SUPPLEMENT TO THE
FIDELITY GINNIE MAE PORTFOLIO AND
FIDELITY MORTGAGE
SECURITIES PORTFOLIO
PROSPECTUS
DATED SEPTEMBER 19, 1995
The following information replaces the similar information found in the
"Key Facts" in the first paragraph of the"Who May Want to Invest" section
found on page 4.
Either fund may be appropriate for investors who seek high current
income from a portfolio of mortgage securities. A fund's level of risk and
potential reward, depend on the quality and maturity of its investments.
Ginnie Mae invests mainly in securities whose interest and principal are
guaranteed by the U.S. government. Mortgage Securities can invest in all
kinds of mortgage-related securities.
The following information replaces the similar information found in
paragraph 6 in the "Investment Principles and Risks" section found on page
11.
In addition to mortgage securities, each fund has the ability to invest
a portion of its assets in U.S. government securities and instruments
related to U.S. government securities. Both funds may also invest in
futures contracts and other derivatives to adjust their investment
exposure. Mortgage Securities is expected to invest in more securities
without government backing than Ginnie Mae.
The following information replaces the similar information found in the
"Securities and Investment Practices" section under the heading "Debt
Securities" found on pages 12 and 13.
DEBT SECURITIES. Bonds and other debt instruments are used by
issuers to borrow money from investors. The issuer pays the investor a
fixed or variable rate of interest, and must repay the amount borrowed at
maturity. Some debt securities, such as zero coupon bonds, do not pay
current interest, but are purchased at a discount from their face values.
In general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics, and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
RESTRICTIONS: Mortgage Securities normally invests in investment-grade
securities, but reserves the right to invest up to 5% of its assets in
below investment-grade securities (sometimes called "junk bonds"). A
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 Investors Service, L.P., or is unrated
but judged by FMR to be of equivalent quality.
On February 20, 1996 each fund's name changed from Fidelity Ginnie Mae
Portfolio and Fidelity Mortgage Securities Portfolio to Fidelity Ginnie Mae
Fund and Fidelity Mortgage Securities Fund, respectively.
