SUPPLEMENT TO THE FIDELITY OTC PORTFOLIO SEPTEMBER 29, 1999
PROSPECTUS
The following information supplements the information found under
the heading "Principal Investment Strategies" in the "Investment
Summary" section on page 3.
(small solid bullet) Investing more than 25% of total assets in the
technology sector.
The following information supplements the information found under
the heading "Principal Investment Risks" in the "Investment Summary"
section on page 3.
(small solid bullet) TECHNOLOGY INDUSTRY CONCENTRATION. The
technology industries can be significantly affected by obsolescence of
existing technology, short product cycles, falling prices and profits,
and competition from new market entrants.
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.
The following information supplements the information found under
the heading "Principal Investment Strategies" in the "Investment
Details" section on page 6.
FMR will invest more than 25% of the fund's total assets in the
technology sector.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
The following information replaces similar information found in the
"Investment Details" section on page 6.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The 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. The 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 the fund's
investments in a particular group of industries, the fund's
performance could depend heavily on the performance of that group of
industries and could be more volatile than the performance of less
concentrated funds. In addition, because FMR may invest a significant
percentage of the fund's assets 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 the fund, they could
be worth more or less than what you paid for them.
The following information supplements the information found under
the heading "Principal Investment Risks" in the "Investment Details"
section beginning on page 6.
INDUSTRY CONCENTRATION. Market conditions, interest rates,
and economic, regulatory, or financial developments could
significantly affect a group of related industries, and the securities
of companies in that group of related industries could react similarly
to these or other developments.
The TECHNOLOGY industries can be significantly affected by
obsolescence of existing technology, short product cycles, falling
prices and profits, and competition from new market entrants.
The following information replaces similar information found in the
"Investment Summary" section under the heading "Fundamental Investment
Policies" beginning on page 6.
The policy discussed below is fundamental, that is, subject to
change only by shareholder approval.
OTC PORTFOLIO seeks capital appreciation.
The following information replaces similar information found in the
"Fund Management" section on page 21.
(small solid bullet) Fidelity Management & Research Far East Inc.
(FMR Far East) serves as a sub-adviser for the 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 the fund.
The following information supplements the information found in the
"Fund Management" section on page 21.
(small solid bullet) Fidelity Investments Japan Ltd. (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of September
28, 1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for the fund.
The following information replaces similar information found in the
"Fund Management" section on page 21.
Jason Weiner is vice president and manager of OTC Portfolio, which
he has managed since February 2000. Previously, he managed other
Fidelity funds. Since joining Fidelity in 1991, Mr. Weiner has worked
as an analyst and manager.
The following information replaces similar information found in the
"Fund Management" section on page 22.
FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory
services.
The following information supplements information found in the
"Fund Distribution" section on page 22.
The fund has adopted a Distribution and Service Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 that recognizes
that FMR may use its management fee revenues, as well as its past
profits or its resources from any other source, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
FMR, directly or through FDC, may pay significant amounts to
intermediaries, such as banks, broker-dealers, and other
service-providers, that provide those services. Currently, the Board
of Trustees of the fund has authorized such payments.
If payments made by FMR to FDC or to intermediaries under the
Distribution and Service Plan were considered to be paid out of the
fund's assets on an ongoing basis, they might increase the cost of
your investment and might cost you more than paying other types of
sales charges.
To receive payments made pursuant to a Distribution and Service
Plan, intermediaries must sign the appropriate agreement with FDC in
advance.
SUPPLEMENT TO THE
FIDELITY OTC PORTFOLIO
SEPTEMBER 29, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
THE "INVESTMENT POLICIES AND LIMITATIONS" ON PAGE 2.
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 3
days (not including Sundays and holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(3) underwrite any issue of securities (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);
(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 will invest more than 25% of its total assets in the
technology sector.
(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 instrument 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 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 10% 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 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 10% of its net assets were 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 6.
For purposes of normally investing at least 65% of the fund's total
assets in securities principally traded on the over-the-counter (OTC)
market, FMR interprets "total assets" to exclude collateral received
for securities lending transactions.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(IV) of the 1940 Act.
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.
BART A. GRENIER (40), is Vice President of certain High-Income Bond
Funds (1997) and certain Equity Funds (1999). Mr. Grenier rejoined
Fidelity in August 1997 from DDJ Capital Management, LLC, where he had
served as Managing Director since April 1997. Mr. Grenier originally
joined Fidelity in 1991 as a senior analyst. Mr. Grenier served as a
Director of High-Income Group Research and as Director of U.S. Equity
Research from 1994 to March 1996. He later became Group Leader of the
Income-Growth and Asset Allocation-Income Groups in 1996 and Assistant
Equity Division Head in 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).
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 SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 16.
*EDWARD C. JOHNSON 3d (69), Trustee, is President of Fidelity OTC
Portfolio. Mr. Johnson also serves as President of other Fidelity
funds. He is Chief Executive Officer, Chairman, 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 Management &
Research (U.K.) Inc. and of Fidelity Management & Research (Far East)
Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments
Money Management, Inc.; Chairman and Representative Director of
Fidelity Investments Japan Limited (1997); and a Director of FDC and
of FMR Co., Inc. (2000). Abigail Johnson, Vice President of Fidelity
OTC Portfolio, is Mr. Johnson's daughter.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 16.
ABIGAIL P. JOHNSON (38), 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. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), Columbia/HCA Healthcare Corporation (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, a Director of the National Forum for Health Care Quality,
Measurement and Reporting, past chairman and a member of the Board of
Catalyst (a leading organization for the advancement of women in
business), and is a Director of the STAR Foundation (Society to
Advance the Retarded and Handicapped). He also serves as a member of
the Board and Executive Committee and as Co-Chairman of the Audit and
Finance Committee of the Center for Strategic & International Studies,
a member of the Board of Overseers of the Columbia Business School,
and a Member of the Advisory Board of the Graduate School of Business
of the University of Florida.
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).
ROBERT A. DWIGHT (42), is Treasurer of Fidelity OTC Portfolio
(2000). Mr. Dwight also serves as Treasurer of other Fidelity funds
(2000) 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 REPLACES THE "COMPENSATION TABLE" FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION ON PAGE 19.
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>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board OTC PortfolioB,C,D Fund Complex*,A
Edward C. Johnson 3d** $ 0 $ 0
J. Michael Cook***** $ 0 $ 0
Ralph F. Cox $ 1,697 $ 223,500
Phyllis Burke Davis $ 1,614 $ 220,500
Robert M. Gates $ 1,687 $223,500
E. Bradley Jones**** $ 1,677 $ 222,000
Donald J. Kirk $ 1,695 $ 226,500
Ned C. Lautenbach*** $ 0 $ 0
Peter S. Lynch** $ 0 $ 0
William O. McCoy $ 1,687 $ 223,500
Gerald C. McDonough $ 2,065 $ 273,500
Marvin L. Mann $ 1,687 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 1,648 $223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund 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.
***** Effective March 16, 2000, Mr. Cook 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, 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: Ralph F. Cox, $764; Phyllis Burke Davis, $764;
Robert M. Gates, $764; E. Bradley Jones, $764; Donald J. Kirk, $764;
William O. McCoy, $764; Gerald C. McDonough, $891; Marvin L. Mann,
$764; and Thomas R. Williams, $764.
D Certain of the non-interested Trustees' aggregate compensation from
the fund includes accrued voluntary deferred compensation as follows:
Ralph F. Cox, $643; Marvin L. Mann, $238; William O. McCoy, $643; and
Thomas R. Williams, $643.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 19.
As of July 31, 1999, the Trustees, Members of the Advisory Board, and
officers of the fund owned, in the aggregate, less than 1% of the
fund's total outstanding shares.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"CONTROL OF INVESTMENT ADVISERS" SECTION ON PAGE 20.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of 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 investors investing
in securities throughout the world.
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES ON PAGE 21.
<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 FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
THE HEADING "COMPUTING THE PERFORMANCE ADJUSTMENT" IN THE "MANAGEMENT
CONTRACT" SECTION ON PAGE 21.
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 FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 22.
SUB-ADVISERS. On behalf of the fund, 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 fund.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 22.
On behalf of the fund, 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 CONTRACT" SECTION ON PAGE 22.
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 SUPPLEMENTS SIMILAR INFORMATION FOUND IN
THE "DISTRIBUTION SERVICES" SECTION BEGINNING ON PAGE 22.
The Trustees have approved a Distribution and Service Plan on
behalf of the fund (the Plan) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to
FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
In addition, the Plan provides that FMR, directly or through FDC, may
pay significant amounts to intermediaries, such as banks,
broker-dealers and other service-providers, that provide those
services. Currently, the Board of Trustees has authorized such
payments for Fidelity OTC Portfolio shares.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flows may result. Furthermore,
certain shareholder support services may be provided more effectively
under the Plans by local entities with whom shareholders have other
relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the business
of underwriting, selling or distributing securities. FDC believes that
the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks, as well as further
judicial or administrative decisions or interpretations, could prevent
a bank from continuing to perform all or a part of the contemplated
services. If a bank were prohibited from so acting, the Trustees would
consider what actions, if any, would be necessary to continue to
provide efficient and effective shareholder services. In such event,
changes in the operation of the fund might occur, including possible
termination of any automatic investment or redemption or other
services then provided by the bank. It is not expected that
shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws
on this issue may differ from the interpretations of federal law
expressed herein, and banks and other financial institutions may be
required to register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DISTRIBUTION SERVICES" SECTION BEGINNING ON PAGE 22.
FDC may compensate intermediaries 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUST" SECTION BEGINNING ON PAGE 23.
AUDITOR. PricewaterhouseCoopers LLP, 160 Federal Street,
Boston, Massachusetts, served as independent accountants for the fund
for the fiscal period ended July 31, 1999. The auditor examined
financial statements for the fund and provided other audit, tax, and
related services.
Effective January 20, 2000, Deloitte & Touche LLP, 200 Berkeley
Street, Boston, Massachusetts, serves as independent accountant for
the fund for the fiscal period ending July 31, 2000. The auditor
examines financial statements for the fund and provides other audit,
tax, and related services.
