shareholders of the trust or the fund. In the event of the dissolution
or liquidation of the trust, shareholders of each of its funds are
entitled to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a
fund, shareholders of that fund are entitled to receive the underlying
assets of the fund available for distribution.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of Canada Fund, Hong Kong
and China Fund, Japan Smaller Companies Fund, Latin America
Fund, and Nordic Fund. The Chase Manhattan Bank, 1 Chase Manhattan
Plaza, New York, New York, is custodian of the assets of Emerging
Markets Fund, Europe Fund, Europe Capital Appreciation Fund, Japan
Fund, Pacific Basin Fund, and Southeast Asia Fund. Each custodian is
responsible for the safekeeping of a f und's assets and the
appointment of any subcustodian banks and clearing agencies. The Bank
of New York, headquartered in New York, also may serve as a special
purpose custodian of certain assets in connection with repurchase
agreement transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. The Boston branch of Canada Fund, Hong Kong and
China Fund, Japan Smaller Companies Fund, Latin America Fund ,
and Nordic Fund's custodian leases its office space from an
affiliate of FMR at a lease payment which, when and entered into, was
consistent with prevailing market rates. Transactions that have
occurred to date include mortgages and personal and general business
loans. In the judgment of FMR, the terms and conditions of those
transactions were not influenced by existing or potential custodial or
other fund relationships.
AUDITOR. P ricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts serves as independent accountant for Canada Fund,
Emerging Markets Fund, Europe Fund , Hong Kong and China Fund,
Japan Fund, Japan Smaller Companies Fund, Latin America Fund, Nordic
Fund, Pacific Basin Fund, and Southeast Asia Fund. The auditor
examines financial statements for the funds and provides other audit,
tax, and related services.
Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts
serves as independent accountant for Europe Capital Appreciation
Fund. The auditor examines financial statements for the fund and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended October 31, 1999, and report of the auditor, are
included in the fund's annual report and are incorporated herein by
reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus,
Fidelity Investments, and Magellan are registered trademarks of FMR
Corp.
Portfolio Advisory Services is a service mark of FMR Corp.
THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.

SUPPLEMENT TO FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
DECEMBER 29, 1999 PROSPECTUS

On February 17, 2000, the Board of Trustees of Fidelity Europe Fund
and Fidelity Europe Capital Appreciation Fund authorized elimination
of each fund's 3.00% front-end sales charge. Beginning March 1, 2000,
purchases of shares of the funds will not be subject to a sales
charge.

In addition, on February 17, 2000, the Board of Trustees of
Fidelity Europe Fund and Fidelity Europe Capital Appreciation Fund
authorized the reduction of each fund's redemption fee period from 90
days to 30 days. Redemptions after February 29, 2000, of shares held
less than 30 days will be subject to a redemption fee of 1.00% of the
amount redeemed.

On February 17, 2000, the Board of Trustees of Fidelity Pacific
Basin Fund approved increasing the redemption fee from 1.00% to 1.50%.
Redemptions after May 31, 2000 of shares held less than 90 days will
be subject to a redemption fee of 1.50% of the amount redeemed.

The following information replaces similar information found under
the heading "Average Annual Returns" found in the "Performance"
section on page P-12.

The returns in the following table include the effect of each
fund's 3.00% maximum applicable front-end sales charge, which has been
eliminated effective March 1, 2000, for Europe Fund and Europe Capital
Appreciation Fund.

The following information replaces similar information found in the
"Fee Table" section on page P-13.

SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)

Maximum sales charge (load) 3.00%A
on purchases (as a % of
offering price) for Canada
Fund, Emerging Markets Fund,
Hong Kong and China Fund,
Japan Fund, Japan Smaller
Companies Fund, Latin
America Fund, Nordic Fund,
Pacific Basin Fund, and
Southeast Asia Fund only

Sales charge (load) on None
reinvested distributions

Deferred sales charge (load) None
on redemptions

Redemption fee on shares held 1.50%
less than 90 days (as a % of
amount redeemed) for Canada
Fund, Emerging Markets Fund,
Hong Kong and China Fund,
Japan Fund, Japan Smaller
Companies Fund, Latin
America Fund, Nordic Fund,
and Southeast Asia Fund only

Redemption fee on shares held 1.50%
less than 90 days that are
redeemed after May 31, 2000
(as a % of amount redeemed)
for Pacific Basin Fund only

Redemption fee on shares held 1.00%
less than 90 days that are
redeemed on or before May
31, 2000 (as a % of amount
redeemed) for Pacific Basin
Fund only

Redemption fee on shares held 1.00%
less than 30 days (as a % of
amount redeemed) for Europe
Fund and Europe Capital
Appreciation Fund only

Annual account maintenance $ 12.00
fee (for accounts under
$2,500)

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

The following information replaces similar information found in the
"Fee Table" section on page P-15.

EUROPE FUND 1 year $ 98

3 years $ 306

5 years $ 531

10 years $ 1,178

EUROPE CAPITAL APPRECIATION 1 year $ 109
FUND

3 years $ 340

5 years $ 590

10 years $ 1,306

The following information replaces the first three paragraphs under
the heading "Buying Shares" found in the "Buying and Selling Shares"
section on page P-23.

The price to buy one share of Europe Fund or Europe Capital
Appreciation Fund is the fund's NAV. Each fund's shares are sold
without a sales charge. The price to buy one share of Canada Fund,
Emerging Markets Fund, Hong Kong and China Fund, Japan Fund, Japan
Smaller Companies Fund, Latin America Fund, Nordic Fund, Pacific Basin
Fund, or Southeast Asia Fund is the fund's offering price or the
fund's NAV, depending on whether you pay a sales charge.

If you pay a sales charge, your price will be the fund's offering
price. When you buy shares of a fund at the offering price, Fidelity
deducts the appropriate sales charge and invests the rest in the fund.
If you qualify for a sales charge waiver, your price will be the
fund's NAV.

The offering price of Canada Fund, Emerging Markets Fund, Hong Kong
and China Fund, Japan Fund, Japan Smaller Companies Fund, Latin
America Fund, Nordic Fund, Pacific Basin Fund, or Southeast Asia Fund
is the fund's NAV divided by the difference between one and the
applicable sales charge percentage. The maximum sales charge is 3.00%
of the offering price.

The following information replaces the second paragraph under the
heading "Selling Shares" found in the "Buying and Selling Shares"
section on page P-25.

Canada Fund, Emerging Markets Fund, Hong Kong and China Fund, Japan
Fund, Japan Smaller Companies Fund, Latin America Fund, Nordic Fund,
and Southeast Asia Fund will deduct a short-term trading fee of 1.50%
from the redemption amount if you sell your shares after holding them
less than 90 days. Europe Fund and Europe Capital Appreciation Fund
will deduct a short-term trading fee of 1.00% from the redemption
amount if you sell your shares after holding them less than 30 days.
Pacific Basin Fund will deduct a short-term trading fee of 1.00% from
the redemption amount if you sell your shares on or before May 31,
2000 after holding them less than 90 days, and will deduct a
short-term trading fee of 1.50% from the redemption amount if you sell
your shares after May 31, 2000 after holding them less than 90 days.
This fee is paid to the fund rather than Fidelity, and is designed to
offset the brokerage commissions, market impact, and other costs
associated with fluctuations in fund asset levels and cash flow caused
by short-term shareholder trading.

The following information replaces similar information under the
heading "Features" found in the "Account Features and Policies"
section on page P-27.

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

FREQUENCY PROCEDURES

Monthly (small solid bullet) To set
up, call 1-800-544-6666.

(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.

(small solid bullet) Because
of Canada Fund's, Emerging
Markets Fund's, Hong Kong
and China Fund's, Japan
Fund's, Japan Smaller
Companies Fund's, Latin
America Fund's, Nordic
Fund's, Pacific Basin
Fund's, and Southeast Asia
Fund's front-end sales
charge, you may not want to
set up a systematic
withdrawal program when you
are buying Canada Fund's,
Emerging Markets Fund's,
Hong Kong and China Fund's,
Japan Fund's, Japan Smaller
Companies Fund's, Latin
America Fund's, Nordic
Fund's, Pacific Basin
Fund's, or Southeast Asia
Fund's shares on a regular
basis.

Effective April 1, 2000, the following information replaces similar
information found in the "Fund Management" section on page P-30.

Patricia Satterthwaite is vice president and lead manager of Latin
America Fund, and vice president and manager of Emerging Markets Fund,
which she has managed since April 1993 and April 2000, respectively.
She also manages other Fidelity funds. Since joining Fidelity in 1986,
Ms. Satterthwaite has worked as an analyst and manager.

Effective April 1, 2000, the following information replaces similar
information found in the "Fund Management" section on page P-30.

(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
each fund. As of September 28, 1999, FIIA(U.K.)L had approximately
$2.6 billion in discretionary assets under management. Currently,
FIIA(U.K.)L is primarily responsible for choosing investments for
Europe Fund and Nordic Fund. Currently, FIIA(U.K.)L provides
investment research and advice on issuers based outside the United
States and may also provide investment advisory services for Canada
Fund, Emerging Markets Fund, Europe Capital Appreciation Fund, Hong
Kong and China Fund, Japan Fund, Japan Smaller Companies Fund, Latin
America Fund, Pacific Basin Fund, and Southeast Asia Fund.

The following information replaces similar information found in the
"Fund Distribution" section on page P-32.

FDC distributes each fund's shares.

You may pay a sales charge when you buy your shares of Canada Fund,
Emerging Markets Fund, Hong Kong and China Fund, Japan Fund, Japan
Smaller Companies Fund, Latin America Fund, Nordic Fund, Pacific Basin
Fund, and Southeast Asia Fund.

FDC collects the sales charge.

Canada Fund's, Emerging Markets Fund's, Hong Kong and China Fund's,
Japan Fund's, Japan Smaller Companies Fund's, Latin America Fund's,
Nordic Fund's, Pacific Basin Fund's, and Southeast Asia Fund's sales
charge may be reduced if you buy directly through Fidelity or through
prototype or prototype-like retirement plans sponsored by FMR or FMR
Corp. The amount you invest, plus the value of your account, must fall
within the ranges shown below. Purchases made with assistance or
intervention from a financial intermediary are not eligible for a
sales charge reduction.

SALES CHARGE

RANGES AS A % OF OFFERING PRICE AS AN APPROXIMATE % OF NET
AMOUNT INVESTED

$0 - 249,999 3.00% 3.09%

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

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

$1,000,000 OR MORE NONE NONE

FDC may pay a portion of sales charge proceeds to securities
dealers who have sold Canada Fund's, Emerging Markets Fund's, Hong
Kong and China Fund's, Japan Fund's, Japan Smaller Companies Fund's,
Latin America Fund's, Nordic Fund's, Pacific Basin Fund's, or
Southeast Asia Fund's shares, or to others, including banks and other
financial institutions (qualified recipients), under special
arrangements in connection with FDC's sales activities. The sales
charge paid to qualified recipients is 1.50% of a fund's offering
price.

The following information replaces similar information found in the
"Fund Distribution" section on page P-32.

SUPPLEMENT TO
FIDELITY'S 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 (FORMERLY FIDELITY JAPAN SMALL
COMPANIES FUND),
FIDELITY LATIN AMERICA FUND, FIDELITY NORDIC FUND, FIDELITY PACIFIC
BASIN FUND, AND
FIDELITY SOUTHEAST ASIA FUND
DECEMBER 29, 1999
STATEMENT OF ADDITIONAL INFORMATION

ON FEBRUARY 17, 2000, THE BOARD OF TRUSTEES OF FIDELITY EUROPE FUND
AND FIDELITY EUROPE CAPITAL APPRECIATION FUND AUTHORIZED ELIMINATION
OF EACH FUND'S 3.00% FRONT-END SALES CHARGE. BEGINNING MARCH 1, 2000,
PURCHASES OF SHARES OF THE FUNDS WILL NOT BE SUBJECT TO A SALES
CHARGE.

IN ADDITION, ON FEBRUARY 17, 2000, THE BOARD OF TRUSTEES OF
FIDELITY EUROPE FUND AND FIDELITY EUROPE CAPITAL APPRECIATION FUND
AUTHORIZED THE REDUCTION OF EACH FUND'S REDEMPTION FEE PERIOD FROM 90
DAYS TO 30 DAYS. REDEMPTIONS AFTER FEBRUARY 29, 2000 OF SHARES HELD
LESS THAN 30 DAYS WILL BE SUBJECT TO A REDEMPTION FEE OF 1.00% OF THE
AMOUNT REDEEMED.

ON FEBRUARY 17, 2000, THE BOARD OF TRUSTEES OF FIDELITY PACIFIC
BASIN FUND APPROVED INCREASING THE REDEMPTION FEE FROM 1.00% TO 1.50%.
REDEMPTIONS AFTER MAY 31, 2000 OF SHARES HELD LESS THAN 90 DAYS WILL
BE SUBJECT TO A REDEMPTION FEE OF 1.50% OF THE AMOUNT REDEEMED.

THE FOLLOWING INFORMATION REPLACES THE FIRST TWO PARAGRAPHS
FOLLOWING THE HEADING "HISTORICAL FUND RESULTS" FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 34.

Canada Fund, Emerging Markets Fund, Hong Kong and China Fund, Japan
Fund, Japan Smaller Companies Fund, Latin America Fund, Nordic Fund,
Pacific Basin Fund, and Southeast Asia Fund have a maximum front-end
sales charge of 3.00% which is included in the average annual and
cumulative returns.

Europe Fund and Europe Capital Appreciation Fund had a maximum
front-end sales charge of 3.00% (eliminated effective March 1, 2000)
which is included in the average annual and cumulative returns.

For Europe Fund and Europe Capital Appreciation Fund, returns do
not include the effect of the funds' 1.00% short-term trading fee,
applicable to shares held less than 90 days that were redeemed on or
before February 29, 2000.

For Pacific Basin Fund, returns do not include the effect of the
fund's 1.00% short-term trading fee, applicable to shares held less
than 90 days that are redeemed on or before May 31, 2000.

For Canada Fund, Emerging Markets Fund, Hong Kong and China Fund,
Japan Fund, Japan Smaller Companies Fund, Latin America Fund, Nordic
Fund, Pacific Basin Fund, and Southeast Asia Fund, returns do not
include the effect of the funds' 1.50% short-term trading fee,
applicable to shares held less than 90 days.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 37.

During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Europe Fund would have grown to $32,385,
including the effect of the fund's maximum sales charge, which was
eliminated effective March 1, 2000.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 37.

Explanatory Notes: With an initial investment of $10,000 in Europe
Fund on November 1, 1989, assuming the maximum sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $17,759. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $1,728 for
dividends and $4,676 for capital gain distributions. The figures in
the table do not include the effect of the fund's 1.00% short-term
trading fee, applicable to shares held less than 90 days that were
redeemed on or before February 29, 2000.

During the period from December 21, 1993 (commencement of
operations) to October 31, 1999, a hypothetical $10,000 investment in
Europe Capital Appreciation Fund would have grown to $23,822,
including the effect of the fund's maximum sales charge, which was
eliminated effective March 1, 2000.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION BEGINNING ON PAGE 37.

Explanatory Notes: With an initial investment of $10,000 in Europe
Capital Appreciation Fund on December 21, 1993, assuming the maximum
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $14,212. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $601 for dividends and $3,279 for capital gain
distributions. The figures in the table do not include the effect of
the fund's 1.00% short-term trading fee, applicable to shares held
less than 90 days that were redeemed on or before February 29,
2000.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 40.

Explanatory Notes: With an initial investment of $10,000 in Pacific
Basin Fund on November 1, 1989, assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $12,461. If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to $479
for dividends and $1,795 for capital gain distributions. The figures
in the table do not include the effect of the fund's 1.00% short-term
trading fee, applicable to shares held less than 90 days that are
redeemed on or before May 31, 2000.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 45.

Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right
to waive Canada Fund's, Emerging Markets Fund's, Hong Kong and China
Fund's, Japan Fund's, Japan Smaller Companies Fund's, Latin America
Fund's, Nordic Fund's, Pacific Basin Fund's, and Southeast Asia Fund's
front-end sales charge on shares acquired through reinvestment of
dividends and capital gain distributions or in connection with a
fund's merger with or acquisition of any investment company or trust.
In addition, FDC has chosen to waive Canada Fund's, Emerging Markets
Fund's, Hong Kong and China Fund's, Japan Fund's, Japan Smaller
Companies Fund's, Latin America Fund's, Nordic Fund's, Pacific Basin
Fund's, and Southeast Asia Fund's front-end sales charge in certain
instances due to sales efficiencies and competitive considerations.
The sales charge will not apply:

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 46.

Canada Fund's, Emerging Markets Fund's, Hong Kong and China Fund's,
Japan Fund's, Japan Smaller Companies Fund's, Latin America Fund's,
Nordic Fund's, Pacific Basin Fund's, and Southeast Asia Fund's sales
charge may be reduced to reflect sales charges previously paid, or
that would have been paid absent a reduction for some purchases made
directly with Fidelity as noted in the prospectus, in connection with
investments in other Fidelity funds. This includes reductions for
investments in prototype-like retirement plans sponsored by FMR or FMR
Corp., which are listed above.

On October 12, 1990, each of Canada Fund, Europe Fund, and Pacific
Basin Fund changed its sales charge policy from a 2% sales charge upon
purchase and a 1% deferred sales charge upon redemption, to a 3% sales
charge upon purchase. If you purchased shares prior to that date, when
you redeem those shares a deferred sales charge of 1% of the
redemption amount will be deducted. On March 1, 2000, the 3% sales
charge was eliminated for Europe Fund.

THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 47.

E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (automotive, space, defense, and
information technology), CSX Corporation (freight transportation),
Birmingham Steel Corporation (producer of steel and steel products),
and RPM, Inc. (manufacturer of chemical products), and he previously
served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining, 1985-1997), and as a
Trustee of First Union Real Estate Investments (1986-1997). In
addition, he serves as a Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the Executive Committee as well as
Chairman of the Board and President, a Trustee of University School
(Cleveland), and a Trustee of Cleveland Clinic Florida.

RICHARD A. SILVER (52), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).

J. GARY BURKHEAD (58), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.

THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 47.

NED C. LAUTENBACH (55), Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).

THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 47.

MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer of
the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.

ROBERT A. DWIGHT (41),Treasurer (2000), is Treasurer of the Fidelity
funds and is an employee of FMR. Prior to becoming Treasurer of the
Fidelity funds, he served as President of Fidelity Accounting and
Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.

THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 47.

The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended October 31, 1999, or
calendar year ended December 31, 1998, as applicable.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION
FROM A Edward C. Johnson 3d** Abigail P. Johnson ** Ralph F. Cox Phyllis Burke Davis Robert M. Gates
FUND

Canada FundB $ 0 $ 0 $ 14 $ 13 $ 14

Emerging Markets FundB $ 0 $ 0 $ 96 $ 93 $ 96

Europe FundB $ 0 $ 0 $ 445 $ 427 $ 441

Europe Capital Appreciation $ 0 $ 0 $ 176 $ 169 $ 174
FundB

Hong Kong and China FundB $ 0 $ 0 $ 43 $ 41 $ 43

Japan FundB $ 0 $ 0 $ 116 $ 112 $ 116

Japan Smaller Companies FundB $ 0 $ 0 $ 147 $ 142 $ 146

Latin America FundB $ 0 $ 0 $ 98 $ 94 $ 97

Nordic FundB $ 0 $ 0 $ 31 $ 30 $ 31

Pacific Basin FundB $ 0 $ 0 $ 91 $ 88 $ 91

Southeast Asia FundB $ 0 $ 0 $ 83 $ 80 $ 83

TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 223,500 $ 220,500 $ 223,500
FUND COMPLEX*,A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION
FROM A E. Bradley Jones *** Donald J. Kirk Ned C. Lautenbach **** Peter S. Lynch ** William O. McCoy
FUND

Canada FundB $ 13 $ 13 $ 1 $ 0 $ 14

Emerging Markets FundB $ 96 $ 95 $ 10 $ 0 $ 96

Europe FundB $ 441 $ 438 $ 31 $ 0 $ 441

Europe Capital Appreciation $ 174 $ 173 $ 11 $ 0 $ 174
FundB

Hong Kong and China FundB $ 43 $ 42 $ 4 $ 0 $ 43

Japan FundB $ 116 $ 115 $ 18 $ 0 $ 116

Japan Smaller Companies FundB $ 147 $ 146 $ 40 $ 0 $ 146

Latin America FundB $ 97 $ 97 $ 7 $ 0 $ 97

Nordic FundB $ 31 $ 31 $ 2 $ 0 $ 31

Pacific Basin FundB $ 90 $ 90 $ 14 $ 0 $ 91

Southeast Asia FundB $ 82 $ 82 $ 9 $ 0 $ 83

TOTAL COMPENSATION FROM THE $ 222,000 $ 226,500 $ 0 $ 0 $ 223,500
FUND COMPLEX*,A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION FROM A Gerald C. McDonough Marvin L. Mann Robert C. Pozen ** Thomas R. Williams
FUND

Canada FundB $ 17 $ 14 $ 0 $ 13

Emerging Markets FundB $ 119 $ 96 $ 0 $ 94

Europe FundB $ 545 $ 441 $ 0 $ 433

Europe Capital Appreciation $ 215 $ 174 $ 0 $ 171
FundB

Hong Kong and China FundB $ 53 $ 43 $ 0 $ 42

Japan FundB $ 144 $ 116 $ 0 $ 114

Japan Smaller Companies FundB $ 184 $ 146 $ 0 $ 143

Latin America FundB $ 120 $ 97 $ 0 $ 95

Nordic FundB $ 38 $ 31 $ 0 $ 30

Pacific Basin FundB $ 113 $ 91 $ 0 $ 89

Southeast Asia FundB $ 103 $ 83 $ 0 $ 81

TOTAL COMPENSATION FROM THE $ 273,500 $ 220,500 $ 0 $ 223,500
FUND COMPLEX*,A

</TABLE>

* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.

** Interested Trustees of the funds and Ms. Johnson are compensated by
FMR.

*** Mr. Jones served on the Board of Trustees through December 31,
1999.

**** During the period from October 14, 1999 through December 31,
1999, Mr. Lautenbach served as a Member of the Advisory Board.
Effective January 1, 2000, Mr. Lautenbach serves as a Member of the
Board of Trustees.

A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.

B Compensation figures include cash.

EFFECTIVE APRIL 1, 2000, THE FOLLOWING INFORMATION REPLACES SIMILAR
INFORMATION IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 56.

Currently, FIIA is primarily responsible for choosing investments for
Southeast Asia Fund and Hong Kong and China Fund. Currently, FIIA
(U.K.)L is primarily responsible for choosing investments for Europe
Fund and Nordic Fund. Currently, FIJ is primarily responsible for
choosing investments for Japan Fund and Japan Smaller Companies Fund.

FIDELITY (LOGO) FMR Corp. 82 Devonshire
INVESTMENTS(registered Street Boston MA 02109-3614
trademark) 617-563-7000

March 1, 2000

Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Attention: File Room

Re: Fidelity Investment Trust
(the trust):

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 (formerly
Fidelity Japan Small
Companies Fund) Fidelity
Latin America Fund Fidelity
Nordic Fund Fidelity
Pacific Basin Fund Fidelity
Southeast Asia Fund (the
funds')

File Nos. 2-90649 and 811-4008

______________________________________________________________________

Ladies and Gentlemen:

Transmitted herewith for filing pursuant to Rule 497(e) under the
Securities Act of 1933 are Supplements, dated March 1, 2000, to the
funds' Prospectus and Statement of Additional Information, each dated
December 29, 1999. The documents have been marked to indicate changes
made since the last filing.

Very truly yours,

/s/Nicole Garceau
Nicole Garceau

Legal Department

(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)
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Telephone (FAST SM) 1-800-544-5555
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Investments
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FIDELITY'S TARGETED INTERNATIONAL EQUITY FUNDS
FIDELITY FRANCE FUND, FIDELITY GERMANY FUND, AND FIDELITY UNITED
KINGDOM FUND
FUNDS OF FIDELITY INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 29, 1999
This statement of additional information (SAI) is not a prospectus.
Portions of each fund's annual report are incorporated herein. The
annual report is supplied with this SAI.
To obtain a free additional copy of the prospectus, dated December 29,
1999, or an annual report, please call Fidelity(registered trademark)
at 1-800-544-8544 or visit Fidelity's Web site at www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 22
Limitations
Special Considerations 29
Regarding Canada
Special Considerations 29
Regarding Europe
Special Considerations 30
Regarding Japan
Special Considerations 30
Regarding Asia Pacific
Region (ex Japan)
Special Considerations 30
Regarding Latin America
Special Considerations 31
Regarding Russia
Special Considerations 31
Regarding Africa
Portfolio Transactions 31
Valuation 34
Performance 34
Additional Purchase, Exchange 43
and Redemption Information
Distributions and Taxes 44
Trustees and Officers 44
Control of Investment Advisers 48
Management Contracts 48
Distribution Services 54
Transfer and Service Agent 55
Agreements
Description of the Trust 56
Financial Statements 57
Appendix 57
(fidelity_logo_graphic)
(registered trademark)
82 Devonshire Street, Boston, MA 02109
EFG-ptb-1299
1.733675.100
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF FRANCE FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 44.
For purposes of investing at least 65% of the fund's total assets in
securities of French issuers, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
INVESTMENT LIMITATIONS OF GERMANY FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 45.
For purposes of investing at least 65% of the fund's total assets in
securities of German issuers, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
INVESTMENT LIMITATIONS OF UNITED KINGDOM FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).
(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 46.
For purposes of investing at least 65% of the fund's total assets in
securities of British issuers, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity , and diversification of their investments.
COMMON STOCK. represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. For example, many
foreign countries are less prepared than the United States to properly
process and calculate information related to dates from and after
January 1, 2000. As a result, some foreign markets, brokers, banks or
securities depositories could experience at least temporary
disruptions, which could result in difficulty buying and selling
securities in certain foreign markets and pricing foreign investments,
and foreign issuers could fail to pay timely dividends, interest or
principal. In addition, the costs associated with foreign investments,
including withholding taxes, brokerage commissions and custodial
costs, are generally higher than with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements involve
an agreement to purchase a foreign security and to sell that security
back to the original seller at an agreed-upon price in either
U.S. dollars or foreign currency. Unlike typical U.S. repurchase
agreements, foreign repurchase agreements may not be fully
collateralized at all times. The value of a security purchased by a
fund may be more or less than the price at which the counterparty has
agreed to repurchase the security. In the event of default by the
counterparty, the fund may suffer a loss if the value of the security
purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve
higher credit risks than repurchase agreements in U.S. markets, as
well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging
markets may involve issuers or counterparties with lower credit
ratings than typical U.S. repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Futures can be held until their
delivery dates, or can be closed out before then if a liquid secondary
market is available.
Futures may be based on foreign indexes such as the CAC 40 (France),
DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
ISSUER LOCATION. FMR determines where an issuer or its principal
activities are located by looking at such factors as the issuer's
country of organization, the primary trading market for the issuer's
securities, and the location of the issuer's assets, personnel, sales,
and earnings. The issuer of a security is considered to be located in
a particular country if (1) the security is issued or guaranteed by
the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary
trading market in that country; or (3) the issuer is organized under
the laws of that country, derives at least 50% of its revenues or
profits from goods sold, investments made, or services performed in
the country, or has at least 50% of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
PREFERRED STOCK represents an equity or ownership interest in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of bonds
take precedence over the claims of those who own preferred and common
stock.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
( NYSE ) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. 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. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to invest
without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
SPECIAL CONSIDERATIONS REGARDING CANADA
POLITICAL. Canada's parliamentary system of government is, in general,
stable. However, from time to time, some provinces, but particularly
Quebec, have called for a revamping of the legal and financial
relationship between the federal government in Ottawa and the
provinces. To date, referendums on Quebec sovereignty have been
defeated, but the issue remains unresolved. The Supreme Court of
Canada decided in August 1998 that if there was a "clear answer" to a
"clear question" in a referendum, then the federal government would be
obliged to negotiate with Quebec.
ECONOMIC. Canada is a major producer of commodities such as forest
products, metals, agricultural products, and energy related products
like oil, gas, and hydroelectricity. Accordingly, changes in the
supply and demand of industrial and basic materials, both domestically
and internationally, can have a significant effect on Canadian market
performance.
In addition, Canada relies considerably on the health of the United
States' economy, its biggest trading partner and largest foreign
investor. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities market increasingly sensitive to U.S. economic and market
events.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. Since Canada let its currency float in 1970, its
value has been in a steady decline against the U.S. dollar. While the
decline has helped Canada stay competitive in export markets, U.S.
investors have seen their investment returns eroded by the impact of
currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
On January 1, 1999, eleven of the fifteen member countries of the
European Union (EU) fixed their currencies irrevocably to the euro,
the new unit of currency of the European Economic and Monetary Union
(EMU). At that time each member's currency was converted at a fixed
rate to the euro. Initially, use of the euro will be confined mainly
to the wholesale financial markets, while its widespread use in the
retail sector will follow the circulation of euro bank- notes and
coins on January 1, 2002. At that time, the national banknotes and
coins of participating member countries will cease to be legal tender.
In addition to adopting a single currency, member countries will no
longer control their own monetary policies. Instead, the authority to
direct monetary policy will be exercised by the new European Central
Bank.
While economic and monetary convergence in the European Union may
offer new opportunities for those investing in the region, investors
should be aware that the success of the union is not wholly assured.
Europe must grapple with a number of challenges, any one of which
could threaten the survival of this monumental undertaking. Eleven
disparate economies must adjust to a unified monetary system, the
absence of exchange rate flexibility, and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized, and its cultures differ widely. Unemployment is
historically high and could pose political risk. One or more member
countries might exit the union, placing the currency and banking
system in jeopardy.
POLITICAL. For those countries in Western and Eastern Europe that were
not included in the first round of the EU implementation, the
prospects for eventual membership serve as a strong political impetus
for many governments to employ tight fiscal and monetary policies.
Particularly for the Eastern European countries, aspirations to join
the EU are likely to push governments to act decisively.
At the same time, there could become an increasingly widening gap
between rich and poor within the aspiring countries, those countries
who are close to meeting membership criteria, and those who are not
likely to join the EMU. Realigning traditional alliances could alter
trading relationships and potentially provoke divisive socioeconomic
splits. Despite relative calm in Western Europe in recent years, the
risk of regional conflict or targeted terrorist activity could disrupt
European markets.
In the transition to the single economic system, significant political
decisions will be made which will effect the market regulation,
subsidization, and privatization across all industries, from
agricultural products to telecommunications.
ECONOMIC. As economic conditions across member states vary from robust
to dismal, there is continued concern about national-level support for
the currency and the accompanying coordination of fiscal and wage
policy among the eleven EMU member nations. According to the Maastrich
treaty, member countries must maintain inflation below 3.3%, public
debt below 60% of GDP, and a deficit of 3% or less of GDP to qualify
for participation in the euro. These requirements severely limit
member countries' ability to implement monetary policy to address
regional economic conditions. Countries that did not qualify for the
euro, such as Greece, risk being left farther behind.
FOREIGN TRADE. The EU has recently been involved in a number of trade
disputes with major trading partners, including the United States.
Tariffs and embargoes have been levied upon imports of agricultural
products and meat that have resulted in the affected nation levying
retaliatory tariffs upon imports from Europe. These disputes can
adversely affect the valuations of the European companies that export
the targeted products.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. However, investing in euro-denominated securities
entails risk of being exposed to a new currency that may not fully
reflect the strengths and weaknesses of the disparate economies that
make up the Union. This has been the case in the first six months of
1999, when the initial exchange rates of the euro versus many of the
world's major currencies steadily declined. In this environment, U.S.
and other foreign investors experienced erosion of their investment
returns in the region. In addition, many European countries rely
heavily upon export dependent businesses and any strength in the
exchange rate between the euro and the dollar can have either a
positive or a negative effect upon corporate profits.
GERMANY. The German economy is heavily industrialized, with a strong
emphasis on manufacturing and exports. Therefore, Germany's economic
growth is heavily dependent on the prosperity of its trading partners
and on currency exchange rates. Germany is closely tied to a number of
Eastern European emerging market economies and weakness in these
economies will likely dampen demand for German exports. Germany
continues to struggle with its incorporation of former East Germany
and the country as a whole faces high labor costs and high
unemployment.
FRANCE. In recent years, the country's economic growth has been hit by
a series of general strikes. France's strong labor unions reacted
negatively to government cuts driven by the country's effort to meet
EMU membership criteria. Recently, unions have demanded a lower
retirement age and a shorter work week. Economic growth also is
limited by the country's pay-as-you-go pension system; spending on
pensions accounts for about 10% of GDP.
NORDIC COUNTRIES. Faced with stronger global competition, the Nordic
countries - Norway, Finland, Denmark, and Sweden - have had to scale
down their historically generous welfare programs, resulting in drops
in domestic demand and increased unemployment. Major industries in the
region, such as forestry, agriculture, and oil, are heavily resource
dependent and face pressure as a result of high labor costs. Pension
reform, union regulation, and further cuts in liberal social programs
will likely need to be addressed as the Nordic countries face
increased international competition.
UNITED KINGDOM. The United Kingdom continues to be overtly less
enthusiastic about EMU than other countries in Europe and has not
committed itself to joining the euro. While the UK views independence
from the EMU as a competitive advantage, the country may not benefit
from its independence if economic conditions on the continent improve.
If the continental European stock markets make more compelling
prospects for economic growth, there is concern that the UK market may
lag its European counterparts.
EASTERN EUROPE. Investing in the securities of Eastern European
issuers is highly speculative and involves risks not usually
associated with investing in the more developed markets of Western
Europe.
The economies of the Eastern European nations are embarking on the
transition from communism at different paces with appropriately
different characteristics. Most Eastern European markets suffer from
thin trading activity, dubious investor protections, and often, a
dearth of reliable corporate information. Information and transaction
costs, differential taxes, and sometimes political or transfer risk
give a comparative advantage to the domestic investor rather than the
foreign investor. In addition, these markets are particularly
sensitive to political, economic, and currency events in Russia and
have recently suffered heavy losses as a result of their trading and
investment links to the troubled Russian economy and currency.
SPECIAL CONSIDERATIONS REGARDING JAPAN
Fueled by public investment, protectionist trade policies, and
innovative management styles, the Japanese economy has transformed
itself since World War II into the world's second largest economy.
Despite its impressive history, investors face special risks when
investing in Japan.
ECONOMIC. Since Japan's bubble economy collapsed eight years ago, the
nation has drifted between modest growth and recession. By mid-year
1998, the world's second largest economy had slipped into its deepest
recession since World War II. Much of the blame can be placed on
government inaction in implementing long-neglected structural reforms
despite strong and persistent prodding from the International Monetary
Fund and the G7 member nations. Steps have been taken to deregulate
and liberalize protected areas of the economy, but the pace of change
has been disappointedly slow.
The most pressing need for action is the daunting task of overhauling
the nation's financial institutions and securing public support for
taxpayer-funded bailouts. Banks, in particular, must dispose of their
huge overhang of bad loans and trim their balance sheets in
preparation for greater competition from foreign institutions as more
areas of the financial sector are opened. Successful financial sector
reform would allow Japan's financial institutions to act as a catalyst
for economic recovery at home and across the troubled Asian region.
FOREIGN TRADE. Much of Japan's economy is dependent upon international
trade. The country is a leading exporter of automobiles and industrial
machinery as well as industrial and consumer electronics. While the
United States is Japan's largest single trading partner, close to half
of Japan's trade is conducted with developing nations, almost all of
which are in Southeast Asia. For the past two years, Southeast Asia's
economies have been mired in economic stagnation causing a steep
decline in Japan's exports to the area. Much of Japan's hopes for
economic recovery and renewed export growth is largely dependent upon
the pace of economic recovery in Southeast Asia.
NATURAL RESOURCE DEPENDENCY. An island nation with limited natural
resources, Japan is also heavily dependent upon imports of essential
products such as oil, forest products, and industrial metals.
Accordingly, Japan's industrial sector and domestic economy are highly
sensitive to fluctuations in international commodity prices. In
addition, many of these commodities are traded in U.S. dollars and any
strength in the exchange rate between the yen and the dollar can have
either a positive or a negative effect upon corporate profits.
NATURAL DISASTERS. The Japanese islands have been subjected to
periodic natural disasters including earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industries.
SPECIAL CONSIDERATIONS REGARDING ASIA PACIFIC REGION (EX JAPAN)
Many countries in the region have historically faced political
uncertainty, corruption, military intervention, and social unrest.
Examples include the ethnic, sectarian, and separatist violence found
in Indonesia, and the nuclear arms threats between India and Pakistan.
To the extent that such events continue in the future, they can be
expected to have a negative effect on economic and securities market
conditions in the region.
ECONOMIC. The economic health of the region depends, in great part, on
each country's respective ability to carry out fiscal and monetary
reforms and its ability to address the International Monetary Fund's
mandated benchmarks. The majority of the countries in the region can
be characterized as either developing or newly industrialized
economies, which tend to experience more volatile economic cycles than
developed countries. In addition, a number of countries in the region
have historically faced hyperinflation, a deterrent to productivity
and economic growth.
CURRENCY. For U.S. investors, investing in any currency entails an
additional risk that is not faced when investing in the domestic
market. Some countries in the region may impose restrictions on
converting local currency, effectively preventing foreigners from
selling assets and repatriating funds. While flexible exchange rates
through most of the region should allow greater control of domestic
liquidity conditions, the region's currencies generally face
above-average volatility with potentially negative implications for
economic and security market conditions.
NATURAL DISASTERS. The Asia Pacific region has been subjected to
periodic natural disasters such as earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industry.
CHINA AND HONG KONG. As with all transition economies, China's ability
to develop and sustain a credible legal, regulatory, monetary, and
socioeconomic system could influence the course of outside investment.
Hong Kong is closely tied to China, economically and through China's
1997 acquisition of the country as a Special Autonomous Region (SAR).
Hong Kong's success depends, in large part, on its ability to retain
the legal, financial and monetary systems that allow economic freedom
and market expansion.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
As an emerging market, Latin America has long suffered from political,
economic, and social instability. For investors, this has meant
additional risk caused by periods of regional conflict, political
corruption, totalitarianism, protectionist measures, nationalization,
hyperinflation, debt crises, and currency devaluation. However, much
has changed in the past decade. Democracy is beginning to become well
established in some countries. A move to a more mature and accountable
political environment is well under way. Domestic economies have been
deregulated and have enjoyed sound levels of growth. Privatization of
state-owned companies is almost completed. Foreign trade restrictions
have been relaxed. Large fiscal deficits have been reduced and
inflation controlled. Nonetheless, the volatile stock markets of 1998
have clearly demonstrated that investors in the region continue to
face a number of potential risks.
POLITICAL. While investors recently have benefited from friendlier
forms of government, the Latin American political climate is still
vulnerable to sudden changes. Many countries in the region have been
in recession and have faced high unemployment. Corruption remains part
of the political landscape. This could lead to social unrest and
changes in governments that are less favorable to investors. The
investor friendly trends of social, economic, and market reforms seen
over the past several years could be reversed. Also, as has
historically been the case, the stock markets may be subject to
increased volatility as some countries approach elections: Argentina,
Chile, Mexico, and Peru.
SOCIAL UNREST. Latin America continues to suffer from one of the most
inequitable distributions of wealth in the world, as well as rampant
delinquency and street crime. The recent reforms and the move to
democracy, which were initially welcomed by the population, so far
have failed to significantly improve the living conditions of the
majority of people. This could lead to social unrest, occasional labor
strikes, rebellion, or civil war.
ECONOMIC. Many countries in the region have experienced periods of
hyperinflation which adversely impacted and may continue to impact
their economies and local stock markets. Despite signs that inflation
has been tamed, the risk of hyperinflation persists.
FOREIGN TRADE. One key to the recent economic growth in the region has
been the reduction of trade barriers and a series of free-trade
agreements. These are currently under pressure given the recent
macro-economic imbalances between many trading partners. One example
would be Mercosur, which includes Argentina, Brazil, Uruguay, and
Paraguay. As long as the economies perform well and the regimes
maintain similar economic and currency policies, all will benefit from
this agreement. However, the recent devaluation of Brazil's currency,
combined with recessions in the region, has created tension between
the largest trading partners, Brazil and Argentina. This could
threaten the pace of vital trade integration and regional economic
stability.
CURRENCY. For U.S. investors, investing in any foreign market entails
the risk of currency fluctuations; any weakness in the local currency
could erode the investment returns to U.S. investors upon currency
conversion. As is typical of emerging markets, Latin America has a
long history of currency devaluation, evidenced by the Mexican peso
crisis and the more recent Brazilian devaluation. The region remains
exposed to currency speculators, particularly if the economic or
political conditions worsen. Countries where the currency is
artificially pegged to the dollar are most at risk. For example,
predatory speculation may shift to Argentina if the cost of
maintaining the currency board reaches an unsustainable level given
the negative impact of the Brazilian devaluation, the economic
recession, the deterioration of the foreign trade balances, and the
mounting fiscal deficit.
SOVEREIGN DEBT. Although austerity programs in many countries have
significantly reduced fiscal deficits, the region is still facing
significant debt. Interest on the debt is subject to market conditions
and may reach levels that would impair economic activity and create a
difficult and costly environment for borrowers. In addition,
governments may be forced to reschedule or freeze their debt
repayment, which could negatively impact the stock market.
NATURAL RESOURCES DEPENDENCY. Commodities such as agricultural
products, minerals, and metals account for a significant percentage of
exports of many Latin American countries. As a result, these economies
have been particularly sensitive to the fluctuation of commodity
prices. As an example, Chile has been affected by the change in the
prices of copper and pulp, which has adversely affected its economy
and stock market. Similarly, because the U.S. is Mexico's largest
trading partner - accounting for more than four-fifths of its exports
- - - any economic downturn in the U.S. economy could adversely impact the
Mexican economy and stock market.
NATURAL DISASTERS. The region has been subjected to periodic natural
disasters, such as earthquakes and floods. These events have often
inflicted substantial damage upon the populations and the economy.
More recently, weather disorders attributed to the "El Nino" effect
have placed a serious drag on the economy of some countries, such as
Peru and Ecuador.
FINANCIAL REPORTING STANDARDS. As is typical of many emerging markets,
many companies in the region are still controlled by families and
their associates. Accordingly, these owners may not always act in the
best interests of public shareholders. In addition, rules for
disclosing financial information are less stringent, which increases
the difficulty of accessing reliable and viable information.
SPECIAL CONSIDERATIONS REGARDING RUSSIA
Investing in Russian securities is highly speculative and involves
greater risks than generally encountered when investing in the
securities markets of the U.S. and most other developed countries.
Over the past century, Russia has experienced political and economic
turbulence and has endured decades of communist rule under which tens
of millions of its citizens were collectivized into state agricultural
and industrial enterprises. For most of the past decade, Russia's
government has been faced with the daunting task of stabilizing its
domestic economy, while transforming it into a modern and efficient
structure able to compete in international markets and respond to the
needs of its citizens. However, to date, many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other economic assistance have been squandered or stolen. In this
environment, there is always the risk that the nation's government
will abandon the current program of economic reform and replace it
with radically different political and economic policies that would be
detrimental to the interests of foreign investors. This could entail a
return to a centrally planned economy and nationalization of private
enterprises similar to what existed under the old Soviet Union. As
recently as 1998, the government imposed a moratorium on the repayment
of its international debt and the restructuring of the repayment
terms.
Foreign investors also face a high degree of currency risk when
investing in Russian securities. In a surprise move in August 1998,
Russia devalued the ruble, defaulted on short-term domestic bonds, and
declared a moratorium on commercial debt payments. In light of these
and other recent government actions, foreign investors face the
possibility of further devaluations. In addition, there is the risk
the government may impose capital controls on foreign portfolio
investments in the event of extreme financial or political crisis.
Such capital controls would prevent the sale of a portfolio of foreign
assets and the repatriation of proceeds.
Many of Russia's businesses have failed to mobilize the available
factors of production because the country's privatization program
virtually ensured the predominance of the old management teams that
are largely non-market-oriented in their management approach. A
combination of poor accounting standards, inept management, endemic
corruption, and limited shareholder rights pose a significant risk,
particularly to foreign investors.
Compared to most national stock markets, the Russian securities market
suffers from a variety of problems not encountered in more developed
markets. Among these are thin trading activity, inadequate regulatory
protection for the rights of investors, and lax custody procedures.
Additionally, there is a dearth of solid corporate information
available to investors.
The Russian economy is heavily dependent upon the export of a range of
commodities including most industrial metals, forestry products, oil,
and gas. Accordingly, it is strongly affected by international
commodity prices and is particularly vulnerable to any weakening in
global demand for these products.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of over
50 countries and 840 million people. Civil wars, coups, and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, the continent is home to an abundance of natural
resources, including natural gas, aluminum, crude oil, copper, iron,
bauxite, cotton, diamonds, and timber. Wealthier African countries
generally have strong connections to European partners; evidence of
these relationships is seen in the growing market capitalization and
foreign investment. Economic performance remains closely tied to world
commodity markets, particularly oil, as well as agricultural
conditions, such as drought.
Several Northern African countries have substantial oil reserves and,
accordingly, their economies react strongly to world oil prices. They
share a regional and sometimes religious identification with the oil
producing nations of the Middle East and can be strongly affected by
political and economic developments in those countries. As in the
south, weather conditions have a strong impact on many of their
natural resources, as was the case in 1995, when severe drought
adversely affected economic growth.
Several African countries have active equity markets, many established
since 1989. The oldest market, in Egypt, was established in 1883,
while the youngest, in Zambia, was established in 1994. The mean age
for all equity markets is 40 years old. A total of 1,830 firms are
listed on the respective exchanges. With the exception of the
relatively large and liquid South African stock market, sub-Saharan
Africa is probably the riskiest of all the world's emerging markets.
During the past two decades, sub-Saharan Africa has lagged behind
other developing regions in economic growth. The area attracts only a
modest share of foreign direct investment and remains highly dependent
on foreign aid. The financial markets are small and underdeveloped and
offer little regulatory protection for investors. Except for South
Africa, the most fundamental problems in all of the countries in the
region are the absence of an effective court system to ensure the
enforceability of contracts. Investors in the area generally face a
high risk of continuing political and economic instability as well as
currency exchange rate volatility.
SOUTH AFRICA. South Africa has a highly developed and industrialized
economy. It is rich in mineral resources and is the world's largest
producer and exporter of gold. The nation's new government has made
remarkable progress in consolidating the nation's peaceful transition
to democracy and in redressing the socioeconomic disparities created
by apartheid. It has a sophisticated financial structure with a large
and active stock exchange that ranks 19th in the world in terms of
market capitalization. Nevertheless, investors in South Africa face a
number of risks common to other developing regions. The nation's heavy
dependence upon the export of natural resources makes its economy and
stock market vulnerable to weak global demand and declines in
commodity prices. The country's currency reserves have been a constant
problem and its currency can be vulnerable to devaluation. There is
also the risk that ethnic and civic conflict could result in the
abandonment of many of the nation's free market reforms to the
detriment of shareholders.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
F or the fiscal periods ended October 31, 1999 and 1998, the
portfolio turnover rates were 118 % and 182% for France Fund,
132% and 139% for Germany Fund, and 78 % and 191% for United
Kingdom Fund. Variations in turnover rate may be due to fluctuating
volume of shareholder purchase and redemption orders, market
conditions, or changes in FMR's investment outlook.
The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.
The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended Total Amount Paid
France Fund October 31
1999 $ 75,883
1998 $ 120,951
1997 $ 35,607
Germany Fund
1999 $ 145,666
1998 $ 200,174
1997 $ 69,561
United Kingdom Fund
1999 $ 12,361
1998 $ 20,208
1997 $ 10,578
The following table shows the total amount of brokerage commissions
paid by each fund to FBS for the past three fiscal years.
FBS is paid on a commission basis.
Total Amount Paid
Fiscal Year Ended To FBS
France Fund October 31
1999 $ 0
1998 0
1997 601
Germany Fund
1999 0
1998 8,519
1997 12,760
United Kingdom Fund
1999 0
1998 61
1997 0
The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 1999 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*
France Fund October 31 $ 62,528 $ 28,996,215
Germany Fund October 31 $ 122,063 $ 60,480,982
United Kingdom Fund October 31 $ 11,127 $ 6,906,534
</TABLE>
* The provision of research services was not necessarily a factor in
the placement of all this business with such firms.
The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds managed by FMR or investment accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each fund's NAV is the value of a single share. The NAV of each fund
is computed by adding the value of the fund's investments, cash, and
other assets, subtracting its liabilities, and dividing the result by
the number of shares outstanding.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or closing bid price normally is used. Securities of other
open-end investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's share price and
return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than
their original cost.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a fund's NAV over a
stated period. A cumulative return reflects actual performance over a
stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's maximum sales charge,
short-term trading fee, or small account fee. Excluding a fund's sales
charge, short-term trading fee, or small account fee from a return
calculation produces a higher return figure. Returns and other
performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs,
and benchmark indexes may be used to exhibit performance. An adjusted
NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted
NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average. The
13-week and 39-week long-term moving averages for each fund are shown
in the table below.
Fund 13-Week Long-Term Moving 39-Week Long-Term Moving
Average Average
France Fund* $ 16.97 $ 16.34
Germany Fund* $ 14.65 $ 14.49
United Kingdom Fund* $ 14.63 $ 14.77
* On October 29, 1999 .
HISTORICAL FUND RESULTS. The following table shows each fund's returns
for the fiscal periods ended October 31, 1999.
Each fund has a maximum front-end sales charge of 3.00%, which is
included in the average annual and cumulative returns.
Returns do not include the effect of a fund's $25 exchange fee, which
was in effect from December 1, 1987 through October 23, 1989, or the
effect of France Fund's, Germany Fund's, and United Kingdom Fund's
1.50% short-term trading fee, applicable to shares held less than 90
days.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
One Year Life of Fund* Life of Fund*
Five Years One Year Five Years
France Fund 18.04% N/A 19.57% 18.04% N/A 104.39%
Germany Fund -1.75% N/A 13.31% -1.75% N/A 64.83%
United Kingdom Fund 9.11% N/A 13.95% 9.11% N/A 68.58%
</TABLE>
* From November 1, 1995 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during these
periods, each fund 's returns would have been lower.
The following tables show the income and capital elements of each
fund's cumulative return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500(registered
trademark)), the Dow Jones Industrial Average (DJIA), and the cost of
living, as measured by the Consumer Price Index (CPI), over the same
period. The S&P 500 and DJIA comparisons are provided to show how each
fund's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Each fund has the ability to invest in securities not included
in either index, and its investment portfolio may or may not be
similar in composition to the indexes. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the life of each fund, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments (with the exception of foreign tax withholdings)
have not been factored into the figures below.
During the period from November 1, 1995 (commencement of
operations) to October 31, 1999, a hypothetical $10,000 investment
in France Fund would have grown to $20,439, including the
effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FRANCE FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 17,412 $ 371 $ 2,656 $ 20,439 $ 25,014
1998 $ 14,308 $ 304 $ 2,183 $ 16,795 $ 19,905
1997 $ 12,872 $ 230 $ 681 $ 13,783 $ 16,317
1996* $ 11,873 $ 47 $ 0 $ 11,920 $ 12,350
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FRANCE FUND
1999 $ 24,201 $ 10,931
1998 $ 19,083 $ 10,677
1997 $ 16,248 $ 10,521
1996* $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in France
Fund on November 1, 1995 , assuming the maximum sales
c harge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 12,025 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 233 for
dividends and $ 1,70 7 for capital gain distributions. The
figures in the table do not include the effect of the fund's 1.50%
short-term trading fee applicable to shares held less than 90 days.
During the period from November 1, 1995 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in Germany Fund would have grown to $ 16,483,
i ncluding the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GERMANY FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 14,531 $ 12 $ 1,940 $ 16,483 $ 25,014
1998 $ 14,346 $ 13 $ 1,915 $ 16,274 $ 19,905
1997 $ 12,843 $ 11 $ 398 $ 13,252 $ 16,317
1996* $ 11,000 $ 0 $ 0 $ 11,000 $ 12,350
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
GERMANY FUND
Fiscal Year Ended DJIA Cost of Living**
1999 $ 24,201 $ 10,931
1998 $ 19,083 $ 10,677
1997 $ 16,248 $ 10,521
1996* $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Germany
Fund on November 1, 1995 , assuming the maximum sales charge had
been in effect, the net amount invested in fund shares was
$9 ,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $11,6 00. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $10 for dividends and $1,552 for capital
gain distributions. The figures in the table do not include the
effect of the fund's 1.50% short-term trading fee applicable to shares
held less than 90 days.
During the period from November 1, 1995 (commencement of
operations) to October 31, 1999 , a hypothetical $10,000
investment in United Kingdom Fund would have grown to $16,85 8,
including the effect of the fund's maximum sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
UNITED KINGDOM FUND INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 14,201 $ 583 $ 2,074 $ 16,858 $ 25,014
1998 $ 13,541 $ 399 $ 1,047 $ 14,987 $ 19,905
1997 $ 13,784 $ 209 $ 235 $ 14,228 $ 16,317
1996* $ 11,533 $ 47 $ 0 $ 11,580 $ 12,350
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
UNITED KINGDOM FUND
Fiscal Year Ended DJIA Cost of Living**
1999 $ 24,201 $ 10,931
1998 $ 19,083 $ 10,677
1997 $ 16,248 $ 10,521
1996* $ 12,923 $ 10,306
</TABLE>
* From November 1, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in United
Kingdom Fund on November 1, 1995 , assuming the maximum sales
charge had been in effect, the net amount invested in fund shares was
$ 9,700 . The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $ 12,39 3. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $485 for dividends and $1,775 for
capital gain distributions. The figures in the table do not
include the effect of the fund's 1.50% short-term trading fee
applicable to shares held less than 90 days.
INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the International Finance Corporation Emerging
Markets database, and the performance of national stock markets as
measured in U.S. dollars by the Morgan Stanley Capital International
stock market indexes for the twelve months ended October 31, 1999. Of
course, these results are not indicative of future stock market
performance or the funds' performance. Market conditions during the
periods measured fluctuated widely. Brokerage commissions and other
fees are not factored into the values of the indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew to $ 9,147.2 billion in
October 1999 ($18,463.2 billion including the U.S.).
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of each market is measured
in billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION
Australia $ 210.6 Malaysia $ 66.8
Austria $ 22.0 Netherlands $ 470.7
Belgium $ 104.2 Norway $ 34.1
Canada $ 372.6 Singapore $ 87.8
Denmark $ 67.9 Spain $ 235.4
France $ 838.7 Sweden $ 201.8
Germany $ 838.1 Switzerland $ 561.0
Hong Kong $ 192.6 United Kingdom $ 1,783.8
Italy $ 334.2 United States $ 9,316.0
Japan $ 2,509.3
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of each market is measured in
billions of U.S. dollars as of October 31, 1999.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 22.0
Brazil $ 87.4
Chile $ 32.6
Colombia $ 3.3
Mexico $ 98.7
Venezuela $ 6.8
Peru $ 7.0
Total Latin America $ 257.8
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended October 31, 1999. The second table shows the
same performance as measured in local currency. Each table measures
return based on the period's change in price, dividends paid on stocks
in the index, and the effect of reinvesting dividends net of any
applicable foreign taxes. These are unmanaged indexes composed of a
sampling of selected companies representing an approximation of the
market structure of the designated country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia 11.43% Malaysia 184.38%
Austria -14.33% Netherlands 12.31%
Belgium -5.05% Norway 3.11%
Canada 35.31% Singapore 90.23%
Denmark 7.20% Spain 0.85%
France 24.30% Sweden 47.73%
Germany 7.48% Switzerland -0.59%
Hong Kong 27.24% United Kingdom 13.25%
Italy 1.55% United States 26.21%
Japan 58.40%
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 8.80% Malaysia 99.02%
Austria -3.75% Netherlands 26.08%
Belgium 6.69% Norway 9.71%
Canada 28.65% Singapore 94.38%
Denmark 20.41% Spain 13.13%
France 39.60% Sweden 55.68%
Germany 20.76% Switzerland 11.85%
Hong Kong 27.63% United Kingdom 15.58%
Italy 14.20% United States 26.21%
Japan 41.86%
The following table shows the average annualized stock market returns
measured in U.S. dollars as of October 31, 1999.
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
1999 1999
Germany 15.87% 13.41%
Hong Kong 6.06% 18.32%
Japan -0.90% -1.39%
Spain 23.55% 11.99%
United Kingdom 17.59% 15.18%
United States 26.28% 17.59%
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market
mutual fund performance indexes prepared by Lipper or other
organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The return of each index reflects reinvestment of all
dividends and capital gains paid by securities included in each index.
Unlike a fund's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
France Fund may compare its performance to that of the Societe des
Bourses Francaises (SBF) 250, a market capitalization-weighted index
of the stocks of the 250 largest companies in the French market.
Germany Fund may compare its performance to that of the Deutscher
Akteinindex (DAX) 100, a market-weighted index of the 100 most heavily
traded stocks in the German market.
United Kingdom Fund may compare its performance to that of the FT -
All Shares Index, a market capitalization -weighted index of over 700
stocks traded in the U.K. market.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of October 31, 1999, FMR advised over $ 33 billion in
municipal fund assets, $ 136 billion in taxable fixed-income
fund assets, $ 140 billion in money market fund assets,
$ 567 billion in equity fund assets, $ 18 billion in
international fund assets, and $ 43 billion in Spartan fund
assets. The funds may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive each fund's front-end sales charge on shares acquired through
reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive each fund's
front-end sales charge in certain instances due to sales efficiencies
and competitive considerations. The sales charge will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs
but otherwise as defined in the Employee Retirement Income Security
Act) maintained by a U.S. employer and having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary
group of corporations (within the meaning of Section 1563(a)(1) of the
Internal Revenue Code, with "50%" substituted for "80%") any member of
which maintains an employee benefit plan having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity
mutual funds, the assets of which are held in a bona fide trust for
the exclusive benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used
to fund annuity contracts purchased by employee benefit plans
(including 403(b) programs, but otherwise as defined in the Employee
Retirement Income Security Act), which, in the aggregate, have either
more than 200 eligible employees or a minimum of $3,000,000 in assets
invested in Fidelity funds;
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan provided that: (i) at the time of the distribution, the employer,
or an affiliate (as described in waiver (1) above) of such employer,
maintained at least one employee benefit plan that qualified for
waiver (1) above and that had at least some portion of its assets
invested in one or more mutual funds advised by FMR, or in one or more
investment accounts or pools advised by Fidelity Management Trust
Company; and (ii) either (a) the distribution is transferred from the
plan to a Fidelity IRA account within 60 days from the date of the
distribution or (b) the distribution is transferred directly from the
plan into another Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the Trust Portfolios funds and
must, during the initial six-month period, reach and maintain an
aggregate balance of at least $500,000 in all accounts and subaccounts
purchased through the Trust Portfolios program);
7. to shares purchased by a mutual fund or a qualified state tuition
program for which FMR or an affiliate serves as investment manager;
8. to shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services SM;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited or their
direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a
Fidelity Trustee or employee;
10. to shares purchased by a bank trust officer, registered
representative, or other employee of a qualified recipient. Qualified
recipients are securities dealers or other entities, including banks
and other financial institutions, who have sold the fund's shares
under special arrangements in connection with FDC's sales activities;
11. to shares purchased by contributions and exchanges to the
following prototype or prototype-like retirement plans sponsored by
FMR Corp. or FMR and that are marketed and distributed directly to
plan sponsors or participants without any intervention or assistance
from any intermediary distribution channel: The Fidelity Traditional
IRA, The Fidelity Roth IRA, The Fidelity Rollover IRA, The Fidelity
SEP-IRA and SARSEP, The Fidelity SIMPLE IRA, The Fidelity Retirement
Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The
Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype
Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement
(Profit Sharing and Money Purchase Plan);
12. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains
all of its mutual fund assets in Fidelity mutual funds, provided the
plan executes a Fidelity non-prototype sales charge waiver request
form confirming its qualification;
13. to shares purchased by a registered investment adviser (RIA) for
his or her discretionary accounts, provided he or she executes a
Fidelity RIA load waiver agreement which specifies certain aggregate
minimum and operating provisions. This waiver is available only for
shares purchased directly from Fidelity, without a broker, unless
purchased through a brokerage firm which is a correspondent of
National Financial Services Corporation (NFSC). The waiver is
unavailable, however, if the RIA is part of an organization
principally engaged in the brokerage business, unless the brokerage
firm in the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution or bank trust
department for its non-discretionary, non-retirement fiduciary
accounts, provided it executes a Fidelity Trust load waiver agreement
which specifies certain aggregate minimum and operating provisions.
This waiver is available only for shares purchased either directly
from Fidelity or through a bank-affiliated broker, and is unavailable
if the trust department or institution is part of an organization not
principally engaged in banking or trust activities.
A fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction for
some purchases made directly with Fidelity as noted in the prospectus,
in connection with investments in other Fidelity funds. This includes
reductions for investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed above.
A fund may make redemption payments in whole or in part in
readily marketable securities or other property, valued for
this purpose as they are valued in computing each fund's NAV, if FMR
determines it is in the best interests of the fund. Shareholders
that receive securities or other property on redemption may
realize a gain or loss for tax purposes, and will incur any costs of
sale, as well as the associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund invests significantly in foreign
securities, corporate shareholders should not expect fund dividends to
qualify for the dividends-received deduction. Short-term capital gains
are taxable as dividends, but do not qualify for the
dividends-received deduction.
CAPITAL GAIN DISTRIBUTIONS. Each fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
As of October 31, 1999, France Fund had a capital loss carryforward
aggregating approximately $694,000. This loss carryforward, all of
which will expire on October 31, 2006, is available to offset future
capital gains.
As of October 31, 1999, Germany Fund had a capital loss
carryforward aggregating approximately $5,231,000. This loss
carryforward, of which $2,136,000 and $3,095,000 will expire on
October 31, 2006 and 2007, respectively, is available to offset future
capital gains.
As of October 31, 1999, United Kingdom Fund had a capital loss
carryforward aggregating approximately $2,000. This loss carryforward,
all of which will expire on October 31, 2007, is available to offset
future capital gains.
RETURNS OF CAPITAL. If a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may withhold
taxes on dividends and interest earned by a fund with respect to
foreign securities. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. If, at the close
of its fiscal year, more than 50% of a fund's total assets is invested
in securities of foreign issuers, the fund may elect to pass through
eligible foreign taxes paid and thereby allow shareholders to take a
deduction or, if they meet certain holding period requirements with
respect to fund shares, a credit on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments(registered trademark), P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons"
by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (69), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Investment Trust, is Mr.
Johnson's daughter.
ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Investment Trust (1999), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
J. GARY BURKHEAD (58), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (67), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste
Management Inc. (non-hazardous waste, 1993), CH2M Hill
Companies (engineering), and Bonnevillle Pacific (independent
power and petroleum production ). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (67), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S.
sales, distribution, and manufacturing. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing), and the TJX Companies, Inc. (retail
stores), and previously served as a Director of Hallmark Cards,
Inc. , Nabisco Brands, Inc. , and Standard Brands, Inc. In
addition, she is a member of the Board of Directors of the
Southampton Hospital in Southampton, N.Y. (1998).
ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a director of
Lucas Varity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A&M University (1999-2000). Mr. Gates also
is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (automotive, space, defense, and
information technology), CSX Corporation (freight transportation),
Birmingham Steel Corporation (producer of steel and steel
products), and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining
and manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining , 1985-1997 ), and
as a Trustee of First Union Real Estate Investments
(1986-1997) . In addition, he serves as a Trustee of the Cleveland
Clinic Foundation, where he has also been a member of the Executive
Committee as well as Chairman of the Board and President, a Trustee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. From 1987 to January
1995, Mr. Kirk was a Professor at Columbia University Graduate School
of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a
Director of Valuation Research Corp. (appraisals and valuations,
1993-1995). He serves as Chairman of the Board of Directors of
National Arts Stabilization Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association, Director of the Yale-New Haven
Health Services Corp. (1998), a Vice Chairman of the Public
Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
NED C. LAUTENBACH (55), Member of the Advisory Board (1999), has
been a partner of Clayton, Dubilier & Rice, Inc. (private equity
investment firm) since September 1998. Mr. Lautenbach was Senior Vice
President of IBM Corporation from 1992 until his retirement in July
1998. From 1993 to 1995 he was Chairman of IBM World Trade
Corporation. He also was a member of IBM's Corporate Executive
Committee from 1994 to July 1998. He is a Director of PPG Industries
Inc. (glass, coating and chemical manufacturer), Dynatech Corporation
(global communications equipment), Eaton Corporation (global
manufacturer of highly engineered products) and ChoicePoint Inc. (data
identification, retrieval, storage, and analysis).
*PETER S. LYNCH (56), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan(registered trademark) Fund and FMR
Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was
also Vice President of Fidelity Investments Corporate Services
(1991-1992). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and
Society for the Preservation of New England Antiquities, and as an
Overseer of the Museum of Fine Arts of Boston.
WILLIAM O. McCOY (66), Trustee (1997), is the Interim Chancellor
for the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Duke- Weeks Realty
Corporation (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), the Kenan Transport Company (trucking,
1996), and Dynatech Corporation (electronics, 1999). Previously,
he was a Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy serve d as a member of the
Board of Visitors for the University of North Carolina at Chapel Hill
(1994 -1998 ) and currently serves on the Board of Visitors
of the Kenan-Flager Business School (University of North Carolina
at Chapel Hill, 1988).
GERALD C. McDONOUGH (71), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the
Board of York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (hydraulic systems,
building systems, and metal products, 1992), CUNO, Inc. (liquid and
gas filtration products, 1996), and Associated Estates Realty
Corporation (a real estate investment trust, 1993). Mr. McDonough
served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (66), Trustee (1993), is Chairman Emeritus, of
Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. Prior to 1991, he held the
positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna
Company (chemicals, 1993), Imation Corp. (imaging and information
storage, 1997). He is a Board member of Dynatech Corporation
(electronics, 1999).
*ROBERT C. POZEN (53), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a
Director National Life Insurance Company of Vermont and American
Software, Inc. Mr. Williams was previously a Director of ConAgra,
Inc. (agricultural products), Georgia Power Company (electric
utility), and Avado , Inc. (restaurants).
RICHARD A. SPILLANE, JR. (48), is Vice President of certain Equity
Funds and Senior Vice President of FMR (1997). Since joining Fidelity,
Mr. Spillane is Chief Investment Officer for Fidelity International,
Limited. Prior to that position, Mr. Spillane served as Director of
Research.
ERIC D. ROITER (50), Secret ary (1998), is Vice President (1998)
and General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).
RICHARD A. SILVER (52), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
MATTHEW N. KARSTETTER (38), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
JOHN H. COSTELLO (53), Assistant Treasurer, is an employee of FMR.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended October 31, 1999, or
calendar year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Aggregate Compensation from
Advisory Board France FundB Germany FundB United Kingdom FundB
Edward C. Johnson 3d** $ 0 $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox $ 4 $ 8 $ 2
Phyllis Burke Davis $ 4 $ 7 $ 2
Robert M. Gates $ 4 $ 8 $ 2
E. Bradley Jones $ 4 $ 8 $ 2
Donald J. Kirk $ 4 $ 8 $ 2
Ned C. Lautenbach*** $ 0 $ 0 $ 0
Peter S. Lynch** $ 0 $ 0 $ 0
William O. McCoy $ 4 $ 8 $ 2
Gerald C. McDonough $ 5 $ 9 $ 3
Marvin L. Mann $ 4 $ 8 $ 2
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ 4 $ 8 $ 2
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustees and Members of the Total Compensation from the
Advisory Board Fund Complex*,A
Edward C. Johnson 3d** $ 0
Abigail P. Johnson** $ 0
J. Gary Burkhead** $ 0
Ralph F. Cox $ 223,500
Phyllis Burke Davis $ 220,500
Robert M. Gates $ 223,500
E. Bradley Jones $ 222,000
Donald J. Kirk $ 226,500
Ned C. Lautenbach*** $ 0
Peter S. Lynch** $ 0
William O. McCoy $ 223,500
Gerald C. McDonough $ 273,500
Marvin L. Mann $ 220,500
Robert C. Pozen** $ 0
Thomas R. Williams $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** Effective October 14, 1999, Mr. Lautenbach serves as a Member
of the Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of October 31, 1999 , approximately 27.03 % of
United Kingdom Fund's and 17.97% of France Fund's total
outstanding shares were held by an FMR affiliate. FMR Corp. is
the ultimate parent company of this FMR affiliate. By virtue of their
ownership interest in FMR Corp., as described in the "Control of
Investment Advisers" section on page 97, Mr. Edward C. Johnson 3d,
President and Trustee of the fund, and Ms. Abigail P. Johnson, Member
of the Advisory Board of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's and Ms. Johnson's deemed ownership of United Kingdom
Fund's and France Fund's shares, the Trustees, Members of the
Advisory Board, and officers of the funds owned, in the aggregate,
less than 1 % of each fund's total outstanding shares.
As of October 31, 1999 , the following owned of record or
beneficially 5% or more (up to and including 25%) of each fund's
outstanding shares:
France Fund: FMR Capital, Boston, MA (17.97%).
Germany Fund: Kohler Foundation Inc., Kohler, WI (9.25%).
United Kingdom Fund: FMR Capital, Boston, MA (27.03%).
A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
FMR U.K., and FMR Far East. The voting common stock of FMR Corp. is
divided into two classes. Class B is held predominantly by members of
the Edward C. Johnson 3d family and is entitled to 49% of the vote on
any matter acted upon by the voting common stock. Class A is held
predominantly by non-Johnson family member employees of FMR Corp. and
its affiliates and is entitled to 51% of the vote on any such matter.
The Johnson family group and all other Class B shareholders have
entered into a shareholders' voting agreement under which all Class B
shares will be voted in accordance with the majority vote of Class B
shares. Under the 1940 Act, control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the 1940 Act, to
form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of FIIA, Fidelity Investments
Japan Limited (FIJ), a nd FIIA(U.K.)L. Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of the
Johnson family own, directly or indirectly, more than 25% of the
voting common stock of FIL. FIL provides investment advisory services
to non-U.S. investment companies and institutional investors investing
in securities throughout the world.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.
MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and the
costs associated with securities lending, as applicable, each fund
pays all of its expenses that are not assumed by those parties. Each
fund pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Each fund's
management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal securities laws and making
necessary filings under state securities laws. Each fund is also
liable for such non-recurring expenses as may arise, including costs
of any litigation to which the fund may be a party, and any obligation
it may have to indemnify its officers and Trustees with respect to
litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, each fund pays FMR a monthly management fee which has
two components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
over 1,260 .2167
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 757 billion of group net assets - the approximate
level for October 1999 - was 0.2805 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 757 billion.
Each fund's individual fund fee rate is 0.45 %. Based on
the average group net assets of the funds advised by FMR for October
1999, each fund's annual management fee rate would be calculated as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
France Fund 0.2805% + 0.45% = 0.7305%
Germany Fund 0.2805% + 0.45% = 0.7305%
United Kingdom Fund 0.2805% + 0.45% = 0.7305%
</TABLE>
One-twelfth of the management fee rate is applied to each fund's
average net assets for the month, giving a dollar amount which is the
fee for that month.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Fiscal Years Ended October 31 Management Fees Paid to FMR
France Fund 1999 $ 94,267
1998 $ 91,019
1997 $ 46,846
Germany Fund 1999 $ 181,310
1998 $ 173,896
1997 $ 88,900
United Kingdom Fund 1999 $ 49,300
1998 $ 55,409
1997 $ 38,193
</TABLE>
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, securities
lending costs , brokerage commissions, and extraordinary
expenses), which is subject to revision or discontinuance. FMR retains
the ability to be repaid for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the
fiscal year.
Expense reimbursements by FMR will increase a fund's returns, and
repayment of the reimbursement by a fund will lower its returns.
FMR voluntarily agreed to reimburse each of the fund s if
and to the extent that the fund's aggregate operating expenses,
including management fees, were in excess of an annual rate of its
average net assets. The table below show s the periods of
reimbursement and levels of expense limitations for the
applicable funds; the dollar amount of management fees incurred under
each fund's contract before reimbursement; and the dollar amount of
management fees reimbursed by FMR under the expense reimbursement for
each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Periods of Expense Limitation Aggregate Operating Expense Fiscal Year Ended October 31
From To Limitation
France Fund November 1, 1998 October 31, 1999 2.0% 1999
United Kingdom
Fund November 1, 1998 October 31, 1999 2.0% 1999
Name of Fund Periods of Expense Limitation Aggregate Operating Expense Fiscal Year Ended
From To Limitation
France November 1, 1997 October 31, 1998 2.0% 1998
United Kingdom November 1, 1997 October 31, 1998 2.0% 1998
Name of Fund Periods of Expense Limitation Aggregate Operating Expense Fiscal Year Ended
From To Limitation
France November 1, 1996 October 31, 1997 2.0% 1997
Germany November 1, 1996 October 31, 1997 2.0% 1997
United Kingdom November 1, 1996 October 31, 1997 2.0% 1997
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Management Fee Before Amount of Management Fee
Reimbursement Reimbursement
France Fund $ 94,267 $ 94,267
United Kingdom Fund $ 49,300 $ 49,300
Name of Fund Management Fee Before Amount of Management Fee
Reimbursement Reimbursement
France $ 91,019 $ 77,473
United Kingdom $ 55,409 $ 55,409
Name of Fund Management Fee Before Amount of Management Fee
Reimbursement Reimbursement
France $ 46,846 $ 46,846
Germany $ 88,900 $ 32,849
United Kingdom $ 38,193 $ 38,193
</TABLE>
SUB-ADVISERS. On behalf of each fund, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, and FIIA. FIIA,
in turn, has entered into a sub-advisory agreement with FIIA(U.K.)L.
Pursuant to the sub-advisory agreements, FMR may receive from the
sub-advisers investment research and advice on issuers
outside the United States and FMR may grant the sub-advisers
investment management authority as well as the authority to buy and
sell securities if FMR believes it would be beneficial to the
funds.
Effective January 1, 2000, on behalf of each fund, FMR Far East
will enter into a sub-advisory agreement with FIJ pursuant to which
FMR Far East may receive from FIJ investment research and advice
relating to Japanese issuers (and such other Asian issuers as FMR Far
East may designate).
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR pays FIIA fees equal to 30% of FMR's monthly
management fee with respect to the average net assets held by the fund
for which the sub-adviser has provided FMR with investment advice and
research services.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee with respect to the fund's average
net assets managed by the sub-adviser on a discretionary basis.
(small solid bullet) FMR pays FIIA a fee equal to 57% of its monthly
management fee with respect to the fund's average net assets managed
by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
For investment advice and research services, no fees were paid to
FMR U.K., FMR Far East, FIIA, and FIIA (U.K.) L on behalf of
the funds for the past three fiscal years.
Currently, FIIA (U.K.)L is primarily responsible for choosing
investments for France Fund, Germany Fund, and United Kingdom Fund.
For discretionary investment management and execution of portfolio
transactions, fees paid to FIIA and F IIA(U.K.)L, on behalf of
France Fund, Germany Fund, and United Kingdom Fund for the past three
fiscal years are shown in the table below.
Fiscal Year Ended October 31 FIIA* FIIA(U.K.)L
France Fund
1999 $ 36,582 $ 11,874
1998 $ 26,226 $ 19,283
1997 $ 23,423 $ 12,702
Germany Fund
1999 $ 75,075 $ 18,261
1998 $ 46,455 $ 40,493
1997 $ 44,450 $ 21,182
United Kingdom Fund
1999 $ 20,159 $ 5,325
1998 $ 19,389 $ 8,316
1997 $ 19,096 $ 12,642
* Prior to August 1, 1999, FMR paid FIIA a fee equal to 50% of its
monthly management fee with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the funds, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenues collected by FDC for the fiscal year ended
1997 are shown in the table below.
Sales Charge Revenue
Fiscal Year Ended October 31 Amount Paid to FDC
France Fund 1997 $ 15,163
Germany Fund 1997 $ 53,819
United Kingdom Fund 1997 $ 26,135
Sales charge revenues collected and retained by FDC for the
fiscal years ended 1998 and 1999 are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Sales Charge Revenue
Fiscal Year Ended Amount Paid to FDC Amount Retained by FDC
France Fund October 31,
1999 $ 18,605 $ 18,605
1998 $ 40,597 $ 40,597
Germany Fund October 31,
1999 $ 52,463 $ 52,463
1998 $ 148,281 $ 148,137
United Kingdom Fund October 31,
1999 $ 5,957 $ 5,957
1998 $ 18,402 $ 17,652
</TABLE>
FDC may compensate intermediaries (such as banks, broker-dealers and
other service-providers) that satisfy certain criteria established
from time to time by FDC relating to the level or type of services
provided by the intermediary, the sale or expected sale of significant
amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state tuition
program (QSTP), as defined under the Small Business Job Protection Act
of 1996, managed by FMR or an affiliate and in each Fidelity Freedom
Fund and Fidelity Four-in-One Index Fund, funds of funds managed by an
FMR affiliate, according to the percentage of the QSTP's, Freedom
Fund's or Fidelity Four-in-One Index Fund's assets that is invested in
a fund, subject to certain limitations in the case of Fidelity
Four-in-One Index Fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month.
The annual rates for pricing and bookkeeping services for the funds
are 0.0550% of the first $500 million of average net assets, 0.0425%
of average net assets between $500 million and $3 billion, and 0.0010%
of average net assets in excess of $3 billion. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 1999 1998 1997
France Fund $ 60,354 $ 60,217 $ 60,010
Germany Fund $ 60,413 $ 60,342 $ 60,017
United Kingdom Fund $ 60,031 $ 60,078 $ 60,007
For administering each fund's securities lending program, FSC is
paid based on the number and duration of individual securities
loans.
For the fiscal years ended October 31, 1999, 1998, and 1997, the
funds did not pay FSC for securities lending.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity France Fund, Fidelity Germany Fund, and
Fidelity United Kingdom Fund are funds of Fidelity Investment Trust,
an open-end management investment company organized as a Massachusetts
business trust on April 20, 1984. Currently, there are 20 funds in
Fidelity Investment Trust: Fidelity Canada Fund, Fidelity Diversified
International Fund, Fidelity Emerging Markets Fund, Fidelity Europe
Fund, Fidelity Europe Capital Appreciation Fund, Fidelity France Fund,
Fidelity Germany Fund, Fidelity Global Balanced Fund, Fidelity Hong
Kong and China Fund, Fidelity International Growth & Income Fund,
Fidelity International Value Fund, Fidelity Japan Fund, Fidelity Japan
Small er Companies Fund, Fidelity Latin America Fund, Fidelity
Nordic Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund,
Fidelity Southeast Asia Fund, Fidelity United Kingdom Fund, and
Fidelity Worldwide Fund. The Trustees are permitted to create
additional funds in the trusts.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust provides that the trust shall not have any
claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust shall include a provision limiting the
obligations created thereby to the trust and its assets.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.
The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or any of its funds may be terminated upon the sale of its
assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by a vote of
shareholders of the trust or the fund. In the event of the dissolution
or liquidation of the trust, shareholders of each of its funds are
entitled to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a
fund, shareholders of that fund are entitled to receive the underlying
assets of the fund available for distribution.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of each fund . The
custodian is responsible for the safekeeping of a fund's assets
and the appointment of any subcustodian banks and clearing
agencies.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. The Boston branch of France Fund, Germany Fund,
and United Kingdom Fund's custodian leases its office space from an
affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have
occurred to date include mortgages and personal and general business
loans. In the judgment of FMR, the terms and conditions of those
transactions were not influenced by existing or potential custodial or
other fund relationships.
AUDITOR. P ricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts serves as independent accountant for ea ch
fund . The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended October 31, 1999, and report of the auditor, are
included in the fund's annual report and are incorporated herein by
reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus,
Fidelity Investments, and Magellan are registered trademarks of FMR
Corp.
Portfolio Advisory Services is a service mark of FMR Corp.
THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.

SUPPLEMENT TO THE FIDELITY'S TARGETED INTERNATIONAL
EQUITY FUNDS
DECEMBER 29, 1999 PROSPECTUS

Effective the close of business on April 19, 2000, the funds will no
longer be available for purchase except through the reinvestment of
dividends and other distributions by shareholders of the fund on April
19, 2000.

PROPOSED REORGANIZATIONS. The Board of Trustees of Fidelity Investment
Trust has unanimously approved Agreements and Plans of Reorganization
("Agreements") between Fidelity Europe Fund and Fidelity France Fund,
Fidelity Europe Fund and Fidelity Germany Fund, and Fidelity Europe
Fund and Fidelity United Kingdom Fund.

The Agreements provide for the transfer of all of the assets and the
assumption of all of the liabilities of Fidelity France Fund, Fidelity
Germany Fund and Fidelity United Kingdom Fund by Fidelity Europe Fund
solely in exchange for the number of shares of Fidelity Europe Fund
equal in value to the relative net asset value of the outstanding
shares of Fidelity France Fund, Fidelity Germany Fund or Fidelity
United Kingdom Fund. Following such exchanges, Fidelity France Fund,
Fidelity Germany Fund and Fidelity United Kingdom Fund will distribute
the Fidelity Europe Fund shares to their shareholders pro rata, in
liquidation of Fidelity France Fund, Fidelity Germany Fund and
Fidelity United Kingdom Fund as provided in the Agreements (the
transactions contemplated by the Agreements referred to as the
"Reorganizations").

The Reorganizations can be consummated only if, among other things,
they are approved by a "majority of the outstanding voting securities"
of the respective fund, as that term is defined under the Investment
Company Act of 1940. A Special Meeting (the "Meeting") of the
Shareholders of Fidelity France Fund, Fidelity Germany Fund and
Fidelity United Kingdom Fund will be held on July 19, 2000, and
approval of the Agreements will be voted on at that time. In
connection with the Meeting, Fidelity France Fund, Fidelity Germany
Fund and Fidelity United Kingdom Fund will be filing with the
Securities and Exchange Commission and delivering to their
shareholders of record a Proxy Statement describing the
Reorganizations and a Prospectus for Fidelity Europe Fund

If the Agreements are approved at the Meeting and certain conditions
required by the Agreements are satisfied, the Reorganizations are
expected to become effective on or about July 24, 2000 for Fidelity
United Kingdom Fund, on or about July 26, 2000 for Fidelity Germany
Fund and on or about July 28, 2000 for Fidelity France Fund. If
shareholder approval of any Agreement is delayed due to failure to
meet a quorum or otherwise, that Reorganization will become effective,
if approved, as soon as practicable thereafter.

In the event that Fidelity France Fund, Fidelity Germany Fund or
Fidelity United Kingdom Fund shareholders fail to approve that fund's
Agreement, that fund will continue to engage in business as a
registered investment company and the Board of Trustees will consider
other proposals for the reorganization or liquidation of that fund.

FIDELITY (LOGO) FMR Corp. 82 Devonshire
INVESTMENTS(registered Street Boston MA 02109-3614
trademark) 617-563-7000

January 29, 2000

Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Attention: File Room

Re: Fidelity Investment Trust
(the trust):

Fidelity France Fund
Fidelity Germany Fund
Fidelity United Kingdom Fund
(the funds)

File Nos. 2-90649 and 811-4008

______________________________________________________________________

Ladies and Gentlemen:

Transmitted herewith for filing pursuant to Rule 497(e) under the
Securities Act of 1933 is a Supplement, dated January 29, 2000, to the
fund's Prospectus, dated December 29, 1999.

Very truly yours,

/s/ A. Michael Primo
A. Michael Primo

Legal Department

(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

Fidelity France Fund, Fidelity Germany Fund and Fidelity United
Kingdom Fund
(Funds of Fidelity Investment Trust)
Fidelity Europe Fund
(A Fund of Fidelity Investment Trust)

FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
May 22, 2000

This Statement of Additional Information, relates to the proposed
reorganizations whereby Fidelity Europe Fund, a fund of Fidelity
Investment Trust, would acquire all of the assets of Fidelity France
Fund, Fidelity Germany Fund and Fidelity United Kingdom Fund, also
funds of Fidelity Investment Trust, and assume all of Fidelity France
Fund's, Fidelity Germany Fund's and Fidelity United Kingdom Fund's
liabilities in exchange solely for shares of beneficial interest in
Fidelity Europe Fund.

This Statement of Additional Information consists of this cover page
and the following described documents, each of which is incorporated
herein by reference:

1. The Prospectus and Statement of Additional Information of Fidelity
Europe Fund dated December 29, 1999, which were previously filed
via EDGAR (Accession No. 0000744822-00-000028).

2. The Supplements to the Prospectus and Statement of Additional
Information of Fidelity Europe Fund each dated March 1, 2000, which
were previously filed via EDGAR (Accession No. 0000744822-00-000006 ).

3. The Prospectus and Statement of Additional Information of Fidelity
France Fund, Fidelity Germany Fund and Fidelity United Kingdom Fund
dated December 29, 1999, which were previously filed via EDGAR
(Accession No. 0000744822-00000028).

4. The Supplement to the Prospectus for Fidelity France Fund,
Fidelity Germany Fund and Fidelity United Kingdom Fund dated January
29, 2000, which was previously filed via EDGAR (Accession No.
0000744822-00-000002).

5. The Financial Statements included in the Annual Report of Fidelity
Europe Fund for the fiscal year ended October 31, 1999.

6. The Financial Statements included in the Annual Report of Fidelity
France Fund, Fidelity Germany Fund and Fidelity United Kingdom Fund
for the fiscal year ended October 31, 1999.

This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated May 22, 2000, relating to the
above-referenced matter may be obtained from Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, Massachusetts, 02109. This
Statement of Additional Information relates to, and should be read in
conjunction with, such Proxy Statement and Prospectus.

PART C. OTHER INFORMATION

Item 15. Indemnification

Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.

Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.

Pursuant to the agreement by which Fidelity Service Company, Inc.
("FSC") is appointed transfer agent, the Trust agrees to indemnify and
hold FSC harmless against any losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting
from:

(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names FSC and/or the
Trust as a party and is not based on and does not result from FSC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FSC's performance
under the Transfer Agency Agreement; or

(2) any claim, demand, action or suit (except to the extent
contributed to by FSC's willful misfeasance, bad faith or negligence
or reckless disregard of its duties) which results from the negligence
of the Trust, or from FSC's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person
duly authorized by the Trust, or as a result of FSC's acting in
reliance upon advice reasonably believed by FSC to have been given by
counsel for the Trust, or as a result of FSC's acting in reliance upon
any instrument or stock certificate reasonably believed by it to have
been genuine and signed, countersigned or executed by the proper
person.

Item 16. Exhibits

(1) Restated Declaration of Trust, dated February 16, 1995, is
incorporated herein by reference to Exhibit 1 of Post-Effective
Amendment No. 58.

(b) Supplement, dated October 15, 1997, to the Restated Declaration of
Trust is incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 73.

(2) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.

(3) Not applicable.

(4)(a) Agreement and Plan of Reorganization between Fidelity
Investment Trust: Fidelity France Fund and Fidelity Investment Trust:
Fidelity Europe Fund is filed herein as Exhibit 1 to the Proxy
Statement and Prospectus.

(b) Agreement and Plan of Reorganization between Fidelity Investment
Trust: Fidelity Germany Fund and Fidelity Investment Trust: Fidelity
Europe Fund is filed herein as Exhibit 2 to the Proxy Statement and
Prospectus.

(c) Agreement and Plan of Reorganization between Fidelity Investment
Trust: Fidelity United Kingdom Fund and Fidelity Investment Trust:
Fidelity Europe Fund is filed herein as Exhibit 3 to the Proxy
Statement and Prospectus.

(5) Articles VIII and XII of the Restated Declaration of Trust, dated
February 16, 1995, are incorporated herein by reference to Exhibit 1
of Post-Effective Amendment No. 58.

(6) (1) Form of Management Contract between Fidelity Global Balanced
Fund and Fidelity Management & Research Company is incorporated
herein by reference to d(1) of Post- Effective Amendment No. 79.

(2) Management Contract, dated August 1, 1999, between Fidelity
Diversified International Fund and Fidelity Management & Research
Company, is incorporated herein by reference to Exhibit d(2) of
Post-Effective Amendment No. 79.

(3) Management Contract, dated October 1, 1997, between Fidelity
International Growth & Income Fund and Fidelity Management & Research
Company, is incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 73.

(4) Management Contract, dated October 1, 1997, between Fidelity
International Value Fund and Fidelity Management & Research Company,
is incorporated herein by reference to Exhibit 5(l) of Post-Effective
Amendment No. 73.

(5) Management Contract, dated October 1, 1997, between Fidelity
Overseas Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(r) of Post-Effective
Amendment No. 73.

(6) Management Contract, dated October 1, 1997, between Fidelity
Worldwide Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(x) of Post-Effective
Amendment No. 73.

(7) Management Contract, dated October 1, 1997, between Fidelity
Canada Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(dd) of Post-Effective
Amendment No. 73.

(8) Management Contract, dated October 1, 1997, between Fidelity
Europe Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(ii) of Post-Effective
Amendment No. 73.

(9) Management Contract, dated October 1, 1997, between Fidelity
Europe Capital Appreciation Fund and Fidelity Management & Research
Company, is incorporated herein by reference to Exhibit 5(nn) of
Post-Effective Amendment No. 73.

(10) Management Contract, dated October 1, 1997, between Fidelity
Japan Fund and Fidelity Management & Research Company, is incorporated
herein by reference to Exhibit 5(ss) of Post-Effective Amendment No.
73.

(11) Management Contract, dated October 1, 1997, between Fidelity
Pacific Basin Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(yy) of Post-Effective
Amendment No. 73.

(12) Management Contract, dated October 1, 1997, between Fidelity
Emerging Markets Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(eee) of Post-Effective
Amendment No. 73.

(13) Management Contract, dated October 1, 1997, between Fidelity
Latin America Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(kkk) of Post-Effective
Amendment No. 73.

(14) Management Contract, dated October 1, 1997, between Fidelity
Southeast Asia Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(ppp) of Post-Effective
Amendment No. 73.

(15) Management Contract, dated October 1, 1997, between Fidelity
France Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(hhhh) of Post-Effective
Amendment No. 73.

(16) Management Contract, dated October 1, 1997, between Fidelity
Germany Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(mmmm) of Post-Effective
Amendment No. 73.

(17) Management Contract, dated October 1, 1997, between Fidelity
United Kingdom Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(rrrr) of Post-Effective
Amendment No. 73.

(18) Management Contract, dated October 1, 1997, between Fidelity
Japan Smaller Companies Fund (formerly Fidelity Japan Small Companies
Fund) and Fidelity Management & Research Company, is incorporated
herein by reference to Exhibit 5(wwww) of Post-Effective Amendment No.
73.

(19) Management Contract, dated October 1, 1997, between Fidelity Hong
Kong and China Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(ccccc) of Post-Effective
Amendment No. 73.

(20) Management Contract, dated October 1, 1997, between Fidelity
Nordic Fund and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(iiiii) of Post-Effective
Amendment No. 73.

(21) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.) Inc. on
behalf of Fidelity Global Balanced Fund, is incorporated herein by
reference to Exhibit d(21) of Post-Effective Amendment No. 79.

(22) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Global Balanced Fund, is incorporated herein by
reference to Exhibit d(22) of Post-Effective Amendment No. 79.

(23) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment Advisors on
behalf of Fidelity Global Balanced Fund, is incorporated herein by
reference to Exhibit d(23) of Post-Effective Amendment No. 79.

(24) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment Advisors
(U.K.) Limited on behalf of Fidelity Global Balanced Fund, is
incorporated herein by reference to Exhibit d(24) of Post-Effective
Amendment No. 79.

(25) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Investments Japan Limited on behalf of
Fidelity Global Balanced Fund, is incorporated herein by reference to
Exhibit d(25) of Post-Effective Amendment No. 79.

(26) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Global Balanced Fund, is incorporated herein by reference to
Exhibit d(26) of Post-Effective Amendment No. 79.

(27) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Diversified International Fund, is
incorporated herein by reference to Exhibit 5(nn) of Post-Effective
Amendment No. 51.

(28) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Diversified International Fund, is
incorporated herein by reference to Exhibit 5(p) of Post-Effective
Amendment No. 51.

(29) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Diversified International Fund, is
incorporated herein by reference to Exhibit d(28) of Post-Effective
Amendment No. 77.

(30) Sub-Advisory Agreement, dated October 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Diversified
International Fund, is incorporated herein by reference to Exhibit
5(yyy) of Post-Effective Amendment No. 51.

(31) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Diversified International Fund, is incorporated
herein by reference to Exhibit d(30) of Post-Effective Amendment No.
77.

(32) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Diversified International Fund, is incorporated herein by
reference to Exhibit d(32) of Post-Effective Amendment No. 79.

(33) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity International Growth & Income Fund,
is incorporated herein by reference to Exhibit 5(g) of Post-Effective
Amendment No. 57.

(34) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity International Growth & Income Fund,
is incorporated herein by reference to Exhibit 5(f) of Post-Effective
Amendment No. 57.

(35) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Growth & Income Fund, is
incorporated herein by reference to Exhibit d(33) of Post-Effective
Amendment No. 77.

(36) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity International
Growth & Income Fund, is incorporated herein by reference to Exhibit
5(h) of Post-Effective Amendment No. 57.

(37) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity International Growth & Income Fund, is
incorporated herein by reference to Exhibit d(35) of Post-Effective
Amendment No. 77.

(38) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity International Growth & Income Fund, is incorporated herein by
reference to Exhibit d(38) of Post-Effective Amendment No. 79.

(39) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity International Value Fund,
is incorporated herein by reference to Exhibit 5(l) of Post-Effective
Amendment No. 57.

(40) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity International Value
Fund, is incorporated herein by reference to Exhibit 5(k) of
Post-Effective Amendment No. 57.

(41) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity International Value Fund, is
incorporated herein by reference to Exhibit d(38) of Post-Effective
Amendment No. 77.

(42) Sub-Advisory Agreement, dated September 16, 1994, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity International
Value Fund, is incorporated herein by reference to Exhibit 5(m) of
Post-Effective Amendment No. 64.

(43) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity International Value Fund, is incorporated herein
by reference to Exhibit d(40) of Post-Effective Amendment No. 77.

(44) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity International Value Fund, is incorporated herein by reference
to Exhibit d(44) of Post-Effective Amendment No. 79.

(45) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Overseas Fund, is incorporated
herein by reference to Exhibit 5(r) of Post-Effective Amendment No.
57.

(46) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Overseas Fund, is incorporated herein
by reference to Exhibit 5(q) of Post-Effective Amendment No. 57.

(47) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Overseas Fund, is incorporated herein
by reference to Exhibit d(43) of Post-Effective Amendment No. 77.

(48) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Overseas
Fund, is incorporated herein by reference to Exhibit 5(s) of
Post-Effective Amendment No. 57.

(49) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Overseas Fund, is incorporated herein by
reference to Exhibit d(45) of Post-Effective Amendment No. 77.

(50) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Overseas Fund, is incorporated herein by reference to Exhibit
d(50) of Post-Effective Amendment No. 79.

(51) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Worldwide Fund, is incorporated
herein by reference to Exhibit 5(w) of Post-Effective Amendment No.
57.

(52) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Worldwide Fund, is incorporated
herein by reference to Exhibit 5(v) of Post-Effective Amendment No.
57.

(53) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Worldwide Fund, is incorporated herein
by reference to Exhibit d(48) of Post-Effective Amendment No. 77.

(54) Sub-Advisory Agreement, dated March 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Worldwide
Fund, is incorporated herein by reference to Exhibit 5(x) of
Post-Effective Amendment No. 57.

(55) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Worldwide Fund, is incorporated herein by
reference to Exhibit d(50) of Post-Effective Amendment No. 77.

(56) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Worldwide Fund, is incorporated herein by reference to
Exhibit d(56) of Post-Effective Amendment No. 79.

(57) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Canada Fund, is incorporated herein
by reference to Exhibit 5(bb) of Post-Effective Amendment No. 57.

(58) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Canada Fund, is incorporated herein
by reference to Exhibit 5(aa) of Post-Effective Amendment No. 57.

(59) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Canada Fund, is incorporated herein by
reference to Exhibit d(53) of Post-Effective Amendment No. 77.

(60) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Canada Fund,
is incorporated herein by reference to Exhibit 5(cc) of Post-Effective
Amendment No. 57.

(61) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Canada Fund, is incorporated herein by reference to Exhibit
d(61) of Post-Effective Amendment No. 79.

(62) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Europe Fund, is incorporated herein
by reference to Exhibit 5(gg) of Post-Effective Amendment No. 57

(63) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Europe Fund, is incorporated herein
by reference to Exhibit 5(ff) of Post-Effective Amendment No. 57.

(64) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Fund, is incorporated herein by
reference to Exhibit d(57) of Post-Effective Amendment No. 77.

(65) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Europe Fund,
is incorporated herein by reference to Exhibit 5(hh) of Post-Effective
Amendment No. 57.

(66) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Europe Fund, is incorporated herein by reference to
Exhibit d(66) of Post-Effective Amendment No. 79.

(67) Sub-Advisory Agreement, dated November 18, 1993, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Europe Capital Appreciation
Fund, is incorporated herein by reference to Exhibit 5(ss) of Post-
Effective Amendment No. 53.

(68) Sub-Advisory Agreement, dated November 18, 1993, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Europe Capital
Appreciation Fund, is incorporated herein by reference to Exhibit
5(dd) of Post-Effective Amendment No. 53.

(69) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Europe Capital Appreciation Fund, is
incorporated herein by reference to Exhibit d(61) of Post-Effective
Amendment No. 77.

(70) Sub-Advisory Agreement, dated November 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Europe
Capital Appreciation Fund, is incorporated herein by reference to
Exhibit 5(ggg) of Post-Effective Amendment No. 55.

(71) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Europe Capital Appreciation Fund, is incorporated herein by
reference to Exhibit d(71) of Post-Effective Amendment No. 79.

(72) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Japan Fund, is incorporated herein
by reference to Exhibit 5(oo) of Post-Effective Amendment No. 53.

(73) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Japan Fund, is incorporated herein by
reference to Exhibit 5(z) of Post-Effective Amendment No. 53.

(74) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Japan Fund, is incorporated herein by
reference to Exhibit d(65) of Post-Effective Amendment No. 77.

(75) Sub-Advisory Agreement, dated July 16, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Japan Fund,
is incorporated herein by reference to Exhibit 5(ccc) of
Post-Effective Amendment No. 55.

(76) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Japan Fund, is incorporated herein by reference
to Exhibit d(67) of Post-Effective Amendment No. 77.

(77) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Japan Fund, is incorporated herein by reference to Exhibit
d(77) of Post-Effective Amendment No. 79.

(78) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Pacific Basin Fund, is incorporated
herein by reference to Exhibit 5(vv) of Post-Effective Amendment No.
57.

(79) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Pacific Basin Fund, is incorporated
herein by reference to Exhibit 5(uu) of Post-Effective Amendment No.
57.

(80) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Pacific Basin Fund, is incorporated
herein by reference to Exhibit d(70) of Post-Effective Amendment No.
77.

(81) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Pacific Basin
Fund, is incorporated herein by reference to Exhibit 5(ww) of
Post-Effective Amendment No. 57.

(82) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Pacific Basin Fund, is incorporated herein by
reference to Exhibit d(72) of Post-Effective Amendment No. 77.

(83) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Pacific Basin Fund, is incorporated herein by reference to
Exhibit d(83) of Post-Effective Amendment No. 79.

(84) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Emerging Markets Fund, is
incorporated herein by reference to Exhibit 5(aaa) of Post-Effective
Amendment No. 57.

(85) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Emerging Markets Fund, is
incorporated herein by reference to Exhibit 5(zz) of Post-Effective
Amendment No. 57.

(86) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Emerging Markets Fund, is incorporated
herein by reference to Exhibit d(75) of Post-Effective Amendment No.
77.

(87) Sub-Advisory Agreement, dated April 1, 1992, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Emerging
Markets Fund, is incorporated herein by reference to Exhibit 5(bbb) of
Post-Effective Amendment No. 57.

(88) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Emerging Markets Fund, is incorporated herein by
reference to Exhibit d(77) of Post-Effective Amendment No. 77.

(89) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Emerging Markets Fund, is incorporated herein by reference to
Exhibit d(89) of Post-Effective Amendment No. 79.

(90) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Latin America Fund, is incorporated
herein by reference to Exhibit 5(nn) of Post-Effective Amendment No.
48.

(91) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Latin America Fund, is incorporated
herein by reference to Exhibit 5(z) of Post-Effective Amendment No.
48.

(92) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Latin America Fund, is incorporated
herein by reference to Exhibit d(80) of Post-Effective Amendment No.
77.

(93) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Latin America
Fund, is incorporated herein by reference to Exhibit 5(ddd) of
Post-Effective Amendment No. 55.

(94) Form of Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on behalf of
Fidelity Latin America Fund, is incorporated herein by reference to
Exhibit d(94) of Post-Effective Amendment No. 79.

(95) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Southeast Asia Fund, is incorporated
herein by reference to Exhibit 5(oo) of Post-Effective Amendment No.
48.

(96) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Southeast Asia Fund, is incorporated
herein by reference to Exhibit 5(aa) of Post-Effective Amendment No.
48.

(97) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Southeast Asia Fund, is incorporated
herein by reference to Exhibit d(84) of Post-Effective Amendment No.
77.

(98) Sub-Advisory Agreement, dated March 18, 1993, between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Southeast
Asia Fund, is incorporated herein by reference to Exhibit 5(eee) of
Post-Effective Amendment No. 55.

(99) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity Investments Japan Limited
on behalf of Fidelity Southeast Asia Fund, is incorporated herein by
reference to Exhibit d(86) of Post-Effective Amendment No. 77.

(100) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Southeast Asia Fund, is incorporated herein by
reference to Exhibit d(100) of Post-Effective Amendment No. 79.

(101) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity France Fund, is
incorporated herein by reference to Exhibit 5(hhhh) of Post-Effective
Amendment No. 62.

(102) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity France Fund, is
incorporated herein by reference to Exhibit 5(gggg) of Post-Effective
Amendment No. 62.

(103) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity France Fund, is incorporated herein by
reference to Exhibit d(89) of Post-Effective Amendment No. 77.

(104) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity France Fund,
is incorporated herein by reference to Exhibit 5(iiii) of
Post-Effective Amendment No. 62.

(105) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity France Fund, is incorporated herein by reference to
Exhibit d(105) of Post-Effective Amendment No. 79.

(106) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Germany Fund, is
incorporated herein by reference to Exhibit 5(mmmm) of Post-Effective
Amendment No. 62.

(107) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Germany Fund, is
incorporated herein by reference to Exhibit 5(llll) of Post-Effective
Amendment No. 62.

(108) Sub-Advisory Agreement, dated August 1, 1999, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Germany Fund, is
incorporated herein by reference to Exhibit d(93) of Post-Effective
Amendment No. 77.

(109) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Germany Fund,
is incorporated herein by reference to Exhibit 5(nnnn) of
Post-Effective Amendment No. 62.

(110) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Germany Fund, is incorporated herein by reference
to Exhibit d(110) of Post-Effective Amendment No. 79.

(111) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity United Kingdom Fund, is
incorporated herein by reference to Exhibit 5(rrrr) of Post-Effective
Amendment No. 62.

(112) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity United Kingdom Fund, is
incorporated herein by reference to Exhibit 5(qqqq) of Post-Effective
Amendment No. 62.

(113) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity United Kingdom Fund, is incorporated
herein by reference to Exhibit d(97) of Post-Effective Amendment No.
77.

(114) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity United
Kingdom Fund, is incorporated herein by reference to Exhibit 5(ssss)
of Post-Effective Amendment No. 62.

(115) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity United Kingdom Fund, is incorporated herein by
reference to Exhibit d(115) of Post-Effective Amendment No. 79.

(116) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Japan Smaller Companies
Fund (formerly Fidelity Japan Small Companies Fund), is incorporated
herein by reference to Exhibit 5(wwww) of Post-Effective Amendment No.
62.

(117) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Japan Smaller Companies
Fund (formerly Fidelity Japan Small Companies Fund), is incorporated
herein by reference to Exhibit 5(vvvv) of Post-Effective Amendment No.
62.

(118) Sub-Advisory Agreement, dated August 1, 1999, between Fidelity
Management & Research Company and Fidelity International Investment
Advisors on behalf of Fidelity Japan Smaller Companies Fund (formerly
Fidelity Japan Small Companies Fund), is incorporated herein by
reference to Exhibit d(101) of Post-Effective Amendment No. 77.

(119) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Japan Smaller
Companies Fund (formerly Fidelity Japan Small Companies Fund), is
incorporated herein by reference to Exhibit 5(xxxx) of Post-Effective
No. 62.

(120) Sub-Advisory Agreement, dated August 1, 1999, between
Fidelity Management & Research Company and Fidelity Investments Japan
Limited on behalf of Fidelity Japan Smaller Companies Fund (formerly
Fidelity Japan Small Companies Fund), is incorporated herein by
reference to Exhibit d(103) of Post-Effective Amendment No. 77.

(121) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Japan Smaller Companies Fund, is incorporated
herein by reference to Exhibit d(121) of Post-Effective Amendment No.
79.

(122) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Hong Kong and China Fund,
is incorporated herein by reference to Exhibit 5(ccccc) of
Post-Effective Amendment No. 62.

(123) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Hong Kong and China
Fund, is incorporated herein by reference to Exhibit 5(bbbbb) of
Post-Effective Amendment No. 62.

(124) Sub-Advisory Agreement, dated August 1, 1999, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Hong Kong and China Fund, is
incorporated herein by reference to Exhibit d(106) of Post-Effective
Amendment No. 77.

(125) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Hong Kong and
China Fund, is incorporated herein by reference to Exhibit 5(ddddd) of
Post-Effective Amendment No. 62.

(126) Sub-Advisory Agreement, dated August 1, 1999, between
Fidelity Management & Research Company and Fidelity Investments Japan
Limited on behalf of Fidelity Hong Kong and China Fund, is
incorporated herein by reference to Exhibit d(108) of Post-Effective
Amendment No. 77.

(127) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Hong Kong and China Fund, is incorporated herein by
reference to Exhibit d(127) of Post-Effective Amendment No. 79.

(128) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. on behalf of Fidelity Nordic Fund, is
incorporated herein by reference to Exhibit 5(iiiii) of Post-Effective
Amendment No. 62.

(129) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity Management & Research Company and Fidelity Management &
Research (Far East) Inc. on behalf of Fidelity Nordic Fund, is
incorporated herein by reference to Exhibit 5(hhhhh) of Post-Effective
Amendment No. 62.

(130) Sub-Advisory Agreement, dated August 1, 1999, between
Fidelity Management & Research Company and Fidelity International
Investment Advisors on behalf of Fidelity Nordic Fund, is incorporated
herein by reference to Exhibit d(111) of Post-Effective Amendment No.
77.

(131) Sub-Advisory Agreement, dated September 14, 1995, between
Fidelity International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited on behalf of Fidelity Nordic Fund,
is incorporated herein by reference to Exhibit 5(jjjjj) of
Post-Effective Amendment No. 62.

(132) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Fidelity Nordic Fund, is incorporated herein by reference to
Exhibit d(132) of Post-Effective Amendment No. 79.

(7) (1) Form of General Distribution Agreement between Fidelity
Global Balanced Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit e(1) of Post-Effective
Amendment No. 79.

(2) General Distribution Agreement, dated May 19, 1990,
between Fidelity Overseas Fund, Fidelity Europe Fund, Fidelity Pacific
Basin Fund, Fidelity International Growth & Income Fund, and Fidelity
Canada Fund and Fidelity Distributors Corporation; dated September 30,
1990, between Fidelity Worldwide Fund and Fidelity Distributors
Corporation; dated between Fidelity Emerging Markets Fund (formerly
Fidelity International Opportunities Fund) and Fidelity Distributors
Corporation; and dated December 12, 1991, between Fidelity Diversified
International Fund and Fidelity Distributors Corporation, are
incorporated herein by reference to Exhibit Nos. 6(a)(1-8) of
Post-Effective Amendment No. 57.

(3) General Distribution Agreement, dated December 12, 1991, between
Fidelity Diversified International Fund and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(k) of
Post-Effective Amendment No. 38.

(4) General Distribution Agreement, dated July 16, 1992, between
Fidelity Japan Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(l) of Post-Effective
Amendment No. 55.

(5) General Distribution Agreement, dated March 18, 1993, between
Fidelity Latin America Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(m) of Post-Effective
Amendment No. 55.

(6) General Distribution Agreement, dated March 18, 1993, between
Fidelity Southeast Asia Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(n) of Post-Effective
Amendment No. 55.

(7) General Distribution Agreement, dated November 18, 1993, between
Fidelity Europe Capital Appreciation Fund and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(p) of
Post-Effective Amendment No. 55.

(8) General Distribution Agreement, dated September 16, 1994, between
Fidelity International Value Fund and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(l) of
Post-Effective Amendment No. 58.

(9) General Distribution Agreement, dated September 14, 1995, between
Fidelity France Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(m) of Post-Effective
Amendment No. 66.

(10) General Distribution Agreement, dated September 14, 1995, between
Fidelity Germany Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(n) of Post-Effective
Amendment No. 66.

(11) General Distribution Agreement, dated September 14, 1995, between
Fidelity United Kingdom Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(o) of Post-Effective
Amendment No. 66.

(12) General Distribution Agreement, dated September 14, 1995, between
Fidelity Japan Smaller Companies Fund (formerly Fidelity Japan Smaller
Companies Fund) and Fidelity Distributors Corporation, is incorporated
herein by reference to Exhibit 6(p) of Post-Effective Amendment No.
66.

(13) General Distribution Agreement, dated September 14, 1995, between
Fidelity Hong Kong and China Fund and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(q) of
Post-Effective Amendment No. 66.

(14) General Distribution Agreement, dated September 14, 1995, between
Fidelity Nordic Fund and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(r) of Post-Effective
Amendment No. 66.

(15) Amendments, dated March 14, 1996 and July 15, 1996, to the
General Distribution Agreement between Fidelity Investment Trust on
behalf of Fidelity France Fund, Fidelity Germany Fund, Fidelity Hong
Kong and China Fund, Fidelity International Value Fund, Fidelity Japan
Smaller Companies Fund (formerly Fidelity Japan Small Companies Fund),
Fidelity Nordic Fund, and Fidelity United Kingdom Fund and Fidelity
Distributors Corporation, are incorporated herein by reference to
Exhibit 6(k) of Fidelity Select Portfolios'(File No. 2-69972)
Post-Effective Amendment No. 57.

(16) Amendments, dated March 14, 1996 and July 15, 1996, to the
General Distribution Agreement between Fidelity Investment Trust on
behalf of Fidelity Canada Fund, Fidelity Diversified International
Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity
Europe Capital Appreciation Fund, Fidelity International Growth &
Income Fund, Fidelity Japan Fund, Fidelity Latin America Fund,
Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity
Southeast Asia Fund, and Fidelity Worldwide Fund and Fidelity
Distributors Corporation, are incorporated herein by reference to
Exhibit 6(l) of Fidelity Select Portfolios' (File No. 2-69972)
Post-Effective Amendment No. 57 .

(17) Form of Bank Agency Agreement (most recently revised January,
1997) is incorporated herein by reference to Exhibit (e)(17) of
Post-Effective Amendment No. 79.

(18) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is incorporated herein by
reference to Exhibit (e)(18) of Post-Effective Amendment No. 79.

(8) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995
and amended through November 14, 1996, is incorporated herein by
reference to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File
No. 33-43529) Post-Effective Amendment No. 19.

(9) (1) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Man hattan Bank, N.A. and Fidelity Investment
Trust on behalf of Fidelity Diversified Global Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund,
Fidelity Europe Capital Appreciation Fund, Fidelity Europe Fund,
Fidelity International Growth & Income Fund, Fidelity International
Value Fund, Fidelity Japan Fund, Fidelity Overseas Fund, Fidelity
Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity
Worldwide Fund are incorporated herein by reference to Exhibit 8(a)
of Fidelity Investment Trust's (File No. 2-90649) Post-Effective
Amendment No. 59.

(2) Appendix A, dated September 29, 1999, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan Bank,
N.A. and Fidelity Investment Trust on behalf of Fidelity Diversified
Global Fund, Fidelity Diversified International Fund, Fidelity
Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity Europe Fund, Fidelity International Growth & Income Fund,
Fidelity International Value Fund, Fidelity Japan Fund, Fidelity
Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia
Fund, and Fidelity Worldwide Fund is incorporated herein by reference
to Exhibit g(2) of Fidelity Advisor Series I's (File No. 2-84776)
Post-Effective Amendment No. 50.

(3) Appendix B, dated June 17, 1999, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and
Fidelity Investment Trust on behalf of Fidelity Diversified Global
Fund, Fidelity Diversified International Fund, Fidelity Emerging
Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity
Europe Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Overseas Fund,
Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and
Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
g(3) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 102.

(4) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and
Fidelity Investment Trust on behalf of Fidelity Diversified Global
Fund, Fidelity Diversified International Fund, Fidelity Emerging
Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity
Europe Fund, Fidelity International Growth & Income Fund, Fidelity
International Value Fund, Fidelity Japan Fund, Fidelity Overseas Fund,
Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and
Fidelity Worldwide Fund is incorporated herein by reference to Exhibit
g(4) of Fidelity Charles Street Trust's (File No. 2-73133)
Post-Effective Amendment No. 65.

(5) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity Investment
Trust on behalf of Fidelity Global Balanced Fund, Fidelity France
Fund, Fidelity Germany Fund, Fidelity Japan Smaller Companies Fund
(formerly Fidelity Japan Small Companies Fund), Fidelity United
Kingdom Fund, Fidelity Hong Kong and China Fund, Fidelity Nordic Fund,
Fidelity Canada Fund, and Fidelity Latin America Fund are incorporated
herein by reference to Exhibit 8(a) of Fidelity Commonwealth Trust's
(File No. 2-52322) Post-Effective Amendment No. 56.

(6) Appendix A, dated August 11, 1999, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity France Fund, Fidelity
Germany Fund, Fidelity Japan Smaller Companies Fund (formerly Fidelity
Japan Small Companies Fund), Fidelity United Kingdom Fund, Fidelity
Hong Kong and China Fund, Fidelity Nordic Fund, Fidelity Canada Fund,
and Fidelity Latin America Fund is incorporated herein by reference to
Exhibit g(6) of Fidelity Advisor Series I's (File No. 2-84776)
Post-Effective Amendment No. 50.

(7) Form of Appendix A to the Custodian Agreement, dated September
1, 1994, between Brown Brothers Harriman & Company and Fidelity
Investment Trust on behalf of Fidelity Global Balanced Fund is
incorporated herein by reference to Exhibit g(7) of Post-Effective
Amendment No. 79.

(8) Appendix B, dated September 16, 1999, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers Harriman &
Company and Fidelity Investment Trust on behalf of Fidelity Global
Balanced Fund, Fidelity France Fund, Fidelity Germany Fund, Fidelity
Japan Smaller Companies Fund (formerly Fidelity Japan Small Companies
Fund), Fidelity United Kingdom Fund, Fidelity Hong Kong and China
Fund, Fidelity Nordic Fund, Fidelity Canada Fund, and Fidelity Latin
America Fund is incorporated herein by reference to Exhibit g(7) of
Fidelity Advisor Series I's (File No. 2-84776) Post-Effective
Amendment No. 50.

(9) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman & Company and
Fidelity Investment Trust on behalf of Fidelity Global Balanced Fund,
Fidelity France Fund, Fidelity Germany Fund, Fidelity Japan Smaller
Companies Fund (formerly Fidelity Japan Small Companies Fund),
Fidelity United Kingdom Fund, Fidelity Hong Kong and China Fund,
Fidelity Nordic Fund, Fidelity Canada Fund, and Fidelity Latin America
Fund is incorporated herein by reference to Exhibit g(4) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No.
68.

(10) Fidelity Group Repo Custodian Agreement, dated February 12,
1996, among The Bank of New York, J. P. Morgan Securities, Inc., and
the Registrant, is incorporated herein by reference to Exhibit 8(d) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.

(11) Schedule 1 to the Fidelity Group Repo Custodian Agreement,
dated February 12, 1996, between The Bank of New York and the
Registrant, is incorporated herein by reference to Exhibit 8(e) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.

(12) Fidelity Group Repo Custodian Agreement, dated November 13,
1995, among Chemical Bank, Greenwich Capital Markets, Inc., and the
Registrant, is incorporated herein by reference to Exhibit 8(f) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.

(13) Schedule 1 to the Fidelity Group Repo Custodian Agreement,
dated November 13, 1995, between Chemical Bank and the Registrant, is
incorporated herein by reference to Exhibit 8(g) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.

(14) Joint Trading Account Custody Agreement, dated May 11, 1995,
between The Bank of New York and Fidelity Investment Trust on behalf
of Fidelity Global Balanced Fund, Fidelity Canada Fund, Fidelity
Diversified International Fund, Fidelity Emerging Markets Fund,
Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund,
Fidelity International Growth & Income Fund, Fidelity International
Value Fund, Fidelity Japan Fund, Fidelity Latin America Fund, Fidelity
Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia
Fund and Fidelity Worldwide Fund, is incorporated herein by reference
to Exhibit 8(h) of Fidelity Institutional Cash Portfolios' (File No.
2-74808) Post-Effective Amendment No. 31.

(15) First Amendment to Joint Trading Account Custody Agreement,
dated July 14, 1995, between The Bank of New York and Fidelity
Investment Trust on behalf of Fidelity Global Balanced Fund, Fidelity
Canada Fund, Fidelity Diversified International Fund, Fidelity
Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity International Growth & Income Fund,
Fidelity International Value Fund, Fidelity Japan Fund, Fidelity Latin
America Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund,
Fidelity Southeast Asia Fund and Fidelity Worldwide Fund, is
incorporated herein by reference to Exhibit 8(i) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.

(10) (1) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Global Balanced Fund is incorporated herein by reference to
Exhibit m(1) of Post-Effective Amendment No. 79.

(2) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Diversified International Fund is incorporated herein by reference to
Exhibit m(2) of Post-Effective Amendment No. 79.

(3) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
International Value Fund is incorporated herein by reference to
Exhibit m(3) of Post-Effective Amendment No. 79.

(4) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
International Growth & Income Fund is incorporated herein by reference
to Exhibit m(4) of Post-Effective Amendment No. 79.

(5) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Overseas Fund is incorporated herein by reference to Exhibit m(5) of
Post-Effective Amendment No. 79.

(6) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Worldwide Fund is incorporated herein by reference to Exhibit m(6) of
Post-Effective Amendment No. 79.

(11) Opinion and consent of counsel (K&L) as to the legality of shares
being registered is filed herein as Exhibit 11.

(12) (a) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Fidelity France Fund is filed
herein as Exhibit 12 (a).

(b) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Fidelity Germany Fund is filed
herein as Exhibit 12 (b).

(c) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Fidelity United Kingdom Fund is
filed herein as Exhibit 12 (c).

(13) Not applicable.

(14) Consent of PricewaterhouseCoopers is filed herein as Exhibit 14.

(15) Not applicable.

(16) Powers of Attorney, dated July 17, 1997 and December 16, 1999,
are filed herein as Exhibit 16.

(17) Not applicable.

Item 17. Undertakings

(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of the
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the meaning
of Rule 145(c) of the Securities Act of 1933, the reoffering
prospectus will contain the information called for by the applicable
registration form for reoffering by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.

(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment
to the Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each Post-Effective Amendment shall be deemed
to be a new Registration Statement for the securities offered therein,
and the offering of securities at that time shall be deemed to be the
initial bona fide offering of them.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and
Commonwealth of Massachusetts, on the 24th day of March 2000.

Fidelity Investment Trust

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

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

(Signature) (Title) (Date)

/s/Edward C. Johnson 3d President and Trustee March 24, 2000
(dagger)

Edward C. Johnson 3d (Principal Executive Officer)

/s/Robert A. Dwight Treasurer March 24, 2000

Robert A. Dwight

/s/Robert C. Pozen Trustee March 24, 2000

Robert C. Pozen

/s/Ralph F. Cox Trustee March 24, 2000
*

Ralph F. Cox

/s/Phyllis Burke Davis Trustee March 24, 2000
*

Phyllis Burke Davis

/s/Robert M. Gates Trustee March 24, 2000
*

Robert M. Gates

/s/Donald J. Kirk Trustee March 24, 2000
*

Donald J. Kirk

/s/Ned C. Lautenbach Trustee March 24, 2000
*

Ned C. Lautenbach

/s/Peter S. Lynch Trustee March 24, 2000
*

Peter S. Lynch

/s/Marvin L. Mann Trustee March 24, 2000
*

Marvin L. Mann

/s/William O. McCoy Trustee March 24, 2000
*

William O. McCoy

/s/Gerald C. McDonough Trustee March 24, 2000
*

Gerald C. McDonough

/s/Thomas R. Williams Trustee March 24, 2000
*

Thomas R. Williams

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.

* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 16, 1999 and filed herewith.

Exhibit 11

Kirkpatrick & Lockhart llp 1800 Massachusetts Avenue, NW
Second Floor
Washington, DC 20036-1800
202.778.9000
www.kl.com

March 24, 2000

Fidelity Investment Trust
82 Devonshire Street
Boston, Massachusetts 02109

Ladies and Gentlemen:

You have requested our opinion regarding certain matters in
connection with the issuance of shares of Fidelity Europe Fund, a
series of Fidelity Investment Trust (the "Trust"), pursuant to a
Registration Statement to be filed by the Trust on Form N-14 (the
"Registration Statement") under the Securities Act of 1933 (the "1933
Act") in connection with the proposed acquisition by Fidelity Europe
Fund of all of the assets of Fidelity France Fund, Fidelity Germany
Fund, and Fidelity United Kingdom Fund (the "Merged Funds"), each a
series of the Trust, and the assumption by Fidelity Europe Fund of the
liabilities of the Merged Funds solely in exchange for Fidelity Europe
Fund shares. This transfer will be affected under three separate
Agreements and Plans of Reorganization.

In connection with our services as counsel for the Trust, we have
examined, among other things, originals or copies of such documents,
certificates and corporate and other records as we deemed necessary or
appropriate for purposes of this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us, the conformity to original documents of all documents
presented to us as copies thereof and the authenticity of the original
documents from which any such copies were made, which assumptions we
have not independently verified. As to various matters of fact
material to this opinion, we have relied upon statements and
certificates of officers of the Trust. Based upon this examination,
we are of the opinion that the shares to be issued pursuant to the
Registration Statement, when issued upon the terms provided in the
Registration Statement, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state law regulating
the offer and sale of securities, will be legally issued, fully paid,
and non-assessable.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of a business
trust may be held personally liable for the obligations of the Trust.
The Trust's Declaration of Trust provides that the Trustees shall have
no power to bind any shareholder personally or to call upon any
shareholder for the payment of any sum of money or assessment
whatsoever other than such as the shareholder may at any time
personally agree to pay by way of subscription for any shares or
otherwise. The Declaration of Trust also requires that every note,
bond, contract or other undertaking issued by or on behalf of the
Trust or the Trustees relating to the Trust shall include a recitation
limiting the obligation represented thereby to the Trust and its
assets (although the omission of such a recitation shall not operate
to bind any shareholder). The Declaration of Trust provides that: (i)
in case any shareholder or any former shareholder of any Series of the
Trust shall be held personally liable solely by reason of his being or
having been a shareholder and not because of his acts or omissions or
for some other reason, the shareholder or former shareholder shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability; and (ii) a Series shall, upon request by
the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of that Series and satisfy any
judgment thereon.

We hereby consent to your filing a copy of this opinion as an exhibit
to the Registration Statement.

Very truly yours,

Kirkpatrick & Lockhart LLP
/s/Kirkpatrick & Lockhart LLP

Exhibit 12(a)

March 24, 2000

Fidelity Investment Trust
82 Devonshire Street
Boston, MA 02109

Ladies and Gentlemen:

Fidelity Investment Trust ("FIT"), a Massachusetts business trust, on
behalf of Fidelity Germany Fund ("Acquired") and Fidelity Europe Fund
("Acquiring"), both series of FIT, has requested our opinion as to
certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets
and assume all of the liabilities of Acquired in exchange solely for
shares of beneficial interest in Acquiring ("Acquiring Shares")
pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring as of May
22, 2000.

In rendering this opinion, we have examined a draft of the Agreement
("Draft Agreement"), the prospectus/proxy statement to be filed with
the Securities and Exchange Commission in connection with the
Reorganization, the currently effective prospectuses and statements of
additional information of Acquired and Acquiring, and such other
documents as we have deemed necessary. We have also relied, with your
consent, on certificates of officers of FIT.

OPINION

Based solely on the facts and representations set forth in the
reviewed documents and the certificates of officers of FIT, and
assuming that (i) those representations are true on the date of the
Reorganization, (ii) the Reorganization is consummated in accordance
with the Agreement, and (iii) the Agreement does not differ materially
from the Draft Agreement, our opinion with respect to the federal
income tax consequences of the Reorganization is as follows:

1. The Reorganization will be a reorganization under Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"), and Acquired and Acquiring will each be parties to the
Reorganization under Section 368(b) of the Code.

2. No gain or loss will be recognized by Acquired upon the transfer
of all of its assets to Acquiring in exchange solely for Acquiring
Shares and Acquiring's assumption of Acquired's liabilities followed
by the distribution of those Acquiring Shares to the Acquired
shareholders in liquidation of Acquired.

3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.

4. The basis of Acquired's assets in the hands of Acquiring will be
the same as the basis of such assets in Acquired's hands immediately
prior to the Reorganization.

5. Acquiring's holding period in the assets to be received from
Acquired will include Acquired's holding period in such assets.

6. The Acquired shareholders will recognize no gain or loss on the
exchange of shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.

7. The Acquired shareholders' basis in the Acquiring Shares to be
received by them will be the same as their basis in the Acquired
Shares to be surrendered in exchange therefor.

8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.

The foregoing opinion is based on, and is conditioned on the
continued applicability of, the provisions of the Code and the
regulations thereunder, case law precedent, and the Internal Revenue
Service pronouncements in existence at the date hereof. We express no
opinion as to whether Acquired will recognize gain or loss in the
Reorganization under Section 1256 of the Code with respect to futures,
forwards, or options, or income or deductions under Section 1296 of
the Code with respect to its investments in passive foreign investment
companies. Nor do we express any opinion other than those contained
herein.

We consent to the inclusion of this opinion in the Registration
Statement on Form N-14 filed with the Securities and Exchange
Commission and the inclusion of the name "Kirkpatrick &
Lockhart LLP" in the "Federal Income Tax Consequences of the
Reorganization," "Federal Income Tax Considerations" and "Legal
Matters" Sections of that Registration Statement.

Very truly yours,

/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP

Exhibit 12(b)

March 24, 2000

Fidelity Investment Trust
82 Devonshire Street
Boston, MA 02109

Ladies and Gentlemen:

Fidelity Investment Trust ("FIT"), a Massachusetts business trust, on
behalf of Fidelity United Kingdom Fund ("Acquired") and Fidelity
Europe Fund ("Acquiring"), both series of FIT, has requested our
opinion as to certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets
and assume all of the liabilities of Acquired in exchange solely for
shares of beneficial interest in Acquiring ("Acquiring Shares")
pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring as of May
22, 2000.

OPINION

9. The Reorganization will be a reorganization under Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"), and Acquired and Acquiring will each be parties to the
Reorganization under Section 368(b) of the Code.

10. No gain or loss will be recognized by Acquired upon the transfer
of all of its assets to Acquiring in exchange solely for Acquiring
Shares and Acquiring's assumption of Acquired's liabilities followed
by the distribution of those Acquiring Shares to the Acquired
shareholders in liquidation of Acquired.

11. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.

12. The basis of Acquired's assets in the hands of Acquiring will be
the same as the basis of such assets in Acquired's hands immediately
prior to the Reorganization.

13. Acquiring's holding period in the assets to be received from
Acquired will include Acquired's holding period in such assets.

14. The Acquired shareholders will recognize no gain or loss on the
exchange of shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.

15. The Acquired shareholders' basis in the Acquiring Shares to be
received by them will be the same as their basis in the Acquired
Shares to be surrendered in exchange therefor.

16. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.

Very truly yours,

/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP

Exhibit 12(c)

March 24, 2000

Fidelity Investment Trust
82 Devonshire Street
Boston, MA 02109

Ladies and Gentlemen:

Fidelity Investment Trust ("FIT"), a Massachusetts business trust, on
behalf of Fidelity France Fund ("Acquired") and Fidelity Europe Fund
("Acquiring"), both series of FIT, has requested our opinion as to
certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets
and assume all of the liabilities of Acquired in exchange solely for
shares of beneficial interest in Acquiring ("Acquiring Shares")
pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring as of May
22, 2000.

OPINION

17. The Reorganization will be a reorganization under Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"), and Acquired and Acquiring will each be parties to the
Reorganization under Section 368(b) of the Code.

18. No gain or loss will be recognized by Acquired upon the transfer
of all of its assets to Acquiring in exchange solely for Acquiring
Shares and Acquiring's assumption of Acquired's liabilities followed
by the distribution of those Acquiring Shares to the Acquired
shareholders in liquidation of Acquired.

19. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.

20. The basis of Acquired's assets in the hands of Acquiring will be
the same as the basis of such assets in Acquired's hands immediately
prior to the Reorganization.

21. Acquiring's holding period in the assets to be received from
Acquired will include Acquired's holding period in such assets.

22. The Acquired shareholders will recognize no gain or loss on the
exchange of shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.

23. The Acquired shareholders' basis in the Acquiring Shares to be
received by them will be the same as their basis in the Acquired
Shares to be surrendered in exchange therefor.

24. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.

Very truly yours,

/s/ Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP

Exhibit 14

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference into the Proxy
Statement and Prospectus (the Proxy/Prospectus) constituting part of
this Registration Statement on Form N-14 (the Registration Statement)
of Fidelity Investment Trust: Fidelity Europe Fund, Fidelity France
Fund, Fidelity Germany Fund and Fidelity United Kingdom Fund of our
reports dated December 15, 1999 on the financial statements and
financial highlights included in the October 31, 1999 Annual Reports
to Shareholders of the above referenced funds.

We also consent to the references to our Firm under the headings
"Experts" and "Financial Highlights" in the Proxy/Prospectus and to
the references to our Firm under the headings "Financial Highlights"
in the Prospectuses and "Auditor" in the Statements of Additional
Information for Fidelity Fidelity Investment Trust: Fidelity Europe
Fund, Fidelity France Fund, Fidelity Germany Fund and Fidelity United
Kingdom Fund.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Boston, Massachusetts
March 23, 2000

POWER OF ATTORNEY

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

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

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

WITNESS my hand on the date set forth below.

/s/Edward C. Johnson 3d July 17, 1997

Edward C. Johnson 3d

POWER OF ATTORNEY

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

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

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 2000.

WITNESS our hands on this sixteenth day of December, 1999.

/s/Edward C. Johnson 3d /s/Peter S. Lynch

Edward C. Johnson 3d Peter S. Lynch

/s/Ralph F. Cox /s/William O. McCoy

Ralph F. Cox William O. McCoy

/s/Phyllis Burke Davis /s/Gerald C. McDonough

Phyllis Burke Davis Gerald C. McDonough

/s/Ned C. Lautenbach /s/Marvin L. Mann

Ned C. Lautenbach Marvin L. Mann

/s/Donald J. Kirk /s/Thomas R. Williams

Donald J. Kirk Thomas R. Williams

/s/Robert C. Pozen /s/Robert M. Gates

Robert C. Pozen Robert M. Gates