FIDELITY INCOME FUND /MA/, 497, 1998-09-30

FIDELITY INCOME FUND /MA/
497, 1998-09-30

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SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS
CLASS A, CLASS T, CLASS B, AND CLASS C
FEBRUARY 28, 1998 PROSPECTUS
SHAREHOLDER MEETING. On or about November 18, 1998, a meeting of the
shareholders of Fidelity Advisor Equity Income Fund will be held to
approve various proposals, including modifications to the fund's
management contract. Shareholders of record on September 21, 1998 are
entitled to vote at the meeting. Included in the proposed management
contract modifications is a proposal to revise the fund's current flat
management fee structure to a group fee structure that is standard for
other comparable Fidelity equity funds. The proposed contract
modifications also include a proposal to allow FMR and the trust, on
behalf of the fund, to amend the fund's management contract subject to
the provisions of Section 15 of the Investment Company Act of 1940.
For more detailed information concerning the proposals under
consideration, please contact Client Services at 1-800-522-7297 to
request a free copy of the proxy statement.
AS OF MAY 28, 1998, Fidelity Advisor Short-Intermediate Municipal
Income Fund was merged into Fidelity Advisor Intermediate Municipal
Income Fund and shareholders of Fidelity Advisor Short-Intermediate
Municipal Income Fund became shareholders of Fidelity Advisor
Intermediate Municipal Income Fund. The merger was voted on and
approved at a shareholder meeting on May 4, 1998. Fidelity Advisor
Short-Intermediate Municipal Income Fund ceased to exist and is not
offered.
The following information replaces similar information found in "Who
May Want to Invest" on page 3.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
Class A and Class T shares have a front-end sales charge and pay a
12b-1 fee. Class A and Class T shares may be subject to a contingent
deferred sales charge (CDSC). Class B and Class C shares do not have a
front-end sales charge, but do have a CDSC, and pay a 12b-1 fee.
Institutional Class shares have no sales charge and do not pay a 12b-1
fee, but are available only to certain types of investors. See "Sales
Charge Reductions and Waivers," page 82, for Institutional Class
eligibility information. You may obtain more information about
Institutional Class shares, which are not offered through this
prospectus, by calling 1-800-522-7297 if you are investing through a
broker-dealer or insurance representative, 1-800-843-3001 if you are
investing through a bank representative, or from your investment
professional.
The following information replaces similar information for
INTERMEDIATE MUNICIPAL INCOME found in "Expenses" on page 8.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL FUNDS

Operating Expenses Class A Class T Class B Class C
INTERMEDIATE Management fee 0.39% 0.39% 0.39% 0.39%
MUNICIPAL INCOME

12b-1 fee (including 0.25% Shareholder
Service Fee for Class B and Class C shares) 0.15% 0.25% 0.90% 1.00%

Other expenses (after reimbursement) 0.36% 0.26% 0.36% 0.36%[A]

Total operating expenses 0.90% 0.90% 1.65% 1.75%

</TABLE>

[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
The following information replaces similar information for EQUITY
INCOME found in "Expenses" on page 9.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS
Examples

Full Redemption No Redemption

Class A Class T Class B Class C Class B Class C

EQUITY INCOME 1 year $ 68 $ 47 $ 68[A] $ 29[A] $ 18 $ 19

3 years $ 90 $ 73 $ 85[A] $ 58 $ 55 $ 58

5 years $ 115 $ 100 $ 114[A] $ 100 $ 94 $ 100

10 years[B] $ 184 $ 179 $ 180 $ 217 $ 180 $ 217

</TABLE>

[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER
SEVEN YEARS.
The following information replaces similar information for
INTERMEDIATE MUNICIPAL INCOME found in "Expenses" on page 11.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
MUNICIPAL FUNDS
Examples

Full Redemption No Redemption

Class A Class T Class B Class C Class B Class C

INTERMEDIATE MUNICIPAL INCOME 1 year $ 46 $ 36 $ 47[A] $ 28[A] $ 17 $ 18

3 years $ 65 $ 55 $ 62[A] $ 55 $ 52 $ 55

5 years[C] $ 85 $ 76 $ 81 $ 95 $ 81 $ 95

10 years[C] $ 144 $ 135 $ 140 $ 206 $ 140 $ 206

</TABLE>

[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[C] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER FOUR
YEARS.
The following information replaces similar information for
INTERMEDIATE MUNICIPAL INCOME found in "Expenses" on page 11.
FMR has voluntarily agreed to reimburse Class A, Class T, Class B, and
Class C of each fund to the extent that total operating expenses, as a
percentage of their respective average net assets, exceed the
following rates:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Effective Date Class T Effective Date Class B Effective Date Class C Effective Date

Intermediate
Municipal Income 0.90% 8/30/96 0.90% 5/29/98 1.65% 1/1/96 1.75% 11/1/97

</TABLE>

The following information replaces similar information found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 56.
Ian Spreadbury is manager of Advisor Strategic Income's foreign bond
investments, which he has managed since May 1998. He also co-manages
another Fidelity fund. Additionally, Mr. Spreadbury is a director of
fixed income and a portfolio manager for Fidelity International
Limited (FIL). Prior to joining Fidelity in 1995, Mr. Spreadbury was a
senior manager with Legal & General, Limited, from 1981 to 1995.
Christine Thompson is Vice President and manager of Advisor Municipal
Income, which she has managed since July 1998. She also manages
several other Fidelity funds. Since joining Fidelity in 1985, Ms.
Thompson has worked as a senior analyst and portfolio manager.
The following information replaces the last paragraph found under
the heading "FMR and Its Affiliates" in the "Charter" section on page
57.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of Fidelity Advisor Funds, provided that the fund receives brokerage
services and commission rates comparable to those of other
broker-dealers.
The following information replaces similar information found under the
heading "Strategic Income Fund" in "Investment Principles and Risks"
on page 59.
The fund invests primarily in debt securities, including lower-quality
securities, allocated among four general investment categories: high
yield securities, U.S. Government and investment-grade securities,
emerging market securities, and foreign developed market securities.
The fund's neutral mix, or the benchmark for its combination of
investments in each category over time, is approximately 40% high
yield, 30% U.S. Government and investment-grade, 15% emerging markets
and 15% foreign developed markets. The fund also may invest a portion
of its assets in convertible securities and common and preferred
stocks.
The HIGH YIELD category includes high-yielding, lower-quality
securities consisting mainly of U.S. securities. The U.S. GOVERNMENT
AND INVESTMENT-GRADE category includes mortgage securities, U.S.
Government securities, government agency securities and other U.S.
dollar-denominated securities of investment-grade quality. The
EMERGING MARKET category includes corporate and governmental
securities of any quality of issuers located in emerging markets. The
FOREIGN DEVELOPED MARKET category includes corporate and governmental
securities of any quality of issuers located in developed foreign
markets. These investment categories are only general guidelines, and
FMR may use its judgment as to which category an investment falls
within. The fund may also make investments that do not fall within
these categories.
The following information replaces the thirteenth paragraph found
under the heading "Other Expenses" in the "Breakdown of Expenses"
section beginning on page 69.
In addition, pursuant to each Class B plan, Class B of each fund pays
FDC a monthly service fee at an annual rate of 0.25% of Class B's
average net assets throughout the month. Up to the full amount of the
Class B service fee may be reallowed to investment professionals for
providing personal service to and/or maintenance of Class B
shareholder accounts.
The following information replaces the fourteenth and fifteenth
paragraphs found under the heading "Other Expenses" in the "Breakdown
of Expenses" section beginning on page 69.
Class C shares of each fund (except Strategic Opportunities, Mortgage
Securities, and Short-Intermediate Municipal Income) have adopted a
DISTRIBUTION AND SERVICE PLAN. Under the plans, Class C of each fund
is authorized to pay FDC a monthly distribution fee as compensation
for its services and expenses in connection with the distribution of
Class C shares. Class C of each fund may pay FDC a distribution fee at
an annual rate of 0.75% of its average net assets, or such lesser
amount as the Trustees may determine from time to time. Class C of
each fund currently pays FDC a monthly distribution fee at an annual
rate of 0.75% of its average net assets throughout the month.
Normally, after the first year of investment, up to the full amount of
the Class C distribution fee may be reallowed to investment
professionals as compensation for their services in connection with
the distribution of Class C shares.
In addition, pursuant to each Class C plan, Class C of each fund pays
FDC a monthly service fee at an annual rate of 0.25% of Class C's
average net assets throughout the month. Normally, after the first
year of investment, up to the full amount of the Class C service fee
may be reallowed to investment professionals for providing personal
service to and/or maintenance of Class C shareholder accounts.
For purchases of Class C shares made for an employee benefit plan or
through reinvested dividends or capital gain distributions, during the
first year of investment and thereafter, up to the full amount of the
Class C distribution fee and Class C service fee paid by such shares
may be reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares and for
providing personal service to and/or maintenance of Class C
shareholder accounts.
The following information replaces similar information found in "How
to Buy Shares" on page 72.
IF YOU ARE NEW TO THE FIDELITY ADVISOR FUNDS, complete and sign an
account application and mail it along with your check. If there is no
account application accompanying this prospectus, call your investment
professional or, if you are investing through a broker-dealer or
insurance representative, call 1-800-522-7297 or, if you are investing
through a bank representative, call 1-800-843-3001.
The following information supplements the information found under the
heading "Finder's Fee" in the "Transaction Details" section on page
80.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
The following information replaces the third paragraph under the
heading "Contingent Deferred Sales Charge" in the "Transaction
Details" section on page 80.
Except as provided below, investment professionals with whom FDC has
agreements receive as compensation from FDC, at the time of the sale,
a concession equal to 4.00% (2.00% for the Intermediate-Term Bond
Funds) of your purchase of Class B shares. For purchases of Class B
shares through reinvested dividends or capital gain distributions,
investment professionals do not receive a concession at the time of
sale.
The following information replaces the fifth paragraph under the
heading "Contingent Deferred Sales Charge" in the "Transactions
Details" section on page 80.
Except as provided below, investment professionals with whom FDC has
agreements receive as compensation from FDC, at the time of the sale,
a concession equal to 1.00% of your purchase of Class C shares. For
purchases of Class C shares made for an employee benefit plan or
through reinvested dividends or capital gain distributions, investment
professionals do not receive a concession at the time of sale.
The following information replaces similar information found in "Sales
Charge Reductions and Waivers" on page 83.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS A
SHARES:
5. Purchased for (i) an employee benefit plan that has $25 million or
more in plan assets or (ii) an employee benefit plan that is part of
an investment professional sponsored program that requires the
participating employee benefit plan to initially invest in Class C or
Class B shares and, upon meeting certain criteria, subsequently
requires the plan to invest in Class A shares, or

SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS
INSTITUTIONAL CLASS FEBRUARY 28,1998 PROSPECTUS
SHAREHOLDER MEETING. On or about November 18, 1998, a meeting of the
shareholders of Fidelity Advisor Equity Income Fund will be held to
approve various proposals, including modifications to the fund's
management contract. Shareholders of record on September 21, 1998 are
entitled to vote at the meeting. Included in the proposed management
contract modifications is a proposal to revise the fund's current flat
management fee structure to a group fee structure that is standard for
other comparable Fidelity equity funds. The proposed contract
modifications also include a proposal to allow FMR and the trust, on
behalf of the fund, to amend the fund's management contract subject to
the provisions of Section 15 of the Investment Company Act of 1940.
For more detailed information concerning the proposals under
consideration, please contact Client Services at 1-800-522-7297 to
request a free copy of the proxy statement.
AS OF MAY 28, 1998, Fidelity Advisor Short-Intermediate Municipal
Income Fund was merged into the corresponding class of Fidelity
Advisor Intermediate Municipal Income Fund and shareholders of
Fidelity Advisor Short-Intermediate Municipal Income Fund became
shareholders of Fidelity Advisor Intermediate Municipal Income Fund.
The merger was voted on and approved at a shareholder meeting on May
4, 1998. Fidelity Advisor Short-Intermediate Municipal Income Fund
ceased to exist and is not offered.
The following information replaces each reference to 1-800-843-3001.
If you are investing through a broker-dealer or insurance
representative, call 1-800-522-7297. If you are investing through a
bank representative, call 1-800-843-3001.
The following information replaces the third paragraph under the
heading "FMR and Its Affiliates" in the "Charter" section on page 22.
Beginning January 1, 1999, Fidelity Investments Money Management, Inc.
(FIMM), located in Merrimack, New Hampshire, will select certain types
of investments for Balanced and Strategic Income. Beginning January 1,
1999, FIMM will have primary responsibility for providing investment
management services for Mortgage Securities, Government Investment,
Intermediate Bond, Short Fixed-Income, Municipal Income, Intermediate
Municipal Income, and Short-Intermediate Municipal Income.
The following information replaces similar information found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 23.
Ian Spreadbury is manager of Advisor Strategic Income's foreign bond
investments, which he has managed since May 1998. He also co-manages
another Fidelity fund. Additionally, Mr. Spreadbury is a director of
fixed income and a portfolio manager for Fidelity International,
Limited (FIL). Prior to joining Fidelity in 1995, Mr. Spreadbury was a
senior manager with Legal & General, Limited, from 1981 to 1995.
Christine Thompson is Vice President and manager of Advisor Municipal
Income, which she has managed since July 1998. She also manages
several other Fidelity funds. Since joining Fidelity in 1985, Ms.
Thompson has worked as a senior analyst and portfolio manager.
The following information replaces the last paragraph found under
the heading "FMR and Its Affiliates" in the "Charter" section on page
24.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of Fidelity Advisor Funds, provided that the fund receives brokerage
services and commission rates comparable to those of other
broker-dealers.
The following information replaces the second and fourth paragraphs,
respectively, under the heading "Strategic Income Fund" in "Investment
Principles and Risks" on page 26.
The fund invests primarily in debt securities including lower-quality
securities, allocated among four general investment categories: high
yield securities, U.S. Government and investment-grade securities,
emerging market securities, and foreign developed market securities.
The fund's neutral mix, or the benchmark for its combination of
investments in each category over time, is approximately 40% high
yield, 30% U.S. Government and investment-grade, 15% emerging markets
and 15% foreign developed markets. The fund also may invest a portion
of its assets in convertible securities and common and preferred
stocks.
The HIGH YIELD category includes high-yielding, lower-quality
securities consisting mainly of U.S. securities. The U.S. GOVERNMENT
AND INVESTMENT-GRADE category includes mortgage securities, U.S.
Government securities, government agency securities and other U.S.
dollar-denominated securities of investment-grade quality. The
EMERGING MARKET category includes corporate and governmental
securities of any quality of issuers located in emerging markets. The
FOREIGN DEVELOPED MARKET category includes corporate and governmental
securities of any quality of issuers located in developed foreign
markets. These investment categories are only general guidelines, and
FMR may use its judgment as to which category an investment falls
within. The fund may also make investments that do not fall within
these categories.

SUPPLEMENT TO THE FIDELITY MORTGAGE
SECURITIES FUND
INITIAL CLASS
FEBRUARY 28,1998 PROSPECTUS
The following information replaces the last paragraph found under
the heading "FMR and Its Affiliates" in the "Charter" section on page
10.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of Fidelity Advisor Funds, provided that the fund receives brokerage
services and commission rates comparable to those of other
broker-dealers.

SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS:
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
FEBRUARY 28, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES FUNDAMENTAL INVESTMENT LIMITATION
(1) IN EACH OF "INVESTMENT LIMITATIONS OF BALANCED FUND," "INVESTMENT
LIMITATIONS OF HIGH YIELD FUND," "INVESTMENT LIMITATIONS OF MORTGAGE
SECURITIES FUND," "INVESTMENT LIMITATIONS OF GOVERNMENT INVESTMENT
FUND," AND INVESTMENT LIMITATIONS OF SHORT FIXED-INCOME FUND" FOUND ON
PAGES 13, 15, 17, 18, AND 20, RESPECTIVELY.
The fund may not 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.
THE FOLLOWING INFORMATION REPLACES FUNDAMENTAL INVESTMENT LIMITATION
(5) IN "INVESTMENT LIMITATIONS OF GOVERNMENT INVESTMENT FUND" FOUND ON
PAGE 18.
The fund may not 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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION FOUND ON PAGE 36.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
SAI.
SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION
The Russian Federation is the largest republic of the Commonwealth of
Independent States with a 1995 population of 147,500,000. It is about
one and four fifths of the land area of the United States and occupies
most of eastern Europe and north Asia.
Russia has had a long history of political and economic turbulence.
The U.S.S.R. lasted 69 years and for more than half that time it
ranked as a nuclear superpower. In the 1930's tens of millions of its
citizens were collectivized under state agricultural and industrial
enterprises and millions died in political purges and the vast penal
and labor system or in state-created famines. During World War II, as
many as 20 million Soviet citizens died. After decades of communist
rule the Soviet Union was dissolved on December 8, 1991 following a
failed coup attempt against the government of Mikhail Gorbachev. On
the day that the leaders declared that the Soviet Union ceased to
exist, the Soviet republics were invited to join with Russia in the
Commonwealth of Independent states (CIS). At one time or another those
that have agreed to join have included the Ukraine, Belarus, Moldova,
Georgia, Armenia, Azerbaijan, Uzbekistan, Turkmenistan, Tajikistan,
Kazakhstan and Kyrgyzstan, but a number have dropped out since or have
only observer status. Each of the republics is a sovereign state that
controls its own economy and natural resources and collects its own
taxes, providing only minimal support to the CIS.
Boris Yeltsin, President of Russia, inherited the mantle of economic
and political chaos. With the freeing of most prices he staked his
political life on the rapid creation of a free market economy. Since
1991 Yeltsin and his Russian reformers have been faced with the
daunting task of stabilizing the Russian economy while transforming it
into a modern and efficient structure able to compete in international
markets and respond to the needs of the Russian people. To date, their
efforts have yielded widely mixed results. On the one hand, they have
made some impressive progress. Since 1992, they have abolished central
planning, decontrolled prices, unified the foreign exchange market,
made the ruble convertible, and privatized two thirds of the economy.
They have accomplished this in spite of the crushing burdens inherited
from the communist system: huge industrial enterprises that are
unprofitable; an obsolete capital stock; a crumbling energy sector,
huge external debt; and armies that had to be repatriated and
resettled at home.
Russia remains a paradox among the major economies of the world in
that it is a country marked by stagnation in production levels, but
has few constraints on growth. Labor supply is adequate and savings
are high. In addition, there is almost unlimited scope for increasing
productivity through the introduction of improved technologies,
production process and market-oriented managerial development. There
are 147 million consumers who are slowly increasing their buying power
and education standards are high. Russia is also rich in natural
resources. It has 40% of the world's natural gas reserves, 6% of its
oil, 25% of coal, diamonds, gold and nickel, and 30% of timber and
bauxite. Approximately ten million people are engaged in agriculture
and they produce half of the region's grain, meat, milk, and other
dairy products.
The main reason for the continued poor performance of the Russian
economy is the country's failure to mobilize the resources that are
available. While the official unemployment rate was at 10.6% in 1996,
up to half of the working population is, in effect, unemployed or, to
a significant degree, underemployed in inefficient and unproductive
industries. Much of the country's savings have been siphoned off
through capital flight. Russia's technological potential for
assimilating both domestic and foreign technologies is not being
exploited. Industry privatization and restructuring initiatives have
generally failed to mobilize the available factors of production as
the country's privatization program virtually ensures the predominance
of the old management teams that are largely non market-oriented in
their management approach. Approximately 80% of Russian privatized
companies continue to be majority-owned by insiders and only 10% are
owned by investors with large enough stakes to influence the running
of the company.
In July 1996, Boris Yeltsin was re-elected for a second term and it
was hoped that the election would mark the start of a more stable
period of economic growth. However, macroeconomic indicators in 1996
proved contradictory. On the one hand, the Russian government
continued its strict credit policies, and the annual inflation rate
for 1996 dropped to 23%, down from 131% in 1995. Inflation has since
remained below 3% a month through the first half of 1997. In addition,
expenditure cuts trimmed the budget deficit to 7% of GDP for the first
nine months of 1996. On the other hand, however, GDP fell by 6%
following 1995's 4% fall, while industrial production was down by 5%
and real investment dropped by approximately 19%. Non-payment
continues to represent a serious problem for the economy, particularly
in the energy sector.
While Russia is widely believed to be one of the most risky markets in
eastern Europe, it is also recognized for its potential for positive
returns. In 1996 the Russian market delivered the world's best stock
market performance and was among the top performing markets in the
first half of 1997. However, the market has been essentially liquidity
driven and concentrated in a very few of the country's largest
companies. At just $65 billion, the total capitalization of the stock
market accounts for just 12 percent of GDP. The majority of investors
in Russian equities are small and medium-sized US hedge funds. In
addition, several country specific funds have been established to make
direct and portfolio investments in Russian companies. To facilitate
foreign investment, a number of the larger Russian companies have
issued equity in the form of American depositary receipts while six
big firms have issued securities in the form of Russian depositary
certificates. These certificates are issued and marketed by the Bank
of New York. Any investment in Russia is risky and deciding which
companies will perform well at this stage of the country's
transformation is far from easy. A combination of poor accounting
standards, inept management, limited shareholder rights and the
criminalization of large sectors of the economy pose a significant
risk, particularly to foreign investors.
THE FOLLOWING INFORMATION REPLACES THE FIFTH PARAGRAPH FOUND IN THE
"PORTFOLIO TRANSACTIONS" SECTION ON PAGE 48.
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 research services of the 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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 108.
Balanced may compare its performance to that of the Fidelity Balanced
Composite Benchmark which is a hypothetical representation of the
performance of the fund's general investment categories using a
weighting of 60% equity and 40% bond. The following indices are used
to calculate the Fidelity Balanced Composite Benchmark: equity - the
Standard & Poor's 500 Index, a widely recognized, unmanaged index of
common stocks; and bond - the Lehman Brothers Aggregate Bond Index, a
benchmark of investment-grade bonds. The index weightings of the
Fidelity Balanced Composite Benchmark are rebalanced monthly.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" BEGINNING
ON PAGE 110.
CLASS A SHARES ONLY
2. to shares purchased by a trust institution or bank trust department
for a managed account that is charged an asset-based fee. Employee
benefit plans (including 403(b) programs, but otherwise as defined in
ERISA) and accounts managed by third parties do not qualify for this
waiver;
3. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee. Employee benefit plans (including
403(b) programs, but otherwise as defined in ERISA) do not qualify for
this waiver;
4. to shares purchased by a registered investment adviser that is not
part of an organization primarily engaged in the brokerage business
for an account that is managed on a discretionary basis and is charged
an asset-based fee. Employee benefit plans (including 403(b) programs,
but otherwise as defined in ERISA) do not qualify for this waiver;
5. to shares purchased for an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) having $25 million or
more in plan assets; or
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" BEGINNING
ON PAGE 111.
CLASS T SHARES ONLY
5. to shares purchased for an employee benefit plan (as defined by
ERISA (except SIMPLE IRA, SEP, and SARSEP plans and plans covering
self-employed individuals and their employees (formerly, Keogh/H.R. 10
plans), but including 403(b) programs));
6. to shares purchased for a Fidelity or Fidelity Advisor account
(including purchases by exchange) with the proceeds of a distribution
from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA) that are invested in Fidelity Advisor
or Fidelity funds, or (ii) an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) that is invested in
Fidelity Advisor or Fidelity funds. (Distributions other than those
transferred to an IRA account must be transferred directly into a
Fidelity account.);
STRATEGIC OPPORTUNITIES: INITIAL CLASS ONLY
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan (including 403(b) programs, but otherwise as defined in ERISA)
provided that: (i) at the time of the distribution, the employer, or
an affiliate (as described in exemption 1 above) of such employer,
maintained at least one employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) that qualified for
exemption (1) 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
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;
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER THE
HEADING "FINDER'S FEE" IN THE "ADDITIONAL PURCHASE, EXCHANGE AND
REDEMPTION INFORMATION" SECTION BEGINNING ON PAGE 113.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. For all funds except the Short-Term Bond Funds, on
eligible purchases of (i) Class A shares in amounts of $1 million or
more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, or (iii) Class T shares in amounts of
$1 million or more, investment professionals will be compensated with
a fee at the rate of 0.25% of the purchase amount. Class A eligible
purchases are the following purchases made through broker-dealers and
banks: an individual trade of $25 million or more; an individual trade
of $1 million or more that is load waived; a trade which brings the
value of the accumulated account(s) of an investor (including an
employee benefit plan (including 403(b) programs, but otherwise as
defined in ERISA)) past $25 million; a load waived trade that brings
the value of the accumulated account(s) of an investor (including an
employee benefit plan (including 403(b) programs, but otherwise as
defined in ERISA)) past $1 million; a trade for an investor with an
accumulated account value of $25 million or more; a load waived trade
for an investor with an accumulated account value of $1 million or
more; an incremental trade toward an investor's $25 million "Letter of
Intent"; and an incremental load waived trade toward an investor's $1
million "Letter of Intent". Class T eligible purchases are the
following purchases made through broker-dealers and banks: an
individual trade of $1 million or more; a trade which brings the value
of the accumulated account(s) of an investor (including an employee
benefit plan (including 403(b) programs, but otherwise as defined in
ERISA)) past $1 million; a trade for an investor with an accumulated
account value of $1 million or more; and an incremental trade toward
an investor's $1 million "Letter of Intent."
For the Short-Term Bond Funds, on eligible purchases of (i) Class A
shares in amounts of $1 million or more, or (ii) Class T shares in
amounts of $1 million or more, investment professionals will be
compensated with a fee at the rate of 0.25% of the purchase amount.
Class A eligible purchases are the following purchases made through
broker-dealers and banks: an individual trade of $1 million or more; a
trade which brings the value of the accumulated account(s) of an
investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $1 million or
more; and an incremental trade toward an investor's $1 million "Letter
of Intent." Class T eligible purchases are the following purchases
made through broker-dealers and banks: an individual trade of $1
million or more; a trade which brings the value of the accumulated
account(s) of an investor (including an employee benefit plan
(including 403(b) programs, but otherwise as defined in ERISA)) past
$1 million; a trade for an investor with an accumulated account value
of $1 million or more; and an incremental trade toward an investor's
$1 million "Letter of Intent."
Any assets on which a finder's fee has been paid will bear a
contingent deferred sales charge (Class A or Class T CDSC) if they do
not remain in Class A or Class T shares of the Fidelity Advisor Funds,
or Daily Money Class shares of Treasury Fund, Prime Fund or Tax-Exempt
Fund, for a period of at least one uninterrupted year. The Class A or
Class T CDSC will be 0.25% of the lesser of the cost of the Class A or
Class T shares, as applicable, at the initial date of purchase or the
value of the Class A or Class T shares, as applicable, at redemption,
not including any reinvested dividends or capital gains. Class A and
Class T shares acquired through distributions (dividends or capital
gains) will not be subject to a Class A or Class T CDSC. In
determining the applicability and rate of any Class A or Class T CDSC
at redemption, Class A or Class T shares representing reinvested
dividends and capital gains, if any, will be redeemed first, followed
by those Class A or Class T shares, as applicable that have been held
for the longest period of time.
With respect to employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA), the Class A or Class T CDSC does not
apply to the following types of redemptions: (i) plan loans or
distributions or (ii) exchanges to non-Advisor fund investment
options. With respect to Individual Retirement Accounts, the Class A
or Class T CDSC does not apply to redemptions made for disability,
payment of death benefits, or required partial distributions starting
at age 70 1/2.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"DISTRIBUTIONS AND TAXES" SECTION ON PAGE 117.
If a fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the
Internal Revenue Code, it may be subject to U.S. federal income tax on
a portion of any excess distribution or gain from the disposition of
such shares. Interest charges may also be imposed on a fund with
respect to deferred taxes arising from such distributions or gains.
Generally, a fund will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for tax purposes and
must be distributed to shareholders as dividends.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 121.
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 in 1997, or calendar year
ended December 31, 1997, as applicable.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
COMPENSATION TABLE
Aggregate
Compensation
from a FundA
J. Gary Ralph Phyllis Richard Robert Edward C. E.
Burkhead F. Burke J. Flynn M. Johnson Bradley
(double dagger) Cox Davis (double dagger) Gates 3d(double dagger) Jones
(double dagger)

TechnoQuant
$ 0 $ 8 $ 8 $ 0 $ 5 $ 0 $ 8
Growth**,B

International
0 20 20 0 17 0 20
Capital
AppreciationB,++

Overseas*,B,C
0 481 471 64 121 0 474

MidCap**,B
0 144 141 6 66 0 142

Equity
0 2,067 2,022 127 783 0 2,038
Growth**,B,D,N

Growth
0 7,159 7,008 860 5,170 0 7,060
Opportunities
**,B,E,N,O

Strategic
0 265 259 0 170 0 261
Opportunities**,B

Large Cap**,B
0 24 24 1 11 0 24

Growth &
0 23 23 0 16 0 23
Income**,B

Equity
0 1,202 1,177 66 965 0 1,186
Income**,B,F,N

Balanced*,B,G,N
0 1,236 1,209 178 839 0 1,219

Emerging
0 49 48 0 33 0 49
Markets
Income***,B

High
0 1,013 991 123 729 0 998
Yield*,B,H,N

Strategic
0 67 66 0 45 0 66
Income***,B

Mortgage
0 204 199 82 98 0 200
Securities*,B,I,P

Government
0 92 90 15 57 0 91
Investment*,B,J

Intermediate
0 197 193 13 151 0 194
Bond**,B,K

Short Fixed-
0 166 161 25 109 0 164
Income*,B,L

Municipal
0 200 195 30 131 0 197
Income*,B,M

Municipal
0 395 386 0 326 0 389
Bond***,B

Intermediate
0 27 27 2 21 0 27
Municipal
Income**,B

Short-
0 11 11 1 8 0 11
Intermediate
Municipal
Income**,B

TOTAL
0 214,500 210,000 0 176,000 0 211,500
COMPENSATION
FROM THE FUND
COMPLEX+,A

</TABLE>

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C>
COMPENSATION TABLE
Aggregate
Compensation
from a FundA
Donald Peter William Gerald C. Edward H. Marvin Robert Thomas
J. S. O. McCoy McDono Malone L. C. R.
Kirk Lynch
(double dagger) (double dagger)
(double dagger) ugh (double dagger)
(double dagger) (double dagger) Mann Pozen Williams

TechnoQuant
$ 8 $ 0 $ 5 $ 10 $ 0 $ 8 $ 0 $ 8
Growth**,B

International
20 0 20 25 0 20 0 20
Capital
AppreciationB,++

Overseas*,B,C
474 0 260 575 66 481 0 478

MidCap**,B
142 0 94 175 6 144 0 144

Equity
2,038 0 1,110 2,506 123 2,067 0 2,069
Growth**,B,D,N

Growth
7,060 0 7,213 8,573 929 7,159 0 7,115
Opportunities
**,B,E,N,O

Strategic
261 0 227 326 0 265 0 265
Opportunities**,B

Large Cap**,B
24 0 16 29 1 24 0 24

Growth &
23 0 16 29 0 23 0 23
Income**,B

Equity
1,186 0 1,237 1,460 64 1,202 0 1,203
Income**,B,F,N

Balanced*,B,G,N
1,219 0 1,232 1,470 198 1,236 0 1,227

Emerging
49 0 42 61 0 49 0 49
Markets
Income***,B

High
998 0 1,021 1,212 132 1,013 0 1,006
Yield*,B,H,N

Strategic
66 0 57 83 0 67 0 67
Income***,B

Mortgage
200 0 202 235 68 204 0 204
Securities*,B,I,P

Government
91 0 90 105 14 92 0 91
Investment*,B,J

Intermediate
194 0 202 239 13 197 0 197
Bond**,B,K

Short Fixed-
164 0 164 197 28 166 0 165
Income*,B,L

Municipal
197 0 197 237 34 200 0 198
Income*,B,M

Municipal
389 0 404 486 0 395 0 395
Bond***,B

Intermediate
27 0 28 33 2 27 0 27
Municipal
Income**,B

Short-
11 0 11 13 1 11 0 11
Intermediate
Municipal
Income**,B

TOTAL
211,500 0 214,500 264,500 0 214,500 0 214,500
COMPENSATION
FROM THE FUND
COMPLEX+,A

* Fiscal year ended October 31.
** Fiscal year ended November 30.
*** Fiscal year ended December 31.
(double dagger) Interested trustees of each fund and Mr. Burkhead are
compensated by FMR.
(double dagger)(double dagger) Richard J. Flynn and Edward H. Malone
served on the Board of Trustees through December 31, 1996.
(double dagger)(double dagger)(double dagger) During the period from
May 1, 1996 through December 31, 1996, William O. McCoy served as a
Member of the Advisory Board for the funds. Mr. McCoy was appointed to
the Board of Trustees of Advisor Series II, III, IV, V, VI, Income
Fund, and Municipal Trust effective January 1, 1997. Mr. McCoy was
elected to the Board of Trustees of Advisor Series I, VII, and VIII on
July 16, 1997, September 17, 1997, and June 18, 1997, respectively.
+ Information is as of December 31, 1997 for 230 funds in the complex.
++ Figures presented are estimates for the fund's first fiscal year
end October 31, 1998.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000, Phyllis Burke Davis, $75,000, Robert M. Gates, $62,500, E.
Bradley Jones, $75,000, Donald J. Kirk, $75,000, William O. McCoy,
$75,000, Gerald C. McDonough, $87,500, Marvin L. Mann, $75,000, and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation: Ralph F.
Cox, $53,699, Marvin L. Mann, $53,699, and Thomas R. Williams,
$62,462.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $12, Phyllis Burke Davis, $12, Robert M. Gates, $0, Richard J.
Flynn, $0, E. Bradley Jones, $12, Donald J. Kirk, $12, William O.
McCoy, $0, Gerald C. McDonough, $12, Edward H. Malone, $12, Marvin L.
Mann, $12, and Thomas R. Williams, $12.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $925, Phyllis Burke Davis, $925, Robert M. Gates, $330, Richard
J. Flynn, $0, E. Bradley Jones, $925, Donald J. Kirk, $925, William O.
McCoy, $330, Gerald C. McDonough, $1,078, Edward H. Malone, $4, Marvin
L. Mann, $925, and Thomas R. Williams, $925.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $3,130, Phyllis Burke Davis, $3,130, Richard J. Flynn, $0, Robert
M. Gates, $2,446, E. Bradley Jones, $3,130, Donald J. Kirk, $3,130,
William O. McCoy, $3,044, Gerald C. McDonough, $3,624, Edward H.
Malone, $165, Marvin L. Mann, $3,130, and Thomas R. Williams, $3,130.
F The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $541, Phyllis Burke Davis, $541, Richard J. Flynn, $0, Robert M.
Gates, $454, E. Bradley Jones, $541, Donald J. Kirk, $541, William O.
McCoy, $552, Gerald C. McDonough, $631, Edward H. Malone, $2, Marvin
L. Mann, $541, and Thomas R. Williams, $541.
G The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $535, Phyllis Burke Davis, $535, Richard J. Flynn, $0, Robert M.
Gates, $397, E. Bradley Jones, $535, Donald J. Kirk, $535, William O.
McCoy, $508, Gerald C. McDonough, $617, Edward H. Malone, $41, Marvin
L. Mann, $535, and Thomas R. Williams, $535.
H The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $442, Phyllis Burke Davis, $442, Richard J. Flynn, $0, Robert M.
Gates, $345, E. Bradley Jones, $442, Donald J. Kirk, $442, William O.
McCoy, $430, Gerald C. McDonough, $512, Edward H. Malone, $23, Marvin
L. Mann, $442, and Thomas R. Williams, $442.
I The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $6, Phyllis Burke Davis, $6, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $6, Donald J. Kirk, $6, William O. McCoy,
$0, Gerald C. McDonough, $6, Edward H. Malone, $6, Marvin L. Mann, $6,
and Thomas R. Williams, $6.
J The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $4, Phyllis Burke Davis, $4, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $4, Donald J. Kirk, $4, William O. McCoy,
$0, Gerald C. McDonough, $4, Edward H. Malone, $4, Marvin L. Mann, $4,
and Thomas R. Williams, $4.
K The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $1, Phyllis Burke Davis, $1, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $1, Donald J. Kirk, $1, William O. McCoy,
$0, Gerald C. McDonough, $1, Edward H. Malone, $1, Marvin L. Mann, $1,
and Thomas R. Williams, $1.
L The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $6, Phyllis Burke Davis, $6, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $6, Donald J. Kirk, $6, William O. McCoy,
$0, Gerald C. McDonough, $6, Edward H. Malone, $6, Marvin L. Mann, $6,
and Thomas R. Williams, $6.
M The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $7, Phyllis Burke Davis, $7, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $7, Donald J. Kirk, $7, William O. McCoy,
$0, Gerald C. McDonough, $7, Edward H. Malone, $7, Marvin L. Mann, $7,
and Thomas R. Williams, $7.
N For the fiscal period ended in 1997, certain of the non-interested
trustees' aggregate compensation from certain funds includes accrued
voluntary deferred compensation as follows: Equity Growth (Cox, $870,
Malone, $119, Mann, $870, Williams, $767); Growth Opportunities (Cox,
$3,178, Malone, $764, Mann, $3,178, Williams, $2,464); Equity Income
(Cox, $502, Malone, $62, Mann, $502, Williams, $449); Balanced (Cox,
$557, Malone, $157, Mann, $557, Williams $410); and High Yield (Cox,
$450, Malone, $109, Mann, $450, Williams, $348).
O Aggregate compensation from Growth Opportunities for the one month
period ended November 30, 1997: J. Gary Burkhead, $0, Ralph F. Cox,
$697, Phyllis Burke Davis, $697, Richard J. Flynn, $0, Robert M.
Gates, $688, Edward C. Johnson 3d, $0, E. Bradley Jones, $697, Donald
J. Kirk, $697, Peter S. Lynch, $0, William O. McCoy, $688, Gerald C.
McDonough, $851, Edward H. Malone, $14, Marvin L. Mann, $697, Robert
C. Pozen, $0, and Thomas R. Williams, $697.
P Aggregate compensation from Mortgage Securities for the three month
period ended October 31, 1997: J. Gary Burkhead, $0, Ralph F. Cox,
$51, Phyllis Burke Davis, $51, Richard J. Flynn, $0, Robert M. Gates,
$51, Edward C. Johnson 3d, $0, E. Bradley Jones, $51, Donald J. Kirk,
$51, Peter S. Lynch, $0, William O. McCoy, $51, Gerald C. McDonough,
$63, Edward H. Malone, $0, Marvin L. Mann, $51, Robert C. Pozen, $0,
and Thomas R. Williams, $51.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "MANAGEMENT CONTRACTS"
SECTION BEGINNING ON PAGE 127.
The following fee schedule is the current fee schedule for High Yield,
Mortgage Securities, Government Investment and Short Fixed-Income, and
replaces the similar information for each fund on pages 129 and 130.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

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

0 - $3 billion .3700% $ 0.5 billion .3700%

3 - 6 .3400 25 .2664

6 - 9 .3100 50 .2188

9 - 12 .2800 75 .1986

12 - 15 .2500 100 .1869

15 - 18 .2200 125 .1793

18 - 21 .2000 150 .1736

21 - 24 .1900 175 .1690

24 - 30 .1800 200 .1652

30 - 36 .1750 225 .1618

36 - 42 .1700 250 .1587

42 - 48 .1650 275 .1560

48 - 66 .1600 300 .1536

66 - 84 .1550 325 .1514

84 - 120 .1500 350 .1494

120 - 156 .1450 375 .1476

156 - 192 .1400 400 .1459

192 - 228 .1350 425 .1443

228 - 264 .1300 450 .1427

264 - 300 .1275 475 .1413

300 - 336 .1250 500 .1399

336 - 372 .1225 525 .1385

372 - 408 .1200 550 .1372

408 - 444 .1175

444 - 480 .1150

480 - 516 .1125

Over 516 .1100

This fee schedule was approved by the shareholders of High Yield,
Mortgage Securities, Government Investment and Short Fixed-Income.
THE FOLLOWING CHART REPLACES THE SIMILAR CHART FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 128.

</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FUND DATE OF MANAGEMENT CONTRACT DATE OF SHAREHOLDER APPROVAL

TechnoQuant Growth 12/1/96 12/23/96*

International Capital Appreciation 10/16/97 10/31/97*

Overseas 10/31/97 9/17/97

Mid Cap 1/18/96 1/18/96*

Equity Growth 8/1/97 7/16/97

Growth Opportunities 2/28/98 7/16/97

Strategic Opportunities 2/28/98 6/18/97

Large Cap 1/18/96 1/18/96*

Growth & Income 12/1/96 12/23/96*

Equity Income 8/1/86 7/23/86

Balanced 6/1/98 5/13/98

Emerging Markets Income 7/1/97 6/18/97

High Yield 6/1/98 5/13/98

Strategic Income 10/31/97 6/18/97

Mortgage Securities 8/1/98 7/15/98

Government Investment 6/1/98 5/13/98

Intermediate Bond 1/1/95 12/14/94

Short Fixed-Income 6/1/98 5/13/98

Municipal Income 12/1/94 11/16/94

Municipal Bond 1/1/94 12/15/93

Intermediate Municipal Income 7/1/95 6/14/95

Short-Intermediate Municipal Income 7/1/95 6/14/95

</TABLE>

* Approved by FMR, then the sole shareholder of the fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 133.
The individual fund fee rates for each fund (except Equity Income) are
set forth in the following chart. Based on the average group net
assets of the funds advised by FMR for December 1997 the annual basic
fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND BASIC FEE RATE
FEE RATE

TechnoQuant Growth 0.2942% + 0.30% = 0.5942%

International Capital Appreciation* 0.2942% + 0.45% = 0.7442%

Overseas 0.2942% + 0.45% = 0.7442%

Mid Cap 0.2942% + 0.30% = 0.5942%

Equity Growth 0.2942% + 0.30% = 0.5942%

Growth Opportunities 0.2942% + 0.30% = 0.5942%

Strategic Opportunities 0.2942% + 0.30% = 0.5942%

Large Cap 0.2942% + 0.30% = 0.5942%

Growth & Income 0.2942% + 0.20% = 0.4942%

Balanced 0.2942% + 0.15% = 0.4442%

Emerging Markets Income 0.1372% + 0.55% = 0.6872%

High Yield 0.1372% + 0.45% = 0.5872%

Strategic Income 0.1372% + 0.45% = 0.5872%

Mortgage Securities 0.1372% + 0.30% = 0.4372%

Government Investment 0.1372% + 0.30% = 0.4372%

Intermediate Bond 0.1372% + 0.30% = 0.4372%

Short Fixed-Income 0.1372% + 0.30% = 0.4372%

Municipal Income 0.1372% + 0.25% = 0.3872%

Municipal Bond 0.1372% + 0.25% = 0.3872%

Intermediate Municipal Income 0.1372% + 0.25% = 0.3872%

Short-Intermediate Municipal Income 0.1372% + 0.25% = 0.3872%

</TABLE>

* Estimated
THE FOLLOWING INFORMATION REPLACES THE SECOND, FOURTH, FIFTH, AND
SIXTH PARAGRAPHS FOUND UNDER THE HEADING "DISTRIBUTION AND SERVICE
PLANS" BEGINNING ON PAGE 137.
Pursuant to the Class A Plans, FDC is paid a distribution fee as a
percentage of Class A's average net assets at an annual rate of up to
0.75% for each of TechnoQuant Growth, International Capital
Appreciation, Overseas, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, Growth & Income, Equity Income,
and Balanced (the Equity Funds); and up to 0.40% for each of Emerging
Markets Income, High Yield, Strategic Income, Government Investment,
Mortgage Securities, and Municipal Income (the Bond Funds),
Intermediate Bond and Intermediate Municipal Income (the
Intermediate-Term Bond Funds), and Short-Intermediate Municipal Income
and Short Fixed-Income (the Short-Term Bond Funds). Pursuant to the
Class T Plans, FDC is paid a distribution fee as a percentage of Class
T's average net assets at an annual rate of up to 0.75% for each of
TechnoQuant Growth, International Capital Appreciation, Equity Growth,
Mid Cap, Large Cap, Growth & Income, and Equity Income; up to 0.65%
for each of Overseas, Growth Opportunities, Strategic Opportunities,
and Balanced; up to 0.40% for each of Emerging Markets Income, High
Yield, Strategic Income, Intermediate Bond, Mortgage Securities,
Government Investment, Municipal Income, Short-Intermediate Municipal
Income, and Intermediate Municipal Income; and up to 0.15% for Short
Fixed-Income. Pursuant to the Class B Plans, FDC is paid a
distribution fee as a percentage of Class B's average net assets at an
annual rate of up to 0.75% for each fund with Class B shares. Pursuant
to the Class C Plans, FDC is paid a distribution fee as a percentage
of Class C's average net assets at an annual rate of up to 0.75% for
each fund with Class C shares. For the purpose of calculating the
distribution fees, average net assets are determined at the close of
business on each day throughout the month, but excluding assets
attributable to Class T shares of Equity Income purchased more than
144 months prior to such day and to Class B shares of Equity Income
purchased more than 144 months prior to such day.
Currently, up to the full amount of distribution fees paid by Class A
and Class T may be reallowed to investment professionals as
compensation for their services in connection with the distribution of
Class A or Class T shares, as applicable, and for providing support
services to Class A or Class T shareholders, as applicable, based upon
the level of services provided.
Currently, the full amount of distribution fees paid by Class B is
retained by FDC as compensation for its services and expenses in
connection with the distribution of Class B shares, and up to the full
amount of service fees paid by Class B may be reallowed to investment
professionals for providing personal service to and/or maintenance of
Class B shareholder accounts.
Currently, for the first year of investment, the full amount of
distribution fees paid by Class C is retained by FDC as compensation
for its services and expenses in connection with the distribution of
Class C shares, and the full amount of service fees paid by Class C is
retained by FDC for providing personal service to and/or maintenance
of Class C shareholder accounts. After the first year of investment,
up to the full amount of distribution fees paid by Class C may be
reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares, and up
to the full amount of service fees paid by Class C may be reallowed to
investment professionals for providing personal service to and/or
maintenance of Class C shareholder accounts.
THE FOLLOWING TABLES REPLACE THE TABLES SHOWING DISTRIBUTION FEES AND,
FOR CLASS B AND CLASS C, SERVICE FEES, PAID BY CLASS A, CLASS T, CLASS
B, AND CLASS C, RESPECTIVELY, FOUND ON PAGES 139-141 IN THE
"DISTRIBUTION AND SERVICE PLANS" SECTION.
The table below shows the distribution fees paid by Class A for the
fiscal years ended 1997.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS A DISTRIBUTION FEES
1997
FUND FEES PAID PAID BY FDC TO RETAINED BY
TO FDC INVESTMENT FDC****
PROFESSIONALS

TechnoQuant Growth $ 9,431 $ 9,265 $ 166

Overseas 6,465 6,238 227

Mid Cap 6,575 6,326 249

Equity Growth 36,449 36,286 163

Growth Opportunities 28,348+ 28,141+ 207+

Growth Opportunities 153,641++ 153,641++ 0++

Strategic Opportunities 2,516*** 2,255*** 261***

Large Cap 3,619 3,142 477

Growth & Income 6,421 6,256 165

Equity Income 32,093 32,089 4

Balanced 10,612 10,344 268

Emerging Markets Income 1,903 1,718 185

High Yield 29,386 29,364 22

Strategic Income 2,600 2,450 150

Mortgage Securities 600* 565* 35*

Mortgage Securities 530** 482** 48**

Government Investment 1,086 945 141

Intermediate Bond 3,177 3,056 121

Short Fixed-Income 4,666 4,666 0

Municipal Income 2,810 2,723 87

Intermediate Municipal Income 521 358 163

Short-Intermediate Municipal Income 523 372 151

</TABLE>

+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period November 1, 1996 through October 31, 1997.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period March 3, 1997 through July 31, 1997.
*** For the fiscal period January 1, 1997 through November 30, 1997.
**** Amounts represent fees paid to FDC but not yet reallowed to
investment professionals as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to investment
professionals. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
The table below shows the distribution fees paid by Class T for the
fiscal years ended 1997.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS T DISTRIBUTION FEES
1997

FUND FEES PAID PAID BY FDC TO RETAINED BY
TO FDC INVESTMENT FDC****
PROFESSIONALS

TechnoQuant Growth $ 59,373 $ 58,479 $ 894

Overseas 5,557,206 5,466,383 90,823

Mid Cap 1,333,963 1,224,468 109,495

Equity Growth 19,297,519 19,090,886 206,633

Growth Opportunities 8,369,900+ 8,200,499+ 169,401+

Growth Opportunities 86,243,939++ 85,413,638++ 830,301++

Strategic Opportunities 2,266,860*** 2,222,675*** 44,185***

Large Cap 179,058 176,655 2,403

Growth & Income 254,429 254,073 356

Equity Income 9,635,902 9,452,123 183,779

Balanced 14,548,840 14,388,949 159,891

Emerging Markets Income 230,572 207,314 23,258

High Yield 4,929,860 4,878,524 51,336

Strategic Income 276,410 273,944 2,466

Mortgage Securities 8,099* 3,787* 4,312*

Mortgage Securities 2,602** 1,400** 1,202**

Government Investment 427,659 414,018 13,641

Intermediate Bond 655,179 632,537 22,642

Short Fixed-Income 570,695 561,631 9,064

Municipal Income 1,062,341 1,051,649 10,692

Intermediate Municipal Income 127,082 124,865 2,217

Short-Intermediate Municipal Income 37,068 36,623 445

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B DISTRIBUTION FEES AND SHAREHOLDER SERVICE FEES
1997

FUND DISTRIBUTION RETAINED BY SHAREHOLDER PAID BY FDC RETAINED BY
FEES PAID FDC***** SERVICE FEES TO INVESTMENT FDC****
TO FDC PAID TO FDC PROFESSIONALS

TechnoQuant Growth $ 44,157 $ 44,157 $ 14,718 $ 14,625 $ 93

Overseas 215,984 215,984 71,995 71,995 0

Mid Cap 325,966 325,966 108,656 108,656 0

Equity Growth 217,770 217,770 72,590 72,590 0

Growth Opportunities 247,111+ 247,111+ 82,370+ 81,953+ 417+

Growth Opportunities 844,796++ 844,796++ 281,598++ 281,598++ 0++

Strategic Opportunities 683,989*** 683,989*** 227,996*** 227,107*** 889***

Large Cap 120,477 120,477 40,162 39,938 224

Growth & Income 88,496 88,496 29,498 29,498 0

Equity Income 4,395,816 4,395,816 1,465,270 1,461,265 4.005

Balanced 47,252 47,252 15,751 15,407 344

Emerging Markets Income 144,517 144,517 55,579 55,579 0

High Yield 2,991,471 2,991,471 1,150,565 1,150,565 0

Strategic Income 295,764 295,764 113,756 113,256 500

Mortgage Securities 1,950* 1,950* 749* 689* 60*

Mortgage Securities 994** 994** 380** 291** 89**

Government Investment 112,488 112,488 43,269 42,928 341

Intermediate Bond 127,539 127,539 49,049 48,705 344

Municipal Income 259,150 259,150 99,673 99,539 134

Intermediate Municipal Income 48,596 48,596 18,691 18,629 62

</TABLE>

+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period November 1, 1996 through October 31, 1997.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period March 3, 1997 through July 31, 1997.
*** For the fiscal period January 1, 1997 through November 30, 1997.
**** Amounts represent fees paid to FDC but not yet reallowed to
investment professionals as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to investment
professionals. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
***** Amounts are retained by FDC for use in its capacity as
distributor.
The table below shows the distribution fees and the shareholder
service fees paid by Class C for the fiscal years ended 1997. (Class C
shares were not offered prior to November 3, 1997.)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CLASS C DISTRIBUTION FEES AND SHAREHOLDER SERVICE FEES
1997

FUND PAID BY FDC RETAINED SHAREHOLDER PAID BY FDC RETAINED BY
DISTRIBUTION TO INVESTMENT BY FDC* SERVICE FEES TO INVESTMENT FDC*
FEES PAID PROFESSIONALS PAID TO FDC PROFESSIONALS
TO FDC

TechnoQuant Growth $ 8 $ 0 $ 8 $ 2 $ 0 $ 2

Mid Cap 84 0 84 28 0 28

Equity Growth 281 0 281 94 0 94

Growth Opportunities 1,701 0 1,701 567 0 567

Large Cap 12 0 12 2 0 2

Growth & Income 113 0 113 38 0 38

Equity Income 192 0 192 64 0 64

Emerging Markets Income 35 0 35 12 0 12

Strategic Income 354 0 354 118 0 118

Intermediate Bond 41 0 41 14 0 14

Intermediate Municipal Income 4 0 4 2 0 2

</TABLE>

* Amounts are retained by FDC for use in its capacity as distributor.
THE FOLLOWING INFORMATION REPLACES THE SEVENTH PARAGRAPH FOUND UNDER
"CONTRACTS WITH FMR AFFILIATES" ON PAGE 144.
Each of the taxable funds has entered into a service agent agreement
with FSC. Under the terms of the agreements, FSC calculates the NAV
and dividends for each class of each fund, maintains each fund's
portfolio and general accounting records, and administers each fund's
securities lending program.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH OF THE
"SHAREHOLDER AND TRUSTEE LIABILITY" SECTION FOUND UNDER "DESCRIPTION
OF THE TRUSTS" ON PAGE 153.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
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. Each Declaration of Trust (except for Fidelity Advisor Series
II and Fidelity Income Fund) 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 its Trustees shall
include a provision limiting the obligations created thereby to the
trust and its assets. Fidelity Advisor Series II's and Fidelity Income
Fund's Declaration of Trust provides that each 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 shall
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. Each
Declaration of Trust provides for indemnification out of each fund's
property of any shareholder held personally liable for the obligations
of the fund. Each Declaration of Trust also provides that its funds
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 the 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.
THE FOLLOWING INFORMATION REPLACES THE "VOTING RIGHTS" SECTION FOUND
UNDER "DESCRIPTION OF THE TRUSTS" ON PAGE 153.
VOTING RIGHTS . Each fund's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive
rights, and Class A, Class T, Class C, Institutional Class, and
Initial Class shares have no conversion rights; the voting and
dividend rights, the conversion rights of Class B shares, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of a trust, a fund, or class of
a fund may, as set forth in the Declaration of Trust, call meetings of
a trust, fund or class, as applicable, for any purpose related to the
trust, fund, or class, as the case may be, including, in the case of a
meeting of an entire trust, the purpose of voting on removal of one or
more Trustees. Each trust (except Fidelity Advisor Series II and
Fidelity Income Fund) or fund (except Balanced, Government Investment,
High Yield, Mortgage Securities, Short Fixed-Income, and Strategic
Income) may be terminated upon the sale of their assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the trust or the fund, as determined by the current value
of each shareholder's investment in the funds or trusts. Fidelity
Advisor Series II and Fidelity Income Fund or any of their respective
funds may be terminated upon sale of their assets to, or merger with,
another open-end management investment company or series thereof, or
upon liquidation and distribution of their assets. Generally, the
merger of a trust or a fund with another entity or the sale of
substantially all of the assets of a trust or a fund to another entity
requires the vote of a majority of the outstanding shares of a trust
or a fund, as determined by the current value of each shareholder's
investment in the fund or trust. The Trustees of Fidelity Advisor
Series II and Fidelity Income Fund may, however, reorganize or
terminate each trust or any fund without prior shareholder approval.
If not so terminated, each trust and fund will continue indefinitely.
Each fund (except Equity Income and Municipal Bond) may invest all of
their assets in another investment company.
EFFECTIVE AUGUST 24, 1998, THE FOLLOWING INFORMATION REPLACES SIMILAR
INFORMATION FOUND UNDER "ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION
INFORMATION" ON PAGE 111.
CLASS A SHARES ONLY
5. to shares purchased for (i) an employee benefit plan (including
403(b) programs, but otherwise as defined in ERISA) having $25 million
or more in plan assets or (ii) an employee benefit plan (including
403(b) programs, but otherwise as defined in ERISA) that is part of an
investment professional sponsored program that requires the
participating employee benefit plan to initially invest in Class C or
Class B shares and, upon meeting certain criteria, subsequently
requires the plan to invest in Class A shares; or
EFFECTIVE AUGUST 24, 1998, THE FOLLOWING INFORMATION REPLACES THE
FIRST TWO PARAGRAPHS FOUND UNDER THE HEADING "FINDER'S FEE" IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION
BEGINNING ON PAGE 113.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. For all funds except the Short-Term Bond Funds, on
eligible purchases of (i) Class A shares in amounts of $1 million or
more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, or (iii) Class T shares in amounts of
$1 million or more, investment professionals will be compensated with
a fee at the rate of 0.25% of the purchase amount. Except as provided
below, Class A eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $25 million
or more; an individual trade of $1 million or more that is load
waived; a trade which brings the value of the accumulated account(s)
of an investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $25 million; a load
waived trade that brings the value of the accumulated account(s) of an
investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $25 million or
more; a load waived trade for an investor with an accumulated account
value of $1 million or more; an incremental trade toward an investor's
$25 million "Letter of Intent"; and an incremental load waived trade
toward an investor's $1 million "Letter of Intent". Except as provided
below, Class T eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $1 million or
more; a trade which brings the value of the accumulated account(s) of
an investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $1 million or
more; and an incremental trade toward an investor's $1 million "Letter
of Intent."
For the Short-Term Bond Funds, on eligible purchases of (i) Class A
shares in amounts of $1 million or more, or (ii) Class T shares in
amounts of $1 million or more, investment professionals will be
compensated with a fee at the rate of 0.25% of the purchase amount.
Except as provided below, Class A eligible purchases are the following
purchases made through broker-dealers and banks: an individual trade
of $1 million or more; a trade which brings the value of the
accumulated account(s) of an investor (including an employee benefit
plan (including 403(b) programs, but otherwise as defined in ERISA))
past $1 million; a trade for an investor with an accumulated account
value of $1 million or more; and an incremental trade toward an
investor's $1 million "Letter of Intent." Except as provided below,
Class T eligible purchases are the following purchases made through
broker-dealers and banks: an individual trade of $1 million or more; a
trade which brings the value of the accumulated account(s) of an
investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $1 million or
more; and an incremental trade toward an investor's $1 million "Letter
of Intent."
For the purpose of determining the availability of Class A or Class T
finder's fees, purchases of Class A or Class T shares made with the
proceeds from the redemption of shares of any Fidelity fund will not
be considered "eligible purchases."
EFFECTIVE AUGUST 24, 1998, THE FOLLOWING INFORMATION REPLACES THE
SIXTH PARAGRAPH FOUND UNDER "DISTRIBUTION AND SERVICE PLANS" ON PAGE
138.
Currently and except as provided below, for the first year of
investment, the full amount of distribution fees paid by Class C is
retained by FDC as compensation for its services and expenses in
connection with the distribution of Class C shares, and the full
amount of service fees paid by Class C is retained by FDC for
providing personal service to and/or maintenance of Class C
shareholder accounts. Normally, after the first year of investment, up
to the full amount of distribution fees paid by Class C may be
reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares, and up
to the full amount of service fees paid by Class C may be reallowed to
investment professionals for providing personal service to and/or
maintenance of Class C shareholder accounts. For purchases of Class C
shares made for an employee benefit plan (including 403(b) programs,
but otherwise as defined in ERISA) or through reinvested dividends or
capital gain distributions, during the first year of investment and
thereafter, up to the full amount of distribution fees and service
fees paid by such Class C shares may be reallowed to investment
professionals as compensation for their services in connection with
the distribution of Class C shares and for providing personal service
to and/or maintenance of Class C shareholder accounts.