FIDELITY ADVISOR SERIES II, N-30D, 1996-12-24

FIDELITY ADVISOR SERIES II
N-30D, 1996-12-24

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(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

SHORT FIXED-INCOME
FUND - CLASS A AND CLASS T
(FORMERLY CLASS A)
ANNUAL REPORT
OCTOBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 11 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 14 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 15 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 32 Notes to the financial statements.

REPORT OF INDEPENDENT 38 The auditors' opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first 10
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
ADVISOR SHORT FIXED-INCOME FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). You can also look at income to
measure performance. The initial offering of Class A shares took place on
September 3, 1996. Class A shares bear a 0.15% 12b-1 fee. Returns prior to
September 3, 1996 are those of Class T, the original class of the fund, and
reflect Class T's 0.15% 12b-1 fee. If Fidelity had not reimbursed certain
class expenses during the periods shown, the total returns and dividends
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Short Fixed-Income - Class 5.29% 33.06% 87.59%
A

Advisor Short Fixed-Income - Class A 3.71% 31.06% 84.78%
(incl. max. 1.50% sales charge)

Lehman Brothers 1-3 Year 6.04% 33.99% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.44% 32.15% n/a

CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on September 16, 1987. For example, if you invested $1,000 in a
fund that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class A's returns to the performance of
the Lehman Brothers 1-3 Year Government/Corporate Bond Index - a market
value weighted performance benchmark for government and corporate
fixed-rate debt issues with maturities between one and three years. To
measure how Class A's performance stacked up against its peers, you can
compare it to the short investment grade debt funds average, which reflects
the performance of 98 mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. over the past 12 months. These benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Short Fixed-Income - Class A 5.29% 5.88% 7.13%

Advisor Short Fixed-Income - Class A 3.71% 5.56% 6.95%
(incl. max. 1.50% sales charge)

Lehman Brothers 1-3 Year 6.04% 6.03% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.44% 5.72% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class A's actual (or cumulative) return
and show you what would have happened
if Class A shares had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Sht Fixed Inc CL A LB 1-3 YR Govt/Corp
00263 LB013
1987/09/30 9850.00 10000.00
1987/10/31 9999.49 10197.98
1987/11/30 10069.38 10266.04
1987/12/31 10130.15 10337.38
1988/01/31 10263.19 10493.14
1988/02/29 10364.90 10584.77
1988/03/31 10397.94 10608.33
1988/04/30 10410.62 10622.40
1988/05/31 10402.91 10618.15
1988/06/30 10508.28 10724.50
1988/07/31 10509.69 10732.03
1988/08/31 10553.35 10759.19
1988/09/30 10658.72 10883.86
1988/10/31 10755.10 10993.49
1988/11/30 10723.65 10967.31
1988/12/31 10756.74 10992.51
1989/01/31 10844.41 11080.86
1989/02/28 10863.57 11083.48
1989/03/31 10918.18 11128.31
1989/04/30 11036.70 11308.94
1989/05/31 11187.27 11469.62
1989/06/30 11369.33 11681.34
1989/07/31 11562.89 11855.43
1989/08/31 11480.37 11788.34
1989/09/30 11539.61 11857.72
1989/10/31 11711.46 12042.61
1989/11/30 11803.46 12150.27
1989/12/31 11865.45 12198.37
1990/01/31 11838.59 12211.13
1990/02/28 11886.45 12275.93
1990/03/31 11949.35 12314.87
1990/04/30 11960.25 12345.63
1990/05/31 12148.22 12536.40
1990/06/30 12242.20 12668.94
1990/07/31 12387.19 12822.41
1990/08/31 12367.36 12867.89
1990/09/30 12398.20 12964.43
1990/10/31 12366.56 13098.27
1990/11/30 12444.44 13226.22
1990/12/31 12561.85 13381.00
1991/01/31 12524.08 13502.08
1991/02/28 12654.01 13599.59
1991/03/31 12879.98 13698.42
1991/04/30 13067.46 13832.59
1991/05/31 13200.84 13918.98
1991/06/30 13265.37 13970.68
1991/07/31 13356.50 14093.39
1991/08/31 13580.71 14284.50
1991/09/30 13721.20 14438.30
1991/10/31 13874.36 14593.74
1991/11/30 14014.71 14741.32
1991/12/31 14241.52 14964.17
1992/01/31 14299.93 14948.79
1992/02/29 14396.33 14996.24
1992/03/31 14463.54 14992.96
1992/04/30 14557.35 15130.08
1992/05/31 14708.26 15271.77
1992/06/30 14843.45 15427.86
1992/07/31 15028.03 15608.82
1992/08/31 15155.65 15734.81
1992/09/30 15281.00 15883.70
1992/10/31 15184.02 15788.15
1992/11/30 15191.10 15765.90
1992/12/31 15324.72 15914.79
1993/01/31 15556.96 16084.62
1993/02/28 15746.23 16215.84
1993/03/31 15847.34 16268.53
1993/04/30 15927.54 16370.63
1993/05/31 15995.14 16333.32
1993/06/30 16155.75 16457.02
1993/07/31 16251.31 16494.65
1993/08/31 16410.75 16632.74
1993/09/30 16467.43 16686.41
1993/10/31 16569.96 16725.35
1993/11/30 16638.14 16730.26
1993/12/31 16779.65 16798.00
1994/01/31 16884.35 16905.00
1994/02/28 16746.56 16802.58
1994/03/31 16362.99 16716.19
1994/04/30 16276.72 16652.70
1994/05/31 16374.72 16675.28
1994/06/30 16245.85 16719.13
1994/07/31 16394.04 16871.30
1994/08/31 16527.13 16928.24
1994/09/30 16520.77 16890.61
1994/10/31 16533.37 16929.22
1994/11/30 16561.77 16858.21
1994/12/31 16214.32 16890.28
1995/01/31 16334.96 17122.29
1995/02/28 16537.36 17359.21
1995/03/31 16624.29 17457.70
1995/04/30 16759.64 17615.76
1995/05/31 17061.18 17920.74
1995/06/30 17141.52 18018.26
1995/07/31 17204.66 18090.25
1995/08/31 17306.84 18199.88
1995/09/30 17389.90 18289.87
1995/10/31 17533.49 18441.70
1995/11/30 17675.74 18600.41
1995/12/31 17805.75 18741.45
1996/01/31 17936.81 18901.80
1996/02/29 17874.74 18829.80
1996/03/31 17841.39 18816.06
1996/04/30 17843.56 18835.04
1996/05/31 17882.53 18878.56
1996/06/30 18013.32 19016.66
1996/07/31 18068.98 19090.61
1996/08/31 18125.37 19160.97
1996/09/30 18266.10 19336.37
1996/10/31 18460.81 19554.63
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short Fixed-Income Fund - Class A on September
30, 1987, shortly after the fund started, and the current maximum 1.50%
sales charge was paid. As the chart shows, by October 31, 1996, the value
of the investment would have grown to $18,461 - an 84.61% increase on the
initial investment. For comparison, look at how the Lehman Brothers 1-3
Year Government/Corporate Bond Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$19,555 - an 95.55% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.35% 6.16% A 5.82% 7.72% 8.63%
A

Capital appreciation return -1.06% -0.11% -6.04% 1.41% 0.81%

Total return 5.29% 6.05% -0.22% 9.13% 9.44%

DIVIDEND returns and capital appreciation returns are both part of a class'
total return. A dividend return reflects the actual dividends paid by the
class. A capital appreciation return reflects both the amount paid by the
class to shareholders as capital gain distributions and changes in the
class' share price. Both returns assume the dividends or gains are
reinvested, if any, and exclude the effects of sales charges.
DIVIDENDS AND YIELD
PERIODS ENDED OCTOBER 31, 1996 PAST LIFE OF
MONTH CLASS

Dividends per share 4.94(cents) 9.15(cents)

Annualized dividend rate 6.22% 6.17%

30-day annualized yield n/a -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $9.35
over the past month and $9.33 over the life of class, you can compare the
class' income over these two periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. Yield
information will be reported once Class A has a longer, more stable,
operating history.

A DIVIDENDS PAID ARE BASED ON THE CLASS' INVESTMENT INCOME AND DO NOT
REFLECT CURRENCY RELATED LOSSES. AS A RESULT OF CURRENCY LOSSES, CLASS T
(THE ORIGINAL CLASS OF THE FUND) DIVIDENDS PAID DURING 1995 OF
APPROXIMATELY 15.4(CENTS) PER SHARE WERE A NON-TAXABLE RETURN OF CAPITAL.
CLASS T (THE ORIGINAL CLASS OF THE FUND) DIVIDENDS PAID DURING 1994 OF
APPROXIMATELY 8.0(CENTS) PER SHARE WERE A NON-TAXABLE RETURN OF CAPITAL.
ADVISOR SHORT FIXED-INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE

Advisor Short Fixed-Income - Class 5.45% 33.27% 87.89%
T

Advisor Short Fixed-Income - Class T 3.87% 31.27% 85.07%
(incl. max. 1.50% sales charge)

Lehman Brothers 1-3 Year 6.04% 33.99% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.44% 32.15% n/a

CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on September 16, 1987. For example, if you invested $1,000 in a
fund that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class T's returns to the performance of
the Lehman Brothers 1-3 Year Government/Corporate Bond Index - a market
value weighted performance benchmark for government and corporate
fixed-rate debt
issues with maturities between one and three years. To measure how Class
T's performance stacked up against its peers, you can compare it to the
short investment grade debt funds average, which reflects the performance
of 98 mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. over the past 12 months. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Short Fixed-Income - Class T 5.45% 5.91% 7.15%

Advisor Short Fixed-Income - Class T 3.87% 5.59% 6.97%
(incl. max. 1.50% sales charge)

Lehman Brothers 1-3 Year 6.04% 6.03% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.44% 5.72% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class T's actual (or cumulative) return
and show you what would have happened
if Class T shares had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Sht Fixed Inc CL T LB 1-3 YR Govt/Corp
00222 LB013
1987/09/30 9850.00 10000.00
1987/10/31 9999.49 10197.98
1987/11/30 10069.38 10266.04
1987/12/31 10130.15 10337.38
1988/01/31 10263.19 10493.14
1988/02/29 10364.90 10584.77
1988/03/31 10397.94 10608.33
1988/04/30 10410.62 10622.40
1988/05/31 10402.91 10618.15
1988/06/30 10508.28 10724.50
1988/07/31 10509.69 10732.03
1988/08/31 10553.35 10759.19
1988/09/30 10658.72 10883.86
1988/10/31 10755.10 10993.49
1988/11/30 10723.65 10967.31
1988/12/31 10756.74 10992.51
1989/01/31 10844.41 11080.86
1989/02/28 10863.57 11083.48
1989/03/31 10918.18 11128.31
1989/04/30 11036.70 11308.94
1989/05/31 11187.27 11469.62
1989/06/30 11369.33 11681.34
1989/07/31 11562.89 11855.43
1989/08/31 11480.37 11788.34
1989/09/30 11539.61 11857.72
1989/10/31 11711.46 12042.61
1989/11/30 11803.46 12150.27
1989/12/31 11865.45 12198.37
1990/01/31 11838.59 12211.13
1990/02/28 11886.45 12275.93
1990/03/31 11949.35 12314.87
1990/04/30 11960.25 12345.63
1990/05/31 12148.22 12536.40
1990/06/30 12242.20 12668.94
1990/07/31 12387.19 12822.41
1990/08/31 12367.36 12867.89
1990/09/30 12398.20 12964.43
1990/10/31 12366.56 13098.27
1990/11/30 12444.44 13226.22
1990/12/31 12561.85 13381.00
1991/01/31 12524.08 13502.08
1991/02/28 12654.01 13599.59
1991/03/31 12879.98 13698.42
1991/04/30 13067.46 13832.59
1991/05/31 13200.84 13918.98
1991/06/30 13265.37 13970.68
1991/07/31 13356.50 14093.39
1991/08/31 13580.71 14284.50
1991/09/30 13721.20 14438.30
1991/10/31 13874.36 14593.74
1991/11/30 14014.71 14741.32
1991/12/31 14241.52 14964.17
1992/01/31 14299.93 14948.79
1992/02/29 14396.33 14996.24
1992/03/31 14463.54 14992.96
1992/04/30 14557.35 15130.08
1992/05/31 14708.26 15271.77
1992/06/30 14843.45 15427.86
1992/07/31 15028.03 15608.82
1992/08/31 15155.65 15734.81
1992/09/30 15281.00 15883.70
1992/10/31 15184.02 15788.15
1992/11/30 15191.10 15765.90
1992/12/31 15324.72 15914.79
1993/01/31 15556.96 16084.62
1993/02/28 15746.23 16215.84
1993/03/31 15847.34 16268.53
1993/04/30 15927.54 16370.63
1993/05/31 15995.14 16333.32
1993/06/30 16155.75 16457.02
1993/07/31 16251.31 16494.65
1993/08/31 16410.75 16632.74
1993/09/30 16467.43 16686.41
1993/10/31 16569.96 16725.35
1993/11/30 16638.14 16730.26
1993/12/31 16779.65 16798.00
1994/01/31 16884.35 16905.00
1994/02/28 16746.56 16802.58
1994/03/31 16362.99 16716.19
1994/04/30 16276.72 16652.70
1994/05/31 16374.72 16675.28
1994/06/30 16245.85 16719.13
1994/07/31 16394.04 16871.30
1994/08/31 16527.13 16928.24
1994/09/30 16520.77 16890.61
1994/10/31 16533.37 16929.22
1994/11/30 16561.77 16858.21
1994/12/31 16214.32 16890.28
1995/01/31 16334.96 17122.29
1995/02/28 16537.36 17359.21
1995/03/31 16624.29 17457.70
1995/04/30 16759.64 17615.76
1995/05/31 17061.18 17920.74
1995/06/30 17141.52 18018.26
1995/07/31 17204.66 18090.25
1995/08/31 17306.84 18199.88
1995/09/30 17389.90 18289.87
1995/10/31 17533.49 18441.70
1995/11/30 17675.74 18600.41
1995/12/31 17805.75 18741.45
1996/01/31 17936.81 18901.80
1996/02/29 17874.74 18829.80
1996/03/31 17841.39 18816.06
1996/04/30 17843.56 18835.04
1996/05/31 17882.53 18878.56
1996/06/30 18013.32 19016.66
1996/07/31 18068.98 19090.61
1996/08/31 18125.37 19160.97
1996/09/30 18295.03 19336.37
1996/10/31 18489.92 19554.63
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short Fixed-Income Fund - Class T on September
30, 1987, shortly after the fund started, and the current maximum 1.50%
sales charge was paid. As the chart shows, by October 31, 1996, the value
of the investment would have grown to $18,490 - an 84.90% increase on the
initial investment. For comparison, look at how the Lehman Brothers 1-3
Year Government/Corporate Bond Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$19,555 - a 95.55% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.40% 6.16% A 5.82% 7.72% 8.63%
A

Capital appreciation return -0.95% -0.11% -6.04% 1.41% 0.81%

Total return 5.45% 6.05% -0.22% 9.13% 9.44%

Dividends per share 4.94(cents) 29.27(cents) 59.00(cents)

Annualized dividend rate 6.22% 6.22% 6.28%

30-day annualized yield 5.37% - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $9.35
over the past month, $9.33 over the past six months, and $9.39 over the
past year, you can compare the class' income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The offering share price used in the calculation of the
yield includes the effect of Class T's maximum 1.50% sales charge.

MARKET RECAP
Shifting expectations about the
strength of the economy led to mixed
performance in domestic U.S.
bond markets over the 12 months
ended October 31, 1996. For the
period, the Lehman Brothers
Aggregate Bond Index - a proxy
for the performance of the U.S.
taxable bond market - posted a
total return of 5.85%.
Stronger-than-expected economic
signals - including surprisingly
robust employment reports in
February and March - rattled the
bond market and caused the yield
on the 30-year bond to rise to over
7% - a level not seen in over a
year. Bond investors spent most of
the summer anticipating an
increase in short-term interest
rates by the Federal Reserve Board.
However, the Fed stood pat
through the end of October, neither
raising nor lowering rates. After
rising in early 1996 and stabilizing
during much of the spring and
summer, interest rates
responded to the Fed's inaction by
falling in October.
Mortgage-backed securities
performed favorably relative to
other investment-grade securities,
as the higher, relatively stable
interest rate environment led to
diminishing refinancing activity. To
illustrate, the Salomon Brothers
Mortgage Index outperformed the
Lehman Aggregate Index by
returning 6.93% during the period.
Investment-grade corporate
bonds also performed
competitively, as income-driven
investors continued to soak up
higher yielding products during the
period. The Lehman Brothers
Corporate Bond Index returned
6.22% during the 12-month
period.
An interview with Charles Morrison, Portfolio Manager of Fidelity Advisor
Short Fixed-Income Fund
Q. HOW DID THE FUND PERFORM, CHARLIE?
A. For the 12-month period ending October 31, 1996, the fund's Class A
shares had a return of 5.29%. The fund's Class T shares returned 5.45% for
the same time period. The Lehman Brothers 1-3 Year Government/Corporate
Bond Index, which reflects the marketplace in which the fund invests, had a
12-month return of 6.04%. The short investment grade debt funds average, as
tracked by Lipper Analytical Services, returned 5.44%.
Q. CAN YOU SINGLE OUT ANY FACTORS THAT FIGURED INTO THOSE RETURN
COMPARISONS?
A. Throughout the period, I focused on keeping the duration of the
portfolio - a measure of the fund's sensitivity to interest rate movements
- - more in line with that of the short-term bond market, as reflected by the
fund's index. Given some of the unexpected swings in the bond market over
the past six months, this strategy helped keep the fund from getting
whipsawed. Rather than betting on the direction of interest rates, I chose
to concentrate on individual issuers and security selection. This strategy
was further reflected in the overall sector composition between the fund
and its benchmark. In a volatile rate environment like we've seen, I
believe this strategy should generally benefit the fund relative to its
competition.
Q. YOU MENTIONED A VOLATILE RATE ENVIRONMENT. WHAT WAS BEHIND THE MARKET'S
BEHAVIOR OVER THE PAST YEAR?
A. The bond market reacted to several economic developments during the
course of the period. As we entered the spring of 1996, the
stronger-than-expected February employment report was still fresh in the
minds of many market participants. The report had sent out warning signals
that the U.S. economy was better off than many had originally thought. As
the period progressed, the markets were hit with economic statistics that
seemed to flip-flop from one report indicating strength in the economy to
another reflecting weakness. This caused some interesting shifts in
investor sentiment and led to interest rates trading in a volatile range
over the period.
Q. WHAT TYPES OF STRATEGIES DID YOU USE IN NAVIGATING THE FUND THROUGH
THESE CONDITIONS?
A. I spent much of my time looking for value within the various "spread
products." Corporate, asset-backed and mortgage-backed bonds offered
advantageous spreads - or differences in yield - relative to their Treasury
counterparts. I continued to boost my exposure to these sectors with the
intention of increasing both yield and total return. Corporates and
asset-backeds benefited in large part due to solid fundamentals (factors
relating to the fiscal health of the issuers) and technicals (the supply of
and demand for corporate issues). Many subsectors of the mortgage market
also benefited from improving conditions. Collateralized mortgage
obligations and commercial mortgage-backed securities - which include
pooled mortgages on office buildings and multi-family housing developments
- - performed very well in light of the growing market demand for these types
of investments. I maintained a large position in these yield-enhancing
alternatives throughout the period.
Q. WERE THERE ANY INDIVIDUAL HOLDINGS THAT PLAYED SIGNIFICANT ROLES IN THE
FUND'S PERFORMANCE?
A. The fund benefited from its position in RJR Nabisco, Inc., as volatile
spreads created attractive trading opportunities. Tightening yield spreads
in Time Warner and 360 Degrees Communications, a wireless communications
company, added to returns. In addition, a number of super premium,
high-coupon mortgage-backed securities provided stable yet higher-yielding
alternatives to short-duration Treasury securities.
Q. WHAT DO YOU FORESEE HAPPENING - WITH THE FUND AND THE OVERALL MARKET -
IN THE NEXT SIX MONTHS?
A. It's going to be a challenge to keep finding ways to improve
performance. The sectors we've touched upon - corporates, asset-backeds and
mortgages - are all in very good shape. Valuation, I think, is fairly
reflected in most of the markets I target for the fund. Going forward, I'll
try to position the fund to take advantage of opportunities as they come
up, and to use our internal research capabilities to try to avoid any
deteriorating situations.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks to obtain a high
level of current income,
consistent with preservation
of capital, by investing
primarily in a broad range of
investment-grade,
fixed-income securities
START DATE: September 16,
1987
SIZE: as of October 31, 1996,
more than $426 milliion
MANAGER: Charles Morrison,
since 1995; joined Fidelity
in 1987
(checkmark)
CHARLIE MORRISON ON HIS
INVESTING STYLE:
"There are a number of
considerations I weigh when
determining whether an issue
will benefit the fund. One is
valuation. How is the security
trading in the market relative
to similar securities? I also
pay close attention to an
issuer's fundamentals.
Fundamentals for a corporate
bond, for instance, refer to
everything from the
management team that runs
the company, right on down to
its balance sheet and cash
flows. I spend a good deal of
time meeting with different
companies and kicking their
tires to see what they're made
of. If I'm uncomfortable after
meeting the management
team, there's a strong chance
I won't invest in that
company. I also pay close
attention to an issuer's
technicals, or the supply and
demand of an issuer's paper
on the open market. How
much issuance is out there
and is there enough demand to
absorb it? By looking at both
the fundamentals and
technicals of an issuer, I can
make informed judgments
about the merits of an issuer
and its paper."
DISTRIBUTIONS
A total of 40.50% of the
dividends distributed during
the fiscal year was derived
from interest on U.S.
Government securities which
is generally exempt from state
income tax.
INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1996
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS
6 MONTHS AGO

Aaa 58.4 60.9

Aa 2.4 0.8

A 12.4 10.6

Baa 19.9 17.0

Ba 4.7 5.6

Not rated 2.0 2.6

TABLE EXCLUDES CASH EQUIVALENTS. WHERE MOODY'S RATINGS ARE NOT AVAILABLE,
WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW WERE RATED
INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING AGENCIES OR ASSIGNED
AN INVESTMENT GRADE RATING AT THE TIME OF ACQUISITION BY FIDELITY.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1996
6 MONTHS AGO

Years 2.2 2.2

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1996
6 MONTHS AGO

Years 1.7 1.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF OCTOBER 31, 1996 * AS OF APRIL 30, 1996 **
Corporate bonds 50.7%
U.S. government
and government
agency obligations 35.9%
Mortgage-backed
securities 12.3%
Foreign government
obligations 0.1%
Short-term
investments 0.2%
Other investments 0.8%
FOREIGN INVESTMENTS 1.1%
Corporate bonds 41.9%
U.S. government
and government
agency obligations 42.3%
Mortgage-backed
securities 11.9%
Foreign government
obligations 0.3%
Short-term
investments 2.5%
Other investments 1.1%
FOREIGN INVESTMENTS 1.8%
Row: 1, Col: 1, Value: 1.8
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 1.1
Row: 1, Col: 4, Value: 12.3
Row: 1, Col: 5, Value: 35.9
Row: 1, Col: 6, Value: 47.7
Row: 1, Col: 1, Value: 2.1
Row: 1, Col: 2, Value: 3.5
Row: 1, Col: 3, Value: 1.8
Row: 1, Col: 4, Value: 11.9
Row: 1, Col: 5, Value: 40.5
Row: 1, Col: 6, Value: 39.9

*
**
INVESTMENTS OCTOBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 50.7%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
BASIC INDUSTRIES - 1.0%
CHEMICALS & PLASTICS - 1.0%
Methanex Corp. yankee 8 7/8%, 11/15/01 A2 $ 3,760,000 $ 4,053,919
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
General Motors Corp. 9 5/8%, 12/1/00 A3 1,360,000 1,510,865
ENERGY - 1.0%
OIL & GAS - 1.0%
Occidental Petroleum Corp. 6.09%, 11/29/99 Baa3 700,000 692,895
Tosco Corp. 7%, 7/15/00 Ba1 2,250,000 2,278,170
USX Corp.:
8 7/8%, 9/15/97 Baa3 460,000 470,451
6 3/8%, 7/15/98 Baa3 651,000 649,522
4,091,038
FINANCE - 32.1%
ASSET-BACKED SECURITIES - 17.6%
Boatmens Auto Trust 6.35%, 10/15/01 A2 640,000 641,400
Capita Equipment Receivables Trust
6.57%, 3/15/01 A2 1,020,000 1,026,056
Case Equipment Loan Trust:
6.15%, 9/15/02 Aaa 6,840,000 6,833,160
6.45%, 9/15/02 A3 1,400,000 1,372,000
5.85%, 2/15/03 A3 800,000 785,520
Caterpillar Financial Asset Trust:
6.65%, 6/25/00 A2 885,279 886,247
6.55%, 5/22/02 A3 480,000 483,150
Chase Manhattan Grantor Trust
5.90%, 11/15/01 Aaa 3,590,229 3,587,967
Chevy Chase Auto Receivables Trust
5.80%, 6/15/02 Aaa 2,237,112 2,235,015
CPS Auto Grantor Trust 6.70%, 2/15/02 Aaa 870,152 876,134
Discover Card Master Trust I 6.90%, 2/16/00 A2 1,888,000 1,913,960
Discover Card Trust 7 1/2%, 6/16/00 A2 650,000 661,980
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa 3,802,648 3,803,836
General Motors Acceptance Corp. Grantor
Trust 1995-A, 7.15%, 3/15/00 Aaa 2,965,111 3,000,307
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FINANCE - CONTINUED
ASSET-BACKED SECURITIES - CONTINUED
Green Tree Financial Corp.:
5 1/2%, 1/31/00 Aaa $ 425,966 $ 421,573
5.80%, 2/15/27 Aaa 3,500,000 3,478,125
6.10%, 4/15/27 Aaa 3,298,513 3,293,359
6.45%, 5/15/27 Aaa 1,550,000 1,559,192
6 1/2%, 6/15/27 Aaa 980,000 986,733
6.65%, 7/15/27 Aaa 2,110,000 2,127,787
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 306,239 305,933
MBNA Master Credit Card Trust
7 3/4%, 10/15/98 Aaa 450,000 451,406
Premier Auto Trust:
4.95%, 2/2/99 A2 846,541 840,192
8.05%, 4/4/00 Aaa 6,200,000 6,384,063
6%, 5/6/00 Aaa 1,240,000 1,240,769
6.35%, 7/6/00 A3 1,980,000 1,981,841
SCFC Recreational Vehicle Loan Trust
7 1/4%, 9/15/06 Aaa 25,916 25,980
Standard Credit Card Master Trust I:
4.85%, 3/7/99 A2 2,000,000 1,993,740
7.65%, 2/15/00 A2 800,000 812,375
6 3/4%, 6/7/00 Aaa 4,830,000 4,884,338
TMS Auto Grantor Trust 5.90%, 9/15/02 Aaa 815,935 814,405
Toyota Auto Receivables Grantor Trust
6.15%, 1/15/99 Baa2 557,838 556,443
Union Federal Savings Bank Grantor Trust:
6.975%, 7/10/00 Baa2 352,003 352,663
7.275%, 10/10/00 Baa2 343,612 346,189
8.20%, 1/10/01 Baa2 362,578 368,584
Western Financial Grantor Trust:
6.20%, 2/1/02 Aaa 1,246,341 1,244,113
5 7/8%, 3/1/02 Aaa 2,853,393 2,844,227
WFS Financial Owner Trust:
6.05%, 6/1/00 Aaa 3,460,000 3,463,503
7.05%, 11/20/03 Aaa 3,160,000 3,200,881
6.90%, 12/20/03 Aaa 1,990,000 2,015,710
74,100,856
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FINANCE - CONTINUED
BANKS - 6.6%
Bank of Boston Corp. 9 1/2%, 8/15/97 Baa1 $ 2,013,000 $ 2,067,955
Banponce Financial Corp.:
6%, 4/15/97 A3 250,000 250,175
6.34%, 3/29/99 A3 740,000 740,015
7.65%, 5/3/00 A3 1,260,000 1,293,113
6.88%, 6/16/00 A3 650,000 657,436
Banponce Corp.:
5 3/4%, 3/1/99 A3 990,000 976,150
6.378%, 4/8/99 A3 1,100,000 1,097,481
Capital One Bank:
8 1/8%, 2/27/98 Baa3 2,560,000 2,619,443
6.66%, 8/17/98 Baa3 2,850,000 2,863,680
First Fidelity Bancorp 8 1/2%, 4/1/98 A2 1,010,000 1,042,724
First USA Bank 6 1/8%, 10/30/97 Baa3 1,670,000 1,673,657
Kansallis-Osake-Pankki (NY Branch) yankee
9 3/4%, 12/15/98 A3 1,000,000 1,068,040
KeyCorp 7.10%, 3/28/97 A1 1,440,000 1,447,114
Manufacturers Hanover Trust
5 5/8%, 4/30/97 (d) A1 1,000,000 999,330
Marine Midland Banks, Inc. 8 5/8%, 3/1/97 Baa1 1,850,000 1,864,097
Signet Banking Corp. 5 5/8%, 5/15/97 (d) Baa2 2,430,000 2,421,860
Union Planters National Bank:
6.29%, 8/20/98 A3 2,210,000 2,218,288
6.53%, 8/20/99 A3 2,400,000 2,412,000
27,712,558
CREDIT & OTHER FINANCE - 7.6%
Advanta National Bank 6.41%, 4/30/98 Baa2 1,820,000 1,823,021
Aristar, Inc. 7 1/2%, 7/1/99 Baa1 2,540,000 2,615,184
Associates Corp. of North America:
6 1/2%, 9/9/98 Aa3 4,980,000 5,027,758
6 3/8%, 8/15/99 Aa3 1,500,000 1,504,860
Finova Capital Corp. 6.14%, 11/2/98 Baa1 1,730,000 1,729,239
General Motors Acceptance Corp.:
5 3/8%, 3/9/98 A3 5,840,000 5,801,339
5.45%, 3/1/99 A3 3,650,000 3,590,907
6 3/8%, 4/26/99 A3 900,000 902,439
Greyhound Financial Corp. 6.94%, 1/28/98 Baa2 3,000,000 3,036,120
MCN Investment Corp. 5.84%, 2/1/99 Baa2 1,640,000 1,627,274
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Tenneco Credit Corp.:
10 1/8%, 12/1/97 Baa2 $ 500,000 $ 520,610
10.05%, 8/17/98 Baa2 2,880,000 3,066,912
Union Acceptance Corp. 7.075%, 7/10/02 Baa2 506,914 507,548
31,753,211
INSURANCE - 0.2%
ITT Hartford Group, Inc. 7 1/4%, 12/1/96 A1 850,000 850,400
SAVINGS & LOANS - 0.1%
Golden West Financial Corp.
10 1/4%, 5/15/97 A3 300,000 306,645
TOTAL FINANCE 134,723,670
HEALTH - 0.2%
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
Cardinal Distribution, Inc. 8%, 3/1/97 A3 950,000 956,413
MEDIA & LEISURE - 2.9%
BROADCASTING - 2.6%
Time Warner, Inc.:
7.45%, 2/1/98 Ba1 6,840,000 6,941,095
7.95%, 2/1/00 Ba1 3,740,000 3,872,396
10,813,491
LEISURE DURABLES & TOYS - 0.3%
Mattel, Inc. 6 7/8%, 8/1/97 A3 1,250,000 1,254,363
TOTAL MEDIA & LEISURE 12,067,854
NONDURABLES - 1.4%
FOODS - 1.1%
Nabisco, Inc. 8%, 1/15/00 Baa2 4,600,000 4,801,664
TOBACCO - 0.3%
RJR Nabisco, Inc. 8%, 1/15/00 Baa3 1,320,000 1,335,206
TOTAL NONDURABLES 6,136,870
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
RETAIL & WHOLESALE - 1.8%
APPAREL STORES - 0.2%
Limited, Inc. 9 1/8%, 2/1/01 Baa2 $ 970,000 $ 1,043,613
GENERAL MERCHANDISE STORES - 1.5%
Dayton Hudson Corp. 10%, 12/1/00 Baa1 1,070,000 1,200,989
Sears, Roebuck & Co.:
8.95%, 11/27/96 A2 245,000 245,515
9.22%, 1/30/97 A2 1,700,000 1,713,872
7 3/4%, 2/27/97 A2 2,210,000 2,223,348
7.30%, 6/12/97 A2 245,000 247,269
5.83%, 7/27/98 A2 470,000 468,755
6,099,748
GROCERY STORES - 0.1%
American Stores Co.:
8 1/4%, 4/21/98 Baa3 300,000 308,097
8.44%, 4/24/98 Baa3 300,000 308,931
617,028
TOTAL RETAIL & WHOLESALE 7,760,389
TECHNOLOGY - 3.2%
COMPUTERS & OFFICE EQUIPMENT - 3.2%
Comdisco, Inc.:
7 1/4%, 4/15/98 Baa1 1,630,000 1,656,553
6.70%, 7/1/98 Baa1 1,580,000 1,596,100
6.59%, 9/1/98 Baa1 1,740,000 1,754,529
6.29%, 10/22/98 Baa1 1,230,000 1,233,161
5 3/4%, 1/19/99 Baa2 2,010,000 1,991,528
6.86%, 7/29/99 Baa1 5,210,000 5,276,428
13,508,299
TRANSPORTATION - 3.7%
AIR TRANSPORTATION - 3.7%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 6,810,000 6,920,458
9 1/2%, 7/15/98 Baa3 1,540,000 1,617,631
Delta Air Lines, Inc. 9 7/8%, 1/1/98 Baa3 3,370,000 3,504,834
United Air Lines, Inc. 6 3/4%, 12/1/97 Baa3 3,430,000 3,442,245
15,485,168
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
UTILITIES - 3.0%
CELLULAR - 0.6%
360 Degrees Communications Co.
7 1/8%, 3/1/03 Ba2 $ 2,770,000 $ 2,745,264
ELECTRIC UTILITY - 0.1%
United Illuminating Co. 7 3/8%, 1/15/98 Baa3 450,000 454,347
GAS - 2.3%
Arkla, Inc.:
9 7/8%, 4/15/97 Baa3 4,710,000 4,787,527
8.60%, 9/15/98 Ba2 500,000 518,350
8.43%, 9/17/98 Ba1 560,000 578,950
8 7/8%, 7/15/99 Baa3 1,840,000 1,943,463
Florida Gas Transmission Co.
7 3/4%, 11/1/97 (c) Baa2 1,630,000 1,657,955
9,486,245
TOTAL UTILITIES 12,685,856
TOTAL NONCONVERTIBLE BONDS
(Cost $213,120,052) 212,980,341
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 35.9%
U.S. TREASURY OBLIGATIONS - 33.5%
6 1/8%, 3/31/98 Aaa 35,260,000 35,486,017
9%, 5/15/98 Aaa 28,670,000 30,058,775
6 1/4%, 7/31/98 Aaa 4,900,000 4,942,875
9 1/4%, 8/15/98 Aaa 26,250,000 27,796,388
8 7/8%, 11/15/98 Aaa 961,000 1,017,459
8 7/8%, 2/15/99 Aaa 390,000 415,104
9 1/8%, 5/15/99 Aaa 1,297,000 1,395,494
7 3/4%, 12/31/99 Aaa 11,409,000 11,991,886
6 7/8%, 3/31/00 Aaa 26,712,000 27,442,306
140,546,304
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.4%
Government Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Defense Security Assistance Agency):
Class 1-C 9 1/4%, 11/15/01 Aaa $ 1,202,000 $ 1,288,424
Class T-2 9 5/8%, 5/15/02 Aaa 640,00 686,688
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank)
Series 1994-C 6.61%, 9/15/99 Aaa 526,728 531,827
Israel Export Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1994-1
6.88%, 1/26/03 Aaa 917,647 932,082
Private Export Funding Corp. secured
6.86%, 4/30/04 Aaa 1,431,000 1,459,681
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
4 7/8%, 9/15/98 Aaa 2,050,000 2,013,531
7 3/4%, 11/15/99 Aaa 3,124,000 3,264,361
10,176,594
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $151,785,257) 150,722,898
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 2.6%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.6%
7%, 9/1/99 to 8/1/01 Aaa 2,418,884 2,446,096
12%, 11/1/19 Aaa 203,145 232,215
2,678,311
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.2%
11 1/2%, 11/1/15 Aaa 708,032 802,731
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.8%
11%, 12/15/09 to 2/15/16 Aaa 4,072,751 4,564,324
11 1/2%, 7/15/13 to 11/15/15 Aaa 1,068,097 1,226,282
12%, 2/15/16 Aaa 1,350,000 1,572,961
7,363,567
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $10,751,967) 10,844,609
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.8%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
PRIVATE SPONSOR - 0.2%
GE Capital Mortgage Services, Inc.
planned amortization class Series 1994-2
Class A-4, 6%, 1/25/09 Aa1 $ 930,000 $ 917,503
U.S. GOVERNMENT AGENCY - 0.6%
Federal National Mortgage Association
planned amortization class Series 155-PC,
5 1/4%, 3/25/13 Aaa 948,310 942,971
Federal National Mortgage Association
Series 1994-M3 Class A, 7.71%, 4/1/06 Aaa 1,330,331 1,361,095
2,304,066
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $3,203,774) 3,221,569
COMMERCIAL MORTGAGE SECURITIES - 8.9%
Blackrock Capital Funding LLC Commercial
Mortgage Series 1996 Class C2,
7.62%, 11/16/26 (c) AAA 550,000 558,336
CBM Funding Corp. sequential pay:
Series 1996-1B Class A1, 7.55%, 7/1/99 AA 237,897 241,540
Series 1996-1 Class A-2, 6.88%, 7/1/02 AA 980,000 985,053
CS First Boston Mortgage Securities Corp.:
Series 1995-AEWI Class A1,
6.665%, 11/25/27 AAA 867,384 866,028
floater Series 1994-CFB1
Class A-1, 5.96%, 1/25/28 (d) AAA 2,121,768 2,120,442
Equitable Life Assurance Society of the United
States floater Series 174 Class D-2,
6.43%, 5/15/03 (c)(d) Baa2 1,200,000 1,203,750
Federal Deposit Insurance Corp. Series 1994-C1
Class II-A2, 7.85%, 9/25/25 Aaa 1,969,332 2,002,564
Lennar Central Partners LP (c):
floater Series 1994-1 Class B,
6 1/2%, 9/15/01 (d) - 2,280,171 2,282,309
Series 1995-1, Class C, 7.55%, 5/15/03 - 930,508 932,834
Meritor Mortgage Security Corp. Series 1987-1
Class A3, 9.40%, 6/1/99 Baa3 434,224 433,681
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
Nomura Asset Securities Corp.
floater Series 1994-MD-II Class A-6,
6.69%, 7/4/03 (d) - $ 1,232,929 $ 1,235,049
Oregon Commercial Mortgage Series 1995-1
Class A, 7.15%, 6/25/26 (c) Aaa 3,172,712 3,192,541
Resolution Trust Corp.:
Series 1994-C2 Class E, 8%, 4/25/25 BB+ 3,175,436 3,035,518
Series 1994-N2 Class 3,
7 1/2%, 12/15/04 (b)(c) Baa2 1,238,530 1,238,530
Series 1995-C1 Class A-4A,
6 1/4%, 2/25/27 Aaa 1,113,751 1,112,359
Series 1995-C2 Class A-1A,
6 1/4%, 5/25/27 Aaa 1,119,259 1,114,421
Series 1995-C2 Class A-1B,
6 1/4%, 5/25/27 Aaa 1,510,000 1,481,215
floater (d):
Series 1993-C2 Class A-2,
6.43%, 3/25/25 AAA 2,936,468 2,936,468
Series 1994-C1 Class A-3,
6.11%, 6/25/26 AAA 2,339,454 2,339,454
SC Finance Corp. floater 6.99%, 8/1/04 (c)(d) - 4,100,000 4,112,813
Structured Asset Securities Corp.:
Series 1993-C1 Class A-1, 6.60%, 10/25/24 AA+ 699,742 699,195
Series 1995-C4 Class A-1A, 6.90%, 6/25/26 AAA 1,383,182 1,383,182
Series 1996 Class A-1B, 5.751%, 2/25/28 AAA 470,000 465,447
Series 1996 Class A-1C, 5.944%, 2/25/28 AAA 1,627,000 1,608,696
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $37,134,575) 37,581,425
FOREIGN GOVERNMENT OBLIGATIONS (E) - 0.1%
Ontario Province yankee 15 1/4%, 8/31/12
(Cost $544,563) Aa3 450,000 508,653
CERTIFICATES OF DEPOSIT - 0.4%
Advanta National Bank 6.26%, 9/1/97
(Cost $1,798,128) Baa2 1,800,000 1,816,695
MUNICIPAL SECURITIES - 0.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
Shreveport Louisiana Wtr. & Swr. Rev. Rfdg.
0%, 12/1/96 (Cost $1,493,170) Aaa $ 1,500,000 $ 1,493,904
CASH EQUIVALENTS - 0.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.54%, dated
10/31/96 due 11/1/96 $ 843,130 843,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $420,674,486) $ 420,013,094
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $15,179,068 or 3.6% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 69.6% AAA, AA, A 69.4%
Baa 19.9% BBB 21.6%
Ba 4.0% BB 5.5%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
both S&P and Moody's amounted to 2.1%.
INCOME TAX INFORMATION
At October 31, 1996, the aggregate cost of investment securities for income
tax purposes was $420,773,546. Net unrealized depreciation aggregated
$760,452, of which $2,555,332 related to appreciated investment securities
and $3,315,784 related to depreciated investment securities.
At October 31, 1996, the fund had a capital loss carryforward of
approximately $40,265,000 of which $ 128,000, $63,000, $286,000, $38,000,
$336,000, $17,692,000, $19,457,000, and $2,265,000 will expire on October
31, 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS OCTOBER 31, 1996

Investment in securities, at value (including repurchase $ 420,013,094
agreements of $843,000) (cost $420,674,486) -
See accompanying schedule

Cash 81,440

Receivable for investments sold 2,054,919

Receivable for fund shares sold 3,067,460

Interest receivable 5,775,049

Other receivables 2,354

Prepaid expenses 16,768

TOTAL ASSETS 431,011,084

LIABILITIES

Payable for investments purchased $ 4,171,739

Distributions payable 388,574

Accrued management fee 151,442

Distribution fees payable 52,125

Other payables and accrued expenses 142,584

TOTAL LIABILITIES 4,906,464

NET ASSETS $ 426,104,620

Net Assets consist of:

Paid in capital $ 467,749,418

Distributions in excess of net investment income (591,234)

Accumulated undistributed net realized gain (loss) (40,392,172)
on investments

Net unrealized appreciation (depreciation) on (661,392)
investments

NET ASSETS $ 426,104,620

CALCULATION OF MAXIMUM OFFERING PRICE $9.37
CLASS A:
NET ASSET VALUE and redemption price per share
($204,207 (divided by) 21,795 shares)

Maximum offering price per share (100/98.50 of $9.37) $9.51

CLASS T: $9.38
NET ASSET VALUE and redemption price per share
($416,700,224 (divided by) 44,445,285 shares)

Maximum offering price per share (100/98.50 of $9.38) $9.52

INSTITUTIONAL CLASS: $9.37
NET ASSET VALUE, offering price and redemption price
per share ($9,200,189 (divided by) 981,362 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1996

INVESTMENT INCOME $ 35,401,655
Interest

EXPENSES

Management fee $ 2,203,578

Transfer agent fees 77
Class A

Class T 1,048,063

Institutional Class 15,570

Distribution fees 35
Class A

Class T 725,063

Accounting fees and expenses 197,893

Non-interested trustees' compensation 2,133

Custodian fees and expenses 32,931

Registration fees 8,816
Class A

Class T 25,949

Institutional Class 36,996

Audit 43,270

Legal 5,710

Miscellaneous 17,144

Total expenses before reductions 4,363,228

Expense reductions (40,836) 4,322,392

NET INVESTMENT INCOME 31,079,263

REALIZED AND UNREALIZED GAIN (LOSS) (66,135)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (5,191,796)
investment securities

NET GAIN (LOSS) (5,257,931)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,821,332
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 31,079,263 $ 38,568,812
Net investment income

Net realized gain (loss) (66,135) (29,368,060)

Change in net unrealized appreciation (depreciation) (5,191,796) 24,940,899

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,821,332 34,141,651
FROM OPERATIONS

Distributions to shareholders (1,434) -
From net investment income
Class A

Class T (30,327,901) (27,653,285)

Institutional Class (675,143) (106,031)

Return of capital (Note 1)

Class T - (10,490,479)

Institutional Class - (36,934)

TOTAL DISTRIBUTIONS (31,004,478) (38,286,729)

Share transactions - net increase (decrease) (125,084,667) (227,408,479)

TOTAL INCREASE (DECREASE) IN NET ASSETS (130,267,813) (231,553,557)

NET ASSETS

Beginning of period 556,372,433 787,925,990

End of period (including distributions in excess of net $ 426,104,620 $ 556,372,433
investment income of $591,234 and $2,835,623,
respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
OCTOBER 31,

1996 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.290

Income from Investment Operations

Net interest income .090 D

Net realized and unrealized gain (loss) .081 G

Total from investment operations .171

Less Distributions

From net interest income (.091)

Net asset value, end of period $ 9.370

TOTAL RETURN B, C 1.85%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 204

Ratio of expenses to average net assets .90% A,
F

Ratio of net interest income to average net assets 6.27% A

Portfolio turnover rate 124%

A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO OCTOBER 31, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
FINANCIAL HIGHLIGHTS - CLASS T

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 E 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870
of period

Income from Investment
Operations

Net interest income .594 D .403 .479 .732 .830

Net realized and unrealized (.094) .148 A (.501) .146 .071
gain (loss)

Total from investment .500 .551 (.022) .878 .901
operations

Less Distributions

From net interest income (.590) (.407) (.464) (.738) (.821)

In excess of net - - (.044) - -
investment income

Return of capital (Note 1) - (.154) (.080) - -

Total distributions (.590) (.561) (.588) (.738) (.821)

Net asset value, end of period $ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950

TOTAL RETURN B, C 5.45% 6.05% (.22)% 9.13% 9.44%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 416,700 $ 546,546 $ 787,926 $ 654,202 $ 170,558
(000 omitted)

Ratio of expenses to .88% .89% .97% .95% .90%
average net assets F

Ratio of net interest income 6.29% 6.05% 5.91% 6.77% 7.59%
to average net assets

Portfolio turnover rate 124% 179% 108% 58% 57%

</TABLE>

A THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED OCTOBER
31,

1996 1995 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.470 $ 9.450

Income from Investment Operations

Net interest income .598 D .137

Net realized and unrealized gain (loss) (.098) .067 G

Total from investment operations .500 .204

Less Distributions

From net interest income (.600) (.136)

Return of capital (Note 1) - (.048)

Total distributions (.600) (.184)

Net asset value, end of period $ 9.370 $ 9.470

TOTAL RETURN B, C 5.45% 2.18%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 9,200 $ 9,827

Ratio of expenses to average net assets .80% F .85% A,
F

Ratio of net interest income to average net assets 6.37% 6.10% A

Portfolio turnover rate 124% 179%

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Short Fixed-Income Fund (the fund) is a fund of Fidelity
Advisor Series II (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust.
The fund offers Class A, Class T, and Institutional Class shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. The fund
commenced sale of a new Class A of shares on September 3, 1996. On this
date, the original Class A was renamed Class T. Investment income, realized
and unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions are allocated on a pro rata basis
to each class based on the relative net assets of each class to the total
net assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
with remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities
(including restricted securities) for which market quotations are not
readily available are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net investment
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
income accrued and the U.S. dollar amount actually received. The effects of
changes in foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on investment
securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date. Income dividends are declared
separately for each class, while capital gain distributions are declared at
the fund level and allocated to each class on a pro rata basis based on the
number of shares held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, market discount, capital loss
carryforwards, expiring capital loss carryforwards and losses deferred due
to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
For the period ended October 31, 1995, the fund's distributions exceeded
the aggregate amount of taxable income and net realized gains resulting in
a return of capital. This was due to certain foreign currency losses which
decreased taxable income available for distribution after certain
distributions had been made.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally use foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $597,597,958 and $720,675,502, respectively, of which U.S.
government and government agency obligations aggregated $416,713,218 and
$537,424,593, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annual rate of .45% of
average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class T shares (Class T Plan),
and Institutional Class shares (collectively referred to as "the Plans").
Under the Class A and Class T Plans, the fund pays Fidelity Distributors
Corporation (FDC), an affiliate of FMR, a distribution and service fee.
This fee is based on an annual rate of .15% of the average net assets of
the Class A and Class T shares. For the period, the fund paid FDC $35 and
$725,063 under the Class A and Class T Plans, all of which was paid to
securities dealers, banks and other financial institutions for the
distribution of Class A and Class T shares, and providing shareholder
support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class T,
and Institutional Class shares. The Plans also authorize payments to third
parties that assist in the sale of the fund's shares or render shareholder
support services.
SALES LOAD. FDC received a front-end sales charge of up to 1.50% for
selling Class A and Class T shares of the fund. For the period, FDC
received sales charges of $1,525 and $553,986 on sales of Class A and Class
T shares of the fund, of which $1,294 and $458,131 were paid to securities
dealers, banks, and other financial institutions.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, and Institutional Class
Shares, while State Street Bank and Trust Company (State Street)
(collectively, with FIIOC,
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
referred to as the Transfer Agents) acts in that capacity for the fund's
Class T shares. The Transfer Agents receive account fees and asset-based
fees that vary according to account size and type of account of the
shareholders of the respective classes of the fund. With respect to the
Class T shares, State Street has delegated certain transfer, dividend
disbursing, and shareholder services to FIIOC for which FIIOC receives its
allocable share of all such fees. FIIOC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to annual rates of .33%,
.22%, and .15% of the average net assets of Class A, Class T, and
Institutional Class, respectively.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates of average net assets for each class.
(I) CLASS A. For the period, this expense limitation was .90% of average
net assets and the reimbursement reduced expenses by $8,761.
(II) CLASS T. Effective August 30, 1996, the expense limitation changed
from an annual rate of 1.00% to .90% of average net assets.
(III) INSTITUTIONAL CLASS. Effective August 30, 1996, the expense
limitation changed from an annual rate of .85% to .75% of average net
assets and the reimbursement reduced expenses by $20,596.
The fund has entered into an arrangement with its custodian where by
interest earned on uninvested cash balances was used to offset a portion of
expenses. During the period, the fund's custodian fees were reduced by
$11,479 under the custodian arrangement.
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 23,644 - $ 220,223 $ -
Shares sold

Reinvestment of 152 - 1,421 -
distributions

Shares redeemed (2,001) - (18,626) -

Net increase (decrease) 21,795 - $ 203,018 $ -

CLASS T 16,400,676 20,377,823 $ 154,169,354 $ 190,869,432
Shares sold

Reinvestment of 2,602,490 3,265,988 24,457,228 30,573,100
distributions

Shares redeemed (32,291,505) (48,984,447) (303,417,559) (458,631,505)

Net increase (decrease) (13,288,339) (25,340,636) $ (124,790,977) $ (237,188,973)

INSTITUTIONAL CLASS 706,911 1,074,155 $ 6,663,694 $ 10,126,478
Shares sold

Reinvestment of 62,772 13,078 589,181 123,702
distributions

Shares redeemed (825,831) (49,723) (7,749,583) (469,686)

Net increase (decrease) (56,148) 1,037,510 $ (496,708) $ 9,780,494

</TABLE>

To the Trustees of Fidelity Advisor Series II and the Shareholders of
Fidelity Advisor Short Fixed-Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series II: Fidelity Advisor Short Fixed-Income Fund,
including the schedule of portfolio investments, as of October 31, 1996,
and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended and the financial highlights of Class A, Class T and
Institutional Class for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1996, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Advisor Series II: Fidelity Advisor Short Fixed-Income Fund as
of October 31, 1996, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights of Class A, Class T and Institutional
Class for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 13, 1996
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company
Boston, MA - Class A
State Street Bank and Trust Company
Boston, MA - Class T
CUSTODIAN
The Bank of New York
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

SHORT FIXED-INCOME
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
OCTOBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 28 Notes to the financial statements.

REPORT OF INDEPENDENT 34 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). You can also look at income to
measure performance. The initial offering of Institutional Class shares
took place on July 3, 1995. Institutional Class shares are sold to eligible
investors without a sales load or 12b-1 fee. Returns prior to July 3, 1995
are those of Class T, the original class of the fund, and reflect Class T's
0.15% 12b-1 fee. If Fidelity had not reimbursed certain class expenses,
during the periods shown, the total returns and dividends would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Short Fixed-Income - 5.45% 33.30% 87.94%
Institutional Class

Lehman Brothers 1-3 Year 6.04% 33.99% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds 5.44% 32.15% n/a
Average

CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five years, or
since the fund started on September 16, 1987. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Institutional Class' returns to
the performance of the Lehman Brothers 1-3 Year Government/Corporate Bond
Index - a market value weighted performance benchmark for government and
corporate fixed-rate debt issues with maturities between one and three
years. To measure how Institutional Class' performance stacked up against
its peers, you can compare it to the short investment grade debt funds
average, which reflects the performance of 98 mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. over the past 12
months. These benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Short Fixed-Income - 5.45% 5.92% 7.15%
Institutional Class

Lehman Brothers 1-3 Year 6.04% 6.03% n/a
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.44% 5.72% n/a

AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' actual (or
cumulative) return and show you what would have hap-
pened if Institutional Class shares had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Sht Fixed Inc CL I LB 1-3 YR Govt/Corp
00643 LB013
1987/09/30 10000.00 10000.00
1987/10/31 10151.77 10197.98
1987/11/30 10222.72 10266.04
1987/12/31 10284.41 10337.38
1988/01/31 10419.48 10493.14
1988/02/29 10522.74 10584.77
1988/03/31 10556.28 10608.33
1988/04/30 10569.16 10622.40
1988/05/31 10561.33 10618.15
1988/06/30 10668.31 10724.50
1988/07/31 10669.73 10732.03
1988/08/31 10714.06 10759.19
1988/09/30 10821.04 10883.86
1988/10/31 10918.88 10993.49
1988/11/30 10886.96 10967.31
1988/12/31 10920.55 10992.51
1989/01/31 11009.55 11080.86
1989/02/28 11029.00 11083.48
1989/03/31 11084.45 11128.31
1989/04/30 11204.77 11308.94
1989/05/31 11357.63 11469.62
1989/06/30 11542.47 11681.34
1989/07/31 11738.98 11855.43
1989/08/31 11655.20 11788.34
1989/09/30 11715.34 11857.72
1989/10/31 11889.81 12042.61
1989/11/30 11983.20 12150.27
1989/12/31 12046.15 12198.37
1990/01/31 12018.87 12211.13
1990/02/28 12067.46 12275.93
1990/03/31 12131.32 12314.87
1990/04/30 12142.39 12345.63
1990/05/31 12333.21 12536.40
1990/06/30 12428.63 12668.94
1990/07/31 12575.82 12822.41
1990/08/31 12555.70 12867.89
1990/09/30 12587.01 12964.43
1990/10/31 12554.88 13098.27
1990/11/30 12633.95 13226.22
1990/12/31 12753.15 13381.00
1991/01/31 12714.81 13502.08
1991/02/28 12846.72 13599.59
1991/03/31 13076.12 13698.42
1991/04/30 13266.46 13832.59
1991/05/31 13401.87 13918.98
1991/06/30 13467.38 13970.68
1991/07/31 13559.90 14093.39
1991/08/31 13787.52 14284.50
1991/09/30 13930.15 14438.30
1991/10/31 14085.65 14593.74
1991/11/30 14228.13 14741.32
1991/12/31 14458.40 14964.17
1992/01/31 14517.70 14948.79
1992/02/29 14615.57 14996.24
1992/03/31 14683.79 14992.96
1992/04/30 14779.04 15130.08
1992/05/31 14932.25 15271.77
1992/06/30 15069.49 15427.86
1992/07/31 15256.89 15608.82
1992/08/31 15386.45 15734.81
1992/09/30 15513.70 15883.70
1992/10/31 15415.25 15788.15
1992/11/30 15422.43 15765.90
1992/12/31 15558.09 15914.79
1993/01/31 15793.87 16084.62
1993/02/28 15986.02 16215.84
1993/03/31 16088.67 16268.53
1993/04/30 16170.09 16370.63
1993/05/31 16238.72 16333.32
1993/06/30 16401.78 16457.02
1993/07/31 16498.79 16494.65
1993/08/31 16660.66 16632.74
1993/09/30 16718.20 16686.41
1993/10/31 16822.29 16725.35
1993/11/30 16891.51 16730.26
1993/12/31 17035.18 16798.00
1994/01/31 17141.47 16905.00
1994/02/28 17001.59 16802.58
1994/03/31 16612.17 16716.19
1994/04/30 16524.59 16652.70
1994/05/31 16624.08 16675.28
1994/06/30 16493.25 16719.13
1994/07/31 16643.69 16871.30
1994/08/31 16778.81 16928.24
1994/09/30 16772.35 16890.61
1994/10/31 16785.15 16929.22
1994/11/30 16813.98 16858.21
1994/12/31 16461.24 16890.28
1995/01/31 16583.71 17122.29
1995/02/28 16789.20 17359.21
1995/03/31 16877.45 17457.70
1995/04/30 17014.86 17615.76
1995/05/31 17320.99 17920.74
1995/06/30 17402.55 18018.26
1995/07/31 17483.96 18090.25
1995/08/31 17590.77 18199.88
1995/09/30 17677.27 18289.87
1995/10/31 17806.12 18441.70
1995/11/30 17953.61 18600.41
1995/12/31 18088.84 18741.45
1996/01/31 18225.52 18901.80
1996/02/29 18165.84 18829.80
1996/03/31 18131.78 18816.06
1996/04/30 18133.73 18835.04
1996/05/31 18172.46 18878.56
1996/06/30 18305.74 19016.66
1996/07/31 18362.38 19090.61
1996/08/31 18419.24 19160.97
1996/09/30 18574.19 19336.37
1996/10/31 18776.42 19554.63
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short Fixed-Income Fund - Institutional Class
on September 30, 1987, shortly after the fund started. As the chart shows,
by October 31, 1996, the value of the investment would have grown to
$18,776 - an 87.76% increase on the initial investment. For comparison,
look at how the Lehman Brothers 1-3 Year Government/
Corporate Bond Index did over the same period. With dividends reinvested,
the same $10,000 investment would have grown to $19,555 - a 95.55%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.51% 6.21% A 5.82% 7.72% 8.63%
A

Capital appreciation return -1.06% -0.11% -6.04% 1.41% 0.81%

Total return 5.45% 6.10% -0.22% 9.13% 9.44%

DIVIDEND returns and capital appreciation returns are both part of a class'
total return. A dividend return reflects the actual dividends paid by the
class. A capital appreciation return reflects both the amount paid by the
class to shareholders as capital gain distributions and changes in the
class' share price. Both returns assume the dividends or gains are
reinvested, if any.
DIVIDENDS AND YIELD
PERIODS ENDED OCTOBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.15(cents) 29.55(cents) 59.95(cents)

Annualized dividend rate 6.49% 6.29% 6.38%

30-day annualized yield 5.74% - -

DIVIDENDS per share show the income paid by the class for a set period and
do not reflect any tax reclassifications. If you annualize this number,
based on an average net asset value of $9.35 over the past month, $9.32
over the past six months, and $9.39 over the past year, you can compare the
class' income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis.

A DIVIDENDS PAID ARE BASED ON THE CLASS' INVESTMENT INCOME AND DO NOT
REFLECT CURRENCY RELATED LOSSES. AS A RESULT OF CURRENCY LOSSES,
INSTITUTIONAL CLASS DIVIDENDS PAID DURING 1995 OF APPROXIMATELY 4.8(CENTS)
PER SHARE WERE A NON-TAXABLE RETURN OF CAPITAL. CLASS T (THE ORIGINAL CLASS
OF THE FUND) DIVIDENDS PAID DURING 1994 OF APPROXIMATELY 8.0(CENTS) PER
SHARE WERE A NON-TAXABLE RETURN OF CAPITAL.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Shifting expectations about the
strength of the economy led to mixed
performance in domestic U.S.
bond markets over the 12 months
ended October 31, 1996. For the
period, the Lehman Brothers
Aggregate Bond Index - a proxy
for the performance of the U.S.
taxable bond market - posted a
total return of 5.85%.
Stronger-than-expected economic
signals - including surprisingly
robust employment reports in
February and March - rattled the
bond market and caused the yield
on the 30-year bond to rise to over
7% - a level not seen in over a
year. Bond investors spent most of
the summer anticipating an
increase in short-term interest
rates by the Federal Reserve Board.
However, the Fed stood pat
through the end of October, neither
raising nor lowering rates. After
rising in early 1996 and stabilizing
during much of the spring and
summer, interest rates
responded to the Fed's inaction by
falling in October.
Mortgage-backed securities
performed favorably relative to
other investment-grade securities,
as the higher, relatively stable
interest rate environment led to
diminishing refinancing activity. To
illustrate, the Salomon Brothers
Mortgage Index outperformed the
Lehman Aggregate Index by
returning 6.93% during the period.
Investment-grade corporate
bonds also performed
competitively, as income-driven
investors continued to soak up
higher yielding products during the
period. The Lehman Brothers
Corporate Bond Index returned
6.22% during the 12-month
period.
An interview with Charles Morrison, Portfolio Manager of Fidelity Advisor
Short Fixed-Income Fund
Q. HOW DID THE FUND PERFORM, CHARLIE?
A. For the 12-months ending on October 31, 1996, the fund's Institutional
Class shares returned 5.45%. For a sense of how the fund stacked up against
its peers, the short investment grade debt funds average, as tracked by
Lipper Analytical Services, returned 5.44% over the same period. The Lehman
Brothers 1-3 Year Government/Corporate Bond Index, which reflects the
marketplace in which the fund invests, had a 12-month return of 6.04%.
Q. CAN YOU SINGLE OUT ANY FACTORS THAT FIGURED INTO THOSE RETURN
COMPARISONS?
A. Throughout the period, I focused on keeping the duration of the
portfolio - a measure of the fund's sensitivity to interest rate movements
- - more in line with that of the short-term bond market, as reflected by the
fund's index. Given some of the unexpected swings in the bond market over
the past six months, this strategy helped keep the fund from getting
whipsawed. Rather than betting on the direction of interest rates, I chose
to concentrate on individual issuers and security selection. This strategy
was further reflected in the overall sector composition between the fund
and its benchmark. In a volatile rate environment like we've seen, I
believe this strategy should generally benefit the fund relative to its
competition.
Q. YOU MENTIONED A VOLATILE RATE ENVIRONMENT. WHAT WAS BEHIND THE MARKET'S
BEHAVIOR OVER THE PAST YEAR?
A. The bond market reacted to several economic developments during the
course of the period. As we entered the spring of 1996, the
stronger-than-expected February employment report was still fresh in the
minds of many market participants. The report had sent out warning signals
that the U.S. economy was better off than many had originally thought. As
the period progressed, the markets were hit with economic statistics that
seemed to flip-flop from one report indicating strength in the economy to
another reflecting weakness. This caused some interesting shifts in
investor sentiment and led to interest rates trading in a volatile range
over the period.
Q. WHAT TYPES OF STRATEGIES DID YOU USE IN NAVIGATING THE FUND THROUGH
THESE CONDITIONS?
A. I spent much of my time looking for value within the various "spread
products." Corporate, asset-backed and mortgage-backed bonds offered
advantageous spreads - or differences in yield - relative to their Treasury
counterparts. I continued to boost my exposure to these sectors with the
intention of increasing both yield and total return. Corporates and
asset-backeds benefited in large part due to solid fundamentals (factors
relating to the fiscal health of the issuers) and technicals (the supply of
and demand for corporate issues). Many subsectors of the mortgage market
also benefited from improving conditions. Collateralized mortgage
obligations and commercial mortgage-backed securities - which include
pooled mortgages on office buildings and multi-family housing developments
- - performed very well in light of the growing market demand for these types
of investments. I maintained a large position in these yield-enhancing
alternatives throughout the period.
Q. WERE THERE ANY INDIVIDUAL HOLDINGS THAT PLAYED SIGNIFICANT ROLES IN THE
FUND'S PERFORMANCE?
A. The fund benefited from its position in RJR Nabisco, Inc., as volatile
spreads created attractive trading opportunities. Tightening yield spreads
in Time Warner and 360 Degrees Communications, a wireless communications
company, added to returns. In addition, a number of super premium,
high-coupon mortgage-backed securities provided stable yet higher-yielding
alternatives to short-duration Treasury securities.
Q. WHAT DO YOU FORESEE HAPPENING - WITH THE FUND AND THE OVERALL MARKET -
IN THE NEXT SIX MONTHS?
A. It's going to be a challenge to keep finding ways to improve
performance. The sectors we've touched upon - corporates, asset-backeds and
mortgages - are all in very good shape. Valuation, I think, is fairly
reflected in most of the markets I target for the fund. Going forward, I'll
try to position the fund to take advantage of opportunities as they come
up, and to use our internal research capabilities to try to avoid any
deteriorating situations.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1996
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS
6 MONTHS AGO

Aaa 58.4 60.9

Aa 2.4 0.8

A 12.4 10.6

Baa 19.9 17.0

Ba 4.7 5.6

Not rated 2.0 2.6

Years 2.2 2.2

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1996
6 MONTHS AGO

Years 1.7 1.7

*
**
INVESTMENTS OCTOBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS OCTOBER 31, 1996

Investment in securities, at value (including repurchase $ 420,013,094
agreements of $843,000) (cost $420,674,486) -
See accompanying schedule

Cash 81,440

Receivable for investments sold 2,054,919

Receivable for fund shares sold 3,067,460

Interest receivable 5,775,049

Other receivables 2,354

Prepaid expenses 16,768

TOTAL ASSETS 431,011,084

LIABILITIES

Payable for investments purchased $ 4,171,739

Distributions payable 388,574

Accrued management fee 151,442

Distribution fees payable 52,125

Other payables and accrued expenses 142,584

TOTAL LIABILITIES 4,906,464

NET ASSETS $ 426,104,620

Net Assets consist of:

Paid in capital $ 467,749,418

Distributions in excess of net investment income (591,234)

Accumulated undistributed net realized gain (loss) (40,392,172)
on investments

Net unrealized appreciation (depreciation) on (661,392)
investments

NET ASSETS $ 426,104,620

CALCULATION OF MAXIMUM OFFERING PRICE $9.37
CLASS A:
NET ASSET VALUE and redemption price per share
($204,207 (divided by) 21,795 shares)

Maximum offering price per share (100/98.50 of $9.37) $9.51

CLASS T: $9.38
NET ASSET VALUE and redemption price per share
($416,700,224 (divided by) 44,445,285 shares)

Maximum offering price per share (100/98.50 of $9.38) $9.52

INSTITUTIONAL CLASS: $9.37
NET ASSET VALUE, offering price and redemption price
per share ($9,200,189 (divided by) 981,362 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1996

INVESTMENT INCOME $ 35,401,655
Interest

EXPENSES

Management fee $ 2,203,578

Transfer agent fees 77
Class A

Class T 1,048,063

Institutional Class 15,570

Distribution fees 35
Class A

Class T 725,063

Accounting fees and expenses 197,893

Non-interested trustees' compensation 2,133

Custodian fees and expenses 32,931

Registration fees 8,816
Class A

Class T 25,949

Institutional Class 36,996

Audit 43,270

Legal 5,710

Miscellaneous 17,144

Total expenses before reductions 4,363,228

Expense reductions (40,836) 4,322,392

NET INVESTMENT INCOME 31,079,263

REALIZED AND UNREALIZED GAIN (LOSS) (66,135)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (5,191,796)
investment securities

NET GAIN (LOSS) (5,257,931)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,821,332
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 31,079,263 $ 38,568,812
Net investment income

Net realized gain (loss) (66,135) (29,368,060)

Change in net unrealized appreciation (depreciation) (5,191,796) 24,940,899

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,821,332 34,141,651
FROM OPERATIONS

Distributions to shareholders (1,434) -
From net investment income
Class A

Class T (30,327,901) (27,653,285)

Institutional Class (675,143) (106,031)

Return of capital (Note 1)

Class T - (10,490,479)

Institutional Class - (36,934)

TOTAL DISTRIBUTIONS (31,004,478) (38,286,729)

Share transactions - net increase (decrease) (125,084,667) (227,408,479)

TOTAL INCREASE (DECREASE) IN NET ASSETS (130,267,813) (231,553,557)

NET ASSETS

Beginning of period 556,372,433 787,925,990

End of period (including distributions in excess of net $ 426,104,620 $ 556,372,433
investment income of $591,234 and $2,835,623,
respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
OCTOBER 31,

1996 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.290

Income from Investment Operations

Net interest income .090 D

Net realized and unrealized gain (loss) .081 G

Total from investment operations .171

Less Distributions

From net interest income (.091)

Net asset value, end of period $ 9.370

TOTAL RETURN B, C 1.85%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 204

Ratio of expenses to average net assets .90% A,
F

Ratio of net interest income to average net assets 6.27% A

Portfolio turnover rate 124%

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 E 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870
of period

Income from Investment
Operations

Net interest income .594 D .403 .479 .732 .830

Net realized and unrealized (.094) .148 A (.501) .146 .071
gain (loss)

Total from investment .500 .551 (.022) .878 .901
operations

Less Distributions

From net interest income (.590) (.407) (.464) (.738) (.821)

In excess of net - - (.044) - -
investment income

Return of capital (Note 1) - (.154) (.080) - -

Total distributions (.590) (.561) (.588) (.738) (.821)

Net asset value, end of period $ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950

TOTAL RETURN B, C 5.45% 6.05% (.22)% 9.13% 9.44%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 416,700 $ 546,546 $ 787,926 $ 654,202 $ 170,558
(000 omitted)

Ratio of expenses to .88% .89% .97% .95% .90%
average net assets F

Ratio of net interest income 6.29% 6.05% 5.91% 6.77% 7.59%
to average net assets

Portfolio turnover rate 124% 179% 108% 58% 57%

</TABLE>

1996 1995 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.470 $ 9.450

Income from Investment Operations

Net interest income .598 D .137

Net realized and unrealized gain (loss) (.098) .067 G

Total from investment operations .500 .204

Less Distributions

From net interest income (.600) (.136)

Return of capital (Note 1) - (.048)

Total distributions (.600) (.184)

Net asset value, end of period $ 9.370 $ 9.470

TOTAL RETURN B, C 5.45% 2.18%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 9,200 $ 9,827

Ratio of expenses to average net assets .80% F .85% A,
F

Ratio of net interest income to average net assets 6.37% 6.10% A

Portfolio turnover rate 124% 179%

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 23,644 - $ 220,223 $ -
Shares sold

Reinvestment of 152 - 1,421 -
distributions

Shares redeemed (2,001) - (18,626) -

Net increase (decrease) 21,795 - $ 203,018 $ -

CLASS T 16,400,676 20,377,823 $ 154,169,354 $ 190,869,432
Shares sold

Reinvestment of 2,602,490 3,265,988 24,457,228 30,573,100
distributions

Shares redeemed (32,291,505) (48,984,447) (303,417,559) (458,631,505)

Net increase (decrease) (13,288,339) (25,340,636) $ (124,790,977) $ (237,188,973)

INSTITUTIONAL CLASS 706,911 1,074,155 $ 6,663,694 $ 10,126,478
Shares sold

Reinvestment of 62,772 13,078 589,181 123,702
distributions

Shares redeemed (825,831) (49,723) (7,749,583) (469,686)

Net increase (decrease) (56,148) 1,037,510 $ (496,708) $ 9,780,494

</TABLE>

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

GOVERNMENT INVESTMENT
FUND - CLASS A, CLASS T (FORMERLY CLASS A), AND CLASS B
ANNUAL REPORT
OCTOBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 15 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 18 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 19 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 24 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 31 Notes to the financial statements.

REPORT OF INDEPENDENT 36 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 37

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first 10
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
ADVISOR GOVERNMENT INVESTMENT FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). You can also look at income to
measure performance. The initial offering of Class A shares took place on
September 3, 1996. Class A shares bear a 0.15% 12b-1 fee. Returns prior to
September 3, 1996 are those of Class T, the original class of the fund, and
reflect Class T's 0.25% 12b-1 fee. If Fidelity had not reimbursed certain
class expenses during the periods shown, the total returns and dividends
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - Class A 4.34% 38.66% 95.24%

Advisor Government Investment - Class A -0.09% 32.77% 86.94%
(incl. max 4.25% sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 44.92% n/a

General U.S. Government Funds Average 4.04% 37.88% n/a

CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 7, 1987. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare Class A's returns to those of the Salomon
Brothers Treasury/Agency Index - a market capitalization weighted index of
U.S. Treasury and U.S. government agency securities with fixed-rate coupons
and weighted average lives of at least one year. To measure how Class A's
performance stacked up against its peers, you can compare it to the general
U.S. government funds average, which reflects the performance of 169 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past 12 months. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - Class A 4.34% 6.76% 7.05%

Advisor Government Investment - Class A -0.09% 5.83% 6.57%
(incl. max. 4.25% sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 7.70% n/a

General U.S. Government Funds Average 4.04% 6.61% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class A shares' actual (or cumulative)
return and show you what would have happened if Class A shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Govt. Inv ClassA SB Treasury/Agency
00265 SB022
1987/01/31 9575.00 10000.00
1987/02/28 9607.29 10077.02
1987/03/31 9564.96 9962.08
1987/04/30 9224.01 9770.91
1987/05/31 9186.04 9724.70
1987/06/30 9309.61 9835.30
1987/07/31 9327.41 9807.25
1987/08/31 9274.82 9766.17
1987/09/30 9089.85 9582.12
1987/10/31 9379.82 9947.07
1987/11/30 9453.53 9994.47
1987/12/31 9536.83 10107.43
1988/01/31 9827.46 10450.67
1988/02/29 9937.35 10562.05
1988/03/31 9880.52 10456.59
1988/04/30 9822.08 10387.87
1988/05/31 9763.76 10339.28
1988/06/30 9959.86 10548.23
1988/07/31 9942.77 10480.69
1988/08/31 9937.48 10497.67
1988/09/30 10106.27 10721.23
1988/10/31 10255.72 10909.23
1988/11/30 10170.01 10789.95
1988/12/31 10163.58 10825.10
1989/01/31 10281.66 10970.46
1989/02/28 10249.79 10885.93
1989/03/31 10280.14 10950.31
1989/04/30 10446.92 11155.30
1989/05/31 10650.99 11438.90
1989/06/30 10888.88 11826.37
1989/07/31 11058.43 12072.44
1989/08/31 10945.25 11868.24
1989/09/30 11008.81 11922.74
1989/10/31 11216.66 12232.40
1989/11/30 11301.87 12347.74
1989/12/31 11357.79 12366.30
1990/01/31 11234.21 12196.07
1990/02/28 11271.22 12206.34
1990/03/31 11287.90 12218.58
1990/04/30 11186.49 12115.49
1990/05/31 11514.26 12440.95
1990/06/30 11680.12 12639.23
1990/07/31 11821.69 12807.09
1990/08/31 11746.10 12621.85
1990/09/30 11824.18 12754.96
1990/10/31 11942.97 12964.29
1990/11/30 12151.21 13242.36
1990/12/31 12307.93 13452.09
1991/01/31 12442.98 13594.68
1991/02/28 12546.58 13652.34
1991/03/31 12597.01 13726.99
1991/04/30 12701.68 13890.51
1991/05/31 12768.34 13939.09
1991/06/30 12761.10 13930.01
1991/07/31 12897.89 14105.77
1991/08/31 13097.93 14419.78
1991/09/30 13334.66 14731.81
1991/10/31 13453.78 14845.56
1991/11/30 13531.56 15000.00
1991/12/31 13963.44 15514.65
1992/01/31 13774.04 15274.51
1992/02/29 13837.40 15335.73
1992/03/31 13742.48 15243.31
1992/04/30 13823.00 15352.32
1992/05/31 14076.74 15619.32
1992/06/30 14271.61 15846.43
1992/07/31 14512.59 16239.43
1992/08/31 14637.51 16406.11
1992/09/30 14773.50 16632.83
1992/10/31 14595.37 16391.50
1992/11/30 14632.31 16361.48
1992/12/31 14868.82 16637.97
1993/01/31 15123.47 17011.22
1993/02/28 15407.27 17343.00
1993/03/31 15495.61 17389.60
1993/04/30 15612.35 17538.91
1993/05/31 15636.94 17512.44
1993/06/30 15944.74 17905.44
1993/07/31 16023.71 18015.64
1993/08/31 16284.97 18416.15
1993/09/30 16314.85 18497.51
1993/10/31 16424.27 18546.49
1993/11/30 16173.03 18342.68
1993/12/31 16260.13 18424.44
1994/01/31 16543.63 18677.62
1994/02/28 16160.49 18288.96
1994/03/31 15672.08 17863.18
1994/04/30 15515.72 17725.73
1994/05/31 15531.89 17708.74
1994/06/30 15478.99 17672.41
1994/07/31 15816.46 17980.88
1994/08/31 15807.23 17985.62
1994/09/30 15585.15 17733.63
1994/10/31 15558.79 17715.85
1994/11/30 15529.13 17676.75
1994/12/31 15634.24 17798.40
1995/01/31 15914.90 18147.17
1995/02/28 16262.68 18527.53
1995/03/31 16370.46 18637.73
1995/04/30 16564.34 18877.87
1995/05/31 17208.58 19652.03
1995/06/30 17329.36 19800.93
1995/07/31 17268.51 19732.21
1995/08/31 17464.74 19957.74
1995/09/30 17623.82 20137.85
1995/10/31 17879.23 20451.85
1995/11/30 18134.29 20782.84
1995/12/31 18393.99 21070.78
1996/01/31 18488.38 21204.28
1996/02/29 18109.38 20781.26
1996/03/31 17942.18 20598.39
1996/04/30 17826.94 20436.84
1996/05/31 17789.21 20432.10
1996/06/30 17996.29 20689.63
1996/07/31 18032.62 20735.84
1996/08/31 17990.45 20692.79
1996/09/30 18267.21 21036.81
1996/10/31 18655.53 21513.94
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Government Investment Fund - Class A on
January 31, 1987, shortly after the fund started, and the current maximum
4.25% sales charge was paid. As the chart shows, by October 31, 1996, the
value of the investment would have grown to $18,656 - an 86.56% increase on
the initial investment. For comparison, look at how the Salomon Brothers
Treasury/Agency Index did over the same period. With dividends reinvested
the same $10,000 investment would have grown to $21,514 - a 115.14%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.20% 6.99% 5.01% 6.13% 7.03%

Capital appreciation return -1.86% 7.92% -10.28% 6.40% 1.46%

Total return 4.34% 14.91% -5.27% 12.53% 8.49%

</TABLE>

Dividends per share 4.85(cents) 9.07(cents)

Annualized dividend rate 6.07% 6.10%

30-day annualized yield n/a -

DIVIDENDS per share show the income paid by the class for a set period and
do not reflect any tax reclassifications. If you annualize this number,
based on an average net asset value of $9.41 over the past month, or $9.36
over the life of the class, you can compare the class' income over these
two periods. The 30-day annualized YIELD is a standard formula for all
funds based on the yields of the bonds in the fund, averaged over the past
30 days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds from
different companies on an equal basis. Yield information will be reported
once Class A has a longer, more stable, operating history.
ADVISOR GOVERNMENT INVESTMENT FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE

Advisor Government Investment - Class T 4.38% 38.71% 95.30%

Advisor Government Investment - Class T 0.72% 33.86% 88.47%
(incl. max 3.50% sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 44.92% n/a

General U.S. Government Funds Average 4.04% 37.88% n/a

CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 7, 1987. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare Class T's returns to those of the Salomon
Brothers Treasury/Agency Index - a market capitalization weighted index of
U.S. Treasury and U.S. government agency securities with fixed-rate coupons
and weighted average lives of at least one year. To measure how Class T's
performance stacked up against its peers, you can compare it to the general
U.S. government funds average, which reflects the performance of 169 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past 12 months. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - Class T 4.38% 6.76% 7.05%

Advisor Government Investment - Class T 0.72% 6.01% 6.66%
(incl. max. 3.50% sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 7.70% n/a

General U.S. Government Funds Average 4.04% 6.61% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class T shares' actual (or cumulative)
return and show you what would have happened if Class T shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Govt. Inv. Cl T SB Treasury/Agency
00217 SB022
1987/01/31 9650.00 10000.00
1987/02/28 9682.54 10077.02
1987/03/31 9639.88 9962.08
1987/04/30 9296.26 9770.91
1987/05/31 9257.99 9724.70
1987/06/30 9382.53 9835.30
1987/07/31 9400.47 9807.25
1987/08/31 9347.47 9766.17
1987/09/30 9161.05 9582.12
1987/10/31 9453.29 9947.07
1987/11/30 9527.58 9994.47
1987/12/31 9611.53 10107.43
1988/01/31 9904.44 10450.67
1988/02/29 10015.19 10562.05
1988/03/31 9957.91 10456.59
1988/04/30 9899.02 10387.87
1988/05/31 9840.24 10339.28
1988/06/30 10037.88 10548.23
1988/07/31 10020.65 10480.69
1988/08/31 10015.32 10497.67
1988/09/30 10185.43 10721.23
1988/10/31 10336.05 10909.23
1988/11/30 10249.67 10789.95
1988/12/31 10243.19 10825.10
1989/01/31 10362.20 10970.46
1989/02/28 10330.08 10885.93
1989/03/31 10360.66 10950.31
1989/04/30 10528.75 11155.30
1989/05/31 10734.41 11438.90
1989/06/30 10974.18 11826.37
1989/07/31 11145.05 12072.44
1989/08/31 11030.98 11868.24
1989/09/30 11095.04 11922.74
1989/10/31 11304.52 12232.40
1989/11/30 11390.39 12347.74
1989/12/31 11446.76 12366.30
1990/01/31 11322.21 12196.07
1990/02/28 11359.51 12206.34
1990/03/31 11376.31 12218.58
1990/04/30 11274.11 12115.49
1990/05/31 11604.45 12440.95
1990/06/30 11771.60 12639.23
1990/07/31 11914.29 12807.09
1990/08/31 11838.11 12621.85
1990/09/30 11916.80 12754.96
1990/10/31 12036.52 12964.29
1990/11/30 12246.39 13242.36
1990/12/31 12404.34 13452.09
1991/01/31 12540.44 13594.68
1991/02/28 12644.86 13652.34
1991/03/31 12695.68 13726.99
1991/04/30 12801.17 13890.51
1991/05/31 12868.36 13939.09
1991/06/30 12861.05 13930.01
1991/07/31 12998.92 14105.77
1991/08/31 13200.53 14419.78
1991/09/30 13439.11 14731.81
1991/10/31 13559.17 14845.56
1991/11/30 13637.55 15000.00
1991/12/31 14072.82 15514.65
1992/01/31 13881.94 15274.51
1992/02/29 13945.78 15335.73
1992/03/31 13850.12 15243.31
1992/04/30 13931.28 15352.32
1992/05/31 14187.00 15619.32
1992/06/30 14383.39 15846.43
1992/07/31 14626.26 16239.43
1992/08/31 14752.17 16406.11
1992/09/30 14889.22 16632.83
1992/10/31 14709.70 16391.50
1992/11/30 14746.92 16361.48
1992/12/31 14985.28 16637.97
1993/01/31 15241.93 17011.22
1993/02/28 15527.96 17343.00
1993/03/31 15616.98 17389.60
1993/04/30 15734.64 17538.91
1993/05/31 15759.43 17512.44
1993/06/30 16069.64 17905.44
1993/07/31 16149.22 18015.64
1993/08/31 16412.53 18416.15
1993/09/30 16442.64 18497.51
1993/10/31 16552.92 18546.49
1993/11/30 16299.71 18342.68
1993/12/31 16387.49 18424.44
1994/01/31 16673.21 18677.62
1994/02/28 16287.07 18288.96
1994/03/31 15794.83 17863.18
1994/04/30 15637.25 17725.73
1994/05/31 15653.55 17708.74
1994/06/30 15600.24 17672.41
1994/07/31 15940.35 17980.88
1994/08/31 15931.05 17985.62
1994/09/30 15707.22 17733.63
1994/10/31 15680.66 17715.85
1994/11/30 15650.76 17676.75
1994/12/31 15756.70 17798.40
1995/01/31 16039.56 18147.17
1995/02/28 16390.06 18527.53
1995/03/31 16498.69 18637.73
1995/04/30 16694.08 18877.87
1995/05/31 17343.37 19652.03
1995/06/30 17465.10 19800.93
1995/07/31 17403.77 19732.21
1995/08/31 17601.54 19957.74
1995/09/30 17761.87 20137.85
1995/10/31 18019.28 20451.85
1995/11/30 18276.33 20782.84
1995/12/31 18538.07 21070.78
1996/01/31 18633.20 21204.28
1996/02/29 18251.23 20781.26
1996/03/31 18082.72 20598.39
1996/04/30 17966.58 20436.84
1996/05/31 17928.55 20432.10
1996/06/30 18137.25 20689.63
1996/07/31 18173.87 20735.84
1996/08/31 18131.36 20692.79
1996/09/30 18418.43 21036.81
1996/10/31 18808.20 21513.94
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Government Investment Fund - Class T on
January 31, 1987, shortly after the fund started, and the current maximum
3.50% sales charge was paid. As the chart shows, by October 31, 1996, the
value of the investment would have grown to $18,808 - an 88.08% increase on
the initial investment. For comparison, look at how the Salomon Brothers
Treasury/Agency Index did over the same period. With dividends reinvested
the same $10,000 investment would have grown to $21,514 - a 115.14%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.24% 6.99% 5.01% 6.13% 7.03%

Capital appreciation return -1.86% 7.92% -10.28% 6.40% 1.46%

Total return 4.38% 14.91% -5.27% 12.53% 8.49%

</TABLE>

Dividends per share 4.77(cents) 28.92(cents) 58.62(cents)

Annualized dividend rate 5.97% 6.16% 6.18%

30-day annualized yield 5.34% - -

DIVIDENDS per share show the income paid by the class for a set period and
do not reflect any tax reclassifications. If you annualize this number,
based on an average net asset value of $9.41 over the past month, or $9.32
over the past six months or $9.49 over the past year, you can compare the
class' income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
offering share price used in the calculation of the yield includes the
effect of Class T's current maximum 3.50% sales charge.
ADVISOR GOVERNMENT INVESTMENT FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). You can also look at income to
measure performance. The initial offering of Class B shares took place on
June 30, 1994. Class B shares bear a 0.90% 12b-1/shareholder service fee
(1.00% prior to January 1, 1996). Returns prior to June 30, 1994 are those
of Class T, the original class of the fund, and reflect Class T's 0.25%
12b-1 fee. Had Class B's 12b-1 fee been reflected, returns prior to June
30, 1994 would have been lower. Class B's contingent deferred sales charges
included in the past one year, past five years and life of fund total
return figures are 4%, 1% and 0%, respectively. If Fidelity had not
reimbursed certain class expenses during the periods shown, the total
returns and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - Class 3.69% 36.34% 91.96%
B

Advisor Government Investment - Class B -0.23% 35.35% 91.96%
(incl. contingent deferred sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 44.92% n/a

General U.S. Government Funds Average 4.04% 37.88% n/a

CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 7, 1987. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare Class B's returns to those of the Salomon
Brothers Treasury/Agency Index - a market capitalization weighted index of
U.S. Treasury and U.S. government agency securities with fixed-rate coupons
and weighted average lives of at least one year. To measure how Class B's
performance stacked up against its peers, you can compare it to the general
U.S. government funds average, which reflects the performance of 169 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past 12 months. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - Class 3.69% 6.40% 6.86%
B

Advisor Government Investment - Class B -0.23% 6.24% 6.86%
(incl. contingent deferred sales charge)

Salomon Brothers Treasury/Agency Index 5.19% 7.70% n/a

General U.S. Government Funds Average 4.04% 6.61% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class B shares' actual (or cumulative)
return and show you what would have happened if Class B shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Govt. Inv ClassB SB Treasury/Agency
00667 SB022
1987/01/31 10000.00 10000.00
1987/02/28 10033.72 10077.02
1987/03/31 9989.52 9962.08
1987/04/30 9633.43 9770.91
1987/05/31 9593.77 9724.70
1987/06/30 9722.83 9835.30
1987/07/31 9741.42 9807.25
1987/08/31 9686.50 9766.17
1987/09/30 9493.31 9582.12
1987/10/31 9796.16 9947.07
1987/11/30 9873.14 9994.47
1987/12/31 9960.14 10107.43
1988/01/31 10263.66 10450.67
1988/02/29 10378.44 10562.05
1988/03/31 10319.08 10456.59
1988/04/30 10258.05 10387.87
1988/05/31 10197.14 10339.28
1988/06/30 10401.94 10548.23
1988/07/31 10384.09 10480.69
1988/08/31 10378.57 10497.67
1988/09/30 10554.85 10721.23
1988/10/31 10710.93 10909.23
1988/11/30 10621.42 10789.95
1988/12/31 10614.71 10825.10
1989/01/31 10738.03 10970.46
1989/02/28 10704.75 10885.93
1989/03/31 10736.44 10950.31
1989/04/30 10910.62 11155.30
1989/05/31 11123.75 11438.90
1989/06/30 11372.20 11826.37
1989/07/31 11549.27 12072.44
1989/08/31 11431.07 11868.24
1989/09/30 11497.45 11922.74
1989/10/31 11714.53 12232.40
1989/11/30 11803.52 12347.74
1989/12/31 11861.92 12366.30
1990/01/31 11732.86 12196.07
1990/02/28 11771.51 12206.34
1990/03/31 11788.93 12218.58
1990/04/30 11683.02 12115.49
1990/05/31 12025.34 12440.95
1990/06/30 12198.55 12639.23
1990/07/31 12346.41 12807.09
1990/08/31 12267.47 12621.85
1990/09/30 12349.02 12754.96
1990/10/31 12473.08 12964.29
1990/11/30 12690.56 13242.36
1990/12/31 12854.24 13452.09
1991/01/31 12995.27 13594.68
1991/02/28 13103.48 13652.34
1991/03/31 13156.15 13726.99
1991/04/30 13265.46 13890.51
1991/05/31 13335.08 13939.09
1991/06/30 13327.52 13930.01
1991/07/31 13470.38 14105.77
1991/08/31 13679.30 14419.78
1991/09/30 13926.54 14731.81
1991/10/31 14050.95 14845.56
1991/11/30 14132.18 15000.00
1991/12/31 14583.23 15514.65
1992/01/31 14385.42 15274.51
1992/02/29 14451.59 15335.73
1992/03/31 14352.46 15243.31
1992/04/30 14436.56 15352.32
1992/05/31 14701.56 15619.32
1992/06/30 14905.07 15846.43
1992/07/31 15156.75 16239.43
1992/08/31 15287.22 16406.11
1992/09/30 15429.24 16632.83
1992/10/31 15243.21 16391.50
1992/11/30 15281.78 16361.48
1992/12/31 15528.79 16637.97
1993/01/31 15794.74 17011.22
1993/02/28 16091.15 17343.00
1993/03/31 16183.40 17389.60
1993/04/30 16305.32 17538.91
1993/05/31 16331.01 17512.44
1993/06/30 16652.47 17905.44
1993/07/31 16734.95 18015.64
1993/08/31 17007.80 18416.15
1993/09/30 17039.01 18497.51
1993/10/31 17153.29 18546.49
1993/11/30 16890.89 18342.68
1993/12/31 16981.85 18424.44
1994/01/31 17277.94 18677.62
1994/02/28 16877.79 18288.96
1994/03/31 16367.70 17863.18
1994/04/30 16204.40 17725.73
1994/05/31 16221.30 17708.74
1994/06/30 16163.68 17672.41
1994/07/31 16487.93 17980.88
1994/08/31 16481.47 17985.62
1994/09/30 16217.16 17733.63
1994/10/31 16179.21 17715.85
1994/11/30 16137.77 17676.75
1994/12/31 16236.13 17798.40
1995/01/31 16517.05 18147.17
1995/02/28 16871.17 18527.53
1995/03/31 16972.64 18637.73
1995/04/30 17162.89 18877.87
1995/05/31 17819.66 19652.03
1995/06/30 17933.67 19800.93
1995/07/31 17858.69 19732.21
1995/08/31 18050.29 19957.74
1995/09/30 18203.50 20137.85
1995/10/31 18474.59 20451.85
1995/11/30 18726.70 20782.84
1995/12/31 18984.03 21070.78
1996/01/31 19070.32 21204.28
1996/02/29 18669.63 20781.26
1996/03/31 18487.90 20598.39
1996/04/30 18340.87 20436.84
1996/05/31 18291.04 20432.10
1996/06/30 18513.48 20689.63
1996/07/31 18540.59 20735.84
1996/08/31 18486.56 20692.79
1996/09/30 18769.71 21036.81
1996/10/31 19156.64 21513.94
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Government Investment Fund - Class B on
January 31, 1987, shortly after the fund started. As the chart shows, by
October 31, 1996, the value of the investment would have grown to $19,157 -
a 91.57% increase on the initial investment. For comparison, look at how
the Salomon Brothers Treasury/Agency Index did over the same period. With
dividends reinvested the same $10,000 investment would have grown to
$21,514 - a 115.14% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 5.55% 6.15% 4.72% 6.13% 7.03%

Capital appreciation return -1.86% 8.04% -10.38% 6.40% 1.46%

Total return 3.69% 14.19% -5.66% 12.53% 8.49%

</TABLE>

Dividends per share 4.25(cents) 25.80(cents) 52.32(cents)

Annualized dividend rate 5.32% 5.49% 5.51%

30-day annualized yield 4.87% - -

DIVIDENDS per share show the income paid by the class for a set period and
do not reflect any tax reclassifications. The annualized dividend rate is
based on an average net asset value of $9.41 over the past month, $9.32
over the past six months, and $9.49 over the past year. The 30-day
annualized YIELD is a standard formula for all funds based on the yields of
the bonds in the fund, averaged over the past 30 days. This figure shows
you the yield characteristics of the fund's investments at the end of the
period. It also helps you compare funds from different companies on an
equal basis. The offering share price used in the calculation of the yield
excludes the effect of Class B's contingent deferred sales charge.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Shifting expectations about the
strength of the economy led to mixed
performance in domestic U.S.
bond markets over the 12 months
ended October 31, 1996. For the
period, the Lehman Brothers
Aggregate Bond Index - a proxy
for the performance of the U.S.
taxable bond market - posted a
total return of 5.85%.
Stronger-than-expected economic
signals - including surprisingly
robust employment reports in
February and March - rattled the
bond market and caused the yield
on the 30-year bond to rise to over
7% - a level not seen in over a
year. Bond investors spent most of
the summer anticipating an
increase in short-term interest
rates by the Federal Reserve Board.
However, the Fed stood pat
through the end of October, neither
raising nor lowering rates. After
rising in early 1996 and stabilizing
during much of the spring and
summer, interest rates
responded to the Fed's inaction by
falling in October.
Mortgage-backed securities
performed favorably relative to
other investment-grade securities,
as the higher, relatively stable
interest rate environment led to
diminishing refinancing activity. To
illustrate, the Salomon Brothers
Mortgage Index outperformed the
Lehman Aggregate Index by
returning 6.93% during the period.
Investment-grade corporate bonds
also performed competitively, as
income-driven investors continued
to soak up higher yielding
products during the period. The
Lehman Brothers Corporate Bond
Index returned 6.22% during the
12-month period.
An interview with Robert Ives, Portfolio Manager of Fidelity Advisor
Government Investment Fund
Q. BOB, HOW DID THE FUND PERFORM?
A. For the 12-month period that ended October 31, 1996, the fund's Class A,
Class T and Class B shares generated returns of 4.34%, 4.38% and 3.69%,
respectively. To gauge how the fund did versus its competition, the general
U.S. government funds average had a return of 4.04%, according to Lipper
Analytical Services. The Salomon Brothers Treasury/Agency Index, which
reflects the marketplace in which the fund invests, had a 12-month return
of 5.19% as of October 31, 1996.
Q. CAN YOU SUM UP THE EVENTS THAT TOOK PLACE IN THE BOND MARKET OVER THE
PAST YEAR?
A. Prior to October, the most significant overall development during the
period had been the consistent growth of the U.S. economy. In conjunction
with this growth, we also witnessed a low unemployment rate and some
concern over inflation. While the unemployment rate remained at this low
level as the period came to a close, the economy shifted into a more
moderate pace of growth and inflation concerns subsided. While interest
rates fell significantly in October, they have risen over the past 12
months.
Q. THE MARKET SEEMED TO PAY PARTICULARLY CLOSE ATTENTION TO FED DECISIONS
DURING THE PERIOD . . .
A. That's true. The Fed's reluctance to raise short-term rates had varying
effects on the market. Bonds staged a rally in August and September largely
due to the Fed's lack of action. Given the unemployment scenario, I would
have thought the market would have reacted less enthusiastically. In
October, rates dropped significantly as the slowing economy took the
pressure off the Fed to act. As the period closed, investor sentiment
leaned toward a possible lowering of short-term rates by the Fed. With the
direction of the economy unclear and low unemployment, it's natural for
bond investors to monitor the Fed's moves so closely.
Q. LET'S TURN TO THE FUND. CAN YOU RELATE ITS PERFORMANCE TO THE INVESTING
ENVIRONMENT YOU JUST SPOKE OF?
A. Over the course of the year, the increase in interest rates led to a
drop in bond prices, partially offsetting the fund's income return. As the
economy cooled down recently, bond yields declined and bond prices rose.
I'd like to point out, though, that my strategy is not dictated by
short-term market fluctuations. Some of the fund's competitors may still be
trying to guess the direction of interest rates, but I think they're
fighting a losing battle. I feel my strategy of keeping a close eye on the
fund's benchmark helped the fund perform well within its peer group.
Q. IN TERMS OF PORTFOLIO STRUCTURE, WHICH AREAS DID YOU LOOK TO IN ORDER TO
ENHANCE PERFORMANCE?
A. Relative to the fund's index, I typically strive to be overweighted in
agency issues. At the end of the period, the fund had an approximate
non-mortgage-backed agency position of 32%. The key factor with agencies is
monitoring the spreads - that is, the difference in yield - between
agencies and Treasuries. While agencies present slightly more risk than
Treasuries, they can be worthwhile investments depending upon spread
levels. With respect to maturity, I generally sought to add short- and
intermediate-term agencies. Mortgage-backed securities also played a key
role in the fund's return.
Q. WHICH HOLDINGS PLAYED KEY ROLES IN THE FUND'S PERFORMANCE?
A. Both mortgage-backed securities and agency securities helped the fund
during the period. Both sectors bolstered the income return of the fund,
while adding just a bit in capital appreciation as yield spreads versus
Treasury bonds continued to fall. Most of the mortgage securities in the
fund are relatively stable, short average-life securities, which present
minimal risks to the fund and offer somewhat higher yields than Treasuries.
While mortgage securities generally did well during the period, they
weakened in October as the drop in rates resulted in expectations of
increased prepayment activity.
Q. WHAT DO YOU SEE HAPPENING IN THE NEXT SIX MONTHS?
A. On a fund level, I'll continue to look for opportunities within all
sectors of the government bond market. From an economic standpoint, the key
issue is how economic growth plays out in the fourth quarter. One indicator
will be sales volume during the holiday season. If growth is weak, the Fed
will most likely lower rates and bonds may stage a rally. If growth is
moderate or strong, the Fed will probably stand pat or even consider a rate
increase. The other important factor is inflation. The current low
unemployment situation means that a stronger economy could re-ignite
inflation. This would be a real negative for the bond market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks a high level of
current income by investing
primarily in obligations
issued or guaranteed by the
U.S. government or any of
its agencies or
instrumentalities
START DATE: January 7, 1987
SIZE: as of October 31, 1996,
more than $263 million
MANAGER: Robert Ives, since
1995; manager, Fidelity
Advisor World U.S.
Government Investment
Fund, Fidelity Advisor
Annuity Government
Investment Fund, since
1995; joined Fidelity in 1991
(checkmark)
BOB IVES ON HOW ECONOMIC
INDICATORS AFFECT THE BOND
MARKET:
UNEMPLOYMENT: "When the
economy is strong, you usually
see low levels of
unemployment. When the
unemployment rate is low, it
means there aren't enough
workers for all the jobs that
exist. Employers then need to
increase wages to attract
good help. This upward wage
pressure contributes to
inflation and is frowned upon
by the bond market."
INFLATION: "Inflation eats away
at the return realized by a
bondholder. If you buy a
five-year Treasury note at
6% and the inflation level is at
3%, you're earning 3% over
inflation. If inflation inches up
to 4%, then you're only
earning 2%. Any increase in
inflation is a big concern. If
inflation moves above the 3%
mark, that would pose real
problems for the market."
WAGES: "Wage increases are
accomplices to inflation. In
fact, wages constitute
two-thirds of the weight of the
Consumer Price Index - a
common measure of inflation.
If wages rise 1%, it means the
overall inflation level goes up
about 0.67%. If companies are
paying people more, they'll
have to increase the prices of
their products in order to stay
profitable."
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF OCTOBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Less than 5% 0.2 0.2

5 - 5.99% 9.4 3.8

6 - 6.99% 26.5 13.4

7 - 7.99% 23.0 24.8

8 - 8.99% 28.0 35.6

9 - 9.99% 7.7 13.1

10 - 10.99% 0.4 0.5

11 - 11.99% 0.3 1.1

12% and over 2.9 6.5

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING CASH EQUIVALENTS.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1996
6 MONTHS AGO

Years 8.5 8.7

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1996
6 MONTHS AGO

Years 4.8 4.8

INVESTMENTS OCTOBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 84.8%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 52.8%
8 3/4%, 10/15/97 $ 690,000 $ 710,486
7 3/8%, 11/15/97 10,970,000 11,165,376
6 1/8%, 3/31/98 24,510,000 24,667,109
6 7/8%, 8/31/99 490,000 502,518
7 3/4%, 12/31/99 30,720,000 32,289,485
8 1/2%, 2/15/00 4,000,000 4,299,360
12%, 8/15/13 (callable) 4,570,000 6,579,113
9%, 11/15/18 5,420,000 6,819,010
8 7/8%, 2/15/19 40,498,000 50,381,942
137,414,399
U.S. GOVERNMENT AGENCY OBLIGATIONS - 32.0%
Farm Credit System Financial Assistance Corporation
9 3/8%, 7/21/03 4,212,000 4,881,329
Federal Agricultural Mortgage Corporation:
7.48%, 11/27/00 1,440,000 1,507,046
7.01%, 8/10/04 500,000 511,015
Federal Farm Credit Bank:
6.20%, 9/23/02 740,000 735,027
6.40%, 10/3/02 160,000 160,475
Federal Home Loan Bank:
8.85%, 6/21/00 750,000 815,625
6.37%, 6/30/03 230,000 229,354
7.36%, 7/1/04 850,000 891,302
7.38%, 8/5/04 1,580,000 1,659,490
7.46%, 9/9/04 920,000 970,600
8.09%, 12/28/04 290,000 317,277
7.59%, 3/10/05 290,000 308,534
7.315%, 4/21/05 180,000 188,381
Federal Home Loan Mortgage Corporation:
5.51%, 2/5/99 5,600,000 5,544,896
5.76%, 6/9/00 3,680,000 3,636,870
6.20%, 4/15/03 350,000 346,665
8%, 1/26/05 330,000 358,773
Federal National Mortgage Association:
8.90%, 6/12/00 3,300,000 3,591,852
6.40%, 9/27/05 2,350,000 2,314,374
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Government Trust Certificates (assets of Trust guaranteed
by U.S. Government through Defense Security
Assistance Agency):
Class 1-C 9 1/4%, 11/15/01 $ 478,000 $ 512,368
Class 2-E 9.40%, 5/15/02 1,040,000 1,118,884
Class T-2 9 5/8%, 5/15/02 673,000 722,095
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government through
Export-Import Bank):
Series 1993-C, 5.20%, 10/15/04 206,222 198,006
Series 1993-D, 5.23%, 5/15/05 364,894 349,956
Series 1994-A, 7.12%, 4/15/06 1,958,358 2,016,191
Series 1994-C, 6.61%, 9/15/99 175,755 177,457
Series 1994-F, 8.187%, 12/15/04 955,030 1,009,668
Guaranteed Trade Trust Certificates (assets of
Trust guaranteed by U.S. Government through
Export-Import Bank):
Series 1992-A, 7.02%, 9/1/04 356,000 365,948
Series 1994-A, 7.39%, 6/26/06 760,000 788,256
Series 1994-B, 7 1/2%, 1/26/06 268,497 280,437
Israel Export Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1994-1, 6.88%, 1/26/03 405,294 411,669
Overseas Private Investment Corp. (U.S. Government
guaranteed participation certificate) Series 1994-195,
6.08%, 8/15/04 800,000 788,560
Private Export Funding Corp. secured:
6.24%, 5/15/02 310,000 308,115
6.90%, 1/31/03 90,000 92,132
5.65%, 3/15/03 1,114,750 1,096,780
6.86%, 4/30/04 1,023,750 1,042,987
State of Israel (guaranteed by U.S. Government through
Agency for International Development):
7 3/4%, 4/1/98 278,146 283,095
4 7/8%, 9/15/98 520,000 510,749
6 1/8%, 8/15/99 11,000,000 11,033,550
7 1/8%, 8/15/99 2,167,000 2,224,129
8%, 11/15/01 2,140,000 2,296,691
6 1/4%, 8/15/02 846,000 841,262
6 1/8%, 3/15/03 630,000 619,681
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
State of Israel (guaranteed by U.S. Government through
Agency for International Development): - continued
7 5/8%, 8/15/04 $ 480,000 $ 507,320
5.89%, 8/15/05 8,420,000 8,017,052
8 1/2%, 4/1/06 1,070,000 1,175,866
Student Loan Marketing Association 8.14%, 10/15/03 300,000 327,561
U.S. Housing & Urban Development:
8.24%, 8/1/02 4,000,000 4,363,960
8.27%, 8/1/03 415,000 456,039
6.98%, 8/1/05 3,000,000 3,063,510
U.S. Trade Trust 6 3/4%, 8/15/08 7,100,000 7,181,721
83,150,580
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $216,575,704) 220,564,979
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 6.3%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.8%
6 1/2%, 5/1/08 436,534 432,850
8 1/2%, 8/1/09 to 10/1/25 1,494,221 1,559,297
9%, 10/1/08 to 10/1/20 1,810,702 1,917,976
9 1/2%, 2/1/08 to 7/1/21 1,324,153 1,429,661
10 1/2%, 1/1/16 to 12/1/20 1,002,019 1,109,441
12 1/2%, 2/1/10 to 6/1/19 694,756 808,017
7,257,242
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.2%
6%, 12/1/08 177,778 172,971
6.345%, 3/1/99 1,839,445 1,837,721
6 1/2%, 6/1/07 2,697,718 2,675,383
8 1/4%, 12/1/01 687,934 730,069
8 1/2%, 8/1/16 to 1/1/17 382,080 398,825
9%, 6/1/25 1,104,616 1,167,778
9 1/4%, 9/1/16 209,132 222,398
9 1/2%, 2/1/10 to 5/1/20 1,043,424 1,128,192
12 1/2%, 8/1/15 35,345 41,298
8,374,635
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.3%
11 1/2%, 3/15/10 to 1/15/13 $ 667,974 $ 760,718
13 1/2%, 7/15/11 73,811 89,256
849,974
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $16,205,187) 16,481,851
COLLATERALIZED MORTGAGE OBLIGATIONS - 7.3%
Federal Home Loan Mortgage Corporation:
planned amortization class:
Series 1511 Class D, 6%, 10/15/04 3,820,000 3,808,091
Series 1727 Class D, 6 1/2%, 8/15/14 2,700,000 2,715,188
sequential pay Series 1353 Class A, 5 1/2%, 11/15/04 60,954 60,401
Federal National Mortgage Association:
planned amortization class:
Series 1993-134 Class GA, 6 1/2%, 2/25/07 2,730,000 2,721,469
Series 1993-28 Class PD, 5 1/4%, 10/25/01 170,629 169,883
Series 1994-51 Class PD, 5 3/4%, 2/25/15 5,480,000 5,418,350
Series 1994-M3 Class A, 7.71%, 4/1/06 282,886 289,428
sequential pay Series 1996-M5 Class A1,
7.141%, 6/25/08 3,607,156 3,683,245
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $18,700,163) 18,866,055
CASH EQUIVALENTS - 1.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.54%, dated
10/31/96 due 11/1/96 $ 4,107,632 4,107,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $255,588,054) $ 260,019,885
INCOME TAX INFORMATION
At October 31, 1996, the aggregate cost of investment securities for income
tax purposes was $255,956,897. Net unrealized appreciation aggregated
$4,062,988, of which $5,262,131 related to appreciated investment
securities and $1,199,143 related to depreciated investment securities.
At October 31, 1996, the fund had a capital loss carryforward of
approximately $5,958,000 of which $3,262,000 and $2,696,000 will expire on
October 31, 2002 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1996

ASSETS $ 260,019,885
Investment in securities, at value (including repurchase
agreements of $4,107,000) (cost $255,588,054) -
See accompanying schedule

Cash 38,165

Receivable for investments sold 20,627

Interest receivable 3,964,251

Other receivables 100

Prepaid expenses 16,772

TOTAL ASSETS 264,059,800

LIABILITIES $ 508,288
Payable for investments purchased

Payable for fund shares redeemed 23,017

Distributions payable 159,566

Accrued management fee 95,742

Distribution fees payable 57,532

Other payables and accrued expenses 94,449

TOTAL LIABILITIES 938,594

NET ASSETS $ 263,121,206

Net Assets consist of: $ 264,722,594
Paid in capital

Undistributed net investment income 294,939

Accumulated undistributed net realized gain (loss) (6,328,158)
on investments

Net unrealized appreciation (depreciation) on 4,431,831
investments

NET ASSETS $ 263,121,206

CALCULATION OF MAXIMUM OFFERING PRICE $9.49
CLASS A:
NET ASSET VALUE and redemption price per share
($222,770 (divided by) 23,479 shares)

Maximum offering price per share (100/95.75 of $9.49) $9.91

CLASS B: $9.49
NET ASSET VALUE and offering price per share
($17,355,243 (divided by) 1,828,931 shares) A

CLASS T: $9.49
NET ASSET VALUE and redemption price per share
($217,882,928 (divided by) 22,959,195 shares)

Maximum offering price per share (100/96.50 of $9.49) $9.83

INSTITUTIONAL CLASS: $9.48
NET ASSET VALUE, offering price and redemption price per

share ($27,660,265 (divided by) 2,918,196 shares)

</TABLE>

A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1996

INVESTMENT INCOME $ 19,284,797
Interest

EXPENSES

Management fee $ 1,197,929

Transfer agent fees 82
Class A

Class B 35,135

Class T 495,669

Institutional Class 39,231

Distribution fees 39
Class A

Class B 136,432

Class T 572,796

Accounting fees and expenses 109,259

Non-interested trustees' compensation 1,109

Custodian fees and expenses 22,270

Registration fees 8,350
Class A

Class B 17,325

Class T 39,740

Institutional Class 39,325

Audit 38,634

Legal 2,547

Miscellaneous 6,710

Total expenses before reductions 2,762,582

Expense reductions (54,138) 2,708,444

NET INVESTMENT INCOME 16,576,353

REALIZED AND UNREALIZED GAIN (LOSS) (2,903,627)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) (3,481,958)
on investment securities

NET GAIN (LOSS) (6,385,585)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,190,768
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 16,576,353 $ 10,696,532
Net investment income

Net realized gain (loss) (2,903,627) 1,340,696

Change in net unrealized appreciation (depreciation) (3,481,958) 12,015,016

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,190,768 24,052,244
FROM OPERATIONS

Distributions to shareholders (1,602) -
From net investment income
Class A

Class B (822,494) (347,897)

Class T (14,160,622) (9,989,930)

Institutional Class (1,585,768) (207,322)

TOTAL DISTRIBUTIONS (16,570,486) (10,545,149)

Share transactions - net increase (decrease) 34,526,256 104,952,275

TOTAL INCREASE (DECREASE) IN NET ASSETS 28,146,538 118,459,370

NET ASSETS

Beginning of period 234,974,668 116,515,298

End of period (including undistributed net investment $ 263,121,206 $ 234,974,668
income of $294,939 and $134,662, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
OCTOBER 31,

1996 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.250

Income from Investment Operations

Net investment income .090 E

Net realized and unrealized gain (loss) .241 G

Total from investment operations .331

Less Distributions

From net investment income (.091)

Net asset value, end of period $ 9.490

TOTAL RETURN B, C 3.58%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 223

Ratio of expenses to average net assets .90% A
, F

Ratio of net investment income to average net assets 6.28% A

Portfolio turnover rate 153%

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO OCTOBER 31, 1996.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED OCTOBER 31,

1996 1995 1994 D

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.670 $ 8.950 $ 9.100

Income from Investment Operations

Net investment income .520 E .542 .144

Net realized and unrealized gain (loss) (.177) .693 (.137)

Total from investment operations .343 1.235 .007

Less Distributions

From net investment income (.523) (.515) (.157)

Net asset value, end of period $ 9.490 $ 9.670 $ 8.950

TOTAL RETURN B, C 3.69% 14.19% 0.10%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 17,355 $ 11,766 $ 2,062

Ratio of expenses to average net assets 1.67% F 1.65% F 1.70% A
, F

Ratio of net investment income to average net assets 5.51% 5.58% 5.22% A

Portfolio turnover rate 153% 261% 313%

</TABLE>

1996 1995 1994 D 1993 1992

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.670 $ 8.960 $ 10.140 $ 9.730 $ 9.590

Income from Investment
Operations

Net investment income .586 C .594 .515 .567 .666

Net realized and unrealized (.180) .701 (1.031) .601 .125
gain (loss)

Total from investment operations .406 1.295 (.516) 1.168 .791

Less Distributions

From net investment income (.586) (.585) (.504) (.558) (.651)

From net realized gain - - (.130) (.200) -

In excess of net realized gain - - (.030) - -

Total distributions (.586) (.585) (.664) (.758) (.651)

Net asset value, end of period $ 9.490 $ 9.670 $ 8.960 $ 10.140 $ 9.730

TOTAL RETURN A, B 4.38% 14.91% (5.27) 12.53% 8.49%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 217,883 $ 208,620 $ 114,453 $ 69,876 $ 23,281
(000 omitted)

Ratio of expenses to average 1.00% .89% .74% .68% 1.10%
net assets E E E E

Ratio of expenses to average net .99% .89% .74% .68% 1.10%
assets after expense reductions F

Ratio of net investment income to 6.19% 6.34% 6.18% 6.11% 6.98%
average net assets

Portfolio turnover rate 153% 261% 313% 333% 315%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED OCTOBER 31,

1996 1995 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.670 $ 9.560

Income from Investment Operations

Net investment income .604 E .197

Net realized and unrealized gain (loss) (.180) .108

Total from investment operations .424 .305

Less Distributions

From net investment income (.614) (.195)

Net asset value, end of period $ 9.480 $ 9.670

TOTAL RETURN B, C 4.58% 3.23%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 27,660 $ 14,588

Ratio of expenses to average net assets .75% F .75% A
, F

Ratio of net investment income to average net assets 6.43% 6.48% A

Portfolio turnover rate 153% 261%

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Government Investment Fund (the fund) is a fund of
Fidelity Advisor Series II (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class B, Class T, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
with remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which market quotations are not readily available are valued at their fair
value as determined in good faith under consistently applied procedures
under the general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. FMR bears all organizational expenses except for
registering and qualifying each class and shares of each class for
distribution under federal
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
PREPAID EXPENSES - CONTINUED
and state securities law. These expenses are borne by each class and
amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date. Income dividends are declared
separately for each class, while capital gain distributions are declared at
the fund level and allocated to each class on a pro rata basis based on the
number of shares held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, market discount, capital loss
carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments may
include
temporary book and tax basis differences which will reverse in a subsequent
period. Any taxable income or gain remaining at fiscal year end is
distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase for U.S. Treasury or Federal
Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $439,384,020 and $396,141,747, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annual rate of .45% of
average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
Class T shares (Class T Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class B, and Class T Plans
the fund pays Fidelity Distributors Corporation (FDC), an
affiliate of FMR, a distribution and service fee. This fee is based on
annual rates of .15%, .90% (of which .65% represents a distribution fee and
.25% represents a shareholder service fee), and .25% of the average net
assets of the Class A, Class B and Class T shares, respectively. Prior to
January 1, 1996, the fee for Class B was based on an annual rate of 1.00%
(of which .75% represented a distribution fee and .25% represented a
shareholder service fee) of the average net assets of the Class B shares.
For the period, the fund paid FDC $39, $136,432, and $572,796 under the
Class A, Class B and Class T Plans, of which $39, $37,314, and $572,796
were paid to securities dealers, banks and other financial institutions for
the distribution of Class A, Class B and Class T shares, and providing
shareholder support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
Class T, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 4.25% and 3.50%
(4.75% prior to January 1, 1996) for selling Class A and Class T shares of
the fund, respectively, and the proceeds of a contingent deferred sales
charge levied on Class B share redemptions occurring within five years of
purchase. The Class B charge is based on declining rates which range from
4% to 1% of the lesser of the cost of shares at the initial date of
purchase
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SALES LOAD - CONTINUED
or the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains.
For the period, FDC received sales charges of $5,077 and $618,420 on sales
of Class A and Class T shares of the fund, of which $3,920 and $516,587
were paid to securities dealers, banks, and other financial institutions.
FDC also received contingent deferred sales charges of $38,738 on Class B
share redemptions from the fund. When Class B shares are sold, FDC pays
commissions from its own resources to dealers through which the sales are
made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A , Class B, and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, and shareholder services
to FIIOC for which FIIOC receives its allocable share of all such fees.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the transfer agent fees
were equivalent to annual rates of .31%, .24%, .22%, and .16% of the
average net assets of Class A, Class B, Class T, and Institutional Class,
respectively.
ACCOUNTING FEES. Fidelity Service Co. maintains the fund's accounting
records. The fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates of average net assets for each class.
(I) CLASS A. For the period, this expense limitation was .90% of average
net assets and the reimbursement reduced expenses by $8,357.
(II) CLASS B. Effective January 1, 1996, the expense limitation changed
from an annual rate of 1.75% to 1.65% of average net assets and the
reimbursement reduced expenses by $15,886.
(III) CLASS T. For the period, this expense limitation was 1.00% of average
net assets.
(IV) INSTITUTIONAL CLASS. For the period, this expense limitation was .75%
of average net assets and the reimbursement reduced expenses by $18,990.
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of expenses. During the period, the fund's custodian fees were
reduced by $10,905 under the custodian arrangement.
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 23,309 - $ 216,298 $ -
Shares sold

Reinvestment of distributions 170 - 1,602 -

Shares redeemed - - - -

Net increase (decrease) 23,479 - $ 217,900 $ -

CLASS B 1,364,781 1,185,499 $ 13,027,776 $ 11,060,085
Shares sold

Reinvestment of distributions 64,712 26,606 612,407 250,266

Shares redeemed (817,313) (225,713) (7,792,379) (2,134,205)

Net increase (decrease) 612,180 986,392 $ 5,847,804 $ 9,176,146

CLASS T 16,389,663 17,166,450 $ 156,392,785 $ 159,682,098
Shares sold

Reinvestment of distributions 1,323,588 936,679 12,548,852 8,742,840

Shares redeemed (16,317,212) (9,315,536) (154,061,866) (86,931,676)

Net increase (decrease) 1,396,039 8,787,593 $ 14,879,771 $ 81,493,262

INSTITUTIONAL CLASS 2,699,943 1,632,166 $ 25,667,067 $ 15,464,154
Shares sold

Reinvestment of distributions 131,515 19,194 1,241,701 184,114

Shares redeemed (1,421,950) (142,672) (13,327,987) (1,365,401)

Net increase (decrease) 1,409,508 1,508,688 $ 13,580,781 $ 14,282,867

</TABLE>

To the Trustees of Fidelity Advisor Series II and the Shareholders of
Fidelity Advisor Government Investment Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series II: Fidelity Advisor Government Investment Fund,
including the schedule of portfolio investments, as of October 31, 1996,
and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended and the financial highlights of Class A, Class B, Class T and
Institutional Class for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Advisor Series II: Fidelity Advisor Government Investment Fund
as of October 31, 1996, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights of Class A, Class B, Class
T and Institutional Class for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 13, 1996
DISTRIBUTIONS

A total of 68.97% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
State Street Bank and Trust Company
Boston, MA - Class T
Fidelity Investments Institutional Operations Company
Boston, MA - Class A & Class B
CUSTODIAN
The Bank of New York
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

GOVERNMENT INVESTMENT
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
OCTOBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 23 Notes to the financial statements.

REPORT OF INDEPENDENT 28 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 29

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first 10
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
ADVISOR GOVERNMENT INVESTMENT FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). You can also look at income to
measure performance. The initial offering of Institutional Class shares
took place on July 3, 1995. Institutional Class shares are sold to eligible
investors without a sales load or 12b-1 fee. Returns prior to July 3, 1995
are those of Class T, the original class of the fund, and reflect Class T's
0.25% 12b-1 fee. If Fidelity had not reimbursed certain class expenses
during the periods shown, the total returns and dividends would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - 4.58% 39.09% 95.84%
Institutional Class

Salomon Brothers Treasury/Agency Index 5.19% 44.92% n/a

General U.S. Government Funds Average 4.04% 37.88% n/a

CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five years, or
since the fund started on January 7, 1987. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Institutional Class' returns to
those of the Salomon Brothers Treasury/Agency Index - a market
capitalization weighted index of U.S. Treasury and U.S. government agency
securities with fixed-rate coupons and weighted average lives of at least
one year. To measure how Institutional Class' performance stacked up
against its peers, you can compare it to the general U.S. government funds
average, which reflects the performance of 169 mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. over the past 12
months. These benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Advisor Government Investment - 4.58% 6.82% 7.08%
Institutional Class

Salomon Brothers Treasury/Agency Index 5.19% 7.70% n/a

General U.S. Government Funds Average 4.04% 6.61% n/a

AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' actual (or
cumulative) return and show you what would have happened if Institutional
Class shares had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Gov Inv. Class I SB Treasury/Agency
00697 SB022
1987/01/31 10000.00 10000.00
1987/02/28 10033.72 10077.02
1987/03/31 9989.52 9962.08
1987/04/30 9633.43 9770.91
1987/05/31 9593.77 9724.70
1987/06/30 9722.83 9835.30
1987/07/31 9741.42 9807.25
1987/08/31 9686.50 9766.17
1987/09/30 9493.31 9582.12
1987/10/31 9796.16 9947.07
1987/11/30 9873.14 9994.47
1987/12/31 9960.14 10107.43
1988/01/31 10263.66 10450.67
1988/02/29 10378.44 10562.05
1988/03/31 10319.08 10456.59
1988/04/30 10258.05 10387.87
1988/05/31 10197.14 10339.28
1988/06/30 10401.94 10548.23
1988/07/31 10384.09 10480.69
1988/08/31 10378.57 10497.67
1988/09/30 10554.85 10721.23
1988/10/31 10710.93 10909.23
1988/11/30 10621.42 10789.95
1988/12/31 10614.71 10825.10
1989/01/31 10738.03 10970.46
1989/02/28 10704.75 10885.93
1989/03/31 10736.44 10950.31
1989/04/30 10910.62 11155.30
1989/05/31 11123.75 11438.90
1989/06/30 11372.20 11826.37
1989/07/31 11549.27 12072.44
1989/08/31 11431.07 11868.24
1989/09/30 11497.45 11922.74
1989/10/31 11714.53 12232.40
1989/11/30 11803.52 12347.74
1989/12/31 11861.92 12366.30
1990/01/31 11732.86 12196.07
1990/02/28 11771.51 12206.34
1990/03/31 11788.93 12218.58
1990/04/30 11683.02 12115.49
1990/05/31 12025.34 12440.95
1990/06/30 12198.55 12639.23
1990/07/31 12346.41 12807.09
1990/08/31 12267.47 12621.85
1990/09/30 12349.02 12754.96
1990/10/31 12473.08 12964.29
1990/11/30 12690.56 13242.36
1990/12/31 12854.24 13452.09
1991/01/31 12995.27 13594.68
1991/02/28 13103.48 13652.34
1991/03/31 13156.15 13726.99
1991/04/30 13265.46 13890.51
1991/05/31 13335.08 13939.09
1991/06/30 13327.52 13930.01
1991/07/31 13470.38 14105.77
1991/08/31 13679.30 14419.78
1991/09/30 13926.54 14731.81
1991/10/31 14050.95 14845.56
1991/11/30 14132.18 15000.00
1991/12/31 14583.23 15514.65
1992/01/31 14385.42 15274.51
1992/02/29 14451.59 15335.73
1992/03/31 14352.46 15243.31
1992/04/30 14436.56 15352.32
1992/05/31 14701.56 15619.32
1992/06/30 14905.07 15846.43
1992/07/31 15156.75 16239.43
1992/08/31 15287.22 16406.11
1992/09/30 15429.24 16632.83
1992/10/31 15243.21 16391.50
1992/11/30 15281.78 16361.48
1992/12/31 15528.79 16637.97
1993/01/31 15794.74 17011.22
1993/02/28 16091.15 17343.00
1993/03/31 16183.40 17389.60
1993/04/30 16305.32 17538.91
1993/05/31 16331.01 17512.44
1993/06/30 16652.47 17905.44
1993/07/31 16734.95 18015.64
1993/08/31 17007.80 18416.15
1993/09/30 17039.01 18497.51
1993/10/31 17153.29 18546.49
1993/11/30 16890.89 18342.68
1993/12/31 16981.85 18424.44
1994/01/31 17277.94 18677.62
1994/02/28 16877.79 18288.96
1994/03/31 16367.70 17863.18
1994/04/30 16204.40 17725.73
1994/05/31 16221.30 17708.74
1994/06/30 16166.05 17672.41
1994/07/31 16518.50 17980.88
1994/08/31 16508.86 17985.62
1994/09/30 16276.91 17733.63
1994/10/31 16249.39 17715.85
1994/11/30 16218.41 17676.75
1994/12/31 16328.19 17798.40
1995/01/31 16621.31 18147.17
1995/02/28 16984.52 18527.53
1995/03/31 17097.09 18637.73
1995/04/30 17299.57 18877.87
1995/05/31 17972.41 19652.03
1995/06/30 18098.55 19800.93
1995/07/31 18033.56 19732.21
1995/08/31 18242.49 19957.74
1995/09/30 18414.70 20137.85
1995/10/31 18688.55 20451.85
1995/11/30 18960.43 20782.84
1995/12/31 19218.58 21070.78
1996/01/31 19323.01 21204.28
1996/02/29 18932.05 20781.26
1996/03/31 18763.61 20598.39
1996/04/30 18646.37 20436.84
1996/05/31 18609.97 20432.10
1996/06/30 18830.00 20689.63
1996/07/31 18871.87 20735.84
1996/08/31 18831.34 20692.79
1996/09/30 19134.07 21036.81
1996/10/31 19543.66 21513.94
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Government Investment Fund - Institutional
Class on January 31, 1987, shortly after the fund started. As the chart
shows, by October 31, 1996, the value of the investment would have grown to
$19,544 - a 95.44% increase on the initial investment. For comparison, look
at how the Salomon Brothers Treasury/Agency Index did over the same period.
With dividends reinvested the same $10,000 investment would have grown to
$21,514 - a 115.14% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,

1996 1995 1994 1993 1992

Dividend return 6.54% 7.11% 5.01% 6.13% 7.03%

Capital appreciation return -1.96% 7.92% -10.28% 6.40% 1.46%

Total return 4.58% 15.03% -5.27% 12.53% 8.49%

</TABLE>

DIVIDEND returns and capital appreciation returns are both part of a class'
total return. A dividend return reflects the actual dividends paid by the
class. A capital appreciation return reflects both the amount paid by the
class to shareholders as capital gain distributions and changes in the
class' share price. Both returns assume the dividends or gains are
reinvested, if any.
DIVIDENDS AND YIELD
PERIODS ENDED OCTOBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.97(cents) 30.02(cents) 61.38(cents)

Annualized dividend rate 6.23% 6.39% 6.47%

30-day annualized yield 5.78% - -

DIVIDENDS per share show the income paid by the class for a set period and
do not reflect any tax reclassifications. If you annualize this number,
based on an average net asset value of $9.40 over the past month, $9.32
over the past six months, and $9.48 over the past year, you can compare the
class' income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Shifting expectations about the
strength of the economy led to mixed
performance in domestic U.S.
bond markets over the 12 months
ended October 31, 1996. For the
period, the Lehman Brothers
Aggregate Bond Index - a proxy
for the performance of the U.S.
taxable bond market - posted a
total return of 5.85%.
Stronger-than-expected economic
signals - including surprisingly
robust employment reports in
February and March - rattled the
bond market and caused the yield
on the 30-year bond to rise to over
7% - a level not seen in over a
year. Bond investors spent most of
the summer anticipating an
increase in short-term interest
rates by the Federal Reserve Board.
However, the Fed stood pat
through the end of October, neither
raising nor lowering rates. After
rising in early 1996 and stabilizing
during much of the spring and
summer, interest rates
responded to the Fed's inaction by
falling in October.
Mortgage-backed securities
performed favorably relative to
other investment-grade securities,
as the higher, relatively stable
interest rate environment led to
diminishing refinancing activity. To
illustrate, the Salomon Brothers
Mortgage Index outperformed the
Lehman Aggregate Index by
returning 6.93% during the period.
Investment-grade corporate bonds
also performed competitively, as
income-driven investors continued
to soak up higher yielding
products during the period. The
Lehman Brothers Corporate Bond
Index returned 6.22% during the
12-month period.
An interview with Robert Ives, Portfolio Manager of Fidelity Advisor
Government Investment Fund
Q. BOB, HOW DID THE FUND PERFORM?
A. For the 12-month period that ended October 31, 1996, the fund's
Institutional Class shares returned 4.58%. To see how the fund stacked up
against its competitors, the general U.S. government funds average had a
return of 4.04%, according to Lipper Analytical Services. The Salomon
Brothers Treasury/Agency Index, which reflects the marketplace in which the
fund invests, had a 12-month return of 5.19% as of October 31, 1996.
Q. CAN YOU SUM UP THE EVENTS THAT TOOK PLACE IN THE BOND MARKET OVER THE
PAST YEAR?
A. Prior to October, the most significant overall development during the
period had been the consistent growth of the U.S. economy. In conjunction
with this growth, we also witnessed a low unemployment rate and some
concern over inflation. While the unemployment rate remained at this low
level as the period came to a close, the economy shifted into a more
moderate pace of growth and inflation concerns subsided. While interest
rates fell significantly in October, they have risen over the past 12
months.
Q. THE MARKET SEEMED TO PAY PARTICULARLY CLOSE ATTENTION TO FED DECISIONS
DURING THE PERIOD . . .
A. That's true. The Fed's reluctance to raise short-term rates had varying
effects on the market. Bonds staged a rally in August and September largely
due to the Fed's lack of action. Given the unemployment scenario, I would
have thought the market would have reacted less enthusiastically. In
October, rates dropped significantly as the slowing economy took the
pressure off the Fed to act. As the period closed, investor sentiment
leaned toward a possible lowering of short-term rates by the Fed. With the
direction of the economy unclear and low unemployment, it's natural for
bond investors to monitor the Fed's moves so closely.
Q. LET'S TURN TO THE FUND. CAN YOU RELATE ITS PERFORMANCE TO THE INVESTING
ENVIRONMENT YOU JUST SPOKE OF?
A. Over the course of the year, the increase in interest rates led to a
drop in bond prices, partially offsetting the fund's income return. As the
economy cooled down recently, bond yields declined and bond prices rose.
I'd like to point out, though, that my strategy is not dictated by
short-term market fluctuations. Some of the fund's competitors may still be
trying to guess the direction of interest rates, but I think they're
fighting a losing battle. I feel my strategy of keeping a close eye on the
fund's benchmark helped the fund perform well within its peer group.
Q. IN TERMS OF PORTFOLIO STRUCTURE, WHICH AREAS DID YOU LOOK TO IN ORDER TO
ENHANCE PERFORMANCE?
A. Relative to the fund's index, I typically strive to be overweighted in
agency issues. At the end of the period, the fund had an approximate
non-mortgage-backed agency position of 32%. The key factor with agencies is
monitoring the spreads - that is, the difference in yield - between
agencies and Treasuries. While agencies present slightly more risk than
Treasuries, they can be worthwhile investments depending upon spread
levels. With respect to maturity, I generally sought to add short- and
intermediate-term agencies. Mortgage-backed securities also played a key
role in the fund's return.
Q. WHICH HOLDINGS PLAYED KEY ROLES IN THE FUND'S PERFORMANCE?
A. Both mortgage-backed securities and agency securities helped the fund
during the period. Both sectors bolstered the income return of the fund,
while adding just a bit in capital appreciation as yield spreads versus
Treasury bonds continued to fall. Most of the mortgage securities in the
fund are relatively stable, short average-life securities, which present
minimal risks to the fund and offer somewhat higher yields than Treasuries.
While mortgage securities generally did well during the period, they
weakened in October as the drop in rates resulted in expectations of
increased prepayment activity.
Q. WHAT DO YOU SEE HAPPENING IN THE NEXT SIX MONTHS?
A. On a fund level, I'll continue to look for opportunities within all
sectors of the government bond market. From an economic standpoint, the key
issue is how economic growth plays out in the fourth quarter. One indicator
will be sales volume during the holiday season. If growth is weak, the Fed
will most likely lower rates and bonds may stage a rally. If growth is
moderate or strong, the Fed will probably stand pat or even consider a rate
increase. The other important factor is inflation. The current low
unemployment situation means that a stronger economy could re-ignite
inflation. This would be a real negative for the bond market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.