SUPPLEMENT TO THE FIDELITY ADVISOR BALANCED FUND - CLASS A, CLASS T
AND CLASS B OCTOBER 31, 1997 ANNUAL REPORT
The following information replaces similar information found in
"Performance: The Bottom Line" on pages 8 and 9.
FIDELITY ADVISOR BALANCED FUND - CLASS B
THE FOLLOWING INFORMATION REPLACES THE FIRST QUESTION
AND ANSWER FOUND IN "FUND TALK: THE MANAGER'S
OVERVIEW" ON PAGE 10.
Q. HOW DID THE FUND PERFORM, BETTINA?
A. FOR THE 12 MONTHS THAT ENDED
OCTOBER 31, 1997, THE FUND'S CLASS A, CLASS
T AND CLASS B SHARES RETURNED 20.99%,
21.36% AND 20.54%, RESPECTIVELY. THESE
RETURNS TOPPED THAT OF THE BALANCED
FUNDS AVERAGE WHICH, ACCORDING TO
LIPPER ANALYTICAL SERVICES, RETURNED
19.51% DURING THAT PERIOD. GIVEN THE
FUND'S BALANCED ASSET ALLOCATION - NAMELY
ITS BLEND OF EQUITIES AND BONDS -
PERFORMANCE TYPICALLY FALLS BETWEEN ITS
TWO BENCHMARK INDICES, THE STANDARD &
POOR'S 500 INDEX AND THE LEHMAN
BROTHERS AGGREGATE BOND INDEX. DURING
THE PERIOD, THE S&P 500 AND LEHMAN
BROTHERS AGGREGATE BOND INDEX GAINED
32.11% AND 8.89%, RESPECTIVELY.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS B 20.54% 65.46% 259.70%
ADVISOR BALANCED - CLASS B 15.54% 63.46% 259.70%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS B 20.54% 10.60% 13.66%
ADVISOR BALANCED - CLASS B 15.54% 10.33% 13.66%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
$10,000 OVER 10 YEARS
S&P 500 Index
Fidelity Adv Balanced - CL B LB Aggregate Bond Index
$48,782
$35,970
$24,228
$
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class B on October 31,
1987. As the chart shows, by October 31, 1997, the value of the
investment would have grown to $35,970 - a 259.70% increase on the
initial investment. For comparison, look at how both the S&P 500 and
the Lehman Brothers Aggregate Bond Index did over the same period.
With dividends and capital gains, if any, reinvested in each, the same
$10,000 would have grown to $48,782 - a 387.82% increase and $24,228 -
a 142.28% increase, respectively.
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
BALANCED FUND -
CLASS A, CLASS T AND CLASS B
ANNUAL REPORT
OCTOBER 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 10 THE MANAGERS' REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 13 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 14 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 44 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 52 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 61 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 62
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 financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October, the
Standard & Poor's 500 Index remained up more than 25% year-to-date,
twice its historical annual average. Meanwhile, bond markets -
primarily influenced by a relatively steady flow of positive news on
the inflation front - continued to post moderate returns through the
first 10 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR BALANCED 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 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 0.50% 12b-1 fee (0.65% prior to January 1,
1996). Effective August 1, 1997, the maximum 5.25% sales charge on
Class A shares was increased to 5.75%. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS A 20.99% 65.98% 260.84%
ADVISOR BALANCED - CLASS A 14.03% 56.44% 240.09%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500(REGISTERED TRADEMARK) 32.11% 147.49% 387.82%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 43.65% 142.28%
BALANCED FUNDS AVERAGE 19.51% 86.93% 231.34%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks - and the performance of the Lehman Brothers Aggregate
Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of at least one year. To measure how Class A's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 343 mutual funds. 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, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS A 20.99% 10.67% 13.69%
ADVISOR BALANCED - CLASS A 14.03% 9.36% 13.02%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500 32.11% 19.87% 17.16%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 7.51% 9.25%
BALANCED FUNDS AVERAGE 19.51% 13.27% 12.66%
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971031 19971113 103223 S00000000000001
FA Balanced -CL A S&P 500
LB Aggregate Bond
00249 SP001
LB001
1987/10/31 9425.00 10000.00
10000.00
1987/11/30 9255.27 9176.00
10080.10
1987/12/31 9659.87 9874.29
10217.41
1988/01/31 10226.91 10290.00
10576.57
1988/02/29 10652.19 10769.52
10702.12
1988/03/31 10682.56 10436.74
10601.68
1988/04/30 10867.28 10552.59
10544.47
1988/05/31 10908.32 10644.39
10473.59
1988/06/30 11360.77 11132.97
10726.27
1988/07/31 11319.19 11090.67
10670.01
1988/08/31 11277.62 10713.58
10697.98
1988/09/30 11486.44 11169.98
10940.18
1988/10/31 11654.89 11480.51
11146.14
1988/11/30 11539.08 11316.34
11010.74
1988/12/31 11677.35 11514.37
11023.14
1989/01/31 12136.75 12357.22
11181.74
1989/02/28 12179.48 12049.53
11100.69
1989/03/31 12384.46 12330.28
11148.69
1989/04/30 12882.00 12970.22
11381.98
1989/05/31 13303.83 13495.52
11681.08
1989/06/30 13487.22 13418.59
12036.74
1989/07/31 14099.77 14630.29
12292.61
1989/08/31 14318.54 14917.05
12110.48
1989/09/30 14340.90 14855.89
12172.46
1989/10/31 14119.76 14511.23
12472.19
1989/11/30 14407.24 14807.26
12591.06
1989/12/31 14549.62 15162.63
12624.75
1990/01/31 13845.80 14145.22
12474.73
1990/02/28 13882.21 14327.69
12515.10
1990/03/31 14076.51 14707.38
12524.32
1990/04/30 13892.26 14339.69
12409.57
1990/05/31 14408.16 15737.81
12777.00
1990/06/30 14469.28 15630.80
12982.01
1990/07/31 14431.99 15580.78
13161.59
1990/08/31 13549.41 14172.28
12985.82
1990/09/30 13236.68 13482.09
13093.26
1990/10/31 13110.74 13424.11
13259.49
1990/11/30 13702.67 14291.31
13544.91
1990/12/31 14121.43 14690.04
13755.96
1991/01/31 14850.53 15330.52
13926.01
1991/02/28 15720.33 16426.66
14044.88
1991/03/31 16119.61 16824.18
14141.50
1991/04/30 16429.60 16864.56
14294.70
1991/05/31 17114.17 17593.11
14378.30
1991/06/30 16763.40 16787.34
14370.99
1991/07/31 17480.35 17569.63
14570.28
1991/08/31 17923.55 17986.03
14885.58
1991/09/30 18055.51 17685.67
15187.21
1991/10/31 18581.53 17922.66
15356.30
1991/11/30 18147.56 17200.37
15497.11
1991/12/31 18990.71 19168.09
15957.35
1992/01/31 19115.65 18811.57
15740.26
1992/02/29 19518.23 19056.12
15842.60
1992/03/31 19448.94 18684.52
15753.29
1992/04/30 19602.97 19233.85
15867.08
1992/05/31 19995.02 19328.10
16166.49
1992/06/30 19813.22 19040.11
16388.98
1992/07/31 20391.81 19818.85
16723.35
1992/08/31 20391.81 19412.56
16892.76
1992/09/30 20560.51 19641.63
17093.00
1992/10/31 20489.42 19710.37
16866.38
1992/11/30 20617.39 20382.50
16870.19
1992/12/31 20737.78 20633.20
17138.45
1993/01/31 21129.06 20806.52
17467.10
1993/02/28 21580.53 21089.49
17772.87
1993/03/31 22395.04 21534.48
17846.93
1993/04/30 23032.30 21013.34
17971.20
1993/05/31 23472.31 21576.50
17994.09
1993/06/30 23321.18 21639.07
18320.20
1993/07/31 23565.86 21552.52
18423.81
1993/08/31 24422.25 22369.36
18746.74
1993/09/30 24193.92 22197.11
18798.23
1993/10/31 24517.53 22656.59
18868.48
1993/11/30 24193.92 22441.36
18707.97
1993/12/31 24813.81 22712.90
18809.36
1994/01/31 25503.53 23485.14
19063.31
1994/02/28 25054.41 22848.69
18732.12
1994/03/31 24053.79 21852.49
18270.29
1994/04/30 23859.81 22132.20
18124.40
1994/05/31 23956.80 22495.17
18121.86
1994/06/30 23502.15 21944.03
18081.81
1994/07/31 23956.61 22663.80
18440.98
1994/08/31 24248.76 23593.01
18463.86
1994/09/30 24086.72 23014.99
18192.10
1994/10/31 23859.02 23532.82
18175.89
1994/11/30 23533.75 22675.76
18135.53
1994/12/31 23550.01 23012.04
18260.76
1995/01/31 23484.41 23608.74
18622.15
1995/02/28 23894.41 24528.77
19064.90
1995/03/31 24291.41 25252.62
19181.87
1995/04/30 24555.98 25996.31
19449.81
1995/05/31 25035.53 27035.38
20202.47
1995/06/30 25336.09 27663.41
20350.58
1995/07/31 25719.46 28580.73
20305.13
1995/08/31 25786.14 28652.47
20550.19
1995/09/30 26035.26 29861.60
20750.11
1995/10/31 25732.53 29755.00
21019.96
1995/11/30 26455.73 31061.24
21334.94
1995/12/31 26861.62 31659.48
21634.35
1996/01/31 27100.99 32737.17
21778.02
1996/02/29 26656.44 33040.64
21399.47
1996/03/31 26452.49 33358.82
21250.72
1996/04/30 26418.04 33850.53
21131.21
1996/05/31 26555.82 34723.54
21088.30
1996/06/30 26711.54 34855.83
21371.50
1996/07/31 26155.78 33315.90
21429.98
1996/08/31 26364.19 34018.54
21394.06
1996/09/30 27391.40 35933.10
21766.89
1996/10/31 28109.92 36924.13
22249.06
1996/11/30 29617.06 39715.23
22630.16
1996/12/31 29092.60 38928.47
22419.74
1997/01/31 30088.44 41360.72
22488.40
1997/02/28 30550.79 41684.99
22544.34
1997/03/31 29493.60 39972.15
22294.51
1997/04/30 30712.05 42358.49
22628.25
1997/05/31 31948.42 44937.28
22842.16
1997/06/30 33165.59 46950.47
23113.28
1997/07/31 34950.04 50686.31
23736.57
1997/08/31 33399.91 47846.87
23534.10
1997/09/30 34752.68 50467.44
23881.19
1997/10/31 34009.01 48781.83
24227.64
IMATRL PRASUN SHR__CHT 19971031 19971113 103232 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class A on October 31,
1987, and the current maximum 5.75% sales charge was paid. As the
chart shows, by October 31, 1997, the value of the investment would
have grown to $34,009 - a 240.09% increase on the initial investment.
For comparison, look at how both the S&P 500 and the Lehman Brothers
Aggregate Bond Index did over the same period. With dividends and
capital gains, if any, reinvested in each, the same $10,000 would have
grown to $48,782 - a 387.82% increase and $24,228 - a 142.28%
increase, respectively.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
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)
FIDELITY ADVISOR BALANCED FUND - CLASS T
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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS T 21.36% 66.59% 262.16%
ADVISOR BALANCED - CLASS T 17.11% 60.76% 249.48%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500(REGISTERED TRADEMARK) 32.11% 147.49% 387.82%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 43.65% 142.28%
BALANCED FUNDS AVERAGE 19.51% 86.93% 231.34%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks - and the performance of the Lehman Brothers Aggregate
Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of at least one year. To measure how Class T's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 343 mutual funds. 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, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS T 21.36% 10.75% 13.73%
ADVISOR BALANCED - CLASS T 17.11% 9.96% 13.33%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500 32.11% 19.87% 17.16%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 7.51% 9.25%
BALANCED FUNDS AVERAGE 19.51% 13.27% 12.66%
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
___IMAHDR PRASUN SHR__CHT 19971031 19971113 103300 S00000000000001
FA Balanced -CL T S&P 500
LB Aggregate Bond
00170 SP001
LB001
1987/10/31 9650.00 10000.00
10000.00
1987/11/30 9476.22 9176.00
10080.10
1987/12/31 9890.48 9874.29
10217.41
1988/01/31 10471.05 10290.00
10576.57
1988/02/29 10906.48 10769.52
10702.12
1988/03/31 10937.58 10436.74
10601.68
1988/04/30 11126.71 10552.59
10544.47
1988/05/31 11168.73 10644.39
10473.59
1988/06/30 11631.98 11132.97
10726.27
1988/07/31 11589.41 11090.67
10670.01
1988/08/31 11546.84 10713.58
10697.98
1988/09/30 11760.65 11169.98
10940.18
1988/10/31 11933.13 11480.51
11146.14
1988/11/30 11814.55 11316.34
11010.74
1988/12/31 11956.12 11514.37
11023.14
1989/01/31 12426.49 12357.22
11181.74
1989/02/28 12470.24 12049.53
11100.69
1989/03/31 12680.11 12330.28
11148.69
1989/04/30 13189.53 12970.22
11381.98
1989/05/31 13621.43 13495.52
11681.08
1989/06/30 13809.19 13418.59
12036.74
1989/07/31 14436.37 14630.29
12292.61
1989/08/31 14660.37 14917.05
12110.48
1989/09/30 14683.25 14855.89
12172.46
1989/10/31 14456.83 14511.23
12472.19
1989/11/30 14751.18 14807.26
12591.06
1989/12/31 14896.96 15162.63
12624.75
1990/01/31 14176.34 14145.22
12474.73
1990/02/28 14213.61 14327.69
12515.10
1990/03/31 14412.56 14707.38
12524.32
1990/04/30 14223.91 14339.69
12409.57
1990/05/31 14752.12 15737.81
12777.00
1990/06/30 14814.70 15630.80
12982.01
1990/07/31 14776.52 15580.78
13161.59
1990/08/31 13872.87 14172.28
12985.82
1990/09/30 13552.67 13482.09
13093.26
1990/10/31 13423.72 13424.11
13259.49
1990/11/30 14029.79 14291.31
13544.91
1990/12/31 14458.55 14690.04
13755.96
1991/01/31 15205.05 15330.52
13926.01
1991/02/28 16095.61 16426.66
14044.88
1991/03/31 16504.43 16824.18
14141.50
1991/04/30 16821.82 16864.56
14294.70
1991/05/31 17522.73 17593.11
14378.30
1991/06/30 17163.59 16787.34
14370.99
1991/07/31 17897.65 17569.63
14570.28
1991/08/31 18351.43 17986.03
14885.58
1991/09/30 18486.54 17685.67
15187.21
1991/10/31 19025.12 17922.66
15356.30
1991/11/30 18580.79 17200.37
15497.11
1991/12/31 19444.07 19168.09
15957.35
1992/01/31 19571.99 18811.57
15740.26
1992/02/29 19984.19 19056.12
15842.60
1992/03/31 19913.24 18684.52
15753.29
1992/04/30 20070.94 19233.85
15867.08
1992/05/31 20472.36 19328.10
16166.49
1992/06/30 20286.21 19040.11
16388.98
1992/07/31 20878.62 19818.85
16723.35
1992/08/31 20878.62 19412.56
16892.76
1992/09/30 21051.34 19641.63
17093.00
1992/10/31 20978.55 19710.37
16866.38
1992/11/30 21109.58 20382.50
16870.19
1992/12/31 21232.85 20633.20
17138.45
1993/01/31 21633.47 20806.52
17467.10
1993/02/28 22095.72 21089.49
17772.87
1993/03/31 22929.67 21534.48
17846.93
1993/04/30 23582.14 21013.34
17971.20
1993/05/31 24032.66 21576.50
17994.09
1993/06/30 23877.92 21639.07
18320.20
1993/07/31 24128.45 21552.52
18423.81
1993/08/31 25005.27 22369.36
18746.74
1993/09/30 24771.49 22197.11
18798.23
1993/10/31 25102.83 22656.59
18868.48
1993/11/30 24771.49 22441.36
18707.97
1993/12/31 25406.18 22712.90
18809.36
1994/01/31 26112.36 23485.14
19063.31
1994/02/28 25652.52 22848.69
18732.12
1994/03/31 24628.02 21852.49
18270.29
1994/04/30 24429.41 22132.20
18124.40
1994/05/31 24528.72 22495.17
18121.86
1994/06/30 24063.20 21944.03
18081.81
1994/07/31 24528.51 22663.80
18440.98
1994/08/31 24827.64 23593.01
18463.86
1994/09/30 24661.73 23014.99
18192.10
1994/10/31 24428.60 23532.82
18175.89
1994/11/30 24095.56 22675.76
18135.53
1994/12/31 24112.21 23012.04
18260.76
1995/01/31 24045.05 23608.74
18622.15
1995/02/28 24464.83 24528.77
19064.90
1995/03/31 24871.31 25252.62
19181.87
1995/04/30 25142.20 25996.31
19449.81
1995/05/31 25633.19 27035.38
20202.47
1995/06/30 25940.93 27663.41
20350.58
1995/07/31 26333.46 28580.73
20305.13
1995/08/31 26401.72 28652.47
20550.19
1995/09/30 26656.80 29861.60
20750.11
1995/10/31 26346.83 29755.00
21019.96
1995/11/30 27087.30 31061.24
21334.94
1995/12/31 27502.87 31659.48
21634.35
1996/01/31 27747.97 32737.17
21778.02
1996/02/29 27292.80 33040.64
21399.47
1996/03/31 27083.98 33358.82
21250.72
1996/04/30 27048.71 33850.53
21131.21
1996/05/31 27189.78 34723.54
21088.30
1996/06/30 27349.22 34855.83
21371.50
1996/07/31 26780.18 33315.90
21429.98
1996/08/31 26993.57 34018.54
21394.06
1996/09/30 28044.79 35933.10
21766.89
1996/10/31 28797.43 36924.13
22249.06
1996/11/30 30338.55 39715.23
22630.16
1996/12/31 29820.30 38928.47
22419.74
1997/01/31 30839.80 41360.72
22488.40
1997/02/28 31313.14 41684.99
22544.34
1997/03/31 30230.21 39972.15
22294.51
1997/04/30 31496.68 42358.49
22628.25
1997/05/31 32763.16 44937.28
22842.16
1997/06/30 34028.33 46950.47
23113.28
1997/07/31 35875.68 50686.31
23736.57
1997/08/31 34286.96 47846.87
23534.10
1997/09/30 35692.08 50467.44
23881.19
1997/10/31 34948.11 48781.83
24227.64
IMATRL PRASUN SHR__CHT 19971031 19971113 103304 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class T on October 31,
1987, and the current maximum 3.50% sales charge was paid. As the
chart shows, by October 31, 1997, the value of the investment would
have grown to $34,948 - a 249.48% increase on the initial investment.
For comparison, look at how both the S&P 500 and the Lehman Brothers
Aggregate Bond Index did over the same period. With dividends and
capital gains, if any, reinvested in each, the same $10,000 would have
grown to $48,782 - a 387.82% increase and $24,228 - a 142.28%
increase, respectively.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
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)
ADVISOR BALANCED 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class B shares took place on December
31, 1996. Returns prior to December 31, 1996 are those of Class T, the
original class of the fund, and reflect Class T's 0.50% 12b-1 fee
(0.65% prior to January 1, 1996). Had Class B's 12b-1 fee been
reflected, returns prior to December 31, 1996 would have been lower.
Class B's contingent deferred sales charges included in the past one
year, past five years and past 10 years total return figures are 5%,
2% and 0%, respectively.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS B 20.39% 65.26% 259.26%
ADVISOR BALANCED - CLASS B 15.39% 63.26% 259.26%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500(REGISTERED TRADEMARK) 32.11% 147.49% 387.82%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 43.65% 142.28%
BALANCED FUNDS AVERAGE 19.51% 86.93% 231.34%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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 the performance of the
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks - and the performance of the Lehman Brothers Aggregate
Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of at least one year. To measure how Class B's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 343 mutual funds. 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, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR BALANCED - CLASS B 20.39% 10.57% 13.64%
ADVISOR BALANCED - CLASS B 15.39% 10.30% 13.64%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 32.11% 19.87% 17.16%
LEHMAN BROTHERS AGGREGATE BOND INDEX 8.89% 7.51% 9.25%
BALANCED FUNDS AVERAGE 19.51% 13.27% 12.66%
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971031 19971113 103238 S00000000000001
FA Balanced -CL B S&P 500
LB Aggregate Bond
00241 SP001
LB001
1987/10/31 10000.00 10000.00
10000.00
1987/11/30 9819.92 9176.00
10080.10
1987/12/31 10249.20 9874.29
10217.41
1988/01/31 10850.83 10290.00
10576.57
1988/02/29 11302.05 10769.52
10702.12
1988/03/31 11334.28 10436.74
10601.68
1988/04/30 11530.27 10552.59
10544.47
1988/05/31 11573.82 10644.39
10473.59
1988/06/30 12053.87 11132.97
10726.27
1988/07/31 12009.75 11090.67
10670.01
1988/08/31 11965.64 10713.58
10697.98
1988/09/30 12187.20 11169.98
10940.18
1988/10/31 12365.93 11480.51
11146.14
1988/11/30 12243.06 11316.34
11010.74
1988/12/31 12389.76 11514.37
11023.14
1989/01/31 12877.19 12357.22
11181.74
1989/02/28 12922.53 12049.53
11100.69
1989/03/31 13140.01 12330.28
11148.69
1989/04/30 13667.91 12970.22
11381.98
1989/05/31 14115.47 13495.52
11681.08
1989/06/30 14310.04 13418.59
12036.74
1989/07/31 14959.97 14630.29
12292.61
1989/08/31 15192.09 14917.05
12110.48
1989/09/30 15215.80 14855.89
12172.46
1989/10/31 14981.17 14511.23
12472.19
1989/11/30 15286.19 14807.26
12591.06
1989/12/31 15437.26 15162.63
12624.75
1990/01/31 14690.51 14145.22
12474.73
1990/02/28 14729.13 14327.69
12515.10
1990/03/31 14935.29 14707.38
12524.32
1990/04/30 14739.80 14339.69
12409.57
1990/05/31 15287.17 15737.81
12777.00
1990/06/30 15352.02 15630.80
12982.01
1990/07/31 15312.45 15580.78
13161.59
1990/08/31 14376.03 14172.28
12985.82
1990/09/30 14044.22 13482.09
13093.26
1990/10/31 13910.60 13424.11
13259.49
1990/11/30 14538.64 14291.31
13544.91
1990/12/31 14982.95 14690.04
13755.96
1991/01/31 15756.53 15330.52
13926.01
1991/02/28 16679.39 16426.66
14044.88
1991/03/31 17103.03 16824.18
14141.50
1991/04/30 17431.94 16864.56
14294.70
1991/05/31 18158.27 17593.11
14378.30
1991/06/30 17786.10 16787.34
14370.99
1991/07/31 18546.79 17569.63
14570.28
1991/08/31 19017.02 17986.03
14885.58
1991/09/30 19157.04 17685.67
15187.21
1991/10/31 19715.15 17922.66
15356.30
1991/11/30 19254.71 17200.37
15497.11
1991/12/31 20149.30 19168.09
15957.35
1992/01/31 20281.86 18811.57
15740.26
1992/02/29 20709.00 19056.12
15842.60
1992/03/31 20635.48 18684.52
15753.29
1992/04/30 20798.90 19233.85
15867.08
1992/05/31 21214.88 19328.10
16166.49
1992/06/30 21021.98 19040.11
16388.98
1992/07/31 21635.87 19818.85
16723.35
1992/08/31 21635.87 19412.56
16892.76
1992/09/30 21814.87 19641.63
17093.00
1992/10/31 21739.43 19710.37
16866.38
1992/11/30 21875.21 20382.50
16870.19
1992/12/31 22002.95 20633.20
17138.45
1993/01/31 22418.10 20806.52
17467.10
1993/02/28 22897.12 21089.49
17772.87
1993/03/31 23761.32 21534.48
17846.93
1993/04/30 24437.46 21013.34
17971.20
1993/05/31 24904.31 21576.50
17994.09
1993/06/30 24743.96 21639.07
18320.20
1993/07/31 25003.57 21552.52
18423.81
1993/08/31 25912.20 22369.36
18746.74
1993/09/30 25669.94 22197.11
18798.23
1993/10/31 26013.30 22656.59
18868.48
1993/11/30 25669.94 22441.36
18707.97
1993/12/31 26327.65 22712.90
18809.36
1994/01/31 27059.44 23485.14
19063.31
1994/02/28 26582.93 22848.69
18732.12
1994/03/31 25521.27 21852.49
18270.29
1994/04/30 25315.45 22132.20
18124.40
1994/05/31 25418.36 22495.17
18121.86
1994/06/30 24935.96 21944.03
18081.81
1994/07/31 25418.15 22663.80
18440.98
1994/08/31 25728.13 23593.01
18463.86
1994/09/30 25556.20 23014.99
18192.10
1994/10/31 25314.61 23532.82
18175.89
1994/11/30 24969.49 22675.76
18135.53
1994/12/31 24986.75 23012.04
18260.76
1995/01/31 24917.15 23608.74
18622.15
1995/02/28 25352.15 24528.77
19064.90
1995/03/31 25773.38 25252.62
19181.87
1995/04/30 26054.09 25996.31
19449.81
1995/05/31 26562.89 27035.38
20202.47
1995/06/30 26881.79 27663.41
20350.58
1995/07/31 27288.56 28580.73
20305.13
1995/08/31 27359.30 28652.47
20550.19
1995/09/30 27623.62 29861.60
20750.11
1995/10/31 27302.42 29755.00
21019.96
1995/11/30 28069.74 31061.24
21334.94
1995/12/31 28500.39 31659.48
21634.35
1996/01/31 28754.37 32737.17
21778.02
1996/02/29 28282.69 33040.64
21399.47
1996/03/31 28066.30 33358.82
21250.72
1996/04/30 28029.75 33850.53
21131.21
1996/05/31 28175.93 34723.54
21088.30
1996/06/30 28341.16 34855.83
21371.50
1996/07/31 27751.49 33315.90
21429.98
1996/08/31 27972.61 34018.54
21394.06
1996/09/30 29061.96 35933.10
21766.89
1996/10/31 29841.90 36924.13
22249.06
1996/11/30 31438.92 39715.23
22630.16
1996/12/31 30864.13 38928.47
22419.74
1997/01/31 31920.61 41360.72
22488.40
1997/02/28 32373.38 41684.99
22544.34
1997/03/31 31252.47 39972.15
22294.51
1997/04/30 32525.37 42358.49
22628.25
1997/05/31 33817.27 44937.28
22842.16
1997/06/30 35088.93 46950.47
23113.28
1997/07/31 36979.95 50686.31
23736.57
1997/08/31 35318.14 47846.87
23534.10
1997/09/30 36713.34 50467.44
23881.19
1997/10/31 35926.07 48781.83
24227.64
IMATRL PRASUN SHR__CHT 19971031 19971113 103250 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class B on October 31,
1987. As the chart shows, by October 31, 1997, the value of the
investment would have grown to $35,926 - a 259.26% increase on the
initial investment. For comparison, look at how both the S&P 500 and
the Lehman Brothers Aggregate Bond Index did over the same period.
With dividends and capital gains, if any, reinvested in each, the same
$10,000 would have grown to $48,782 - a 387.82% increase and $24,228 -
a 142.28% increase, respectively.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
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)
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
A favorable economic backdrop of
low inflation, moderate growth and
healthy corporate earnings
translated into positive results for
both stocks and bonds for the
12-month period that ended
October 31, 1997. The stock
market rallied through much of the
period, as prices in general reached
record levels. The Standard & Poor's
500 Index returned 32.11% during
the period. Large-cap,
household-name stocks led much of
this growth, and the Dow Jones
Industrial Average reached the
8,000-point mark for the first time
in its history. International market
volatility got into the act in October,
as currency problems erupted in
Southeast Asia. The Dow fell
550-plus points in one day, only to
reclaim 330-plus points the next.
Inflationary concern and economic
data played major roles in the
direction of the bond market. The
Lehman Brothers Aggregate Bond
Index - a broad measure of the
U.S. taxable bond market - returned
8.89% during the period. Through
the first half of the year, bonds
suffered from the perception of an
accelerating economy and, in turn,
that inflation would make an
appearance. After a Federal Reserve
Board rate hike in March,
encouraging economic data and the
sense that no further rate increases
would be forthcoming sent bond
markets on a rally that lasted from
April through July. While some of
these gains evaporated in August, a
strong September and October
helped ease the pain. The bond
market attracted wary stock investors
in late October, due to the
aforementioned overseas
developments.
NOTE TO SHAREHOLDERS: The following is an interview with Bettina
Doulton, who managed the fund during the period, with additional
comments from John Avery, who will become manager of the fund
effective January 1, 1998.
Q. HOW DID THE FUND PERFORM, BETTINA?
A. For the 12 months that ended October 31, 1997, the fund's Class A,
Class T and Class B shares returned 20.99%, 21.36% and 20.39%,
respectively. These returns topped that of the balanced funds average
which, according to Lipper Analytical Services, returned 19.51% during
that period. Given the fund's balanced asset allocation - namely its
blend of equities and bonds - performance typically falls between its
two benchmark indices, the Standard & Poor's 500 Index and the Lehman
Brothers Aggregate Bond Index. During the period, the S&P 500 and
Lehman Brothers Aggregate Bond Index gained 32.11% and 8.89%,
respectively.
Q. WHAT STRATEGIES HELPED THE FUND OUTPERFORM ITS LIPPER GROUP?
B.D. While I typically focus on individual stocks - rather than
industry sectors - my analysis uncovered a number of attractive
investments within the finance and pharmaceuticals industries.
Emphasizing these stocks helped, since finance and drug stocks
performed very well during the period. BankAmerica and Bristol-Myers
Squibb, both top holdings, were particularly impressive performers.
Relative to many other balanced funds, an underweighting in telephone
and electric utility stocks also worked out well, as unfolding
deregulation caused these groups to struggle. Performance also
benefited from a moderately higher weighting in stocks, since stocks
strongly outperformed bonds during the period.
Q. WERE THERE ANY DISAPPOINTING INVESTMENTS, OR AREAS WHERE THE FUND
LOST GROUND?
B.D. There were certainly a few smaller positions that didn't perform
as I expected - largely because what I felt were promising business
prospects didn't materialize. However, given the strength of the
market, I'd characterize most of my disappointments as missed
opportunities. In some cases, I sold stocks too early as they reached
my price targets, only to watch them continue rising. In other
situations, I simply missed out on stocks by not buying them fast
enough. The fund's underexposure to technology stocks - the
best-performing sector over the past year - also hurt. However, given
the fund's income-oriented objective, it's difficult to justify a
sizable weighting in technology stocks because they generally don't
pay attractive dividends. The fund's position in General Signal was
disappointing, as was R.R. Donnelley, which had a lackluster
second-half performance.
Q. HOW DID THE BOND PORTION OF THE PORTFOLIO FARE?
B.D. The fund's bond positions performed well through much of the
period, with significant emphasis being placed on short-term corporate
bonds, particularly bonds issued by companies that wouldn't be too
sensitive to economic swings. Shorter-term bonds - typically in the
two-to-four-year range - offered yield advantages relative to
Treasuries. In the summer of 1997, we saw some foreshadowing of the
currency problems that eventually blew up in Southeast Asia in late
October. While Asian corporate bonds struggled during that time, the
fund itself had only very small positions that were adversely
affected. The only types of bonds that did really well in October were
Treasuries, as U.S. corporate bonds felt the ramifications from Asia's
woes. With mortgage rates down toward the end of the period, the
fund's underweighting in mortgage-backed bonds could prove prudent.
Many mortgages are now "in the money," or are refinancable because of
the lower rates. This type of climate increases prepayment risk - in
which the bondholder prepays principal - and is generally a negative
trend for mortgage-related bonds.
Q. TURNING TO YOU, JOHN, WHAT CHANGES DO YOU ENVISION MAKING TO THE
FUND IN THE COMING MONTHS?
J.A. Very few. Bettina and I have very similar investment approaches
and styles and I think the transition will be mostly seamless. I'm not
going to come in on January 2 and turn the portfolio upside down. In
fact, if shareholders look at the top holdings now and three months
from now, there will most likely be a lot of similarities. I'd like to
keep the allocation balance of the fund roughly the same: 60% in
equities, 30% in high-grade bonds, 5% in high-yield bonds and the
remainder in cash. I'll generally focus on mid- and large-cap issues,
with an emphasis on companies with market capitalizations of $2
billion or more. In terms of the Southeast Asia debacle, I'll admit
it's a concern. Historically, corrections of this magnitude have
resulted in a shakeout, but I don't think the companies that have been
affected will be able to assess the damage until next quarter. The
future implications will certainly be something to keep an eye on.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
JOHN AVERY'S INVESTMENT
PHILOSOPHY ON . . .
COMPANIES. "When I'm looking for
a good buying opportunity, my main
consideration is whether a company
has the potential to improve its
earnings growth. Companies that
are restructuring themselves -
either through cost-cutting, selling
non-profitable subdivisions or
making logical acquisitions - are
frequently good candidates. I also
like companies that have
competitive market positions that
allow for pricing stability and
economies of scale. This can
reduce expenses, while
improving the bottom line to the
shareholder."
EARNINGS. "I want to buy
companies that are doing proactive
things to boost their earnings. If I
know that steel prices are going to
be down for three consecutive
quarters, and that steel company
earnings will be down for that time
as well, that's not something I'm
attracted to. If a pharmaceutical
company, however, has a promising
product in its pipeline that I feel
will enhance future earnings, that
company becomes a possibility."
SECTORS. "Two areas that are
well-represented among the fund's
top holdings are the finance and
health care groups. Many banks
have been utilizing the proactive
approaches I described above, while
the health care sector remains
exciting. Pharmaceutical
companies have impressive
pipelines of products and
demographics - the aging of
America - could ensure that
demand meets supply."
FUND FACTS
GOAL: seeks both income and
growth of capital by investing
in a diversified portfolio of
equity and fixed-income
securities with income, growth
of income and capital
appreciation potential
START DATE: January 6, 1987
SIZE: as of October 31, 1997,
more than $2.9 billion
MANAGER: Bettina Doulton,
since 1996; joined Fidelity
in 1986
(checkmark)
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF OCTOBER 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
PHILIP MORRIS COMPANIES, INC. 2.7 2.4
CITICORP 2.6 2.4
BANKAMERICA CORP. 2.3 2.1
GENERAL ELECTRIC CO. 2.2 2.1
BRISTOL-MYERS SQUIBB CO. 2.2 1.7
TOP FIVE BOND ISSUERS AS OF OCTOBER 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
(WITH MATURITIES OF MORE THAN ONE YEAR) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE BOND ISSUERS
6 MONTHS AGO
U.S. TREASURY 8.3 6.2
FEDERAL NATIONAL MORTGAGE ASSOCIATION 5.5 5.9
FEDERAL HOME LOAN MORTGAGE CORPORATION 0.7 1.3
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 0.7 1.1
WORLDCOM, INC. 0.6 0.3
</TABLE>
TOP FIVE MARKET SECTORS AS OF OCTOBER 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
FINANCE 22.2 20.2
NONDURABLES 8.6 8.8
ENERGY 8.2 8.1
HEALTH 7.9 8.1
INDUSTRIAL MACHINERY & EQUIPMENT 5.6 6.2
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF OCTOBER 31, 1997 * AS OF APRIL 30, 1997**
ROW: 1, COL: 1, VALUE: 2.7
ROW: 1, COL: 2, VALUE: 1.1
ROW: 1, COL: 3, VALUE: 2.1
ROW: 1, COL: 4, VALUE: 25.1
ROW: 1, COL: 5, VALUE: 59.0
STOCKS 62.4%
BONDS 34.9%
CONVERTIBLE
SECURITIES 0.8%
CERTIFICATES OF
DEPOSIT 0.0%
SHORT-TERM
INVESTMENTS 1.9%
FOREIGN
INVESTMENTS 11.2%
STOCKS 61.0%
BONDS 36.1%
CONVERTIBLE
SECURITIES 1.1%
CERTIFICATES OF
DEPOSIT 0.1%
SHORT-TERM
INVESTMENTS 1.7%
FOREIGN
INVESTMENTS 9.8%
ROW: 1, COL: 1, VALUE: 2.9
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 1.8
ROW: 1, COL: 4, VALUE: 34.9
ROW: 1, COL: 5, VALUE: 60.4
*
**
INVESTMENTS OCTOBER 31, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 59.4%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 4.2%
AEROSPACE & DEFENSE - 3.2%
AlliedSignal, Inc. 965,200 $ 34,747
Boeing Co. 12,398 594
Lockheed Martin Corp. 279,800 26,598
Sundstrand Corp. 179,000 9,733
Textron, Inc. 62,100 3,590
United Technologies Corp. 246,400 17,248
92,510
DEFENSE ELECTRONICS - 0.7%
Raytheon Co. 396,600 21,516
SHIP BUILDING & REPAIR - 0.3%
General Dynamics Corp. 120,500 9,783
TOTAL AEROSPACE & DEFENSE 123,809
BASIC INDUSTRIES - 2.1%
CHEMICALS & PLASTICS - 1.3%
Air Products & Chemicals, Inc. 207,300 15,755
Goodrich (B.F.) Co. 149,000 6,640
Monsanto Co. 138,000 5,900
Nalco Chemical Co. 77,600 3,104
Praxair, Inc. 160,700 7,000
38,399
PAPER & FOREST PRODUCTS - 0.8%
Chesapeake Corp. 1,700 54
Fort James Corp. 151,250 6,003
Kimberly-Clark Corp. 327,600 17,015
23,072
TOTAL BASIC INDUSTRIES 61,471
CONSTRUCTION & REAL ESTATE - 0.3%
BUILDING MATERIALS - 0.3%
Masco Corp. 173,700 7,621
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 1.3%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Johnson Controls, Inc. 105,500 $ 4,734
CONSUMER DURABLES - 1.1%
Minnesota Mining & Manufacturing Co. 355,000 32,483
TEXTILES & APPAREL - 0.0%
Fieldcrest Cannon, Inc. (a) 14,600 488
TOTAL DURABLES 37,705
ENERGY - 7.7%
ENERGY SERVICES - 0.4%
Halliburton Co. 130,000 7,751
Schlumberger Ltd. 58,200 5,093
12,844
OIL & GAS - 7.3%
Amoco Corp. 250,700 22,986
British Petroleum PLC:
Ord. 3,490,485 51,171
ADR 66,077 5,798
Chevron Corp. 125,900 10,442
Exxon Corp. 128,600 7,901
Mobil Corp. 237,200 17,271
Royal Dutch Petroleum Co.:
Ord. 117,600 6,210
NY shares 787,600 41,447
Texaco, Inc. 437,200 24,893
Total SA Class B 49,500 5,484
Total SA sponsored ADR 53,800 2,986
USX-Marathon Group 476,300 17,028
213,617
TOTAL ENERGY 226,461
FINANCE - 15.4%
BANKS - 8.2%
Banc One Corp. 132,000 6,881
Bank of New York Co., Inc. 177,200 8,339
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
BankAmerica Corp. 943,800 $ 67,482
Chase Manhattan Corp. 222,000 25,613
Citicorp 617,800 77,264
National City Corp. 10 1
NationsBank Corp. 693,600 41,529
U.S. Bancorp 27,400 2,786
Wells Fargo & Co. 34,200 9,965
239,860
CREDIT & OTHER FINANCE - 2.4%
American Express Co. 644,800 50,294
Beneficial Corp. 100,200 7,684
First Chicago NBD Corp. 75,000 5,456
Household International, Inc. 42,300 4,790
Transamerica Corp. 12,400 1,252
69,476
FEDERAL SPONSORED CREDIT - 2.4%
Federal Home Loan Mortgage Corporation 1,128,900 42,757
Federal National Mortgage Association 606,300 29,368
72,125
INSURANCE - 2.0%
Allstate Corp. 329,100 27,295
Hartford Financial Services Group, Inc. 198,700 16,095
Progressive Corp. 1,100 114
St. Paul Companies, Inc. (The) 84,800 6,779
Travelers Group, Inc. (The) 103,333 7,233
57,516
SAVINGS & LOANS - 0.4%
Washington Mutual, Inc. 160,000 10,950
TOTAL FINANCE 449,927
HEALTH - 7.8%
DRUGS & PHARMACEUTICALS - 7.2%
American Home Products Corp. 676,100 50,116
Bristol-Myers Squibb Co. 732,740 64,298
Merck & Co., Inc. 250,200 22,330
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
Novartis AG (Reg.) 3,400 $ 5,332
Schering-Plough Corp. 494,900 27,745
SmithKline Beecham PLC ADR 867,500 41,315
211,136
MEDICAL EQUIPMENT & SUPPLIES - 0.6%
Baxter International, Inc. 349,100 16,146
TOTAL HEALTH 227,282
HOLDING COMPANIES - 0.0%
CINergy Corp. 36,500 1,204
INDUSTRIAL MACHINERY & EQUIPMENT - 5.0%
ELECTRICAL EQUIPMENT - 2.6%
Emerson Electric Co. 91,500 4,798
General Electric Co. 1,011,100 65,279
Grainger (W.W.), Inc. 25,200 2,203
Honeywell, Inc. 54,900 3,737
76,017
INDUSTRIAL MACHINERY & EQUIPMENT - 1.6%
Cooper Industries, Inc. 351,129 18,303
Tyco International Ltd. 750,678 28,338
46,641
POLLUTION CONTROL - 0.8%
Browning-Ferris Industries, Inc. 644,600 20,950
Waste Management, Inc. 179,700 4,200
25,150
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 147,808
MEDIA & LEISURE - 0.7%
BROADCASTING - 0.1%
Benedek Communications Corp. warrants 7/1/00 (a) 10,500 21
CS Wireless Systems, Inc. (a)(f) 381 -
Time Warner, Inc. 59,500 3,432
3,453
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.3%
Cedar Fair LP depositary unit 150,000 $ 7,341
PUBLISHING - 0.3%
McGraw-Hill, Inc. 145,100 9,486
TOTAL MEDIA & LEISURE 20,280
NONDURABLES - 7.6%
FOODS - 1.4%
Flowers Industries, Inc. 98,000 1,862
General Mills, Inc. 30,000 1,980
Heinz (H.J.) Co. 330,300 15,338
Nabisco Holdings Corp. Class A 219,200 9,015
Sara Lee Corp. 228,000 11,657
39,852
HOUSEHOLD PRODUCTS - 2.7%
Procter & Gamble Co. 287,600 19,557
Renaissance Cosmetics, Inc. warrants 8/31/06 (a)(f) 2,250 -
Unilever PLC Ord. 1,932,800 14,361
Unilever NV:
Ord. 120,000 6,367
ADR 755,600 40,330
80,615
TOBACCO - 3.5%
Philip Morris Companies, Inc. 1,989,000 78,814
RJR Nabisco Holdings Corp. 719,200 22,790
101,604
TOTAL NONDURABLES 222,071
RETAIL & WHOLESALE - 1.4%
DRUG STORES - 0.5%
CVS Corp. 73,900 4,531
Rite Aid Corp. 161,900 9,613
14,144
GENERAL MERCHANDISE STORES - 0.7%
Wal-Mart Stores, Inc. 603,000 21,180
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.2%
American Stores Co. 258,000 $ 6,627
TOTAL RETAIL & WHOLESALE 41,951
SERVICES - 0.8%
LEASING & RENTAL - 0.1%
Ryder Systems, Inc. 87,700 3,069
PRINTING - 0.7%
Deluxe Corp. 150,600 4,932
Donnelley (R.R.) & Sons Co. 481,400 15,706
20,638
SERVICES - 0.0%
Orion Network Systems, Inc. warrants 1/15/07 (a) 1,445 19
Orion Network Systems, Inc. warrants 1/15/07 (a) 6,760 74
93
TOTAL SERVICES 23,800
TECHNOLOGY - 3.1%
COMPUTERS & OFFICE EQUIPMENT - 2.3%
Exide Electronics Group, Inc. (a) 2,317 67
International Business Machines Corp. 31,800 3,118
Pitney Bowes, Inc. 613,200 48,634
Xerox Corp. 201,300 15,966
67,785
ELECTRONICS - 0.7%
AMP, Inc. 59,100 2,660
Thomas & Betts Corp. 335,400 16,686
19,346
PHOTOGRAPHIC EQUIPMENT - 0.1%
Eastman Kodak Co. 72,000 4,311
TOTAL TECHNOLOGY 91,442
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 0.2%
RAILROADS - 0.2%
Burlington Northern Santa Fe Corp. 23,500 $ 2,232
CSX Corp. 21,900 1,198
Union Pacific Corp. 30,000 1,838
5,268
UTILITIES - 1.8%
CELLULAR - 0.0%
McCaw International Ltd. warrants 4/15/07 (a)(f) 5,760 14
Microcell Telecommunications, Inc. (a):
warrants 6/1/06 21,520 409
conditional warrants 6/1/06 21,520 -
423
ELECTRIC UTILITY - 0.4%
Allegheny Energy, Inc. 37,000 1,045
CMS Energy Corp. 222,100 8,107
Edison International 90,000 2,306
11,458
GAS - 0.1%
Consolidated Natural Gas Co. 48,800 2,638
TELEPHONE SERVICES - 1.3%
AT&T Corp. 177,600 8,691
ALLTEL Corp. 46,900 1,659
Ameritech Corp. 118,600 7,709
BCE, Inc. 267,600 7,457
Frontier Corp. 14,300 309
GTE Corp. 243,900 10,351
Hyperion Telecommunications, Inc.
warrants 4/15/01 (a)(f) 3,790 284
RSL Communications Ltd. /RSL Communications PLC
warrants 11/15/06 (a) 990 91
Sprint Corp. 30,000 1,560
38,111
TOTAL UTILITIES 52,630
TOTAL COMMON STOCKS
(Cost $1,320,472) 1,740,730
PREFERRED STOCKS - 2.2%
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - 0.6%
DURABLES - 0.1%
AUTOS, TIRES, & ACCESSORIES - 0.1%
Republic Industries, Inc. $1.55 74,000 $ 2,091
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.2%
Loral Space & Communications Ltd $3.00 Series C (f) 85,000 5,153
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.0%
Benedek Communications Corp. 15% (a) 6,100 744
LODGING & GAMING - 0.2%
Host Marriott Financial Trust $3.375 (f) 85,000 5,472
TOTAL MEDIA & LEISURE 6,216
RETAIL & WHOLESALE - 0.1%
APPAREL STORES - 0.1%
TJX Companies, Inc., Series E, $7.00 12,000 3,900
TOTAL CONVERTIBLE PREFERRED STOCKS 17,360
NONCONVERTIBLE PREFERRED STOCKS - 1.6%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.0%
American Annuity Group Capital Trust II 8 3/4% 1,000 1,060
SIG Capital Trust I 9 1/2%, (f) 80 81
1,141
SAVINGS & LOANS - 0.1%
California Federal Preferred Capital Corp. 9 1/8% 61,560 1,631
TOTAL FINANCE 2,772
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Echostar Communications Corp. 12 1/8%, pay-in-kind 233 $ 238
MEDIA & LEISURE - 0.8%
BROADCASTING - 0.7%
Adelphia Communications Corp. 13% (f) 5,170 589
American Radio Systems Corp. 11 3/8%, pay-in-kind 24,712 2,839
Cablevision System Corp.:
11 1/8%, depositary shares pay-in-kind 32,526 3,578
Series H, $11.75 pay-in-kind 7,125 805
CapStar Broadcasting Partners, Inc. 12%, pay-in-kind 1,500 165
Chancellor Media Corp. 12%, pay-in-kind (f) 6,621 761
Citadel Brodcasting Co. 13 1/4%, pay-in-kind (f) 10,350 1,139
Granite Broadcasting Corp. 12 3/4%, pay-in-kind 788 827
SFX Broadcasting, Inc. 12 5/8% 408 47
Time Warner, Inc., Series M, 10 1/4%, pay-in-kind 8,888 10,266
21,016
PUBLISHING - 0.1%
K-III Communications Corp.:
Series B, $11.625 pay-in-kind 3,480 368
Series D, $10 28,400 2,911
3,279
TOTAL MEDIA & LEISURE 24,295
NONDURABLES - 0.1%
HOUSEHOLD PRODUCTS - 0.1%
Renaissance Cosmetics, Inc. 14%, pay-in-kind 2,674 1,791
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.2%
Intermedia Communications, Inc. 13 1/2%, pay-in-kind 5,048 5,856
UTILITIES - 0.4%
CELLULAR - 0.1%
Nextel Communications Corp. 13%, pay-in-kind (f) 2,749 3,010
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - 0.3%
American Communications Services, Inc.
12 3/4%, pay-in-kind (f) 521 $ 490
Hyperion Telecommunications, Inc.
12 7/8%, pay-in-kind (f) 1,209 1,173
ICG Holdings, Inc. 14 1/4%, pay-in-kind 491 562
IXC Communications, Inc. 12 1/2%, pay-in-kind (f) 495 551
NEXTLINK Communications, Inc. 14%, pay-in-kind 93,857 5,537
8,313
TOTAL UTILITIES 11,323
TOTAL NONCONVERTIBLE PREFERRED STOCKS 46,275
TOTAL PREFERRED STOCKS
(Cost $56,096) 63,635
CORPORATE BONDS - 18.8%
MOODY'S RATINGS (C) PRINCIPAL
(UNAUDITED) AMOUNT (000S)
CONVERTIBLE BONDS - 0.5%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
POLLUTION CONTROL - 0.1%
WMX Technologies, Inc. 2%, 1/24/05 Baa2 $ 4,340 3,581
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Time Warner, Inc. liquid yield option notes
0%, 6/22/13 Ba1 11,500 5,520
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
Federated Department Stores, Inc. 5%, 10/1/03 Baa3 2,460 3,370
TECHNOLOGY - 0.1%
COMPUTERS & OFFICE EQUIPMENT - 0.1%
Unisys Corp. 8 1/4%, 3/15/06 B3 800 1,588
TOTAL CONVERTIBLE BONDS 14,059
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - 18.3%
AEROSPACE & DEFENSE - 1.0%
AEROSPACE & DEFENSE - 0.7%
Alliant Techsystems, Inc. 11 3/4%, 3/1/03 B2 $ 2,217 $ 2,417
Argo-Tech Corp. 8 5/8%, 10/1/07 (f) B3 440 440
Fairchild Corp. 12%, 10/15/01 Caa1 210 211
Lockheed Martin Corp. 7.20%, 5/1/36 A3 15,000 16,169
19,237
DEFENSE ELECTRONICS - 0.3%
Raytheon Co. 6.45%, 8/15/04 Baa1 8,000 8,057
Tracor, Inc. 8 1/2%, 3/1/07 B1 710 710
8,767
SHIP BUILDING & REPAIR - 0.0%
Newport News Shipbuilding, Inc.:
8 5/8%, 12/1/06 Ba2 70 73
9 1/4%, 12/1/06 B1 450 468
541
TOTAL AEROSPACE & DEFENSE 28,545
BASIC INDUSTRIES - 1.1%
CHEMICALS & PLASTICS - 0.3%
Atlantis Group, Inc. 11%, 2/15/03 B2 740 751
Freedom Chemical Co. 10 5/8%, 10/15/06 B3 1,960 2,185
Huntsman Corp. 9 1/2%, 7/1/07 (f) B2 1,880 1,962
Sovereign Specialty Chemicals, Inc.
9 1/2%, 8/1/07 (f) B3 40 41
Sterling Chemicals Holdings, Inc.:
11 3/4%, 8/15/06 B3 2,020 2,237
11 1/4%, 4/1/07 B3 910 994
8,170
IRON & STEEL - 0.1%
GS Technologies Operating, Inc.
12 1/4%, 10/1/05 B2 610 680
Republic Engineered Steels, Inc.
9 7/8%, 12/15/01 Caa1 1,630 1,565
WCI Steel, Inc. 10%, 12/1/04 B2 720 756
3,001
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 0.0%
Commonwealth Aluminum Corp.
10 3/4%, 10/1/06 B2 $ 1,060 $ 1,132
PACKAGING & CONTAINERS - 0.2%
Crown Cork & Seal, Inc. 5 7/8%, 4/15/98 Baa1 5,000 5,004
Huntsman Packaging Corp.
9 1/8%, 10/1/07 (f) B2 70 72
5,076
PAPER & FOREST PRODUCTS - 0.5%
APP Finance II Mauritius Ltd. 12%, 3/15/04 B3 2,265 2,106
American Pad & Paper Co., Inc.
13%, 11/15/05 B3 820 953
Doman Industries Ltd. yankee
8 3/4%, 3/15/04 B1 2,320 2,262
Florida Coast Paper Co./LLC Florida Coast
Paper Finance Corp., Series B,
12 3/4%, 6/1/03 Caa1 320 342
Koppers Industries, Inc. 8 1/2%, 2/1/04 B1 410 429
Mail-Well Corp. 10 1/2%, 2/15/04 B 190 198
Paperboard Industries International, Inc.
8 3/8%, 9/15/07 (f) Ba3 40 40
Repap New Brunswick, Inc. yankee
9 7/8%, 7/15/00 B2 1,230 1,255
Riverwood International Corp.
10 5/8%, 8/1/07 (f) B3 505 521
SD Warren Co., Series B, 12%, 12/15/04 B1 900 1,008
Stone Container Corp.:
12 5/8%, 7/15/98 B2 1,870 1,949
11 7/8%, 12/1/98 B2 630 658
10 3/4%, 10/1/02 B1 1,600 1,712
11 7/8%, 8/1/16 B2 1,180 1,289
Tembec Finance Corp. yankee
9 7/8%, 9/30/05 B1 480 503
15,225
TOTAL BASIC INDUSTRIES 32,604
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - 0.0%
BUILDING MATERIALS - 0.0%
Insilco Corp. 10 1/4%, 8/15/07 (f) B3 $ 290 $ 303
REAL ESTATE - 0.0%
Iron Mountain, Inc. 8 3/4%, 9/30/09 (f) B3 425 428
TOTAL CONSTRUCTION & REAL ESTATE 731
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Blue Bird Body Co. 10 3/4%, 11/15/06 B2 310 326
HOME FURNISHINGS - 0.1%
Guitar Center Management Co., Inc.
11%, 7/1/06 B2 670 737
Interlake Corp. 12 1/8%, 3/1/02 B3 1,600 1,664
Knoll, Inc. 10 7/8%, 3/15/06 B1 618 680
3,081
TEXTILES & APPAREL - 0.3%
Dan River, Inc. 10 1/8%, 12/15/03 B3 520 551
Levi Strauss & Co. 6.80%, 11/1/03 (f) Baa2 5,560 5,672
Nine West Group, Inc. (f):
8 3/8%, 8/15/05 Ba2 800 794
9%, 8/15/07 Ba3 810 808
Polymer Group, Inc. 9%, 7/1/07 B2 760 752
Synthetic Industries, Inc. 9 1/4%, 2/15/07 B2 990 1,022
9,599
TOTAL DURABLES 13,006
ENERGY - 0.5%
ENERGY SERVICES - 0.1%
DI Industries, Inc. 8 7/8%, 7/1/07 B1 390 400
McDermott International, Inc.
9 3/8%, 3/15/02 Ba3 1,200 1,291
1,691
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - 0.4%
Belden & Blake Corp. 9 7/8%, 6/15/07 (f) B3 $ 1,060 $ 1,081
Chesapeake Energy Corp.:
7 7/8%, 3/15/04 Ba3 100 98
9 1/8%, 4/15/06 Ba3 250 258
8 1/2%, 3/15/12 Ba2 70 69
Clark R&M Holdings, Inc. 0%, 2/15/00 B2 1,000 770
Cross Timbers Oil Co.:
9 1/4%, 4/1/07 B2 1,380 1,411
8 3/4%, 11/1/09 (f) B2 210 209
Flores & Rucks, Inc. 9 3/4%, 10/1/06 B3 1,410 1,498
Occidental Petroleum Corp.:
6.39%, 11/9/00 Baa3 1,000 1,004
8 1/2%, 11/9/01 Baa2 1,180 1,272
Ocean Energy, Inc. 8 7/8%, 7/15/07 B3 1,130 1,158
Pennzoil Co. 9 5/8%, 11/15/99 Baa3 1,730 1,845
Plains Resources, Inc., Series B,
10 1/4%, 3/15/06 B2 400 425
Southwest Royalties, Inc.
10 1/2%, 10/15/04 (f) B3 240 238
11,336
TOTAL ENERGY 13,027
FINANCE - 6.7%
ASSET-BACKED SECURITIES - 1.7%
Airplanes Pass Through Trust Class D
10 7/8%, 3/15/19 Ba2 1,570 1,782
Capital Equipment Receivables Trust
6.11%, 7/15/99 Aaa 14,150 14,201
Chase Manhattan Grantor Trust:
6.61%, 9/15/02 Aaa 5,193 5,231
6.76%, 9/15/02 A3 1,298 1,308
Chevy Chase Auto Receivables Trust:
6.60%, 12/15/02 Aaa 1,694 1,705
5.90%, 7/15/03 Aaa 4,708 4,707
Ford Credit Auto Owner Trust
6.40%, 5/15/02 A2 2,710 2,718
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
ASSET-BACKED SECURITIES - CONTINUED
Ford Credit Grantor Trust
5.90%, 10/15/00 Aaa $ 781 $ 782
Green Tree Financial Corp.
6.10%, 4/15/27 Aaa 1,755 1,756
MBNA Master Credit Card Trust II
7 1/4%, 9/15/02 Aaa 9,000 9,147
Sears Credit Account Master Trust II
6 1/2%, 10/15/03 Aaa 6,280 6,329
49,666
BANKS - 2.3%
ABN Amro Bank NV
6 5/8%, 10/31/01 Aa3 5,000 5,093
Bank of New York Institutional Capital Trust A
7.78%, 10/1/26 (f) A1 10,000 10,178
BanPonce Financial Corp.:
6.88%, 6/16/00 A3 2,500 2,546
6.69%, 9/21/00 A3 2,250 2,283
6 3/4%, 8/9/01 A3 3,850 3,920
BanPonce Corp. 5 3/4%, 3/1/99 A3 880 875
Capital One Bank:
6.74%, 5/31/99 Baa3 2,630 2,658
6.42%, 11/12/99 Baa3 5,000 5,017
Central Fidelity Banks, Inc. 8.15%, 11/15/02 Baa2 9,045 9,777
First Chicago Institutional Capital B
7 3/4%, 12/1/26 (f) A1 6,000 6,133
First Tennessee National Corp.
6 3/4%, 11/15/05 Baa1 720 728
First USA Bank 6 1/2%, 12/23/99 Aa2 4,700 4,740
Kansallis-Osake-Pankki 10%, 5/1/02 A3 710 810
Provident Bank 6 1/8%, 12/15/00 A3 3,420 3,416
Summit Bancorp. 8 5/8%, 12/10/02 BBB 1,250 1,363
Union Planters Corp. 6 3/4%, 11/1/05 Baa2 400 404
Wachovia Corp. 6.605%, 10/1/25 A1 7,550 7,725
67,666
CREDIT & OTHER FINANCE - 2.0%
AT&T Capital Corp.:
6.65%, 4/30/99 Baa3 6,560 6,626
6.41%, 8/13/99 Baa3 1,000 1,006
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Ahmanson Capital Trust I
8.36%, 12/1/26 (f) Baa3 $ 2,700 $ 2,880
Associates Corp. of North America
6 1/2%, 9/9/98 Aa3 10,000 10,056
BankBoston Capital Trust II
7 3/4%, 12/15/26 Baa1 8,000 8,200
CIT Group Holdings, Inc. 6 1/4%, 9/30/99 Aa3 8,440 8,485
Chrysler Financial Corp. 6 3/8%, 1/28/00 A3 4,750 4,771
Cityscape Financial Corp. 12 3/4%, 6/1/04 B2 970 660
Delta Financial Corp. 9 1/2%, 8/1/04 B1 210 208
First Security Capital I 8.41%, 12/15/26 A3 1,280 1,390
GST Equipment Funding, Inc.
13 1/4%, 5/1/07 (f) - 540 608
General Electric Capital Corp.
6.94%, 4/13/09 (e) Aaa 4,700 4,765
Imperial Credit Capital Trust I
10 1/4%, 6/14/02 (f) B2 510 500
Imperial Credit Industries, Inc.
9 7/8%, 1/15/07 B2 1,130 1,119
Indah Kiat Finance Mauritius Ltd.
10%, 7/1/07 (f) Ba3 490 443
MCN Investment Corp. 6.03%, 2/1/01 Baa2 2,350 2,341
Nordstrom Credit, Inc. 7 1/4%, 4/30/02 A2 3,100 3,230
Ocwen Capital Trust 10 7/8%, 8/1/27 B2 485 517
PTC International Finance BV
0%, 7/1/07 (d)(f) B3 240 155
Pindo Deli Finance Mauritius Ltd.
10 1/4%, 10/1/02 (f) Ba3 330 310
Tjiwi Kimia Mauritius Ltd.
10%, 8/1/04 (f) Ba3 940 837
59,107
INSURANCE - 0.5%
SunAmerica, Inc. 6.20%, 10/31/99 Baa1 13,750 13,743
SAVINGS & LOANS - 0.2%
First Nationwide Holdings, Inc.
10 5/8%, 10/1/03 Ba3 1,360 1,496
First Nationwide Parent Holdings Ltd.
12 1/2%, 4/15/03 B3 3,940 4,462
5,958
TOTAL FINANCE 196,140
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
HEALTH - 0.1%
MEDICAL EQUIPMENT & SUPPLIES - 0.0%
Graham-Field Health Products, Inc.
9 3/4%, 8/15/07 (f) B3 $ 160 $ 165
Wright Medical Technology, Inc.
11 3/4%, 7/1/00 (f)(g) Caa3 1,191 1,191
1,356
MEDICAL FACILITIES MANAGEMENT - 0.1%
Integrated Health Services, Inc. (f):
9 1/2%, 9/15/07 B2 300 303
9 1/4%, 1/15/08 B2 1,200 1,197
Tenet Healthcare Corp.:
8%, 1/15/05 Ba1 620 626
8 5/8%, 1/15/07 Ba3 170 173
Vencor, Inc. 8 5/8%, 7/15/07 (f) B1 215 209
2,508
TOTAL HEALTH 3,864
HOLDING COMPANIES - 0.2%
Gray Communications System, Inc.
10 5/8%, 10/1/06 B3 970 1,038
Norfolk Southern Corp. 7.05%, 5/1/37 Baa1 5,800 6,032
7,070
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.2%
Amphenol Corp. 9 7/8%, 5/15/07 B2 130 134
Echostar Communications Corp. secured
discount 0%, 6/1/04 (d) B2 3,829 3,417
Motors & Gears, Inc. 10 3/4%, 11/15/06 B3 1,820 1,929
5,480
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Calmar, Inc. 11 1/2%, 8/15/05 B3 100 106
Continental Global Group, Inc. 11%, 4/1/07 B2 550 580
Goss Graphic System, Inc. 12%, 10/15/06 B2 1,210 1,349
2,035
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.0%
Allied Waste North America
10 1/4%, 12/1/06 B3 $ 350 $ 378
Envirosource, Inc. 9 3/4%, 6/15/03 B3 270 268
646
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 8,161
MEDIA & LEISURE - 2.4%
BROADCASTING - 1.4%
ACME Television/ACME Financial Corp.
0%, 9/30/04 (d)(f) B3 820 605
Adelphia Communications Corp.:
9 1/2%, 2/15/04 B3 670 655
9 7/8%, 3/1/07 B3 650 663
CapStar Broadcasting Partners, Inc.:
9 1/4%, 7/1/07 B2 1,110 1,121
0%, 2/1/09 (d) B3 1,670 1,169
Chancellor Media Corp.
8 3/4%, 6/15/07 (f) B3 620 622
Continental Cablevision, Inc. 9%, 9/1/08 Baa3 1,700 1,937
CS Wireless Systems, Inc. 0%, 3/1/06 (d) Caa 1,386 402
Echostar Satellite Broadcasting Corp.
0%, 3/15/04 (d) Caa1 100 80
Falcon Holdings Group LP
11%, 9/15/03 pay-in-kind - 2,387 2,434
Fox Kids Worldwide, Inc. 0%, 11/1/07 (d)(f) B1 1,720 968
Frontiervision Holdings LP/Frontiervision Holdings
Capital Corp. 0%, 9/15/07 (d)(f) Caa1 146 100
Granite Broadcasting Corp.:
10 3/8%, 5/15/05 B3 140 144
9 3/8%, 12/1/05 B3 380 377
Intermedia Capital Partners IV L P / Intermedia
Partners IV Capital Corp. 11 1/4%, 8/1/06 B2 60 66
International Cabletel, Inc 0%, 2/1/06 (d) B3 1,000 735
Olympus Communications LP/ Olympus
Capital Corp 10 5/8%, 11/15/06 B1 1,660 1,793
Panamsat Corp. 12 3/4%, 4/15/05 pay-in-kind BBB+ 444 531
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
SFX Broadcasting, Inc. 10 3/4%, 5/15/06 B3 $ 820 $ 888
TCI Communications, Inc.:
7 1/4%, 6/15/99 Ba1 1,000 1,013
6.82%, 9/15/10 (g) Ba1 4,000 4,019
TeleTrac, Inc. 14%, 8/1/07 unit (f) Caa2 920 929
Telewest PLC 0%, 10/1/07 (d) B1 770 572
Time Warner, Inc.:
7 3/4%, 6/15/05 Ba1 8,000 8,389
6.85%, 1/15/26 Ba1 7,120 7,275
UIH Australia/Pacific, Inc. (d):
Series B, 0%, 5/15/06 B2 4,330 3,009
0%, 5/15/06 (f) B2 100 70
United International Holdings, Inc.
0%, 11/15/99 B3 450 369
40,935
ENTERTAINMENT - 0.2%
AMC Entertainment, Inc. 9 1/2%, 3/15/09 B2 1,370 1,390
AMF Group, Inc., Series B:
0%, 3/15/06 (d) B2 360 271
10 7/8%, 3/15/06 B2 755 815
Cinemark USA, Inc. 9 5/8%, 8/1/08 B2 890 917
Regal Cinemas, Inc. 8 1/2%, 10/1/07 (f) B1 60 60
Viacom, Inc. 8%, 7/7/06 B1 2,360 2,313
5,766
LEISURE DURABLES & TOYS - 0.0%
ICON Fitness Corp. 0%, 11/15/06 (d) Caa3 270 154
LODGING & GAMING - 0.4%
American Skiing Co. 12%, 7/15/06 B3 830 925
HMC Acquisition Properties, Inc.
9%, 12/15/07 Ba3 2,810 2,880
HMH Properties, Inc.:
9 1/2%, 5/15/05 Ba3 1,460 1,529
8 7/8%, 7/15/07 Ba3 1,210 1,237
Hollywood Casino Corp. 12 3/4%, 11/1/03 B2 1,330 1,443
KSL Recreation Group, Inc. 10 1/4%, 5/1/07 B3 280 295
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
Station Casinos, Inc. 9 3/4%, 4/15/07 B2 $ 320 $ 322
Sun International Hotels Ltd. /Sun International
North America, Inc. yankee 9%, 3/15/07 Ba3 1,780 1,825
10,456
PUBLISHING - 0.1%
Big Flower Press Holdings, Inc.:
8 7/8%, 7/1/07 B2 1,860 1,869
8 7/8%, 7/1/07 (f) B2 310 311
ITT Publimedia BV 9 3/8%, 9/15/07 (f) B3 1,040 1,082
3,262
RESTAURANTS - 0.3%
AFC Enterprises, Inc. 10 1/4%, 5/15/07 B3 1,000 1,045
Darden Restaurants, Inc. 6 3/8%, 2/1/06 Baa1 2,700 2,607
SC International Services, Inc.
9 1/4%, 9/1/07 (f) B2 800 816
Wendy's International, Inc. 6.35%, 12/15/05 Baa1 5,000 4,945
9,413
TOTAL MEDIA & LEISURE 69,986
NONDURABLES - 0.9%
FOODS - 0.3%
ConAgra, Inc. 7 1/8%, 10/1/26 Baa1 3,600 3,830
International Home Foods, Inc.
10 3/8%, 11/1/06 B2 710 753
Nabisco, Inc. 8%, 1/15/00 Baa2 3,153 3,265
7,848
HOUSEHOLD PRODUCTS - 0.2%
Renaissance Cosmetic, Inc. 11 3/4%, 2/15/04 B3 1,470 1,441
Revlon Consumer Products Corp.
10 1/2%, 2/15/03 B3 5,425 5,723
7,164
TOBACCO - 0.4%
North Atlantic Trading, Inc. 11%, 6/15/04 (f) B3 320 326
Philip Morris Companies, Inc. 6.95%, 6/1/06 A2 10,000 10,275
10,601
TOTAL NONDURABLES 25,613
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 1.1%
APPAREL STORES - 0.1%
Mothers Work, Inc. 12 5/8%, 8/1/05 B3 $ 240 $ 256
Specialty Retailers, Inc.:
8 1/2%, 7/15/05 Ba3 530 541
9%, 7/15/07 B2 820 832
1,629
GENERAL MERCHANDISE STORES - 0.5%
Dayton Hudson Corp.:
6.80%, 10/1/01 Baa1 1,400 1,430
6.40%, 2/15/03 Baa1 425 426
Federated Department Stores, Inc.:
8 1/2%, 6/15/03 Baa2 3,000 3,280
6.79%, 7/15/27 Baa2 7,000 7,152
Penney (J.C.) Co., Inc. 6.95%, 4/1/00 A2 3,250 3,305
15,593
GROCERY STORES - 0.4%
American Stores Co. 7 1/2%, 5/1/37 Baa2 4,850 5,278
Brunos, Inc. 10 1/2%, 8/1/05 Caa2 160 83
Di Giorgio Corp. 10%, 6/15/07 B3 820 802
Fleming Companies, Inc.
10 1/2%, 12/1/04 (f) B3 550 572
Food 4 Less Holdings, Inc. 13 5/8%, 6/15/07 - 214 246
Pathmark Stores, Inc.:
11 5/8%, 6/15/02 Caa1 1,280 1,261
9 5/8%, 5/1/03 B3 950 895
Penn Traffic Co.:
10 1/4%, 2/15/02 B3 720 648
8 5/8%, 12/15/03 B3 430 363
10 3/8%, 10/1/04 B3 420 378
11 1/2%, 4/15/06 B3 350 329
Pueblo Xtra International, Inc.:
9 1/2%, 8/1/03 B3 1,320 1,287
9 1/2%, 8/1/03 B3 30 29
12,171
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
Central Tractor Farm & Country, Inc.
10 5/8%, 4/1/07 B2 $ 270 $ 279
Corporate Express, Inc., Series B,
9 1/8%, 3/15/04 B2 120 122
J Crew Operating Corp. (f):
10 3/8%, 10/15/07 B3 510 505
0%, 10/15/08 (d) Caa2 680 374
1,280
TOTAL RETAIL & WHOLESALE 30,673
SERVICES - 0.3%
LEASING & RENTAL - 0.0%
Hollywood Entertainment Corp.
10 5/8%, 8/15/04 B2 1,150 1,167
PRINTING - 0.1%
Sullivan Graphics, Inc. 12 3/4%, 8/1/05 Caa1 1,800 1,818
SERVICES - 0.2%
Orion Network Systems, Inc.:
0%, 1/15/07 (d) B2 6,760 4,918
11 1/4%, 1/15/07 B2 1,445 1,622
Outsourcing Solutions, Inc. 11%, 11/1/06 B3 420 464
7,004
TOTAL SERVICES 9,989
TECHNOLOGY - 0.9%
COMMUNICATIONS EQUIPMENT - 0.1%
Intermedia Communications, Inc.
0%, 7/15/07 (d) B2 2,110 1,382
Jordan Telecommunication Products, Inc. (f):
0%, 8/1/07 (d) B3 1,090 850
9 7/8%, 8/1/07 B3 460 465
2,697
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 0.0%
DecisionOne Corp. 9 3/4%, 8/1/07 B3 $ 170 $ 174
DecisionOne Holdings Corp.
0%, 8/1/08 unit (d) Caa1 150 95
269
COMPUTERS & OFFICE EQUIPMENT - 0.6%
Comdisco, Inc.:
6.35%, 8/7/98 Baa1 2,500 2,507
6.70%, 8/6/99 Baa1 3,000 3,037
5 3/4%, 2/15/01 Baa1 6,000 5,914
6 3/8%, 11/30/01 Baa1 4,500 4,521
Dictaphone Corp. 11 3/4%, 8/1/05 Caa3 370 326
Exide Electronics Group, Inc. 11 1/2%, 5/15/06 B3 140 165
16,470
ELECTRONIC INSTRUMENTS - 0.0%
Wavetek Corp. 10 1/8%, 6/15/07 B3 180 185
ELECTRONICS - 0.2%
Texas Instruments, Inc. 6 7/8%, 7/15/00 A3 5,370 5,482
Viasystems, Inc. 9 3/4%, 6/1/07 (f) B3 490 501
5,983
TOTAL TECHNOLOGY 25,604
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.1%
Atlas Air, Inc. pass through trust
12 1/4%, 12/1/02 Ba3 860 959
Delta Air Lines, Inc. equipment trust certificate
8.54%, 1/2/07 Baa1 765 835
1,794
RAILROADS - 0.1%
Burlington Northern Santa Fe Corp.
7.29%, 6/1/36 Baa2 4,360 4,644
TRUCKING & FREIGHT - 0.0%
Allied Holdings, Inc. 8 5/8%, 10/1/07 (f) B1 80 82
TOTAL TRANSPORTATION 6,520
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - 2.2%
CELLULAR - 0.8%
Dial Call Communications, Inc.
0%, 4/15/04 (d) B3 $ 690 $ 642
McCaw International Ltd.
0%, 4/15/07 (d) CCC 5,760 3,341
Microcell Telecommunications, Inc.
0%, 6/1/06 (d) B3 3,220 2,157
Millicom International Cellular SA
0%, 6/1/06 (d) B3 8,980 6,735
Pagemart Nationwide, Inc. 0%, 2/1/05 (d) - 730 602
Pagemart, Inc. 0%, 11/1/03 (d) - 2,850 2,594
Rogers Communications, Inc. 8 7/8%, 7/15/07 B2 180 178
Telesystem International Wireless, Inc. (f):
0%, 6/30/07 (d) Caa1 1,070 642
10 1/2%, 11/1/07 Caa1 80 42
360 Degrees Communications Co.
7 1/8%, 3/1/03 Ba1 6,970 7,057
USA Mobile Communications, Inc. II:
9 1/2%, 2/1/04 B2 390 382
14%, 11/1/04 B2 180 200
24,572
ELECTRIC UTILITY - 0.3%
AES Corp. 8 3/8%, 8/15/07 Ba1 500 488
CMS Energy Corp. 8 1/8%, 5/15/02 Ba3 230 233
DR Investment UK PLC yankee
7.10%, 5/15/02 (f) Baa1 5,000 5,165
Virginia Electric & Power Co. 6.35%, 6/8/98 A3 3,000 3,007
8,893
GAS - 0.2%
Columbia Gas System, Inc. 6.61%, 11/28/02 Baa1 6,000 6,089
TELEPHONE SERVICES - 0.9%
GST USA, Inc. 0%, 12/15/05 (d) - 1,000 720
Hyperion Telecommunications, Inc.:
Series B, 0%, 4/15/03 (d) - 3,380 2,298
12 1/4%, 9/1/04 (f) - 1,075 1,140
McLeodUSA, Inc. 0%, 3/1/07 (d) B3 820 567
NEXTLINK Communications, Inc.
9 5/8%, 10/1/07 B3 240 242
RCN Corp. 0%, 10/15/07 (d)(f) B3 1,320 766
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
RSL Communications Ltd. /RSL
Communications PLC 12 1/4%, 11/15/06 Caa1 $ 1,110 $ 1,204
Winstar Communications, Inc.
0%, 10/15/05 (d) Caa1 2,050 1,456
Winstar Equipment 12 1/2%, 3/15/04 B3 220 229
WorldCom, Inc.:
9 3/8%, 1/15/04 Ba1 1,228 1,308
8 7/8%, 1/15/06 Ba1 5,667 6,181
7 3/4%, 4/1/07 Ba1 9,000 9,439
25,550
TOTAL UTILITIES 65,104
TOTAL NONCONVERTIBLE BONDS 536,637
TOTAL CORPORATE BONDS
(Cost $536,238) 550,696
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 10.2%
U.S. TREASURY OBLIGATIONS - 8.3%
5 7/8%, 10/31/98 Aaa 4,170 4,181
6 5/8%, 6/30/01 Aaa 38,530 39,620
6 5/8%, 3/31/02 Aaa 40,100 41,397
10 3/4%, 5/15/03 Aaa 402 495
12 3/8%, 5/15/04 Aaa 1,315 1,775
7%, 7/15/06 Aaa 92,825 99,598
12 3/4%, 11/15/10 (callable) Aaa 30,500 43,510
13 7/8%, 5/15/11 (callable) Aaa 1,410 2,144
7 1/4%, 2/15/23 Aaa 10,153 11,300
TOTAL U.S. TREASURY OBLIGATIONS 244,020
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.9%
Federal Agricultural Mortgage Corporation
7.01%, 2/10/04 Aaa $ 1,720 $ 1,809
Federal Home Loan Bank:
7.36%, 7/1/04 Aaa 1,590 1,701
7.38%, 8/5/04 Aaa 3,790 4,066
7.56%, 9/1/04 Aaa 5,530 5,989
7.70%, 9/20/04 Aaa 1,170 1,273
Federal National Mortgage Association:
8 5/8%, 6/30/04 Aaa 4,000 4,536
6.72%, 8/1/05 Aaa 3,980 4,105
Financing Corp. stripped principal 0%, 6/6/02 Aaa 5,230 3,994
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 142 151
Class 2-E, 9.40%, 5/15/02 Aaa 1,975 2,095
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank):
Series 1993-C, 5.20%, 10/15/04 Aaa 397 386
Series 1993-D, 5.23%, 5/15/05 Aaa 712 693
Series 1994-A, 7.12%, 4/15/06 Aaa 655 682
Guaranteed Trade Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank) Series 1994-B,
7 1/2%, 1/26/06 Aaa 543 574
Overseas Private Investment Corp. (U.S.
Government guaranteed participation
certificate):
Series 1994-195, 6.08%, 8/15/04 (callable) Aaa 1,840 1,840
Series 1996-A1, 6.726%, 9/15/10 (callable) - 5,000 5,144
State of Israel (guaranteed by U.S. government
through Agency for International Development):
7 3/4%, 11/15/99 Aaa 2,660 2,757
0%, 11/15/01 Aaa 2,320 1,836
8%, 11/15/01 Aaa 1,160 1,245
6 1/8%, 3/15/03 Aaa 3,443 3,469
7 5/8%, 8/15/04 Aaa 1,650 1,792
5.89%, 8/15/05 Aaa 3,155 3,113
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
U.S. Department of Housing and Urban Development
Government guaranteed participation certificates
Series 1995-A, 8.24%, 8/1/04 Aaa $ 2,200 $ 2,450
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 55,700
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $295,108) 299,720
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 6.0%
Federal Home Loan Mortgage Corporation:
5 1/2%, 10/1/02 to 5/1/03 Aaa 4,054 3,938
7%, 7/1/99 to 7/1/26 Aaa 4,327 4,383
Federal National Mortgage Association:
5 1/2%, 8/1/02 to 4/1/26 Aaa 84,526 82,184
6%, 6/1/11 to 9/1/25 Aaa 17,416 16,825
6 1/2%, 2/1/24 to 9/1/27 Aaa 50,782 50,011
Government National Mortgage Association:
7%, 12/15/22 to 12/15/25 Aaa 2,730 2,751
8%, 11/15/21 to 12/15/26 Aaa 15,843 16,458
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $174,199) 176,550
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.5%
U.S. GOVERNMENT AGENCY - 0.5%
Federal Home Loan Mortgage Corporation
planned amortization class Series 1645
Class ZA, 5 1/2%, 4/15/05 Aaa 11,092 10,980
Federal National Mortgage Association planned
amortization class Series 1993-129 Class D,
6.10%, 6/25/05 Aaa 5,000 5,000
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $15,700) 15,980
COMMERCIAL MORTGAGE SECURITIES - 0.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
American Southwest Financial Securities
Series 1994-C2 Class B2,
9.6596%, 12/25/01 (f)(g) - $ 700 $ 712
Berkeley Federal Bank & Trust FSB Series 1994
Class 1-B, 7.7349%, 8/1/24 (f)(g) - 1,836 1,398
CS First Boston Mortgage Securities Corp.
floater Series 1995-AEWI Class E,
9.7763%, 11/25/97 (f)(g) - 250 253
DLJ Mortgage Acceptance Corp.
Series 1993-MF12 Class B-2,
10.10%, 9/18/03 (f) - 700 712
First Chicago /Lennar Trust I Series 1997-CHL1 (g):
Class E, 8.1217%, 4/1/39 - 650 548
Class D, 8.12%, 5/29/08 - 700 704
General Motors Acceptance Corp. Commercial
Mortgage Securities, Inc. Series 1996-C1
Class F, 7.86%, 11/15/06 (f) Ba3 500 477
Morgan Stanley Capital One, Inc.
Series 1996-MBL1 Class E,
8.6777%, 5/25/21 (f)(g) - 764 718
Penn Mutual Life Insurance Co. (The)
Series 1996-PML Class K,
7.90%, 11/15/26 (f) - 1,250 906
Structured Asset Securities Corp.:
Series 1995-C1 Class E,
7 3/8%, 9/25/24 (f) BB 1,000 921
Series 1993-C1 Class E,
6.60%, 10/25/24 (f) B 500 175
sequential pay Series 1995-C4 Class A-1A,
6.90%, 6/25/26 AAA 210 210
sequential pay Series 1996 Class A-2A,
7 3/4%, 2/25/28 AAA 1,356 1,378
Wells Fargo Capital Markets Apartment
Financing Trust 6.56%, 12/29/05 (f) Aaa 1,727 1,748
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $9,949) 10,860
FOREIGN GOVERNMENT OBLIGATIONS (H) - 0.6%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
Export Development Corp. yankee
8 1/8%, 8/10/99 Aa2 $ 1,250 $ 1,296
Manitoba Province yankee 6 3/8%, 10/15/99 A1 4,780 4,825
Mexico Value recovery rights
6/30/03 discount A - 1 -
Quebec Province yankee (e):
6.86%, 4/15/26 A2 8,000 8,221
7.22%, 7/22/36 A2 3,200 3,388
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $16,962) 17,730
SUPRANATIONAL OBLIGATIONS - 0.1%
Inter American Development Bank yankee
6.29%, 7/16/27 (Cost $3,975) Aaa 4,000 4,115
CERTIFICATES OF DEPOSIT - 0.1%
Canadian Imperial Bank of Commerce NY
Branch yankee 6.20%, 8/1/00
(Cost $3,005) 3,000 3,002
CASH EQUIVALENTS - 1.7%
SHARES
Taxable Central Cash Fund (b)
(Cost $48,548) 48,547,890 48,548
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,480,252) $ 2,931,566
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.64%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4. Debt obligation initially issued in zero coupon form which converts
to coupon form at a specified rate and date.
5. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
6. 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 $81,448,000 or
2.7% of net assets.
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. For foreign government obligations not 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 23.2% AAA, AA, A 22.4%
Baa 5.3% BBB 7.6%
Ba 2.4% BB 0.8%
B 4.5% B 4.5%
Caa 0.4% CCC 0.4%
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 Moody's or S&P amounted to 0.7%. FMR has determined that
unrated debt securities that are lower quality account for 0.6% of the
total value of investment in securities.
INCOME TAX INFORMATION
At October 31, 1997, the aggregate cost of investment securities for
income tax purposes was $2,482,190,000. Net unrealized appreciation
aggregated $449,376,000, of which $472,670,000 related to appreciated
investment securities and $23,294,000 related to depreciated
investment securities.
The fund hereby designates approximately $29,059,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) OCTOBER 31, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $2,480,252) - $ 2,931,566
SEE ACCOMPANYING SCHEDULE
CASH 57
RECEIVABLE FOR INVESTMENTS SOLD 26,407
RECEIVABLE FOR FUND SHARES SOLD 3,842
DIVIDENDS RECEIVABLE 2,866
INTEREST RECEIVABLE 16,998
OTHER RECEIVABLES 332
PREPAID EXPENSES 2
TOTAL ASSETS 2,982,070
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 7,193
PAYABLE FOR FUND SHARES REDEEMED 8,236
ACCRUED MANAGEMENT FEE 1,134
DISTRIBUTION FEES PAYABLE 1,260
OTHER PAYABLES AND ACCRUED EXPENSES 578
TOTAL LIABILITIES 18,401
NET ASSETS $ 2,963,669
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 2,277,330
UNDISTRIBUTED NET INVESTMENT INCOME 9,114
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 225,890
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 451,335
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS $ 2,963,669
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) OCTOBER 31, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $18.75
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($7,565 (DIVIDED BY) 403.49 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/94.25 OF $18.75) $19.89
CLASS T: $18.79
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($2,901,222 (DIVIDED BY) 154,430 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/96.50 OF $18.79) $19.47
CLASS B: $18.71
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($15,958 (DIVIDED BY) 853 SHARES) A
INSTITUTIONAL CLASS: $18.85
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE ($38,924 (DIVIDED BY) 2,065 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>
AMOUNTS IN THOUSANDS YEAR ENDED OCTOBER 31, 1997
INVESTMENT INCOME $ 42,317
DIVIDENDS
INTEREST 79,944
TOTAL INCOME 122,261
EXPENSES
MANAGEMENT FEE $ 13,237
TRANSFER AGENT FEES 5,419
DISTRIBUTION FEES 14,623
ACCOUNTING FEES AND EXPENSES 807
NON-INTERESTED TRUSTEES' COMPENSATION 23
CUSTODIAN FEES AND EXPENSES 93
REGISTRATION FEES 134
AUDIT 92
LEGAL 17
INTEREST 1
MISCELLANEOUS 96
TOTAL EXPENSES BEFORE REDUCTIONS 34,542
EXPENSE REDUCTIONS (215) 34,327
NET INVESTMENT INCOME 87,934
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 229,516
FOREIGN CURRENCY TRANSACTIONS 108 229,624
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 251,898
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES 1 251,899
NET GAIN (LOSS) 481,523
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 569,457
FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 87,934 $ 107,896
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 229,624 30,925
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 251,899 144,053
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 569,457 282,874
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (90,048) (124,584)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (19,449) (6,649)
TOTAL DISTRIBUTIONS (109,497) (131,233)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (512,007) (578,059)
TOTAL INCREASE (DECREASE) IN NET ASSETS (52,047) (426,418)
NET ASSETS
BEGINNING OF PERIOD 3,015,716 3,442,134
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 2,963,669 $ 3,015,716
INCOME OF $9,114 AND $10,411, RESPECTIVELY)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED OCTOBER 31,
1997 1996 E
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.04 $ 15.22
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .48 .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.83 .88
TOTAL FROM INVESTMENT OPERATIONS 3.31 .96
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.49) (.14)
FROM NET REALIZED GAIN (.11) -
TOTAL DISTRIBUTIONS (.60) (.14)
NET ASSET VALUE, END OF PERIOD $ 18.75 $ 16.04
TOTAL RETURN B, C 20.99% 6.34%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 8 $ 1
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.41% F 1.50% A,
F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.40% G 1.49% A,
G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.68% 3.07% A
PORTFOLIO TURNOVER 70% 223%
AVERAGE COMMISSION RATE H $ .0435 $ .0106
</TABLE>
A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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 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).
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED OCTOBER 31,
1997 1996 1995 1994 D 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 16.07 $ 15.30 $ 14.67 $ 15.91 $ 14.41
OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .53 C .51 C .59 .38 .48
NET REALIZED AND UNREALIZED 2.84 .88 .54 (.79) 2.18
GAIN (LOSS)
TOTAL FROM INVESTMENT OPERATIONS 3.37 1.39 1.13 (.41) 2.66
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.54) (.59) (.50) (.28) (.56)
IN EXCESS OF NET - - - (.02) -
INVESTMENT INCOME
FROM NET REALIZED GAIN (.11) (.03) - (.49) (.60)
RETURN OF CAPITAL - - - (.04) -
TOTAL DISTRIBUTIONS (.65) (.62) (.50) (.83) (1.16)
NET ASSET VALUE, END OF PERIOD $ 18.79 $ 16.07 $ 15.30 $ 14.67 $ 15.91
TOTAL RETURN A, B 21.36% 9.30% 7.85% (2.69)% 19.66%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 2,901 $ 2,993 $ 3,441 $ 3,129 $ 1,654
(IN MILLIONS)
RATIO OF EXPENSES TO AVERAGE 1.17% 1.26% 1.47% 1.59% 1.52%
NET ASSETS
RATIO OF EXPENSES TO AVERAGE NET 1.17% 1.25% 1.46% 1.58% 1.51%
ASSETS AFTER EXPENSE REDUCTIONS E E E E
RATIO OF NET INVESTMENT INCOME 2.98% 3.32% 3.99% 3.79% 3.24%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 70% 223% 297% 202% 200%
AVERAGE COMMISSION RATE F $ .0435 $ .0106
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
YEAR ENDED
OCTOBER 31,
1997 E
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.36
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .29
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.38
TOTAL FROM INVESTMENT OPERATIONS 2.67
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.32)
NET ASSET VALUE, END OF PERIOD $ 18.71
TOTAL RETURN B, C 16.40%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 16
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.12% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.11% A,
F
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.88% A
PORTFOLIO TURNOVER 70%
AVERAGE COMMISSION RATE G $ .0435
A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1997.
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).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED OCTOBER 31,
1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.11 $ 15.40 $ 15.23
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .61 D .54 D .25
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.86 .87 .09
TOTAL FROM INVESTMENT OPERATIONS 3.47 1.41 .34
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.62) (.67) (.17)
FROM NET REALIZED GAIN (.11) (.03) -
TOTAL DISTRIBUTIONS (.73) (.70) (.17)
NET ASSET VALUE, END OF PERIOD $ 18.85 $ 16.11 $ 15.40
TOTAL RETURN B, C 21.97% 9.41% 2.22%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 39 $ 22 $ 1
RATIO OF EXPENSES TO AVERAGE NET ASSETS .69% 1.06% .92% A,
F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .69% 1.03% G .91% A,
EXPENSE REDUCTIONS G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 3.42% 3.54% 4.54% A
PORTFOLIO TURNOVER 70% 223% 297%
AVERAGE COMMISSION RATE H $ .0435 $ .0106
</TABLE>
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.
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.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Balanced Fund (the fund) (formerly Fidelity Advisor
Income & Growth 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, Class B, 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 Class B shares on
December 31, 1996. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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.
In June 1997, the Board of Trustees approved the creation of an
additional class of shares, Class C shares. Offering of the new class
commenced on November 3, 1997. Class C shares are subject to an annual
distribution and service fee of 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
class' average net assets, and a 1.00% contingent deferred sales
charge levied on Class C share redemptions made within one year of
purchase.
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. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Debt securities for which quotations are
readily available are valued by a pricing service at their market
values as determined by their most recent bid prices in the principal
market (sales prices if the principal market is an exchange) in which
such securities are normally traded. 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. 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.
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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment 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. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
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
Class B, and shares of Class B for distribution under federal and
state securities law. These expenses are borne by Class B and
amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
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, foreign
currency
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
transactions, market discount, partnerships, non-taxable dividends and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
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 SEC), 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 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.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, Inc., an affiliate of FMR. The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its
2. OPERATING POLICIES - CONTINUED
TAXABLE CENTRAL CASH FUND - CONTINUED
affiliates. The Cash Fund seeks preservation of capital, liquidity,
and current income by investing in U.S. Treasury securities and
repurchase agreements for these securities. Income distributions from
the Cash Fund are declared daily and paid monthly from net interest
income. Income distributions received by the fund are recorded as
interest income in the accompanying financial statements.
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 $2,009,067,000 and $2,525,099,000, respectively, of which
U.S. government and government agency obligations aggregated
$641,378,000 and $768,825,000, 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 .2500% to .5200% for the
period. The annual individual fund fee rate is .15%. 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. 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 each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 11,000 $ 11,000
CLASS T 14,549,000 14,549,000
CLASS B 63,000 16,000
$ 14,623,000 $ 14,576,000
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively, and the proceeds of
a contingent deferred sales charge levied on Class B share redemptions
occurring within six years of purchase (five years prior to January 2,
1997). The Class B charge is based on declining rates which range from
5% to 1% (4% to 1% prior to January 2, 1997) of the lesser of the cost
of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital
gains.
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities
dealers, banks, and other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 139,000 $ 102,000
CLASS T 1,052,000 777,000
CLASS B 9,000 0*
$ 1,200,000 $ 879,000
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM
ITS OWN RESOURCES TO DEALERS THROUGH WHICH
THE SALES ARE MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Each class of the fund has entered into a
separate transfer, dividend disbursing, and shareholder servicing
agent (collectively referred to as the Transfer Agents) contract with
respect to its shares. The Transfer Agents receive account fees and
asset-based fees that vary according to the account size and type of
account of the shareholders of the respective classes of the fund.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports. For the period, the following amounts were paid to each
transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC* $ 10,000 .24
CLASS T** FIIOC* 5,353,000 .18
CLASS B FIIOC* 16,000 .25
INSTITUTIONAL CLASS FIIOC* 40,000 .14
$ 5,419,000
* FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC. (FIIOC)
AN AFFILIATE OF FMR.
** PRIOR TO JANUARY 1, 1997 STATE STREET BANK AND TRUST COMPANY WAS
THE TRANSFER AGENT FOR THE FUND'S CLASS T SHARES. STATE STREET,
HOWEVER, HAD DELEGATED CERTAIN
TRANSFER, DIVIDEND DISBURSING, AND SHAREHOLDER SERVICES TO FIIOC FOR
WHICH FIIOC RECEIVED ITS ALLOCABLE SHARE OF ALL SUCH FEES.
ACCOUNTING FEES. Fidelity Service Company, Inc. (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.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $259,000 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each class:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS A 1.50% $ 7,000
FMR also agreed to reimburse certain transfer agent, registration and
other class specific expenses for Class A. For the period, the
reimbursement reduced these expenses by $4,000.
5. EXPENSE REDUCTIONS - CONTINUED
Effective November 1, 1997, Class A, Class T, Class B and
Institutional Class expense limitations were changed from 1.50% to
1.05%, 1.75% to 1.30%, 2.25% to 1.80% and from 1.25% to .80% of each
class' average net assets, respectively.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $202,000 under this arrangement.
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $2,000 under the custodian
arrangement.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balance during the period for which the loan was outstanding amounted
to $5,637,000. The weighted average interest rate was 5.875%.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 21.3% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED OCTOBER 31,
AMOUNTS IN THOUSANDS 1997 B 1996 A
CLASS A
FROM NET INVESTMENT INCOME $ 111 $ 4
FROM NET REALIZED GAIN 12 -
TOTAL $ 123 $ 4
CLASS T
FROM NET INVESTMENT INCOME $ 88,845 $ 124,292
FROM NET REALIZED GAIN 19,290 6,647
TOTAL $ 108,135 $ 130,939
CLASS B
FROM NET INVESTMENT INCOME $ 137 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 955 $ 288
FROM NET REALIZED GAIN 147 2
TOTAL $ 1,102 $ 290
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996.
B DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997.
9. 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,
1997B 1996A 1997B 1996A
AMOUNTS IN THOUSANDS
CLASS A 398 79 $ 7,127 $ 1,223
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 7 - 117 4
SHARES REDEEMED (75) (5) (1,376) (76)
NET INCREASE (DECREASE) 330 74 $ 5,868 $ 1,151
CLASS T 26,574 36,300 $ 469,471 $ 563,225
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 5,886 7,921 101,958 122,603
SHARES REDEEMED (64,227) (82,882) (1,117,978) (1,284,921)
NET INCREASE (DECREASE) (31,767) (38,661) $ (546,549) $ (599,093)
CLASS B 1,099 - $ 20,123 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 7 - 128 -
SHARES REDEEMED (253) - (4,772) -
NET INCREASE (DECREASE) 853 - $ 15,479 $ -
INSTITUTIONAL CLASS 1,168 1,421 $ 21,544 $ 21,932
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 60 17 1,061 270
SHARES REDEEMED (517) (149) (9,410) (2,319)
NET INCREASE (DECREASE) 711 1,289 $ 13,195 $ 19,883
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996
B SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997
10. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 30,000
CLASS T 58,000
CLASS B 27,000
INSTITUTIONAL CLASS 19,000
$ 134,000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series II and the Shareholders of
Fidelity Advisor Balanced Fund (formerly Fidelity Advisor Income &
Growth Fund):
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Series II: Fidelity Advisor Balanced Fund
(formerly Fidelity Advisor Income & Growth Fund), including the
schedule of portfolio investments, as of October 31, 1997, 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, Class B 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, 1997 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
Balanced Fund (formerly Fidelity Advisor Income & Growth Fund) as of
October 31, 1997, 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,
Class B 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 12, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Balanced Fund voted to pay
to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from
sales of portfolio securities, and dividends derived from net
investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/8/97 12/5/97 $0.16 $1.26
Class T 12/8/97 12/5/97 $0.16 $1.26
Class B 12/8/97 12/5/97 $0.12 $1.26
Class C 12/8/97 12/5/97 $0.16 $1.26
A total of 11.81% 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.
Totals of 100%, and 36% of the dividends distributed during the fiscal
year qualify for the dividends-received deduction for corporate
shareholders of Class A and Class T, respectively.
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
William S. Hayes, Vice President
Richard A. Spillane, Vice President
Bettina E. Doulton, Vice President
Kevin Grant, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributions Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
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 International
Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Funds
(REGISTERED TRADEMARK)
SUPPLEMENT TO THE FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS
A, CLASS T, CLASS B AND CLASS C OCTOBER 31, 1997 AND THE ONE-MONTH
PERIOD ENDED NOVEMBER 30, 1997 ANNUAL REPORT
The following information replaces similar information found in
"Performance: The Bottom Line" on pages 10 and 11.
FIDELITY ADVISOR GROWTH OPPORTUNTIES FUND - CLASS C
THE FOLLOWING INFORMATION REPLACES THE FIRST QUESTION
AND ANSWER FOUND IN "FUND TALK: THE MANAGER'S
OVERVIEW" ON PAGE 18.
Q. HOW DID THE FUND PERFORM, GEORGE?
A. FOR THE 12-MONTH PERIOD THAT ENDED
OCTOBER 31, 1997, THE FUND'S CLASS A,
CLASS T AND CLASS B SHARES RETURNED 27.58%,
27.43%, AND 26.95%, RESPECTIVELY. THE
GROWTH FUNDS AVERAGE, AS TRACKED BY
LIPPER ANALYTICAL SERVICES, RETURNED
27.28% DURING THAT PERIOD, WHILE THE
STANDARD & POOR'S 500 INDEX RETURNED
32.11%. FOR THE 12-MONTH PERIOD THAT
ENDED NOVEMBER 30, 1997, THE FUND'S
CLASS A, CLASS T, CLASS B AND CLASS C SHARES
RETURNED 22.32%, 22.13%, 21.63% AND
21.68%, RESPECTIVELY. THE LIPPER GROUP AND
S&P 500 RETURNED 22.00% AND 28.51%,
RESPECTIVELY.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS C 21.68% 151.98% 649.06%
ADVISOR GROWTH OPPORTUNITIES - CLASS C 20.68% 151.98% 649.06%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS C 21.68% 20.30% 22.31%
ADVISOR GROWTH OPPORTUNITIES - CLASS C 20.68% 20.30% 22.31%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
$10,000 OVER 10 YEARS
Fidelity Adv Growth Opportunities - CL C S&P 500 Index
$74,906
$55,623
$
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class C on
November 30, 1987. As the chart shows, by November 30, 1997, the value
of the investment would have been $74,906 - a 649.06% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,623 - a 456.23%
increase.
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
GROWTH OPPORTUNITIES
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORTS
OCTOBER 31, 1997
AND THE ONE-MONTH
PERIOD ENDED
NOVEMBER 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 18 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 22 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS.
INVESTMENTS 23 A COMPLETE LIST OF THE FUND'S INVESTMENTS
NOVEMBER 30, 1997 WITH THEIR MARKET VALUES.
INVESTMENTS 35 A COMPLETE LIST OF THE FUND'S INVESTMENTS
OCTOBER 31, 1997 WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 48 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 57 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 69 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 70
PROXY VOTING RESULTS 71
NOTE TO SHAREHOLDERS: The fiscal year end for Fidelity Advisor Growth
Opportunities Fund recently changed from October 31 to November 30.
This change was made in order to align the fund's fiscal year end more
closely with other similar Fidelity funds. To reduce expenses and
provide you with a comprehensive report covering both periods ended
October 31 and November 30, we've combined both annual reports into
one document.
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 financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR GROWTH OPPORTUNITIES 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the total returns would have been lower. The
initial offering of Class A shares took place on September 3, 1996.
Class A shares bear a 0.25% 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 0.50% 12b-1 fee (0.65% prior to January 1, 1996). Effective
August 1, 1997, the maximum 5.25% sales charge on Class A shares was
increased to 5.75%.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS A 22.32% 153.15% 652.56%
ADVISOR GROWTH OPPORTUNITIES - CLASS A 15.28% 138.60% 609.28%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 28.51% 150.41% 456.23%
GROWTH FUNDS AVERAGE 22.00% 118.19% 390.30%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks. To measure how Class A's performance stacked up against
its peers, you can compare it to the growth funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 791 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS A 22.32% 20.41% 22.36%
ADVISOR GROWTH OPPORTUNITIES - CLASS A 15.28% 19.00% 21.64%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500 28.51% 20.15% 18.69%
GROWTH FUNDS AVERAGE 22.00% 16.55% 16.76%
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971209 115035 S00000000000001
FA Growth Opp -CL A S&P 500
00248 SP001
1987/11/30 9425.00 10000.00
1987/12/31 10765.71 10761.00
1988/01/31 11225.96 11214.04
1988/02/29 12496.63 11736.61
1988/03/31 12726.75 11373.95
1988/04/30 13106.95 11500.20
1988/05/31 12986.89 11600.25
1988/06/30 14137.50 12132.71
1988/07/31 14107.48 12086.60
1988/08/31 13627.23 11675.66
1988/09/30 14177.52 12173.04
1988/10/31 14277.57 12511.45
1988/11/30 13817.33 12332.54
1988/12/31 14348.26 12548.36
1989/01/31 15577.50 13466.90
1989/02/28 15280.79 13131.57
1989/03/31 15429.14 13437.54
1989/04/30 16425.26 14134.94
1989/05/31 17527.34 14707.41
1989/06/30 16774.95 14623.58
1989/07/31 17718.08 15944.09
1989/08/31 18375.09 16256.59
1989/09/30 18194.94 16189.94
1989/10/31 17516.74 15814.33
1989/11/30 17633.31 16136.94
1989/12/31 17812.25 16524.23
1990/01/31 16529.31 15415.45
1990/02/28 16930.22 15614.31
1990/03/31 17365.51 16028.09
1990/04/30 16792.77 15627.39
1990/05/31 18797.36 17151.06
1990/06/30 18900.45 17034.43
1990/07/31 18213.16 16979.92
1990/08/31 16208.57 15444.94
1990/09/30 14948.54 14692.77
1990/10/31 14879.81 14629.59
1990/11/30 16460.58 15574.66
1990/12/31 17518.90 16009.20
1991/01/31 19616.07 16707.20
1991/02/28 21377.23 17901.76
1991/03/31 21968.14 18334.98
1991/04/30 22420.02 18378.99
1991/05/31 23648.20 19172.96
1991/06/30 21979.73 18294.84
1991/07/31 23520.74 19147.38
1991/08/31 24436.08 19601.17
1991/09/30 23879.93 19273.83
1991/10/31 23845.17 19532.10
1991/11/30 22431.61 18744.96
1991/12/31 24996.11 20889.38
1992/01/31 25716.79 20500.84
1992/02/29 26879.99 20767.35
1992/03/31 25982.30 20362.38
1992/04/30 26690.34 20961.04
1992/05/31 27069.64 21063.75
1992/06/30 26450.11 20749.90
1992/07/31 27360.44 21598.57
1992/08/31 26601.83 21155.80
1992/09/30 26677.69 21405.44
1992/10/31 26728.27 21480.36
1992/11/30 28017.90 22212.84
1992/12/31 28752.05 22486.05
1993/01/31 29628.63 22674.94
1993/02/28 29709.55 22983.32
1993/03/31 30815.40 23468.26
1993/04/30 30869.34 22900.33
1993/05/31 31732.44 23514.06
1993/06/30 31853.81 23582.25
1993/07/31 32069.59 23487.92
1993/08/31 33054.06 24378.11
1993/09/30 33175.44 24190.40
1993/10/31 34240.83 24691.14
1993/11/30 34079.00 24456.58
1993/12/31 35127.33 24752.50
1994/01/31 37071.08 25594.09
1994/02/28 36511.72 24900.49
1994/03/31 34959.52 23814.83
1994/04/30 35882.45 24119.66
1994/05/31 36078.23 24515.22
1994/06/30 35099.36 23914.60
1994/07/31 36092.21 24699.00
1994/08/31 37616.45 25711.65
1994/09/30 36483.76 25081.72
1994/10/31 37224.90 25646.06
1994/11/30 36036.28 24712.03
1994/12/31 36130.89 25078.51
1995/01/31 36412.24 25728.79
1995/02/28 37522.82 26731.44
1995/03/31 38485.32 27520.29
1995/04/30 39788.40 28330.76
1995/05/31 41446.87 29463.14
1995/06/30 42853.60 30147.57
1995/07/31 44275.15 31147.26
1995/08/31 44586.11 31225.44
1995/09/30 45430.15 32543.16
1995/10/31 45741.11 32426.98
1995/11/30 46851.69 33850.52
1995/12/31 48067.65 34502.48
1996/01/31 48827.25 35676.95
1996/02/29 48690.52 36007.67
1996/03/31 48614.56 36354.43
1996/04/30 49419.74 36890.29
1996/05/31 50422.41 37841.69
1996/06/30 50695.87 37985.87
1996/07/31 49267.82 36307.65
1996/08/31 49662.81 37073.38
1996/09/30 52002.39 39159.87
1996/10/31 53764.67 40239.90
1996/11/30 57988.06 43281.64
1996/12/31 56571.97 42424.23
1997/01/31 59375.60 45074.89
1997/02/28 59875.09 45428.28
1997/03/31 56910.34 43561.63
1997/04/30 59488.39 46162.26
1997/05/31 63162.10 48972.62
1997/06/30 65143.97 51166.59
1997/07/31 69961.69 55237.92
1997/08/31 67399.76 52143.49
1997/09/30 70074.48 54999.39
1997/10/31 68592.11 53162.41
1997/11/28 70928.46 55623.30
IMATRL PRASUN SHR__CHT 19971130 19971209 115037 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class A on
November 30, 1987, and the current maximum 5.75% sales charge was
paid. As the chart shows, by November 30, 1997, the value of the
investment would have grown to $70,928 - a 609.28% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 would have grown to $55,623 - a 456.23% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS T
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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the past 10 year returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS T 22.13% 152.90% 651.81%
ADVISOR GROWTH OPPORTUNITIES - CLASS T 17.86% 144.05% 625.50%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 28.51% 150.41% 456.23%
GROWTH FUNDS AVERAGE 22.00% 118.19% 390.30%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks. To measure how Class T's performance stacked up against
its peers, you can compare it to the growth funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 791 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS T 22.13% 20.39% 22.35%
ADVISOR GROWTH OPPORTUNITIES - CLASS T 17.86% 19.54% 21.92%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500 28.51% 20.15% 18.69%
GROWTH FUNDS AVERAGE 22.00% 16.55% 16.76%
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971209 110843 S00000000000001
FA Growth Opp -CL T S&P 500
00168 SP001
1987/11/30 9650.00 10000.00
1987/12/31 11022.72 10761.00
1988/01/31 11493.95 11214.04
1988/02/29 12794.96 11736.61
1988/03/31 13030.57 11373.95
1988/04/30 13419.85 11500.20
1988/05/31 13296.92 11600.25
1988/06/30 14475.00 12132.71
1988/07/31 14444.27 12086.60
1988/08/31 13952.55 11675.66
1988/09/30 14515.98 12173.04
1988/10/31 14618.42 12511.45
1988/11/30 14147.19 12332.54
1988/12/31 14690.79 12548.36
1989/01/31 15949.38 13466.90
1989/02/28 15645.58 13131.57
1989/03/31 15797.48 13437.54
1989/04/30 16817.37 14134.94
1989/05/31 17945.76 14707.41
1989/06/30 17175.42 14623.58
1989/07/31 18141.06 15944.09
1989/08/31 18813.76 16256.59
1989/09/30 18629.31 16189.94
1989/10/31 17934.91 15814.33
1989/11/30 18054.26 16136.94
1989/12/31 18237.47 16524.23
1990/01/31 16923.90 15415.45
1990/02/28 17334.39 15614.31
1990/03/31 17780.07 16028.09
1990/04/30 17193.65 15627.39
1990/05/31 19246.10 17151.06
1990/06/30 19351.66 17034.43
1990/07/31 18647.96 16979.92
1990/08/31 16595.51 15444.94
1990/09/30 15305.40 14692.77
1990/10/31 15235.03 14629.59
1990/11/30 16853.53 15574.66
1990/12/31 17937.12 16009.20
1991/01/31 20084.36 16707.20
1991/02/28 21887.56 17901.76
1991/03/31 22492.58 18334.98
1991/04/30 22955.25 18378.99
1991/05/31 24212.74 19172.96
1991/06/30 22504.45 18294.84
1991/07/31 24082.25 19147.38
1991/08/31 25019.44 19601.17
1991/09/30 24450.01 19273.83
1991/10/31 24414.42 19532.10
1991/11/30 22967.11 18744.96
1991/12/31 25592.84 20889.38
1992/01/31 26330.72 20500.84
1992/02/29 27521.69 20767.35
1992/03/31 26602.57 20362.38
1992/04/30 27327.51 20961.04
1992/05/31 27715.87 21063.75
1992/06/30 27081.55 20749.90
1992/07/31 28013.61 21598.57
1992/08/31 27236.89 21155.80
1992/09/30 27314.56 21405.44
1992/10/31 27366.34 21480.36
1992/11/30 28686.76 22212.84
1992/12/31 29438.43 22486.05
1993/01/31 30335.95 22674.94
1993/02/28 30418.79 22983.32
1993/03/31 31551.04 23468.26
1993/04/30 31606.27 22900.33
1993/05/31 32489.98 23514.06
1993/06/30 32614.25 23582.25
1993/07/31 32835.18 23487.92
1993/08/31 33843.15 24378.11
1993/09/30 33967.42 24190.40
1993/10/31 35058.25 24691.14
1993/11/30 34892.55 24456.58
1993/12/31 35965.91 24752.50
1994/01/31 37956.06 25594.09
1994/02/28 37383.36 24900.49
1994/03/31 35794.10 23814.83
1994/04/30 36739.06 24119.66
1994/05/31 36939.51 24515.22
1994/06/30 35937.28 23914.60
1994/07/31 36953.83 24699.00
1994/08/31 38514.45 25711.65
1994/09/30 37354.72 25081.72
1994/10/31 38113.56 25646.06
1994/11/30 36896.56 24712.03
1994/12/31 36993.43 25078.51
1995/01/31 37281.49 25728.79
1995/02/28 38418.59 26731.44
1995/03/31 39404.07 27520.29
1995/04/30 40738.26 28330.76
1995/05/31 42436.32 29463.14
1995/06/30 43876.63 30147.57
1995/07/31 45332.11 31147.26
1995/08/31 45650.50 31225.44
1995/09/30 46514.69 32543.16
1995/10/31 46833.08 32426.98
1995/11/30 47970.17 33850.52
1995/12/31 49215.15 34502.48
1996/01/31 49992.89 35676.95
1996/02/29 49852.89 36007.67
1996/03/31 49775.12 36354.43
1996/04/30 50599.52 36890.29
1996/05/31 51626.13 37841.69
1996/06/30 51906.12 37985.87
1996/07/31 50443.97 36307.65
1996/08/31 50848.40 37073.38
1996/09/30 53243.82 39159.87
1996/10/31 55079.28 40239.90
1996/11/30 59403.49 43281.64
1996/12/31 57941.61 42424.23
1997/01/31 60797.66 45074.89
1997/02/28 61306.49 45428.28
1997/03/31 58269.89 43561.63
1997/04/30 60896.14 46162.26
1997/05/31 64654.96 48972.62
1997/06/30 66673.89 51166.59
1997/07/31 71614.52 55237.92
1997/08/31 68988.27 52143.49
1997/09/30 71713.00 54999.39
1997/10/31 70186.50 53162.41
1997/11/28 72550.12 55623.30
IMATRL PRASUN SHR__CHT 19971130 19971209 110846 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class T on
November 30, 1987, and the current maximum 3.50% sales charge was
paid. As the chart shows, by November 30, 1997, the value of the
investment would have grown to $72,550 - a 625.50% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,623 - a 456.23%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the total returns would have been lower. The
initial offering of Class B shares took place on March 3, 1997.
Returns prior to March 3, 1997 are those of Class T, the original
class of the fund, and reflect Class T's 0.50% 12b-1 fee (0.65% prior
to January 1, 1996). Had Class B's 12b-1 fee been reflected, returns
prior to March 3, 1997 would have been lower. Class B's contingent
deferred sales charges included in the past one year, past five year
and 10 year total return figures are 5%, 2% and 0%, respectively.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS B 21.63% 151.87% 648.75%
ADVISOR GROWTH OPPORTUNITIES - CLASS B 16.63% 149.87% 648.75%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 28.51% 150.41% 456.23%
GROWTH FUNDS AVERAGE 22.00% 118.19% 390.30%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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 the performance of the
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks. To measure how Class B's performance stacked up against
its peers, you can compare it to the growth funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 791 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS B 21.63% 20.29% 22.30%
ADVISOR GROWTH OPPORTUNITIES - CLASS B 16.63% 20.10% 22.30%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 28.51% 20.15% 18.69%
GROWTH FUNDS AVERAGE 22.00% 16.55% 16.76%
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971209 110823 S00000000000001
FA Growth Opp -CL B S&P 500
00278 SP001
1987/11/30 10000.00 10000.00
1987/12/31 11422.51 10761.00
1988/01/31 11910.83 11214.04
1988/02/29 13259.02 11736.61
1988/03/31 13503.18 11373.95
1988/04/30 13906.58 11500.20
1988/05/31 13779.19 11600.25
1988/06/30 15000.00 12132.71
1988/07/31 14968.15 12086.60
1988/08/31 14458.60 11675.66
1988/09/30 15042.46 12173.04
1988/10/31 15148.62 12511.45
1988/11/30 14660.30 12332.54
1988/12/31 15223.61 12548.36
1989/01/31 16527.85 13466.90
1989/02/28 16213.04 13131.57
1989/03/31 16370.44 13437.54
1989/04/30 17427.33 14134.94
1989/05/31 18596.64 14707.41
1989/06/30 17798.36 14623.58
1989/07/31 18799.03 15944.09
1989/08/31 19496.12 16256.59
1989/09/30 19304.98 16189.94
1989/10/31 18585.40 15814.33
1989/11/30 18709.08 16136.94
1989/12/31 18898.93 16524.23
1990/01/31 17537.72 15415.45
1990/02/28 17963.10 15614.31
1990/03/31 18424.94 16028.09
1990/04/30 17817.26 15627.39
1990/05/31 19944.15 17151.06
1990/06/30 20053.53 17034.43
1990/07/31 19324.31 16979.92
1990/08/31 17197.42 15444.94
1990/09/30 15860.52 14692.77
1990/10/31 15787.60 14629.59
1990/11/30 17464.80 15574.66
1990/12/31 18587.69 16009.20
1991/01/31 20812.81 16707.20
1991/02/28 22681.41 17901.76
1991/03/31 23308.38 18334.98
1991/04/30 23787.82 18378.99
1991/05/31 25090.93 19172.96
1991/06/30 23320.67 18294.84
1991/07/31 24955.70 19147.38
1991/08/31 25926.88 19601.17
1991/09/30 25336.79 19273.83
1991/10/31 25299.91 19532.10
1991/11/30 23800.11 18744.96
1991/12/31 26521.08 20889.38
1992/01/31 27285.72 20500.84
1992/02/29 28519.88 20767.35
1992/03/31 27567.43 20362.38
1992/04/30 28318.66 20961.04
1992/05/31 28721.11 21063.75
1992/06/30 28063.78 20749.90
1992/07/31 29029.65 21598.57
1992/08/31 28224.76 21155.80
1992/09/30 28305.25 21405.44
1992/10/31 28358.91 21480.36
1992/11/30 29727.22 22212.84
1992/12/31 30506.15 22486.05
1993/01/31 31436.21 22674.94
1993/02/28 31522.07 22983.32
1993/03/31 32695.38 23468.26
1993/04/30 32752.62 22900.33
1993/05/31 33668.37 23514.06
1993/06/30 33797.15 23582.25
1993/07/31 34026.09 23487.92
1993/08/31 35070.62 24378.11
1993/09/30 35199.40 24190.40
1993/10/31 36329.79 24691.14
1993/11/30 36158.09 24456.58
1993/12/31 37270.37 24752.50
1994/01/31 39332.71 25594.09
1994/02/28 38739.23 24900.49
1994/03/31 37092.33 23814.83
1994/04/30 38071.57 24119.66
1994/05/31 38279.29 24515.22
1994/06/30 37240.70 23914.60
1994/07/31 38294.12 24699.00
1994/08/31 39911.35 25711.65
1994/09/30 38709.56 25081.72
1994/10/31 39495.91 25646.06
1994/11/30 38234.77 24712.03
1994/12/31 38335.16 25078.51
1995/01/31 38633.67 25728.79
1995/02/28 39812.01 26731.44
1995/03/31 40833.23 27520.29
1995/04/30 42215.81 28330.76
1995/05/31 43975.46 29463.14
1995/06/30 45468.01 30147.57
1995/07/31 46976.28 31147.26
1995/08/31 47306.22 31225.44
1995/09/30 48201.75 32543.16
1995/10/31 48531.69 32426.98
1995/11/30 49710.02 33850.52
1995/12/31 51000.16 34502.48
1996/01/31 51806.10 35676.95
1996/02/29 51661.03 36007.67
1996/03/31 51580.44 36354.43
1996/04/30 52434.74 36890.29
1996/05/31 53498.58 37841.69
1996/06/30 53788.72 37985.87
1996/07/31 52273.55 36307.65
1996/08/31 52692.64 37073.38
1996/09/30 55174.95 39159.87
1996/10/31 57076.98 40239.90
1996/11/30 61558.03 43281.64
1996/12/31 60043.12 42424.23
1997/01/31 63002.75 45074.89
1997/02/28 63530.04 45428.28
1997/03/31 60383.31 43561.63
1997/04/30 63070.79 46162.26
1997/05/31 66931.92 48972.62
1997/06/30 68973.05 51166.59
1997/07/31 74058.85 55237.92
1997/08/31 71303.33 52143.49
1997/09/30 74075.86 54999.39
1997/10/31 72459.97 53162.41
1997/11/28 74875.30 55623.30
IMATRL PRASUN SHR__CHT 19971130 19971209 110829 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class B on
November 30, 1987. As the chart shows, by November 30, 1997, the value
of the investment would have been $74,875 - a 648.75% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,623 - a 456.23%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS C
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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the total returns would have been lower. The
initial offering of Class C shares took place on November 3, 1997.
Returns between March 3, 1997 and November 3, 1997 are those of Class
B and reflect Class B's 1.00% 12b-1 fee. Returns prior to March 3,
1997 are those of Class T, the original class of the fund, and reflect
Class T's 0.50% 12b-1 fee (0.65% prior to January 1, 1996). Had Class
C's 12b-1 fee been reflected, returns prior to March 3, 1997 would
have been lower. Class C's contingent deferred sales charge included
in the past one year is 1.00%.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS C 22.13% 152.90% 651.81%
ADVISOR GROWTH OPPORTUNITIES - CLASS C 21.13% 152.90% 651.81%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 28.51% 150.41% 456.23%
GROWTH FUNDS AVERAGE 22.00% 118.19% 390.30%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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 C's returns to the performance of the
Standard & Poor's 500 Index - a widely recognized, unmanaged index of
common stocks. To measure how Class C's performance stacked up against
its peers, you can compare it to the growth funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 791 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR GROWTH OPPORTUNITIES - CLASS C 22.13% 20.39% 22.35%
ADVISOR GROWTH OPPORTUNITIES - CLASS C 21.13% 20.39% 22.35%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 28.51% 20.15% 18.69%
GROWTH FUNDS AVERAGE 22.00% 16.55% 16.76%
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971210 123339 S00000000000001
FA Growth Opp -CL C S&P 500
00482 SP001
1987/11/30 10000.00 10000.00
1987/12/31 11422.51 10761.00
1988/01/31 11910.83 11214.04
1988/02/29 13259.02 11736.61
1988/03/31 13503.18 11373.95
1988/04/30 13906.58 11500.20
1988/05/31 13779.19 11600.25
1988/06/30 15000.00 12132.71
1988/07/31 14968.15 12086.60
1988/08/31 14458.60 11675.66
1988/09/30 15042.46 12173.04
1988/10/31 15148.62 12511.45
1988/11/30 14660.30 12332.54
1988/12/31 15223.61 12548.36
1989/01/31 16527.85 13466.90
1989/02/28 16213.04 13131.57
1989/03/31 16370.44 13437.54
1989/04/30 17427.33 14134.94
1989/05/31 18596.64 14707.41
1989/06/30 17798.36 14623.58
1989/07/31 18799.03 15944.09
1989/08/31 19496.12 16256.59
1989/09/30 19304.98 16189.94
1989/10/31 18585.40 15814.33
1989/11/30 18709.08 16136.94
1989/12/31 18898.93 16524.23
1990/01/31 17537.72 15415.45
1990/02/28 17963.10 15614.31
1990/03/31 18424.94 16028.09
1990/04/30 17817.26 15627.39
1990/05/31 19944.15 17151.06
1990/06/30 20053.53 17034.43
1990/07/31 19324.31 16979.92
1990/08/31 17197.42 15444.94
1990/09/30 15860.52 14692.77
1990/10/31 15787.60 14629.59
1990/11/30 17464.80 15574.66
1990/12/31 18587.69 16009.20
1991/01/31 20812.81 16707.20
1991/02/28 22681.41 17901.76
1991/03/31 23308.38 18334.98
1991/04/30 23787.82 18378.99
1991/05/31 25090.93 19172.96
1991/06/30 23320.67 18294.84
1991/07/31 24955.70 19147.38
1991/08/31 25926.88 19601.17
1991/09/30 25336.79 19273.83
1991/10/31 25299.91 19532.10
1991/11/30 23800.11 18744.96
1991/12/31 26521.08 20889.38
1992/01/31 27285.72 20500.84
1992/02/29 28519.88 20767.35
1992/03/31 27567.43 20362.38
1992/04/30 28318.66 20961.04
1992/05/31 28721.11 21063.75
1992/06/30 28063.78 20749.90
1992/07/31 29029.65 21598.57
1992/08/31 28224.76 21155.80
1992/09/30 28305.25 21405.44
1992/10/31 28358.91 21480.36
1992/11/30 29727.22 22212.84
1992/12/31 30506.15 22486.05
1993/01/31 31436.21 22674.94
1993/02/28 31522.07 22983.32
1993/03/31 32695.38 23468.26
1993/04/30 32752.62 22900.33
1993/05/31 33668.37 23514.06
1993/06/30 33797.15 23582.25
1993/07/31 34026.09 23487.92
1993/08/31 35070.62 24378.11
1993/09/30 35199.40 24190.40
1993/10/31 36329.79 24691.14
1993/11/30 36158.09 24456.58
1993/12/31 37270.37 24752.50
1994/01/31 39332.71 25594.09
1994/02/28 38739.23 24900.49
1994/03/31 37092.33 23814.83
1994/04/30 38071.57 24119.66
1994/05/31 38279.29 24515.22
1994/06/30 37240.70 23914.60
1994/07/31 38294.12 24699.00
1994/08/31 39911.35 25711.65
1994/09/30 38709.56 25081.72
1994/10/31 39495.91 25646.06
1994/11/30 38234.77 24712.03
1994/12/31 38335.16 25078.51
1995/01/31 38633.67 25728.79
1995/02/28 39812.01 26731.44
1995/03/31 40833.23 27520.29
1995/04/30 42215.81 28330.76
1995/05/31 43975.46 29463.14
1995/06/30 45468.01 30147.57
1995/07/31 46976.28 31147.26
1995/08/31 47306.22 31225.44
1995/09/30 48201.75 32543.16
1995/10/31 48531.69 32426.98
1995/11/30 49710.02 33850.52
1995/12/31 51000.16 34502.48
1996/01/31 51806.10 35676.95
1996/02/29 51661.03 36007.67
1996/03/31 51580.44 36354.43
1996/04/30 52434.74 36890.29
1996/05/31 53498.58 37841.69
1996/06/30 53788.72 37985.87
1996/07/31 52273.55 36307.65
1996/08/31 52692.64 37073.38
1996/09/30 55174.95 39159.87
1996/10/31 57076.98 40239.90
1996/11/30 61558.03 43281.64
1996/12/31 60043.12 42424.23
1997/01/31 63002.75 45074.89
1997/02/28 63530.04 45428.28
1997/03/31 60383.31 43561.63
1997/04/30 63070.79 46162.26
1997/05/31 66931.92 48972.62
1997/06/30 68973.05 51166.59
1997/07/31 74058.85 55237.92
1997/08/31 71303.33 52143.49
1997/09/30 74075.86 54999.39
1997/10/31 72476.98 53162.41
1997/11/28 75181.47 55623.30
IMATRL PRASUN SHR__CHT 19971130 19971210 123341 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class C on
November 30, 1987. As the chart shows, by November 30, 1997, the value
of the investment would have been $75,181 - a 651.81% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,623 - a 456.23%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the past five year and life of fund total returns
would have been lower. The initial offering of Class A shares took
place on September 3, 1996. Class A shares bear a 0.25% 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 0.50% 12b-1 fee (0.65% prior
to January 1, 1996). Effective August 1, 1997, the maximum 5.25% sales
charge was increased to 5.75%.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS A 27.58% 156.63% 585.56%
ADVISOR GROWTH OPPORTUNITIES - CLASS A 20.24% 141.87% 546.14%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 32.11% 147.49% 399.25%
GROWTH FUNDS AVERAGE 27.28% 125.25% 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 November 18, 1987. For example, if you had
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 Standard & Poor's 500 Index - a
widely recognized, unmanaged index of common stocks. To measure how
Class A's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 799 mutual
funds. 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, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS A 27.58% 20.74% 21.32%
ADVISOR GROWTH OPPORTUNITIES - CLASS A 20.24% 19.32% 20.61%
(INCL. MAX. 5.75% SALES CHARGE)
S&P 500 32.11% 19.87% 17.52%
GROWTH FUNDS AVERAGE 27.28% 17.28% N/A
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' 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 19971031 19971126 114249 S00000000000001
FA Growth Opp -CL A S&P 500
00248 SP001
1987/11/18 9425.00 10000.00
1987/11/30 8878.35 9391.04
1987/12/31 10141.30 10105.70
1988/01/31 10574.85 10531.15
1988/02/29 11771.83 11021.90
1988/03/31 11988.60 10681.32
1988/04/30 12346.75 10799.89
1988/05/31 12233.65 10893.85
1988/06/30 13317.53 11393.87
1988/07/31 13289.25 11350.58
1988/08/31 12836.85 10964.66
1988/09/30 13355.23 11431.75
1988/10/31 13449.48 11749.55
1988/11/30 13015.93 11581.53
1988/12/31 13516.06 11784.21
1989/01/31 14674.01 12646.82
1989/02/28 14394.50 12331.91
1989/03/31 14534.25 12619.24
1989/04/30 15472.59 13274.18
1989/05/31 16510.75 13811.79
1989/06/30 15802.01 13733.06
1989/07/31 16690.43 14973.16
1989/08/31 17309.34 15266.63
1989/09/30 17139.64 15204.04
1989/10/31 16500.77 14851.30
1989/11/30 16610.57 15154.27
1989/12/31 16779.13 15517.97
1990/01/31 15570.61 14476.72
1990/02/28 15948.27 14663.46
1990/03/31 16358.31 15052.05
1990/04/30 15818.79 14675.75
1990/05/31 17707.11 16106.63
1990/06/30 17804.23 15997.11
1990/07/31 17156.80 15945.91
1990/08/31 15268.47 14504.40
1990/09/30 14081.52 13798.04
1990/10/31 14016.78 13738.71
1990/11/30 15505.86 14626.23
1990/12/31 16502.80 15034.30
1991/01/31 18478.34 15689.80
1991/02/28 20137.35 16811.62
1991/03/31 20693.99 17218.46
1991/04/30 21119.66 17259.78
1991/05/31 22276.60 18005.40
1991/06/30 20704.91 17180.76
1991/07/31 22156.54 17981.38
1991/08/31 23018.79 18407.54
1991/09/30 22494.89 18100.13
1991/10/31 22462.15 18342.67
1991/11/30 21130.57 17603.46
1991/12/31 23546.34 19617.30
1992/01/31 24225.22 19252.42
1992/02/29 25320.95 19502.70
1992/03/31 24475.33 19122.40
1992/04/30 25142.30 19684.60
1992/05/31 25499.60 19781.05
1992/06/30 24916.01 19486.31
1992/07/31 25773.54 20283.30
1992/08/31 25058.93 19867.50
1992/09/30 25130.39 20101.93
1992/10/31 25178.03 20172.29
1992/11/30 26392.86 20860.16
1992/12/31 27084.43 21116.74
1993/01/31 27910.17 21294.13
1993/02/28 27986.39 21583.73
1993/03/31 29028.10 22039.14
1993/04/30 29078.92 21505.79
1993/05/31 29891.96 22082.15
1993/06/30 30006.29 22146.19
1993/07/31 30209.55 22057.60
1993/08/31 31136.93 22893.59
1993/09/30 31251.26 22717.31
1993/10/31 32254.86 23187.55
1993/11/30 32102.41 22967.27
1993/12/31 33089.94 23245.18
1994/01/31 34920.95 24035.51
1994/02/28 34394.04 23384.15
1994/03/31 32931.87 22364.60
1994/04/30 33801.27 22650.87
1994/05/31 33985.69 23022.34
1994/06/30 33063.60 22458.29
1994/07/31 33998.86 23194.93
1994/08/31 35434.69 24145.92
1994/09/30 34367.70 23554.34
1994/10/31 35065.85 24084.32
1994/11/30 33946.17 23207.17
1994/12/31 34035.30 23551.33
1995/01/31 34300.33 24162.01
1995/02/28 35346.49 25103.61
1995/03/31 36253.17 25844.42
1995/04/30 37480.67 26605.53
1995/05/31 39042.95 27668.96
1995/06/30 40368.09 28311.71
1995/07/31 41707.19 29250.52
1995/08/31 42000.12 29323.94
1995/09/30 42795.20 30561.41
1995/10/31 43088.13 30452.31
1995/11/30 44134.30 31789.16
1995/12/31 45279.72 32401.42
1996/01/31 45995.27 33504.37
1996/02/29 45866.47 33814.95
1996/03/31 45794.92 34140.59
1996/04/30 46553.39 34643.82
1996/05/31 47497.91 35537.29
1996/06/30 47755.51 35672.68
1996/07/31 46410.28 34096.66
1996/08/31 46782.37 34815.76
1996/09/30 48986.25 36775.19
1996/10/31 50646.31 37789.45
1996/11/30 54624.75 40645.96
1996/12/31 53290.80 39840.76
1997/01/31 55931.81 42330.01
1997/02/28 56402.34 42661.88
1997/03/31 53609.54 40908.90
1997/04/30 56038.06 43351.17
1997/05/31 59498.70 45990.39
1997/06/30 61365.62 48050.75
1997/07/31 65903.91 51874.15
1997/08/31 63490.57 48968.16
1997/09/30 66010.16 51650.15
1997/10/31 64613.76 49925.03
IMATRL PRASUN SHR__CHT 19971031 19971126 114253 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class A on
November 18, 1987, when the fund started, and the current maximum
5.75% sales charge was paid. As the chart shows, by October 31, 1997,
the value of the investment would have grown to $64,614 - a 546.14%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 would have grown to $49,925 - a
399.25% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS T
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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses during
the periods shown, the life of fund total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS T 27.43% 156.47% 585.14%
ADVISOR GROWTH OPPORTUNITIES - CLASS T 22.97% 147.49% 561.16%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 32.11% 147.49% 399.25%
GROWTH FUNDS AVERAGE 27.28% 125.25% 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 November 18, 1987. For example, if you had
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 Standard & Poor's 500 Index - a
widely recognized, unmanaged index of common stocks. To measure how
Class T's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 799 mutual
funds. 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, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS T 27.43% 20.73% 21.32%
ADVISOR GROWTH OPPORTUNITIES - CLASS T 22.97% 19.87% 20.88%
(INCL. MAX. 3.50% SALES CHARGE)
S&P 500 32.11% 19.87% 17.52%
GROWTH FUNDS AVERAGE 27.28% 17.28% N/A
AVERAGE ANNUAL TOTAL RETURNS take Class T shares' 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 19971031 19971126 114412 S00000000000001
FA Growth Opp -CL T S&P 500
00168 SP001
1987/11/18 9650.00 10000.00
1987/11/30 9090.30 9391.04
1987/12/31 10383.40 10105.70
1988/01/31 10827.30 10531.15
1988/02/29 12052.85 11021.90
1988/03/31 12274.80 10681.32
1988/04/30 12641.50 10799.89
1988/05/31 12525.70 10893.85
1988/06/30 13635.45 11393.87
1988/07/31 13606.50 11350.58
1988/08/31 13143.30 10964.66
1988/09/30 13674.05 11431.75
1988/10/31 13770.55 11749.55
1988/11/30 13326.65 11581.53
1988/12/31 13838.72 11784.21
1989/01/31 15024.31 12646.82
1989/02/28 14738.14 12331.91
1989/03/31 14881.22 12619.24
1989/04/30 15841.96 13274.18
1989/05/31 16904.91 13811.79
1989/06/30 16179.24 13733.06
1989/07/31 17088.88 14973.16
1989/08/31 17722.56 15266.63
1989/09/30 17548.81 15204.04
1989/10/31 16894.69 14851.30
1989/11/30 17007.11 15154.27
1989/12/31 17179.70 15517.97
1990/01/31 15942.32 14476.72
1990/02/28 16329.00 14663.46
1990/03/31 16748.82 15052.05
1990/04/30 16196.42 14675.75
1990/05/31 18129.83 16106.63
1990/06/30 18229.26 15997.11
1990/07/31 17566.38 15945.91
1990/08/31 15632.97 14504.40
1990/09/30 14417.69 13798.04
1990/10/31 14351.40 13738.71
1990/11/30 15876.03 14626.23
1990/12/31 16896.77 15034.30
1991/01/31 18919.46 15689.80
1991/02/28 20618.08 16811.62
1991/03/31 21188.01 17218.46
1991/04/30 21623.84 17259.78
1991/05/31 22808.40 18005.40
1991/06/30 21199.19 17180.76
1991/07/31 22685.48 17981.38
1991/08/31 23568.31 18407.54
1991/09/30 23031.91 18100.13
1991/10/31 22998.38 18342.67
1991/11/30 21635.02 17603.46
1991/12/31 24108.45 19617.30
1992/01/31 24803.54 19252.42
1992/02/29 25925.43 19502.70
1992/03/31 25059.62 19122.40
1992/04/30 25742.51 19684.60
1992/05/31 26108.35 19781.05
1992/06/30 25510.82 19486.31
1992/07/31 26388.82 20283.30
1992/08/31 25657.15 19867.50
1992/09/30 25730.32 20101.93
1992/10/31 25779.10 20172.29
1992/11/30 27022.93 20860.16
1992/12/31 27731.00 21116.74
1993/01/31 28576.46 21294.13
1993/02/28 28654.50 21583.73
1993/03/31 29721.08 22039.14
1993/04/30 29773.11 21505.79
1993/05/31 30605.56 22082.15
1993/06/30 30722.62 22146.19
1993/07/31 30930.74 22057.60
1993/08/31 31880.25 22893.59
1993/09/30 31997.31 22717.31
1993/10/31 33024.87 23187.55
1993/11/30 32868.78 22967.27
1993/12/31 33879.89 23245.18
1994/01/31 35754.61 24035.51
1994/02/28 35215.12 23384.15
1994/03/31 33718.04 22364.60
1994/04/30 34608.20 22650.87
1994/05/31 34797.02 23022.34
1994/06/30 33852.91 22458.29
1994/07/31 34810.51 23194.93
1994/08/31 36280.61 24145.92
1994/09/30 35188.15 23554.34
1994/10/31 35902.97 24084.32
1994/11/30 34756.56 23207.17
1994/12/31 34847.81 23551.33
1995/01/31 35119.17 24162.01
1995/02/28 36190.31 25103.61
1995/03/31 37118.63 25844.42
1995/04/30 38375.44 26605.53
1995/05/31 39975.01 27668.96
1995/06/30 41331.79 28311.71
1995/07/31 42702.85 29250.52
1995/08/31 43002.77 29323.94
1995/09/30 43816.84 30561.41
1995/10/31 44116.76 30452.31
1995/11/30 45187.90 31789.16
1995/12/31 46360.67 32401.42
1996/01/31 47093.30 33504.37
1996/02/29 46961.43 33814.95
1996/03/31 46888.16 34140.59
1996/04/30 47664.75 34643.82
1996/05/31 48631.82 35537.29
1996/06/30 48895.56 35672.68
1996/07/31 47518.22 34096.66
1996/08/31 47899.19 34815.76
1996/09/30 50155.68 36775.19
1996/10/31 51884.68 37789.45
1996/11/30 55958.09 40645.96
1996/12/31 54581.00 39840.76
1997/01/31 57271.39 42330.01
1997/02/28 57750.72 42661.88
1997/03/31 54890.24 40908.90
1997/04/30 57364.16 43351.17
1997/05/31 60904.97 45990.39
1997/06/30 62806.80 48050.75
1997/07/31 67460.88 51874.15
1997/08/31 64986.95 48968.16
1997/09/30 67553.65 51650.15
1997/10/31 66115.68 49925.03
IMATRL PRASUN SHR__CHT 19971031 19971126 114421 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class T on
November 18, 1987, when the fund started, and the current maximum
3.50% sales charge was paid. As the chart shows, by October 31, 1997,
the value of the investment would have grown to $66,116 - a 561.16%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 would have grown to $49,925 - a
399.25% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FIDELITY ADVISOR GROWTH OPPORTUNITIES 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.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class B shares took place on March 3,
1997. Returns prior to March 3, 1997 are those of Class T, the
original class of the fund, and reflect Class T's 0.50% 12b-1 fee
(0.65% prior to January 1, 1996). Had Class B's 12b-1 fee been
reflected, returns prior to March 3, 1997 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 5%, 2% and
0%, respectively.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS B 26.95% 155.51% 582.57%
ADVISOR GROWTH OPPORTUNITIES - CLASS B 21.95% 153.51% 582.57%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 32.11% 147.49% 399.25%
GROWTH FUNDS AVERAGE 27.28% 125.25% 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 November 18, 1987. For example, if you had
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 the performance of the Standard & Poor's 500 Index - a
widely recognized, unmanaged index of common stocks. To measure how
Class B's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 799 mutual
funds. 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, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
ADVISOR GROWTH OPPORTUNITIES - CLASS B 26.95% 20.64% 21.27%
ADVISOR GROWTH OPPORTUNITIES - CLASS B 21.95% 20.45% 21.27%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 32.11% 19.87% 17.52%
GROWTH FUNDS AVERAGE 27.28% 17.28% N/A
AVERAGE ANNUAL TOTAL RETURNS take Class B shares' 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 19971031 19971126 114400 S00000000000001
FA Growth Opp -CL B S&P 500
00278 SP001
1987/11/18 10000.00 10000.00
1987/11/30 9420.00 9391.04
1987/12/31 10760.00 10105.70
1988/01/31 11220.00 10531.15
1988/02/29 12490.00 11021.90
1988/03/31 12720.00 10681.32
1988/04/30 13100.00 10799.89
1988/05/31 12980.00 10893.85
1988/06/30 14130.00 11393.87
1988/07/31 14100.00 11350.58
1988/08/31 13620.00 10964.66
1988/09/30 14170.00 11431.75
1988/10/31 14270.00 11749.55
1988/11/30 13810.00 11581.53
1988/12/31 14340.64 11784.21
1989/01/31 15569.24 12646.82
1989/02/28 15272.68 12331.91
1989/03/31 15420.96 12619.24
1989/04/30 16416.54 13274.18
1989/05/31 17518.04 13811.79
1989/06/30 16766.06 13733.06
1989/07/31 17708.68 14973.16
1989/08/31 18365.34 15266.63
1989/09/30 18185.29 15204.04
1989/10/31 17507.45 14851.30
1989/11/30 17623.95 15154.27
1989/12/31 17802.80 15517.97
1990/01/31 16520.54 14476.72
1990/02/28 16921.24 14663.46
1990/03/31 17356.29 15052.05
1990/04/30 16783.86 14675.75
1990/05/31 18787.39 16106.63
1990/06/30 18890.43 15997.11
1990/07/31 18203.50 15945.91
1990/08/31 16199.97 14504.40
1990/09/30 14940.61 13798.04
1990/10/31 14871.92 13738.71
1990/11/30 16451.84 14626.23
1990/12/31 17509.61 15034.30
1991/01/31 19605.66 15689.80
1991/02/28 21365.89 16811.62
1991/03/31 21956.49 17218.46
1991/04/30 22408.13 17259.78
1991/05/31 23635.65 18005.40
1991/06/30 21968.07 17180.76
1991/07/31 23508.27 17981.38
1991/08/31 24423.12 18407.54
1991/09/30 23867.26 18100.13
1991/10/31 23832.52 18342.67
1991/11/30 22419.71 17603.46
1991/12/31 24982.85 19617.30
1992/01/31 25703.15 19252.42
1992/02/29 26865.73 19502.70
1992/03/31 25968.52 19122.40
1992/04/30 26676.18 19684.60
1992/05/31 27055.28 19781.05
1992/06/30 26436.08 19486.31
1992/07/31 27345.93 20283.30
1992/08/31 26587.72 19867.50
1992/09/30 26663.54 20101.93
1992/10/31 26714.09 20172.29
1992/11/30 28003.04 20860.16
1992/12/31 28736.79 21116.74
1993/01/31 29612.91 21294.13
1993/02/28 29693.79 21583.73
1993/03/31 30799.05 22039.14
1993/04/30 30852.96 21505.79
1993/05/31 31715.61 22082.15
1993/06/30 31836.92 22146.19
1993/07/31 32052.58 22057.60
1993/08/31 33036.53 22893.59
1993/09/30 33157.84 22717.31
1993/10/31 34222.66 23187.55
1993/11/30 34060.92 22967.27
1993/12/31 35108.69 23245.18
1994/01/31 37051.41 24035.51
1994/02/28 36492.36 23384.15
1994/03/31 34940.98 22364.60
1994/04/30 35863.42 22650.87
1994/05/31 36059.09 23022.34
1994/06/30 35080.74 22458.29
1994/07/31 36073.06 23194.93
1994/08/31 37596.49 24145.92
1994/09/30 36464.40 23554.34
1994/10/31 37205.15 24084.32
1994/11/30 36017.16 23207.17
1994/12/31 36111.72 23551.33
1995/01/31 36392.92 24162.01
1995/02/28 37502.91 25103.61
1995/03/31 38464.90 25844.42
1995/04/30 39767.29 26605.53
1995/05/31 41424.88 27668.96
1995/06/30 42830.87 28311.71
1995/07/31 44251.66 29250.52
1995/08/31 44562.46 29323.94
1995/09/30 45406.05 30561.41
1995/10/31 45716.85 30452.31
1995/11/30 46826.84 31789.16
1995/12/31 48042.15 32401.42
1996/01/31 48801.35 33504.37
1996/02/29 48664.69 33814.95
1996/03/31 48588.77 34140.59
1996/04/30 49393.52 34643.82
1996/05/31 50395.66 35537.29
1996/06/30 50668.98 35672.68
1996/07/31 49241.68 34096.66
1996/08/31 49636.47 34815.76
1996/09/30 51974.80 36775.19
1996/10/31 53766.51 37789.45
1996/11/30 57987.66 40645.96
1996/12/31 56560.62 39840.76
1997/01/31 59348.59 42330.01
1997/02/28 59845.30 42661.88
1997/03/31 56881.08 40908.90
1997/04/30 59412.68 43351.17
1997/05/31 63049.87 45990.39
1997/06/30 64972.61 48050.75
1997/07/31 69763.44 51874.15
1997/08/31 67167.74 48968.16
1997/09/30 69779.46 51650.15
1997/10/31 68257.29 49925.03
IMATRL PRASUN SHR__CHT 19971031 19971126 114405 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class B on
November 18, 1987, when the fund started. As the chart shows, by
October 31, 1997, the value of the investment would have been $68,257
- - a 582.57% increase on the initial investment. For comparison, look
at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 would have grown
to $49,925 - a 399.25% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
The 12 months that ended
November 30, 1997, was a period
that truly tested the U.S. stock
market's resolve. But despite
frequent shifts in sentiment, an
interest-rate hike and global
volatility concerns, U.S. stocks still
managed to perform well. The
Standard & Poor's 500 Index - a
broad gauge of the U.S. stock
market - returned 28.51% during
the period, well above the
market's long-term annual
average of around 11%. In the first
half of the period, large-cap stocks
were responsible for much of the
market's gain, as investors were
drawn to stocks with recognizable
names and consistent
earnings-growth track records.
Consequently, stock prices soared
and enthusiasm was high. The
Federal Reserve Board - in an
attempt to halt inflation before it
appeared - raised a key
short-term interest rate by 0.25%
in March. The market paused
briefly, but then kept rolling as the
Dow Jones Industrial Average
reached the 8,000-point mark for
the first time ever in August. With
several multinational companies
announcing earnings shortfalls in
mid-August, small-cap stocks
came into favor among investors.
During August and September,
the Russell 2000 Index - which
measures small-cap stock
performance - was up 9.78%
while the S&P was down 0.43%.
Volatility in Asian markets in late
October sent skittish investors
running for cover. The Dow slid
554 points in one day, then
snapped back the next, reclaiming
330-plus points. Sensing
continued fallout from this
volatility, investors again became
quality-conscious and large-caps
regained their perch through
November.
An interview with George Vanderheiden, Portfolio Manager of Fidelity
Advisor Growth Opportunities Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the 12-month period that ended October 31, 1997, the fund's
Class A, Class T and Class B shares returned 27.58%, 27.43%, and
26.95%, respectively. The growth funds average, as tracked by Lipper
Analytical Services, returned 27.28% during that period, while the
Standard & Poor's 500 Index returned 32.11%. For the 12-month period
that ended November 30, 1997, the fund's Class A, Class T, Class B and
Class C shares returned 22.32%, 22.13%, 21.63% and 22.13%,
respectively. The Lipper group and S&P 500 returned 22.00% and 28.51%,
respectively.
Q. WHAT MARKET SECTORS HELPED THE FUND'S PERFORMANCE?
A. Over the year ended October 31, stocks in the technology, basic
industries and consumer nondurable sectors had the biggest impact on
performance. Despite the stigma of litigation, tobacco and consumer
nondurable giant Philip Morris was the single biggest contributor to
the fund's performance during the period. Strong growth in personal
computer sales and corporate spending on telecommunications and
networking hardware propelled the fund's technology positions to
healthy gains. Compaq Computer, for instance, reported strong unit
growth - a key to success given the lack of pricing power in the
industry.
Q. HOW DID THE INVESTMENT CLIMATE DURING THE PERIOD AFFECT THE FUND?
A. The past year has been a very favorable environment for U.S.
stocks, and the fund has certainly benefited. For the full period,
large-capitalization U.S. companies continued to be among the best
investments available. I have had about two-thirds of the fund's
assets invested in companies with market capitalizations greater than
$15 billion, which was the strongest segment of the market for much of
the period.
Q. HAVE YOU SEEN ANY IMPORTANT CHANGES IN THE EQUITY MARKET?
A. One of the more significant equity market changes was the
resurgence of small stocks relative to larger stocks during August,
September and October. This shift, I believe, was due to several
factors. First, when the Federal Reserve Board starts raising interest
rates as it did this past spring, investors typically take refuge in
those stocks with lower, more conservative valuations, which small-cap
stocks had when rates began climbing. Second, large-cap companies have
recently seen their earnings growth slow. The valuation levels of many
large-cap companies, particularly in the consumer and technology
sector, were based upon continued strength in earnings growth. Third,
small-cap stocks have historically outperformed when economic strength
is broadening and accelerating, especially after an economic slowdown
like we had in the first three quarters of 1996.
Q. WHAT IMPLICATIONS DO THE FALTERING SOUTHEAST ASIAN ECONOMIES HAVE
FOR THE U.S. STOCK MARKET AND FOR THE FUND ITSELF?
A. U.S. investors face three main risks from the economic problems in
Southeast Asia. The first is that the widespread financial problems
could push the region, including China, into a recession. This in turn
would slow world economic growth, including that of the United States.
The second risk is that currency devaluations could escalate and
ultimately lead to a slowdown in world trade. Over the past several
months, many Southeast Asian countries have tried to reverse their
economic deterioration by devaluing their currencies. Cheaper currency
reduces the price of exports, thereby allowing a country to sell more
goods - which increases factory utilization and improves the economy.
The problem is that all the economies of Southeast Asia are heavily
dependent on exporting. For example, Thailand's export-share gain may
be South Korea's share loss. The risk is that the countries in
Southeast Asia may embark upon another round of competitive currency
devaluations that ultimately forces other export-based countries
around the world to react. The final risk is that the bank crisis in
the region could escalate as real estate prices fall. A significant
portion of bank lending activity has involved real estate projects.
Q. DID YOU MAKE ANY ADJUSTMENTS TO THE PORTFOLIO DURING THE RECENT
MARKET DECLINE?
A. I didn't make any significant changes to the fund during the
October decline. The Asian crisis has not yet resulted in any great
opportunities to purchase companies at bargain prices in the U.S.
Although the Dow Jones Industrial Average fell over 1,000 points from
its peak this past August to its low in October - just as it did in
October 1987 - the U.S. stock market is not even close to offering the
same type of bargains that were available 10 years ago. Despite the
fact that the Dow decreased over 13% from its August peak to its
October low, many stocks were still selling at the top-end of their
historic valuations. However, I continue to monitor the situation in
Southeast Asia - particularly Hong Kong - for attractive
opportunities.
Q. HOW DID THE FUND'S BOND AND CASH HOLDINGS AFFECT PERFORMANCE?
A. Relative to the performance of the S&P 500, the bond and cash
holdings hurt performance over the 12 months ended October 31. The
allocations to bonds reduced the return of the fund by approximately
2%. Compared to the S&P 500, the allocation to cash reduced the return
of the fund by about 2%. Over the past year, the equity holdings in
the fund returned 34.12%, outperforming the S&P 500 return of 32.11%.
Q. WHY DOES THE FUND OWN BONDS?
A. The fund owns bonds because they are currently among the most
undervalued and attractively priced financial assets. Four years ago,
the 30-year Treasury bond yield was 5.8%. Since then, inflation has
declined and industrial capacity has, on average, grown in line with
demand, both factors that should relieve pressure on interest rates.
In spite of this, prices on the 30-year Treasury bond remained below
their level of four years ago. In addition, one potential shock to the
economy that could disrupt the stock market is deflation. In this
scenario, the prices of products and services fall, the economy begins
to slow and earnings decline. Though I consider this development
somewhat unlikely, Treasury bonds would be the best assets to own
under these circumstances.
Q. THE FUND'S FISCAL YEAR-END HAS BEEN CHANGED FROM OCTOBER 31 TO
NOVEMBER 30. CAN YOU GIVE AN UPDATE ON MARKET EVENTS IN THE MONTH OF
NOVEMBER AND HOW THEY AFFECTED THE FUND?
A. The Asian currency crises continued to be the big story through
November, causing very high market volatility not only in that region,
but also in Europe and the U.S. The fund has fared comparatively well
amidst all this, for a couple of reasons. First, equity market turmoil
has turned investors' attention a bit more toward bonds - which has
benefited the fund's bond positions - and interest rates have moved
lower. Many of the fund's top holdings have been financial stocks, and
they have benefited from their interest-rate sensitivity. Second, the
fund owned fewer of the smaller and more commodity-oriented
semiconductor and technology stocks that have fallen so sharply on
concerns over the events in Asia.
Q. WHAT'S YOUR OUTLOOK?
A. I have positioned the fund with two scenarios in mind. The first is
what many call the "Goldilocks" economy, in which the economy grows
not too slow, not too fast, but just right. Also in this scenario,
inflation remains subdued, corporate profits grow steadily and the
stock market grows along with corporate profits. Another possibility
is that of deflation, which I mentioned earlier. I'll try to take
advantage of a low inflation environment by focusing the fund on four
areas: (1) innovative companies in the technology, health care and
telecommunications sectors with strong unit growth; (2)
financial-sector companies that stand to benefit from lower interest
rates; (3) strong global-oriented companies; and (4) industries in
which consolidation is occurring and growth rates are strong.
Shareholders should keep in mind that there will always be short-term
market fluctuations. It's important to remain focused on the
long-term, and I feel I've positioned the fund to weather any type of
investment climate over the next five to 10 years.
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.
JOHN AVERY'S INVESTMENT
PHILOSOPHY ON . . .
COMPANIES. "When I'm looking for
a good buying opportunity, my main
consideration is whether a company
has the potential to improve its
earnings growth. Companies that
are restructuring themselves -
either through cost-cutting, selling
non-profitable subdivisions or
making logical acquisitions - are
frequently good candidates. I also
like companies that have
competitive market positions that
allow for pricing stability and
economies of scale. This can
reduce expenses, while
improving the bottom line to the
shareholder."
EARNINGS. "I want to buy
companies that are doing proactive
things to boost their earnings. If I
know that steel prices are going to
be down for three consecutive
quarters, and that steel company
earnings will be down for that time
as well, that's not something I'm
attracted to. If a pharmaceutical
company, however, has a promising
product in its pipeline that I feel
will enhance future earnings, that
company becomes a possibility."
SECTORS. "Two areas that are
well-represented among the fund's
top holdings are the finance and
health care groups. Many banks
have been utilizing the proactive
approaches I described above, while
the health care sector remains
exciting. Pharmaceutical
companies have impressive
pipelines of products and
demographics - the aging of
America - could ensure that
demand meets supply."
FUND FACTS
GOAL: seeks both income and
growth of capital by investing
in a diversified portfolio of
equity and fixed-income
securities with income, growth
of income and capital
appreciation potential
START DATE: January 6, 1987
SIZE: as of October 31, 1997,
more than $2.9 billion
MANAGER: Bettina Doulton,
since 1996; joined Fidelity
in 1986
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
% OF FUND'S INVESTMENTS AS OF
OCTOBER 31, 1997 APRIL 30, 1997
PHILIP MORRIS 6.0 5.7 7.2
COMPANIES, INC.
FEDERAL NATIONAL 5.0 4.8 5.0
MORTGAGE ASSOCIATION
FLEET FINANCIAL GROUP, INC. 3.0 2.9 3.1
COLUMBIA/HCA 2.9 2.5 2.0
HEALTHCARE CORP.
FEDERAL HOME LOAN 2.8 2.7 2.7
MORTGAGE CORPORATION
GENERAL MOTORS CORP. 1.9 2.3 2.6
HOME DEPOT, INC. 1.9 2.0 0.9
WAL-MART STORES, INC. 1.8 1.6 1.4
VODAFONE GROUP PLC 1.6 1.4 1.6
SPONSORED ADR
INTERNATIONAL BUSINESS 1.6 1.7 3.5
MACHINES CORP.
</TABLE>
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S INVESTMENTS AS OF
OCTOBER 31, 1997 APRIL 30, 1997
FINANCE 18.8 18.4 16.5
TECHNOLOGY 10.7 11.3 14.4
RETAIL & WHOLESALE 8.0 8.1 5.4
HEALTH 7.9 7.3 5.8
UTILITIES 7.2 6.3 6.5
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1997 * AS OF OCTOBER 31, 1997 ** AS OF APRIL 30,
1997 ***
ROW: 1, COL: 1, VALUE: 7.6
ROW: 1, COL: 2, VALUE: 12.1
ROW: 1, COL: 3, VALUE: 80.3
ROW: 1, COL: 1, VALUE: 7.1
ROW: 1, COL: 2, VALUE: 12.1
ROW: 1, COL: 3, VALUE: 80.8
ROW: 1, COL: 1, VALUE: 7.6
ROW: 1, COL: 2, VALUE: 12.9
ROW: 1, COL: 3, VALUE: 79.5
STOCKS 80.3%
BONDS 12.1%
SHORT-TERM
INVESTMENTS 7.6%
FOREIGN
INVESTMENTS 7.9%
STOCKS 80.8%
BONDS 12.1%
SHORT-TERM
INVESTMENTS 7.1%
FOREIGN
INVESTMENTS 8.0%
STOCKS 79.5%
BONDS 12.9%
SHORT-TERM
INVESTMENTS 7.6%
FOREIGN
INVESTMENTS 8.1%
**
*
***
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 80.8%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.5%
AEROSPACE & DEFENSE - 0.0%
Boeing Co. 20,500 $ 1,089
Gulfstream Aerospace Corp. (a) 235,800 6,926
8,015
DEFENSE ELECTRONICS - 0.4%
Raytheon Co. 1,497,700 83,778
SHIP BUILDING & REPAIR - 0.1%
Avondale Industries, Inc. (a) 105,400 2,991
Newport News Shipbuilding, Inc. 324,000 7,857
10,848
TOTAL AEROSPACE & DEFENSE 102,641
BASIC INDUSTRIES - 3.3%
CHEMICALS & PLASTICS - 2.2%
Air Products & Chemicals, Inc. 333,800 25,598
Dow Chemical Co. 92,700 9,154
du Pont (E.I.) de Nemours & Co. 3,735,100 226,207
Raychem Corp. 1,439,600 136,132
Union Carbide Corp. 1,577,800 69,621
466,712
PACKAGING & CONTAINERS - 0.7%
Bemis Co., Inc. 298,300 12,566
Corning, Inc. 1,353,600 57,444
Owens-Illinois, Inc. (a) 2,292,200 77,648
147,658
PAPER & FOREST PRODUCTS - 0.4%
Boise Cascade Corp. 608,100 20,485
Champion International Corp. 747,000 40,011
International Paper Co. 93,700 4,445
Willamette Industries, Inc. 503,800 17,696
82,637
TOTAL BASIC INDUSTRIES 697,007
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 1.3%
CONSTRUCTION - 1.0%
Centex Corp. 543,700 $ 34,457
D.R. Horton, Inc. 1,689,780 30,099
Fleetwood Enterprises, Inc. (c) 2,038,852 72,762
Kaufman & Broad Home Corp. (c) 2,614,000 56,691
U.S. Home Corp. 560,100 20,794
214,803
ENGINEERING - 0.3%
Fluor Corp. 1,767,600 63,523
TOTAL CONSTRUCTION & REAL ESTATE 278,326
DURABLES - 4.0%
AUTOS, TIRES, & ACCESSORIES - 2.8%
Circuit City Stores, Inc. - CarMax Group 129,700 1,548
Cummins Engine Co., Inc. 612,600 39,436
Discount Auto Parts, Inc. (a)(c) 947,000 17,697
Federal-Mogul Corp. 307,100 12,630
General Motors Corp. 6,738,739 411,063
Gentex Corp. (a) 267,900 6,631
Goodyear Tire & Rubber Co. 396,200 24,044
Honda Motor Co. Ltd. 377,000 13,627
Magna International, Inc. Class A 831,000 52,344
Superior Industries International, Inc. 848,100 22,051
601,071
CONSUMER ELECTRONICS - 0.6%
Newell Co. 600,900 24,524
Philips Electronics NV 490,000 32,830
Philips Electronics NV (Bearer) 1,149,700 75,876
133,230
TEXTILES & APPAREL - 0.6%
Burlington Industries, Inc. (a) 1,068,000 15,486
Liz Claiborne, Inc. 686,800 34,512
NIKE, Inc. Class B 1,298,200 63,206
Reebok International Ltd. (a) 202,400 7,957
121,161
TOTAL DURABLES 855,462
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 5.3%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 1,189,200 $ 37,460
OIL & GAS - 5.1%
Amerada Hess Corp. 545,300 30,537
Atlantic Richfield Co. 719,400 58,631
British Petroleum PLC ADR 2,599,126 215,727
Burlington Resources, Inc. 2,852,865 126,953
Elf Aquitaine SA sponsored ADR 287,447 16,456
Enron Oil & Gas Co. 256,500 4,890
Kerr-McGee Corp. 420,200 27,865
Mobil Corp. 18,100 1,302
Occidental Petroleum Corp. 4,296,100 127,540
Phillips Petroleum Co. 50,000 2,422
Royal Dutch Petroleum Co. 5,064,800 266,852
Santa Fe Energy Resources, Inc. 419,600 4,694
Tosco Corp. 4,277,500 139,286
Total SA Class B 197,574 20,737
Total SA sponsored ADR 435,352 22,883
Valero Energy Corp. 428,400 13,441
1,080,216
TOTAL ENERGY 1,117,676
FINANCE - 18.8%
BANKS - 1.4%
Credit Suisse Group (Reg.) 612,400 89,506
NationsBank Corp. 1,652,500 99,253
Providian Financial Corp. 2,484,800 109,487
298,246
CREDIT & OTHER FINANCE - 3.3%
CIT Group, Inc. Class A 451,100 13,702
Fleet Financial Group, Inc. 9,706,510 641,236
Green Tree Financial Corp. 1,025,600 31,409
Money Store, Inc. 451,100 11,306
697,653
FEDERAL SPONSORED CREDIT - 7.8%
Federal Home Loan Mortgage Corporation 14,533,200 599,494
Federal National Mortgage Association 20,377,220 1,076,172
1,675,666
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - 5.8%
AFLAC, Inc. 477,950 $ 22,045
Aegon NV (Reg.) 80,484 6,841
Allmerica Financial Corp. 912,000 44,232
Allstate Corp. 3,459,982 297,126
American International Group, Inc. 2,354,775 237,391
CIGNA Corp. 1,067,800 178,590
General Re Corp. 239,500 47,541
Loews Corp. 698,100 74,086
MGIC Investment Corp. 2,279,800 133,226
PMI Group, Inc. 1,468,900 95,478
Provident Companies, Inc. 180,400 5,919
Reliastar Financial Corp. 479,200 17,730
Stirling Cooke Brown Holdings Ltd. 10,500 255
Torchmark Corp. 1,485,200 60,615
Travelers Property Casualty Corp. Class A 289,100 11,492
UNUM Corp. 134,200 6,366
1,238,933
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 365,740 32,780
Ocwen Financial Corp. (a) 56,000 1,358
34,138
SECURITIES INDUSTRY - 0.3%
Affiliated Managers Group, Inc. 73,600 1,840
United Asset Management Corp. 2,447,700 63,793
65,633
TOTAL FINANCE 4,010,269
HEALTH - 7.9%
DRUGS & PHARMACEUTICALS - 2.9%
American Home Products Corp. 1,634,500 114,211
Amgen, Inc. 964,800 49,325
Astra AB Class A Free shares 6,517,066 113,028
COR Therapeutics, Inc. (a) 64,500 1,467
Gilead Sciences, Inc. (a) 71,700 2,474
Ligand Pharmaceuticals, Inc. Class B (a) 34,600 441
Medimmune, Inc. (a) 46,200 1,767
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
Merck & Co., Inc. 298,100 $ 28,189
Novartis AG (Reg.) 72,325 115,493
Schering-Plough Corp. 2,871,500 180,007
Sepracor, Inc. (a) 222,200 8,194
614,596
MEDICAL EQUIPMENT & SUPPLIES - 0.7%
Allegiance Corp. 104,840 3,322
Bard (C.R.), Inc. 1,074,600 32,171
Baxter International, Inc. 344,600 17,445
Biomet, Inc. 1,145,100 27,339
Johnson & Johnson 194,200 12,223
St. Jude Medical, Inc. (a) 1,775,100 52,587
145,087
MEDICAL FACILITIES MANAGEMENT - 4.3%
AmeriPath, Inc. 6,800 114
Columbia/HCA Healthcare Corp. 20,665,763 609,640
Humana, Inc. (a) 5,083,900 112,799
Tenet Healthcare Corp. (a) 4,055,400 128,505
United HealthCare Corp. 1,508,600 78,542
929,600
TOTAL HEALTH 1,689,283
HOLDING COMPANIES - 0.1%
U.S. Industries, Inc. 804,750 20,722
INDUSTRIAL MACHINERY & EQUIPMENT - 2.1%
ELECTRICAL EQUIPMENT - 1.4%
Alcatel Alsthom Compagnie Generale d'Electricite SA
sponsored ADR 90,500 2,240
Alcatel Alsthom Compagnie Generale d'Electricite SA 737,500 92,391
Cherry Corp.:
Class A (a)(c) 537,300 7,992
Class B (a)(c) 368,300 5,248
Emerson Electric Co. 282,200 15,521
General Electric Co. 1,688,600 124,534
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT - CONTINUED
Grainger (W.W.), Inc. 135,300 $ 12,668
Scientific-Atlanta, Inc. 718,600 14,372
Westinghouse Electric Corp. 1,046,100 31,383
306,349
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
Caterpillar, Inc. 2,002,300 95,985
Ultratech Stepper, Inc. (a)(c) 1,306,700 32,178
128,163
POLLUTION CONTROL - 0.1%
Browning-Ferris Industries, Inc. 433,741 15,479
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 449,991
MEDIA & LEISURE - 4.0%
BROADCASTING - 0.7%
Comcast Corp. Class A 144,600 4,031
Comcast Corp. Class A special 262,700 7,356
Cox Communications, Inc. Class A (a) 414,400 14,064
HSN, Inc. (a) 57,505 2,566
TCI Group Class A 1,217,527 27,889
Tele-Communications, Inc. (TCI) (Ventures Group) Series A 2,053,373
46,457
Time Warner, Inc. 863,300 50,287
152,650
ENTERTAINMENT - 0.9%
Cedar Fair LP (depositary unit) 1,362,000 36,178
King World Productions, Inc. 269,600 14,659
MGM Grand, Inc. (a) 48,100 1,882
Royal Caribbean Cruises Ltd. 1,972,100 94,661
Viacom, Inc.:
Class A (a) 510,300 17,733
Class B (non-vtg.) (a) 522,800 18,298
183,411
LEISURE DURABLES & TOYS - 0.4%
Nintendo Co. Ltd. Ord. 808,500 83,497
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.9%
Circus Circus Enterprises, Inc. (a) 1,462,400 $ 30,162
HFS, Inc. (a) 1,032,800 70,876
Harrah's Entertainment, Inc. (a) 474,300 9,516
Mirage Resorts, Inc. (a) 2,016,200 47,885
Rio Hotel & Casino, Inc. (a) 145,700 3,041
Sun International Hotels Ltd. Ord. (a) 1,124,000 42,642
204,122
PUBLISHING - 0.4%
Cognizant Corp. 517,200 22,175
Petersen Companies, Inc. Class A 9,500 171
US WEST Media Group (a) 2,068,700 54,950
77,296
RESTAURANTS - 0.7%
Brinker International, Inc. (a) 325,100 4,795
McDonald's Corp. 1,738,700 84,327
Papa John's International, Inc. (a) 190,700 6,341
Tricon Global Restaurants, Inc. (a) 20,010 677
Wendy's International, Inc. 2,405,100 50,507
146,647
TOTAL MEDIA & LEISURE 847,623
NONDURABLES - 6.8%
BEVERAGES - 0.1%
PepsiCo, Inc. 200,100 7,379
HOUSEHOLD PRODUCTS - 0.0%
Premark International, Inc. 124,100 3,242
TOBACCO - 6.7%
Philip Morris Companies, Inc. 29,418,600 1,279,709
RJR Nabisco Holdings Corp. 4,051,760 147,636
1,427,345
TOTAL NONDURABLES 1,437,966
PRECIOUS METALS - 0.1%
Barrick Gold Corp. 150,100 2,467
Newmont Mining Corp. 590,481 17,751
20,218
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 8.0%
APPAREL STORES - 0.4%
Gap, Inc. 695,300 $ 37,329
TJX Companies, Inc. 1,326,800 45,775
83,104
DRUG STORES - 0.0%
CVS Corp. 54,500 3,617
GENERAL MERCHANDISE STORES - 2.2%
Federated Department Stores, Inc. (a) 1,561,513 71,147
Proffitts, Inc. (a) 799,800 24,444
Wal-Mart Stores, Inc. 9,353,600 373,559
469,150
GROCERY STORES - 0.4%
Safeway, Inc. (a) 1,388,300 84,339
RETAIL & WHOLESALE, MISCELLANEOUS - 5.0%
Circuit City Stores, Inc. - Circuit City Group 4,585,300 150,455
Corporate Express, Inc. 835,500 13,055
Home Depot, Inc. 7,141,850 399,497
Lowe's Companies, Inc. 6,472,400 297,326
Officemax, Inc. (a) 2,459,325 34,584
Office Depot, Inc. (a) 713,700 16,861
PEAPOD, Inc. 48,200 380
Rex Stores Corp. (a) 336,000 3,822
Staples, Inc. (a) 1,403,000 39,547
Toys "R" Us, Inc. (a) 1,672,500 57,074
U.S. Office Products Co. (a) 1,107,300 22,008
Viking Office Products, Inc. (a) 996,500 23,106
1,057,715
TOTAL RETAIL & WHOLESALE 1,697,925
SERVICES - 0.2%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc. 229,650 11,009
LEASING & RENTAL - 0.0%
Avis Rent A Car, Inc. (a) 57,100 1,916
PRINTING - 0.0%
Donnelley (R.R.) & Sons Co. 114,100 4,022
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - 0.1%
Reuters Holdings PLC ADR Class B 393,200 $ 26,590
TOTAL SERVICES 43,537
TECHNOLOGY - 10.7%
COMMUNICATIONS EQUIPMENT - 0.1%
Andrew Corp. 570,900 15,129
COMPUTER SERVICES & SOFTWARE - 2.7%
Automatic Data Processing, Inc. 842,300 47,379
CUC International, Inc. (a) 1,916,000 55,085
Ceridian Corp. (a) 1,380,700 60,578
CompUSA, Inc. (a) 554,500 20,274
E Trade Group, Inc. (a) 434,300 10,885
Electronic Data Systems Corp. 2,921,100 111,002
Electronics for Imaging, Inc. (a) 456,400 22,021
First Data Corp. 1,542,900 43,683
Microsoft Corp. (a) 659,800 93,362
Netscape Communications Corp. (a) 11,700 333
Oracle Corp. (a) 1,176,525 39,193
PRT Group, Inc. 97,400 1,303
Paychex, Inc. 290,000 11,890
Policy Management Systems Corp. (a)(c) 932,250 60,247
577,235
COMPUTERS & OFFICE EQUIPMENT - 3.7%
Compaq Computer Corp. 2,995,400 187,025
Hewlett-Packard Co. 1,018,000 62,162
Ingram Micro, Inc. Class A (a) 170,000 5,153
International Business Machines Corp. 3,063,200 335,612
Quantum Corp. (a) 229,100 6,100
SCI Systems, Inc. (a)(c) 3,049,700 139,714
Tech Data Corp. (a) 1,007,300 40,670
Western Digital Corp. (a) 375,800 7,587
784,023
ELECTRONIC INSTRUMENTS - 0.7%
Applied Materials, Inc. (a) 150,000 4,950
Cognex Corp. (a) 372,600 9,921
Lam Research Corp. (a)(c) 2,110,500 64,634
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - CONTINUED
Novellus Systems, Inc. (a) 320,800 $ 12,070
Thermo Electron Corp. (a) 1,071,300 39,437
Varian Associates, Inc. 351,000 20,270
151,282
ELECTRONICS - 3.5%
AMP, Inc. 2,162,400 93,929
Intel Corp. 2,917,100 226,440
International Manufacturing Services, Inc. Class A 16,200 164
Methode Electronics, Inc. Class A 609,500 9,904
Micron Technology, Inc. (a) 4,214,200 104,828
Molex, Inc. 403,325 14,016
Motorola, Inc. 467,200 29,375
Solectron Corp. (a)(c) 7,193,900 262,128
Thomas & Betts Corp. 293,800 13,331
Uniphase Corp. (a) 64,200 2,576
756,691
TOTAL TECHNOLOGY 2,284,360
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.0%
Northwest Airlines Corp. Class A (a) 195,500 8,113
RAILROADS - 0.3%
Bombardier, Inc. Class B 571,800 11,805
Burlington Northern Santa Fe Corp. 182,600 16,708
CSX Corp. 715,900 37,450
65,963
SHIPPING - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 539,500 12,678
Stolt-Nielsen SA 274,900 6,220
18,898
TRUCKING & FREIGHT - 0.1%
Roadway Express, Inc. 120,400 3,251
Yellow Corp. (a) 613,600 16,184
19,435
TOTAL TRANSPORTATION 112,409
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 7.2%
CELLULAR - 2.4%
AirTouch Communications, Inc. 4,139,000 $ 162,456
Century Telephone Enterprises, Inc. 170,000 7,831
Vodafone Group PLC sponsored ADR 5,133,600 338,817
509,104
ELECTRIC UTILITY - 0.4%
American Electric Power Co., Inc. 751,900 37,266
Entergy Corp. 1,104,800 28,725
Houston Industries, Inc. 138,900 3,290
Niagara Mohawk Power Corp. (a) 468,200 4,477
PECO Energy Co. 98,500 2,395
PG&E Corp. 332,819 9,402
85,555
GAS - 0.0%
Enron Corp. 365,600 14,167
TELEPHONE SERVICES - 4.4%
AT&T Corp. 810,400 45,281
Ameritech Corp. 693,400 53,435
Bell Atlantic Corp. 995,546 88,853
BellSouth Corp. 1,265,700 69,297
Deutsche Telekom AG 442,800 9,029
France Telecom SA 84,800 3,112
MCI Communications Corp. 7,396,900 325,001
SBC Communications, Inc. 1,062,100 77,334
Sprint Corp. 3,662,300 214,473
Telebras sponsored ADR 293,600 30,645
WorldCom, Inc. (a) 572,800 18,330
934,790
TOTAL UTILITIES 1,543,616
TOTAL COMMON STOCKS
(Cost $11,716,632) 17,209,031
U.S. TREASURY OBLIGATIONS - 12.1%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
stripped principal:
0%, 2/15/19 $ 617,000 $ 168,503
0%, 8/15/19 420,000 111,245
0%, 8/15/20 1,211,300 302,122
0%, 8/15/21 212,000 49,625
6 1/4%, 8/15/23 300,750 305,589
7 5/8%, 11/15/22 106,000 125,991
8 1/8%, 8/15/19 1,229,000 1,519,929
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,285,788) 2,583,004
CASH EQUIVALENTS - 7.1%
SHARES
Taxable Central Cash Fund (b)
(Cost $1,520,590) 1,520,590,378 1,520,590
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $15,523,010) $ 21,312,625
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.69%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 11 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1997, the aggregate cost of investment securities for
income tax purposes was $15,532,207,000. Net unrealized appreciation
aggregated $5,780,418,000, of which $6,127,955,000 related to
appreciated investment securities and $347,537,000 related to
depreciated investment securities.
The fund hereby designates approximately $66,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
INVESTMENTS OCTOBER 31, 1997
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 80.3%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.7%
AEROSPACE & DEFENSE - 0.2%
Boeing Co. 601,100 $ 28,778
Gulfstream Aerospace Corp. (a) 235,800 6,838
35,616
DEFENSE ELECTRONICS - 0.4%
Raytheon Co. 1,661,200 90,120
SHIP BUILDING & REPAIR - 0.1%
Avondale Industries, Inc. (a) 117,900 3,183
Newport News Shipbuilding, Inc. 343,600 7,388
10,571
TOTAL AEROSPACE & DEFENSE 136,307
BASIC INDUSTRIES - 3.4%
CHEMICALS & PLASTICS - 2.2%
Air Products & Chemicals, Inc. 358,300 27,231
du Pont (E.I.) de Nemours & Co. 3,812,100 216,813
Raychem Corp. 1,439,600 130,374
Union Carbide Corp. 1,577,800 72,085
446,503
PACKAGING & CONTAINERS - 0.7%
Bemis Co., Inc. 254,600 9,707
Corning, Inc. 1,435,000 64,754
Owens-Illinois, Inc. (a) 2,292,200 79,081
153,542
PAPER & FOREST PRODUCTS - 0.5%
Boise Cascade Corp. 701,600 24,293
Champion International Corp. 867,100 47,853
International Paper Co. 153,900 6,926
Ivex Packaging Corp. 24,200 511
Willamette Industries, Inc. 503,800 16,657
96,240
TOTAL BASIC INDUSTRIES 696,285
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 1.2%
CONSTRUCTION - 0.9%
Centex Corp. 564,500 $ 33,023
D.R. Horton, Inc. 1,689,780 25,347
Fleetwood Enterprises, Inc. (c) 2,038,852 61,803
Kaufman & Broad Home Corp. (c) 2,614,000 55,711
U.S. Home Corp. 560,100 19,883
195,767
ENGINEERING - 0.3%
Fluor Corp. 1,533,800 63,078
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Imperial Credit Commercial Mortgage Investment Corp. 14,600 241
TOTAL CONSTRUCTION & REAL ESTATE 259,086
DURABLES - 4.4%
AUTOS, TIRES, & ACCESSORIES - 3.3%
Circuit City Stores, Inc. - CarMax Group 129,700 1,800
Cummins Engine Co., Inc. 612,600 37,330
Discount Auto Parts, Inc. (a)(c) 947,000 19,828
Federal-Mogul Corp. 378,600 16,020
General Motors Corp. 7,453,639 478,430
Gentex Corp. (a) 273,000 6,688
Goodyear Tire & Rubber Co. 396,200 24,812
Honda Motor Co. Ltd. 528,000 17,761
Magna International, Inc. Class A 831,000 54,812
Stoneridge, Inc. 16,900 275
Superior Industries International, Inc. 936,000 24,979
682,735
CONSUMER ELECTRONICS - 0.4%
Newell Co. 600,900 23,060
Philips Electronics NV 202,400 15,863
Philips Electronics NV (Bearer) 576,500 45,053
83,976
TEXTILES & APPAREL - 0.7%
Big Dog Holdings, Inc. 9,200 130
Burlington Industries, Inc. (a) 1,175,600 17,560
Liz Claiborne, Inc. 616,100 31,229
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
NIKE, Inc. Class B 1,563,100 $ 73,466
Reebok International Ltd. 202,400 7,463
129,848
TOTAL DURABLES 896,559
ENERGY - 5.6%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 1,209,800 43,931
OIL & GAS - 5.4%
Amerada Hess Corp. 545,300 33,502
Atlantic Richfield Co. 762,900 62,796
British Petroleum PLC ADR 2,683,173 235,448
Burlington Resources, Inc. 2,852,865 139,612
Dril-Quip, Inc. 1,100 39
Elf Aquitaine SA sponsored ADR 287,447 17,750
Enron Oil & Gas Co. 315,900 6,654
Kerr-McGee Corp. 420,200 28,390
Mobil Corp. 197,600 14,388
Occidental Petroleum Corp. 3,473,300 96,818
Phillips Petroleum Co. 50,000 2,419
Royal Dutch Petroleum Co. 5,064,800 266,535
Santa Fe Energy Resources, Inc. 462,200 6,037
Tosco Corp. 4,277,500 141,158
Total SA Class B 149,374 16,548
Total SA sponsored ADR 435,352 24,162
Union Pacific Resources Group, Inc. 89,100 2,194
Valero Energy Corp. 428,400 12,906
1,107,356
TOTAL ENERGY 1,151,287
FINANCE - 18.4%
BANKS - 1.2%
Credit Suisse Group (Reg.) 612,400 86,375
NationsBank Corp. 1,127,800 67,527
Providian Financial Corp. 2,471,800 91,457
245,359
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 3.1%
Fleet Financial Group, Inc. 9,229,810 $ 593,592
Green Tree Financial Corp. 1,057,200 44,535
638,127
FEDERAL SPONSORED CREDIT - 7.5%
Federal Home Loan Mortgage Corporation 14,589,400 552,573
Federal National Mortgage Association 20,377,220 987,022
1,539,595
INSURANCE - 6.2%
AFLAC, Inc. 477,950 24,316
Aegon NV (Reg.) 440,484 35,019
Allmerica Financial Corp. 912,000 42,750
Allstate Corp. 3,459,982 286,962
American International Group, Inc. 2,354,775 240,334
CIGNA Corp. 987,300 156,383
Equitable of Iowa Companies 424,700 27,801
General Re Corp. 239,500 47,226
Loews Corp. 698,100 77,969
MGIC Investment Corp. 2,406,000 145,112
PMI Group, Inc. 1,468,900 88,777
Provident Companies, Inc. 180,400 6,021
Reliastar Financial Corp. 552,000 20,631
Torchmark Corp. 1,485,200 59,222
Travelers Property Casualty Corp. Class A 172,600 6,235
UNUM Corp. 134,200 6,542
1,271,300
SAVINGS & LOANS - 0.1%
Golden West Financial Corp. 365,740 31,728
Ocwen Financial Corp. (a) 28,000 1,538
33,266
SECURITIES INDUSTRY - 0.3%
United Asset Management Corp. 2,447,700 64,864
TOTAL FINANCE 3,792,511
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 7.3%
DRUGS & PHARMACEUTICALS - 2.6%
American Home Products Corp. 1,108,900 $ 82,197
Amgen, Inc. 988,200 48,669
Astra AB Class A Free shares 6,517,066 104,897
COR Therapeutics, Inc. (a) 64,500 1,439
Gilead Sciences, Inc. (a) 71,700 2,447
Ligand Pharmaceuticals, Inc. Class B (a) 34,600 506
Medimmune, Inc. (a) 46,200 1,842
Merck & Co., Inc. 298,100 26,605
Novartis AG (Reg.) 72,325 113,414
Schering-Plough Corp. 2,871,500 160,984
Sepracor, Inc. (a) 50,700 1,819
544,819
MEDICAL EQUIPMENT & SUPPLIES - 0.7%
Allegiance Corp. 104,840 2,909
Bard (C.R.), Inc. 1,074,600 29,820
Baxter International, Inc. 344,600 15,938
Biomet, Inc. 1,145,100 28,556
Johnson & Johnson 147,800 8,480
St. Jude Medical, Inc. (a) 1,732,200 52,507
138,210
MEDICAL FACILITIES MANAGEMENT - 4.0%
AmeriPath, Inc. 21,200 350
Columbia/HCA Healthcare Corp. 18,409,563 520,070
Humana, Inc. (a) 5,083,900 106,762
Tenet Healthcare Corp. (a) 4,055,400 123,943
United HealthCare Corp. 1,508,600 69,867
820,992
TOTAL HEALTH 1,504,021
HOLDING COMPANIES - 0.1%
U.S. Industries, Inc. 804,750 21,628
INDUSTRIAL MACHINERY & EQUIPMENT - 2.2%
ELECTRICAL EQUIPMENT - 1.4%
Alcatel Alsthom Compagnie Generale d'Electricite
SA sponsored ADR 90,500 2,200
Alcatel Alsthom Compagnie Generale d'Electricite SA 737,500 88,853
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT - CONTINUED
Cherry Corp.:
Class A (a)(c) 537,300 $ 8,261
Class B (a)(c) 368,300 5,571
Emerson Electric Co. 282,200 14,798
General Electric Co. 1,688,600 109,020
Grainger (W.W.), Inc. 135,300 11,830
Scientific-Atlanta, Inc. 718,600 13,339
Westinghouse Electric Corp. 1,137,300 30,068
283,940
INDUSTRIAL MACHINERY & EQUIPMENT - 0.7%
Caterpillar, Inc. 2,327,800 119,300
Ultratech Stepper, Inc. (a)(c) 1,306,700 35,607
154,907
POLLUTION CONTROL - 0.1%
Browning-Ferris Industries, Inc. 433,741 14,096
Casella Waste Systems, Inc. Class A 50,700 1,122
15,218
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 454,065
MEDIA & LEISURE - 4.0%
BROADCASTING - 0.7%
Comcast Corp. Class A 144,600 3,940
Comcast Corp. Class A special 216,600 5,956
Cox Communications, Inc. Class A (a) 414,400 12,743
HSN, Inc. (a) 194,205 7,768
TCI Group Class A 1,217,527 27,927
Tele-Communications, Inc. (TCI) (Ventures Group) Series A (a)
1,537,973 35,469
Time Warner, Inc. 863,300 49,802
143,605
ENTERTAINMENT - 0.8%
Cedar Fair LP (depositary unit) 681,000 33,326
King World Productions, Inc. 238,700 11,279
MGM Grand, Inc. (a) 48,100 2,110
Royal Caribbean Cruises Ltd. 2,038,800 94,677
Viacom, Inc. Class A (a) 423,800 12,661
Viacom, Inc. Class B (non-vtg.) (a) 522,800 15,815
169,868
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.4%
Nintendo Co. Ltd. Ord. 932,700 $ 80,565
LODGING & GAMING - 1.0%
Circus Circus Enterprises, Inc. (a) 1,462,400 32,539
HFS, Inc. (a) 986,400 69,541
Harrah's Entertainment, Inc. (a) 579,600 11,411
Mirage Resorts, Inc. (a) 2,016,200 50,405
Rio Hotel & Casino, Inc. (a) 145,700 3,196
Sun International Hotels Ltd. Ord. (a) 1,124,000 40,464
207,556
PUBLISHING - 0.3%
Cognizant Corp. 517,200 20,268
Petersen Companies, Inc. Class A 20,600 407
US WEST Media Group (a) 1,751,000 44,213
64,888
RESTAURANTS - 0.8%
Brinker International, Inc. (a) 325,100 4,551
Lone Star Steakhouse Saloon (a) 919,000 21,252
McDonald's Corp. 1,738,700 77,915
Papa John's International, Inc. (a) 190,700 5,638
Tricon Global Restaurants, Inc. (a) 20,010 607
Wendy's International, Inc. 2,149,800 45,146
155,109
TOTAL MEDIA & LEISURE 821,591
NONDURABLES - 6.4%
BEVERAGES - 0.1%
PepsiCo, Inc. 200,100 7,366
FOODS - 0.0%
American Italian Pasta Co. Series A 15,500 326
HOUSEHOLD PRODUCTS - 0.0%
Premark International, Inc. 172,700 4,674
TOBACCO - 6.3%
Philip Morris Companies, Inc. 29,415,600 1,165,593
RJR Nabisco Holdings Corp. 4,241,960 134,417
1,300,010
TOTAL NONDURABLES 1,312,376
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
PRECIOUS METALS - 0.1%
Barrick Gold Corp. 150,100 $ 3,075
Newmont Mining Corp. 590,481 20,667
23,742
RETAIL & WHOLESALE - 8.1%
APPAREL STORES - 0.4%
Gap, Inc. 739,600 39,337
TJX Companies, Inc. 1,326,800 39,306
78,643
DRUG STORES - 0.0%
CVS Corp. 107,900 6,616
GENERAL MERCHANDISE STORES - 2.1%
Federated Department Stores, Inc. (a) 1,561,513 68,707
Proffitts, Inc. (a) 799,800 22,944
Wal-Mart Stores, Inc. 9,353,600 328,545
420,196
GROCERY STORES - 0.4%
Safeway, Inc. (a) 1,484,000 86,258
RETAIL & WHOLESALE, MISCELLANEOUS - 5.2%
Circuit City Stores, Inc. - Circuit City Group 4,585,300 182,839
Corporate Express, Inc. 835,500 12,271
Home Depot, Inc. 7,373,150 410,131
Lowe's Companies, Inc. 6,472,400 269,414
Officemax, Inc. (a) 2,459,325 32,893
Office Depot, Inc. (a) 713,700 14,720
PEAPOD, Inc. 48,200 458
Rex Stores Corp. (a) 336,000 3,885
Staples, Inc. (a) 1,403,000 36,829
Toys "R" Us, Inc. (a) 1,738,300 59,211
U.S. Office Products Co. (a) 738,200 23,069
Viking Office Products, Inc. (a) 996,500 23,854
1,069,574
TOTAL RETAIL & WHOLESALE 1,661,287
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 0.2%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc. 229,650 $ 10,908
LEASING & RENTAL - 0.0%
Avis Rent A Car, Inc. (a) 57,100 1,567
PRINTING - 0.0%
Donnelley (R.R.) & Sons Co. 223,700 7,298
SERVICES - 0.1%
Boron LePore & Associates, Inc. 12,800 312
Reuters Holdings PLC ADR Class B 393,200 25,853
26,165
TOTAL SERVICES 45,938
TECHNOLOGY - 11.3%
COMMUNICATIONS EQUIPMENT - 0.1%
Andrew Corp. (a) 570,900 13,238
Concord Communications, Inc. 6,200 110
Nokia Corp. AB sponsored ADR 153,300 13,529
26,877
COMPUTER SERVICES & SOFTWARE - 2.6%
Advantage Learning Systems, Inc. 9,300 235
Automatic Data Processing, Inc. 951,200 48,630
CUC International, Inc. (a) 1,916,000 56,522
Ceridian Corp. (a) 1,380,700 53,934
CompUSA, Inc. (a) 554,500 18,160
E Trade Group, Inc. (a) 387,900 11,976
Electronic Data Systems Corp. 2,828,100 109,412
First Data Corp. 1,542,900 44,840
J.D. Edwards & Co. 15,300 520
Microsoft Corp. (a) 590,200 76,726
N2K, Inc. 6,600 174
Netscape Communications Corp. (a) 11,700 385
Network Solutions, Inc. Class A 5,400 103
Omega Research, Inc. 10,700 88
Oracle Corp. (a) 1,176,525 42,098
Paychex, Inc. 503,400 19,192
Policy Management Systems Corp. (a)(c) 932,250 57,100
540,095
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 4.0%
Compaq Computer Corp. (a) 3,179,900 $ 202,719
Hewlett-Packard Co. 1,018,000 62,798
Ingram Micro, Inc. Class A (a) 170,000 5,068
International Business Machines Corp. 3,529,100 346,072
Quantum Corp. (a) 229,100 7,245
SCI Systems, Inc. (a)(c) 3,060,000 134,640
Tech Data Corp. (a) 1,007,300 44,825
Western Digital Corp. (a) 375,800 11,251
814,618
ELECTRONIC INSTRUMENTS - 0.8%
Applied Materials, Inc. (a) 150,000 5,006
Cognex Corp. (a) 372,600 9,967
Lam Research Corp. (a)(c) 2,110,500 76,242
Novellus Systems, Inc. (a) 320,800 14,276
Thermo Electron Corp. (a) 1,071,300 39,973
Varian Associates, Inc. 351,000 20,533
165,997
ELECTRONICS - 3.8%
AMP, Inc. 2,162,400 97,308
Intel Corp. 2,966,100 228,390
International Manufacturing Services, Inc. Class A 16,200 176
MMC Networks, Inc. 17,700 387
Methode Electronics, Inc. Class A 609,500 12,038
Micron Technology, Inc. (a) 3,889,600 104,290
Molex, Inc. 409,625 14,362
Motorola, Inc. 513,000 31,678
Power-One, Inc. 8,600 160
Solectron Corp. (a)(c) 7,193,900 282,360
Thomas & Betts Corp. 293,800 14,616
Uniphase Corp. (a) 32,100 2,155
787,920
TOTAL TECHNOLOGY 2,335,507
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.1%
Northwest Airlines Corp. Class A (a) 195,500 $ 8,798
RAILROADS - 0.3%
Bombardier, Inc. Class B 571,800 10,961
Burlington Northern Santa Fe Corp. 182,600 17,347
CSX Corp. 715,900 39,151
67,459
SHIPPING - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 610,000 16,165
Stolt-Nielsen SA 282,700 7,209
23,374
TRUCKING & FREIGHT - 0.1%
C.H. Robinson Worldwide, Inc. 39,900 878
Roadway Express, Inc. 170,200 4,723
Yellow Corp. (a) 636,300 17,458
23,059
TOTAL TRANSPORTATION 122,690
UTILITIES - 6.3%
CELLULAR - 2.2%
AirTouch Communications, Inc. (a) 4,183,700 161,595
Century Telephone Enterprises, Inc. 170,000 7,214
Vodafone Group PLC sponsored ADR 5,387,800 295,656
464,465
ELECTRIC UTILITY - 0.3%
American Electric Power Co., Inc. 589,800 27,868
Entergy Corp. 1,104,800 26,999
Niagara Mohawk Power Corp. (a) 468,200 4,536
PG&E Corp. 186,419 4,765
64,168
GAS - 0.1%
Enron Corp. 365,600 13,893
TELEPHONE SERVICES - 3.7%
AT&T Corp. 810,400 39,659
Ameritech Corp. 693,400 45,071
Bell Atlantic Corp. 1,058,746 84,567
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
BellSouth Corp. 1,265,700 $ 59,883
Deutsche Telekom AG 442,800 8,420
France Telecom SA 84,800 3,204
ITC Deltacom, Inc. 14,500 279
MCI Communications Corp. 6,832,100 242,540
Metromedia Fiber Network, Inc. Class A 31,300 751
NEXTLINK Communications, Inc. Class A 24,700 559
SBC Communications, Inc. 1,062,100 67,576
Sprint Corp. 3,707,900 192,811
WorldCom, Inc. (a) 572,800 19,260
764,580
TOTAL UTILITIES 1,307,106
TOTAL COMMON STOCKS
(Cost $11,594,820) 16,541,986
U.S. TREASURY OBLIGATIONS - 12.1%
PRINCIPAL
AMOUNT (000S)
stripped principal:
0%, 2/15/19 $ 557,000 146,948
0%, 8/15/19 420,000 107,616
0%, 8/15/20 1,211,300 290,918
0%, 8/15/21 212,000 47,770
6 1/4%, 8/15/23 280,750 281,758
7 5/8%, 11/15/22 106,000 124,583
8 1/8%, 8/15/19 1,229,000 1,505,144
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,247,055) 2,504,737
CASH EQUIVALENTS - 7.6%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (b)
(Cost $1,561,574) 1,561,574,132 $ 1,561,574
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $15,403,449) $ 20,608,297
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.64%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 11 of Notes to Financial Statements).
INCOME TAX INFORMATION
At October 31, 1997, the aggregate cost of investment securities for
income tax purposes was $15,412,979,000. Net unrealized appreciation
aggregated $5,195,318,000, of which $5,545,920,000 related to
appreciated investment securities and $350,602,000 related to
depreciated investment securities.
The fund hereby designates approximately $108,011,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1997 OCTOBER 31, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $15,523,010 $ 21,312,625 $ 20,608,297
AND $15,403,449, RESPECTIVELY) - SEE ACCOMPANYING
SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 61,687 43,259
RECEIVABLE FOR FUND SHARES SOLD 22,096 12,115
DIVIDENDS RECEIVABLE 18,025 13,369
INTEREST RECEIVABLE 41,775 34,544
OTHER RECEIVABLES 54 53
PREPAID EXPENSES 16 6
TOTAL ASSETS 21,456,278 20,711,643
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 46,983 $ 139,514
PAYABLE FOR FUND SHARES REDEEMED 14,902 24,659
ACCRUED MANAGEMENT FEE 8,232 8,305
DISTRIBUTION FEES PAYABLE 8,730 8,678
OTHER PAYABLES AND ACCRUED EXPENSES 3,911 3,679
TOTAL LIABILITIES 82,758 184,835
NET ASSETS $ 21,373,520 $ 20,526,808
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 14,129,342 $ 13,867,888
UNDISTRIBUTED NET INVESTMENT INCOME 201,723 199,910
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 1,252,830 1,254,148
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 5,789,625 5,204,862
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS $ 21,373,520 $ 20,526,808
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1997 OCTOBER 31, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $44.02 $42.57
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($142,754 (DIVIDED BY) 3,243 SHARES) AND
($129,628 (DIVIDED BY) 3,045 SHARES), RESPECTIVELY
MAXIMUM OFFERING PRICE PER SHARE (100/94.25 $46.71 $45.17
OF $44.02 AND $42.57), RESPECTIVELY
CLASS T: $44.20 $42.76
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($20,410,697 (DIVIDED BY) 461,756 SHARES) AND
($19,651,539 (DIVIDED BY) 459,566 SHARES), RESPECTIVELY
MAXIMUM OFFERING PRICE PER SHARE (100/96.50 $45.80 $44.31
OF $44.20 AND $42.76), RESPECTIVELY
CLASS B: $44.02 $42.60
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($422,511 (DIVIDED BY) 9,598 SHARES) A AND
($370,662 (DIVIDED BY) 8,700 SHARES) A, RESPECTIVELY
CLASS C: $44.20
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($5,845 (DIVIDED BY) 132.24 SHARES) A
INSTITUTIONAL CLASS: $44.31 $42.85
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE ($391,713 (DIVIDED BY) 8,840 SHARES) AND
($374,979 (DIVIDED BY) 8,751 SHARES), RESPECTIVELY
</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>
AMOUNTS IN THOUSANDS ONE MONTH ENDED YEAR ENDED
NOVEMBER 30, OCTOBER 31,
1997 1997
INVESTMENT INCOME $ 16,523 $ 228,696
DIVIDENDS (INCLUDING $196 AND $1,022 RECEIVED FROM
AFFILIATED ISSUERS, RESPECTIVELY)
INTEREST 19,942 226,985
TOTAL INCOME 36,465 455,681
EXPENSES
MANAGEMENT FEE $ 10,410 $ 106,149
BASIC FEE
PERFORMANCE ADJUSTMENT (2,127) (19,295)
TRANSFER AGENT FEES 2,898 30,740
DISTRIBUTION FEES 8,730 87,524
ACCOUNTING FEES AND EXPENSES 78 836
NON-INTERESTED TRUSTEES' COMPENSATION 6 103
CUSTODIAN FEES AND EXPENSES 54 535
REGISTRATION FEES 91 1,182
AUDIT - 108
LEGAL 24 118
INTEREST - 3
REPORTS TO SHAREHOLDERS - 1,155
MISCELLANEOUS 105 97
TOTAL EXPENSES BEFORE REDUCTIONS 20,269 209,255
EXPENSE REDUCTIONS (187) (1,893)
TOTAL EXPENSES AFTER REDUCTIONS 20,082 207,362
NET INVESTMENT INCOME 16,383 248,319
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN (LOSS) 92,112 1,262,939
OF $183 AND $1,017 ON SALES OF INVESTMENTS IN
AFFILIATED ISSUERS, RESPECTIVELY)
FOREIGN CURRENCY TRANSACTIONS 10 (49)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 584,767 2,623,696
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (4) (12)
NET GAIN (LOSS) 676,885 3,886,574
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 693,268 $ 4,134,893
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS ONE MONTH ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, OCTOBER 31, OCTOBER 31,
1997 1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 16,383 $ 248,319 $ 234,195
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 92,122 1,262,890 651,211
CHANGE IN NET UNREALIZED 584,763 2,623,684 1,129,840
APPRECIATION (DEPRECIATION)
NET INCREASE (DECREASE) IN NET ASSETS 693,268 4,134,893 2,015,246
RESULTING FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS - (225,025) (136,201)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN - (596,509) (132,145)
TOTAL DISTRIBUTIONS - (821,534) (268,346)
SHARE TRANSACTIONS - NET INCREASE 153,444 2,638,031 3,065,574
(DECREASE)
TOTAL INCREASE (DECREASE) IN 846,712 5,951,390 4,812,474
NET ASSETS
NET ASSETS
BEGINNING OF PERIOD 20,526,808 14,575,418 9,762,944
END OF PERIOD (INCLUDING UNDISTRIBUTED $ 21,373,520 $ 20,526,808 $ 14,575,418
NET INVESTMENT INCOME OF $201,723,
$199,910 AND $193,053,
RESPECTIVELY)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
ONE MONTH ENDED YEARS ENDED OCTOBER 31,
NOVEMBER 30,
1997 1997 1996 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.57 $ 35.39 $ 32.86
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .04 .54 .09
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.41 8.80 2.44
TOTAL FROM INVESTMENT OPERATIONS 1.45 9.34 2.53
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.72) -
FROM NET REALIZED GAIN - (1.44) -
TOTAL DISTRIBUTIONS - (2.16) -
NET ASSET VALUE, END OF PERIOD $ 44.02 $ 42.57 $ 35.39
TOTAL RETURN B, C 3.41% 27.58% 7.70%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 143 $ 130 $ 10
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.10% A, F 1.05% 1.48% A,
F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER 1.09% A, G 1.04% G 1.47% A,
EXPENSE REDUCTIONS G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.22% A 1.36% 1.74% A
PORTFOLIO TURNOVER 33% A 35% 33%
AVERAGE COMMISSION RATE H $ .0497 $ .0480 $ .0401
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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 6 OF NOTES TO FINANCIAL STATEMENTS).
G 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 6 OF NOTES TO FINANCIAL STATEMENTS).
H A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
ONE MONTH ENDED YEARS ENDED OCTOBER 31,
NOVEMBER 30,
1997 1997 1996 1995 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 42.76 $ 35.41 $ 30.89 $ 26.62 $ 25.39 $ 21.14
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT .03 D .55 D .61 D .39 .22 .08
INCOME
NET REALIZED AND 1.41 8.78 4.72 5.31 1.92 5.56
UNREALIZED GAIN
(LOSS)
TOTAL FROM INVESTMENT 1.44 9.33 5.33 5.70 2.14 5.64
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT - (.54) (.41) (.27) (.07) (.13)
INCOME
FROM NET - (1.44) (.40) (1.16) (.84) (1.26)
REALIZED GAIN
TOTAL DISTRIBUTIONS - (1.98) (.81) (1.43) (.91) (1.39)
NET ASSET VALUE, $ 44.20 $ 42.76 $ 35.41 $ 30.89 $ 26.62 $ 25.39
END OF PERIOD
TOTAL RETURN B, C 3.37% 27.43% 17.61% 22.88% 8.71% 28.11%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 20,411 $ 19,652 $ 14,315 $ 9,691 $ 4,599 $ 2,055
PERIOD (IN MILLIONS)
RATIO OF EXPENSES TO 1.28% A 1.18% 1.34% 1.59% 1.63% 1.65%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO 1.27% A, 1.17% 1.34% 1.58% 1.62% 1.64%
AVERAGE NET ASSETS E E E E E
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INVESTMENT 1.03% A 1.39% 1.88% 1.56% 1.12% .43%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER 33% A 35% 33% 39% 43% 69%
AVERAGE COMMISSION $ .0497 $ .0480 $ .0401
RATE F
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 6 OF NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
ONE MONTH ENDED PERIOD ENDED
NOVEMBER 30, OCTOBER 31,
1997 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.60 $ 37.62
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .02 .13
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.40 4.85
TOTAL FROM INVESTMENT OPERATIONS 1.42 4.98
NET ASSET VALUE, END OF PERIOD $ 44.02 $ 42.60
TOTAL RETURN B, C 3.33% 13.24%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 423 $ 371
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.85% A, H 1.75% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.84% A, F 1.74% A,
F
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .47% A .48% A
PORTFOLIO TURNOVER 33% A 35%
AVERAGE COMMISSION RATE G $ .0497 $ .0480
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1997.
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 6 OF NOTES TO FINANCIAL STATEMENTS).
G A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
H 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 6 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
NOVEMBER 30,
1997 E
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 43.62
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .02
NET REALIZED AND UNREALIZED GAIN (LOSS) .56
TOTAL FROM INVESTMENT OPERATIONS .58
NET ASSET VALUE, END OF PERIOD $ 44.20
TOTAL RETURN B, C 1.33%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 6
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.85% A,
F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.84% A,
G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .74% A
PORTFOLIO TURNOVER 33% A
AVERAGE COMMISSION RATE H $ .0497
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
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 6 OF NOTES TO FINANCIAL STATEMENTS).
G 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 6 OF NOTES TO FINANCIAL STATEMENTS).
H A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
ONE MONTH ENDED YEARS ENDED OCTOBER 31,
NOVEMBER 30,
1997 1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.85 $ 35.47 $ 30.97 $ 29.04
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .05 D .75 D .77 D .12
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.41 8.78 4.74 1.81
TOTAL FROM INVESTMENT OPERATIONS 1.46 9.53 5.51 1.93
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.71) (.61) -
FROM NET REALIZED GAIN - (1.44) (.40) -
TOTAL DISTRIBUTIONS - (2.15) (1.01) -
NET ASSET VALUE, END OF PERIOD $ 44.31 $ 42.85 $ 35.47 $ 30.97
TOTAL RETURN B, C 3.41% 28.07% 18.25% 6.65%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 392 $ 375 $ 250 $ 72
RATIO OF EXPENSES TO AVERAGE NET ASSETS .71% A .66% .85% .82% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .70% A, F .65% .84% .81% A,
EXPENSE REDUCTIONS F F F
RATIO OF NET INVESTMENT INCOME TO AVERAGE 1.60% A 1.91% 2.38% 2.33% A
NET ASSETS
PORTFOLIO TURNOVER 33% A 35% 33% 39%
AVERAGE COMMISSION RATE G $ .0497 $ .0480 $ .0401
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the periods ended November 30, 1997 and October 31, 1997
11. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Growth Opportunities 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, Class B, Class C 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 Class B on March 3, 1997
and Class C on November 3, 1997. 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. At a special meeting of the shareholders of the fund held
on July 16, 1997, shareholders approved an Agreement and Plan of
Reorganization, providing for the reorganization of the fund into
Fidelity Advisor Series I, effective on or about February 28, 1998.
Effective November 30, 1997, the Board of Trustees approved a change
in the fiscal year-end of the fund to November 30. Accordingly, the
financial statements of the fund are presented as of and for the year
ended October 31, 1997 and as of and for the one-month period ended
November 30, 1997. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. 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.
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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 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. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
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
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C and amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
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 litigation proceeds, foreign currency transactions,
partnerships
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
and losses deferred due to wash sales. The fund also utilized earnings
and profits distributed to shareholders on redemption of shares as a
part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
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.
12. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
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 SEC), 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 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.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, an affiliate of FMR. The Cash Fund is
an open-end money market fund available only to investment companies
and other accounts managed by FMR and its affiliates. The Cash Fund
seeks preservation of capital, liquidity, and current income by
investing in
2. OPERATING POLICIES - CONTINUED
TAXABLE CENTRAL CASH FUND - CONTINUED
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions
received by the fund are recorded as interest income in the
accompanying financial statements.
13. PURCHASES AND SALES OF INVESTMENTS.
For the one month period ended November 30, 1997, purchases and sales
of securities, other than short-term securities, aggregated
$545,497,000 and $479,980,000, respectively, of which U.S. government
and government agency obligations aggregated $35,817,000 and $0,
respectively.
For the year ended October 31, 1997, purchases and sales of
securities, other than short-term securities, aggregated
$7,217,046,000 and $5,743,169,000, respectively, of which U.S.
government and government agency obligations aggregated $372,743,000
and $342,374,000, respectively.
14. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic 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 .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. 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 basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the investment performance of the asset weighted
average return of all classes as compared to the appropriate index
over a specific period of time. Prior to August 1, 1997 the
performance adjustment was based on the investment performance of the
lowest performing class as compared to the appropriate index over a
specified period of time. For the one-month period ended November 30,
1997, the management fee was equivalent to an annualized rate of .52%
of average net assets after the performance adjustment. For the year
ended October 31, 1997, the management fee was equivalent to an annual
rate of .49% of average net assets after the performance adjustment.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
C .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
ONE MONTH ENDED YEAR ENDED
NOVEMBER 30, 1997 OCTOBER 31, 1997
PAID TO DEALERS' PAID TO DEALERS'
FDC PORTION FDC PORTION
CLASS A $ 28,000 $ 28,000 $ 154,000 $ 154,000
CLASS T 8,370,000 8,370,000 86,244,000 86,244,000
CLASS B 330,000 82,000 1,126,000 282,000
CLASS C 2,000 -
$ 8,730,000 $ 8,480,000 $ 87,524,000 $ 86,680,000
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase (five years prior
to January 2, 1997) and Class C share redemptions occurring within one
year of purchase. Contingent deferred sales charges are based on
declining rates which range from 5% to 1% (4% to 1% prior to January
2, 1997) for Class B and 1% for Class C, of the lesser of the cost of
shares at the initial date of purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities
dealers, banks, and other financial institutions:
ONE MONTH ENDED YEAR ENDED
NOVEMBER 30,1997 OCTOBER 31, 1997
PAID TO DEALERS' PAID TO DEALERS'
FDC PORTION FDC PORTION
CLASS A $ 189,000 $ 116,000 $ 2,096,000 $ 1,478,000
CLASS T 821,000 469,000 13,380,000 8,842,000
CLASS B 41,000 0 154,000 0 *
*
CLASS C 0 0
*
$ 1,051,000 $ 585,000 $ 15,630,000 $ 10,320,000
D WHEN CLASS B SHARES AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO DEALERS THROUGH WHICH THE SALES
ARE MADE.
TRANSFER AGENT FEES. Each class of the fund has entered into a
separate transfer, dividend disbursing, and shareholder servicing
agent contract with respect to its shares. Fidelity Investments
Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR,
is the transfer agent for each class and receives account fees and
asset-based fees that vary according to the account size and type of
account of the shareholders of the respective classes of the fund.
FIIOC also pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. For the period, the
following amounts were paid:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ONE MONTH ENDED YEAR ENDED
NOVEMBER 30, 1997 OCTOBER 31, 1997
AMOUNT % OF AMOUNT % OF
AVERAGE AVERAGE
NET ASSETS NET ASSETS
CLASS A $ 27,000 .26 $ 150,000 .24
CLASS T ** 2,749,000 .18 29,863,000 .17
CLASS B 76,000 .26 276,000 .24
CLASS C 1,000 .23
INSTITUTIONAL CLASS 45,000 .15 451,000 .15
$ 2,898,000 $ 30,740,000
</TABLE>
** PRIOR TO JANUARY 1, 1997 STATE STREET BANK AND TRUST COMPANY WAS
THE TRANSFER AGENT FOR THE FUND'S CLASS T SHARES. STATE STREET,
HOWEVER, HAD DELEGATED
CERTAIN TRANSFER, DIVIDEND DISBURSING, AND SHAREHOLDER SERVICES TO
FIIOC FOR WHICH FIIOC RECEIVED ITS ALLOCABLE SHARE OF ALL SUCH FEES.
ACCOUNTING FEES. Fidelity Service Company, Inc. 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $171,000 and
$1,392,000 for the periods ended November 30, 1997 and October 31,
1997, respectively.
15. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balance during the period ended October 31, 1997, for which the loan
was outstanding amounted to $21,035,000. The weighted average interest
rate was 5.88%. There were no bank borrowings for the period ended
November 30, 1997.
16. EXPENSE REDUCTIONS.
Effective November 1, 1997, FMR voluntarily agreed to reimburse
operating expenses (excluding interest, taxes, brokerage commissions
and extraordinary expenses) above the following annual rates for each
class. For the one-month period ended November 30, 1997, amounts
reimbursed were as follows:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.10% $ 4,000
CLASS B 1.85% 46,000
CLASS C 1.85% 1,000
$ 51,000
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the periods ended November 30,
1997 and October 31, 1997, the fund's expenses were reduced by
$107,000 and $1,689,000, respectively, under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
For the periods ended November 30, 1997 and October 31,
6. EXPENSE REDUCTIONS - CONTINUED
1997, the fund's custodian fees were reduced by $0 and $8,000,
respectively, under the custodian arrangement, and each applicable
class' expenses were reduced as follows under the transfer agent
arrangements:
TRANSFER TRANSFER
AGENT CREDITS AGENT CREDITS
NOVEMBER 30, OCTOBER 31,
1997 1997
CLASS T $ 29,000 $ 181,000
INSTITUTIONAL CLASS - 15,000
$ 29,000 $ 196,000
17. BENEFICIAL INTEREST.
For the periods ended November 30, 1997 and October 31, 1997, one
shareholder was record owner of approximately 16% of the total
outstanding shares of the fund.
18. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each applicable class were as
follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
CLASS A
FROM NET INVESTMENT INCOME $ 340,000 $ -
FROM NET REALIZED GAIN 680,000 -
TOTAL $ 1,020,000 $ -
CLASS T
FROM NET INVESTMENT INCOME $ 219,398,000 $ 133,926,000
FROM NET REALIZED GAIN 585,105,000 130,654,000
TOTAL $ 804,503,000 $ 264,580,000
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 5,287,000 $ 2,275,000
FROM NET REALIZED GAIN 10,724,000 1,491,000
TOTAL $ 16,011,000 $ 3,766,000
$ 821,534,000 $ 268,346,000
19. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS DOLLARS
ONE MONTH ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, OCTOBER 31, OCTOBER 31,
1997 C 1997 B 1996 A
CLASS A $ 9,817 $ 117,909 $ 10,073
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 980 -
SHARES REDEEMED (1,181) (9,793) (113)
NET INCREASE (DECREASE) $ 8,636 $ 109,096 $ 9,960
CLASS T $ 284,968 $ 4,556,363 $ 4,928,926
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 753,684 246,836
SHARES REDEEMED (188,917) (3,203,810) (2,270,466)
NET INCREASE (DECREASE) $ 96,051 $ 2,106,237 $ 2,905,296
CLASS B $ 40,834 $ 361,076
SHARES SOLD
SHARES REDEEMED (1,738) (7,098)
NET INCREASE (DECREASE) $ 39,096 $ 353,978
CLASS C $ 5,792
SHARES SOLD
SHARES REDEEMED (12)
NET INCREASE (DECREASE) $ 5,780
INSTITUTIONAL CLASS $ 9,609 $ 232,509 $ 256,839
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 12,382 2,371
SHARES REDEEMED (5,728) (176,171) (108,892)
NET INCREASE (DECREASE) $ 3,881 $ 68,720 $ 150,318
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996.
B SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997.
C SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
9. SHARE TRANSACTIONS - CONTINUED
AMOUNTS IN THOUSANDS SHARES
ONE MONTH ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, OCTOBER 31, OCTOBER 31,
1997 C 1997 B 1996 A
CLASS A 225 2,974 291
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 27 -
SHARES REDEEMED (27) (244) (3)
NET INCREASE (DECREASE) 198 2,757 288
CLASS T 6,519 116,907 152,105
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 21,028 7,909
SHARES REDEEMED (4,329) (82,660) (69,474)
NET INCREASE (DECREASE) 2,190 55,275 90,540
CLASS B 938 8,871
SHARES SOLD
SHARES REDEEMED (40) (171)
NET INCREASE (DECREASE) 898 8,700
CLASS C 132
SHARES SOLD
SHARES REDEEMED -
NET INCREASE (DECREASE) 132
INSTITUTIONAL CLASS 219 6,006 7,960
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS - 346 76
SHARES REDEEMED (130) (4,658) (3,302)
NET INCREASE (DECREASE) 89 1,694 4,734
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996.
B SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997.
C SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
20. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, OCTOBER 31,
1997 1997
CLASS A $ 6,000 $ 40,000
CLASS T 51,000 1,036,000
CLASS B 30,000 67,000
CLASS C 1,000
INSTITUTIONAL CLASS 3,000 39,000
$ 91,000 $ 1,182,000
21. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PERIOD ENDED NOVEMBER 30, 1997
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Cherry Corp. Class A $ - $ - $ - $ 7,992
Cherry Corp. Class B - - - 5,248
Discount Auto Parts, Inc. - - - 17,697
Fleetwood Enterprises, Inc. - - - 72,762
Kaufman & Broad Home Corp. - - 196 56,691
Lam Research Corp. - - - 64,634
Policy Management Systems Corp. - - - 60,247
SCI Systems, Inc. - 249 - 139,714
Solectron Corp. - - - 262,128
Ultratech Stepper, Inc. - - - 32,178
TOTALS $ - $ 249 $ 196 $ 719,291
11. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
PERIOD ENDED OCTOBER 31, 1997
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Beazer Homes USA, Inc. $ - $ 5,413 $ - $ -
Cherry Corp. Class A - - - 8,261
Cherry Corp. Class B - - - 5,571
Circuit City Stores, Inc. -
Circuit City Group - 1,155 172 -
Discount Auto Parts, Inc. 1,693 - - 19,828
Fleetwood Enterprises, Inc. 7,044 - 680 61,803
Good Guys, Inc. - 6,371 - -
Kaufman & Broad Home Corp. 12,354 - 170 55,711
Lam Research Corp. 16,964 - - 76,242
Novellus Systems, Inc. 587 2,991 - -
Policy Management Systems Corp. 289 - - 57,100
Quad Systems Corp. - 1,367 - -
Rex Stores Corp. - 2,541 - -
SCI Systems, Inc. 6,704 8,339 - 134,640
Solectron Corp. 14,957 1,693 - 282,360
Ultratech Stepper, Inc. 5,075 - - 35,607
TOTALS $ 65,667 $ 29,870 $ 1,022 $ 737,123
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series II and the Shareholders of
Fidelity Advisor Growth Opportunities Fund:
We have audited the accompanying statements of assets and liabilities
of Fidelity Advisor Series II: Fidelity Advisor Growth Opportunities
Fund, including the schedules of portfolio investments, as of October
31, 1997 and November 30, 1997, and the related statements of
operations for the year ended October 31, 1997 and the one month
period ended November 30, 1997, the statements of changes in net
assets for each of the two years in the period ended October 31, 1997
and the one month period ended November 30, 1997, and the financial
highlights for Class A, Class T, Class B, Class C 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, 1997 and November
30, 1997 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
Growth Opportunities Fund as of October 31, 1997 and November 30,
1997, the results of its operations for the year ended October 31,
1997 and the one month period ended November 30, 1997, the changes in
its net assets for each of the two years in the period ended October
31, 1997 and the one month period ended November 30, 1997, and the
financial highlights for Class A, Class T, Class B, Class C 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
January 5, 1998
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Growth Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/15/97 12/12/97 $0.60 $2.39
1/5/98 1/2/98 - $0.21
Class T 12/15/97 12/12/97 $0.47 $2.39
1/5/98 1/2/98 - $0.21
Class B 12/15/97 12/12/97 $0.48 $2.39
1/5/98 1/2/98 - $0.21
Class C 12/15/97 12/12/97 $0.47 $2.39
1/5/98 1/2/98 - $0.21
A total of 24.14% of the dividends distributed during the fiscal year
ended October 31, 1997, was derived from interest on U.S. Government
securities which is generally exempt from state income tax.
A total of 33% and 40% of the dividends distributed during the fiscal
year ended October 31, 1997, qualifies for the dividends-received
deduction for corporate shareholders of Class A and Class T,
respectively.
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on July 16,
1997. The results of votes taken among shareholders on proposals
before them are listed below.
PROPOSAL 1
To approve an amended management contract for the fund.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 219,101,991.334 89.108
AGAINST 6,155,948.183 2.504
ABSTAIN 20,624,619.428 8.388
TOTAL 245,882,558.945 100.000
PROPOSAL 2
To approve an agreement and plan of reorganization of the fund from a
separate series of one Massachusetts business trust to another.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 220,368,601.420 89.624
AGAINST 4,861,351.636 1.977
ABSTAIN 20,652,605.889 8.399
TOTAL 245,882,558.945 100.00
PROPOSAL 3
To amend the fund's fundamental investment limitation concerning
diversification.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 217,785,887.800 88.573
AGAINST 6,839,777.110 2.782
ABSTAIN 21,256,894.035 8.645
TOTAL 245,882,558.945 100.000
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
George A. Vanderheiden, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
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 International
Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(REGISTERED TRADEMARK)
