SUPPLEMENT TO THE
FIDELITY GOVERNMENT BOND FUNDS
FIDELITY GINNIE MAE FUND
FIDELITY GOVERNMENT INCOME FUND
FIDELITY INTERMEDIATE GOVERNMENT INCOME FUND
SEPTEMBER 29, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
THE HEADING "INVESTMENT LIMITATIONS OF FIDELITY GOVERNMENT INCOME
FUND" ON PAGE 4.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(IV) of the 1940 Act.
The fund has been advised that the Staff of the Securities and
Exchange Commission (SEC) does not consider proprietary strips of
securities issued by the U.S. Government or its agencies or
instrumentalities, and privately sponsored collateralized mortgage
obligations (CMOs) backed by the U.S. Government or its agencies or
instrumentalities to be U.S. Government securities for purposes of
investment limitation (4). Accordingly, the fund may establish the
following four industry groups: (1) custodian banks for proprietary
strips of obligations of the U.S. Government and its agencies and
instrumentalities that are backed by the full faith and credit of the
U.S. Government; (2) custodian banks for proprietary strips of
obligations of the U.S. Government and its agencies and
instrumentalities that are not backed by the full faith and credit of
the U.S. Government; (3) custodian banks for CMOs that are backed by
the full faith and credit of the U.S. Government; (4) custodian banks
for CMOs that are backed by U.S. Government agencies and
instrumentalities but not by the full faith and credit of the U.S.
Government. If the fund concludes that, under applicable legal
principles, any of these securities is a U.S. Government security, it
will exclude the security from investment limitation (4).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
THE HEADING "INVESTMENT LIMITATIONS OF FIDELITY INTERMEDIATE
GOVERNMENT INCOME FUND" ON PAGE 5.
The fund has been advised that the Staff of the SEC does not
consider proprietary strips of securities issued by the U.S.
Government or its agencies or instrumentalities, and privately
sponsored CMOs backed by the U.S. Government or its agencies or
instrumentalities to be U.S. Government securities for purposes of
investment limitation (5). Accordingly, the fund may establish the
following four industry groups: (1) custodian banks for proprietary
strips of obligations of the U.S. Government and its agencies and
instrumentalities that are backed by the full faith and credit of the
U.S. Government; (2) custodian banks for proprietary strips of
obligations of the U.S. Government and its agencies and
instrumentalities that are not backed by the full faith and credit of
the U.S. Government; (3) custodian banks for CMOs that are backed by
the full faith and credit of the U.S. Government; (4) custodian banks
for CMOs that are backed by U.S. Government agencies and
instrumentalities but not by the full faith and credit of the U.S.
Government. If the fund concludes that, under applicable legal
principles, any of these securities is a U.S. Government security, it
will exclude the security from investment limitation (5).
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 17.
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).
DWIGHT D. CHURCHILL (45), is Vice President of Bond Funds, Group
Leader of the Bond Group, Senior Vice President of FMR (1997), and
Vice President of FIMM (1998). Mr. Churchill is President of Fidelity
Investments Fixed-Income Division. Mr. Churchill joined Fidelity in
1993 as Vice President and Group Leader of Taxable Fixed-Income
Investments.
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.
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.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 17.
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.
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. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, 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), and as a Trustee of
First Union Real Estate Investments. 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 and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
FRED L. HENNING, JR. (60), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.
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).
LEONARD M. RUSH (53), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 20.
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 July 31, 1999, or calendar
year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
Trustees and Member of the Aggregate Compensation from Aggregate Compensation from Aggregate Compensation from
Advisory Board Ginnie MaeB Government IncomeB Intermediate Government
IncomeB
Edward C. Johnson 3d** $ 0 $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0 $ 0
Ralph F. Cox $ 384 $ 497 $ 256
Phyllis Burke Davis $ 364 $ 475 $ 244
Robert M. Gates $ 381 $ 494 $ 254
E. Bradley Jones**** $ 379 $ 491 $ 252
Donald J. Kirk $ 383 $ 497 $ 256
Ned C. Lautenbach*** $ 0 $ 0 $ 0
Peter S. Lynch** $ 0 $ 0 $ 0
William O. McCoy $ 381 $ 494 $ 254
Gerald C. McDonough $ 466 $ 604 $ 311
Marvin L. Mann $ 381 $ 494 $ 254
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ 370 $ 485 $ 249
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
COMPENSATION TABLE
Trustees and Member of the Total Compensation from the
Advisory Board Fund Complex*,A
Edward C. Johnson 3d** $ 0
Abigail P. Johnson** $ 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 and Ms. Johnson are
compensated by FMR.
*** 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.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
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, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"CONTROL OF INVESTMENT ADVISERS" SECTION BEGINNING ON PAGE 20.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity Investments Japan
Ltd. (FIJ). 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 investing in securities throughout the world.
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOUND ON PAGE 22.
<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 .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</TABLE>
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 24.
On behalf of Ginnie Mae and Intermediate Government Income, FMR has
entered into sub-advisory agreements with FMR U.K. and FMR Far East.
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.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 24.
On behalf of Ginnie Mae and Intermediate Government Income, FMR Far
East has entered 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).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 24.
For providing non-discretionary investment advice and research
services, 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. For
providing non-discretionary investment advice and research services,
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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 25.
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.
