SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 811-4707)
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 49
Fidelity Advisor Series II
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (617) 563-7000
Eric D. Roiter, Secretary
82 Devonshire Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.
FIDELITY(registered trademark) ADVISOR
INTERMEDIATE
MUNICIPAL INCOME
FUND
CLASS A
(Fund 262, cusip 315917807)
CLASS T
(Fund 289, cusip 315917401)
CLASS B
(Fund 689, cusip 315917609)
CLASS C
(Fund 525, cusip 315917872)
PROSPECTUS
FEBRUARY 14, 2000
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
3 PERFORMANCE
5 FEE TABLE
FUND BASICS 7 INVESTMENT DETAILS
7 VALUING SHARES
SHAREHOLDER INFORMATION 8 BUYING AND SELLING SHARES
14 EXCHANGING SHARES
15 ACCOUNT FEATURES AND POLICIES
19 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
19 TAX CONSEQUENCES
FUND SERVICES 20 FUND MANAGEMENT
20 FUND DISTRIBUTION
APPENDIX 24 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing in investment-grade municipal
debt securities (those of medium and high quality).
(small solid bullet) Normally investing at least 80% of assets in
municipal securities whose interest is exempt from federal income tax.
(small solid bullet) Potentially investing more than 25% of total
assets in municipal securities that finance similar types of projects.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers 1-17 Year Municipal Bond
Index.
(small solid bullet) Normally maintaining a dollar-weighted average
maturity between three and 10 years.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features and
current pricing, trading opportunities, and the credit quality of its
issuer to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) MUNICIPAL MARKET VOLATILITY. The municipal market
is volatile and can be significantly affected by adverse tax,
legislative or political changes and the financial condition of the
issuers of municipal securities.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates the changes in the fund's
performance from year to year as represented by the performance of
Class T, and compares each class's performance to the performance of a
market index and an average of the performance of similar funds over
various periods of time. Each class of the fund also compares its
performance to the performance of an additional index over various
periods of time. Data for the additional index is available only from
June 30, 1993 to the present. Returns are based on past results and
are not an indication of future performance.
YEAR-BY-YEAR RETURNS
The returns in the chart do not include the effect of Class T's
front-end sales charge. If the effect of the sales charge were
reflected, returns would be lower than those shown.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE
MUNICIPAL INCOME - CLASS T
Calendar Years 1993 1994 1995 1996 1997 1998
9.43% -5.68% 14.20% 3.89% 7.80% 5.08%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: 9.43
Row: 6, Col: 1, Value: -5.68
Row: 7, Col: 1, Value: 14.2
Row: 8, Col: 1, Value: 3.89
Row: 9, Col: 1, Value: 7.8
Row: 10, Col: 1, Value: 5.08
DURING THE PERIODS SHOWN IN THE CHART FOR CLASS T OF ADVISOR
INTERMEDIATE MUNICIPAL INCOME, THE HIGHEST RETURN FOR A QUARTER WAS
6.27% (QUARTER ENDING MARCH 31, 1995) AND THE LOWEST RETURN FOR A
QUARTER WAS -5.44% (QUARTER ENDING MARCH 31, 1994).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR CLASS T OF
ADVISOR INTERMEDIATE MUNICIPAL INCOME WAS -0.88%.
AVERAGE ANNUAL RETURNS
The returns in the following table include the effect of Class A's and
Class T's maximum applicable front-end sales charge and Class B's and
Class C's maximum applicable contingent deferred sales charge (CDSC).
For the periods ended Past 1 year Past 5 years Life of Class
December 31, 1998
Advisor Intermediate 1.18% n/a 5.31%A
Municipal Income - Class A
Advisor Intermediate 2.19% 4.27% 5.12%B
Municipal Income - Class T
Advisor Intermediate 1.35% n/a 5.81%C,E
Municipal Income - Class B
Advisor Intermediate 3.32% n/a 5.32%D
Municipal Income - Class C
Lehman Brothers Municipal 6.48% 6.22% n/a
Bond Index
Lehman Brothers 1-17 Year 6.28% 5.92% n/a
Municipal Bond Index
Lipper Intermediate Municipal 5.35% 5.17% n/a
Debt Funds Average
A FROM SEPTEMBER 3, 1996.
B FROM SEPTEMBER 10, 1992.
C FROM JUNE 30, 1994.
D FROM NOVEMBER 3, 1997.
E RETURNS REFLECT THE CONVERSION OF CLASS B SHARES TO CLASS A SHARES
AFTER A MAXIMUM OF FOUR YEARS.
If FMR had not reimbursed certain class expenses during these periods,
Class A's, Class T's, Class B's, and Class C's returns would have been
lower.
The Lehman Brothers Municipal Bond Index is a market value-weighted
index of investment-grade municipal bonds with maturities of one year
or more.
The Lehman Brothers 1-17 Year Municipal Bond Index is a market
value-weighted index of investment-grade municipal bonds with
maturities between one and 17 years.
Lipper Intermediate Municipal Debt Funds Average reflects the
performance (excluding sales charges) of mutual funds with similar
objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell Class A, Class T, Class B, and Class C
shares of the fund. The annual class operating expenses provided below
for each class do not reflect the effect of any expense reimbursements
during the period.
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Class A Class T Class B Class C
Maximum sales charge (load) 3.75%A 2.75%B None None
on purchases (as a % of
offering price)
Maximum CDSC (as a % of the NoneC NoneC 3.00%D 1.00%E
lesser of original purchase
price or redemption proceeds)
Sales charge (load) on None None None None
reinvested distributions
A LOWER FRONT-END SALES CHARGES FOR CLASS A MAY BE AVAILABLE WITH
PURCHASE OF $50,000 OR MORE.
B LOWER FRONT-END SALES CHARGES FOR CLASS T MAY BE AVAILABLE WITH
PURCHASE OF $50,000 OR MORE.
C A CDSC OF 0.25% IS ASSESSED ON CERTAIN REDEMPTIONS OF CLASS A AND
CLASS T SHARES ON WHICH A FINDER'S FEE WAS PAID.
D DECLINES OVER 3 YEARS FROM 3.00% TO 0%.
E ON CLASS C SHARES REDEEMED WITHIN ONE YEAR OF PURCHASE.
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS)
Class A Class T Class B Class C
Management fee 0.38% 0.38% 0.38% 0.38%
Distribution and Service 0.15% 0.25% 0.90% 1.00%
(12b-1) fee (including 0.25%
Service fee only for Class B
and Class C)
Other expenses 0.47% 0.44% 0.43% 0.47%
Total annual class operating 1.00% 1.07% 1.71% 1.85%
expensesA
A FMR HAS VOLUNTARILY AGREED TO REIMBURSE CLASS A, CLASS T, CLASS B,
AND CLASS C OF THE FUND TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS, AND EXTRAORDINARY
EXPENSES), AS A PERCENTAGE OF THEIR RESPECTIVE AVERAGE NET ASSETS,
EXCEED THE FOLLOWING RATES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Effective Date Class T Effective Date Class B Effective Date Class C Effective Date
Advisor Intermediate 0.85% 12/1/98 0.90% 5/29/98 1.60% 12/1/98 1.70% 12/1/98
Municipal Income
</TABLE>
THESE ARRANGEMENTS CAN BE DISCONTINUED BY FMR AT ANY TIME.
This EXAMPLE helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds.
Let's say, hypothetically, that each class's annual return is 5% and
that your shareholder fees and each class's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account after the number of years indicated
and if you leave your account open:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Class A Class T Class B Class C
Account open Account closed Account open Account closed Account open Account closed Account open
1 year $ 473 $ 473 $ 381 $ 381 $ 174 $ 474 $ 188
3 years $ 681 $ 681 $ 606 $ 606 $ 539 $ 639 $ 582
5 years $ 907 $ 907 $ 849 $ 849 $ 846A $ 846A $ 1,001
10 years $ 1,554 $ 1,554 $ 1,545 $ 1,545 $ 1,500A $ 1,500A $ 2,169
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Class C
Account closed
1 year $ 288
3 years $ 582
5 years $ 1,001
10 years $ 2,169
</TABLE>
A REFLECTS CONVERSION TO CLASS A SHARES AFTER A MAXIMUM OF FOUR YEARS.
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests the fund's assets in investment-grade municipal
debt securities (those of medium and high quality).
FMR normally invests at least 80% of the fund's assets in municipal
securities whose interest is exempt from federal income tax. Although
FMR does not currently intend to invest the fund's assets in municipal
securities whose interest is subject to federal income tax, FMR may
invest all of the fund's assets in municipal securities whose interest
is subject to the federal alternative minimum tax.
FMR may invest more than 25% of the fund's total assets in municipal
securities that finance similar projects, such as those relating to
education, health care, transportation, and utilities.
FMR uses the Lehman Brothers 1-17 Year Municipal Bond Index as a guide
in structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. In
addition, the fund normally maintains a dollar-weighted average
maturity between three and 10 years. As of October 31, 1999, the
dollar-weighted average maturity of the fund and the index was
approximately 7.2 and 7.8 years, respectively.
FMR allocates the fund's assets among different market sectors (for
example, general obligation bonds of a state or bonds financing a
specific project) and different maturities based on its view of the
relative value of each sector and maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Municipal debt
securities include general obligation bonds of municipalities, local
or state governments, project or revenue-specific bonds, or
pre-refunded or escrowed bonds.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
and private purposes, including general financing for state and local
governments, or financing for a specific project or public facility.
Municipal securities may be fully or partially backed by the local
government, by the credit of a private issuer, by the current or
anticipated revenues from a specific project or specific assets, or by
domestic or foreign entities providing credit support such as letters
of credit, guarantees, or insurance.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's yield and share
price change daily based on changes in interest rates and market
conditions and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types and maturities of securities in which the fund
invests, the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. When you sell your shares of the
fund, they could be worth more or less than what you paid for them.
The following factors can significantly affect the fund's performance:
MUNICIPAL MARKET VOLATILITY. Municipal securities can be significantly
affected by political changes as well as uncertainties in the
municipal market related to taxation, legislative changes, or the
rights of municipal security holders. Because many municipal
securities are issued to finance similar projects, especially those
relating to education, health care, transportation, and utilities,
conditions in those sectors can affect the overall municipal market.
In addition, changes in the financial condition of an individual
municipal insurer can affect the overall municipal market.
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities can be more
sensitive to interest rate changes. In other words, the longer the
maturity of a security, the greater the impact a change in interest
rates could have on the security's price. In addition, short-term and
long-term interest rates do not necessarily move in the same amount or
the same direction. Short-term securities tend to react to changes in
short-term interest rates, and long-term securities tend to react to
changes in long-term interest rates.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. Lower-quality debt securities (those
of less than investment-grade quality) tend to be more sensitive to
these changes than higher-quality debt securities. Municipal
securities backed by current or anticipated revenues from a specific
project or specific assets can be negatively affected by the
discontinuance of the taxation supporting the project or assets or the
inability to collect revenues for the project or from the assets. If
the Internal Revenue Service determines an issuer of a municipal
security has not complied with applicable tax requirements, interest
from the security could become taxable and the security could decline
significantly in value.
In response to market, economic, political, or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect the fund's
performance, and the fund could distribute income subject to federal
income tax.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital. The fund normally invests
at least 80% of its assets in securities whose interest is free from
federal income tax.
VALUING SHARES
The fund is open for business each day the New York Stock Exchange
(NYSE) is open.
A class's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates each class's NAV as of the close
of business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the Securities and Exchange Commission (SEC). The fund's
assets are valued as of this time for the purpose of computing each
class's NAV.
To the extent that the fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of information
furnished by a pricing service or market quotations. If market
quotations or information furnished by a pricing service is not
readily available for a security or if a security's value has been
materially affected by events occurring after the close of the market
on which the security is principally traded, that security may be
valued by another method that the Board of Trustees believes
accurately reflects fair value. A security's valuation may differ
depending on the method used for determining value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
For account, product and service information, please use the following
phone numbers:
(small solid bullet) If you are investing through a broker-dealer or
insurance representative, 1-800-522-7297 (8:30 a.m. - 7:00 p.m.
Eastern time, Monday through Friday).
(small solid bullet) If you are investing through a bank
representative, 1-800-843-3001 (8:30 a.m. - 7:00 p.m. Eastern time,
Monday through Friday).
Please use the following addresses:
BUYING OR SELLING SHARES
Fidelity Investments(registered trademark)
P.O. Box 770002
Cincinnati, OH 45277-0081
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH2A
Hebron, KY 41048
You may buy or sell Class A, Class T, Class B, and Class C shares of
the fund through an investment professional. When you invest through
an investment professional, the procedures for buying, selling, and
exchanging Class A, Class T, Class B, and Class C shares of the fund
and the account features and policies may differ. Additional fees may
also apply to your investment in Class A, Class T, Class B, and Class
C shares of the fund, including a transaction fee if you buy or sell
Class A, Class T, Class B, and Class C shares of the fund through a
broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone, may be
unavailable or delayed (for example, during periods of unusual market
activity).
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of Class A or Class T is the class's
offering price or the class's NAV, depending on whether you pay a
front-end sales charge.
For Class B and Class C, the price to buy one share is the class's
NAV. Class B and Class C shares are sold without a front-end sales
charge, but may be subject to a CDSC upon redemption.
If you pay a front-end sales charge, your price will be Class A's or
Class T's offering price. When you buy Class A or Class T shares at
the offering price, Fidelity deducts the appropriate sales charge and
invests the rest in Class A or Class T shares of the fund. If you
qualify for a front-end sales charge waiver, your price will be Class
A's or Class T's NAV.
The offering price of Class A or Class T is its NAV divided by the
difference between one and the applicable front-end sales charge
percentage. Class A has a maximum front-end sales charge of 3.75% of
the offering price. Class T has a maximum front-end sales charge of
2.75% of the offering price.
Your shares will be bought at the next offering price or NAV, as
applicable, calculated after your order is received in proper form.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Short-term or excessive trading into and out of the fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, the fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
the fund. For these purposes, FMR may consider an investor's trading
history in the fund or other Fidelity funds, and accounts under common
ownership or control.
The fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) Fidelity must receive payment within three
business days after an order for shares is placed; otherwise your
purchase order may be canceled and you could be liable for any losses
or fees the fund or Fidelity has incurred.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
Shares can be bought or sold through investment professionals using an
automated order placement and settlement system that guarantees
payment for orders on a specified date.
Certain financial institutions that meet creditworthiness criteria
established by Fidelity Distributors Corporation (FDC) may enter
confirmed purchase orders on behalf of customers by phone, with
payment to follow no later than close of business on the next business
day. If payment is not received by that time, the order will be
canceled and the financial institution will be liable for any losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
Through regular investment plansA $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
A AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED.
The fund may waive or lower purchase minimums.
Purchase and account minimums are waived for purchases of Class T
shares with distributions from a Fidelity Defined Trust account.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS
B SHARES.
PURCHASE AMOUNTS OF MORE THAN $1 MILLION WILL NOT BE ACCEPTED FOR
CLASS C SHARES. THIS LIMIT DOES NOT APPLY TO PURCHASES OF CLASS C
SHARES MADE BY AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT), 403(B) PROGRAM OR PLAN COVERING A
SOLE-PROPRIETOR (FORMERLY KEOGH/H.R. 10 PLAN).
KEY INFORMATION
PHONE TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from certain other
Fidelity funds. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from certain other
Fidelity funds. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770002 CINCINNATI, (small solid bullet) Complete
OH 45277-0081 and sign the application.
Make your check payable to
the complete name of the
fund and note the applicable
class. Mail to your
investment professional or
to the address at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund
and note the applicable
class. Indicate your fund
account number on your check
and mail to your investment
professional or to the
address at left.
(small solid bullet) Exchange
from the same class of other
Fidelity Advisor funds or
from certain other Fidelity
funds. Send a letter of
instruction to your
investment professional or
to the address at left,
including your name, the
funds' names, the applicable
class names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to your investment
professional.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to your
investment professional.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to set
up your account and to
arrange a wire transaction.
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Advisor Systematic
Investment Program.
(small solid bullet) Use
Fidelity Advisor Systematic
Exchange Program to exchange
from certain Fidelity money
market funds or a Fidelity
Advisor fund.
SELLING SHARES
The price to sell one share of Class A, Class T, Class B, or Class C
is the class's NAV, minus any applicable CDSC.
If appropriate to protect shareholders, the fund may impose a
redemption fee (trading fee) on redemptions from the fund.
Any applicable CDSC is calculated based on your original redemption
amount.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus any applicable CDSC.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of business on
the day you place your order.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 15 or 30 days, depending on your account;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $1,000 worth of shares in the account to keep
it open, except accounts not subject to account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
the fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it is in the best
interests of the fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
To sell shares issued with certificates, call Fidelity for
instructions. The fund no longer issues share certificates.
KEY INFORMATION
PHONE (small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Exchange
to the same class of other
Fidelity Advisor funds or to
certain other Fidelity
funds. Call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information."
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 770002 CINCINNATI, SOLE PROPRIETORSHIP, UGMA,
OH 45277-0081 UTMA
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including your name, the
fund's name, the applicable
class name, your fund
account number, and the
dollar amount or number of
shares to be sold. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
TRUST
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the trust's name,
the fund's name, the
applicable class name, the
trust's fund account number,
and the dollar amount or
number of shares to be sold.
The trustee must sign the
letter of instruction
indicating capacity as
trustee. If the trustee's
name is not in the account
registration, provide a copy
of the trust document
certified within the last 60
days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the firm's name,
the fund's name, the
applicable class name, the
firm's fund account number,
and the dollar amount or
number of shares to be sold.
At least one person
authorized by corporate
resolution to act on the
account must sign the letter
of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The letter of
instruction must be signed
by all persons required to
sign for transactions,
exactly as their names
appear on the account.
TRUST
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The trustee
must sign the letter of
instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to
your investment
professional. At least one
person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit
your investment professional
for instructions.
AUTOMATICALLY (small solid bullet) Use
Fidelity Advisor Systematic
Exchange Program to exchange
to the same class of another
Fidelity Advisor fund or to
certain Fidelity funds.
(small solid bullet) Use
Fidelity Advisor Systematic
Withdrawal Program to set up
periodic redemptions from
your Class A, Class T, Class
B, and Class C account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a Class A shareholder, you have the privilege of exchanging Class A
shares of the fund for the same class of shares of other Fidelity
Advisor funds at NAV or for Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund.
As a Class T shareholder, you have the privilege of exchanging Class T
shares of the fund for the same class of shares of other Fidelity
Advisor funds at NAV or for Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund. If you purchased your Class T shares
through certain investment professionals that have signed an agreement
with FDC, you also have the privilege of exchanging your Class T
shares for shares of Fidelity Capital Appreciation Fund.
As a Class B shareholder, you have the privilege of exchanging Class B
shares of the fund for the same class of shares of other Fidelity
Advisor funds or for Advisor B Class shares of Treasury Fund.
As a Class C shareholder, you have the privilege of exchanging Class C
shares of the fund for the same class of shares of other Fidelity
Advisor funds or for Advisor C Class shares of Treasury Fund.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) The fund may temporarily or permanently terminate
the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control will be counted together for purposes of the four
exchange limit.
(small solid bullet) The fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Any exchanges of Class A, Class T, Class B and
Class C shares are not subject to a CDSC.
The fund may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 1.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
fund.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
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FIDELITY ADVISOR SYSTEMATIC
INVESTMENT PROGRAM TO MOVE
MONEY FROM YOUR BANK ACCOUNT
TO A FIDELITY ADVISOR FUND.
MINIMUM MINIMUM FREQUENCY PROCEDURES
INITIAL ADDITIONAL Monthly, bimonthly, (small solid bullet) To set
$100 $100 quarterly, or semi-annually up for a new account,
complete the appropriate
section on the application.
(small solid bullet) To set
up for existing accounts,
call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for an
application.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
investment date.
TO DIRECT DISTRIBUTIONS FROM
A FIDELITY DEFINED TRUST TO
CLASS T OF A FIDELITY
ADVISOR FUND.
MINIMUM MINIMUM PROCEDURES
INITIAL ADDITIONAL (small solid bullet) To set
Not Not Applicable up for a new or existing
Applicable account, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information" for
the appropriate enrollment
form.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
FIDELITY ADVISOR SYSTEMATIC
EXCHANGE PROGRAM TO MOVE
MONEY FROM CERTAIN FIDELITY
MONEY MARKET FUNDS TO CLASS
A, CLASS T, CLASS B OR CLASS
C OF A FIDELITY ADVISOR FUND
OR FROM CLASS A, CLASS T,
CLASS B OR CLASS C OF A
FIDELITY ADVISOR FUND TO THE
SAME CLASS OF ANOTHER
FIDELITY ADVISOR FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, quarterly, (small solid bullet) To set
semi-annually, or annually up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" after both
accounts are opened.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 2 business days
prior to your next scheduled
exchange date.
(small solid bullet) The
account from which the
exchanges are to be
processed must have a
minimum balance of $10,000.
The account into which the
exchange is being processed
must have a minimum balance
of $1,000.
</TABLE>
FIDELITY ADVISOR SYSTEMATIC
WITHDRAWAL PROGRAM TO SET UP
PERIODIC REDEMPTIONS FROM
YOUR CLASS A, CLASS T, CLASS
B OR CLASS C ACCOUNT TO YOU
OR TO YOUR BANK CHECKING
ACCOUNT.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MINIMUM MAXIMUM FREQUENCY PROCEDURES
$100 $50,000 Class A and Class T: Monthly, (small solid bullet) Accounts
quarterly, or semi-annually with a value of $10,000 or
Class B and Class C: Monthly more in Class A, Class T,
or quarterly Class B or Class C shares
are eligible for this program.
(small solid bullet) To set
up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for instructions.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
withdrawal date.
(small solid bullet)
Aggregate redemptions per
12-month period from your
Class B or Class C account
may not exceed 10% of the
account value and are not
subject to a CDSC; and you
may set your withdrawal
amount as a percentage of
the value of your account or
a fixed dollar amount.
(small solid bullet) Because
of Class A's and Class T's
front-end sales charge, you
may not want to set up a
systematic withdrawal plan
during a period when you are
buying Class A or Class T
shares on a regular basis.
</TABLE>
OTHER FEATURES. The following other features are also available to buy
and sell shares of the fund.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account.
(small solid bullet) Call your investment professional or call
Fidelity at the appropriate number found in "General Information"
before your first use to verify that this feature is set up on your
account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
(small solid bullet) To add the wire feature or to change the bank
account designated to receive redemption proceeds at any time prior to
making a redemption request, you should send a letter of instruction,
including a signature guarantee, to your investment professional or to
Fidelity at the address found in "General Information."
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
the fund. Call Fidelity at 1-888-622-3175 if you need additional
copies of financial reports or prospectuses.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require the fund to withhold 31% of your taxable distributions and
redemptions.
If your ACCOUNT BALANCE falls below $1,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV, minus any applicable CDSC, on the day
your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The fund earns interest, dividends, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
The fund normally declares dividends daily and pays them monthly. The
fund normally pays capital gain distributions in December.
EARNING DIVIDENDS
Shares purchased by an automated purchase order begin to earn
dividends on the day your payment is received.
Shares purchased by all other purchase orders begin to earn dividends
on the first business day following the day your payment is received.
Shares earn dividends until, but not including, the next business day
following the day of redemption.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each class's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the same class of the
fund. Your dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in the same class of shares of another
identically registered Fidelity Advisor fund or shares of certain
identically registered Fidelity funds. Your capital gain distributions
will be automatically invested in the same class of shares of another
identically registered Fidelity Advisor fund or shares of certain
identically registered Fidelity funds, automatically reinvested in
additional shares of the same class of the fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, contact your investment
professional directly or call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in the fund could have tax
consequences for you.
TAXES ON DISTRIBUTIONS. The fund seeks to earn income and pay
dividends exempt from federal income tax.
Income exempt from federal income tax may be subject to state or local
tax. A portion of the dividends you receive may be subject to federal
and state income taxes and also may be subject to the federal
alternative minimum tax. You may also receive taxable distributions
attributable to the fund's sale of municipal bonds.
For federal tax purposes, the fund's distributions of short-term
capital gains and gains on the sale of bonds characterized as market
discount are taxable to you as ordinary income, while the fund's
distributions of long-term capital gains are taxable to you generally
as capital gains.
If a fund's distributions exceed its income and capital gains realized
in any year, all or a portion of those distributions may be treated as
a return of capital to shareholders for tax purposes. A return of
capital generally will not be taxable to you but will reduce the cost
basis of your shares and result in a higher reported capital gain or a
lower reported capital loss when you sell your shares.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a potentially taxable distribution.
Any taxable distributions you receive from the fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in the same class of shares of another
Fidelity Advisor fund or shares of certain Fidelity funds, you will
receive certain December distributions in January, but those
distributions will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in the fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Advisor Intermediate Municipal Income is a mutual fund, an
investment that pools shareholders' money and invests it toward a
specified goal.
FMR is the fund's manager.
As of March 25, 1999, FMR had approximately $521.7 billion in
discretionary assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.
Fidelity Investments Money Management, Inc. (FIMM), in Merrimack, New
Hampshire, serves as sub-adviser for the fund. FIMM is primarily
responsible for choosing investments for the fund.
FIMM is an affiliate of FMR. As of March 29, 1999, FIMM had
approximately $159.8 billion in discretionary assets under management.
The fund could be adversely affected if the computer systems used by
FMR and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised the fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on the fund.
Norm Lind is vice president and manager of Advisor Intermediate
Municipal Income, which he has managed since January 1998. He also
manages several other Fidelity funds. Since joining Fidelity in 1986,
Mr. Lind has worked as an analyst and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee is calculated by
adding a group fee rate to an individual fund fee rate, dividing by
twelve, and multiplying the result by the fund's average net assets
throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
For October 1999, the group fee rate was 0.1289%. The individual fund
fee rate is 0.25%.
The total management fee for the fiscal year ended October 31, 1999
was 0.38% of the fund's average net assets.
FMR pays FIMM for providing assistance with investment advisory
services.
FMR may, from time to time, agree to reimburse a class for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by a class if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be discontinued by FMR at any time, can decrease a class's
expenses and boost its performance.
FUND DISTRIBUTION
The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.
FDC distributes each class's shares.
You may pay a sales charge when you buy or sell your Class A, Class T,
Class B, and Class C shares.
FDC collects the sales charge.
The front-end sales charge will be reduced for purchases of Class A
and Class T shares according to the sales charge schedules below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SALES CHARGES AND CONCESSIONS - CLASS A
Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 3.75% 3.91% 3.00%
$50,000 to $99,999 3.00% 3.10% 2.25%
$100,000 to $249,999 2.25% 2.30% 1.75%
$250,000 to $499,999 1.75% 1.78% 1.50%
$500,000 to $999,999 1.50% 1.52% 1.25%
$1,000,000 to $24,999,999 0.50% 0.50% 0.50%
$25,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 29.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SALES CHARGES AND CONCESSIONS - CLASS T
Sales Charge
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $49,999 2.75% 2.83% 2.25%
$50,000 to $99,999 2.25% 2.30% 2.00%
$100,000 to $249,999 1.75% 1.78% 1.50%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 29.
Class A or Class T shares purchased by an individual or company
through the Combined Purchase, Rights of Accumulation or Letter of
Intent program may receive a reduced front-end sales charge according
to the sales charge schedules above. To qualify for a Class A or Class
T front-end sales charge reduction under one of these programs, you
must notify Fidelity in advance of your purchase. More detailed
information about these programs is contained in the statement of
additional information (SAI).
COMBINED PURCHASE. To receive a Class A or Class T front-end sales
charge reduction, if you are a new shareholder, you may combine your
purchase of Class A or Class T shares with purchases of: (i) Class A,
Class T, Class B and Class C shares of any Fidelity Advisor fund and
(ii) Advisor B Class shares and Advisor C Class shares of Treasury
Fund.
RIGHTS OF ACCUMULATION. To receive a Class A or Class T front-end
sales charge reduction, if you are an existing shareholder, you may
add to your purchase of Class A or Class T shares the current value of
your holdings in: (i) Class A, Class T, Class B and Class C shares of
any Fidelity Advisor fund, (ii) Advisor B Class shares and Advisor C
Class shares of Treasury Fund and (iii) Daily Money Class shares of
Treasury Fund, Prime Fund or Tax-Exempt Fund acquired by exchange from
any Fidelity Advisor fund.
LETTER OF INTENT. You may receive a Class A or Class T front-end sales
charge reduction on your purchases of Class A and Class T shares made
during a 13-month period by signing a Letter of Intent (Letter). Each
Class A or Class T purchase you make after you sign the Letter will be
entitled to the reduced front-end sales charge applicable to the total
investment indicated in the Letter. Purchases of the following may be
aggregated for the purpose of completing your Letter: (i) Class A and
Class T shares of any Fidelity Advisor fund (except those acquired by
exchange from Daily Money Class shares of Treasury Fund, Prime Fund or
Tax-Exempt Fund that had been previously exchanged from a Fidelity
Advisor fund), (ii) Class B and Class C shares of any Fidelity Advisor
fund and (iii) Advisor B Class shares and Advisor C Class shares of
Treasury Fund. Reinvested income and capital gain distributions will
not be considered purchases for the purpose of completing your Letter.
Class B shares may, upon redemption, be assessed a CDSC based on the
following schedule:
From Date of Purchase Contingent Deferred Sales
Charge
Less than 1 year 3%
1 year to less than 2 years 2%
2 years to less than 3 years 1%
3 years to less than 4 years A 0%
A AFTER A MAXIMUM OF FOUR YEARS, CLASS B SHARES WILL CONVERT
AUTOMATICALLY TO CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND.
When exchanging Class B shares of one fund for Class B shares of
another Fidelity Advisor fund or Advisor B Class shares of Treasury
Fund, your Class B shares retain the CDSC schedule in effect when they
were originally bought.
Except as provided below, investment professionals receive as
compensation from FDC, at the time of sale, a concession equal to
2.00% of your purchase of Class B shares. For purchases of Class B
shares through reinvested dividends or capital gain distributions,
investment professionals do not receive a concession at the time of
sale.
Class C shares may, upon redemption within one year of purchase, be
assessed a CDSC of 1.00%.
Except as provided below, investment professionals will receive as
compensation from FDC, at the time of the sale, a concession equal to
1.00% of your purchase of Class C shares. For purchases of Class C
shares made for an employee benefit plan, 403(b) program or plan
covering a sole-proprietor (formerly Keogh/H.R. 10 plan) or through
reinvested dividends or capital gain distributions, investment
professionals do not receive a concession at the time of sale.
The CDSC for Class B and Class C shares will be calculated based on
the lesser of the cost of the Class B or Class C shares, as
applicable, at the initial date of purchase or the value of those
Class B or Class C shares, as applicable, at redemption, not including
any reinvested dividends or capital gains. Class B and Class C shares
acquired through reinvestment of dividends or capital gain
distributions will not be subject to a CDSC. In determining the
applicability and rate of any CDSC at redemption, Class B or Class C
shares representing reinvested dividends and capital gains will be
redeemed first, followed by those Class B or Class C shares that have
been held for the longest period of time.
A front-end sales charge will not apply to the following Class A
shares:
1. Purchased for an employee benefit plan (except a SIMPLE IRA, SEP,
or SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program with at
least $25 million or more in plan assets;
2. Purchased for an employee benefit plan (except a SIMPLE IRA, SEP,
or SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through an insurance company separate account used to fund
annuity contracts;
3. Purchased for an employee benefit plan (except a SIMPLE IRA, SEP,
or SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through a trust institution, bank trust department or
insurance company, or any such institution's broker-dealer affiliate
that is not part of an organization primarily engaged in the brokerage
business. Employee benefit plans (except SIMPLE IRA, SEP, and SARSEP
plans and plans covering self-employed individuals and their employees
(formerly Keogh/H.R. 10 plans)) and 403(b) programs that participate
in the Advisor Retirement Connection do not qualify for this waiver;
4. Purchased for an employee benefit plan (except a SIMPLE IRA, SEP,
or SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program
investing through an investment professional sponsored program that
requires the participating employee benefit plan to invest initially
in Class C or Class B shares and, upon meeting certain criteria,
subsequently requires the plan to invest in Class A shares;
5. Purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Employee benefit
plans (except SIMPLE IRA, SEP, and SARSEP plans and plans covering
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans)), 403(b) programs and accounts managed by third parties do not
qualify for this waiver;
6. Purchased by a broker-dealer for a managed account that is charged
an asset-based fee. Employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs do
not qualify for this waiver;
7. Purchased by a registered investment adviser that is not part of an
organization primarily engaged in the brokerage business for an
account that is managed on a discretionary basis and is charged an
asset-based fee. Employee benefit plans (except SIMPLE IRA, SEP, and
SARSEP plans and plans covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs do not
qualify for this waiver;
8. Purchased with proceeds from the sale of front-end load shares of a
non-Advisor mutual fund for an account participating in the FundSelect
by Nationwide program;
9. Purchased by a bank trust officer, registered representative, or
other employee (or a member of one of their immediate families) of
investment professionals having agreements with FDC. A member of the
immediate family of a bank trust officer, a registered representative
or other employee of investment professionals having agreements with
FDC, is a spouse of one of those individuals, an account for which one
of those individuals is acting as custodian for a minor child, and a
trust account that is registered for the sole benefit of a minor child
of one of those individuals; or
10. Purchased by the Fidelity Investments Charitable Gift Fund.
A front-end sales charge will not apply to the following Class T
shares:
1. Purchased for an insurance company separate account used to fund
annuity contracts for employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) or 403(b) programs;
2. Purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Accounts managed
by third parties do not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged
an asset-based fee;
4. Purchased by a registered investment adviser that is not part of an
organization primarily engaged in the brokerage business for an
account that is managed on a discretionary basis and is charged an
asset-based fee;
5. Purchased for an employee benefit plan (except a SIMPLE IRA, SEP,
or SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program;
6. Purchased for a Fidelity or Fidelity Advisor account with the
proceeds of a distribution from (i) an insurance company separate
account used to fund annuity contracts for employee benefit plans,
403(b) programs or plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans) that are invested in Fidelity Advisor or Fidelity
funds, or (ii) an employee benefit plan, 403(b) program or plan
covering a sole-proprietor (formerly Keogh/H.R. 10 plan) that is
invested in Fidelity Advisor or Fidelity funds. (Distributions other
than those transferred to an IRA account must be transferred directly
into a Fidelity account.);
7. Purchased for any state, county, or city, or any governmental
instrumentality, department, authority or agency;
8. Purchased with redemption proceeds from other mutual fund complexes
on which you have previously paid a front-end sales charge or CDSC;
9. Purchased by a current or former trustee or officer of a Fidelity
fund or a current or retired officer, director or regular employee of
FMR Corp. or Fidelity International Limited or their direct or
indirect subsidiaries (a Fidelity trustee or employee), the spouse of
a Fidelity trustee or employee, a Fidelity trustee or employee acting
as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee;
10. Purchased by a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code, but excluding the
Fidelity Investments Charitable Gift Fund) investing $100,000 or more;
11. Purchased by a bank trust officer, registered representative, or
other employee (or a member of one of their immediate families) of
investment professionals having agreements with FDC. A member of the
immediate family of a bank trust officer, a registered representative
or other employee of investment professionals having agreements with
FDC, is a spouse of one of those individuals, an account for which one
of those individuals is acting as custodian for a minor child, and a
trust account that is registered for the sole benefit of a minor child
of one of those individuals;
12. Purchased for a charitable remainder trust or life income pool
established for the benefit of a charitable organization (as defined
for purposes of Section 501(c)(3) of the Internal Revenue Code);
13. Purchased with distributions of income, principal, and capital
gains from Fidelity Defined Trusts; or
14. Purchased by the Fidelity Investments Charitable Gift Fund.
The Class B or Class C CDSC will not apply to the redemption of
shares:
1. For disability or death, provided that the shares are sold within
one year following the death or the initial determination of
disability;
2. That are permitted without penalty at age 701/2 pursuant to the
Internal Revenue Code from retirement plans or accounts (other than of
shares purchased on or after February 11, 1999 for Traditional IRAs,
Roth IRAs and Rollover IRAs);
3. For disability, payment of death benefits, or minimum required
distributions starting at age 701/2 from Traditional IRAs, Roth IRAs
and Rollover IRAs purchased on or after February 11, 1999;
4. Through the Fidelity Advisor Systematic Withdrawal Program; or
5. (Applicable to Class C only) From an employee benefit plan, 403(b)
program or plan covering a sole-proprietor (formerly Keogh/H.R. 10
plan).
To qualify for a Class A or Class T front-end sales charge reduction
or waiver, you must notify Fidelity in advance of your purchase.
To qualify for a Class B or Class C CDSC waiver, you must notify
Fidelity in advance of your redemption.
FINDER'S FEE. On eligible purchases of (i) Class A shares in amounts
of $1 million or more that qualify for a Class A load waiver, (ii)
Class A shares in amounts of $25 million or more, and (iii) Class T
shares in amounts of $1 million or more, investment professionals will
be compensated with a fee at the rate of 0.25% of the purchase amount.
Shares held by an insurance company separate account will be
aggregated at the client (e.g., the contract holder or plan sponsor)
level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0.25% fee with respect to shares held by
an insurance company separate account must provide Fidelity access to
records detailing purchases at the client level.
Except as provided below, any assets on which a finder's fee has been
paid will bear a CDSC (Class A or Class T CDSC) if they do not remain
in Class A or Class T shares of the Fidelity Advisor funds, or Daily
Money Class shares of Treasury Fund, Prime Fund or Tax-Exempt Fund,
for a period of at least one uninterrupted year. The Class A or Class
T CDSC will be 0.25% of the lesser of the cost of the Class A or Class
T shares, as applicable, at the initial date of purchase or the value
of those Class A or Class T shares, as applicable, at redemption, not
including any reinvested dividends or capital gains. Class A and Class
T shares acquired through reinvestment of dividends or capital gain
distributions will not be subject to a Class A or Class T CDSC. In
determining the applicability and rate of any Class A or Class T CDSC
at redemption, Class A or Class T shares representing reinvested
dividends and capital gains will be redeemed first, followed by those
Class A or Class T CDSC shares that have been held for the longest
period of time.
The Class A or Class T CDSC will not apply to the redemption of
shares:
1. Held by insurance company separate accounts;
2. For plan loans or distributions or exchanges to non-Advisor fund
investment options from employee benefit plans (except shares of
SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)
purchased on or after February 11, 1999) and 403(b) programs; or
3. For disability, payment of death benefits, or minimum required
distributions starting at age 701/2 from Traditional IRAs, Roth IRAs,
SIMPLE IRAs, SEPs, SARSEPs and plans covering a sole-proprietor or
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans).
To qualify for a Class A or Class T finder's fee or CDSC waiver, you
must notify Fidelity in advance of your purchase or redemption,
respectively.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class A,
Class T, Class B or Class C shares of the fund, you may reinvest an
amount equal to all or a portion of the redemption proceeds in the
same class of the fund or another Fidelity Advisor fund, at the NAV
next determined after receipt in proper form of your investment order,
provided that such reinvestment is made within 90 days of redemption.
Under these circumstances, the dollar amount of the CDSC you paid, if
any, on shares will be reimbursed to you by reinvesting that amount in
Class A, Class T, Class B or Class C shares, as applicable. You must
reinstate your Class A, Class T, Class B or Class C shares into an
account with the same registration. This privilege may be exercised
only once by a shareholder with respect to the fund and certain
restrictions may apply. For purposes of the CDSC schedule, the holding
period will continue as if the Class A, Class T, Class B or Class C
shares had not been redeemed.
To qualify for the reinstatement privilege, you must notify Fidelity
in writing in advance of your reinvestment.
CONVERSION FEATURE. After a maximum of four years from the initial
date of purchase, Class B shares and any capital appreciation
associated with those shares, convert automatically to Class A shares
of the fund. Conversion to Class A shares will be made at NAV. At the
time of conversion, a portion of the Class B shares bought through the
reinvestment of dividends or capital gains (Dividend Shares) will also
convert to Class A shares. The portion of Dividend Shares that will
convert is determined by the ratio of your converting Class B
non-Dividend Shares to your total Class B non-Dividend Shares.
Class A of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class A of the fund is authorized to pay FDC a monthly 12b-1
fee as compensation for providing services intended to result in the
sale of Class A shares and/or shareholder support services. Class A of
the fund may pay FDC a 12b-1 fee at an annual rate of 0.40% of its
average net assets, or such lesser amount as the Trustees may
determine from time to time. Class A of the fund currently pays FDC a
monthly 12b-1 fee at an annual rate of 0.15% of its average net assets
throughout the month. Class A's 12b-1 fee rate may be increased only
when the Trustees believe that it is in the best interests of Class A
shareholders to do so.
Class T of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class T of the fund is authorized to pay FDC a monthly 12b-1
fee as compensation for providing services intended to result in the
sale of Class T shares and/or shareholder support services. Class T of
the fund may pay FDC a 12b-1 fee at an annual rate of 0.40% of its
average net assets, or such lesser amount as the Trustees may
determine from time to time. Class T of the fund currently pays FDC a
monthly 12b-1 fee at an annual rate of 0.25% of its average net assets
throughout the month. Class T's 12b-1 fee rate may be increased only
when the Trustees believe that it is in the best interests of Class T
shareholders to do so.
FDC may reallow to intermediaries (such as banks, broker-dealers and
other service-providers), including its affiliates, up to the full
amount of the Class A and Class T 12b-1 fee, for providing services
intended to result in the sale of Class A or Class T shares and/or
shareholder support services.
Class B of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class B of the fund is authorized to pay FDC a monthly 12b-1
(distribution) fee as compensation for providing services intended to
result in the sale of Class B shares. Class B of the fund may pay FDC
a 12b-1 (distribution) fee at an annual rate of 0.75% of its average
net assets, or such lesser amount as the Trustees may determine from
time to time. Class B of the fund currently pays FDC a monthly 12b-1
(distribution) fee at an annual rate of 0.65% of its average net
assets throughout the month. Class B's 12b-1 (distribution) fee rate
may be increased only when the Trustees believe that it is in the best
interests of Class B shareholders to do so.
In addition, pursuant to the Class B plan, Class B pays FDC a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class B's average
net assets throughout the month for providing shareholder support
services.
FDC may reallow up to the full amount of the Class B 12b-1 (service)
fee to intermediaries (such as banks, broker-dealers and other
service-providers) for providing shareholder support services.
Class C of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Class C of the fund is authorized to pay FDC a monthly 12b-1
(distribution) fee as compensation for providing services intended to
result in the sale of Class C shares. Class C of the fund currently
pays FDC a monthly 12b-1 (distribution) fee at an annual rate of 0.75%
of its average net assets throughout the month.
In addition, pursuant to the Class C plan, Class C pays FDC a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class C's average
net assets throughout the month for providing shareholder support
services.
Normally, after the first year of investment, FDC may reallow up to
the full amount of the Class C 12b-1 (distribution) fees to
intermediaries (such as banks, broker-dealers and other
service-providers) for providing services intended to result in the
sale of Class C shares and may reallow up to the full amount of the
Class C 12b-1 (service) fee to intermediaries for providing
shareholder support services.
For purchases of Class C shares made for an employee benefit plan,
403(b) program or plan covering a sole-proprietor (formerly Keogh/H.R.
10 plan) or through reinvestment of dividends or capital gain
distributions, during the first year of investment and thereafter, FDC
may reallow up to the full amount of the Class C 12b-1 (distribution)
fee paid by such shares to intermediaries, including its affiliates,
for providing services intended to result in the sale of Class C
shares and may reallow up to the full amount of the Class C 12b-1
(service) fee paid by such shares to intermediaries, including its
affiliates, for providing shareholder support services.
Because 12b-1 fees are paid out of each class's assets on an ongoing
basis, they will increase the cost of your investment and may cost you
more than paying other types of sales charges.
In addition, each plan specifically recognizes that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with providing
services intended to result in the sale of the applicable class's
shares and/or shareholder support services, including payments made to
intermediaries that provide those services. Currently, the Board of
Trustees of the fund has authorized such payments for Class A, Class
T, Class B, and Class C.
To receive sales concessions, finder's fees and payments made pursuant
to a Distribution and Service Plan, intermediaries must sign the
appropriate agreement with FDC in advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Fidelity Advisor funds, provided
that the fund receives brokerage services and commission rates
comparable to those of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related SAI,
in connection with the offer contained in this prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the fund or FDC. This prospectus and
the related SAI do not constitute an offer by the fund or by FDC to
sell shares of the fund to or to buy shares of the fund from any
person to whom it is unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each class's financial history for the past 5 years or, if shorter,
the period of the class's operations. Certain information reflects
financial results for a single class share. The total returns in the
table represent the rate that an investor would have earned (or lost)
on an investment in the class (assuming reinvestment of all dividends
and distributions). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report,
along with the fund's financial highlights and financial statements,
are included in the fund's annual report. A free copy of the annual
report is available upon request.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A
Years ended October 31, 1999 1998 H 1997 G 1996 D
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.770 $ 10.600 $ 10.410 $ 10.160
period
Income from Investment
Operations
Net interest income .431 .411 .459 .113
Net realized and unrealized (.540) .200 .191 .250
gain (loss)
Total from investment (.109) .611 .650 .363
operations
Less Distributions
From net interest income (.431) (.411) (.459) (.113)
From net realized gain (.080) (.030) (.001) -
Total distributions (.511) (.441) (.460) (.113)
Net asset value, end of period $ 10.150 $ 10.770 $ 10.600 $ 10.410
TOTAL RETURN B, C (1.07)% 5.89% 6.42% 3.59%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,572 $ 1,082 $ 442 $ 103
(000 omitted)
Ratio of expenses to average .85% E .90% A, E .90% E .90% A, E
net assets
Ratio of net interest income 4.17% 4.19% A 4.37% 4.60% A
to average net assets
Portfolio turnover rate 19% 26% A, F 18% 35%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G YEAR ENDED NOVEMBER 30
H ELEVEN MONTHS ENDED OCTOBER 31
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS T
Years ended October 31, 1999 1998 F 1997 G 1996 G 1995 G 1994 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.770 $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 10.460
period
Income from Investment
Operations
Net interest income .427 .407 .449 .461 .451 .455
Net realized and unrealized (.540) .210 .181 .030 .980 (1.040)
gain (loss)
Total from investment (.113) .617 .630 .491 1.431 (.585)
operations
Less Distributions
From net interest income (.427) (.407) (.449) (.461) (.451) (.455)
From net realized gain (.080) (.030) (.001) - - -
In excess of net realized - - - - - (.020)
gain
Total distributions (.507) (.437) (.450) (.461) (.451) (.475)
Net asset value, end of period $ 10.150 $ 10.770 $ 10.590 $ 10.410 $ 10.380 $ 9.400
TOTAL RETURN B, C (1.11)% 5.94% 6.21% 4.89% 15.49% (5.78)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 50,432 $ 60,070 $ 48,830 $ 56,729 $ 62,852 $ 57,382
(000 omitted)
Ratio of expenses to average .90% D .95% A,D 1.00% D 1.00% D .94% D .90% D
net assets
Ratio of net interest income 4.12% 4.15% A 4.32% 4.42% 4.56% 4.49%
to average net assets
Portfolio turnover rate 19% 26% A, E 18% 35% 53% 53%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
F ELEVEN MONTHS ENDED OCTOBER 31
G YEAR ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS B
Years ended October 31, 1999 1998 G 1997 H 1996 H 1995 H 1994 D
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.760 $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 9.890
period
Income from Investment
Operations
Net interest income .353 .339 .382 .394 .373 .155
Net realized and unrealized (.540) .200 .181 .030 .980 (.490)
gain (loss)
Total from investment (.187) .539 .563 .424 1.353 (.335)
operations
Less Distributions
From net interest income (.353) (.339) (.382) (.394) (.373) (.155)
From net realized gain (.080) (.030) (.001) - - -
Total distributions (.433) (.369) (.383) (.394) (.373) (.155)
Net asset value, end of period $ 10.140 $ 10.760 $ 10.590 $ 10.410 $ 10.380 $ 9.400
TOTAL RETURN B, C (1.81)% 5.17% 5.54% 4.21% 14.60% (3.44)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 10,387 $ 11,134 $ 7,917 $ 7,445 $ 6,226 $ 1,682
(000 omitted)
Ratio of expenses to average 1.60% E 1.65% A, E 1.65% E 1.66% E 1.68% E 1.65% A, E
net assets
Ratio of net interest income 3.43% 3.45% A 3.67% 3.76% 3.71% 3.74% A
to average net assets
Portfolio turnover rate 19% 26% A, F 18% 35% 53% 53%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1994.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G ELEVEN MONTHS ENDED OCTOBER 31
H YEAR ENDED NOVEMBER 30
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS C
Years ended October 31, 1999 1998 G 1997 D
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.770 $ 10.590 $ 10.550
period
Income from Investment
Operations
Net interest income .342 .328 .027
Net realized and unrealized (.540) .210 .040
gain (loss)
Total from investment (.198) .538 .067
operations
Less Distributions
From net interest income (.342) (.328) (.027)
From net realized gain (.080) (.030) -
Total distributions (.422) (.358) (.027)
Net asset value, end of period $ 10.150 $ 10.770 $ 10.590
TOTAL RETURN B, C (1.91)% 5.16% .63%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,562 $ 1,137 $ 13
(000 omitted)
Ratio of expenses to average 1.70% E 1.75% A, E 1.75% A, E
net assets
Ratio of net interest income 3.34% 3.29% A 3.33% A
to average net assets
Portfolio turnover rate 19% 26% A, F 18%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G ELEVEN MONTHS ENDED OCTOBER 31
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The fund's annual and semi-annual reports include a
discussion of the fund's holdings and recent market conditions and the
fund's investment strategies that affected performance.
For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.
The SAI, the fund's annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the fund, including the fund's SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-4707
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments and Directed Dividends are registered trademarks of FMR
Corp.
LTTE-pro- 0200
Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.
FIDELITY(registered trademark) ADVISOR
INTERMEDIATE
MUNICIPAL INCOME
FUND
INSTITUTIONAL CLASS
(Fund 089, CUSIP 315917302)
PROSPECTUS
FEBRUARY 14, 2000
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
2 PERFORMANCE
4 FEE TABLE
FUND BASICS 4 INVESTMENT DETAILS
5 VALUING SHARES
SHAREHOLDER INFORMATION 5 BUYING AND SELLING SHARES
12 EXCHANGING SHARES
12 ACCOUNT FEATURES AND POLICIES
14 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
14 TAX CONSEQUENCES
FUND SERVICES 15 FUND MANAGEMENT
15 FUND DISTRIBUTION
APPENDIX 16 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing in investment-grade municipal
debt securities (those of medium and high quality).
(small solid bullet) Normally investing at least 80% of assets in
municipal securities whose interest is exempt from federal income tax.
(small solid bullet) Potentially investing more than 25% of total
assets in municipal securities that finance similar types of projects.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers 1-17 Year Municipal Bond
Index.
(small solid bullet) Normally maintaining a dollar-weighted average
maturity between three and 10 years.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features and
current pricing, trading opportunities, and the credit quality of its
issuer to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) MUNICIPAL MARKET VOLATILITY. The municipal market
is volatile and can be significantly affected by adverse tax,
legislative or political changes and the financial condition of the
issuers of municipal securities.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates the changes in the fund's
performance from year to year and compares Institutional Class's
performance to the performance of a market index and an average of the
performance of similar funds over various periods of time. The fund
also compares its performance to the performance of an additional
index over various periods of time. Data for the additional index is
available only from June 30, 1993 to the present. Returns are based on
past results and are not an indication of future performance.
<TABLE>
<CAPTION>
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YEAR-BY-YEAR RETURNS
ADVISOR INTERMEDIATE
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Calendar Years 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
7.79% 6.37% 9.64% 7.28% 9.94% -5.43% 14.37% 4.15% 8.07% 5.29%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 7.79
Row: 2, Col: 1, Value: 6.37
Row: 3, Col: 1, Value: 9.639999999999999
Row: 4, Col: 1, Value: 7.28
Row: 5, Col: 1, Value: 9.94
Row: 6, Col: 1, Value: -5.430000000000001
Row: 7, Col: 1, Value: 14.37
Row: 8, Col: 1, Value: 4.15
Row: 9, Col: 1, Value: 8.07
Row: 10, Col: 1, Value: 5.29
DURING THE PERIODS SHOWN IN THE CHART FOR INSTITUTIONAL CLASS OF
ADVISOR INTERMEDIATE MUNICIPAL INCOME, THE HIGHEST RETURN FOR A
QUARTER WAS 6.22% (QUARTER ENDING MARCH 31, 1995) AND THE LOWEST
RETURN FOR A QUARTER WAS -5.46% (QUARTER ENDING MARCH 31, 1994).
THE YEAR-TO-DATE RETURN AS OF SEPTEMBER 30, 1999 FOR INSTITUTIONAL
CLASS OF ADVISOR INTERMEDIATE MUNICIPAL INCOME WAS -0.74%.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1998
Advisor Intermediate 5.29% 5.09% 6.63%
Municipal Income
Lehman Brothers Municipal 6.48% 6.22% 8.22%
Bond Index
Lehman Brothers 1-17 Year 6.28% 5.92% n/a
Municipal Bond Index
Lipper Intermediate Municipal 5.35% 5.17% 6.88%
Debt Funds Average
If FMR had not reimbursed certain class expenses during these periods,
Institutional Class's returns would have been lower.
The Lehman Brothers Municipal Bond Index is a market value-weighted
index of investment-grade municipal bonds with maturities of one year
or more.
The Lehman Brothers 1-17 Year Municipal Bond Index is a market
value-weighted index of investment-grade municipal bonds with
maturities between one and 17 years.
Lipper Intermediate Municipal Debt Funds Average reflects the
performance (excluding sales charges) of mutual funds with similar
objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell Institutional Class shares of the fund.
The annual class operating expenses provided below for Institutional
Class do not reflect the effect of any expense reimbursements during
the period.
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Institutional Class
Sales charge (load) on None
purchases and reinvested
distributions
Deferred sales charge (load) None
on redemptions
ANNUAL CLASS OPERATING EXPENSES (PAID FROM CLASS ASSETS)
Institutional Class
Management fee 0.38%
Distribution and Service None
(12b-1) fee
Other expenses 0.46%
Total annual class operating 0.84%
expensesA
A EFFECTIVE DECEMBER 1, 1998, FMR HAS VOLUNTARILY AGREED TO REIMBURSE
INSTITUTIONAL CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS AND
EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS AVERAGE NET ASSETS,
EXCEED 0.70%. THIS ARRANGEMENT CAN BE DISCONTINUED BY FMR AT ANY TIME.
This EXAMPLE helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds.
Let's say, hypothetically, that Institutional Class's annual return is
5% and that your shareholder fees and Institutional Class's annual
operating expenses are exactly as described in the fee table. This
example illustrates the effect of fees and expenses, but is not meant
to suggest actual or expected fees and expenses or returns, all of
which may vary. For every $10,000 you invested, here's how much you
would pay in total expenses if you close your account after the number
of years indicated:
Institutional Class
1 year $ 86
3 years $ 268
5 years $ 466
10 years $ 1,037
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests the fund's assets in investment-grade municipal
debt securities (those of medium and high quality).
FMR normally invests at least 80% of the fund's assets in municipal
securities whose interest is exempt from federal income tax. Although
FMR does not currently intend to invest the fund's assets in municipal
securities whose interest is subject to federal income tax, FMR may
invest all of the fund's assets in municipal securities whose interest
is subject to the federal alternative minimum tax.
FMR may invest more than 25% of the fund's total assets in municipal
securities that finance similar projects, such as those relating to
education, health care, transportation, and utilities.
FMR uses the Lehman Brothers 1-17 Year Municipal Bond Index as a guide
in structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. In
addition, the fund normally maintains a dollar-weighted average
maturity between three and 10 years. As of October 31, 1999, the
dollar-weighted average maturity of the fund and the index was
approximately 7.2 and 7.8 years, respectively.
FMR allocates the fund's assets among different market sectors (for
example, general obligation bonds of a state or bonds financing a
specific project) and different maturities based on its view of the
relative value of each sector and maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Municipal debt
securities include general obligation bonds of municipalities, local
or state governments, project or revenue-specific bonds, or
pre-refunded or escrowed bonds.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
and private purposes, including general financing for state and local
governments, or financing for a specific project or public facility.
Municipal securities may be fully or partially backed by the local
government, by the credit of a private issuer, by the current or
anticipated revenues from a specific project or specific assets, or by
domestic or foreign entities providing credit support such as letters
of credit, guarantees, or insurance.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's yield and share
price change daily based on changes in interest rates and market
conditions and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types and maturities of securities in which the fund
invests, the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. When you sell your shares of the
fund, they could be worth more or less than what you paid for them.
The following factors can significantly affect the fund's performance:
MUNICIPAL MARKET VOLATILITY. Municipal securities can be significantly
affected by political changes as well as uncertainties in the
municipal market related to taxation, legislative changes, or the
rights of municipal security holders. Because many municipal
securities are issued to finance similar projects, especially those
relating to education, health care, transportation, and utilities,
conditions in those sectors can affect the overall municipal market.
In addition, changes in the financial condition of an individual
municipal insurer can affect the overall municipal market.
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities can be more
sensitive to interest rate changes. In other words, the longer the
maturity of a security, the greater the impact a change in interest
rates could have on the security's price. In addition, short-term and
long-term interest rates do not necessarily move in the same amount or
the same direction. Short-term securities tend to react to changes in
short-term interest rates, and long-term securities tend to react to
changes in long-term interest rates.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. Lower-quality debt securities (those
of less than investment-grade quality) tend to be more sensitive to
these changes than higher-quality debt securities. Municipal
securities backed by current or anticipated revenues from a specific
project or specific assets can be negatively affected by the
discontinuance of the taxation supporting the project or assets or the
inability to collect revenues for the project or from the assets. If
the Internal Revenue Service determines an issuer of a municipal
security has not complied with applicable tax requirements, interest
from the security could become taxable and the security could decline
significantly in value.
In response to market, economic, political, or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect the fund's
performance, and the fund could distribute income subject to federal
income tax.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of
income exempt from federal income taxes that can be obtained
consistent with the preservation of capital. The fund normally invests
at least 80% of its assets in securities whose interest is free from
federal income tax.
VALUING SHARES
The fund is open for business each day the New York Stock Exchange
(NYSE) is open.
A class's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates Institutional Class's NAV as of
the close of business of the NYSE, normally 4:00 p.m. Eastern time.
However, NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the Securities and Exchange Commission
(SEC). The fund's assets are valued as of this time for the purpose of
computing the class's NAV.
To the extent that the fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of information
furnished by a pricing service or market quotations. If market
quotations or information furnished by a pricing service is not
readily available for a security or if a security's value has been
materially affected by events occurring after the close of the market
on which the security is principally traded, that security may be
valued by another method that the Board of Trustees believes
accurately reflects fair value. A security's valuation may differ
depending on the method used for determining value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
For account, product and service information, please use the following
phone numbers:
(small solid bullet) If you are investing through a broker-dealer or
insurance representative, 1-800-522-7297 (8:30 a.m. - 7:00 p.m.
Eastern time, Monday through Friday).
(small solid bullet) If you are investing through a bank
representative, 1-800-843-3001 (8:30 a.m. - 7:00 p.m. Eastern time,
Monday through Friday).
Please use the following addresses:
BUYING OR SELLING SHARES
Fidelity Investments(registered trademark)
P.O. Box 770002
Cincinnati, OH 45277-0081
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH2A
Hebron, KY 41048
You may buy or sell Institutional Class shares of the fund through an
investment professional. When you invest through an investment
professional, the procedures for buying, selling, and exchanging
Institutional Class shares of the fund and the account features and
policies may differ. Additional fees may also apply to your investment
in Institutional Class shares of the fund, including a transaction fee
if you buy or sell Institutional Class shares of the fund through a
broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone, may be
unavailable or delayed (for example, during periods of unusual market
activity).
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. In addition, employee
benefit plans (as defined in the Employee Retirement Income Security
Act), 403(b) programs and plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans) must have at least $50 million in plan assets;
2. Registered investment adviser managed account programs, provided
the registered investment adviser is not part of an organization
primarily engaged in the brokerage business, and the program (i)
charges an asset-based fee and (ii) will have at least $1 million
invested in the Institutional Class of the Advisor funds. In addition,
accounts other than an employee benefit plan, 403(b) program or plan
covering a sole-proprietor (formerly a Keogh/H.R. 10 plan) in the
program must be managed on a discretionary basis;
3. Trust institution and bank trust department managed account
programs that (i) charge an asset-based fee and (ii) will have at
least $1 million invested in the Institutional Class of the Advisor
funds. Accounts managed by third parties are not eligible to purchase
Institutional Class shares;
4. Insurance company separate accounts that will have at least $1
million invested in the Institutional Class of the Advisor funds;
5. Fidelity Trustees and employees; and
6. Insurance company programs for employee benefit plans, 403(b)
programs or plans covering sole-proprietors (formerly Keogh/H.R. 10
plans) that (i) charge an asset-based fee and (ii) will have at least
$1 million invested in the Institutional Class of the Advisor funds.
Insurance company programs for employee benefit plans, 403(b) programs
and plans covering sole-proprietors (formerly Keogh/H.R. 10 plans)
include such programs offered by a broker-dealer affiliate of an
insurance company, provided that the affiliate is not part of an
organization primarily engaged in the brokerage business.
For purchases made by managed account programs, insurance company
separate accounts or insurance company programs for employee benefit
plans, 403(b) programs or plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans), Fidelity may waive the requirement that $1
million be invested in the Institutional Class of the Advisor funds.
The price to buy one share of the class is the class's NAV. The
class's shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your order
is received in proper form.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Short-term or excessive trading into and out of the fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, the fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
the fund. For these purposes, FMR may consider an investor's trading
history in the fund or other Fidelity funds, and accounts under common
ownership or control.
The fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) Fidelity must receive payment within three
business days after an order for shares is placed; otherwise your
purchase order may be canceled and you could be liable for any losses
or fees the fund or Fidelity has incurred.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
Shares can be bought or sold through investment professionals using an
automated order placement and settlement system that guarantees
payment for orders on a specified date.
Certain financial institutions that meet creditworthiness criteria
established by Fidelity Distributors Corporation (FDC) may enter
confirmed purchase orders on behalf of customers by phone, with
payment to follow no later than close of business on the next business
day. If payment is not received by that time, the order will be
canceled and the financial institution will be liable for any losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
Through regular investment plansA $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
A AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED.
The fund may waive or lower purchase minimums.
KEY INFORMATION
PHONE TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from another
Fidelity fund. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from the same class of
another Fidelity Advisor
fund or from another
Fidelity fund. Call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770002 CINCINNATI, (small solid bullet) Complete
OH 45277-0081 and sign the application.
Make your check payable to
the complete name of the
fund and note the applicable
class. Mail to your
investment professional or
to the address at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund
and note the applicable
class. Indicate your fund
account number on your check
and mail to your investment
professional or to the
address at left.
(small solid bullet) Exchange
from the same class of other
Fidelity Advisor funds or
from another Fidelity fund.
Send a letter of instruction
to your investment
professional or to the
address at left, including
your name, the funds' names,
the applicable class names,
the fund account numbers,
and the dollar amount or
number of shares to be
exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to your investment
professional.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to your
investment professional.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to set
up your account and to
arrange a wire transaction.
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00159759.
(small solid bullet) Specify
the complete name of the
fund, note the applicable
class, and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Advisor Systematic
Investment Program.
SELLING SHARES
The price to sell one share of the class is the class's NAV.
If appropriate to protect shareholders, the fund may impose a
redemption fee (trading fee) on redemptions from the fund.
Your shares will be sold at the next NAV calculated after your order
is received in proper form.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of business on
the day you place your order.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 15 or 30 days, depending on your account;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $1,000 worth of shares in the account to keep
it open, except accounts not subject to account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
the fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it is in the best
interests of the fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
To sell shares issued with certificates, call Fidelity for
instructions. The fund no longer issues share certificates.
KEY INFORMATION
PHONE (small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Exchange
to the same class of other
Fidelity Advisor funds or to
another Fidelity fund. Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information."
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 770002 CINCINNATI, SOLE PROPRIETORSHIP, UGMA,
OH 45277-0081 UTMA
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including your name, the
fund's name, the applicable
class name, your fund
account number, and the
dollar amount or number of
shares to be sold. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
TRUST
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the trust's name,
the fund's name, the
applicable class name, the
trust's fund account number,
and the dollar amount or
number of shares to be sold.
The trustee must sign the
letter of instruction
indicating capacity as
trustee. If the trustee's
name is not in the account
registration, provide a copy
of the trust document
certified within the last 60
days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to
your investment professional
or to the address at left,
including the firm's name,
the fund's name, the
applicable class name, the
firm's fund account number,
and the dollar amount or
number of shares to be sold.
At least one person
authorized by corporate
resolution to act on the
account must sign the letter
of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
your investment professional
or call Fidelity at the
appropriate number found in
"General Information" for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The letter of
instruction must be signed
by all persons required to
sign for transactions,
exactly as their names
appear on the account.
TRUST
(small solid bullet) Bring a
letter of instruction to
your investment
professional. The trustee
must sign the letter of
instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to
your investment
professional. At least one
person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit
your investment professional
for instructions.
AUTOMATICALLY (small solid bullet) Use
Fidelity Advisor Systematic
Withdrawal Program to set up
periodic redemptions from
your Institutional Class
account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As an Institutional Class shareholder, you have the privilege of
exchanging your Institutional Class shares for Institutional Class
shares of other Fidelity Advisor funds or for shares of Fidelity
funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) The fund may temporarily or permanently terminate
the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control will be counted together for purposes of the four
exchange limit.
(small solid bullet) The fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The fund may terminate or modify the exchange privilege in the future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 3.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
fund.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY ADVISOR SYSTEMATIC
INVESTMENT PROGRAM TO MOVE
MONEY FROM YOUR BANK ACCOUNT
TO A FIDELITY ADVISOR FUND.
MINIMUM MINIMUM FREQUENCY PROCEDURES
INITIAL ADDITIONAL Monthly, bimonthly, (small solid bullet) To set
$100 $100 quarterly, or semi-annually up for a new account,
complete the appropriate
section on the application.
(small solid bullet) To set
up for existing accounts,
call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for an
application.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
investment date.
FIDELITY ADVISOR SYSTEMATIC
WITHDRAWAL PROGRAM TO SET UP
PERIODIC REDEMPTIONS FROM
YOUR INSTITUTIONAL CLASS
ACCOUNT TO YOU OR TO YOUR
BANK CHECKING ACCOUNT.
MINIMUM MAXIMUM FREQUENCY PROCEDURES
$100 $50,000 Monthly, quarterly, or (small solid bullet) Accounts
semi-annually with a value of $10,000 or
more in Institutional Class
shares are eligible for this
program.
(small solid bullet) To set
up, call your investment
professional or call
Fidelity at the appropriate
number found in "General
Information" for instructions.
(small solid bullet) To make
changes, call your
investment professional or
call Fidelity at the
appropriate number found in
"General Information." Call
at least 10 business days
prior to your next scheduled
withdrawal date.
</TABLE>
OTHER FEATURES. The following other features are also available to buy
and sell shares of the fund.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account.
(small solid bullet) Call your investment professional or call
Fidelity at the appropriate number found in "General Information"
before your first use to verify that this feature is set up on your
account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
(small solid bullet) To add the wire feature or to change the bank
account designated to receive redemption proceeds at any time prior to
making a redemption request, you should send a letter of instruction,
including a signature guarantee, to your investment professional or to
Fidelity at the address found in "General Information."
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
the fund. Call Fidelity at 1-888-622-3175 if you need additional
copies of financial reports or prospectuses.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require the fund to withhold 31% of your taxable distributions and
redemptions.
If your ACCOUNT BALANCE falls below $1,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV on the day your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The fund earns interest, dividends, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
The fund normally declares dividends daily and pays them monthly. The
fund normally pays capital gain distributions in December.
EARNING DIVIDENDS
Shares purchased by an automated purchase order begin to earn
dividends on the day your payment is received.
Shares purchased by all other purchase orders begin to earn dividends
on the first business day following the day your payment is received.
Shares earn dividends until, but not including, the next business day
following the day of redemption.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
Institutional Class's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional Institutional Class
shares of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional Institutional Class shares of
the fund. Your dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in Institutional Class shares of
another identically registered Fidelity Advisor fund or shares of
identically registered Fidelity funds. Your capital gain distributions
will be automatically invested in Institutional Class shares of
another identically registered Fidelity Advisor fund or shares of
identically registered Fidelity funds, automatically reinvested in
additional Institutional Class shares of the fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, contact your investment
professional directly or call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in the fund could have tax
consequences for you.
TAXES ON DISTRIBUTIONS. The fund seeks to earn income and pay
dividends exempt from federal income tax.
Income exempt from federal income tax may be subject to state or local
tax. A portion of the dividends you receive may be subject to federal
and state income taxes and also may be subject to the federal
alternative minimum tax. You may also receive taxable distributions
attributable to the fund's sale of municipal bonds.
For federal tax purposes, the fund's distributions of short-term
capital gains and gains on the sale of bonds characterized as market
discount are taxable to you as ordinary income, while the fund's
distributions of long-term capital gains are taxable to you generally
as capital gains.
If a fund's distributions exceed its income and capital gains realized
in any year, all or a portion of those distributions may be treated as
a return of capital to shareholders for tax purposes. A return of
capital generally will not be taxable to you but will reduce the cost
basis of your shares and result in a higher reported capital gain or a
lower reported capital loss when you sell your shares.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a potentially taxable distribution.
Any taxable distributions you receive from the fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in Institutional Class shares of another
Fidelity Advisor fund or shares of Fidelity funds, you will receive
certain December distributions in January, but those distributions
will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in the fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Advisor Intermediate Municipal Income is a mutual fund, an
investment that pools shareholders' money and invests it toward a
specified goal.
FMR is the fund's manager.
As of March 25, 1999, FMR had approximately $521.7 billion in
discretionary assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.
Fidelity Investments Money Management, Inc. (FIMM), in Merrimack, New
Hampshire, serves as sub-adviser for the fund. FIMM is primarily
responsible for choosing investments for the fund.
FIMM is an affiliate of FMR. As of March 29, 1999, FIMM had
approximately $159.8 billion in discretionary assets under management.
The fund could be adversely affected if the computer systems used by
FMR and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised the fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on the fund.
Norm Lind is vice president and manager of Advisor Intermediate
Municipal Income, which he has managed since January 1998. He also
manages several other Fidelity funds. Since joining Fidelity in 1986,
Mr. Lind has worked as an analyst and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee is calculated by
adding a group fee rate to an individual fund fee rate, dividing by
twelve, and multiplying the result by the fund's average net assets
throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
For October 1999, the group fee rate was 0.1289%. The individual fund
fee rate is 0.25%.
The total management fee for the fiscal year ended October 31, 1999
was 0.38% of the fund's average net assets.
FMR pays FIMM for providing assistance with investment advisory
services.
FMR may, from time to time, agree to reimburse a class for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by a class if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be discontinued by FMR at any time, can decrease a class's
expenses and boost its performance.
FUND DISTRIBUTION
The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.
FDC distributes the class's shares.
Institutional Class has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 that
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with providing services intended
to result in the sale of Institutional Class shares and/or shareholder
support services. FMR, directly or through FDC, may pay
intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Institutional Class.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Fidelity Advisor funds, provided
that the fund receives brokerage services and commission rates
comparable to those of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This prospectus and the related SAI do
not constitute an offer by the fund or by FDC to sell shares of the
fund to or to buy shares of the fund from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand
Institutional Class's financial history for the past 5 years. Certain
information reflects financial results for a single class share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the class (assuming
reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, independent accountants,
whose report, along with the fund's financial highlights and financial
statements, are included in the fund's annual report. A free copy of
the annual report is available upon request.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
Years ended October 31, 1999 1998 G 1997 H 1996 H 1995 H 1994 H
SELECTED PER-SHARE DATA
Net asset value,beginning of $ 10.770 $ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460
period
Income from Investment
Operations
Net interest income .448 .427 .475 .487 .477 .481
Net realized and unrealized (.540) .210 .181 .050 .950 (1.030)
gain (loss)
Total from investment (.092) .637 .656 .537 1.427 (.549)
operations
Less Distributions
From net interest income (.448) (.427) (.475) (.487) (.477) (.481)
From net realized gain (.080) (.030) (.001) - - -
In excess of net realized - - - - - (.020)
gain
Total distributions (.528) (.457) (.476) (.487) (.477) (.501)
Net asset value, end of period $ 10.150 $ 10.770 $ 10.590 $ 10.410 $ 10.360 $ 9.410
TOTAL RETURN B, C (.92)% 6.14% 6.48% 5.36% 15.44% (5.43)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,997 $ 6,328 $ 6,098 $ 6,455 $ 11,085 $ 11,702
(000 omitted)
Ratio of expenses to average .70% D .75% A, D .75% D .75% D .70% D .65% D
net assets
Ratio of expenses to average .70% .75% A .75% .74% E .70% .65%
net assets after expense
reductions
Ratio of net interest income 4.32% 4.36% A 4.57% 4.68% 4.96% 4.75%
to average net assets
Portfolio turnover rate 19% 26% A, F 18% 35% 53% 53%
</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 FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
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 THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G ELEVEN MONTHS ENDED OCTOBER 31
H YEAR ENDED NOVEMBER 30
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The fund's annual and semi-annual reports include a
discussion of the fund's holdings and recent market conditions and the
fund's investment strategies that affected performance.
For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.
The SAI, the fund's annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the fund, including the fund's SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-4707
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, and Directed Dividends are registered trademarks of FMR
Corp.
LTTEI-pro- 0200
FIDELITY(registered trademark) ADVISOR INTERMEDIATE MUNICIPAL INCOME
FUND
A FUND OF FIDELITY ADVISOR SERIES II
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 14, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of the fund's annual reports are incorporated herein. The
annual reports are supplied with this SAI.
To obtain a free additional copy of a prospectus, dated February 14,
2000, or an annual report, please call Fidelity at 1-888-622-3175.
TABLE OF CONTENTS PAGE
Investment Policies and 2
Limitations
Portfolio Transactions 6
Valuation 7
Performance 7
Additional Purchase, Exchange 20
and Redemption Information
Distributions and Taxes 22
Trustees and Officers 22
Control of Investment Advisers 26
Management Contract 26
Distribution Services 29
Transfer and Service Agent 32
Agreements
Description of the Trust 32
Financial Statements 33
Appendix 33
LTTEB-ptb-0200
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of the fund's assets that
may be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities);
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitations (1) and (5), FMR identifies the issuer of
a security depending on its terms and conditions. In identifying the
issuer, FMR will consider the entity or entities responsible for
payment of interest and repayment of principal and the source of such
payments; the way in which assets and revenues of an issuing political
subdivision are separated from those of other political entities; and
whether a governmental body is guaranteeing the security.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 5.
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies Fidelity
Management & Research Company (FMR) may employ in pursuit of the
fund's investment objective, and a summary of related risks. FMR may
not buy all of these instruments or use all of these techniques unless
it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of purchase
contracts, financing leases, or sales agreements entered into by
municipalities. Payment of interest and repayment of principal may be
largely dependent upon the cash flows generated by the assets backing
the securities and, in certain cases, supported by letters of credit,
surety bonds, or other credit enhancements. Asset-backed security
values may also be affected by other factors including changes in
interest rates, the availability of information concerning the pool
and its structure, the creditworthiness of the servicing agent for the
pool, the originator of the loans or receivables, or the entities
providing the credit enhancement. In addition, these securities may be
subject to prepayment risk.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
the fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If the fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. When a municipal bond issuer has committed to call
an issue of bonds and has established an independent escrow account
that is sufficient to, and is pledged to, refund that issue, the
number of days to maturity for the prerefunded bond is considered to
be the number of days to the announced call date of the bonds.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, OTC Options,
Purchasing Put and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Bond Buyer Municipal Bond Index. Futures can be held until
their delivery dates, or can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The fund intends to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option
premiums.
In addition, the fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets; or (c) purchase call options if, as a
result, the current value of option premiums for call options
purchased by the fund would exceed 5% of the fund's total assets.
These limitations do not apply to options attached to or acquired or
traded together with their underlying securities, and do not apply to
securities that incorporate features similar to options.
The above limitations on the fund's investments in futures contracts
and options, and the fund's policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, or other financial
indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. Indexed
securities may have principal payments as well as coupon payments that
depend on the performance of one or more interest rates. Their coupon
rates or principal payments may change by several percentage points
for every 1% interest rate change.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are
indexed, and may also be influenced by interest rate changes. Indexed
securities may be more volatile than the underlying instruments.
Indexed securities are also subject to the credit risks associated
with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates; however, municipal
funds currently intend to participate in this program only as
borrowers. A fund will borrow through the program only when the costs
are equal to or lower than the costs of bank loans. Interfund
borrowings normally extend overnight, but can have a maximum duration
of seven days. Loans may be called on one day's notice. A fund may
have to borrow from a bank at a higher interest rate if an interfund
loan is called or not renewed.
INVERSE FLOATERS have variable interest rates that typically move in
the opposite direction from movements in prevailing short-term
interest rate levels - rising when prevailing short-term interest
rates fall, and vice versa. The prices of inverse floaters can be
considerably more volatile than the prices of bonds with comparable
maturities.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investor Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MUNICIPAL INSURANCE. A municipal bond may be covered by insurance that
guarantees the bond's scheduled payment of interest and repayment of
principal. This type of insurance may be obtained by either (i) the
issuer at the time the bond is issued (primary market insurance), or
(ii) another party after the bond has been issued (secondary market
insurance).
Both primary and secondary market insurance guarantee timely and
scheduled repayment of all principal and payment of all interest on a
municipal bond in the event of default by the issuer, and cover a
municipal bond to its maturity, enhancing its credit quality and
value.
Municipal bond insurance does not insure against market fluctuations
or fluctuations in a fund's share price. In addition, a municipal bond
insurance policy will not cover: (i) repayment of a municipal bond
before maturity (redemption), (ii) prepayment or payment of an
acceleration premium (except for a mandatory sinking fund redemption)
or any other provision of a bond indenture that advances the maturity
of the bond, or (iii) nonpayment of principal or interest caused by
negligence or bankruptcy of the paying agent. A mandatory sinking fund
redemption may be a provision of a municipal bond issue whereby part
of the municipal bond issue may be retired before maturity.
Because a significant portion of the municipal securities issued and
outstanding is insured by a small number of insurance companies, an
event involving one or more of these insurance companies could have a
significant adverse effect on the value of the securities insured by
that insurance company and on the municipal markets as a whole.
FMR may decide to retain an insured municipal bond that is in default,
or, in FMR's view, in significant risk of default. While a fund holds
a defaulted, insured municipal bond, the fund collects interest
payments from the insurer and retains the right to collect principal
from the insurer when the municipal bond matures, or in connection
with a mandatory sinking fund redemption.
PRINCIPAL MUNICIPAL BOND INSURERS. The various insurance companies
providing primary and secondary market insurance policies for
municipal bonds are described below. Ratings reflect each respective
rating agency's assessment of the creditworthiness of an insurer and
the insurer's ability to pay claims on its insurance policies at the
time of the assessment.
Ambac Assurance Corp., a wholly-owned subsidiary of Ambac Financial
Group Inc., is authorized to provide bond insurance in the 50 U.S.
states, the District of Columbia, and the Commonwealth of Puerto Rico.
Bonds insured by Ambac Assurance Corp. are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.
Connie Lee Insurance Co. is a wholly-owned subsidiary of Connie Lee
Holdings Inc., which is a wholly-owned subsidiary of Ambac Assurance
Corp. All losses incurred by Connie Lee Insurance Co. that would cause
its statutory capital to drop below $75 million would be covered by
Ambac Assurance Corp. Connie Lee Insurance Co. is authorized to
provide bond insurance in 49 U.S. states, the District of Columbia,
and the Commonwealth of Puerto Rico. Bonds insured by Connie Lee
Insurance Co. are rated "AAA" by Standard & Poor's.
Financial Guaranty Insurance Co. (FGIC), a wholly-owned subsidiary of
GE Capital Services, is authorized to provide bond insurance in the 50
U.S. states and the District of Columbia. Bonds insured by FGIC are
rated "Aaa" by Moody's Investor Service and "AAA" by Standard &
Poor's.
Financial Security Assurance Inc. (FSA), a wholly-owned subsidiary of
Financial Security Assurance Holdings Ltd., is authorized to provide
bond insurance in 49 U.S. states, the District of Columbia, and three
U.S. territories. Bonds insured by FSA are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.
Municipal Bond Investors Assurance Corp. (MBIA Insurance Corp.), a
wholly-owned subsidiary of MBIA Inc., a publicly-owned company, is
authorized to provide bond insurance in the 50 U.S. states, the
District of Columbia, and the Commonwealth of Puerto Rico. Bonds
insured by MBIA Insurance Corp. are rated "Aaa" by Moody's Investor
Service and "AAA" by Standard & Poor's.
MUNICIPAL LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities. Generally,
a fund will not hold these obligations directly as a lessor of the
property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest
gives the purchaser a specified, undivided interest in the obligation
in proportion to its purchased interest in the total amount of the
issue.
Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations. If a municipality stops making payments or transfers its
obligations to a private entity, the obligation could lose value or
become taxable.
MUNICIPAL MARKET DISRUPTION RISK. The value of municipal securities
may be affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the event
of a bankruptcy. Proposals to restrict or eliminate the federal income
tax exemption for interest on municipal securities are introduced
before Congress from time to time. Proposals also may be introduced
before state legislatures that would affect the state tax treatment of
a municipal fund's distributions. If such proposals were enacted, the
availability of municipal securities and the value of a municipal
fund's holdings would be affected and the Trustees would reevaluate
the fund's investment objectives and policies. Municipal bankruptcies
are relatively rare, and certain provisions of the U.S. Bankruptcy
Code governing such bankruptcies are unclear and remain untested.
Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of
the market, or the relative credit quality of particular securities.
Any of these effects could have a significant impact on the prices of
some or all of the municipal securities held by a fund.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student
loans. Bonds issued to supply educational institutions with funds are
subject to the risk of unanticipated revenue decline, primarily the
result of decreasing student enrollment or decreasing state and
federal funding. Among the factors that may lead to declining or
insufficient revenues are restrictions on students' ability to pay
tuition, availability of state and federal funding, and general
economic conditions. Student loan revenue bonds are generally offered
by state (or substate) authorities or commissions and are backed by
pools of student loans. Underlying student loans may be guaranteed by
state guarantee agencies and may be subject to reimbursement by the
United States Department of Education through its guaranteed student
loan program. Others may be private, uninsured loans made to parents
or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student
loan revenue bonds are impacted by numerous factors, including the
rate of student loan defaults, seasoning of the loan portfolio, and
student repayment deferral periods of forbearance. Other risks
associated with student loan revenue bonds include potential changes
in federal legislation regarding student loan revenue bonds, state
guarantee agency reimbursement and continued federal interest and
other program subsidies currently in effect.
ELECTRIC UTILITIES. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy demand,
(d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.
PUT FEATURES entitle the holder to sell a security back to the issuer
at any time or at specified intervals. In exchange for this benefit, a
fund may accept a lower interest rate. Securities with put features
are subject to the risk that the put provider is unable to honor the
put feature (purchase the security). Demand features and standby
commitments are types of put features.
REFUNDING CONTRACTS. Securities may be purchased on a when-issued
basis in connection with the refinancing of an issuer's outstanding
indebtedness. Refunding contracts require the issuer to sell and a
purchaser to buy refunded municipal obligations at a stated price and
yield on a settlement date that may be several months or several years
in the future. A purchaser generally will not be obligated to pay the
full purchase price if the issuer fails to perform under a refunding
contract. Instead, refunding contracts generally provide for payment
of liquidated damages to the issuer. A purchaser may secure its
obligations under a refunding contract by depositing collateral or a
letter of credit equal to the liquidated damages provisions of the
refunding contract.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The fund will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The fund will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and a fund's
yield and may be viewed as a form of leverage.
SOURCES OF LIQUIDITY OR CREDIT SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit of the
liquidity or credit enhancement provider in determining whether to
purchase a security supported by such enhancement. In evaluating the
credit of a foreign bank or other foreign entities, FMR will consider
whether adequate public information about the entity is available and
whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
STANDBY COMMITMENTS are puts that entitle holders to same-day
settlement at an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of
exercise. A fund may acquire standby commitments to enhance the
liquidity of portfolio securities.
Ordinarily a fund will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a
third party at any time. A fund may purchase standby commitments
separate from or in conjunction with the purchase of securities
subject to such commitments. In the latter case, the fund would pay a
higher price for the securities acquired, thus reducing their yield to
maturity.
Issuers or financial intermediaries may obtain letters of credit or
other guarantees to support their ability to buy securities on demand.
FMR may rely upon its evaluation of a bank's credit in determining
whether to purchase an instrument supported by a letter of credit. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank
may be subject to unfavorable political or economic developments,
currency controls, or other governmental restrictions that might
affect the bank's ability to honor its credit commitment.
Standby commitments are subject to certain risks, including the
ability of issuers of standby commitments to pay for securities at the
time the commitments are exercised; the fact that standby commitments
are not generally marketable; and the possibility that the maturities
of the underlying securities may be different from those of the
commitments.
TEMPORARY DEFENSIVE POLICIES. The fund reserves the right to invest
without limitation in short-term instruments, to hold a substantial
amount of uninvested cash, or to invest more than normally permitted
in federally taxable obligations for temporary, defensive purposes.
TENDER OPTION BONDS are created by coupling an intermediate- or
long-term, fixed-rate, municipal bond (generally held pursuant to a
custodial arrangement) with a tender agreement that gives the holder
the option to tender the bond at its face value. As consideration for
providing the tender option, the sponsor (usually a bank,
broker-dealer, or other financial institution) receives periodic fees
equal to the difference between the bond's fixed coupon rate and the
rate (determined by a remarketing or similar agent) that would cause
the bond, coupled with the tender option, to trade at par on the date
of such determination. After payment of the tender option fee, a fund
effectively holds a demand obligation that bears interest at the
prevailing short-term tax-exempt rate. In selecting tender option
bonds, FMR will consider the creditworthiness of the issuer of the
underlying bond, the custodian, and the third party provider of the
tender option. In certain instances, a sponsor may terminate a tender
option if, for example, the issuer of the underlying bond defaults on
interest payments.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
In many instances bonds and participation interests have tender
options or demand features that permit the holder to tender (or put)
the bonds to an institution at periodic intervals and to receive the
principal amount thereof. Variable rate instruments structured in this
fashion are considered to be essentially equivalent to other variable
rate securities. The IRS has not ruled whether the interest on these
instruments is tax-exempt. Fixed-rate bonds that are subject to third
party puts and participation interests in such bonds held by a bank in
trust or otherwise may have similar features.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS involve a
commitment to purchase or sell specific securities at a predetermined
price or yield in which payment and delivery take place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities pursuant to one of these transactions, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the security
will not be issued as anticipated. Because payment for the securities
is not required until the delivery date, these risks are in addition
to the risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when a purchase is outstanding,
the purchases may result in a form of leverage. When a fund has sold a
security pursuant to one of these transactions, the fund does not
participate in further gains or losses with respect to the security.
If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a fund could miss a favorable price or
yield opportunity or suffer a loss.
A fund may renegotiate a when-issued or forward transaction and may
sell the underlying securities before delivery, which may result in
capital gains or losses for the fund.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of the fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contract"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
The fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, the
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause the fund to pay such higher commissions,
FMR must determine in good faith that such commissions are reasonable
in relation to the value of the brokerage and research services
provided by such executing broker-dealers, viewed in terms of a
particular transaction or FMR's overall responsibilities to that fund
or its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation
should be related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC), an indirect subsidiary of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended October 31, 1999 and 1998, the fund's
portfolio turnover rates were 19% and 26% (ANNUALIZED), respectively.
The fund may pay both commissions and spreads in connection with the
placement of portfolio transactions. For the fiscal year ended October
31, 1999, the eleven-month fiscal period ended October 31, 1998, and
the fiscal year ended November 30, 1997, the fund paid no brokerage
commissions.
During the fiscal year ended October 31, 1999, the fund paid no
brokerage commissions to firms that provided research services.
The Trustees of the fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the fund from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the fund could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the fund of some portion of the brokerage commissions
or similar fees paid by the fund on portfolio transactions is legally
permissible and advisable. The fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for the fund are made independently from those of
other funds managed by FMR or investment accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the fund is
concerned. In other cases, however, the ability of the fund to
participate in volume transactions will produce better executions and
prices for the fund. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each class's net asset value per share (NAV) is the value of a single
share. The NAV of each class is computed by adding the class's pro
rata share of the value of the fund's investments, cash, and other
assets, subtracting the class's pro rata share of the fund's
liabilities, subtracting the liabilities allocated to the class, and
dividing the result by the number of shares of that class that are
outstanding.
Portfolio securities are valued by various methods. If quotations are
not available, fixed-income securities are usually valued on the basis
of information furnished by a pricing service that uses a valuation
matrix which incorporates both dealer-supplied valuations and
electronic data processing techniques. Use of pricing services has
been approved by the Board of Trustees. A number of pricing services
are available, and the fund may use various pricing services or
discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
The procedures set forth above need not be used to determine the value
of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and American Depositary Receipts (ADRs), market and
trading trends, the bid/ask quotes of brokers and off-exchange
institutional trading.
PERFORMANCE
A class may quote performance in various ways. All performance
information supplied by the fund in advertising is historical and is
not intended to indicate future returns. Each class's share price,
yield and return fluctuate in response to market conditions and other
factors, and the value of fund shares when redeemed may be more or
less than their original cost.
YIELD CALCULATIONS. Yields for a class are computed by dividing a
class's pro rata share of the fund's interest and income for a given
30-day or one-month period, net of expenses, by the average number of
shares of that class entitled to receive distributions during the
period, dividing this figure by the class's NAV or offering price, as
applicable, at the end of the period, and annualizing the result
(assuming compounding of income) in order to arrive at an annual
percentage rate. Income is calculated for purposes of yield quotations
in accordance with standardized methods applicable to all stock and
bond funds. In general, interest income is reduced with respect to
bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased
with respect to bonds trading at a discount by adding a portion of the
discount to daily income. Capital gains and losses generally are
excluded from the calculation.
Income calculated for the purposes of calculating a class's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, a class's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statements.
Yield information may be useful in reviewing a class's performance and
in providing a basis for comparison with other investment
alternatives. However, a class's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a class's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a class's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to the fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a class's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
The tax-equivalent yield of a class of a fund is the rate an investor
would have to earn from a fully taxable investment before taxes to
equal a class's tax-free yield. Tax-equivalent yields are calculated
by dividing a class's yield by the result of one minus a specified
federal income tax rate. If only a portion of a class's yield is
tax-exempt, only that portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1999. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of
hypothetical federally tax-exempt obligations yielding from 2% to 9%.
Of course, no assurance can be given that a class of the fund will
achieve any specific tax-exempt yield. While the fund invests
principally in obligations whose interest is exempt from federal
income tax, other income received by the fund may be taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 TAX RATES AND TAX-EQUIVALENT YIELDS
If individual tax-exempt
yield is:
Taxable Income* 2% 3%
Single Return Joint Return Federal Marginal Rate** Then taxable-equivalent yield
is:
$ 0 - $ 25,750 $ 0 - $43,050 15.0% 2.35% 3.53%
$ 25,751 - $ 62,450 $ 43,051 - $ 104,050 28.0% 2.78% 4.17%
$ 62,451 - $ 130,250 $ 104,051 - $ 158,550 31.0% 2.90% 4.35%
$ 130,251 - $ 283,150 $ 158,551 - $ 283,150 36.0% 3.13% 4.69%
$ 283,151 and over $ 283,151 and over 39.6% 3.31% 4.97%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 TAX RATES AND TAX-EQUIVALENT YIELDS
If individual tax-exempt
yield is:
Taxable Income* 4% 5% 6% 7% 8% 9%
Single Return Joint Return Federal Marginal Rate** Then taxable-equivalent yield
is:
$ 0 - $ 25,750 $ 0 - $43,050 15.0% 4.71% 5.88% 7.06% 8.24% 9.41% 10.59%
$ 25,751 - $ 62,450 $ 43,051 - $ 104,050 28.0% 5.56% 6.94% 8.33% 9.72% 11.11% 12.50%
$ 62,451 - $ 130,250 $ 104,051 - $ 158,550 31.0% 5.80% 7.25% 8.70% 10.14% 11.59% 13.04%
$ 130,251 - $ 283,150 $ 158,551 - $ 283,150 36.0% 6.25% 7.81% 9.38% 10.94% 12.50% 14.06%
$ 283,151 and over $ 283,151 and over 39.6% 6.62% 8.28% 9.93% 11.59% 13.25% 14.90%
</TABLE>
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions,
limitations on itemized deductions, and other credits, exclusions, and
adjustments which may increase a taxpayer's marginal tax rate. An
increase in a shareholder's marginal tax rate would increase that
shareholder's tax-equivalent yield.
The fund may invest a portion of its assets in obligations that are
subject to federal income tax. When the fund invests in these
obligations, its tax-equivalent yields will be lower. In the table
above, tax-equivalent yields are calculated assuming investments are
100% federally tax-free.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a class's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a class's NAV over a
stated period. A class's return may be calculated by using the
performance data of a previously existing class prior to the date that
the new class commenced operations, adjusted to reflect differences in
sales charges but not 12b-1 fees. A cumulative return reflects actual
performance over a stated period of time. Average annual returns are
calculated by determining the growth or decline in value of a
hypothetical historical investment in a class over a stated period,
and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline
in value had been constant over the period. For example, a cumulative
return of 100% over ten years would produce an average annual return
of 7.18%, which is the steady annual rate of return that would equal
100% growth on a compounded basis in ten years. While average annual
returns are a convenient means of comparing investment alternatives,
investors should realize that a class's performance is not constant
over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual
year-to-year performance of a class.
In addition to average annual returns, a class may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a class's maximum sales charge.
Excluding a class's sales charge from a return calculation produces a
higher return figure. Returns, yields and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a class's NAVs, adjusted
NAVs, and benchmark indexes may be used to exhibit performance. An
adjusted NAV includes any distributions paid by the fund and reflects
all elements of a class's return. Unless otherwise indicated, a
class's adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following table shows each class's yield,
tax-equivalent yield, and returns for the fiscal periods ended October
31, 1999.
Class A and Class T have a maximum front-end sales charge of 3.75% and
2.75%, respectively, which is included in the yield, tax equivalent
yield, and average annual and cumulative returns. Class B and Class C
have a maximum contingent deferred sales charge (CDSC) of 3.00% and
1.00%, respectively, which is included in the average annual and
cumulative returns.
Class A, Class T, Class B, and Class C have a 12b-1 fee of 0.15%,
0.25%, 0.90%, and 1.00%, respectively, which is included in the yield,
tax-equivalent yield, and average annual and cumulative returns.
The tax-equivalent yields for the fund are based on a 36% federal
income tax rate. Note that the fund may invest in securities whose
income is subject to the federal alternative minimum tax.
<TABLE>
<CAPTION>
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Average Annual Returns
Thirty-Day Yield Tax Equivalent Yield One Year Five Years Ten Years/Life of Fund*
Advisor Intermediate 4.19% 6.55% -4.78% 4.92% 5.34%
Municipal Income - Class A
Advisor Intermediate 4.18% 6.53% -3.83% 5.09% 5.43%
Municipal Income - Class T
Advisor Intermediate 3.61% 5.64% -4.64% 4.93% 5.31%
Municipal Income - Class B
Advisor Intermediate N/A N/A -2.85% 4.91% 5.30%
Municipal Income - Class C
Advisor Intermediate 4.50% 7.03% -0.92% 5.93% 5.90%
Municipal Income -
Institutional Class
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative Returns
One Year Five Years Ten Years/Life of Fund*
Advisor Intermediate -4.78% 27.16% 68.26%
Municipal Income - Class A
Advisor Intermediate -3.83% 28.20% 69.64%
Municipal Income - Class T
Advisor Intermediate -4.64% 27.22% 67.80%
Municipal Income - Class B
Advisor Intermediate -2.85% 27.07% 67.60%
Municipal Income - Class C
Advisor Intermediate -0.92% 33.38% 77.46%
Municipal Income -
Institutional Class
</TABLE>
* Initial offering of Class A took place on September 3, 1996. Class A
returns from September 3, 1996 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.25%. Class A returns prior to
September 10, 1992 are those of Institutional Class, which has no
12b-1 fee. If Class A's 12b-1 fee had been reflected, returns prior to
September 3, 1996 through September 10, 1992 would have been higher
and returns prior to September 10, 1992 would have been lower.
Initial offering of Class T took place on September 10, 1992. Class T
returns prior to September 10, 1992 are those of Institutional Class
which has no 12b-1 fee. If Class T's 12b-1 fee had been reflected,
returns prior to September 10, 1992 would have been lower.
Initial offering of Class B took place on June 30, 1994. Class B
returns prior to June 30, 1994 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.25%. Class B returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class B's 12b-1 fee had been reflected, returns prior to June
30, 1994 would have been lower.
Initial offering of Class C took place on November 3, 1997. Class C
returns prior to November 3, 1997 through June 30, 1994 are those of
Class B which reflect a 12b-1 fee of 0.90% (1.00% prior to January 1,
1996). Class C returns prior to June 30, 1994 through September 10,
1992 are those of Class T which reflect a 12b-1 fee of 0.25%. Returns
prior to September 10, 1992 are those of Institutional Class which has
no 12b-1 fee. If Class C's 12b-1 fee had been reflected, returns prior
to November 3, 1997 through January 1, 1996 and prior to June 30, 1994
would have been lower.
Note: If FMR had not reimbursed certain class expenses during these
periods, Class A's, Class T's, Class B's, Class C's, and Institutional
Class's returns would have been lower.
Note: If FMR had not reimbursed certain class expenses during these
periods, Class A's yield and tax equivalent yield would have been
4.11% and 6.42%, respectively; Class T's yield and tax equivalent
yield would have been 4.06% and 6.34%, respectively; Class B's yield
and tax-equivalent yield would have been 3.55% and 5.55%,
respectively; and Institutional Class's yield and tax equivalent yield
would have been 4.41% and 6.89%, respectively.
The following tables show the income and capital elements of each
class's cumulative return. The tables compare each class's return to
the record of the Standard & Poor's 500 Index (S&P 500(registered
trademark)), the Dow Jones Industrial Average (DJIA), and the cost of
living, as measured by the Consumer Price Index (CPI), over the same
period. The S&P 500SM and DJIA comparisons are provided to show how
each class's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Because the fund invests in fixed-income securities, common
stocks represent a different type of investment from the fund. Common
stocks generally offer greater growth potential than the fund, but
generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than a fixed-income investment such as the fund. The S&P 500
and DJIA returns are based on the prices of unmanaged groups of stocks
and, unlike each class's returns, do not include the effect of
brokerage commissions or other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each class of Advisor Intermediate Municipal
Income during the 10-year period ended October 31, 1999, assuming all
distributions were reinvested. Returns are based on past results and
are not an indication of future performance. Tax consequences of
different investments have not been factored into the figures below.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class A of Advisor Intermediate Municipal Income
would have grown to $16,826, including the effect of Class A's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS A
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,260 $ 6,401 $ 1,165 $ 16,826 $ 51,536
1998 $ 9,826 $ 6,074 $ 1,109 $ 17,009 $ 41,009
1997 $ 9,652 $ 5,281 $ 1,044 $ 15,977 $ 33,617
1996 $ 9,370 $ 4,455 $ 1,012 $ 14,837 $ 25,445
1995 $ 9,397 $ 3,811 $ 1,015 $ 14,223 $ 20,505
1994 $ 8,804 $ 2,981 $ 951 $ 12,736 $ 16,217
1993 $ 9,652 $ 2,657 $ 1,017 $ 13,326 $ 15,613
1992 $ 9,972 $ 2,082 $ 0 $ 12,054 $ 13,583
1991 $ 9,880 $ 1,356 $ 0 $ 11,236 $ 12,351
1990 $ 9,607 $ 645 $ 0 $ 10,252 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS A
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class A of
the fund on November 1, 1989, assuming the maximum sales charge had
been in effect, the net amount invested in Class A shares was $9,625.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $17,767. If distributions had not been
reinvested, the amount of distributions earned from the class over
time would have been smaller, and cash payments for the period would
have amounted to $4,806 for dividends and $922 for capital gain
distributions. Initial offering of Class A of Advisor Intermediate
Municipal Income took place on September 3, 1996. Class A returns from
September 3, 1996 through September 10, 1992 are those of Class T
which reflect a 12b-1 fee of 0.25%. Class A returns prior to September
10, 1992 are those of Institutional Class which has no 12b-1 fee. If
Class A's 12b-1 fee had been reflected, returns prior to September 3,
1996 through September 10, 1992 would have been higher and returns
prior to September 10, 1992 would have been lower.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class T of Advisor Intermediate Municipal Income
would have grown to $16,964, including the effect of Class T's maximum
sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS T
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,356 $ 6,431 $ 1,177 $ 16,964 $ 51,536
1998 $ 9,928 $ 6,108 $ 1,120 $ 17,156 $ 41,009
1997 $ 9,743 $ 5,311 $ 1,054 $ 16,108 $ 33,617
1996 $ 9,476 $ 4,503 $ 1,024 $ 15,003 $ 25,445
1995 $ 9,495 $ 3,851 $ 1,025 $ 14,371 $ 20,505
1994 $ 8,895 $ 3,013 $ 961 $ 12,869 $ 16,217
1993 $ 9,753 $ 2,683 $ 1,028 $ 13,464 $ 15,613
1992 $ 10,075 $ 2,104 $ 0 $ 12,179 $ 13,583
1991 $ 9,983 $ 1,370 $ 0 $ 11,353 $ 12,351
1990 $ 9,707 $ 651 $ 0 $ 10,358 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS T
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class T of
the fund on November 1, 1989, assuming the maximum sales charge had
been in effect, the net amount invested in Class T shares was $9,725.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $17,811. If distributions had not been
reinvested, the amount of distributions earned from the class over
time would have been smaller, and cash payments for the period would
have amounted to $4,835 for dividends and $932 for capital gain
distributions. Initial offering of Class T of Advisor Intermediate
Municipal Income took place on September 10, 1992. Class T returns
prior to September 10, 1992 are those of Institutional Class which has
no 12b-1 fee. If Class T's 12b-1 fee had been reflected, returns prior
to September 10, 1992 would have been lower.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class B of Advisor Intermediate Municipal Income
would have grown to $16,780.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS B
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,611 $ 5,965 $ 1,204 $ 16,780 $ 51,536
1998 $ 10,199 $ 5,740 $ 1,150 $ 17,089 $ 41,009
1997 $ 10,019 $ 5,069 $ 1,084 $ 16,172 $ 33,617
1996 $ 9,735 $ 4,357 $ 1,051 $ 15,143 $ 25,445
1995 $ 9,763 $ 3,799 $ 1,054 $ 14,616 $ 20,505
1994 $ 9,147 $ 3,055 $ 988 $ 13,190 $ 16,217
1993 $ 10,028 $ 2,760 $ 1,057 $ 13,845 $ 15,613
1992 $ 10,360 $ 2,163 $ 0 $ 12,523 $ 13,583
1991 $ 10,265 $ 1,409 $ 0 $ 11,674 $ 12,351
1990 $ 9,981 $ 670 $ 0 $ 10,651 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS B
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class B of
the fund on November 1, 1989, the net amount invested in Class B
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $17,371. If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $4,601 for dividends and $958 for capital gain
distributions. Initial offering of Class B of Advisor Intermediate
Municipal Income took place on June 30, 1994. Class B returns prior to
June 30, 1994 through September 10, 1992 are those of Class T which
reflect a 12b-1 fee of 0.25%. Class B returns prior to September 10,
1992 are those of Institutional Class which has no 12b-1 fee. If Class
B's 12b-1 fee had been reflected, returns prior to June 30, 1994 would
have been lower.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Class C of Advisor Intermediate Municipal Income
would have grown to $16,760.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS C
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,621 $ 5,934 $ 1,205 $ 16,760 $ 51,536
1998 $ 10,209 $ 5,726 $ 1,151 $ 17,086 $ 41,009
1997 $ 10,019 $ 5,069 $ 1,084 $ 16,172 $ 33,617
1996 $ 9,734 $ 4,358 $ 1,051 $ 15,143 $ 25,445
1995 $ 9,763 $ 3,799 $ 1,054 $ 14,616 $ 20,505
1994 $ 9,147 $ 3,055 $ 988 $ 13,190 $ 16,217
1993 $ 10,028 $ 2,760 $ 1,057 $ 13,845 $ 15,613
1992 $ 10,360 $ 2,163 $ 0 $ 12,523 $ 13,583
1991 $ 10,265 $ 1,408 $ 0 $ 11,674 $ 12,351
1990 $ 9,981 $ 670 $ 0 $ 10,651 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME - CLASS C
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Class C of
the fund on November 1, 1989, the net amount invested in Class C
shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $17,333. If distributions had
not been reinvested, the amount of distributions earned from the class
over time would have been smaller, and cash payments for the period
would have amounted to $4,579 for dividends and $958 for capital gain
distributions. Initial offering of Class C of Advisor Intermediate
Municipal Income took place on November 3, 1997. Class C returns prior
to November 3, 1997 through June 30, 1994 are those of Class B which
reflect a 12b-1 fee of 0.90% (1.00% prior to January 1, 1996). Class C
returns prior to June 30, 1994 through September 10, 1992 are those of
Class T which reflect a 12b-1 fee of 0.25%. Class C returns prior to
September 10, 1992 are those of Institutional Class which has no 12b-1
fee. If Class C's 12b-1 fee had been reflected, returns prior to
November 3, 1997 through January 1, 1996 and prior to June 30, 1994
would have been lower.
During the 10-year period ended October 31, 1999, a hypothetical
$10,000 investment in Institutional Class of Advisor Intermediate
Municipal Income would have grown to $17,746.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
1999 $ 9,621 $ 6,912 $ 1,213 $ 17,746 $ 51,536
1998 $ 10,209 $ 6,549 $ 1,153 $ 17,911 $ 41,009
1997 $ 10,019 $ 5,679 $ 1,084 $ 16,782 $ 33,617
1996 $ 9,744 $ 4,794 $ 1,053 $ 15,591 $ 25,445
1995 $ 9,763 $ 4,078 $ 1,055 $ 14,896 $ 20,505
1994 $ 9,147 $ 3,170 $ 988 $ 13,305 $ 16,217
1993 $ 10,028 $ 2,799 $ 1,057 $ 13,884 $ 15,613
1992 $ 10,360 $ 2,166 $ 0 $ 12,526 $ 13,583
1991 $ 10,265 $ 1,409 $ 0 $ 11,674 $ 12,351
1990 $ 9,981 $ 670 $ 0 $ 10,651 $ 9,251
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADVISOR INTERMEDIATE INDEXES
MUNICIPAL INCOME -
INSTITUTIONAL CLASS
Fiscal Year Ended DJIA Cost of Living
1999 $ 52,414 $ 13,392
1998 $ 41,322 $ 13,057
1997 $ 35,190 $ 12,866
1996 $ 27,989 $ 12,604
1995 $ 21,605 $ 12,237
1994 $ 17,317 $ 11,903
1993 $ 15,871 $ 11,600
1992 $ 13,514 $ 11,290
1991 $ 12,484 $ 10,939
1990 $ 9,597 $ 10,629
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Institutional Class of the fund on November 1, 1989, the net amount
invested in Institutional Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $18,339. If distributions had not been reinvested, the amount of
distributions earned from the class over time would have been smaller,
and cash payments for the period would have amounted to $5,140 for
dividends and $958 for capital gain distributions.
PERFORMANCE COMPARISONS. A class's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. Lipper may also rank based on yield. In
addition to the mutual fund rankings, a class's performance may be
compared to stock, bond, and money market mutual fund performance
indexes prepared by Lipper or other organizations. When comparing
these indexes, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds
may offer greater stability of principal, but generally do not offer
the higher potential returns available from stock mutual funds.
From time to time, a class's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a class may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising. The fund may advertise risk
ratings, including symbols or numbers, prepared by independent rating
agencies.
A class's performance may also be compared to that of each index
representing the universe of securities in which the fund may invest.
The return of each index reflects reinvestment of all dividends and
capital gains paid by securities included in each index. Unlike a
class's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
The fund may compare its performance to the Lehman Brothers Municipal
Bond Index, a market value-weighted index for investment-grade
municipal bonds with maturities of one year or more. Issues included
in the index have been issued after December 31, 1990, have an
outstanding par value of at least $3 million, and have been issued as
part of an offering of at least $50 million. Subsequent to December
31, 1995, zero coupon bonds and issues subject to the alternative
minimum tax were excluded from the index.
The fund may also compare its performance to that of the Lehman
Brothers 1-17 Year Municipal Bond Index, a market value-weighted index
for investment-grade municipal bonds with maturities between one and
17 years.
A class may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
The fund may compare and contrast in advertising the relative
advantages of investing in a mutual fund versus an individual
municipal bond. Unlike municipal bond mutual funds, individual
municipal bonds offer a stated rate of interest and, if held to
maturity, repayment of principal. Although some individual municipal
bonds might offer a higher return, they do not offer the reduced risk
of a mutual fund that invests in many different securities. The sales
charges of many municipal bond mutual funds are lower than the
purchase cost of individual municipal bonds, which are generally
subject to direct brokerage costs.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; model portfolios or allocations; and saving for
college or other goals. In addition, Fidelity may quote or reprint
financial or business publications and periodicals, as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products.
The fund may be advertised as part of certain asset allocation
programs involving other Fidelity or non-Fidelity mutual funds. These
asset allocation programs may advertise a model portfolio and its
performance results.
The fund may be advertised as part of a no transaction fee (NTF)
program in which Fidelity and non-Fidelity mutual funds are offered.
An NTF program may advertise performance results.
A class may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote the fund's current portfolio
manager.
VOLATILITY. A class may quote various measures of volatility and
benchmark correlation in advertising. In addition, the class may
compare these measures to those of other funds. Measures of volatility
seek to compare a class's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, the fund may also discuss or illustrate examples
of interest rate sensitivity.
MOMENTUM INDICATORS indicate a class's price movements over specific
periods of time. Each point on the momentum indicator represents a
class's percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
As of October 31, 1999, FMR advised over $33 billion in municipal fund
assets, $136 billion in taxable fixed-income fund assets, $140 billion
in money market fund assets, $567 billion in equity fund assets, $18
billion in international fund assets, and $43 billion in
Spartan(registered trademark) fund assets. The fund may reference the
growth and variety of money market mutual funds and the adviser's
innovation and participation in the industry. The equity funds under
management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR,
its subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each class of the fund may
compare its total expense ratio to the average total expense ratio of
similar funds tracked by Lipper. A class's total expense ratio is a
significant factor in comparing bond and money market investments
because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, Fidelity Distributors
Corporation (FDC) exercises its right to waive Class A's and Class T's
front-end sales charge on shares acquired through reinvestment of
dividends and capital gain distributions or in connection with a
fund's merger with or acquisition of any investment company or trust.
In addition, FDC has chosen to waive Class A's and Class T's front-end
sales charge in certain instances due to sales efficiencies and
competitive considerations. The sales charge will not apply:
CLASS A SHARES ONLY
1. to shares purchased for an employee benefit plan (as defined in the
Employee Retirement Income Security Act) (except a SIMPLE IRA, SEP, or
SARSEP plan or a plan covering self-employed individuals and their
employees (formerly Keogh/H.R. 10 plans)) or a 403(b) program with at
least $25 million or more in plan assets;
2. to shares purchased for an employee benefit plan (except a SIMPLE
IRA, SEP, or SARSEP plan or a plan covering self-employed individuals
and their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program investing through an insurance company separate account used
to fund annuity contracts;
3. to shares purchased for an employee benefit plan (except a SIMPLE
IRA, SEP, or SARSEP plan or a plan covering self-employed individuals
and their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program investing through a trust institution, bank trust department
or insurance company, or any such institution's broker-dealer
affiliate that is not part of an organization primarily engaged in the
brokerage business. Employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs
that participate in the Advisor Retirement Connection do not qualify
for this waiver;
4. to shares purchased for an employee benefit plan (except a SIMPLE
IRA, SEP, or SARSEP plan or a plan covering self-employed individuals
and their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program investing through an investment professional sponsored program
that requires the participating employee benefit plan to initially
invest in Class C or Class B shares and, upon meeting certain
criteria, subsequently requires the plan to invest in Class A shares;
5. to shares purchased by a trust institution or bank trust department
for a managed account that is charged an asset-based fee. Employee
benefit plans (except SIMPLE IRA, SEP, and SARSEP plans and plans
covering self-employed individuals and their employees (formerly
Keogh/H.R. 10 plans)), 403(b) programs and accounts managed by third
parties do not qualify for this waiver;
6. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee. Employee benefit plans (except SIMPLE
IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) and
403(b) programs do not qualify for this waiver;
7. to shares purchased by a registered investment adviser that is not
part of an organization primarily engaged in the brokerage business
for an account that is managed on a discretionary basis and is charged
an asset-based fee. Employee benefit plans (except SIMPLE IRA, SEP,
and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs do
not qualify for this waiver;
8. to shares purchased with proceeds from the sale of front-end load
shares of a non-Advisor mutual fund for an account participating in
the FundSelect by Nationwide program;
9. to shares purchased by a bank trust officer, registered
representative, or other employee (or a member of one of their
immediate families) of investment professionals having agreements with
FDC. A member of the immediate family of a bank trust officer, a
registered representative or other employee of investment
professionals having agreements with FDC, is a spouse of one of those
individuals, an account for which one of those individuals is acting
as custodian for a minor child, and a trust account that is registered
for the sole benefit of a minor child of one of those individuals; or
10. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
A sales load waiver form must accompany these transactions.
CLASS T SHARES ONLY
1. to shares purchased for an insurance company separate account used
to fund annuity contracts for employee benefit plans (except SIMPLE
IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)) or
403(b) programs;
2. to shares purchased by a trust institution or bank trust department
for a managed account that is charged an asset-based fee. Accounts
managed by third parties do not qualify for this waiver;
3. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee;
4. to shares purchased by a registered investment adviser that is not
part of an organization primarily engaged in the brokerage business
for an account that is managed on a discretionary basis and is charged
an asset-based fee;
5. to shares purchased for an employee benefit plan (except a SIMPLE
IRA, SEP, or SARSEP plan or a plan covering self-employed individuals
and their employees (formerly Keogh/H.R. 10 plans)) or a 403(b)
program;
6. to shares purchased for a Fidelity or Fidelity Advisor account
(including purchases by exchange) with the proceeds of a distribution
from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans, 403(b) programs or plans
covering sole-proprietors (formerly Keogh/H.R. 10 plans) that are
invested in Fidelity Advisor or Fidelity funds or (ii) an employee
benefit plan, 403(b) program or plan covering a sole-proprietor
(formerly Keogh/H.R. 10 plan) that is invested in Fidelity Advisor or
Fidelity funds. (Distributions other than those transferred to an IRA
account must be transferred directly into a Fidelity account.);
7. to shares purchased for any state, county, or city, or any
governmental instrumentality, department, authority or agency;
8. to shares purchased with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end or contingent
deferred sales charge;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited (FIL) or their
direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a
Fidelity Trustee or employee;
10. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code, but
excluding the Fidelity Investments Charitable Gift Fund) investing
$100,000 or more;
11. to shares purchased by a bank trust officer, registered
representative, or other employee (or a member of one of their
immediate families) of investment professionals having agreements with
FDC. A member of the immediate family of a bank trust officer, a
registered representative or other employee of investment
professionals having agreements with FDC, is a spouse of one of those
individuals, an account for which one of those individuals is acting
as custodian for a minor child, and a trust account that is registered
for the sole benefit of a minor child of one of those individuals;
12. to shares purchased for a charitable remainder trust or life
income pool established for the benefit of a charitable organization
(as defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
13. to shares purchased with distributions of income, principal, and
capital gains from Fidelity Defined Trusts; or
14. to shares purchased by the Fidelity Investments Charitable Gift
Fund.
A sales load waiver form must accompany these transactions.
CLASS B AND CLASS C SHARES ONLY
The Class B or Class C CDSC will not apply to the redemption of
shares:
1. For disability or death, provided that the shares are sold within
one year following the death or the initial determination of
disability;
2. That are permitted without penalty at age 70 1/2 pursuant to the
Internal Revenue Code from retirement plans or accounts (other than of
shares purchased on or after February 11, 1999 for Traditional IRAs,
Roth IRAs and Rollover IRAs);
3. For disability, payment of death benefits, or minimum required
distributions starting at age 70 1/2 from Traditional IRAs, Roth IRAs
and Rollover IRAs purchased on or after February 11, 1999;
4. Through the Fidelity Advisor Systematic Withdrawal Program; or
5. (Applicable to Class C only) From an employee benefit plan, 403(b)
program or plan covering a sole-proprietor (formerly Keogh/H.R. 10
plan).
A waiver form must accompany these transactions.
INSTITUTIONAL CLASS SHARES ONLY
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. In addition, employee
benefit plans, 403(b) programs and plans covering sole-proprietors
(formerly Keogh/H.R. 10 plans) must have at least $50 million in plan
assets;
2. Registered investment adviser managed account programs, provided
the registered investment adviser is not part of an organization
primarily engaged in the brokerage business and the program (i)
charges an asset-based fee and (ii) will have at least $1 million
invested in the Institutional Class of the Advisor funds. In addition,
accounts other than an employee benefit plan, 403(b) program or plan
covering a sole-proprietor (formerly a Keogh/H.R. 10 plan) in the
program must be managed on a discretionary basis;
3. Trust institution and bank trust department managed account
programs that (i) charge an asset-based fee and (ii) will have at
least $1 million invested in the Institutional Class of the Advisor
funds. Accounts managed by third parties are not eligible to purchase
Institutional Class shares;
4. Insurance company separate accounts that will have at least $1
million invested in the Institutional Class of the Advisor funds;
5. Current or former Trustees or officers of a Fidelity fund or
current or retired officers, directors, or regular employees of FMR
Corp. or FIL or their direct or indirect subsidiaries (Fidelity
Trustee or employee), spouses of Fidelity Trustees or employees,
Fidelity Trustees or employees acting as a custodian for a minor
child, or persons acting as trustee of a trust for the sole benefit of
the minor child of a Fidelity Trustee or employee; and
6. Insurance company programs for employee benefit plans, 403(b)
programs or plans covering sole-proprietors (formerly Keogh/H.R. 10
plans) that (i) charge an asset-based fee and (ii) will have at least
$1 million invested in the Institutional Class of the Advisor funds.
Insurance company programs for employee benefit plans, 403(b) programs
and plans covering sole-proprietors (formerly Keogh/H.R. 10 plans)
include such programs offered by a broker-dealer affiliate of an
insurance company, provided that the affiliate is not part of an
organization primarily engaged in the brokerage business.
For purchases made by managed account programs, insurance company
separate accounts or insurance company programs for employee benefit
plans, 403(b) programs or plans covering sole-proprietors (formerly
Keogh/H.R. 10 plans), Fidelity reserves the right to waive the
requirement that $1 million be invested in the Institutional Class of
the Advisor funds.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. For all funds, on eligible purchases of (i) Class A
shares in amounts of $1 million or more that qualify for a Class A
load waiver, (ii) Class A shares in amounts of $25 million or more, or
(iii) Class T shares in amounts of $1 million or more, investment
professionals will be compensated with a fee at the rate of 0.25% of
the purchase amount. Except as provided below, Class A eligible
purchases are the following purchases made through broker-dealers and
banks: an individual trade of $25 million or more; an individual trade
of $1 million or more that is load waived; a trade which brings the
value of the accumulated account(s) of an investor (including an
employee benefit plan (except a SEP or SARSEP plan or a plan covering
self-employed individuals and their employees (formerly a Keogh/H.R.
10 plan)) or 403(b) program) past $25 million; a load waived trade
that brings the value of the accumulated account(s) of an investor
(including an employee benefit plan (except a SEP or SARSEP plan or a
plan covering self-employed individuals and their employees (formerly
a Keogh/H.R. 10 plan)) or 403(b) program) past $1 million; a trade for
an investor with an accumulated account value of $25 million or more;
a load waived trade for an investor with an accumulated account value
of $1 million or more; an incremental trade toward an investor's $25
million "Letter of Intent;" and an incremental load waived trade
toward an investor's $1 million "Letter of Intent." Except as provided
below, Class T eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $1 million or
more; a trade which brings the value of the accumulated account(s) of
an investor (including an employee benefit plan (except a SEP or
SARSEP plan or a plan covering self-employed individuals and their
employees (formerly a Keogh/H.R. 10 plan)) or 403(b) program) past $1
million; a trade for an investor with an accumulated account value of
$1 million or more; and an incremental trade toward an investor's $1
million "Letter of Intent."
Shares held by an insurance company separate account will be
aggregated at the client (e.g., the contract holder or plan sponsor)
level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0.25% fee with respect to shares held by
an insurance company separate account must provide FDC access to
records detailing purchases at the client level.
For the purpose of determining the availability of Class A or Class T
finder's fees, purchases of Class A or Class T shares made (i) with
the proceeds from the redemption of shares of any Fidelity fund or
(ii) by the Fidelity Investments Charitable Gift Fund, will not be
considered "eligible purchases."
Except as provided below, any assets on which a finder's fee has been
paid will bear a contingent deferred sales charge (Class A or Class T
CDSC) if they do not remain in Class A or Class T shares of the
Fidelity Advisor Funds, or Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund, for a period of at least one
uninterrupted year. The Class A or Class T CDSC will be 0.25% of the
lesser of the cost of the Class A or Class T shares, as applicable, at
the initial date of purchase or the value of those Class A or Class T
shares, as applicable, at redemption, not including any reinvested
dividends or capital gains. Class A and Class T shares acquired
through distributions (dividends or capital gains) will not be subject
to a Class A or Class T CDSC. In determining the applicability and
rate of any Class A or Class T CDSC at redemption, Class A or Class T
shares representing reinvested dividends and capital gains will be
redeemed first, followed by those Class A or Class T shares that have
been held for the longest period of time.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
The Class A or Class T CDSC will not apply to the redemption of
shares:
1. Held by insurance company separate accounts;
2. For plan loans or distributions or exchanges to non-Advisor fund
investment options from employee benefit plans (except shares of
SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly Keogh/H.R. 10 plans)
purchased on or after February 11, 1999) and 403(b) programs; or
3. For disability, payment of death benefits, or minimum required
distributions starting at age 70 1/2 from Traditional IRAs, Roth IRAs,
SIMPLE IRAs, SEPs, SARSEPs and plans covering a sole-proprietor or
self-employed individuals and their employees (formerly Keogh/H.R. 10
plans).
A waiver form must accompany these transactions.
CLASS A AND CLASS T SHARES ONLY
COMBINED PURCHASE, RIGHTS OF ACCUMULATION AND LETTER OF INTENT
PROGRAMS. The following qualify as an "individual" or "company" for
the purposes of determining eligibility for the Combined Purchase,
Rights of Accumulation or Letter of Intent program: an individual,
spouse and their children under age 21 purchasing for his/her or their
own account; a trustee, administrator or other fiduciary purchasing
for a single trust estate or a single fiduciary account or for a
single or parent-subsidiary group of "employee benefit plans" (except
SEP and SARSEP plans and plans covering self-employed individuals and
their employees (formerly Keogh/H.R. 10 plans)) and 403(b) programs;
and tax-exempt organizations (as defined in Section 501(c)(3) of the
Internal Revenue Code).
COMBINED PURCHASE. For your purchases to be aggregated for the purpose
of qualifying for the Combined Purchase program, they must be made on
the same day through one investment professional.
RIGHTS OF ACCUMULATION. The current value of your holdings is
determined at the NAV at the close of business on the day you purchase
the Class A or Class T shares to which the current value of your
holdings will be added. For your purchases and holdings to be
aggregated for the purpose of qualifying for the Rights of
Accumulation program, they must have been made through one investment
professional.
LETTER OF INTENT. You must file your Letter of Intent (Letter) with
Fidelity within 90 days of the start of your purchases toward
completing your Letter. For your purchases to be aggregated for the
purpose of completing your Letter, they must be made through one
investment professional. Your initial purchase toward completing your
Letter must be at least 5% of the total investment specified in your
Letter. Class A and Class T shares acquired through an employee
benefit plan, a Traditional IRA, a Roth IRA, a Rollover IRA, a 403(b)
program or a plan covering a sole-proprietor (formerly Keogh/H.R. 10
plan) will be included for purposes of completing your Letter but may
not be used to meet the initial investment minimum of 5% of the total
investment specified in your Letter. Fidelity will register Class A or
Class T shares equal to 5% of the total investment specified in your
Letter in your name and will hold those shares in escrow. You will
earn income, dividends and capital gain distributions on escrowed
Class A and Class T shares. The escrow will be released when you
complete your Letter. You are not obligated to complete your Letter.
If you do not complete your Letter, you must pay the increased
front-end sales charges due. If you do not pay the increased front-end
sales charges within 20 days after the date your Letter expires,
Fidelity will redeem sufficient escrowed Class A or Class T shares to
pay any applicable front-end sales charges. If you purchase more than
the amount specified in your Letter and qualify for additional Class A
or Class T front-end sales charge reductions, the front-end sales
charge will be adjusted to reflect your total purchase at the end of
13 months and the surplus amount will be applied to your purchase of
additional Class A or Class T shares at the then-current offering
price applicable to the total investment.
ALL CLASSES
The fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing each class's NAV, if FMR determines it is
in the best interests of the fund. Shareholders that receive
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. To the extent that the fund's income is designated as
federally tax-exempt interest, the dividends declared by the fund are
also federally tax-exempt. Short-term capital gains are taxable as
dividends, but do not qualify for the dividends-received deduction.
The fund purchases municipal securities whose interest FMR believes is
free from federal income tax. Generally, issuers or other parties have
entered into covenants requiring continuing compliance with federal
tax requirements to preserve the tax-free status of interest payments
over the life of the security. If at any time the covenants are not
complied with, or if the IRS otherwise determines that the issuer did
not comply with relevant tax requirements, interest payments from a
security could become federally taxable retroactive to the date the
security was issued. For certain types of structured securities, the
tax status of the pass-through of tax-free income may also be based on
the federal tax treatment of the structure.
Interest on certain "private activity" securities is subject to the
federal alternative minimum tax (AMT), although the interest continues
to be excludable from gross income for other tax purposes. Interest
from private activity securities is a tax preference item for the
purposes of determining whether a taxpayer is subject to the AMT and
the amount of AMT to be paid, if any.
A portion of the gain on municipal bonds purchased at market discount
after April 30, 1993 is taxable to shareholders as ordinary income,
not as capital gains.
CAPITAL GAIN DISTRIBUTIONS. The fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, the fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting the fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of the fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs the fund and
is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee the fund's activities, review contractual
arrangements with companies that provide services to the fund, and
review the fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (69), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Advisor Series II, is Mr.
Johnson's daughter.
ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Advisor Series II (1999), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
RALPH F. COX (67), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petroleum production).
In addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (67), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., Nabisco
Brands, Inc., and Standard Brands, Inc. In addition, she is a member
of the Board of Directors of the Southampton Hospital in Southampton,
N.Y. (1998).
ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000). Mr. Gates also
is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.
DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. From 1987 to January
1995, Mr. Kirk was a Professor at Columbia University Graduate School
of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a Director
of Valuation Research Corp. (appraisals and valuations, 1993-1995). He
serves as Chairman of the Board of Directors of National Arts
Stabilization Inc., Chairman of the Board of Trustees of the Greenwich
Hospital Association, Director of the Yale-New Haven Health Services
Corp. (1998), Vice Chairman of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice
Section (1995), and as a Public Governor of the National Association
of Securities Dealers, Inc. (1996).
NED C. LAUTENBACH (55),Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
*PETER S. LYNCH (56), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan(registered trademark) Fund and FMR
Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was
also Vice President of Fidelity Investments Corporate Services
(1991-1992). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and
Society for the Preservation of New England Antiquities, and as an
Overseer of the Museum of Fine Arts of Boston.
WILLIAM O. McCOY (66), Trustee (1997), is the Interim Chancellor for
the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH (71), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the Board of
York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and
metal products, 1992), CUNO, Inc. (liquid and gas filtration products,
1996), and Associated Estates Realty Corporation (a real estate
investment trust, 1993). Mr. McDonough served as a Director of
ACME-Cleveland Corp. (metal working, telecommunications, and
electronic products) from 1987-1996 and Brush-Wellman Inc. (metal
refining) from 1983-1997.
MARVIN L. MANN (66), Trustee (1993), is Chairman Emeritus, of Lexmark
International, Inc. (office machines, 1991) where he still remains a
member of the Board. Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997). He is a
Board member of Dynatech Corporation (electronics, 1999).
*ROBERT C. POZEN (53), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of National Life Insurance Company of Vermont and American Software,
Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).
DWIGHT D. CHURCHILL (45), is Vice President of Bond Funds, Group
Leader of the Bond Group, Senior Vice President of FMR (1997), and
Vice President of FIMM (1998). Mr. Churchill joined Fidelity in 1993
as Vice President and Group Leader of Taxable Fixed-Income
Investments.
FRED L. HENNING, JR. (60), is President of Fidelity Investments
Fixed-Income Divison (1998), and Senior Vice President of FMR and
Fidleity Investments Money Management Inc. Mr. Henning joined Fidelity
in 1977 as a portfolio manager for Fidelity Daily Income Trust Fund.
Since then, he has held a number of positions with FMR and its
affiliates and serves as an officer of other investment companies
managed or advised by FMR.
NORMAN U. LIND (43), is Vice President of Fidelity Advisor
Intermediate Municipal Income Fund (1998) and other funds advised by
FMR. Prior to his current responsibilities, Mr. Lind managed a variety
of Fidelity funds.
ERIC D. ROITER (50), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).
ROBERT A. DWIGHT (41), Treasurer (2000), is Treasurer of the Fidelity
funds and is an employee of FMR. Prior to becoming Treasurer of the
Fidelity funds, he served as President of Fidelity Accounting and
Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer of
the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
MATTHEW N. KARSTETTER (38), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
STANLEY N. GRIFFITH (53), Assistant Vice President (1998), is
Assistant Vice President of Fidelity's Fixed-Income Funds (1998) and
an employee of FMR Corp.
JOHN H. COSTELLO (53), Assistant Treasurer, is an employee of FMR.
THOMAS J. SIMPSON (41), Assistant Treasurer (1996), is Assistant
Treasurer of Fidelity's Fixed-Income Funds (1998) and an employee of
FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and
Fund Controller of Liberty Investment Services (1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended October 31, 1999, or
calendar year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board Advisor Intermediate Fund Complex*,A
Municipal IncomeB
Edward C. Johnson 3d** $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0
Ralph F. Cox $ 23 $ 223,500
Phyllis Burke Davis $ 22 $ 220,500
Robert M. Gates $ 23 $ 223,500
E. Bradley Jones**** $ 23 $ 222,000
Donald J. Kirk $ 23 $ 226,500
Ned C. Lautenbach*** $ 2 $ 0
Peter S. Lynch** $ 0 $ 0
William O. McCoy $ 23 $ 223,500
Gerald C. McDonough $ 28 $ 273,500
Marvin L. Mann $ 23 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 23 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund and Ms. Johnson are compensated by
FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of October 31, 1999, approximately 2.78% of the fund's total
outstanding shares were held by FMR affiliates. FMR Corp. is the
ultimate parent company of these FMR affiliates. By virtue of their
ownership interest in FMR Corp., as described in the "Control of
Investment Advisers" section on page 51, Mr. Edward C. Johnson 3d,
President and Trustee of the fund, and Ms. Abigail P. Johnson, Member
of the Advisory Board of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's and Ms. Johnson's deemed ownership of the fund's shares,
the Trustees, Members of the Advisory Board, and officers of the fund
owned, in the aggregate, less than 1% of the fund's total outstanding
shares.
As of October 31, 1999, the following owned of record or beneficially
5% or more (up to and including 25%) of each class's outstanding
shares:
Advisor Intermediate Municipal Income Class A: PaineWebber, Inc, New
York, NY (21.14%); BMA Financial Services, Inc., Westwood, KS
(18.90%); The Guardian, Phoenix, AZ (11.42); Citigroup, Inc., Long
Island City, NY (10.32%).
Advisor Intermediate Municipal Income Class T: SunAmerica, New York,
NY (7.68%); Citigroup, Inc., New York, NY (5.91%); Aetna Inc.,
Torrance, CA (5.81%).
Advisor Intermediate Municipal Income Class B: Merrill Lynch, Pierce,
Fenner & Smith Inc., Jacksonville, FL (14.90%); Prudential, New York,
NY (6.14%).
Advisor Intermediate Municipal Income Class C: Merrill Lynch, Pierce,
Fenner & Smith Inc., Jackson, FL (15.90%); Allmerica Financial Corp.,
Worcester, MA (11.65%); PaineWebber, Inc., New York, NY (9.64%); First
Union Corp., Roanoke, VA (9.12%); Terra Securities Corporation,
Springfield, IL (6.86%); First Allied Securities, San Diego, CA
(6.12%); Investacorp, Inc., Amherst, NH (5.34%); A.G. Edwards & Sons
Inc., Saint Louis, MO (5.02%).
Advisor Intermediate Municipal Income Institutional Class: Drovers &
Mechanics Bank, York, PA (17.34%); First National Bank of Springdale,
Springdale, AZ (9.84%); South Holland Bancorp, South Holland, IL
(9.18%); Laird Norton Company, Seattle, WA (9.07%); Wells Fargo Bank,
San Francisco, CA (8.03%); Citizens National Bank of Evansville,
Evansville, IN (7.95%).
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR
and FIMM. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.
MANAGEMENT CONTRACT
The fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
the fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides the fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of the
fund or FMR performing services relating to research, statistical and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent and pricing and bookkeeping agent, the
fund or each class thereof, as applicable, pays all of its expenses
that are not assumed by those parties. The fund pays for the
typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor,
and non-interested Trustees. The fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of the fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders of the applicable
classes. Other expenses paid by the fund include interest, taxes,
brokerage commissions, the fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal securities laws and making necessary
filings under state securities laws. The fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation
to which the fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
MANAGEMENT FEE. For the services of FMR under the management contract,
the fund pays FMR a monthly management fee which has two components: a
group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $757 billion of group net assets - the approximate level for
October 1999 - was 0.1289%, which is the weighted average of the
respective fee rates for each level of group net assets up to $757
billion.
The fund's individual fund fee rate is 0.25%. Based on the average
group net assets of the funds advised by FMR for October 1999, the
fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
Advisor Intermediate 0.1289% + 0.25% = 0.3789%
Municipal Income
</TABLE>
One-twelfth of the management fee rate is applied to the fund's
average net assets for the month, giving a dollar amount which is the
fee for that month.
For the fiscal year ended October 31, 1999, the eleven-month fiscal
period ended October 31, 1998, and the fiscal year ended November 30,
1997, the fund paid FMR management fees of $293,995, $242,984, and
$255,140, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses), which is subject to revision
or discontinuance. FMR retains the ability to be repaid for these
expense reimbursements in the amount that expenses fall below the
limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase a class's returns and
yield, and repayment of the reimbursement by a class will lower its
returns and yield.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FIMM
pursuant to which FIMM has primary responsibility for choosing
investments for the fund.
Under the terms of the sub-advisory agreement, FMR pays FIMM fees
equal to 50% of the management fee payable to FMR under its management
contract with the fund. The fees paid to FIMM are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
On behalf of the fund, for the fiscal year ended October 31, 1999, FMR
paid FIMM fees of $121,904.
DISTRIBUTION SERVICES
The fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreement
calls for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenues collected and retained by FDC for the past three
fiscal years are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Sales Charge Revenue CDSC Revenue
Fiscal Year Ended Amount Paid to FDC Amount Retained by FDC Amount Paid to FDC
Advisor Intermediate Oct. 31, 1999 $ 8,353 $ 2,999 $ 0
Municipal Income - Class A
Oct. 31, 1998* 11,024 4,498 0
Nov. 30, 1997 5,742 1,250 0
Advisor Intermediate Oct. 31, 1999 22,401 9,014 0
Municipal Income - Class T
Oct. 31, 1998* 15,232 4,671 0
Nov. 30, 1997 21,915 6,612 0
Advisor Intermediate Oct. 31, 1999 N/A N/A 30,967
Municipal Income - Class B
Oct. 31, 1998* N/A N/A 8,419
Nov. 30, 1997 N/A N/A 19,218
Advisor Intermediate Oct. 31, 1999 N/A N/A 946
Municipal Income - Class C
Oct. 31, 1998* N/A N/A 534
Nov. 30, 1997** N/A N/A 0
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CDSC Revenue
Amount Retained by FDC
Advisor Intermediate $ 0
Municipal Income - Class A
0
0
Advisor Intermediate 0
Municipal Income - Class T
0
0
Advisor Intermediate 30,967
Municipal Income - Class B
8,419
19,218
Advisor Intermediate 946
Municipal Income - Class C
534
0
</TABLE>
* For the fiscal period December 1, 1997 through October 31, 1998.
** For the fiscal period November 3, 1997 through November 30, 1997.
The Trustees have approved Distribution and Service Plans on behalf of
Class A, Class T, Class B, Class C, and Institutional Class of the
fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the Rule).
The Rule provides in substance that a mutual fund may not engage
directly or indirectly in financing any activity that is primarily
intended to result in the sale of shares of the fund except pursuant
to a plan approved on behalf of the fund under the Rule. The Plans, as
approved by the Trustees, allow Class A, Class T, Class B, Class C,
Institutional Class, and FMR to incur certain expenses that might be
considered to constitute direct or indirect payment by the fund of
distribution expenses.
Pursuant to the Class A Plan for the fund, FDC is paid a monthly 12b-1
fee at an annual rate of up to 0.40% of Class A's average net assets
determined at the close of business on each day throughout the month.
Currently, the Trustees have approved a monthly 12b-1 fee for Class A
of the fund at an annual rate of 0.15% of its average net assets. This
fee rate may be increased only when, in the opinion of the Trustees,
it is in the best interests of the shareholders of the applicable
class to do so.
Currently, FDC may reallow to intermediaries (such as banks,
broker-dealers and other service-providers), including its affiliates,
up to the full amount of 12b-1 fees paid by Class A for providing
services intended to result in the sale of Class A shares and/or
shareholder support services.
Pursuant to the Class T Plan for the fund, FDC is paid a monthly 12b-1
fee at an annual rate of up to 0.40% of Class T's average net assets
determined at the close of business on each day throughout the month.
Currently, the Trustees have approved a monthly 12b-1 fee for Class T
of the fund at an annual rate of 0.25% of its average net assets. This
fee rate may be increased only when, in the opinion of the Trustees,
it is in the best interests of the shareholders of the applicable
class to do so.
Currently, FDC may reallow to intermediaries (such as banks,
broker-dealers and other service-providers), including its affiliates,
up to the full amount of 12b-1 fees paid by Class T for providing
services intended to result in the sale of Class T shares and/or
shareholder support services.
Pursuant to the Class B Plan for the fund, FDC is paid a monthly 12b-1
(distribution) fee at an annual rate of up to 0.75% of Class B's
average net assets determined at the close of business on each day
throughout the month. Currently, the Trustees have approved a monthly
12b-1 (distribution) fee for Class B of the fund at an annual rate of
0.65% of its average net assets. This fee rate may be increased only
when, in the opinion of the Trustees, it is in the best interests of
the shareholders of the class to do so.
Pursuant to the Class B Plan for the fund, FDC is also paid a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class B's average
net assets determined at the close of business on each day throughout
the month.
Currently, FDC retains the full amount of 12b-1 (distribution) fees
paid by Class B as compensation for providing services intended to
result in the sale of Class B shares, and FDC may reallow up to the
full amount of 12b-1 (service) fees paid by Class B to intermediaries
(such as banks, broker-dealers and other service-providers) for
providing shareholder support services.
Pursuant to the Class C Plan for the fund, FDC is paid a monthly 12b-1
(distribution) fee at an annual rate of 0.75% of Class C's average net
assets determined at the close of business on each day throughout the
month.
Pursuant to the Class C Plan for the fund, FDC is also paid a monthly
12b-1 (service) fee at an annual rate of 0.25% of Class C's average
net assets determined at the close of business on each day throughout
the month.
Currently and except as provided below, for the first year of
investment, FDC retains the full amount of 12b-1 (distribution) fees
paid by Class C as compensation for providing services intended to
result in the sale of Class C shares and retains the full amount of
12b-1 (service) fees paid by Class C for providing shareholder support
services. Normally, after the first year of investment, FDC may
reallow up to the full amount of 12b-1 (distribution) fees paid by
Class C to intermediaries (such as banks, broker-dealers and other
service-providers) for providing services intended to result in the
sale of Class C shares and may reallow up to the full amount of 12b-1
(service) fees paid by Class C to intermediaries for providing
shareholder support services. For purchases of Class C shares made for
an employee benefit plan, 403(b) program or plan covering a
sole-proprietor (formerly Keogh/H.R. 10 plan) or through reinvestment
of dividends or capital gain distributions, during the first year of
investment and thereafter, FDC may reallow up to the full amount of
12b-1 (distribution) fees paid by such Class C shares to
intermediaries, including its affiliates, for providing services
intended to result in the sale of Class C shares and may reallow up to
the full amount of 12b-1 (service) fees paid by such Class C shares to
intermediaries, including its affiliates, for providing shareholder
support services.
For the fiscal year ended October 31, 1999, Class A paid FDC 12b-1
fees of $3,322, of which FDC paid $3,011 to intermediaries and
retained $311. Amounts retained by FDC represent fees paid to FDC but
not yet reallowed to intermediaries as of the close of the period
reported and fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
For the fiscal year ended October 31, 1999, Class T paid FDC 12b-1
fees of $140,713, of which FDC paid $138,126 to intermediaries and
retained $2,587. Amounts retained by FDC represent fees paid to FDC
but not yet reallowed to intermediaries as of the close of the period
reported and fees paid to FDC that are not eligible to be reallowed to
intermediaries. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
For the fiscal year ended October 31, 1999, Class B paid FDC 12b-1
(distribution) fees of $67,860, of which FDC paid $0 to intermediaries
and retained $67,860. These amounts are retained by FDC for use in its
capacity as distributor.
In addition, for the fiscal year ended October 31, 1999, Class B paid
FDC 12b-1 (service) fees of $26,101, of which FDC paid $26,044 to
intermediaries and retained $57. Amounts retained by FDC represent
fees paid to FDC but not yet reallowed to intermediaries as of the
close of the period reported and fees paid to FDC that are not
eligible to be reallowed to intermediaries. Amounts not eligible for
reallowance are retained by FDC for use in its capacity as
distributor.
For the fiscal year ended October 31, 1999, Class C paid FDC 12b-1
(distribution) fees of $13,270, of which FDC paid $2,482 to
intermediaries and retained $10,788. Amounts retained by FDC represent
fees paid to FDC but not yet reallowed to intermediaries as of the
close of the period reported and fees paid to FDC that are not
eligible to be reallowed to intermediaries. Amounts not eligible for
reallowance are retained by FDC for use in its capacity as
distributor.
In addition, for the fiscal year ended October 31, 1999, Class C paid
FDC 12b-1 (service) fees of $4,423, of which FDC paid $828 to
intermediaries and retained $3,595. Amounts retained by FDC represent
fees paid to FDC but not yet reallowed to intermediaries as of the
close of the period reported and fees paid to FDC that are not
eligible to be reallowed to intermediaries. Amounts not eligible for
reallowance are retained by FDC for use in its capacity as
distributor.
Under the Institutional Class Plan, if the payment of management fees
by the fund to FMR is deemed to be indirect financing by the fund of
the distribution of its shares, such payment is authorized by the
Plan. The Institutional Class Plan specifically recognizes that FMR
may use its management fee revenue, as well as its past profits or its
other resources, to pay FDC for expenses incurred in connection with
providing services intended to result in the sale of Institutional
Class shares and/or shareholder support services. In addition, the
Institutional Class Plan provides that FMR, directly or through FDC,
may pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Institutional Class
shares.
Under each Class A, Class T, Class B, and Class C Plan, if the payment
of management fees by the fund to FMR is deemed to be indirect
financing by the fund of the distribution of its shares, such payment
is authorized by the Plan. Each Class A, Class T, Class B, and Class C
Plan specifically recognizes that FMR may use its management fee
revenue, as well as its past profits or its other resources, to pay
FDC for expenses incurred in connection with providing services
intended to result in the sale of Class A, Class T, Class B, and Class
C shares and/or shareholder support services, including payments made
to intermediaries that provide those services. Currently, the Board of
Trustees has authorized such payments for Class A, Class T, Class B,
and Class C shares.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the applicable class of the fund and its shareholders. In
particular, the Trustees noted that the Institutional Class Plan does
not authorize payments by Institutional Class of the fund other than
those made to FMR under its management contract with the fund. To the
extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of shares of the applicable class,
additional sales of fund shares or stabilization of cash flows may
result. Furthermore, certain shareholder support services may be
provided more effectively under the Plans by local entities with whom
shareholders have other relationships.
Each Class A, Class T, Class B, and Class C Plan does not provide for
specific payments by the applicable class of any of the expenses of
FDC, or obligate FDC or FMR to perform any specific type or level of
distribution activities or incur any specific level of expense in
connection with distribution activities.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the fund might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Each class of the fund has entered into a transfer agent agreement
with Citibank, N.A. (Citibank), which is located at 111 Wall Street,
New York, New York. Under the terms of the agreement, Citibank
provides transfer agency, dividend disbursing, and shareholder
services for each class of the fund. Citibank in turn has entered into
a sub-transfer agent agreement with Fidelity Investments Institutional
Operations Company, Inc. (FIIOC), an affiliate of FMR. Under the terms
of the sub-agreement, FIIOC performs all processing activities
associated with providing these services for each class of the fund
and receives all related transfer agency fees paid to Citibank.
For providing transfer agency services, FIIOC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in the fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.
FIIOC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FIIOC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
The fund has also entered into a service agent agreement with
Citibank. Under the terms of the agreement, Citibank provides pricing
and bookkeeping services for the fund. Citibank in turn has entered
into a sub-service agent agreement with Fidelity Service Company, Inc.
(FSC), an affiliate of FMR. Under the terms of the sub-agreement, FSC
performs all processing activities associated with providing these
services, including calculating the NAV and dividends for each class
of the fund and maintaining the fund's portfolio and general
accounting records, and receives all related pricing and bookkeeping
fees paid to Citibank.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on the fund's average daily net assets throughout the month.
The annual rates for pricing and bookkeeping services for the fund are
0.0275% of the first $500 million of average net assets, 0.0175% of
average net assets between $500 million and $3 billion, and 0.0010% of
average net assets in excess of $3 billion. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 per year.
For the fiscal year ended October 31, 1999, the eleven-month fiscal
period ended October 31, 1998, and the fiscal year ended November 30,
1997, the fund paid FSC pricing and bookkeeping fees, including
reimbursement for related out-of-pocket expenses, of $64,808, $57,149,
and $0, respectively.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Advisor Intermediate Municipal Income
Fund is a fund of Fidelity Advisor Series II, an open-end management
investment company organized as a Massachusetts business trust on
April 23, 1986. On January 1, 1996, Advisor Intermediate Municipal
Income changed its name from Advisor Limited Term Tax-Exempt Bond Fund
to Advisor Intermediate Municipal Income Fund. Currently, there are
eight funds in the trust: Fidelity Advisor High Yield Fund, Fidelity
Advisor Strategic Income Fund, Fidelity Advisor Government Investment
Fund, Fidelity Advisor Mortgage Securities Fund, Fidelity Advisor
Intermediate Bond Fund, Fidelity Advisor Short Fixed-Income Fund,
Fidelity Advisor Municipal Income Fund, and Fidelity Advisor
Intermediate Municipal Income Fund. The Trustees are permitted to
create additional funds in the trust and to create additional classes
of the fund.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund, except that liabilities and
expenses may be allocated to a particular class. Any general expenses
of the trust shall be allocated between or among any one or more of
the funds or classes.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
trust or fund. The Declaration of Trust provides that the trust shall
not have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation,
or instrument entered into or executed by the trust or the Trustees
relating to the trust or to a fund shall include a provision limiting
the obligations created thereby to the trust or to one or more funds
and its or their assets. The Declaration of Trust further provides
that shareholders of a fund shall not have a claim on or right to any
assets belonging to any other fund.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote. Claims asserted against one class of shares may subject
holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.
The shares have no preemptive or, for Class A, Class T, Class C, and
Institutional Class shares, conversion rights. Shares are fully paid
and nonassessable, except as set forth under the heading "Shareholder
Liability" above.
The trust or any of its funds may be terminated upon the sale of its
assets to, or merger with, another open-end management investment
company or series thereof, or upon liquidation and distribution of its
assets. Generally, the merger of the trust or a fund with another
entity or the sale of substantially all of the assets of the trust or
a fund to another entity requires approval by a vote of shareholders
of the trust or the fund. The Trustees may, however, reorganize or
terminate the trust or any of its funds without prior shareholder
approval. In the event of the dissolution or liquidation of the trust,
shareholders of each of its funds are entitled to receive the
underlying assets of such fund available for distribution. In the
event of the dissolution or liquidation of a fund, shareholders of
that fund are entitled to receive the underlying assets of the fund
available for distribution.
CUSTODIAN. Citibank, N.A., 111 Wall Street, New York, New York, is
custodian of the assets of the fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITOR. PricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts, serves as independent accountant for the fund. The
auditor examines financial statements for the fund and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended October 31, 1999, and report of the auditor, are
included in the fund's annual reports and are incorporated herein by
reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Spartan, and
Magellan are registered trademarks of FMR Corp.
THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) (1) Amended and Restated Declaration of Trust, dated December 16,
1999, is incorporated herein by reference to Exhibit a(1) of
Post-Effective Amendment 47.
(b) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment
87.
(c) Not applicable.
(d) (1) Management Contract between Fidelity Advisor Government
Investment Fund and Fidelity Management & Research Company,
dated June 1, 1998, is incorporated herein by reference to
Exhibit d(2) of Post-Effective Amendment No. 43.
(2) Management Contract between Fidelity Advisor High Yield Fund
and Fidelity Management & Research Company, dated June 1,
1998, is incorporated herein by reference to Exhibit d(3) of
Post-Effective Amendment No. 43.
(3) Management Contract between Fidelity Advisor Intermediate
Bond Fund and Fidelity Management & Research Company, dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(3) of Post-Effective Amendment No. 44.
(4) Management Contract between Fidelity Advisor Intermediate
Municipal Income Fund and Fidelity Management & Research
Company, dated February 26, 1999, is incorporated herein by
reference to Exhibit d(4) of Post-Effective Amendment No. 44.
(5) Management Contract between Fidelity Advisor Mortgage
Securities Fund and Fidelity Management & Research Company,
dated February 26, 1999, is incorporated herein by reference
to Exhibit d(5) of Post-Effective Amendment No. 44.
(6) Management Contract between Fidelity Advisor Municipal Income
Fund and Fidelity Management & Research Company, dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(6) of Post-Effective Amendment No. 44.
(7) Management Contract between Fidelity Advisor Short
Fixed-Income Fund and Fidelity Management & Research Company,
dated June 1, 1998, is incorporated herein by reference to
Exhibit d(8) of Post-Effective Amendment No. 43.
(8) Management Contract between Fidelity Advisor Strategic Income
Fund and Fidelity Management & Research Company, dated
October 31, 1997, is incorporated herein by reference to
Exhibit 5(n) of Post-Effective Amendment No. 40.
(9) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Government Investment
Fund, and Fidelity Investments Money Management, Inc., dated
January 1, 1999, is incorporated herein by reference to
Exhibit d(9) of Post-Effective Amendment No. 44.
(10) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor High Yield Fund, and
Fidelity Management & Research (U.K.) Inc., dated January 1,
1995, is incorporated herein by reference to Exhibit 5(k) of
Post-Effective Amendment No. 25.
(11) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor High Yield Fund, and
Fidelity Management & Research (Far East) Inc., dated January
1, 1995, is incorporated herein by reference to Exhibit 5(g)
of Post-Effective Amendment No. 25.
(12) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Intermediate
Bond Fund, and Fidelity Management & Research (U.K.) Inc., is
incorporated herein by reference to Exhibit d(14) of
Post-Effective Amendment No. 43.
(13) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Intermediate Bond
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 26, 1999, is incorporated herein by reference
to Exhibit d(13) of Post-Effective Amendment No. 44.
(14) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Intermediate Bond
Fund, and Fidelity Investments Money Management, Inc., dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(14) of Post-Effective Amendment No. 44.
(15) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Intermediate Municipal
Income Fund, and Fidelity Investments Money Management, Inc.,
dated February 26, 1999, is incorporated herein by reference
to Exhibit d(15) of Post-Effective Amendment No. 44.
(16) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mortgage Securities
Fund, and Fidelity Management & Research (U.K.) Inc., dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(16) of Post-Effective Amendment No. 44.
(17) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mortgage Securities
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 26, 1999, is incorporated herein by reference
to Exhibit d(17) of Post-Effective Amendment No. 44.
(18) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mortgage Securities
Fund, and Fidelity Investments Money Management, Inc., dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(18) of Post-Effective Amendment No. 44.
(19) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Municipal Income Fund,
and Fidelity Investments Money Management, Inc., dated
February 26, 1999, is incorporated herein by reference to
Exhibit d(19) of Post-Effective Amendment No. 44.
(20) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Management & Research (U.K.) Inc., dated
January 1, 1995, is incorporated herein by reference to
Exhibit 5(m) of Post-Effective Amendment No. 25.
(21) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Management & Research (Far East) Inc.,
dated January 1, 1995, is incorporated herein by reference to
Exhibit 5(i) of Post-Effective Amendment No. 25.
(22) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Investments Money Management, Inc., dated
January 1, 1999, is incorporated herein by reference to
Exhibit d(22) of Post-Effective Amendment No. 44.
(23) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Income Fund,
and Fidelity Management & Research (U.K.) Inc., dated October
31, 1997, is incorporated herein by reference to Exhibit 5(o)
of Post-Effective Amendment No. 40.
(24) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Income Fund,
and Fidelity Management & Research (Far East) Inc., dated
October 31, 1997, is incorporated herein by reference to
Exhibit 5(p) of Post-Effective Amendment No. 40.
(25) Sub-advisory agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Income Fund,
and Fidelity International Investment Advisors, dated August
1, 1999, is incorporated herein by reference to Exhibit d(25)
of Post-Effective Amendment No. 46.
(26) Sub-advisory agreement between Fidelity International
Investment Advisors (U.K.) Limited and Fidelity International
Investment Advisors, on behalf of Fidelity Advisor Strategic
Income Fund, dated October 31, 1997, is incorporated herein
by reference to Exhibit 5(r) of Post-Effective Amendment No.
41.
(27) Sub-advisory agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Income Fund,
and Fidelity Investments Japan Limited, dated August 1, 1999,
is incorporated herein by reference to Exhibit d(27) of
Post-Effective Amendment No. 46.
(28) Sub-advisory agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Income Fund,
and Fidelity Investments Money Management, Inc., dated
January 1, 1999, is incorporated herein by reference to
Exhibit d(28) of Post-Effective Amendment No. 44.
(29) Management Contract between Fidelity Advisor High Income Fund
and Fidelity Management & Research Company, dated July 15,
1999, is incorporated herein by reference to Exhibit d(29) of
Post-Effective Amendment No. 46.
(30) Sub-advisory agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor High Income Fund, and
Fidelity Management & Research (U.K.) Inc., dated July 15,
1999, is incorporated herein by reference to Exhibit d(30) of
Post-Effective Amendment No. 46.
(31) Sub-advisory agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor High Income Fund, and
Fidelity Management & Research (Far East) Inc., dated July
15, 1999, is incorporated herein by reference to Exhibit
d(31) of Post-Effective Amendment No. 46.
(32) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor High Income Fund is
incorporated herein by reference to Exhibit d(32) of
Post-Effective Amendment No. 47.
(33) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor High Yield Fund is
incorporated herein by reference to Exhibit d(33) of
Post-Effective Amendment No. 47.
(34) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor Intermediate Bond Fund
is incorporated herein by reference to Exhibit d(34) of
Post-Effective Amendment No. 47.
(35) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor Mortgage Securities
Fund is incorporated herein by reference to Exhibit d(35) of
Post-Effective Amendment No. 47.
(36) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor Short Fixed-Income Fund
is incorporated herein by reference to Exhibit d(36) of
Post-Effective Amendment No. 47.
(37) Form of Research Agreement between Fidelity Management &
Research (Far East), Inc. and Fidelity Investments Japan
Limited on behalf of Fidelity Advisor Strategic Income Fund
is incorporated herein by reference to Exhibit d(37) of
Post-Effective Amendment No. 47.
(e) Not applicable.
(f) (1) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14,
1995 and amended through November 14, 1996, is incorporated
herein by reference to Exhibit 7(b) of Fidelity Aberdeen
Street Trust's (File No. 33-43529) Post-Effective Amendment
No. 19.
(g) (1) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Advisor Series II
on behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Yield Fund, Fidelity Advisor
Intermediate Bond Fund, Fidelity Advisor Mortgage Securities
Fund, Fidelity Advisor Short Fixed-Income Fund, and Fidelity
Advisor Strategic Income Fund are incorporated herein by
reference to Exhibit 8(a) of Fidelity Hereford Street Trust's
(File No. 33-52577) Post-Effective Amendment No. 4.
(2) Appendix A, dated June 23, 1999, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and
Fidelity Advisor Series II on behalf of Fidelity Advisor
Government Investment Fund, Fidelity Advisor High Yield Fund,
Fidelity Advisor Intermediate Bond Fund, Fidelity Advisor
Mortgage Securities Fund, Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Advisor Strategic Income Fund is
incorporated herein by reference to Exhibit g(2) of Fidelity
Money Market Trust's (File No. 2-62417) Post-Effective
Amendment No. 61.
(3) Appendix B, dated March 18, 1999, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and
Fidelity Advisor Series II on behalf of Fidelity Advisor
Government Investment Fund, Fidelity Advisor High Yield Fund,
Fidelity Advisor Intermediate Bond Fund, Fidelity Advisor
Mortgage Securities Fund, Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Advisor Strategic Income Fund is
incorporated herein by reference to Exhibit g(3) of Fidelity
Hereford Street Trust's (File No. 33-52577) Post-Effective
Amendment No. 12.
(4) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and
Fidelity Advisor Series II on behalf of Fidelity Advisor
Government Investment Fund, Fidelity Advisor High Yield Fund,
Fidelity Advisor Intermediate Bond Fund, Fidelity Advisor
Mortgage Securities Fund, Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Advisor Strategic Income Fund is
incorporated herein by reference to Exhibit g(4) of Fidelity
Hereford Street Trust's (File No. 33-52577) Post-Effective
Amendment No. 12.
(5) Form of Custodian Agreement, Appendix B, and Appendix C
between The Bank of New York and Fidelity Advisor Series II
on behalf of Fidelity Advisor High Income Fund is
incorporated herein by reference to Exhibit g(7) of
Post-Effective Amendment No. 43.
(6) Form of Addendum, to the Custodian Agreement, between The
Bank of New York and Fidelity Advisor Series II on behalf of
Fidelity Advisor High Income Fund is incorporated herein by
reference to Exhibit g(6) of Post-Effective Amendment No. 46.
(7) Custodian Agreement, Appendix A, Appendix B, and Appendix C,
dated May 1, 1998, between Citibank, N.A. and Fidelity
Advisor Series II on behalf of Fidelity Advisor Intermediate
Municipal Income Fund and Fidelity Advisor Municipal Income
Fund are incorporated herein by reference to Exhibit g(5) of
Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 102.
(8) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and Fidelity Advisor
Series II on behalf of Fidelity Advisor Government Investment
Fund, Fidelity Advisor High Yield Fund, and Fidelity Advisor
Short Fixed-Income Fund, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(9) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Advisor Series II
on behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Yield Fund, and Fidelity Advisor Short
Fixed-Income Fund, dated February 12, 1996, is incorporated
herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(10) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and Fidelity Advisor Series
II on behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Yield Fund, and Fidelity Advisor Short
Fixed-Income Fund, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(f) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(11) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Fidelity Advisor Series II on
behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Yield Fund, and Fidelity Advisor Short
Fixed-Income Fund, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(12) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Advisor Series II on behalf of Fidelity
Advisor Government Investment Fund, Fidelity Advisor High
Yield Fund, and Fidelity Advisor Short Fixed-Income Fund,
dated May 11, 1995, is incorporated herein by reference to
Exhibit 8(h) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(13) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Advisor Series II
on behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Yield Fund, and Fidelity Advisor Short
Fixed-Income Fund, dated July 14, 1995, is incorporated
herein by reference to Exhibit 8(i) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(14) Form of Fidelity Group Repo Custodian Agreement and Schedule
1 among The Bank of New York, J.P. Morgan Securities, Inc.,
and Fidelity Advisor Series II on behalf of Fidelity Advisor
High Income Fund, Fidelity Advisor Intermediate Bond Fund,
Fidelity Advisor Mortgage Securities Fund, and Fidelity
Advisor Strategic Income Fund is incorporated herein by
reference to Exhibit 8(n) of Post-Effective Amendment No. 42.
(15) Form of Fidelity Group Repo Custodian Agreement and Schedule
1 among Chemical Bank, Greenwich Capital Markets, Inc., and
Fidelity Advisor Series II on behalf of Fidelity Advisor High
Income Fund, Fidelity Advisor Intermediate Bond Fund,
Fidelity Advisor Mortgage Securities Fund, and Fidelity
Advisor Strategic Income Fund is incorporated herein by
reference to Exhibit 8(o) of Post-Effective Amendment No. 42.
(16) Form of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and Fidelity Advisor Series II on behalf
of Fidelity Advisor High Income Fund, Fidelity Advisor
Intermediate Bond Fund, Fidelity Advisor Mortgage Securities
Fund, and Fidelity Advisor Strategic Income Fund is
incorporated herein by reference to Exhibit 8(p) of
Post-Effective Amendment No. 42.
(h) Not applicable.
(i) Not applicable.
(j) Consent of PricewaterhouseCoopers LLP, dated December 21, 1999,
is filed herein as Exhibit j(1).
(k) Not applicable.
(l) Not applicable.
(m) (1) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Government Investment Fund: Class A is
incorporated herein by reference to Exhibit m(1) of
Post-Effective Amendment No. 46.
(2) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Government Investment Fund: Class T
(formerly known as Class A) is incorporated herein by
reference to Exhibit m(2) of Post-Effective Amendment No. 46.
(3) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Government Investment Fund: Class B is
incorporated herein by reference to Exhibit m(3) of
Post-Effective Amendment No. 46.
(4) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Government Investment Fund: Class C is
incorporated herein by reference to Exhibit m(4) of
Post-Effective Amendment No. 46.
(5) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Government Investment Fund: Institutional
Class is incorporated herein by reference to Exhibit m(5) of
Post-Effective Amendment No. 46.
(6) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Yield Fund: Class A is incorporated
herein by reference to Exhibit m(6) of Post-Effective
Amendment No. 46.
(7) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Yield Fund: Class T (formerly known as
Class A) is incorporated herein by reference to Exhibit m(7)
of Post-Effective Amendment No. 46.
(8) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Yield Fund: Class B is incorporated
herein by reference to Exhibit m(8) of Post-Effective
Amendment No. 46.
(9) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Yield Fund: Class C is incorporated
herein by reference to Exhibit m(9) of Post-Effective
Amendment No. 46.
(10) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Yield Fund: Institutional Class is
incorporated herein by reference to Exhibit m(10) of
Post-Effective Amendment No. 46.
(11) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Bond Fund: Class A is
incorporated herein by reference to Exhibit m(11) of
Post-Effective Amendment No. 46.
(12) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Bond Fund: Class T is
incorporated herein by reference to Exhibit m(12) of
Post-Effective Amendment No. 46.
(13) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Bond Fund: Class B is
incorporated herein by reference to Exhibit m(13) of
Post-Effective Amendment No. 46.
(14) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Bond Fund: Class C is
incorporated herein by reference to Exhibit m(14) of
Post-Effective Amendment No. 46.
(15) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Fidelity Advisor Intermediate Bond Fund: Institutional
Class is incorporated herein by reference to Exhibit m(15) of
Post-Effective Amendment No. 46.
(16) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class A
is incorporated herein by reference to Exhibit m(16) of
Post-Effective Amendment No. 46.
(17) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class T
is incorporated herein by reference to Exhibit m(17) of
Post-Effective Amendment No. 46.
(18) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class B
is incorporated herein by reference to Exhibit m(18) of
Post-Effective Amendment No. 46.
(19) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class C
is incorporated herein by reference to Exhibit m(19) of
Post-Effective Amendment No. 46.
(20) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund:
Institutional Class is incorporated herein by reference to
Exhibit m(20) of Post-Effective Amendment No. 46.
(21) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class A is
incorporated herein by reference to Exhibit m(21) of
Post-Effective Amendment No. 46.
(22) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class T is
incorporated herein by reference to Exhibit m(22) of
Post-Effective Amendment No. 46.
(23) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class B is
incorporated herein by reference to Exhibit m(23) of
Post-Effective Amendment No. 46.
(24) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Institutional
Class is incorporated herein by reference to Exhibit m(24) of
Post-Effective Amendment No. 46.
(25) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Initial Class is
incorporated herein by reference to Exhibit m(25) of
Post-Effective Amendment No. 46.
(26) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Municipal Income Fund: Class A is
incorporated herein by reference to Exhibit m(26) of
Post-Effective Amendment No. 46.
(27) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Municipal Income Fund: Class T is
incorporated herein by reference to Exhibit m(27) of
Post-Effective Amendment No. 46.
(28) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Municipal Income Fund: Class B is
incorporated herein by reference to Exhibit m(28) of
Post-Effective Amendment No. 46.
(29) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Municipal Income Fund: Class C is
incorporated herein by reference to Exhibit m(29) of
Post-Effective Amendment No. 46.
(30) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Municipal Income Fund: Institutional Class
is incorporated herein by reference to Exhibit m(30) of
Post-Effective Amendment No. 46.
(31) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short Fixed-Income Fund: Class A is
incorporated herein by reference to Exhibit m(31) of
Post-Effective Amendment No. 46.
(32) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short Fixed-Income Fund: Class T (formerly
known as Class A) is incorporated herein by reference to
Exhibit m(32) of Post-Effective Amendment No. 46.
(33) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short Fixed-Income Fund: Class C is
incorporated herein by reference to Exhibit m(33) of
Post-Effective Amendment No. 46.
(34) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short Fixed-Income Fund: Institutional Class
is incorporated herein by reference to Exhibit m(34) of
Post-Effective Amendment No. 46.
(35) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Income Fund: Class A is
incorporated herein by reference to Exhibit m(35) of
Post-Effective Amendment No. 46.
(36) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Income Fund: Class T is
incorporated herein by reference to Exhibit m(36) of
Post-Effective Amendment No. 46.
(37) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Income Fund: Class B is
incorporated herein by reference to Exhibit m(37) of
Post-Effective Amendment No. 46.
(38) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Income Fund: Class C is
incorporated herein by reference to Exhibit m(38) of
Post-Effective Amendment No. 46.
(39) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Income Fund: Institutional Class
is incorporated herein by reference to Exhibit m(39) of
Post-Effective Amendment No. 46.
(40) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Income Fund: Class A is incorporated
herein by reference to Exhibit m(40) of Post-Effective
Amendment No. 46.
(41) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Income Fund: Class T is incorporated
herein by reference to Exhibit m(41) of Post-Effective
Amendment No. 46.
(42) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Income Fund: Class B is incorporated
herein by reference to Exhibit m(42) of Post-Effective
Amendment No. 46.
(43) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Income Fund: Class C is incorporated
herein by reference to Exhibit m(43) of Post-Effective
Amendment No. 46.
(44) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor High Income Fund: Institutional Class is
incorporated herein by reference to Exhibit m(44) of
Post-Effective Amendment No. 46.
(n) Not applicable.
(o) (1) Multiple Class of Shares Plan pursuant to Rule 18f-3 on
behalf of Fidelity Advisor Government Investment Fund,
Fidelity Advisor High Income Fund, Fidelity Advisor High
Yield Fund, Fidelity Advisor Intermediate Bond Fund, Fidelity
Advisor Intermediate Municipal Income Fund, Fidelity Advisor
Municipal Income Fund, Fidelity Advisor Short Fixed-Income
Fund, and Fidelity Advisor Strategic Income Fund, dated March
19, 1998, is incorporated herein by reference to Exhibit o(1)
of Post-Effective Amendment No. 43.
(2) Schedule 1 to Multiple Class of Shares Plan pursuant to Rule
18f-3 on behalf of Fidelity Advisor Government Investment
Fund, Fidelity Advisor High Income Fund, Fidelity Advisor
High Yield Fund, Fidelity Advisor Intermediate Bond Fund,
Fidelity Advisor Intermediate Municipal Income Fund, Fidelity
Advisor Municipal Income Fund, Fidelity Advisor Short
Fixed-Income Fund, and Fidelity Advisor Strategic Income
Fund, dated August 30, 1999, is incorporated herein by
reference to Exhibit o(2) of Post-Effective Amendment No. 46.
(3) Multiple Class of Shares Plan pursuant to Rule 18f-3, dated
March 19, 1998, and Schedule 1 to Multiple Class of Shares
Plan pursuant to Rule 18f-3, dated February 26, 1999, on
behalf of Fidelity Advisor Mortgage Securities Fund is
incorporated herein by reference to Exhibit o(3) of
Post-Effective Amendment No. 46.
Item 24. Trusts Controlled by or under Common Control with this Trust
The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.
Item 25. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("FSC") is appointed transfer agent, the Trust agrees to indemnify and
hold FSC harmless against any losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names FSC and/or the
Trust as a party and is not based on and does not result from FSC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FSC's performance
under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FSC's willful misfeasance, bad faith or negligence
or reckless disregard of its duties) which results from the negligence
of the Trust, or from FSC's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person
duly authorized by the Trust, or as a result of FSC's acting in
reliance upon advice reasonably believed by FSC to have been given by
counsel for the Trust, or as a result of FSC's acting in reliance upon
any instrument or stock certificate reasonably believed by it to have
been genuine and signed, countersigned or executed by the proper
person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names FIIOC
and/or the Registrant as a party and is not based on and does not
result from FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with
FIIOC's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence
or reckless disregard of duties) which results from the negligence of
the Registrant, or from FIIOC's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of FIIOC's
acting in reliance upon advice reasonably believed by FIIOC to have
been given by counsel for the Registrant, or as a result of FIIOC's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed sub-transfer agent,
the Transfer Agent agrees to indemnify FIIOC for FIIOC's losses,
claims, damages, liabilities and expenses (including reasonable
counsel fees and expenses) (losses) to the extent that the Transfer
Agent is entitled to and receives indemnification from the Fund for
the same events. Under the Transfer Agency Agreement, the Trust agrees
to indemnify and hold the Transfer Agent harmless against any losses,
claims, damages, liabilities, or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names the Transfer
Agent and/or the Trust as a party and is not based on and does not
result from the Transfer Agent's willful misfeasance, bad faith or
negligence or reckless disregard of duties, and arises out of or in
connection with the Transfer Agent's performance under the Transfer
Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith
or negligence or reckless disregard of its duties) which results from
the negligence of the Trust, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Trust, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Trust, or as a result of the Transfer Agent's acting
in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 26. Business and Other Connections of Investment Advisers
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR; President
and Chief Executive Officer
of FMR Corp.; Chairman of
the Board and Director of
FMR Corp., Fidelity
Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), and Fidelity
Management & Research (Far
East) Inc. (FMR Far East);
Chairman of the Executive
Committee of FMR; Chairman
and Representative Director
of Fidelity Investments
Japan Limited (FIJ);
President and Trustee of
funds advised by FMR.
Robert C. Pozen President and Director of
FMR; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR U.K.,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Peter S. Lynch Vice Chairman of the Board
and Director of FMR.
John Avery Vice President of FMR.
Robert Bertelson Vice President of FMR.
John H. Carlson Vice President of FMR and of
funds advised by FMR.
Robert C. Chow Vice President of FMR.
Dwight D. Churchill Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR; Vice
President of FIMM.
Laura B. Cronin Vice President of FMR and
Treasurer of FMR, FIMM, FMR
U.K., and FMR Far East.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Catherine Collins Vice President of FMR.
Frederic G. Corneel Tax Counsel of FMR.
William Danoff Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Scott E. DeSano Vice President of FMR.
Penelope Dobkin Vice President of FMR and of
a fund advised by FMR.
Walter C. Donovan Vice President of FMR.
Bettina Doulton Senior Vice President of FMR
and of funds advised by FMR.
Stephen DuFour Vice President of FMR.
Maria F. Dwyer Vice President of FMR and
Deputy Treasurer of the
Fidelity Funds.
Margaret L. Eagle Vice President of FMR and of
a fund advised by FMR.
William R. Ebsworth Vice President of FMR.
David Felman Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Karen Firestone Vice President of FMR.
Michael B. Fox Assistant Treasurer of FMR,
FIMM, FMR U.K., and FMR Far
East; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FMR U.K.,
FMR Far East, and FIMM.
Gregory Fraser Vice President of FMR and of
a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, and Strategic
Advisers, Inc.; Secretary of
FIMM; Vice President Deputy
General Counsel FMR Corp.
David L. Glancy Vice President of FMR and of
a fund advised by FMR.
Barry A. Greenfield Vice President of FMR.
Boyce I. Greer Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR;
Vice President of FIMM.
Bart A. Grenier Senior Vice President of FMR
and Vice President of
High-Income Funds advised by
FMR.
Robert J. Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR;
Senior Vice President of
FIMM; Vice President of
Fixed-Income Funds advised
by FMR.
Bruce T. Herring Vice President of FMR.
Robert F. Hill Vice President of FMR and
Director of Technical
Research.
Frederick Hoff Vice President of FMR.
Abigail P. Johnson Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.; Associate
Director and Senior Vice
President of Equity Funds
advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Senior Vice President of FMR
and of a fund advised by FMR.
Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
U.K. and FMR Far East.
Harris Leviton Vice President of FMR.
Bradford E. Lewis Vice President of FMR and of
funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of
funds advised by FMR.
Shigeki Makino Vice President of FMR.
Charles A. Mangum Vice President of FMR and of
a fund advised by FMR.
Kevin McCarey Vice President of FMR and of
a fund advised by FMR.
James McDowell Senior Vice President of FMR.
Neal P. Miller Vice President of FMR.
Jacques Perold Vice President of FMR.
Stephen Petersen Senior Vice President of FMR.
Alan Radlo Vice President of FMR.
Eric D. Roiter Vice President, General
Counsel, and Clerk of FMR
and Secretary of funds
advised by FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of
a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Richard A. Silver Vice President of FMR.
Carol A. Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR and of
funds advised by FMR.
Thomas T. Soviero Vice President of FMR and of
a fund advised by FMR.
Richard Spillane Senior Vice President of FMR;
Associate Director and
Senior Vice President of
Equity Funds advised by FMR;
Previously, Senior Vice
President and Director of
Operations and Compliance of
FMR U.K.
Thomas M. Sprague Vice President of FMR and of
a fund advised by FMR.
Robert E. Stansky Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Scott D. Stewart Vice President of FMR.
Beth F. Terrana Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of
a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of
funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.
Jason Weiner Vice President of FMR.
Steven S. Wymer Vice President of FMR and of
a fund advised by FMR.
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR U.K., FMR,
FMR Corp., FIMM, and FMR Far
East; President and Chief
Executive Officer of FMR
Corp.; Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen President and Director of FMR
U.K.; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR, and
FMR Far East; Director of
Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Laura B. Cronin Treasurer of FMR U.K., FMR
Far East, FMR, and FIMM and
Vice President of FMR.
Michael B. Fox Assistant Treasurer of FMR
U.K., FMR, FMR Far East, and
FIMM; Vice President of FMR
U.K., FMR Far East, and
FIMM; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.
Simon Fraser Senior Vice President of FMR
U.K. and Director and
President of FIIA.
Jay Freedman Clerk of FMR U.K., FMR Far
East, FMR Corp., and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.; Assistant
Secretary of FIMM.
Francis V. Knox Compliance Officer of FMR
U.K. and FMR Far East; Vice
President of FMR.
(3) FIDELITY MANAGEMENT & RESEARCH (Far East) INC. (FMR Far East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR Far East,
FMR, FMR Corp., FIMM, and
FMR U.K.; Chairman of the
Executive Committee of FMR;
President and Chief
Executive Officer of FMR
Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.
Robert C. Pozen President and Director of FMR
Far East; Senior Vice
President and Trustee of
funds advised by FMR;
President and Director of
FIMM, FMR U.K., and FMR;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Robert H. Auld Senior Vice President of FMR
Far East.
Laura B. Cronin Treasurer of FMR Far East,
FMR U.K., FMR, and FIMM and
Vice President of FMR.
Michael B. Fox Assistant Treasurer of FMR
Far East, FMR, FMR U.K., and
FIMM; Vice President of FMR
Far East and FMR U.K.; Vice
President and Treasurer of
FMR Corp. and Strategic
Advisers, Inc.
Francis V. Knox Compliance Officer of FMR Far
East and FMR U.K.; Vice
President of FMR.
Jay Freedman Clerk of FMR Far East, FMR
U.K., FMR Corp., and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR Far
East, FMR U.K., and
Strategic Advisers, Inc.;
Assistant Secretary of FIMM.
Billy Wilder Vice President of FMR Far
East; President and
Representative Director of
FIJ.
(4) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
1 Spartan Way, Merrimack, NH 03054
FIMM provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FIMM, FMR, FMR
Corp., FMR Far East, and FMR
U.K.; Chairman of the
Executive Committee of FMR;
President and Chief
Executive Officer of FMR
Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.
Robert C. Pozen President and Director of
FIMM; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FMR, FMR U.K.,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Fred L. Henning Jr. Senior Vice President of
FIMM; Senior Vice President
of FMR and Vice President of
Fixed-Income Funds advised
by FMR.
Boyce I. Greer Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR.
Dwight D. Churchill Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR.
Laura B. Cronin Treasurer of FIMM, FMR Far
East, FMR U.K., and FMR and
Vice President of FMR.
Michael B. Fox Assistant Treasurer of FIMM,
FMR U.K., FMR Far East, and
FMR; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FIMM, FMR
U.K., and FMR Far East.
Jay Freedman Secretary of FIMM; Clerk of
FMR U.K., FMR Far East, FMR
Corp., and Strategic
Advisers, Inc.; Assistant
Clerk of FMR; Vice President
Deputy General Counsel FMR
Corp.
Susan Englander Hislop Assistant Secretary of FIMM;
Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.
Stanley N. Griffith Assistant Secretary of FIMM.
(5) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (FIIA)
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda
The directors and officers of FIIA have held, during the past two
fiscal years, the following positions of a substantial nature.
Anthony J. Bolton Director of FIIA, Fidelity
International Investment
Advisors (U.K.) Limited
(FIIA(U.K.)L), Fidelity
Investment Management
Limited (FIML (U.K.)),
Fidelity Investment Services
Limited (FISL (U.K.)), and
Fidelity Investments
International (FII).
Simon Fraser Director and President of
FIIA and Senior Vice
President of FMR U.K.
Richard Ford Vice President of FIIA.
Simon Haslam Director and Chief Financial
Officer of FIIA, FISL
(U.K.), and FII; Director
and Secretary of
FIIA(U.K.)L; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.);
Director of FIJ.
David J. Saul Director of FIIA; Previously,
President of FIIA, Director
of Fidelity International
Limited, and numerous
companies and funds in the
FIL group.
Keith Ferguson Director of FIIA.
Richard Horlick Director of FIIA.
K.C. Lee Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.
Frank Mutch Director of FIIA.
Peter Phillips Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.
Matthew Heath Secretary of FIIA.
Terrence V. Richards Assistant Secretary of FIIA.
Rosalie Sheppard Assistant Secretary of FIIA.
(6) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
(FIIA(U.K.)L)
26 Lovat Lane, London, EC3R 8LL, England
The directors and officers of FIIA(U.K.)L have held, during the past
two fiscal years, the following positions of a substantial nature.
Anthony J. Bolton Director of FIIA(U.K.)L,
Fidelity International
Investment Advisors (FIIA),
Fidelity Investment
Management Limited (FIML
(U.K.)), Fidelity Investment
Services Limited (FISL
(U.K.)), and Fidelity
Investments International
(FII).
Pamela Edwards Director of FIIA(U.K.)L, FISL
(U.K.), and FII; Previously,
Director of Legal Services
for Europe.
Simon Haslam Director and Secretary of
FIIA(U.K.)L; Director and
Chief Financial Officer of
FIIA, FISL (U.K.), and FII;
Previously, Chief Financial
Officer of FIL, Company
Secretary of Fidelity
Investments Group of
Companies (U.K.); Director
of FIJ.
Sally Walden Director of FIIA(U.K.)L and
FISL (U.K.).
Sally Hinchliffe Assistant Secretary of
FIIA(U.K.)L.
(7) FIDELITY INVESTMENTS JAPAN LIMITED (FIJ)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
The directors and officers of FIJ have held, during the past two
fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman and Representative
Director of FIJ; Chairman of
the Board and Director of
FMR Far East, FMR, FMR
Corp., FMR U.K., and FIMM;
Chairman of the Executive
Committee of FMR; President
and Chief Executive Officer
of FMR Corp.; President and
Trustee of funds advised by
FMR.
Yasuo Kuramoto Vice Chairman and
Representative Director of
FIJ.
Billy Wilder President and Representative
Director of FIJ; Vice
President of FMR Far East.
Noboru Kawai Director and General Manager
of Administration of FIJ.
Tetsuzo Nishimura Director and Vice President
of Wholesales/ Broker
Distribution of FIJ.
Hiroshi Yamashita Senior Managing Director of
FIJ.
Yasushi Murofushi Statutory Auditor of FIJ.
Takeshi Okazaki Director and Head of
Institutional Sales of FIJ.
Simon Haslam Director of FIJ; Director and
Chief Financial Officer of
FIIA, FISL (U.K.), and FII;
Director and Secretary of
FIIA(U.K.)L; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.).
Item 27. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Fund
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
James Curvey Director None
Martha B. Willis President None
Eric D. Roiter Vice President Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 28. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Fidelity Service
Company, Inc. or Fidelity Investments Institutional Operations
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian, The Bank of New York, 110 Washington Street, New
York, NY, or Citibank, N.A., 111 Wall Street, New York, NY.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940,
the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, duly authorized, in the City
of Boston, and Commonwealth of Massachusetts on the 14th day of
February 2000.
Fidelity Advisor Series II
By:/s/Eric D. Roiter_____________________
Eric D. Roiter, Secretary
Exhibit j(1)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Amendment No.
49 to the Registration Statement on Form N-1A of Fidelity Advisor
Series II: Fidelity Advisor Intermediate Municipal Income Fund, of our
report dated December 10, 1999 on the financial statements and
financial highlights included in the October 31, 1999 Annual Report to
Shareholders of Fidelity Advisor Intermediate Municipal Income Fund.
We further consent to the reference to our Firm under the heading
"Auditor" in Part B of this Amendment.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 14, 2000
