FIDELITY
(REGISTERED TRADEMARK)
BALANCED
FUND
ANNUAL REPORT
JULY 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 33 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 37 Notes to the financial statements.
REPORT OF INDEPENDENT 43 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 44
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been positive market indications so far in 1995, no one
can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return figure includes changes in a fund's share price, plus reinvestment
of any dividends (or income) and capital gains (the profits the fund earns
when it sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Balanced 7.19% 68.12% 142.33%
S&P 500(registered trademark) 26.11% 83.44% 200.78%
Lehman Brothers Aggregate Bond 10.11% 54.28% n/a
Index
Average Balanced Fund 16.07% 68.35% 134.26%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on November 6, 1986. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to performance of the
Standard & Poor's Composite Index of 500 Stocks - a common proxy for the
U.S. stock market - and the performance of the Lehman Brothers Aggregate
Bond Index, a broad measure of the bond market. To measure how the fund's
performance stacked up against its peers, you can compare it to the average
balanced fund, which reflects the performance of 179 balanced funds with
similar objectives tracked by Lipper Analytical Services over the past 12
months. These benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Balanced 7.19% 10.95% 10.66%
S&P 500 26.11% 12.90% 13.43%
Lehman Brothers Aggregate Bond Index 10.11% 9.06% n/a
Average Balanced Fund 16.07% 10.93% 10.18%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking the arithmetic
average. This may produce a slightly different figure than that obtained by
averaging the fund's cumulative total returns and annualizing the result.)
$10,000 OVER LIFE OF FUND
Balanced (304) Standard & Poor's Aggregate Bond Ind
11/30/86 10000.00 10000.00 10000.00
12/31/86 9970.56 9745.00 10038.18
01/31/87 10490.68 11057.65 10179.36
02/28/87 10765.46 11494.43 10249.95
03/31/87 10942.82 11826.62 10203.75
04/30/87 10675.43 11721.36 9923.96
05/31/87 10625.92 11823.34 9885.13
06/30/87 10845.17 12420.42 10021.18
07/31/87 10995.11 13050.13 10013.48
08/31/87 11135.05 13536.90 9959.89
09/30/87 10945.73 13240.44 9747.80
10/31/87 10019.00 10388.45 10094.98
11/30/87 9864.55 9532.44 10175.83
12/31/87 10166.90 10257.86 10314.45
01/31/88 10648.05 10689.72 10677.02
02/29/88 10951.39 11187.86 10803.76
03/31/88 10854.98 10842.15 10702.37
04/30/88 10939.87 10962.50 10644.61
05/31/88 10982.31 11057.87 10573.06
06/30/88 11420.26 11565.43 10828.15
07/31/88 11355.68 11521.48 10771.35
08/31/88 11301.86 11129.75 10799.59
09/30/88 11572.03 11603.88 11044.09
10/31/88 11746.70 11926.47 11252.01
11/30/88 11637.53 11755.92 11115.32
12/31/88 11771.18 11961.65 11127.83
01/31/89 12172.85 12837.24 11287.94
02/28/89 12083.59 12517.59 11206.12
03/31/89 12217.63 12809.25 11254.57
04/30/89 12613.58 13474.05 11490.09
05/31/89 12896.39 14019.75 11792.02
06/30/89 13089.00 13939.84 12151.06
07/31/89 13604.77 15198.61 12409.36
08/31/89 13685.00 15496.50 12225.50
09/30/89 13695.74 15432.96 12288.07
10/31/89 13742.16 15074.92 12590.96
11/30/89 13951.08 15382.45 12710.97
12/31/89 14091.15 15751.63 12744.98
01/31/90 13570.63 14694.69 12593.53
02/28/90 13669.77 14884.25 12633.96
03/31/90 13781.31 15278.69 12643.27
04/30/90 13592.87 14896.72 12527.43
05/31/90 14045.13 16349.15 12898.35
06/30/90 14107.61 16237.98 13105.31
07/31/90 14145.80 16186.01 13286.59
08/31/90 13547.38 14722.80 13109.16
09/30/90 13326.05 14005.80 13217.61
10/31/90 13261.49 13945.57 13385.42
11/30/90 13726.35 14846.46 13673.55
12/31/90 14025.60 15260.67 13886.61
01/31/91 14606.15 15926.04 14058.27
02/28/91 15265.87 17064.75 14178.27
03/31/91 15557.86 17477.72 14275.81
04/30/91 15811.81 17519.66 14430.47
05/31/91 16319.71 18276.51 14514.86
06/30/91 16022.99 17439.45 14507.48
07/31/91 16442.51 18252.13 14708.66
08/31/91 16821.43 18684.70 15026.95
09/30/91 16964.60 18372.67 15331.45
10/31/91 17344.09 18618.86 15502.15
11/30/91 17034.87 17868.52 15644.29
12/31/91 17781.87 19912.68 16108.90
01/31/92 17781.87 19542.31 15889.75
02/29/92 18041.04 19796.35 15993.07
03/31/92 17926.03 19410.33 15902.91
04/30/92 18144.64 19980.99 16017.78
05/31/92 18479.84 20078.90 16320.03
06/30/92 18421.89 19779.72 16544.63
07/31/92 18864.37 20588.71 16882.18
08/31/92 18967.62 20166.64 17053.20
09/30/92 19098.85 20404.61 17255.34
10/31/92 19007.32 20476.03 17026.57
11/30/92 19053.08 21174.26 17030.42
12/31/92 19194.74 21434.70 17301.23
01/31/93 19616.43 21614.75 17633.00
02/28/93 20147.44 21908.71 17941.67
03/31/93 20789.95 22370.99 18016.43
04/30/93 21453.45 21829.61 18141.89
05/31/93 21801.01 22414.64 18164.99
06/30/93 21818.20 22479.65 18494.19
07/31/93 22105.70 22389.73 18598.79
08/31/93 22824.46 23238.30 18924.79
09/30/93 22604.67 23059.36 18976.77
10/31/93 22788.72 23536.69 19047.68
11/30/93 22387.15 23313.09 18885.64
12/31/93 22894.97 23595.18 18988.00
01/31/94 23510.52 24397.42 19244.37
02/28/94 23100.16 23736.25 18910.03
03/31/94 22152.04 22701.35 18443.82
04/30/94 21962.12 22991.92 18296.54
05/31/94 21996.65 23368.99 18293.97
06/30/94 21769.75 22796.45 18253.55
07/31/94 22187.06 23544.18 18616.12
08/31/94 22395.72 24509.49 18639.22
09/30/94 22238.25 23909.00 18364.88
10/31/94 21975.59 24446.96 18348.52
11/30/94 21660.40 23556.60 18307.77
12/31/94 21678.30 23905.94 18434.19
01/31/95 21678.30 24525.82 18799.01
02/28/95 22154.55 25481.60 19245.97
03/31/95 22527.17 26233.56 19364.05
04/30/95 22758.67 27006.14 19634.54
05/31/95 23186.07 28085.57 20394.34
06/30/95 23439.13 28738.00 20543.86
07/31/95 23781.43 29690.95 20497.98
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Balanced Fund on November 30, 1986, shortly after the fund started. As the
chart shows, by July 31, 1995, the value of your investment would have
grown to $23,781 - a 137.81% increase on your initial investment. For
comparison, look at how both the S&P 500 and Lehman Brothers Aggregate Bond
Index did over the same period. With dividends reinvested, the same $10,000
investment in the S&P 500 would have grown to $29,691 - a 196.91% increase.
If you'd put $10,000 in the bond index, it would have grown to $20,498 - a
104.98% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks or bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
A favorable interest rate
environment helped spur strong
returns for both stock and bond
markets in the U.S. during the 12
months ended July 31, 1995. A
strong rally starting in November
1994 helped bonds recover from
the effects of the sharply rising
interest rate environment seen
through much of 1994. For the
12-month period, the Lehman
Brothers Aggregate Bond Index
- a broad measure of U.S.
taxable bonds - had a total return
of 10.11%. Indications that the
economy was slowing helped
push interest rates down,
although the rally lost steam in
July as statistics pointed to the
possibility of future economic
strength and resultant inflation.
Strong corporate earnings helped
propel the Standard & Poor's
Composite Index of 500 Stocks to
a 12-month total return of 26.11%
- well above its historical annual
average of roughly 12%.
Technology companies - whose
goods and services benefited
from both corporate and
consumer demand - posted the
strongest earnings growth and
stock price gains. In February, the
Dow Jones Industrial Average
closed above 4000 for the first
time. Returns from foreign
markets were varied, as investors
brought capital back to the U.S.
market. The Morgan Stanley
EAFE (Europe, Australia, Far
East) Index returned 6.95% for the
year ended July 31.
An interview with Bob Haber, Portfolio Manager of Fidelity Balanced Fund
Q. BOB, HOW DID THE FUND DO?
A. The fund had a total return of 7.19% for the 12 months ended July 31,
1995, compared to a total return of 16.07% for the average balanced fund
tracked by Lipper Analytical Services during the same period.
Q. WHY DID THE FUND LAG ITS PEER GROUP AVERAGE?
A. There were a couple of key reasons. First, losses from emerging market
bonds - mainly issued by Argentina - back in 1994 are still negatively
affecting the fund's 12-month performance numbers. However, I've since
restructured the fixed-income portion of the fund. Second, the fund was
overweighted in bonds and underweighted in stocks relative to many of its
peers during the period, which explains some of its underperformance. After
bonds experienced one of their worst years in history last year, I felt
that they offered better relative value than stocks. While bonds did
rebound strongly in 1995, stocks performed far better thanks to strong
corporate earnings and a favorable interest rate environment.
Q. YOU MENTIONED REARRANGING THE BOND PORTION OF THE FUND. WHAT'S CHANGED?
A. I've sold nearly all of the fund's remaining foreign bonds, and
anticipate investing the fund's fixed-income portion in dollar-denominated
securities going forward. In addition, I'm now measuring the performance of
the bond portion of the fund against the Lehman Brothers Aggregate Bond
Index, which reflects the overall fixed-income market. That simply means
I'll be moving the fund's bond investments among various sectors of the
market - such as Treasuries, corporates and mortgages - while working to
keep the volatility of the fund roughly in line with that of the index. My
goal for the bond component of the fund is to outperform the index by
finding value opportunities within those sectors. It's much more of a plain
vanilla approach; I'm looking for the bonds to provide more consistent
returns, which should help reduce the volatility and risk inherent in the
fund.
Q. AT THE SAME TIME, YOU'VE DECREASED THE FUND'S OVERALL INVESTMENT IN
BONDS AND INCREASED ITS INVESTMENT IN STOCKS . . .
A. That's right. Because I'm no longer looking for bonds - be they foreign
or domestic - with opportunities for large price gains, I'll be relying
more on the stock portion of the portfolio for capital appreciation. That's
led me to increase the fund's stake in stocks and convertible securities
from roughly 35% six months ago to about 46% on July 31.
Q. WHERE HAVE YOU FOCUSED YOUR ENERGIES ON THE STOCK SIDE?
A. Mostly in cyclicals - stocks that tend to move up and down with economic
cycles. Although I moved in and out of various cyclical groups over the
past year, I remained relatively heavily invested in commodities such as
aluminum, chemicals and paper. Once the economy began picking up last year,
the demand for commodities increased, and corporate earnings began to
strengthen. Stock performance didn't reflect this earnings growth until
recently, though. During much of the past year, these stocks were fighting
investors' concerns that Federal Reserve Board interest rate hikes would
slow the economy and, thus, slow earnings. But once investors felt that the
Fed was finished raising rates for a while and even might lower rates, the
wind was suddenly at these companies' backs, and the stocks began to
rebound. Paper companies Domtar, Boise Cascade and Union Camp, as well as
Aluminum Company of America, are examples of commodity stocks that made
positive contributions to the fund's returns over the past 12 months. Many
of these stocks remain relatively inexpensive, and I continue to like their
earnings prospects going forward.
Q. HAVE YOU FOUND ANY STOCK IDEAS OVERSEAS?
A. Recently, I reduced the fund's stake in European stocks and raised its
investment in Japan. The Japanese market has been beaten up recently due to
factors such as a strong yen, a weak economy, the Kobe earthquake and the
Barings bank scandal. So stocks are incredibly cheap. Yet, in the face of
this adversity, many Japanese companies are showing the potential for
promising earnings growth. I've focused heavily on electronics companies
such as Hitachi and Mitsubishi Electric. As of July 31, the fund had a 5.6%
stake in Japan.
Q. LET'S DISCUSS YOUR OUTLOOK. HOW IS THE NEXT SIX MONTHS SHAPING UP?
A. As far as bonds go, I think we may have seen their strongest gains for a
while. If that's the case, the fund should benefit from its more
conservative fixed-income strategy that favors more consistent income with
lower volatility. As for stocks, if the Federal Reserve Board succeeds in
keeping the economy from sliding into recession, the fund should benefit
from its cyclical orientation. However, due to its strong rise over the
past several months, the stock market has become very expensive by
historical standards. The risks for stocks appear greater than they were
six months ago.
FUND FACTS
GOAL: to provide high income
with preservation of capital
while also considering the
potential for growth of capital
START DATE: November 6, 1986
SIZE: as of July 31, 1995,
more than $5.0 billion
MANAGER: Robert Haber,
since November 1986;
manager, Fidelity Global
Balanced Fund, since
February 1993; manager,
Fidelity Advisor Income &
Growth Fund, since 1987;
joined Fidelity in 1985
(checkmark)
BOB HABER ON MANAGING THE
FUND IN A BULL MARKET:
"The past 12 months has
been a rough period for the
fund. However, the fund also
lagged during strong upward
stock market moves in 1987
and 1990. That's because I
manage the fund to maintain
relatively low volatility and low
risk. Because it tends to be
more conservatively
positioned, the fund has
trouble keeping up in a
surging stock market.
Conversely, in theory, it
should perform better than
more aggressively positioned
funds during uneven or down
markets.
"I think the fund's risk-averse
stance should bode well if the
stock market begins a
substantial correction, which I
think is overdue. If you believe
in the validity of historical
measures, as I do, stocks are
expensive by any measure. A
friend gave me a couple of
quotes to keep on my desk
that seem very relevant to the
stock market. First, King
Solomon said, `That which
has been is that which will be.'
And Oliver Wendell Holmes
once said, `On this point, a
page of history is worth a
volume of logic.' Finally,
Confucius said, `Study the past
if you would divine the future.'
Over the next six months, it
should be interesting to see
whether the market can
continue to defy history and
continue its upward climb."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENT IN
THESE STOCKS 6
MONTHS AGO
Occidental Petroleum Corp. Indexed $3.00 1.4 1.0
Union Camp Corp. 1.3 0.2
Unocal Corp. $3.50 1.3 1.2
Apple Computer, Inc. 1.3 0.0
Bell Atlantic Corp. 1.2 0.0
TOP FIVE BONDS AS OF JULY 31, 1995
(BY ISSUER, WITH MATURITIES OF % OF FUND'S % OF FUND'S
MORE THAN ONE YEAR) INVESTMENTS INVESTMENTS IN
THESE BONDS 6
MONTHS AGO
U.S. Treasury Obligations A 25.8 26.9
Federal National Mortgage Association A 3.9 0.5
Government National Mortgage Association 2.5 1.2
A
Thermo Electron Corp. 4 5/8%, 8/1/97 1.8 1.4
State of Israel (guaranteed by U.S. 1.7 1.0
Government
through Agency for International
Development) A
A VARIOUS ISSUES
TOP FIVE MARKET SECTORS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE MARKET
SECTORS
6 MONTHS AGO
Basic Industries 12.0 12.6
Energy 8.2 5.2
Finance 7.4 8.2
Technology 5.6 3.2
Durables 4.8 1.0
ASSET ALLOCATION
AS OF JULY 31, 1995* AS OF JANUARY 31, 1995**
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 5.8
Row: 1, Col: 3, Value: 10.9
Row: 1, Col: 4, Value: 48.2
Row: 1, Col: 5, Value: 35.1
Row: 1, Col: 1, Value: 1.1
Row: 1, Col: 2, Value: 3.8
Row: 1, Col: 3, Value: 13.1
Row: 1, Col: 4, Value: 60.0
Row: 1, Col: 5, Value: 22.0
Stocks and
equity futures 35.1%
Bonds 48.2%
Convertible
securities 10.9%
Short-term
investments 5.8%
Other
investments 0.0%
FOREIGN
INVESTMENTS 18.3%
Stocks and
equity futures 22.0%
Bonds 61.0%
Convertible
securities 13.1%
Short-term
investments 3.8%
Other
investments 0.1%
FOREIGN
INVESTMENTS 23.9%
*
**
INVESTMENTS JULY 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 32.9%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.5%
DEFENSE ELECTRONICS - 0.5%
Litton Industries, Inc. (a) 609,900 $ 23,404
Tech-Sym Corp. (a) 25,100 671
24,075
BASIC INDUSTRIES - 10.9%
CHEMICALS & PLASTICS - 1.5%
Geon Co. 1,500 42
International Specialty Products, Inc. 407,800 3,721
Kemira OY 1,807,900 15,698
Methanex Corp. (a) 1,549,800 12,924
Rohm & Haas Co. 279,300 16,269
Union Carbide Corp. 714,700 24,836
Vigoro Corp. 92,600 4,040
77,530
IRON & STEEL - 0.0%
Carpenter Technology Corp. 4,400 324
Huntco, Inc. Class A 60,200 971
1,295
METALS & MINING - 3.6%
Alcan Australia Ltd. 8,754,000 20,644
Aluminum Co. of America 422,300 24,018
Brush Wellman, Inc. 103,000 2,278
Comalco Ltd. 3,882,500 18,943
Eramet SA 70,200 5,059
Falconbridge Ltd. 667,800 13,341
Falconbridge 1st Installment Receipt (k) 698,700 4,995
Inco Ltd. 312,000 10,607
Kaiser Aluminum Corp. (a) 600 10
Noranda, Inc. 733,000 15,517
QNI Ltd. 5,954,100 9,860
Reynolds Metals Co. 868,800 54,300
Sherritt, Inc. (a) 456,000 5,349
Union Miniere SA 1,000 70
184,991
PAPER & FOREST PRODUCTS - 5.8%
Aracruz Celulose SA ADR 1,885,033 23,092
Avenor, Inc. (a) 747,800 18,160
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Boise Cascade Corp. 1,078,300 $ 45,154
Consolidated Papers, Inc. 406,400 24,130
Crestbrook Forest Industries Ltd. 265,500 4,866
Domtar, Inc. (a) 3,366,100 35,782
Fletcher Challenge Canada Ltd. Class A 1,015,300 18,236
International Paper Co. 458,600 38,752
Mead Corp. 243,200 14,318
Pope & Talbot, Inc. 120,200 1,923
QUNO Corp. (a) 334,380 6,128
QUNO Corp. (a)(e) 26,500 486
Union Camp Corp. 1,221,000 68,681
299,708
TOTAL BASIC INDUSTRIES 563,524
CONGLOMERATES - 0.6%
Harris Corp. 267,100 15,291
Textron, Inc. 265,600 17,662
32,953
CONSTRUCTION & REAL ESTATE - 0.9%
BUILDING MATERIALS - 0.3%
Sherwin-Williams Co. 133,000 4,855
Texas Industries, Inc. 120,900 5,335
Vulcan Materials Co. 152,400 8,230
18,420
REAL ESTATE INVESTMENT TRUSTS - 0.6%
CBL & Associates Properties, Inc. 98,000 2,021
Cali Realty Corp.. 164,500 3,188
Equity Residential Property Trust 6,500 192
Glimcher Realty Trust 85,700 1,832
Highwoods Properties, Inc. 80,600 2,035
LTC Properties, Inc. 375,400 5,255
Liberty Property Trust 167,300 3,346
National Golf Properties, Inc. 45,400 936
Shurgard Storage Centers, Inc. 65,000 1,536
Sovran Self Storage, Inc. (a) 57,200 1,316
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - CONTINUED
Speiker Properties, Inc. 235,300 $ 5,324
Starwood Lodging Trust combined certificate (SBI) (a) 70,400 1,830
28,811
TOTAL CONSTRUCTION & REAL ESTATE 47,231
DURABLES - 4.3%
AUTOS, TIRES, & ACCESSORIES - 3.4%
Bandag, Inc. 237,400 14,600
Borg-Warner Automotive, Inc. 226,200 7,352
Chrysler Corp. 1,176,100 57,335
Goodyear Tire & Rubber Co. 300,200 13,021
Johnson Controls, Inc. 294,900 17,768
Michelin SA Cie Generale des Etablissements, Class B 477,600 22,614
Snap-on Tools Corp. 236,700 9,882
Suzuki Motor Corp. 1,544,000 18,869
TRW, Inc. 136,900 10,216
Toyota Motor Corp. 257,000 5,351
177,008
HOME FURNISHINGS - 0.1%
Heilig-Meyers Co. 70,100 1,770
Leggett & Platt, Inc. 58,200 2,699
4,469
TEXTILES & APPAREL - 0.8%
Galey & Lord, Inc. (a) 18,500 261
Guilford Mills, Inc. 220,000 6,022
Russell Corp. 26,500 749
Unifi, Inc. 1,282,100 32,373
39,405
TOTAL DURABLES 220,882
ENERGY - 3.3%
COAL - 0.0%
Eastern Enterprises Co. 23,500 711
ENERGY SERVICES - 0.0%
Nabors Industries, Inc. (a) 37,100 336
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - 3.3%
Atlantic Richfield Co. 197,900 $ 22,809
British Petroleum PLC ADR 528,500 47,961
Coastal Corp. (The) 484,000 15,065
Elf Gabon 40,920 7,607
Kerr-McGee Corp. 115,100 6,546
Louisiana Land & Exploration Co. 84,300 3,351
Mobil Corp. 151,900 14,848
Morrison Petroleums Ltd. 131,400 927
Occidental Petroleum Corp. 831,500 18,709
Pancanadian Petroleum Ltd. 258,000 9,694
Pinnacle Resources Ltd. 254,700 2,707
Santa Fe Energy Resources, Inc. (a) 955,300 8,956
Ulster Petroleums Ltd. (a) 211,600 795
Wascana Energy, Inc. 1,290,000 11,821
171,796
TOTAL ENERGY 172,843
FINANCE - 0.5%
BANKS - 0.1%
Bangkok Bank Ltd. 444,100 4,952
CPR (Comp Par Reescompte) 1,000 76
5,028
CREDIT & OTHER FINANCE - 0.0%
Jayhawk Acceptance Co. 7,200 72
INSURANCE - 0.4%
ACE Ltd. 303,700 8,997
Allianz Versich Holdings Ord. (Reg.) 1,000 1,906
Royal Insurance Holdings PLC (a) 1,800,000 9,377
20,280
SAVINGS & LOANS - 0.0%
Glendale Federal Bank FSB, California (a) 61,100 840
TOTAL FINANCE 26,220
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 0.1%
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
Bergen Brunswig Corp. Class A 239,500 $ 5,179
Sunrise Medical, Inc. 61,600 1,686
6,865
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
ELECTRICAL EQUIPMENT - 1.2%
California Microwave Corp. (a) 213,700 5,556
Mitsubishi Electric Co. Ord. 2,639,000 19,501
Murata Mfg. Co. Ltd. 259,000 11,313
Omron Corp. 1,283,000 29,182
65,552
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Caterpillar, Inc. 612,700 43,119
Dover Corp. 4,000 317
Valmet Corp. OY Ord. 85,900 2,493
45,929
POLLUTION CONTROL - 0.5%
WMX Technologies, Inc. 453,700 14,178
Wheelabrator Technologies, Inc. 626,300 10,412
24,590
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 136,071
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.0%
Resort Hotels PLC (a) 62,500 --
PUBLISHING - 0.0%
Belo (A.H.) Corp. Class A 63,000 2,008
RESTAURANTS - 0.1%
Ryan's Family Steak Houses, Inc. (a) 579,000 4,053
TOTAL MEDIA & LEISURE 6,061
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 0.3%
FOODS - 0.1%
Chiquita Brands International, Inc. 59,300 $ 867
Flowers Industries, Inc. 140,800 2,587
3,454
HOUSEHOLD PRODUCTS - 0.2%
Clorox Co. 112,700 7,396
First Brands Corp. 63,500 2,540
9,936
TOTAL NONDURABLES 13,390
PRECIOUS METALS - 0.5%
Buffelsfontein Gold Mining Ltd. Ord. 39,000 237
Free State Consolidated Gold Mines Ltd.:
Ord. 337,914 4,129
ADR 249,400 2,993
Western Mining Holdings Ltd. 2,498,800 16,219
23,578
RETAIL & WHOLESALE - 1.9%
APPAREL STORES - 0.2%
Limited, Inc. (The) 430,900 8,833
GENERAL MERCHANDISE STORES - 1.0%
Consolidated Stores Corp. (a) 431,300 9,597
Mac Frugals Bargains Closeouts, Inc. (a) 450,500 7,940
Proffitts, Inc. (a) 5,000 171
Wal-Mart Stores, Inc. 1,227,800 32,690
50,398
GROCERY STORES - 0.3%
Great Atlantic & Pacific Tea Co., Inc. 190,100 5,299
Vons Companies, Inc. (a) 563,000 12,527
17,826
RETAIL & WHOLESALE, MISC - 0.4%
Fingerhut Companies, Inc. 217,600 3,645
Pier 1 Imports, Inc. 1,106,600 10,789
Waban, Inc. 295,600 4,915
19,349
TOTAL RETAIL & WHOLESALE 96,406
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 0.1%
PRINTING - 0.0%
Standard Register Co. 5,300 $ 113
SERVICES - 0.1%
Secom Co. Ltd. 59,000 3,632
TOTAL SERVICES 3,745
TECHNOLOGY - 3.7%
COMMUNICATIONS EQUIPMENT - 0.2%
Northern Telecom Ltd. 240,300 9,095
COMPUTER SERVICES & SOFTWARE - 0.2%
Policy Management Systems Corp. (a) 21,400 1,148
SHL Systemhouse, Inc. (a) 1,241,100 9,895
11,043
COMPUTERS & OFFICE EQUIPMENT - 1.6%
Apple Computer, Inc. 1,446,200 65,079
Canon, Inc. 309,000 5,595
NEC Corp. 444,000 5,276
Ricoh Co. Ltd. Ord. 553,000 5,357
81,307
ELECTRONICS - 1.7%
Hitachi Ltd. 3,616,000 38,301
Kyocera Corp. 108,000 9,313
Marshall Industries (a) 209,100 6,691
Nichicon Corp. 38,000 549
Nitto Denko Corp. 1,496,000 24,547
Ryoyo Electro Corp. Ord. 49,000 1,325
Rohm Co. Ltd. 99,000 5,612
TDK Corp. 42,000 2,137
88,475
TOTAL TECHNOLOGY 189,920
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
Alaska Air Group, Inc. (a) 402,000 7,739
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 2.5%
ELECTRIC UTILITY - 0.4%
Fuji Electric Co. Ltd. 4,089,000 $ 22,286
GAS - 0.3%
Enron Corp. 385,600 13,400
TELEPHONE SERVICES - 1.8%
Ameritech Corp. 167,800 8,117
Bell Atlantic Corp. 1,040,200 59,552
BellSouth Corp. 74,600 5,054
Koninklijke PPT Nederland (e) 175,100 6,549
Southern New England Telecommunications Corp. 348,800 11,947
91,219
TOTAL UTILITIES 126,905
TOTAL COMMON STOCKS
(Cost $1,590,885) 1,698,408
PREFERRED STOCKS - 5.1%
CONVERTIBLE PREFERRED STOCKS - 4.0%
BASIC INDUSTRIES - 0.9%
METALS & MINING - 0.9%
Alumax, Inc., Series A, $4.00 101,133 14,614
Kaiser Aluminum Corp. $0.96 787,500 11,222
Reynolds Metals Co. $3.31 369,000 20,341
46,177
ENERGY - 2.8%
OIL & GAS - 2.8%
Occidental Petroleum Corp. Indexed $3.00 1,158,400 71,966
Santa Fe Energy Resources, Inc. $.732 656,000 6,314
Unocal Corp. $3.50 (e) 1,269,100 67,580
145,860
FINANCE - 0.3%
BANKS - 0.3%
Barnett Banks, Inc., Series A, $4.50 (h) 118,200 12,411
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
PRECIOUS METALS - 0.0%
Battle Mountain Gold Co. 3,800 $ 205
Newmont Mining Corp. depositary shares
representing 1/2 share, $1.375 (e) 24,700 1,470
1,675
TOTAL CONVERTIBLE PREFERRED STOCKS 206,123
NONCONVERTIBLE PREFERRED STOCKS - 1.1%
FINANCE - 0.7%
BANKS - 0.5%
Bank United Texas FSB, Series A, $10.12 408,080 10,814
BankAmerica, Series H, 9% 137,440 3,625
Chase Manhattan Corp., Series I, 10.84% 88,729 2,695
First Interstate Bancorp depositary shares representing
1/8 share, Series G, 9% 67,800 1,780
Shawmut National Corp. depositary shares representing
1/10th share, 9.30% 363,100 9,531
28,445
SAVINGS & LOANS - 0.2%
First Nationwide Bank 11 1/2%, 91,000 9,919
TOTAL FINANCE 38,364
UTILITIES - 0.4%
ELECTRIC UTILITY - 0.4%
Gulf States Utilities Co. $1.75 308,500 7,288
Long Island Lighting Co. $7.95 217,350 5,352
Public Service Co. of New Hampshire Co., Series A 207,125 5,463
18,103
TOTAL NONCONVERTIBLE PREFERRED STOCKS 56,467
TOTAL PREFERRED STOCKS
(Cost $243,643) 262,590
CORPORATE BONDS - 15.1%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - 6.9%
BASIC INDUSTRIES - 0.2%
METALS & MINING - 0.2%
Inco Ltd. 5 3/4%, 7/1/04 Baa2 $ 8,580 $ 11,111
DURABLES - 0.5%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Toyota Motor Corp. 1.20%, 1/28/98 -- JPY 772,000 9,085
CONSUMER ELECTRONICS - 0.3%
Whirlpool Corp. liquid yield option notes
0%, 5/14/11 Baa1 42,170 17,975
TOTAL DURABLES 27,060
ENERGY - 1.8%
INDEPENDENT POWER - 1.8%
Thermo Electron Corp. 4 5/8%, 8/1/97 (e)(h) Ba1 47,771 95,064
FINANCE - 0.6%
CREDIT & OTHER FINANCE - 0.3%
Investor AB 8%, 6/01/01 (h) A- SEK 73,570 15,962
INSURANCE - 0.3%
Axa SA 6%, 1/1/01 -- FRF 46 14,874
TOTAL FINANCE 30,836
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Matsushita Electric Works Co. Ltd. 2.70%,
5/31/02 -- JPY 369,000 4,576
MEDIA & LEISURE - 1.6%
ENTERTAINMENT - 1.1%
Carnival Cruise Lines, Inc. 4 1/2%, 7/1/97 (h) Baa1 40,371 54,349
PUBLISHING - 0.1%
Daily Mail General Trust PLC 8 3/4%, 9/27/05 -- GBP 2,024 5,328
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 0.4%
Wendy's International, Inc. 7%, 4/1/06 (h) Baa3 $ 13,495 $ 20,850
TOTAL MEDIA & LEISURE 80,527
SERVICES - 0.3%
First Financial Management Corp. 5%,
12/15/99 (h) Baa2 12,505 17,085
TECHNOLOGY - 1.4%
COMMUNICATIONS EQUIPMENT - 0.1%
Ericsson (L.M.) 4.25%, 6/30/00 A2 SEK 27,511 6,844
COMPUTERS & OFFICE EQUIPMENT - 1.0%
Canon, Inc. 1.30%, 12/19/08 A JPY 916,000 11,402
NEC Corp. 1.90%, 3/30/01 A3 JPY 3,373,000 43,017
54,419
ELECTRONICS - 0.3%
Nitto Denko Corp. 3.90%, 3/30/01 Baa1 JPY 1,010,000 13,715
TOTAL TECHNOLOGY 74,978
UTILITIES - 0.4%
TELEPHONE SERVICES - 0.4%
Compania de Telefonos de Chile yankee
4 1/2%, 1/15/03 (h) Baa2 17,294 18,591
TOTAL CONVERTIBLE BONDS 359,828
NONCONVERTIBLE BONDS - 8.2%
ENERGY - 0.3%
ENERGY SERVICES - 0.2%
Petroliam Nasional BHD yankee
6 7/8%, 7/1/03 (e) A1 8,670 8,549
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - 0.1%
McDermott, Inc. 7.95%, 7/7/97 Baa3 $ 5,000 $ 5,116
TOTAL ENERGY 13,665
FINANCE - 5.3%
ASSET-BACKED SECURITIES - 1.9%
Capital Auto Receivables Asset Trust, 5.85%,
1/15/98 Aaa 2,321 2,310
Chase Manhattan Credit Card Master Trust,:
7.65%, 11/15/98 Aaa 4,887 4,901
8 3/4%, 8/15/99 Aaa 28,540 29,111
Discover Card Master Trust:
7 7/8%, 4/16/98 A2 1,540 1,555
7.30%, 5/21/99 Aaa 2,500 2,528
Discover Card Master Trust I 6.90%, 2/16/00 A2 4,500 4,539
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 2,200 2,190
MBNA Master Credit Card Trust 7 3/4%,
10/15/98 Aaa 2,840 2,891
Premier Auto Trust:
6.85%, 10/4/97 Aaa 12,850 12,941
4.90%, 12/15/98 Aaa 1,312 1,295
Standard Credit Card Master Trust I:
8 1/2%, 6/7/96 Aaa 2,600 2,651
8%, 10/7/97 Aaa 6,229 6,346
8 1/4%, 10/7/97 A2 5,025 5,140
5 1/2%, 9/7/98 A2 2,800 2,750
4.65%, 3/7/99 Aaa 9,000 8,809
4.85%, 3/7/99 A2 5,200 5,064
7.65%, 2/15/00 A2 2,300 2,360
Union Federal Savings 1994-D Grantor Trust
8.20%, 1/10/01 Baa2 1,173 1,199
United Federal Savings Bank Grantor Trust
7.275%, 11/10/00 Baa2 1,637 1,648
100,228
BANKS - 1.3%
Bank of Boston Corp. 10.30%, 9/1/00 Baa1 5,000 5,000
Chase Manhattan Corp. 7 1/2%, 12/1/97 A3 2,100 2,150
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Citicorp euro:
6.20%, 7/10/97 (i) A3 $ 1,000 $ 997
5.6875%, 1/30/98 (i) A3 2,000 1,987
Corporacion Andina de Fomento:
euro 7 1/4%, 4/30/98 Baa3 550 547
yankee 7 1/4%, 4/30/98 (e) Baa3 5,900 5,841
Export-Import Bank Korea 7.85%, 11/1/96 A1 4,000 4,074
First USA Bank 5.40%, 12/6/96 Baa3 1,900 1,877
Hartford National Corp. 9.85%, 6/1/99 Baa2 1,955 2,155
Korea Development Bank 6 1/4%, 5/1/00 A1 4,150 4,062
Midlantic Corp.:
9 1/4%, 9/1/99 A3 1,543 1,672
9.20%, 8/1/01 Baa1 4,832 5,345
Nationsbank Corp. 5 1/8%, 9/15/98 A2 1,600 1,538
Shawmut Corp. 8 1/8%, 2/1/97 Baa1 12,000 12,325
Signet Banking Corp.:
6%, 4/15/98 (i) Baa2 3,750 3,702
9 5/8%, 6/1/99 Baa2 4,469 4,879
Zions Bancorporation 8 5/8%, 10/15/02 BBB- 6,000 6,362
64,513
CREDIT & OTHER FINANCE - 1.3%
CIT Group Holdings, Inc. 6 5/8%, 6/15/05 Aa3 3,370 3,267
Chrysler Financial Corp. 10.34%, 5/15/08 A3 1,600 1,648
Fleet Mortgage Group, Inc. 6 1/2%, 6/15/00 A3 1,900 1,876
Ford Motor Credit Co. euro 8 5/8%, 1/24/00 A1 3,766 4,039
General Motors Acceptance Corp.:
7.40%, 5/20/97 A3 3,300 3,358
7 1/8%, 5/23/97 A3 2,250 2,279
7%, 6/02/97 A3 8,000 8,087
6.40%, 7/30/97 A3 2,000 2,000
6 3/4%, 2/25/98 A3 5,000 5,026
5 7/8%, 1/12/99 A3 8,000 7,770
Greyhound Financial Corp.:
8 1/4%, 3/11/97 Baa1 2,000 2,054
6.95%, 1/28/98 Baa2 1,250 1,259
National Credit Card Trust 9.45%, 12/31/97 Aaa 20,000 20,518
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Westinghouse Credit Corp.:
8.98%, 6/15/98 Ba1 $ 2,000 $ 2,082
8.85%, 7/26/99 Ba1 1,300 1,349
66,612
INSURANCE - 0.5%
Metropolitan Life Insurance Co. 6.30%,
11/1/03 (e) Aa3 9,390 8,814
Nationwide Mutual Insurance Co.
6 1/2%, 2/15/04 (e) Aa3 6,610 6,254
New York Life Insurance Co.
6 2/5%, 12/15/03 (e) Aa2 9,000 8,569
Ohio National Life Insurance Co. 8 7/8%,
7/15/04 (e) A3 4,030 4,354
27,991
SAVINGS & LOANS - 0.3%
Great Western Bank FSB 10 1/4%, 6/15/20 A3 1,600 1,769
Great Western Financial Corp.
6 3/8%, 7/1/00 Baa1 1,000 979
Home Savings of America 6%, 11/1/00 A3 14,500 13,881
16,629
TOTAL FINANCE 275,973
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Westinghouse 9.13%, 6/20/01 Ba1 5,000 5,352
MEDIA & LEISURE - 0.2%
PUBLISHING - 0.2%
News America Holdings, Inc.:
9 1/8%, 10/15/99 Ba1 4,000 4,312
12%, 12/15/01 Ba1 1,000 1,126
8 5/8%, 2/1/03 Ba1 4,180 4,468
9,906
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
NONDURABLES - 0.1%
FOODS - 0.1%
Dart & Kraft, Inc. 7 3/4%, 11/30/98 A2 XEU 3,750 $ 3,863
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 1,000 1,066
4,929
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
El Puerto de Liverpool SA de CV 7 1/4%,
10/19/96 (e) -- 4,042 3,840
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Comdisco, Inc.:
7.82%, 2/05/97 Baa2 2,000 2,036
7 1/4%, 4/15/98 Baa2 9,500 9,656
9.45%, 6/8/00 Baa2 6,000 6,608
9.30%, 6/27/00 Baa2 3,750 4,111
22,411
ELECTRONICS - 0.1%
Grupo Condumex SA de CV:
euro 6 1/4%, 7/27/96 (e) -- 360 347
6 1/4%, 7/27/96 -- 750 722
7 3/8%, 7/27/98 (e) -- 2,000 1,810
2,879
TOTAL TECHNOLOGY 25,290
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 2,030 2,072
9 1/2%, 7/15/98 Baa3 4,000 4,267
Delta Air, Inc. 9 7/8%, 4/30/08 Baa2 5,123 5,695
12,034
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - 1.4%
ELECTRIC UTILITY - 1.0%
British Columbia Hydro & Power Authority gtd.
15%, 4/15/11 Aa2 $ 725 $ 804
Gulf States Utilities Co. 1st mtg. 6 3/4%,
10/1/98 Baa3 1,000 1,005
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 10,908 11,076
7.30%, 7/15/99 Ba1 13,000 12,766
Public Service Co. of New Hampshire 1st mtg.
9.17%, 5/15/98 Baa3 16,900 17,623
Texas Utilities Electric Co.:
6 3/8%, 8/1/97 Baa2 1,200 1,198
9 1/2%, 8/1/99 Baa2 1,000 1,090
United Illuminating Co. 9.76%, 1/2/06 Baa3 4,491 4,714
50,276
GAS - 0.4%
Southwest Gas Corp.:
9 3/4%, 6/15/02 Baa3 10,700 12,118
9 3/8%, 2/1/17 Baa3 4,000 4,185
Transcontinental Gas Pipe Line Corp. extendible
9.41%, 5/15/00 Baa1 4,300 4,292
20,595
TOTAL UTILITIES 70,871
TOTAL NONCONVERTIBLE BONDS 421,860
TOTAL CORPORATE BONDS
(Cost $761,953) 781,688
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 31.4%
U.S. TREASURY OBLIGATIONS - 25.8%
4 3/8%, 11/15/96 Aaa 22,560 22,176
7 1/4%, 11/15/96 Aaa 168,360 171,333
8 1/2%, 4/15/97 to 5/15/97 (g) Aaa 95,060 99,164
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
U.S. TREASURY OBLIGATIONS - CONTINUED
5 1/8%, 6/30/98 Aaa $ 32,500 $ 31,718
9 1/4%, 8/15/98 Aaa 105,485 114,748
7 3/4%, 12/31/99 Aaa 9,520 10,088
10 3/4%, 5/15/03 Aaa 4,910 6,196
11 1/4%, 8/15/03 Aaa 2,800 3,600
11 7/8%, 11/15/03 Aaa 88,690 119,108
12 3/8%, 5/15/04 Aaa 22,190 30,827
11 5/8%, 11/15/04 Aaa 48,800 66,040
12 3/4%, 11/15/10 Aaa 53,380 77,501
13 7/8%, 5/15/11 Aaa 27,480 42,594
9%, 11/15/18 Aaa 125,970 155,769
8 7/8%, 2/15/19 Aaa 19,020 23,258
8 1/8%, 8/15/19 Aaa 26,950 30,626
8 3/4%, 8/15/20 Aaa 221,405 268,350
12%, 8/15/23 Aaa 39,000 56,513
TOTAL U.S. TREASURY OBLIGATIONS 1,329,609
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.6%
Federal Agricultural Mortgage Corp.:
7.01%, 2/10/04 to 2/10/05 Aaa 3,250 3,358
7.04%, 8/10/05 Aaa 2,400 2,481
Federal Home Loan Bank:
7.59%, 12/23/96 Aaa 10,730 10,960
4.89%, 10/14/98 (callable) Aaa 3,470 3,322
5.60%, 2/23/99 (callable) Aaa 18,000 17,415
Federal Home Loan Mortgage Corp.:
4.78%, 2/10/97 Aaa 2,540 2,492
5.60%, 3/1/99 (callable) Aaa 9,790 9,441
5.40%, 11/1/00 (callable) Aaa 3,600 3,400
Federal National Mortgage Association:
5.20%, 7/10/98 (callable) Aaa 3,520 3,411
3%, 7/13/98 (d) Aaa 3,690 3,685
4.82%, 10/21/98 (callable) Aaa 9,090 8,728
4.38%, 10/23/98 (callable) (d) Aaa 3,470 3,342
4.94%, 10/30/98 (callable) Aaa 7,880 7,545
4.70%, 9/10/98 (callable) Aaa 7,700 7,343
4.95%, 9/30/98 (callable) Aaa 19,660 18,879
4 7/8%, 10/15/98 (callable) Aaa 1,360 1,302
5.30%, 12/10/98 (callable) Aaa 1,980 1,915
6.80%, 1/10/03 (callable) Aaa 5,825 5,856
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Government Trust Certificates (assets of Trust
guaranteed by U.S. government through
Defense Security Assistance Agency):
Class G2, 8%, 5/15/98 Aaa $ 6,396 $ 6,553
Class 1-C, 9 1/4%, 11/15/01 Aaa 4,700 5,138
Class 2-E, 9.40%, 5/15/02 Aaa 15,760 17,314
Class T-2, 9 5/8%, 5/15/02 Aaa 2,960 3,246
Series 1995-A, 6.28%, 6/15/04 Aaa 12,700 12,525
Series 1992-A, 7.02%, 9/01/04 Aaa 3,387 3,448
Series 1994-F, 8.178%, 12/15/04 Aaa 9,006 9,529
Private Export Funding Corp.:
9.10%, 10/30/98 Aaa 3,060 3,306
Series CC, 9 1/2%, 3/31/99 Aaa 3,160 3,494
8 3/4%, 6/30/03 Aaa 4,655 5,233
6.86%, 4/30/04 Aaa 2,169 2,186
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
5 1/4%, 3/15/98 Aaa 25,720 25,165
7 3/4%, 4/1/98 Aaa 1,763 1,802
4 7/8%, 9/15/98 Aaa 18,670 17,923
6%, 2/15/99 Aaa 1,420 1,406
7 3/4%, 11/15/99 Aaa 27,448 28,760
5 3/4%, 3/15/00 Aaa 6,650 6,471
8%, 11/15/01 Aaa 1,880 2,011
6 1/8%, 3/15/03 Aaa 4,400 4,242
8 1/2%, 4/1/06 Aaa 1,830 2,006
Tennessee Valley Authority:
8 1/4%, 11/15/96 Aaa 4,730 4,860
4.60%, 12/15/96 Aaa 3,025 2,970
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 6,270 6,795
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 291,258
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,588,516) 1,620,867
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 5.2%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.7%
5 1/2%, 11/1/08 to 4/1/09 Aaa $ 25,000 $ 23,555
6%, 8/1/01 (f) Aaa 54,000 52,734
6 1/2%, 7/1/08 to 6/1/24 Aaa 7,499 7,214
7%, 11/1/22 to 6/1/24 Aaa 30,192 29,456
7%, 8/1/24 (f) Aaa 23,000 22,443
7 1/2%, 6/1/07 to 4/1/08 Aaa 3,883 3,935
8%, 9/1/17 Aaa 458 471
139,808
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.5%
6 1/2%, 8/15/24 (f) Aaa 23,000 21,864
7%, 10/15/22 to 10/15/23 Aaa 16,120 15,746
7 1/2%, 1/15/22 to 1/15/23 Aaa 39,766 39,746
8%, 1/15/17 to 8/15/22 Aaa 2,832 2,891
8 1/2%, 6/15/17 to 3/15/23 Aaa 11,653 12,090
9%, 1/15/22 to 5/15/25 Aaa 28,978 30,409
9 1/2%, 3/15/18 to 8/15/22 Aaa 1,524 1,621
9 1/2%, 8/15/25 (f) Aaa 4,640 4,924
129,291
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $271,613) 269,099
COMMERCIAL MORTGAGE SECURITIES - 0.7%
Morgan Stanley Capital commercial
Series 1995-1, Class A1, 7%, 2/15/02 AAA 4,150 4,168
Resolution Trust Corp.:
commercial Series1994-C2:
Class A-4, 7 1/2%, 4/25/25 AAA 2,322 2,333
Class A-2, 7 3/4%, 4/25/25 AAA 1,477 1,493
commercial Series 1994-C1, Class A-4,
7 1/4%, 6/25/26 AAA 2,718 2,710
commercial Series 1995-C1:
Class A-2A, 6 1/4%, 2/25/27 Aaa 8,658 8,577
Class A-4A, 6 1/4%, 2/25/27 Aaa 4,281 4,243
SKW Real Estate LP:
commercial Series, Class A, 6.45%,
4/15/02 (d)(e) AA 4,805 4,783
commercial Series II, Class B,
6.90%, 4/15/02 (d)(e) A 1,800 1,791
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
Structured Asset Securities Corp.:
commercial Series 1995-C1, Class A-1A,
7 3/8%, 9/25/24 AAA $ 3,141 $ 3,165
commercial Series 1993-C1, Class A-1,
6.60%, 10/25/24 AA+ 3,608 3,566
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $36,687) 36,829
FOREIGN GOVERNMENT OBLIGATIONS (J) - 2.5%
French Government OAT:
7 3/4%, 10/25/05 Aaa FRF 163,450 34,924
8 1/2%, 10/25/08 Aaa FRF 86,170 19,337
Ontario Province:
yankee 7 3/4%, 6/4/02 Aa3 4,000 4,199
deb. 15 3/4%, 3/15/12 Aa3 5,000 5,956
Treuhandanstalt:
6 5/8%, 7/9/03 AAA DEM 14,100 10,082
7 1/2%, 9/9/04 Aaa DEM 24,900 18,721
United Kingdom, Great Britain & Northern
Ireland 9%, 10/13/08 Aaa GBP 17,400 29,341
Victorian Public Authorities Finance Agency:
8.45%, 10/1/01 Aa2 3,000 3,236
8 1/4%, 1/15/02 Aa2 5,000 5,319
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $131,053) 131,115
SUPRANATIONAL OBLIGATIONS - 0.1%
African Development Bank 7 3/4%, 12/15/01
(Cost $2,979) Aa1 3,000 3,143
MUNICIPAL SECURITIES - 0.1%
Louisiana Pub. Facs. Auth. Rev. 9.95%, 6/1/96
(Cost $2,115) A3 2,000 2,057
REPURCHASE AGREEMENTS - 6.9%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.82%,
dated 7/31/95 due 8/1/95 357,473 357,415
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,986,859) $ 5,163,211
SECURITIES SOLD SHORT
AMOUNTS IN THOUSANDS
NUMBER OF SHARES ISSUER VALUE
222 Barnett Banks, Inc. $ 12,310
2,319 Carnival Corp. Class A 52,458
212 Compania de Telefonos Chile SA sponsored ADR 16,566
181 First Financial Management Corp. 15,811
478 Investor AB Free shares B 15,591
2,222 Thermo Electron Corp. 94,983
1,095 Wendy's International, Inc. 20,391
TOTAL SECURITIES SOLD SHORT
(Total proceeds $190,468) $ 228,110
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 4.4%
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
651 Nikkei 225 Contracts Sep. 1995 $ 54,261 $ 275
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.1%
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
2,220 AUD 9/7/95 $ 1,638 $ 38
139,174 CAD 8/3/95 102,023 771
259,670 DEM 8/24/95 to 9/5/95 187,359 1,373
1,067,697 FRF 8/3/95 to 8/23/95 223,006 7,785
27,566,145 ITL 8/2/95 17,315 553
2,751,020 JPY 8/15/95 31,199 (1,712)
17,836 CHF 9/7/95 15,476 (54)
TOTAL CONTRACTS TO BUY
(Payable amount $569,262) $ 578,016 8,754
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 11.2%
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
27,312 AUD 9/7/95 $ 20,156 $ (704)
289,540 CAD 8/3/95 to 8/9/95 212,246 (76)
259,670 DEM 8/24/95 to 9/5/95 187,359 (2,071)
1,067,697 FRF 8/3/95 to 8/23/95 223,006 (13,131)
27,566,145 ITL 8/2/95 17,315 (1,215)
2,751,020 JPY 8/15/95 31,199 1,062
17,836 CHF 9/7/95 15,476 32
TOTAL CONTRACTS TO SELL
(Receivable amount $690,654) $ 706,757 (16,103)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 13.7%
$ (7,349)
CURRENCY ABBREVIATIONS
AUD - Australian dollar
GBP - British pound
CAD - Canadian dollar
XEU - European currency unit
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
SEK - Swedish krona
CHF - Swiss franc
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
4. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $226,101,000 or 4.5% of net
assets.
6. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
7. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $4,384,000.
8. Security was pledged to cover margin requirements on open short sale
transactions (see Note 2 of Notes to Financial Statements). At the period
end the value of securities pledged amounted to $234,312,000.
9. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
10. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
11. Purchased on an installment basis. Market value reflects only those
payments made through July 31, 1995. The remaining installments aggregating
CAD 13,275,000 are due July 31, 1996 and January 31,1997.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 45.0% AAA, AA, A 43.4%
Baa 5.8% BBB 7.2%
Ba 2.5% BB 1.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.9%.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.7%
Japan 5.6
Canada 4.1
France 2.0
United Kingdom 1.8
Australia 1.4
Others (individually less than 1%) 3.4
TOTAL 100.0%
INCOME TAX INFORMATION
At July 31, 1995, the aggregate cost of investment securities for income
tax purposes was $4,997,990,000. Net unrealized appreciation aggregated
$165,221,000, of which $268,528,000 related to appreciated investment
securities and $103,307,000 related to depreciated investment securities.
At July 31, 1995, the fund had a capital loss carryforward of approximately
$87,644,000, all of which will expire on July 31, 2003.
The fund intends to elect to defer to its fiscal year ending July 31, 1996
$42,321,000 of losses recognized during the period Novem- ber 1, 1994 to
July 31, 1995.
At July 31, 1995, the fund was required to defer $2,421,000 of losses on
futures contracts and options.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) JULY 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 5,163,211
agreements of $357,415) (cost $4,986,859) -
See accompanying schedule
Securities sold short, at value (proceeds received (228,110) $ 4,935,101
$190,468)
Restricted cash on securities sold short 190,468
Cash 6,670
Receivable for investments sold 162,567
Unrealized appreciation on foreign currency contracts 12,016
Receivable for closed foreign currency contracts 1,110
Receivable for fund shares sold 13,293
Dividends receivable 3,599
Interest receivable 56,425
Other receivables 17
TOTAL ASSETS 5,381,266
LIABILITIES
Payable for investments purchased 143,454
Regular delivery
Delayed delivery 103,626
Unrealized depreciation on foreign currency contracts 19,365
Payable for closed foreign currency contracts 30
Payable for fund shares redeemed 35,901
Accrued management fee 2,212
Payable for daily variation on futures contracts 407
Other payables and accrued expenses 4,799
Collateral on securities loaned, at value 1,182
TOTAL LIABILITIES 310,976
NET ASSETS $ 5,070,290
Net Assets consist of:
Paid in capital $ 5,002,584
Undistributed net investment income 75,847
Accumulated undistributed net realized gain (loss) on (141,499)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 133,358
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 384,099 shares outstanding $ 5,070,290
NET ASSET VALUE, offering price and redemption price per $13.20
share ($5,070,290 (divided by) 384,099 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME $ 60,207
Dividends
Interest (including income on securities loaned of $69) 263,471
TOTAL INCOME 323,678
EXPENSES
Management fee $ 26,914
Transfer agent fees 12,368
Accounting and security lending fees 783
Non-interested trustees' compensation 46
Custodian fees and expenses 570
Registration fees 95
Audit 118
Legal 33
Interest 1
Dividends on securities sold short 6,231
Miscellaneous 12
Total expenses before reductions 47,171
Expense reductions (600) 46,571
NET INVESTMENT INCOME 277,107
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of (89,133)
$1,491 on sales of investment in affiliated issuers)
Foreign currency transactions (52,814)
Futures contracts (1,197)
Short sales (5,023) (148,167)
Change in net unrealized appreciation (depreciation) on:
Investment securities 259,856
Assets and liabilities in foreign currencies 9,563
Futures contracts (4,835)
Short sales (33,754) 230,830
NET GAIN (LOSS) 82,663
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 359,770
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 277,107 $ 197,865
Net investment income
Net realized gain (loss) (148,167) 10,705
Change in net unrealized appreciation (depreciation) 230,830 (243,781)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 359,770 (35,211)
FROM OPERATIONS
Distributions to shareholders (183,542) (88,138)
From net investment income
From net realized gain - (157,422)
In excess of net realized gain - (127,230)
TOTAL DISTRIBUTIONS (183,542) (372,790)
Share transactions 1,416,410 3,990,023
Net proceeds from sales of shares
Reinvestment of distributions 175,630 357,197
Cost of shares redeemed (2,088,073) (2,148,510)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (496,033) 2,198,710
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (319,805) 1,790,709
NET ASSETS
Beginning of period 5,390,095 3,599,386
End of period (including undistributed net investment $ 5,070,290 $ 5,390,095
income of $75,847 and $10,547, respectively)
OTHER INFORMATION
Shares
Sold 110,702 298,399
Issued in reinvestment of distributions 13,918 26,645
Redeemed (162,998) (162,688)
Net increase (decrease) (38,378) 162,356
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED JULY 31,
1995 1994 B 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning $ 12.76 $ 13.84 $ 12.79 $ 12.15 $ 11.11
of period
Income from Investment
Operations
Net investment income .62 .25 .62 .62 .65
Net realized and unrealized .27 (.17) 1.45 1.07 1.07
gain (loss)
Total from investment .89 .08 2.07 1.69 1.72
operations
Less Distributions (.45) (.25) (.66) (.60) (.68)
From net investment income
From net realized gain - (.50) (.36) (.45) -
In excess of net realized gain - (.41) - - -
Total distributions (.45) (1.16) (1.02) (1.05) (.68)
Net asset value, end of period $ 13.20 $ 12.76 $ 13.84 $ 12.79 $ 12.15
TOTAL RETURN A 7.19% .37% 17.18% 14.73% 16.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,070 $ 5,390 $ 3,599 $ 1,366 $ 458
(in millions)
Ratio of expenses to average .90% 1.01% .93% .96% .98%
net assets
Ratio of expenses to average net .91% 1.02% .93% .96% .98%
assets before expense
reductions
Ratio of net investment income 5.33% 4.09% 5.07% 5.68% 5.93%
to average net assets
Portfolio turnover rate 269% 157% 162% 242% 238%
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS).
B EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Balanced Fund (the fund) is a fund of Fidelity Puritan Trust (the
trust) and is authorized to issue an unlimited number of shares. The trust
is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES- CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, futures and options transactions,
foreign currency transactions, market discount, partnerships, non-taxable
dividends and losses deferred due to wash sales, futures and options, and
excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the fund's Statement of Assets and Liabilities. The U.S. dollar value of
the currencies the fund has committed to buy or sell is shown in the
schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
the fund has acquired or hedged through currency contracts at period end.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
offset; otherwise, gain (loss) is recognized on settlement date. Contracts
that have been offset with different counterparties are reflected as both a
contract to buy and a contract to sell in the schedule of investments under
the caption "Forward Foreign Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. With respect to purchase
commitments, the fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the commitment. Losses
may arise due to changes in the market value of the underlying securities
or if the counterparty does not perform under the contract.
SHORT SALES AGAINST THE BOX. The fund may hedge its investments against
changes in value by engaging in short sales against the box. In a short
sale against the box, the fund sells a borrowed security, while at the same
time either owning an identical security or having the right to obtain such
a security. By selling short against the box the equity underlying one of
its convertible holdings, the fund would seek to offset the effect that a
decline in the underlying equity might have on the value of the convertible
security. While the short sale is outstanding, the fund will not dispose of
the security hedged by the short sale.
2. OPERATING POLICIES - CONTINUED
SHORT SALES AGAINST THE BOX -
CONTINUED
The fund is required to establish a margin account with the broker lending
the security sold short. While the short sale is outstanding, the broker
retains the proceeds of the short sale and the fund instructs the custodian
to maintain in a separate account securities having a value at least equal
to the amount of the securities sold short.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock market and to fluctuations in
interest rates and currency values. Buying futures, writing puts, and
buying calls tend to increase the fund's exposure to the underlying
instrument. Selling futures, buying puts, and writing calls tend to
decrease the fund's exposure to the underlying instrument, or hedge other
fund investments. Futures contracts and written options involve, to varying
degrees, risk of loss in excess of the futures variation margin or the
option value reflected in the Statement of Assets and Liabilities. The
underlying face amount at value is shown in the schedule of investments
under the caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the con
tracts, or if the counterparties do not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
INDEXED SECURITIES. The fund may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
fund uses these securities to increase or decrease its exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At period end, the fund had
no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $13,380,679,000 and $13,613,831,000, respectively, of which U.S.
government and government agency obligations aggregated $7,031,667,000 and
$6,751,945,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $2,481,475,000 and $2,719,656,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2700% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .20%. For
the period, the management fee was equivalent to an annual rate of .52% of
average net assets.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
During the period August 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $3,187,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This
5. SECURITY LENDING - CONTINUED
collateral must be maintained at not less than 100% of the market value of
the loaned securities during the period of the loan. At period end, the
value of the securities loaned and the value of collateral amounted to
$1,084,000 and $1,182,000, respectively.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balance during the period for which
loans were outstanding amounted to $7,264,000. The weighted average
interest rate was 5.25%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$600,000 under this arrangement.
8. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
(AMOUNTS IN THOUSANDS)
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Sherritt, Inc. (a) $ -- $ 30,638 $ - $ -
(a) Non-income producing.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and the Shareholders of Fidelity
Balanced Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Puritan Trust: Fidelity Balanced Fund, including the schedule of
portfolio investments, as of July 31, 1995, and the related statement of
operations for the year then ended, the statement s of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1995 by correspondence with the custodian
and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Puritan Trust: Fidelity Balanced Fund as of July 31, 1995,
the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 8, 1995
DISTRIBUTIONS
A total of 29% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 37% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1996 of these percentages for
use in preparing 1995 income tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert Haber, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
GLOBAL BALANCED
FUND
ANNUAL REPORT
JULY 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 25 Notes to the financial statements.
REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been positive market indications so far in 1995, no one
can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 LIFE OF
YEAR FUND
Global Balanced 3.42% 30.48%
Morgan Stanley World Index 14.04% 47.04%
Salomon Brothers World Government Bond Index 18.13% 33.46%
Average Global Flexible Fund 10.08% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
February 1, 1993. For example, if you invested $1,000 in a fund that had a
5% return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to the performance of the Morgan Stanley
World Index - a common proxy for stocks across the world - and the
performance of the Salomon Brothers World Government Bond Index, a broad
measure of government bonds across the world. To measure how the fund's
performance stacked up against its peers, you can compare it to the average
global flexible fund, which reflects the performance of 43 global flexible
portfolio funds with similar objectives tracked by Lipper Analytical
Services over the past 12 months. These benchmarks include reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 LIFE OF
YEAR FUND
Global Balanced 3.42% 11.25%
Morgan Stanley World Index 14.04% 16.70%
Salomon Brothers World Government Bond Index 18.13% 12.26%
Average Global Flexible Fund 10.08% n/a
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
Global Balanced ms004 sb006
02/01/93 10000.00 10000.00 10000.00
02/28/93 10490.00 10233.90 10197.00
03/31/93 11161.12 10824.22 10354.03
04/30/93 11752.77 11322.89 10572.50
05/31/93 11983.41 11580.84 10678.23
06/30/93 11853.13 11480.71 10655.80
07/31/93 12064.62 11714.25 10685.64
08/31/93 12759.49 12248.33 11007.28
09/30/93 12696.03 12019.10 11138.27
10/31/93 13268.94 12347.41 11119.33
11/30/93 13115.48 11646.04 11040.38
12/31/93 13738.72 12213.06 11134.23
01/31/94 14417.31 13015.73 11223.30
02/28/94 13895.32 12844.42 11150.35
03/31/94 12974.09 12287.79 11134.74
04/30/94 12795.94 12664.77 11146.99
05/31/94 13005.53 12694.48 11048.89
06/30/94 12385.09 12656.32 11208.00
07/31/94 12616.58 12894.04 11297.66
08/31/94 12879.65 13279.41 11258.12
09/30/94 12848.08 12927.56 11339.18
10/31/94 12679.72 13292.32 11520.60
11/30/94 12321.95 12712.87 11361.62
12/31/94 12164.11 12833.00 11393.43
01/31/95 11837.91 12637.29 11632.69
02/28/95 11964.18 12818.46 11930.49
03/31/95 12300.91 13433.19 12639.16
04/30/95 12490.31 13898.23 12872.99
05/31/95 12500.83 14013.98 13236.01
06/30/95 12532.40 14006.52 13314.10
07/31/95 13048.01 14704.17 13346.05
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Global Balanced Fund on February 1, 1993, when the fund started. As the
chart shows, by July 31, 1995, the value of your investment would have
grown to $13,048 - a 30.48% increase on your initial investment. For
comparison, look at how both the Morgan Stanley World Index and Salomon
Brothers World Government Bond Index did over the same period. With
dividends reinvested, the same $10,000 investment in the Morgan Stanley
World Index would have grown to $14,704 - a 47.04% increase. If you had put
$10,000 in the Salomon Brothers World Government Bond Index, it would have
grown to $13,346 - a 33.46% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks or bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond markets worldwide
recovered from the sharp
declines they experienced in
1994. With a more beneficial
interest rate environment, yields
fell and prices rose on most types
of fixed-income investments. The
Lehman Brothers Aggregate
Bond Index - a broad measure
of taxable bonds in the U.S.
market - had a total return of
10.11% for the 12 months ended
July 31, 1995. The Salomon
Brothers World Government
Bond Index - a proxy of bond
market performance in
developed nations including the
U.S. - rose 18.13% during the
same period. Emerging market
bonds rebounded from the
negative effects of Mexico's peso
devaluation in December 1994.
The J.P. Morgan Emerging
Markets Bond Index rose 8.36%.
Stock market performance
worldwide was mixed, with the
U.S. market benefiting - and
overseas markets suffering -
from a flight of capital to the U.S.
Strong corporate earnings and
the favorable interest rate
environment helped propel the
Standard & Poor's Composite
Index of 500 Stocks to a
12-month total return of 26.11%
- well above its historical annual
average of roughly 12%. In
February, the Dow Jones
Industrial Average closed above
4000 for the first time. The
Morgan Stanley EAFE (Europe,
Australia, Far East) Index
returned 6.95% for the 12-month
period, while the Morgan Stanley
Emerging Markets Free Index
returned -3.76%.
An interview with Richard Mace and Robert Haber, Portfolio Managers of
Fidelity Global Balanced Fund
NOTE TO SHAREHOLDERS: In February 1995, Richard Mace (left) began
co-managing the fund with Mr. Haber.
Q. BOB, HOW HAS THE FUND PERFORMED?
R.H. Over the past 12 months, the fund had a total return of 3.42%. That
trailed the average global flexible fund, which returned 10.08% during the
same period, according to Lipper Analytical Services.
Q. WHY DID THE FUND LAG ITS PEER GROUP AVERAGE?
R.H. Most of the fund's underperformance was due to its fixed-income
investments. First, losses from emerging market bonds - mainly issued by
Argentina and Mexico - back in 1994 are still negatively affecting the
fund's 12-month performance numbers. In addition, the fund did not invest
in Japanese government bonds during the period, while some of its peers may
have. A very strong yen and falling interest rates in Japan combined to
make these bonds among the best performing fixed-income investments in the
world over the past two years. As recently as six months ago, we felt these
bonds were overvalued, but a weak economy in Japan kept propelling interest
rates lower and bond prices higher.
Q. HAVE YOU MADE CHANGES TO THE BOND PORTION OF THE FUND?
R.H. We have. The first change has to do with the way in which we approach
global fixed-income investing. Whereas we used to view opportunities in
stocks and bonds separately, now we examine them relative to each other.
For example, when investigating a prospective country in which to invest,
we'll look at the valuations of stocks and bonds together and generally
invest in the cheaper asset class. In addition, we're now using the Morgan
Stanley World Government Bond Index as a loose benchmark for the fund's
bonds. That simply means that we'll use the country weightings of the index
as a guidepost - overweighting those countries where we find the best value
and underweighting those whose bonds we feel are expensive. Finally, we're
investing in bonds with higher credit quality, generally to match the
credit quality of those of the index. That means we're investing mainly in
top-rated government bonds of developed countries. The goal of these
changes is simple: we want the bond component of the fund to provide more
consistent returns with reduced volatility and risk.
Q. LET'S TURN TO STOCKS. WHERE HAVE YOU FOUND OPPORTUNITIES?
R.H. I'll discuss North America, and I'll let Rick take Europe and Japan.
During the past 12 months, I've focused the fund's North American stock
investments in commodity cyclicals - stocks in basic industries such as
aluminum, chemicals and paper, which tend to rise and fall with the
economy. Strengthening economies in the U.S. and Canada have led to
increased demand for commodities and improving earnings growth for these
companies. However, up until a few months ago, investors worried that
1994's rising interest rates might lead to a recession and earnings
disappointments for commodity companies. Once rates began to fall in 1995,
the wind was at the backs of these stocks, and they began to perform quite
well. Convertible preferred stock issued by Occidental Petroleum and
convertible into shares of Canadian Occidental Petroleum, Ltd. - a
worldwide oil and gas production company that also manufactures industrial
chemicals - and Canadian paper manufacturer Domtar are a couple of examples
of cyclical issues that made positive contributions to the fund's
performance during the period.
Q. RICK, THE FUND'S STAKE IN JAPANESE STOCKS HAS INCREASED FROM 14.2% SIX
MONTHS AGO TO 19.4% ON JULY 31. WHERE HAVE YOU FOUND OPPORTUNITIES THERE?
R.M. As with the fund's North American cyclicals, we may have been a bit
early with our Japanese investments. Earlier this year, several factors
combined to dampen investor sentiment and depress stock prices in Japan.
They included a strong yen, a weak economy, the Kobe earthquake, the
Baring's bank scandal and a subway nerve-gas attack. Despite this
adversity, many Japanese companies are telling me that business is better
than expected. Combine these favorable business prospects with extremely
cheap stock prices, and you may have a real opportunity.
Q. WITHIN JAPAN, WHERE HAVE YOU
FOCUSED YOUR EFFORTS?
R.M. I've mostly concentrated on three main groups: exporters, retailers
and domestic industrial companies. As a group, exporters such as Hitachi,
Sony and Honda have done an excellent job cleaning up their balance sheets
and cutting costs. Certainly, the strong yen has made exporters' products
less competitive overseas. However, many have compensated to a certain
extent by moving some production abroad - which has saved on costs - and by
raising product prices. As for retailers, several - such as Ito Yokado -
are well positioned to rebound as the Japanese economy recovers and
consumer confidence picks up. Finally, I expect selected domestic
industrial companies to benefit from an improving economy as well. Examples
include Omron, which manufactures control components, and Mitsubishi
Electric, which makes electric machinery and consumer electronics. In fact,
these stocks did begin to rebound from their depressed levels late in the
period.
Q. HOW ABOUT EUROPE?
R.M. The fund had a modest stake in Europe during the period, and these
stocks did reasonably well. Many of the fund's European stocks should
benefit from economic expansion there, but beyond that, I'm not playing any
strong themes. A couple of the fund's larger European investments include
Koninklijke PPT Nederland (KPN), which runs the Netherlands' post office
and telephone operations, and Veba, a German utility and chemical company.
Q. BOB, IN THE PAST, THE FUND HAS USED A HEDGING STRATEGY TO REDUCE
CURRENCY RISK - THE RISK THAT MOVEMENTS IN A COUNTRY'S CURRENCY WILL
NEGATIVELY AFFECT THE FUND'S INVESTMENTS THERE. IS THIS STRATEGY STILL IN
PLACE?
R.H. We've reduced the fund's investments in forward foreign currency
contracts, which we use to hedge foreign currencies, and we expect to
reduce these investments further. The risk of hedging is that, if the U.S.
dollar falls in value relative to the currency of a country in which the
fund is hedged, investments there will be negatively affected. That
happened during much of 1994 and early 1995, lessening the fund's total
return. Going forward, our reduced use of hedging may result in a bit more
volatility because the fund will have a greater exposure to foreign
currency movements. However, it's important to remember that currencies can
move both ways, and these movements can boost returns as well. In addition,
changes made to the fixed-income portion of the fund described earlier
could help offset an increase in volatility due to foreign currency
exposure.
Q. RICK, WHAT'S IN STORE FOR THE
REMAINDER OF 1995?
R.M. The fund has a heavy concentration in value-oriented cyclical stocks,
which should do well to the extent that economies around the world recover.
The Japanese market remains extremely cheap on a historical basis, and I
believe that stock valuations - prices relative to earnings - should begin
to reflect improving business prospects there. U.S. stocks have had a
strong run. I think corporate earnings growth in the U.S. will depend
largely on whether the Federal Reserve Board lowers interest rates. Again,
cyclicals should benefit from any economic strengthening due to rate cuts.
As for bonds, many markets have rallied quite strongly thus far in 1995. I
think that, going forward, chances are good that we'll see an increased
amount of the total return of the fund's bond investments result from
interest payments rather than price appreciation.
FUND FACTS
GOAL: high current income
while preserving capital and
considering the potential for
capital growth, by investing
in debt and equity securities
from around the world
START DATE: February 1, 1993
SIZE: as of July 31, 1995,
more than $148 million
MANAGER: Robert Haber, since
1993; manager, Fidelity
Balanced Fund, since 1986;
Fidelity Advisor Income &
Growth Fund, since 1987;
joined Fidelity in 1985.
Richard Mace, since February
1995; manager, Fidelity
International Growth & Income
Fund, since 1994; Fidelity
International Value Fund, since
1994; manager, Select
Chemicals, Industrial Materials,
and Transportation Portfolios,
1989-92; joined Fidelity in 1987
(checkmark)
BOB HABER AND RICK MACE ON
THE FUND'S STRATEGY:
R.H. "Currently, the fund is
quite cyclically-oriented. In
the months ahead, its
performance should be
largely dependent upon the
performance of the
economies of the countries in
which we're invested.
Obviously, we're optimistic
about the prospects for
positive growth in the
economies of many
developed nations around the
world. Broadly speaking,
we're searching for, and
investing in, those stocks
whose earnings tend to rise
during periods of economic
growth."
R.M. "You might say we're
investing the fund in line with
the actions of several key
central banks around the
world. At this point, it appears
that three of those central
banks - the Federal Reserve
Board in the U.S.,
Bundesbank in Germany and
the Bank of Japan - are
coordinating policies to lower
interest rates in order to
stimulate their respective
economies. If steady
economic growth in these
countries is the net result of
these policies, the fund
should be well positioned to
benefit."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Omron Corp. (Japan) 2.7 1.3
Occidental Petroleum Corp., Series A,
Indexed $3.00 (United States) 2.7 1.6
Hitachi Ltd. (Japan) 1.6 1.2
Mitsubishi Electric Co. Ord. (Japan) 1.6 1.1
Ito Yokado Co. Ltd. (Japan) 1.5 0.7
TOP FIVE BONDS AS OF JULY 31, 1995
(BY ISSUER, WITH MATURITIES % OF FUND'S % OF FUND'S
MORE THAN ONE YEAR) INVESTMENTS INVESTMENTS
6 MONTHS AGO
United States Treasury (various 13.5 7.9
issues)
Treuhandanstalt 7 1/2%, 9/9/04 10.1 0.0
French Government (various issues) 7.3 4.0
United Kingdom, Great Britain &
Northern Ireland 9%, 10/13/08 5.4 0.0
Thermo Electron Corp. 4 5/8%, 8/1/97 4.7 2.3
TOP FIVE COUNTRIES AS OF JULY 31, 1995
(BY LOCATION OF ISSUER) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
United States of America 37.0 32.3
Japan 19.5 18.3
Germany 12.2 7.9
Canada 6.6 8.2
United Kingdom 6.5 7.0
ASSET ALLOCATION
AS OF JULY 31, 1995* AS OF JANUARY 31, 1995**
Stocks and
equity futures 47.2%
Bonds 38.3%
Convertible
securities 11.4%
Short-term
investments 3.1%
FOREIGN
INVESTMENTS 63.0%
Stocks and
equity futures 44.4%
Bonds 36.4%
Convertible
securities 16.1%
Short-term
investments 3.1%
FOREIGN
INVESTMENTS 67.7%
Row: 1, Col: 1, Value: 3.1
Row: 1, Col: 2, Value: 11.4
Row: 1, Col: 3, Value: 38.3
Row: 1, Col: 4, Value: 47.2
Row: 1, Col: 1, Value: 3.1
Row: 1, Col: 2, Value: 16.1
Row: 1, Col: 3, Value: 36.4
Row: 1, Col: 4, Value: 36.4
*
**
INVESTMENTS JULY 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 44.6%
SHARES VALUE (NOTE 1)
(000S)
AUSTRIA - 0.1%
Mayr Melnhof Karton AG 1,900 $ 124,645
BERMUDA - 0.1%
ACE Ltd. 3,200 94,800
BRAZIL - 0.1%
Aracruz Celulose SA ADR 10,900 133,525
CANADA - 6.2%
Avenor, Inc. (a) 20,300 492,971
Crestbrook Forest Industries Ltd. 3,400 62,314
Domtar, Inc. (a) 180,700 1,920,861
Falconbridge Ltd. 10,800 215,755
Falconbridge Ltd. (h) 20,600 147,518
Fletcher Challenge Canada Ltd. Class A 25,700 461,603
Inco Ltd. 9,100 309,382
Mercer International, Inc. (SBI) (a) 47,000 1,069,250
Noranda, Inc. 13,800 292,126
Pancanadian Petroleum Ltd. 8,500 319,361
Pinnacle Resources Ltd. (a) 102,700 1,091,712
QUNO Corp. (a) 25,400 465,525
SHL Systemhouse, Inc. (a) 20,700 165,032
Sherritt, Inc. (a) 54,000 633,408
Ulster Petroleums Ltd. (a) 314,400 1,181,261
Wascana Energy, Inc. 42,500 389,465
9,217,544
DENMARK - 0.6%
International Service Systems AS, Series B 7,500 218,480
Teledanmark AS Class B 7,500 418,870
Unidanmark AS Class A 5,000 257,909
895,259
FINLAND - 1.3%
Kemira OY 100,000 868,324
Kemira OY sponsored ADR (e) 29,000 496,625
Valmet Corp. OY Ord. 20,000 580,469
1,945,418
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FRANCE - 1.5%
Axa SA 4,000 $ 227,163
Dapta-Mallinjoud SA 7,945 180,879
Generale des Eaux 4,078 482,348
Michelin SA Cie Generale des Etablissements Class B 20,000 947,000
Total SA Class B 7,122 431,388
2,268,778
GERMANY - 2.1%
Deutsche Bank AG 18,200 897,691
SGL Carbon AG (a) 13,000 757,782
Veba Vereinigte Elektrizitaets & Bergwerks AG Ord. 35,000 1,452,368
3,107,841
ITALY - 0.2%
Fiat SPA 75,000 290,390
JAPAN - 19.4%
Canon, Inc. 100,000 1,810,569
Daiwa Securities Co. Ltd. 70,000 839,651
Fuji Electric Co. Ltd. 80,000 438,158
Fuji Photo Film Co. Ltd. 20,000 525,065
Fujitsu Ltd. 30,000 317,415
Hitachi Ltd. 230,000 2,436,121
Honda Motor Co. Ltd. 20,000 325,902
Hoya Corp. 7,000 209,121
Ito Yokado Co. Ltd. 40,000 2,204,368
Kyocera Corp. 6,000 517,370
Matsushita Electric Industrial Co. Ltd. 100,000 1,663,460
Mitsubishi Electric Co. Ord. 325,000 2,401,552
Murata Manufacturing Co. Ltd. 6,000 262,080
NEC Corp. 15,000 178,228
Nichicon Corp. 62,000 884,010
Nifco, Inc. 30,000 397,194
Nitto Denko Corp. 120,000 1,968,994
Nomura Securities Co. Ltd. 60,000 1,154,238
Omron Corp. 180,000 4,094,149
Rohm Co. Ltd. 12,000 680,321
Sankyo Co. Ltd. 11,500 270,680
Secom Co. Ltd. 2,000 123,119
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
JAPAN - CONTINUED
Sekisui Chemical Co. Ltd. 10,000 $ 119,950
Shin-Etsu Chemical Co. Ltd. 10,000 200,294
Sony Corp. 30,000 1,619,329
Suzuki Motor Corp. 23,000 281,091
TDK Corp. 10,000 508,091
Tokyo Electron Ltd. 5,000 187,281
Toppan Printing Co. Ltd. 6,000 84,870
Toshiba Corp. 50,000 347,969
Uny Co. Ltd. 40,000 651,805
Wako Electric Co. Ltd. 15,000 315,718
Tayca Corp. (a) 60,000 210,479
Yamanouchi Pharmaceutical Co. Ltd. 23,000 510,128
Yoshinoya D&C Co. Ltd. Ord. 8 110,444
28,849,214
NETHERLANDS - 1.3%
Koninklijke PPT Nederland 45,000 1,682,974
Vendex International (Bearer) (a) 11,000 300,933
1,983,907
NORWAY - 1.2%
Kverneland Gruppen AS 30,000 488,361
Transocean Drilling AS (a) 60,000 820,446
Wilrig AS (a) 40,000 416,734
1,725,541
SPAIN - 0.2%
Banco Bilbao Vizcaya SA Ord. (Reg.) 10,000 313,982
SWEDEN - 0.4%
Esselte AB Class B Free shares 8,000 103,463
Svedala Industri 10,000 296,820
Volvo AB Class B 14,000 277,032
677,315
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED KINGDOM - 1.1%
BET PLC Ord. 400,000 $ 848,808
British Petroleum PLC ADR 4,100 372,075
Cookson Group 70,000 294,848
Eurocamp PLC 28,571 96,640
Resort Hotels PLC (a) 570,000 11
WPP Group PLC 6,300 13,519
1,625,901
UNITED STATES OF AMERICA - 8.8%
Alaska Air Group, Inc. (a) 29,400 565,950
Allied Products Corp. 16,100 346,150
American Buildings Co. 52,700 1,192,338
Ameritech Corp. 3,200 154,800
Atlantic Richfield Co. 600 69,150
Brush Wellman, Inc. 1,500 33,188
California Microwave Corp. (a) 3,700 96,200
Chase Brass Industries, Inc. (a) 67,300 925,375
Chrysler Corp. 15,400 750,750
Coastal Corp. (The) 600 18,675
Coda Energy, Inc. (a) 64,300 409,913
Consolidated Stores Corp. (a) 9,800 218,050
Galey & Lord, Inc. (a) 2,800 39,550
Guilford Mills, Inc. 2,100 57,488
Huntco, Inc. Class A 2,900 46,763
IMCO Recycling, Inc. 14,700 294,000
Jayhawk Acceptance Corp. 200 2,000
Leggett & Platt, Inc. 1,000 46,375
Litton Industries, Inc. (a) 3,000 115,500
Mac Frugals Bargains, Inc. (a) 1,800 31,725
Nu-West Industries, Inc. 400 4,900
Pier 1 Imports, Inc. 11,700 114,075
Policy Management Systems Corp. (a) 500 26,813
Pride Petroleum Services, Inc. (a) 107,200 830,800
Proffitts, Inc. (a) 19,000 650,750
Redman Industries, Inc. (New) (a) 2,300 54,625
Reynolds Metals Co. 12,300 768,750
Rohm & Haas Co. 1,600 93,200
Ryan's Family Steak Houses, Inc. (a) 13,100 91,700
Santa Fe Energy Resources, Inc. (a) 2,600 24,375
Schnitzer Steel, Inc. Class A 12,000 333,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED STATES OF AMERICA - CONTINUED
Sherwin-Williams Co. 2,200 $ 80,300
Sonic Corp. 1,000 30,250
Southern New England Telecommunications Corp. 3,300 113,025
Sovran Self Storage, Inc. (a) 1,700 39,100
Starwood Lodging Trust combined certificate (SBI) (a) 2,100 54,600
Texas Industries, Inc. 21,700 957,513
Textron, Inc. 7,800 518,700
Tuesday Morning Corp. (a) 85,500 534,375
Unifi, Inc. 12,700 320,675
Universal Forest Products, Inc. 10,000 83,750
Varlen Corp. 47,370 1,136,880
Vertex Communications Corp. (a) 17,500 284,375
Vulcan Materials Co. 1,800 97,200
WMX Technologies, Inc. 7,800 243,750
Welcome Home (a) 55,400 166,200
Wheelabrator Technologies, Inc. 4,600 76,475
13,144,096
TOTAL COMMON STOCKS
(Cost $61,231,161) 66,398,156
CONVERTIBLE PREFERRED STOCKS - 3.3%
UNITED STATES OF AMERICA - 3.3%
Alumax, Inc., Series A, $4.00 200 28,900
Battle Mountain Gold Co. $3.25 100 5,400
Kaiser Aluminum Corp. $0.96 17,800 253,650
Occidental Petroleum Corp., Series A, Indexed $3.00 65,200 4,050,550
Reynolds Metals Co. $3.31 9,900 545,738
Santa Fe Energy Resources, Inc. $0.732 9,900 95,288
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $4,083,885) 4,979,526
CORPORATE BONDS - 8.3%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - 8.1%
CANADA - 0.4%
Domtar, Inc. 8%, 3/18/03 - CAD 80,000 $ 133,133
Horsham Corp. 3 1/4%, 12/10/18 Ba2 340,000 295,800
Inco Ltd. 5 3/4%, 7/1/04 Baa2 150,000 194,250
623,183
CHILE - 1.0%
Compania de Telefonos de Chile yankee
4 1/2%, 1/15/03 (g) Baa2 1,466,000 1,575,950
JAPAN - 0.1%
Matsushita Electric Works Co. Ltd.
2.70%, 5/31/02 - JPY 13,000,000 161,231
SWEDEN - 0.8%
Investor AB 8%, 6/21/01 (g) A- SEK 5,350,000 1,160,742
UNITED STATES OF AMERICA - 5.8%
Aspect Telecommunications Corp.
5%, 10/15/03 (e)(g) B3 382,000 505,195
Orbital Sciences Corp. 6 3/4%, 3/1/03 (g) B3 829,000 1,106,715
Thermo Electron Corp. 4 5/8%, 8/1/97 (e)(g) Ba1 3,488,000 6,941,120
Wendy's International, Inc. 7%, 4/1/06 (g) Baa3 40,000 61,800
8,614,830
TOTAL CONVERTIBLE BONDS 12,135,936
NONCONVERTIBLE BONDS - 0.2%
MEXICO - 0.2%
First Mexican Acceptance Corp.
euro 10 3/4%, 9/15/96 - 500,000 225,000
TOTAL CORPORATE BONDS
(Cost $11,060,248) 12,360,936
GOVERNMENT OBLIGATIONS (I) - 40.9%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
FRANCE - 7.3%
French Government:
OAT 7 3/4%, 10/25/05 Aaa FRF 30,000,000 $ 6,410,109
8 1/2%, 10/25/08 Aaa FRF 20,000,000 4,488,120
10,898,229
GERMANY - 10.1%
Treuhandanstalt 7 1/2%, 9/9/04 Aaa DEM 20,000,000 15,037,334
ITALY - 1.9%
Republic of Italy (BTP) 8 1/2%, 8/1/99 (d) A1 ITL 5,000,000 2,831,500
MEXICO - 0.0%
Mexico Value Recovery (rights) (a) - 1,086,000 11
UNITED KINGDOM - 5.4%
United Kingdom, Great Britain & Northern Ireland
9%, 10/13/08 Aaa GBP 4,750,000 8,009,659
UNITED STATES OF AMERICA - 16.2%
Federal National Mortgage Association
discount note 0%, 9/21/95 Aaa 2,800,000 2,778,160
U.S. Treasury Bill, yields at date of
purchase 5.4638%, 9/21/95 Aaa 1,348,000 1,337,639
U.S. Treasury Bonds:
8 1/8%, 8/15/19 (f) Aaa 6,259,000 7,112,790
7 1/2%, 11/15/24 Aaa 970,000 1,044,719
U.S. Treasury Notes:
8 1/2%, 5/15/97 Aaa 6,834,000 7,132,988
7 1/8%, 9/30/99 Aaa 1,450,000 1,499,837
7 3/4%, 12/31/99 Aaa 1,900,000 2,013,411
6 1/4%, 2/15/03 Aaa 1,277,000 1,265,022
24,184,566
TOTAL GOVERNMENT OBLIGATIONS
(Cost $60,938,609) 60,961,299
REPURCHASE AGREEMENTS - 2.9%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.82%,
dated 7/31/95 due 8/1/95 $ 4,302,695 $ 4,302,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $141,615,903) $ 149,001,917
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
47 Nikkei 225 Index Futures September, 1995 $ 3,917,450 $ 212,606
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.6%
SECURITIES SOLD SHORT
NUMBER OF SHARES ISSUER VALUE
9,800 Aspect Telecommunications Corp. $ 502,250
17,500 Compania de Telefonos de Chile sponsored ADR 1,369,375
34,300 Investor AB free shares 1,119,901
57,500 Orbital Sciences Corp. 1,013,437
161,267 Thermo Electron Corp. 6,894,143
3,000 Wendy's International, Inc. 55,875
TOTAL SECURITIES SOLD SHORT
(Total proceeds $8,604,898) $ 10,954,981
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 7.4%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
8,244,987 CAD 8/3/95 $ 6,044,080 $ 15,302
2,264,584 CHF 9/7/95 1,964,932 4,932
32,993,268 DEM 8/24/95 to 8/31/95 23,806,288 191,360
41,986,460 FRF 8/23/95 8,769,561 317,147
1,235,326,750 ITL 8/23/95 773,364 28,136
48,753,245 JPY 8/15/95 552,906 (30,553)
TOTAL CONTRACTS TO BUY
(Payable amount $41,384,807) $ 41,911,131 526,324
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 28.1%
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
16,907,140 CAD 8/3/95 $ 12,393,970 $ 10,627
2,264,584 CHF 9/7/95 1,964,932 4,100
32,993,268 DEM 8/24/95 to 8/31/95 23,806,288 (545,346)
41,986,460 FRF 8/23/95 8,769,561 (569,560)
1,235,326,750 ITL 8/23/95 773,364 (37,001)
48,753,245 JPY 8/15/95 552,906 22,367
TOTAL CONTRACTS TO SELL
(Receivable amount $47,146,208) $ 48,261,021 (1,114,813)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 32.4%
$ (588,489)
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
CHF - Swiss franc
DEM - German deutsche mark
FRF - French franc
GBP - British pound
ITL - Italian lira
JPY - Japanese yen
SEK - Swedish krona
LEGEND
1. Non-income producing
2. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Principal amount in thousands.
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $7,942,940 or 5.3% of net
assets.
6. A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $1,136,410.
7. Securities pledged to cover margin requirements on open short sale
transactions (see Note 2 of Notes to Financial Statements). At the period
end the value of securities pledged amounted to $11,351,522.
8. Purchased on an installment basis. Market value reflects only those
payments made through 7/31/95. The remaining installments aggregating CAD
$391,400 are due 1/31/97.
9. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 38.1% AAA, AA, A 33.6%
Baa 1.2% BBB 5.8%
Ba 4.8% BB 0.0%
B 1.1% B 0.7%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.3%
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of
Investment in Securities (Unaudited)
Basic Industries 8.5%
Construction & Real Estate 1.7
Durables 4.7
Energy 12.0
Finance 3.4
Government Obligations 40.9
Industrial Machinery & Equipment 7.3
Equity Futures 2.6
Retail & Wholesale 3.2
Technology 7.7
Utilities 4.3
Others (individually less than 1%) 3.7
100.0%
INCOME TAX INFORMATION
At July 31, 1995, the aggregate cost of investment securities for income
tax purposes was $141,884,968. Net unrealized appreciation aggregated
$7,116,949, of which $10,717,178 related to appreciated investment
securities and $3,600,229 related to depreciated investment securities.
At July 31, 1995, the fund had a capital loss carryforward of
approximately $10,190,000 all of which will expire on July 31, 2003.
The fund has elected to defer to its fiscal year ending July 31, 1996
$14,797,000 of losses recognized during the period November 1, 1994 to July
31, 1995.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS JULY 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 149,001,917
agreements of $4,302,000) (cost $141,615,903) -
See accompanying schedule
Securities sold short, at value (proceeds received (10,954,981) $ 138,046,936
$8,604,898)
Restricted cash on securities sold short 8,604,898
Cash 763
Receivable for investments sold 2,410,207
Unrealized appreciation on foreign currency contracts 602,530
Receivable for closed foreign currency contracts 384,539
Receivable for fund shares sold 204,554
Dividends receivable 126,672
Interest receivable 2,570,632
Other receivables 3,591
TOTAL ASSETS 152,955,322
LIABILITIES
Payable for investments purchased 464,608
Unrealized depreciation on foreign currency contracts 1,191,019
Payable for closed foreign currency contracts 465,617
Payable for fund shares redeemed 1,645,409
Accrued management fee 96,790
Payable for daily variation on futures contracts 29,375
Other payables and accrued expenses 231,239
TOTAL LIABILITIES 4,124,057
NET ASSETS $ 148,831,265
Net Assets consist of:
Paid in capital $ 169,022,649
Undistributed net investment income 384,901
Accumulated undistributed net realized gain (loss) on (25,285,131)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 4,708,846
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 12,007,334 shares outstanding $ 148,831,265
NET ASSET VALUE, offering price and redemption price per $12.40
share ($148,831,265 (divided by) 12,007,334 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME $ 2,436,521
Dividends
Interest 10,933,901
TOTAL INCOME 13,370,422
EXPENSES
Management fee $ 1,705,522
Transfer agent fees 668,329
Accounting fees and expenses 127,055
Non-interested trustees' compensation 1,735
Custodian fees and expenses 154,957
Registration fees 19,615
Audit 60,622
Interest 20,858
Dividends on securities sold short 221,385
Total expenses before reductions 2,980,078
Expense reductions (23,304) 2,956,774
NET INVESTMENT INCOME 10,413,648
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (18,593,571)
Foreign currency transactions (7,234,163)
Futures contracts (2,070,077)
Short sales 1,060,489 (26,837,322)
Change in net unrealized appreciation (depreciation) on:
Investment securities 20,482,811
Assets and liabilities in foreign currencies 988,759
Futures contracts 34,433
Short sales (3,863,022) 17,642,981
NET GAIN (LOSS) (9,194,341)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,219,307
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 10,413,648 $ 8,239,034
Net investment income
Net realized gain (loss) (26,837,322) (10,895,215)
Change in net unrealized appreciation (depreciation) 17,642,981 (14,173,854)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,219,307 (16,830,035)
FROM OPERATIONS
Distributions to shareholders - (2,705,641)
From net investment income
From net realized gain - (2,011,483)
In excess of net realized gain - (3,553,845)
Return of capital - (3,298,633)
TOTAL DISTRIBUTIONS - (11,569,602)
Share transactions 57,907,802 710,176,957
Net proceeds from sales of shares
Reinvestment of distributions - 11,133,210
Cost of shares redeemed (223,542,247) (463,821,613)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (165,634,445) 257,488,554
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (164,415,138) 229,088,917
NET ASSETS
Beginning of period 313,246,403 84,157,486
End of period (including undistributed net investment $ 148,831,265 $ 313,246,403
income (loss) of $384,901 and $(6,426,643),
respectively)
OTHER INFORMATION
Shares
Sold 4,870,593 54,873,359
Issued in reinvestment of distributions - 878,740
Redeemed (18,989,120) (36,649,262)
Net increase (decrease) (14,118,527) 19,102,837
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED JULY 31, FEBRUARY 1, 1993
(COMMENCEMENT
OF
OPERATIONS) TO
1995 1994 F JULY 31, 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.99 $ 11.98 $ 10.00
Income from Investment Operations
Net investment income .28 .32 D .15
Net realized and unrealized gain (loss) .13 E .25 E 1.91
Total from investment operations .41 .57 2.06
Less Distributions - (.15) (.08)
From net investment income
From net realized gain - (.11) -
In excess of net realized gain - (.20) -
Return of capital - (.10) -
Total distributions - (.56) (.08)
Net asset value, end of period $ 12.40 $ 11.99 $ 11.98
TOTAL RETURN B, C 3.42% 4.58% 20.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 148,831 $ 313,246 $ 84,157
Ratio of expenses to average net assets 1.33% 1.67% 2.12% A
Ratio of expenses to average net assets before 1.34% 1.68% 2.12% A
expense reductions
Ratio of net investment income to average 4.68% 2.56% 4.02% A
net assets
Portfolio turnover rate 242% 226% 172% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE AGGREGATE NET LOSS
ON INVESTMENTS FOR THE PERIOD ENDED DUE
TO THE TIMING OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F EFFECTIVE AUGUST 1, 1993 THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE,
AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET
INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Global Balanced Fund (the fund) is a fund of Fidelity Puritan
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities for which quotations are not readily available are valued
primarily using dealer-supplied valuations or at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities
maturing within sixty days of their purchase date are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities,
income receipts, and expense payments are translated into U.S. dollars at
the prevailing exchange rate on the respective dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, foreign currency transactions, passive foreign
investment companies (PFIC), market discount, partnerships, non-taxable
dividends, loss carryforwards and losses deferred due to wash sales, and
excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net investment income
and accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
For the period ended July 31, 1994, the fund's distributions exceeded the
aggregate amount of taxable income and net realized gains resulting in a
return of capital. This was due to certain foreign currency losses which
decreased taxable income available for distribution after certain
distributions had been made.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the fund's Statement of Assets and Liabilities. The U.S. dollar value of
the currencies the fund has committed to buy or sell is shown in the
schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
the fund has acquired or hedged through currency contracts at period end.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms.
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date. Contracts that have been offset with different
counterparties are reflected as both a contract to buy and a contract to
sell in the schedule of investments under the caption "Forward Foreign
Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. The fund's investment adviser, Fidelity Management &
Research Company (FMR), is responsible for determining that the value of
the underlying securities remains in accordance with the market value
requirements stated above.
SHORT SALES AGAINST THE BOX. The fund may hedge its investments against
changes in value by engaging in short sales against the box. In a short
sale against the box, the fund sells a borrowed security, while at the same
time either owning an identical security or having the right to obtain such
a security. By selling short against the box the equity underlying one of
its convertible holdings, the fund would seek to offset the effect that a
decline in the underlying equity might have on the value of the convertible
security. While the short sale is outstanding, the fund will not dispose of
the security hedged by the short sale.
The fund is required to establish a margin account with the broker lending
the security sold short. While the short sale is outstanding, the broker
retains the proceeds of the short sale and the fund instructs the custodian
to maintain in a separate account securities having a value at least equal
to the amount of the securities sold short.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock market and to fluctuations
in currency values. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts,
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS AND OPTIONS
- CONTINUED
and writing calls tend to decrease the fund's exposure to the underlying
instrument, or hedge other fund investments. Futures contracts and written
options involve, to varying degrees, risk of loss in excess of the futures
variation margin or the option value reflected in the Statement of Assets
and Liabilities. The underlying face amount at value is shown in the
schedule of investments under the caption"Futures Contracts." This amount
reflects each contract's exposure to the underlying instrument at period
end. Losses may arise from changes in the value of the underlying
instruments, if there is an illiquid secondary market for the contracts, or
if the counterparties do not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $564,159,210 and $698,187,536, respectively, of which U.S.
government and government agency obligations aggregated $85,839,056 and
$64,883,218, respectively.
The market value of futures contracts opened and closed during the period
amounted to $112,656,971 and $128,756,810, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2700% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during those periods,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .45%. For
the period, the management fee was equivalent to an annual rate of .77% of
average net assets .
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisers,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.) and Fidelity Investments
Japan Ltd. (FIJ). Under the sub-advisory arrangements, FMR may receive
investment advice and research services and may grant the sub-advisers
investment
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE - CONTINUED
management authority to buy and sell securities. FMR pays its sub-advisers
either a portion of its management fee or a fee based on costs incurred for
these services. FIIA pays FIIAL U.K. a fee based on costs incurred for
either service.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
During the period August 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $82,630 for the period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $8,894,000 and $2,502,211,
respectively. The weighted average interest rate was 5.46%.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$23,304 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and the Shareholders of
Fidelity Global Balanced Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Puritan Trust: Fidelity Global Balanced Fund, including the
schedule of portfolio investments, as of July 31, 1995, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the two years in the period then ended,
and for the period February 1, 1993 (commencement of operations) to July
31, 1993. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Puritan Trust: Fidelity Global Balanced Fund as of July 31,
1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and
the financial highlights for each of the two years in the period then
ended, and for the period February 1, 1993 (commencement of operations) to
July 31, 1993, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 8, 1995
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
Fidelity International Investment Advisors, Pembroke, Bermuda
Fidelity International Investment Advisors (U.K.) Limited
Kent, England
Fidelity Investments Japan Ltd.
Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert Haber, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
PURITAN(registered trademark)
FUND
ANNUAL REPORT
JULY 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 47 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 51 Notes to the financial statements.
REPORT OF INDEPENDENT 57 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 58
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been positive market indications so far in 1995, no one
can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). Puritan has a 2% sales charge,
which was in effect October 1, 1987 through December 31, 1992, then waived
through 1995. The sales charge is being eliminated January 1, 1996.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Puritan 13.03% 93.21% 246.46%
Puritan (including 2% sales charge) 10.77% 89.34% 239.53%
Lehman Brothers Aggregate Bond Index 10.11% 54.28% 159.94%
S&P 500(registered trademark) 26.11% 83.44% 307.06%
Average Equity Income Fund 16.18% 71.72% 207.34%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 Stocks - a common proxy for the U.S. stock market - and the
performance of the Lehman Brothers Aggregate Bond Index, a broad measure of
the bond market. To measure how the fund's performance stacked up against
its peers, you can compare it to the average equity income fund, which
reflects the performance of 111 equity income funds with similar objectives
tracked by Lipper Analytical Services over the past 12 months. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Puritan 13.03% 14.08% 13.23%
Puritan (including 2% sales charge) 10.77% 13.62% 13.00%
Lehman Brothers Aggregate Bond Index 10.11% 9.06% 10.02%
S&P 500(registered trademark) 26.11% 12.90% 15.07%
Average Equity Income Fund 16.18% 11.30% 11.56%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Puritan
07/31/85 10000.00
08/31/85 9976.83
09/30/85 9937.46
10/31/85 10144.52
11/30/85 10515.77
12/31/85 10809.31
01/31/86 11124.16
02/28/86 11720.73
03/31/86 12194.47
04/30/86 12194.72
05/31/86 12346.05
06/30/86 12443.96
07/31/86 12119.92
08/31/86 12776.03
09/30/86 12535.67
10/31/86 12896.06
11/30/86 13013.48
12/31/86 13052.61
01/31/87 13849.76
02/28/87 14117.82
03/31/87 14356.09
04/30/87 14267.16
05/31/87 14247.02
06/30/87 14619.56
07/31/87 15034.35
08/31/87 15340.96
09/30/87 15021.96
10/31/87 12802.77
11/30/87 12347.46
12/31/87 12818.88
01/31/88 13597.13
02/29/88 14008.49
03/31/88 13751.15
04/30/88 13943.23
05/31/88 14180.52
06/30/88 14694.59
07/31/88 14729.03
08/31/88 14579.79
09/30/88 14994.69
10/31/88 15239.55
11/30/88 15134.61
12/31/88 15240.12
01/31/89 15992.57
02/28/89 15849.24
03/31/89 16137.16
04/30/89 16682.74
05/31/89 17240.45
06/30/89 17361.00
07/31/89 18320.04
08/31/89 18442.99
09/30/89 18239.66
10/31/89 17694.24
11/30/89 18024.03
12/31/89 18226.97
01/31/90 17455.32
02/28/90 17641.58
03/31/90 17666.98
04/30/90 17234.76
05/31/90 18193.74
06/30/90 18096.36
07/31/90 17931.85
08/31/90 16848.81
09/30/90 16066.45
10/31/90 15787.76
11/30/90 16679.57
12/31/90 17069.50
01/31/91 17834.44
02/28/91 18868.53
03/31/91 18993.89
04/30/91 19152.05
05/31/91 20086.65
06/30/91 19389.73
07/31/91 20060.85
08/31/91 20411.01
09/30/91 20428.15
10/31/91 20724.21
11/30/91 20013.67
12/31/91 21244.10
01/31/92 21424.39
02/29/92 22025.35
03/31/92 21917.70
04/30/92 22633.57
05/31/92 22892.50
06/30/92 22769.17
07/31/92 23462.88
08/31/92 23231.65
09/30/92 23514.92
10/31/92 23337.39
11/30/92 23966.82
12/31/92 24521.51
01/31/93 25220.23
02/28/93 25735.94
03/31/93 26753.59
04/30/93 27258.38
05/31/93 27628.55
06/30/93 27815.51
07/31/93 28223.81
08/31/93 29040.41
09/30/93 28840.51
10/31/93 29590.33
11/30/93 29114.84
12/31/93 29780.66
01/31/94 31104.24
02/28/94 30763.89
03/31/94 29618.83
04/30/94 29943.26
05/31/94 30134.11
06/30/94 29900.86
07/31/94 30651.27
08/31/94 31555.60
09/30/94 30875.21
10/31/94 31237.27
11/30/94 30251.68
12/31/94 30312.02
01/31/95 30168.75
02/28/95 31089.77
03/31/95 31811.33
04/30/95 32450.86
05/31/95 33152.28
06/30/95 33524.64
07/31/95 34645.59
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Puritan
Fund on July 31, 1985 and paid the 2% sales charge. As the chart shows, by
July 31, 1995, the value of your investment would have grown to $33,953 - a
239.53% increase on your initial investment. For comparison, look at how
both the S&P 500 and Lehman Brothers Aggregate Bond Index did over the same
period. With dividends reinvested, the same $10,000 investment in the S&P
500 would have grown to $40,706 - a 307.06% increase. If you'd put $10,000
in the bond index, it would have grown to $25,994 - a 159.94% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks or bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Strong corporate earnings and a
favorable interest rate
environment helped the U.S.
stock market post strong returns
for the 12 months ended July 31,
1995. The Standard & Poor's
Composite Index of 500 Stocks
finished the 12-month period with a
total return of 26.11% - well
above its historical annual
average of roughly 12%. With
inflation posing little threat,
interest rates fell during the first
half of 1995. The Federal
Reserve Board cut the federal
funds rate - the rate banks
charge each other for overnight
loans - by 0.25% on July 6.
Large-capitalization stocks led
the somewhat narrow market
rally. Technology companies -
whose goods and services
benefited from both corporate
and consumer demand - posted
the strongest earnings growth
and stock price gains. In
February, the Dow Jones
Industrial Average closed
above 4000 for the first time.
Returns from foreign markets
were varied, as investors brought
capital back to the U.S. The
Morgan Stanley Emerging
Markets Free Index was down
3.76% for the 12 months ended
July 31. The Morgan Stanley
EAFE (Europe, Australia, Far
East) Index returned 6.95% for the
year ended July 31. European
markets have fared well through
the first half of 1995 - after a
difficult year in 1994 - while the
Japanese market recently has
shown some signs of recovery
after struggling through much of
the year.
An interview with Richard Fentin, Portfolio Manager of Fidelity
Puritan Fund
Q. RICHARD, HOW DID THE FUND PERFORM?
A. For the 12 months ended July 31, 1995, the fund returned 13.03%. The
average equity income fund returned 16.18% for the same time period,
according to Lipper Analytical Services.
Q. WHY DID THE FUND UNDERPERFORM ITS PEER GROUP AVERAGE?
A. During the period, the fund's holdings in Japanese equities didn't
perform well, which contributed to underperformance. Japanese securities
accounted for about 8% of the fund's investments and they suffered a 20%
decline.
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PAST SIX MONTHS?
A. I've been concentrating on three particular areas: retailing, energy and
Japanese equities. There's a common theme here which is that they all are
very cheap stocks with improving business prospects.
Q. LET'S LOOK AT RETAILING FIRST. WHAT'S BEEN HAPPENING THERE?
A. Not much is happening right now. The industry has performed poorly for
the past 12 to 18 months and sales have been lackluster. However, while
interest rates were rising, retailers did a fairly good job of holding down
inventories and keeping prices reasonable. The industry is fairly
competitive and the stocks are very inexpensive. So far we haven't seen
strong sales, ebullient consumer spending or a roaring economy, yet stocks
like Wal-Mart, Federated and The Limited should be in a position to prosper
when things turn around.
Q. WHAT ABOUT ENERGY?
A. For the past seven years, oil prices have been flat. Despite this, many
energy companies have been growing revenues such that their profit margins
are all in the double digits. Interestingly, utilization of energy is at a
very high level and demand is rising by over a million barrels per year,
yet energy prices have remained stable. Some of the bigger companies such
as Schlumberger, British Petroleum and Amerada Hess are doing a great job
of improving their profits despite the external environment. If the price
of energy eventually goes up, these companies will be poised to profit.
Q. THERE SEEMS TO BE A RECURRING THEME HERE . . .
A. Yes. First, all of the stocks I've been buying are historically cheap.
Secondly, they are companies that are doing well under adverse conditions.
And the third thing is that there is the expectation that these adverse
conditions are going to change positively. When that happens, the stock
prices should gain some momentum and go from low valuations - prices
relative to earnings - to higher-end valuations. It's the same with the
Japanese stocks. The Japanese stocks that the fund owns all have rock solid
balance sheets, generate cash and are the best at what they do. They're
household names like Sony and Toyota. The problem for them is that the
Japanese domestic economy isn't doing all that well and the strong yen has
hurt them internationally.
Q. LET'S SWITCH DIRECTIONS. WHAT'S YOUR STRATEGY BEEN ON THE BOND SIDE OF
THE FUND?
A. I haven't made many changes to the fund's bond holdings since January.
By that time, the bond portfolio was fairly conservative, moving out of
corporates and into governments and out of the Latin American debt. My
overall philosophy on bonds has changed. When interest rates were 9% or
10%, they were a good investment. Now that rates are much lower, they're
not as attractive to me versus the stock market. These days, the only time
the fund's bond weighting increases is when I sell stocks that are fairly
valued.
Q. IN THE LAST REPORT SIX MONTHS AGO, YOU TALKED ABOUT SOME OF THE FUND
BEING HEDGED WITH FORWARD FOREIGN CURRENCY CONTRACTS. HAVE THESE IMPACTED
THE FUND?
A. I had been using currency contracts to hedge some foreign investments -
especially in Japan - against currency volatility. When some foreign
currencies strengthened against the U.S. dollar during the period, the fund
wound up with currency gains in its foreign stocks, offset by currency
losses in its hedge contracts. The net impact on the fund was about
break-even, which is the result I was looking for when I decided to hedge.
Although the gain side stayed in the fund's share price, unfortunately, for
tax reasons, the loss side of the equation counted against the fund's
income. This resulted in lower fund dividends. To avoid such a situation in
the future, I'll be looking to replace currency contracts with other
hedging strategies that can have less impact on the fund's dividend payout.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I think the underlying environment is strong for equities, even though
the remainder of 1995 probably won't be as strong as the first part was.
More than likely it will be a stock picker's market, as opposed to
large-cap and technology stocks dominating. Companies are still performing
well, pricing is good and volume is good. Unless something changes
drastically, I'll probably stick with my strategies for the coming six
months.
FUND FACTS
GOAL: high income with
preservation of capital. The
fund also considers the
potential for growth of capital
START DATE: April 16, 1947
SIZE: as of July 31, 1995,
more than $14.3 billion
MANAGER: Richard Fentin,
since April 1987; manager
Fidelity Growth Company
Fund, 1983-1987; joined
Fidelity in 1980
(checkmark)
RICH FENTIN ON PURITAN FUND'S
HISTORICAL PERFORMANCE:
"Puritan Fund typically
performs better in modest
market years. When the
market was up about 30% in
1989, the fund was up 19%.
When there was another 30%
year in 1991, the fund was up
24%. Conversely, in 1992,
when the market was up 7%,
the fund was up 15% and in
1993, when the market was
up about 10%, the fund was
up 21%.
"This is good news for
investors because in the past
80 years, we've had only a
handful of 30% markets.
We've just lived through an
incredibly strong market, a
market that you don't see too
often.
"When the market calms
down, as it inevitably will, this
fund should outperform. I
manage Puritan for the long
term and the fund is not likely
to hold the more expensive
"hot" stocks. I'm not
interested in volatility as much
as I am interested in growth
potential at reasonable
valuations."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Schlumberger Ltd. 2.7 2.6
British Petroleum PLC ADR 1.5 1.5
Loews Corp. 1.4 1.3
Philip Morris Companies, Inc. 1.4 1.4
United Technologies Corp. 1.1 1.1
TOP FIVE BONDS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE BONDS
6 MONTHS AGO
United States Government 19.1 14.8
(various issues)
Standard Credit Card Master Trust I 0.7 0.1
(various issues)
Comdisco, Inc. (various issues) 0.2 0.2
Midlantic Corp. (various issues) 0.2 0.3
Hanson PLC euro 9 1/2%, 1/31/06 0.2 0.3
TOP FIVE MARKET SECTORS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Energy 11.1 11.1
Finance 10.5 10.8
Retail & Wholesale 8.6 6.3
Basic Industries 8.1 8.5
Durables 6.1 4.5
ASSET ALLOCATION
AS OF JULY 31, 1995 * AS OF JANUARY 31, 1995 **
Row: 1, Col: 1, Value: 2.1
Row: 1, Col: 2, Value: 2.7
Row: 1, Col: 3, Value: 28.1
Row: 1, Col: 4, Value: 67.09999999999999
Row: 1, Col: 5, Value: 0.0
Stocks 63.4%
Bonds 28.4%
Convertible
securities 2.6%
Short-term and
other investments 5.6%
FOREIGN
INVESTMENTS 23.5%
Stocks 67.1%
Bonds 28.1%
Convertible
securities 2.7%
Short-term and
other investments 2.1%
FOREIGN
INVESTMENTS 20.1%
Row: 1, Col: 1, Value: 5.6
Row: 1, Col: 2, Value: 2.6
Row: 1, Col: 3, Value: 28.4
Row: 1, Col: 4, Value: 63.4
Row: 1, Col: 5, Value: 0.0
*
**
INVESTMENTS JULY 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 66.3%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.2%
Flightsafety International, Inc. 745,100 $ 34,181
BASIC INDUSTRIES - 7.5%
CHEMICALS & PLASTICS - 4.8%
Betz Laboratories, Inc. (g) 2,261,100 102,032
CBI Industries, Inc. 642,100 17,337
Dow Chemical Co. 418,000 30,984
du Pont (E.I.) de Nemours & Co. 2,353,100 157,658
Grace (W.R.) & Co. 220,600 13,650
Great Lakes Chemical Corp. 2,507,400 164,548
Nalco Chemical Co. (g) 3,481,200 124,018
Olin Corp. 128,000 7,408
Praxair, Inc. 75,000 2,100
Shin-Etsu Chemical Co. Ltd. 1,606,000 32,167
Union Carbide Corp. 1,325,800 46,072
697,974
IRON & STEEL - 0.2%
Armco, Inc. (a) 688,300 4,560
Carpenter Technology Corp. 10,200 752
Nucor Corp. 473,500 25,451
Republic Engineered Steels, Inc. (a) 350,000 2,800
33,563
METALS & MINING - 0.8%
Alcan Aluminium Ltd. 2,224,900 75,438
Alumax, Inc. (a) 1,000,100 34,378
Reynolds Metals Co. 71,600 4,475
114,291
PACKAGING & CONTAINERS - 0.2%
Carnaudmetalbox SA 285,000 12,614
Owens-Illinois, Inc. (a) 1,081,600 15,007
Sonoco Products Co. 257,775 6,573
34,194
PAPER & FOREST PRODUCTS - 1.5%
Champion International Corp. 1,899,700 107,096
International Paper Co. 850,097 71,833
Jefferson Smurfit Corp. (a) 703,100 10,415
Mail-Well Holdings, Inc. (a)(h) 7,500 45
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Union Camp Corp. 613,300 $ 34,498
Weyerhaeuser Co. 10,000 468
224,355
TOTAL BASIC INDUSTRIES 1,104,377
CONGLOMERATES - 1.8%
Allied-Signal, Inc. 212,300 9,925
Brascan Ltd. Class A 950,000 16,454
Coltec Industries, Inc. (a) 1,748,200 26,660
Textron, Inc. 334,000 22,211
Tomkins PLC Ord. 3,445,147 14,099
Tyco International Ltd. 241,300 13,272
United Technologies Corp. 1,966,900 165,220
267,841
CONSTRUCTION & REAL ESTATE - 1.6%
BUILDING MATERIALS - 0.2%
Cooper Cameron Corp. 836,662 18,720
Masco Corp. 562,900 14,635
33,355
CONSTRUCTION - 0.0%
Centex Corp. 77,900 2,181
Walter Industries, Inc. (a) 25,749 402
2,583
ENGINEERING - 0.4%
EG & G, Inc. (g) 3,170,000 59,041
REAL ESTATE INVESTMENT TRUSTS - 1.0%
Associated Estates Realty Corp. 87,700 1,787
Bay Apartment Community, Inc. 66,300 1,318
Bradley Real Estate Trust 20,000 323
CBL & Associates Properties, Inc. 199,900 4,123
CWM Mortgage Holdings, Inc. 55,000 701
Cali Realty Corp. (a) 365,000 7,072
Carr Realty Corp. 41,100 760
CenterPoint Properties Corp. 102,400 2,099
Crown American Realty Trust (SBI) 735,200 9,282
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - CONTINUED
Developers Diversified Realty 80,000 $ 2,430
Duke Realty Investors, Inc. 100,000 2,863
Equity Residential Property Trust (SBI) 231,600 6,832
Excel Realty Trust, Inc. 259,200 5,184
Felcor Suite Hotels, Inc. 230,900 6,205
Glimcher Realty Trust 182,500 3,901
Haagen Alexander Properties, Inc. 185,000 2,266
Highwoods Properties, Inc. 81,100 2,048
Kimco Realty Corp. 324,500 12,939
LTC Properties, Inc. 636,500 8,911
Liberty Property Trust (SBI) 380,600 7,612
Macerich Co. 397,600 8,151
Mid Atlantic Realty Trust 272,000 2,397
National Golf Properties, Inc. 221,300 4,564
Omega Healthcare Investors, Inc. 5,300 138
RFS Hotel Investors, Inc. 600,000 8,625
Realty Income Corp. 121,000 2,632
Simon Properties Group, Inc. 465,400 11,402
Speiker Properties, Inc. 132,300 2,993
Starwood lodging Trust combined certificate (SBI)(a) 219,400 5,704
Storage Equities, Inc. 362,200 6,203
Urban Shopping Centers, Inc. 160,000 3,460
144,925
TOTAL CONSTRUCTION & REAL ESTATE 239,904
DURABLES - 5.9%
AUTOS, TIRES, & ACCESSORIES - 3.0%
Genuine Parts Co. 1,153,600 43,548
Honda Motor Co. Ltd. 2,827,000 46,066
Johnson Controls, Inc. 1,593,300 95,996
Michelin SA Cie Generale des Etablissements Class B (a) 1,200,000 56,820
PACCAR, Inc. 49,800 2,639
Pullman Co. (Del)(a) 131,108 918
Snap-on Tools Corp. (g) 2,607,800 108,876
Suzuki Motor Corp. 515,000 6,294
Toyota Motor Corp. 3,750,000 78,081
439,238
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 1.8%
Matsushita Electric Industrial Co. Ltd. 5,674,000 $ 94,385
Sony Corp. 1,627,400 87,843
Sunbeam-Oster, Inc. 2,611,800 43,095
Whirlpool Corp. 511,100 29,516
254,839
HOME FURNISHINGS - 0.0%
Heilig-Meyers Co. 20,000 505
Polyvision Corp. 5,679 19
524
TEXTILES & APPAREL - 1.1%
Burlington Industries, Inc. (a) 2,360,200 29,503
Liz Claiborne, Inc. 1,153,300 26,382
Nisshinbo Industries 537,000 4,837
Reebok International Ltd. 409,500 14,691
Russell Corp. 238,500 6,738
Shaw Industries, Inc. 304,500 5,138
Stride Rite Corp. 1,426,100 15,865
Unifi, Inc. 2,366,800 59,762
162,916
TOTAL DURABLES 857,517
ENERGY - 10.0%
COAL - 0.0%
Eastern Enterprises Co. 32,900 995
MAPCO, Inc. 51,300 2,783
3,778
ENERGY SERVICES - 4.6%
Baker Hughes, Inc. 4,390,100 97,131
Enterra Corp. (a) 65,900 1,384
Halliburton Co. 2,200,300 89,387
Helmerich & Payne, Inc. (g) 1,343,700 38,631
Marine Drilling Cos., Inc. (a) 500,000 1,875
McDermott International, Inc. 772,800 19,030
Schlumberger Ltd. 5,786,200 387,675
Sonat Offshore Drilling, Inc. 342,800 11,484
Transocean Drilling AS (a) 1,122,500 15,349
661,946
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - 5.4%
Amerada Hess Corp. 2,366,300 $ 112,991
Atlantic Richfield Co. 423,300 48,785
British Petroleum PLC:
ADR 2,348,498 213,126
Ord. 7,441,819 56,221
Burlington Resources, Inc. 2,436,100 94,703
Coastal Corp. (The) 2,517,500 78,357
Kelley Oil & Gas Corp. (a)(g) 3,000,000 13,125
Kerr-McGee Corp. 242,700 13,804
Murphy Oil Corp. 90,800 3,711
Occidental Petroleum Corp. 2,299,500 51,739
Petro-Canada 1,007,200 10,061
Renaissance Energy Ltd. (a) 130,000 2,704
San Juan Basin Royalty Trust (UBI) 1,469,600 9,736
Sun Company, Inc. 10,000 294
Total SA:
Class B 769,460 46,607
sponsored ADR 228,419 7,110
Unocal Corp. 904,810 25,448
788,522
TOTAL ENERGY 1,454,246
FINANCE - 6.6%
BANKS - 0.3%
Bankers Trust New York Corp. 10,000 645
Deutsche Bank AG 800,000 39,459
40,104
CREDIT & OTHER FINANCE - 0.4%
American Express Co. 1,555,827 59,899
Jayhawk Acceptance Corp. 18,500 185
60,084
INSURANCE - 3.8%
Alexander & Alexander Services, Inc. 236,100 5,430
Allstate Corp. 4,473,295 139,790
Berkley (W.R.) Corp. (g) 885,000 33,962
Chubb Corp. (The) 412,400 34,642
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Loews Corp. 1,702,300 $ 204,914
MBIA, Inc. 524,100 35,508
NAC Re Corp. 707,900 26,015
Old Republic International Corp. 553,000 14,585
PMI Group, Inc. 121,500 5,650
Providian Corp. 30,000 1,076
SAFECO Corp. 10,900 638
Travelers, Inc. (The) 920,349 43,602
Western National Corp. 399,000 4,738
550,550
SAVINGS & LOANS - 0.9%
Ahmanson (H.F.) & Co. 3,507,928 78,490
Golden West Financial Corp. 991,670 46,361
Washington Mutual, Inc. 134,100 3,202
128,053
SECURITIES INDUSTRY - 1.2%
Bear Stearns Companies, Inc. 649,950 14,380
Daiwa Securities Co. Ltd. 1,264,000 15,162
ECM Corp. LP (a)(i) 6,318 632
Edwards (A.G.), Inc. 531,700 13,027
Lehman Brothers Holdings, Inc. 687,000 15,200
Morgan Stanley Group, Inc. 211,000 17,645
Nomura Securities Co. Ltd. 4,750,000 91,377
167,423
TOTAL FINANCE 946,214
HEALTH - 2.2%
DRUGS & PHARMACEUTICALS - 1.2%
American Home Products Corp. 1,161,600 91,766
Sankyo Co. Ltd. 2,248,400 52,921
Sigma Aldrich Corp. 422,400 21,226
Takeda Chemical Industries Ltd. 403,000 5,427
171,340
MEDICAL EQUIPMENT & SUPPLIES - 1.0%
Acuson Corp. (a) 70,300 808
Baxter International, Inc. 2,189,500 81,559
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
Hillenbrand Industries, Inc. 812,200 $ 24,163
Pall Corp. 1,591,100 36,396
142,926
TOTAL HEALTH 314,266
HOLDING COMPANIES - 0.2%
Brierley Investments Ltd. 35,224,151 26,627
SDW Holdings Corp. (warrants) (a) 1,970 13
26,640
INDUSTRIAL MACHINERY & EQUIPMENT - 3.8%
ELECTRICAL EQUIPMENT - 1.4%
AMETEK, Inc. (g) 3,001,800 54,408
Ampex Corp. (a):
Class A 33,152 143
Class A (warrants) 93,551 403
Class C 236,529 1,020
Mitsubishi Electric Co. Ord. 11,006,000 81,328
Omron Corp. 2,966,000 67,462
Westinghouse Electric Corp. 20,000 273
205,037
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
Caterpillar, Inc. 294,400 20,718
Cooper Industries, Inc. 1,575,650 58,890
Exide Corp. 627,900 32,023
Goulds Pumps, Inc. 1,030,900 22,680
Harnischfeger Industries, Inc. 1,236,100 46,354
Keystone International, Inc. 1,468,100 30,830
McDermott (J. Ray) SA 352,400 7,885
Mitsubishi Heavy Industries Ltd. 6,502,000 46,869
Terex Corp. (rights) (a)(h) 5,610 1
Thermadyne Holdings Corp. (a) 82,059 1,292
Valmet Corp. OY Ord. 1,000,000 29,023
Watts Industries, Inc. Class A 3,000 70
296,635
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.4%
Safety Kleen Corp. 1,074,800 $ 16,794
WMX Technologies, Inc. 1,100,000 34,375
51,169
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 552,841
MEDIA & LEISURE - 0.8%
ENTERTAINMENT - 0.0%
Live Entertainment, Inc. (a)(h):
$2.00 (warrants) 256,000 64
$2.72 (warrants) 244,705 61
125
LEISURE DURABLES & TOYS - 0.3%
Fleetwood Enterprises, Inc. 1,869,900 38,567
IHF Capital, Inc. (a)(i):
Series H (warrants) 10,225 716
Series I (warrants) 5,050 101
Rawlings Sporting Goods, Inc. (a)(g) 781,500 7,815
47,199
LODGING & GAMING - 0.1%
Bally's Gaming International, Inc. (a) 84,392 928
Bally's Gaming International, Inc. (warrants) (a) 135,000 928
Bally's Grand, Inc. (warrants) (a) 12,878 109
Forte PLC 2,750,000 11,474
Motels of America, Inc. (a) 3,000 225
Sun International Hotels Ltd. (a) 39,107 2,082
Sun International Hotels Ltd. Class B (a) 8,212 409
16,155
PUBLISHING - 0.0%
General Media, Inc. (warrants) (a) 1,110 11
RESTAURANTS - 0.4%
Brinker International, Inc. (a) 2,487,900 44,160
Darden Restaurants, Inc (a). 754,300 8,203
Dave & Busters, Inc. (a) 142,000 2,254
54,617
TOTAL MEDIA & LEISURE 118,107
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 3.9%
BEVERAGES - 0.0%
Seagram Co. Ltd. 100,900 $ 3,625
FOODS - 1.2%
ConAgra, Inc. 2,613,300 98,652
Dole Food, Inc. 2,077,600 66,224
Flowers Industries, Inc. 262,800 4,829
International Multifoods Corp. 191,300 4,376
174,081
HOUSEHOLD PRODUCTS - 0.5%
First Brands Corp. 903,200 36,128
Rubbermaid, Inc. 550,300 16,371
Stanhome, Inc. 421,900 13,554
66,053
TOBACCO - 2.2%
Imasco Ltd. 1,069,600 19,211
Philip Morris Companies, Inc. 2,764,400 198,000
RJR Nabisco Holdings Corp. 3,509,422 96,948
314,159
TOTAL NONDURABLES 557,918
PRECIOUS METALS - 0.2%
Agnico Eagle Mines Ltd. 1,169,400 15,860
Newmont Mining Corp. 100,000 4,275
Sudbury Contact Mines Ltd. (a) 358,000 3,674
23,809
RETAIL & WHOLESALE - 8.3%
APPAREL STORES - 1.5%
Charming Shoppes, Inc. 4,339,600 21,156
Edison Brothers Stores, Inc. 1,068,000 10,680
Filene's Basement Corp. (a)(g) 1,927,310 10,721
Gap, Inc. 1,660,100 57,896
Lamonts Apparel, Inc. (a) 50,220 19
Lamonts Apparel, Inc. (warrants) (a) 92,674 -
Limited, Inc. (The) 5,605,400 114,911
215,383
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - 4.4%
Dayton Hudson Corp. 1,848,900 $ 139,823
Dillard Department Stores, Inc. Class A 2,490,800 77,215
Family Dollar Stores, Inc. 999,600 18,243
Federated Department Stores, Inc. (a) 4,001,187 113,534
Ito-Yokado Co. Ltd. 1,400,000 77,153
Mac Frugals Bargains Closeout, Inc.(a) 876,700 15,452
Price/Costco, Inc. (a) 1,995,100 35,787
Sears, Roebuck & Co. 1,365,100 44,536
Wal-Mart Stores, Inc. 4,100,500 109,176
630,919
GROCERY STORES - 1.4%
FF Holdings Corp. (a)(h) 39,600 79
Fleming Companies, Inc. 1,628,993 42,965
Food 4 Less Holdings, Inc. (warrants) (a)(h) 14,206 431
Giant Food, Inc. Class A 972,200 29,652
Grand Union Capital Corp. Class B (a) 5,975 -
Great Atlantic & Pacific Tea Co., Inc. 1,647,800 45,932
Supervalu, Inc. 2,941,600 90,454
209,513
RETAIL & WHOLESALE, MISCELLANEOUS - 1.0%
Barrys Jewelers, Inc. (a) 45,576 199
Barrys Jewelers, Inc. (warrants) (a) 5,697 1
Duty Free International, Inc. 1,029,700 9,525
Fabri-Centers of America, Inc. (a) 441,800 10,493
Fingerhut Companies, Inc. 1,876,000 31,423
Finlay Enterprises, Inc. (a) 2,446 38
Pier 1 Imports, Inc. 398,700 3,887
Sotheby's Holdings, Inc. Class A (g) 1,981,100 26,497
Toys "R" Us, Inc. (a) 900,000 25,200
Uny Co. Ltd. 1,516,000 24,703
Vendex International Bearer (a) 390,000 10,669
142,635
TOTAL RETAIL & WHOLESALE 1,198,450
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 3.4%
ADVERTISING - 0.3%
WPP Group PLC 2,388,900 $ 5,126
WPP Group PLC (i) 13,740,000 29,157
WPP Group PLC ADR 541,000 2,333
36,616
PRINTING - 1.2%
Deluxe Corp. 1,758,500 56,492
Donnelley (R.R.) & Sons Co. 1,292,200 48,296
Harland (John H.) Co. 842,900 18,649
Komori Corp. 757,000 16,619
Nashua Corp. 235,700 4,213
Standard Register Co. 97,200 2,078
Toppan Printing Co. Ltd. 1,853,000 26,211
172,558
SERVICES - 1.9%
ADT Ltd. (a) 4,306,400 51,677
Angelica Corp. 10,000 253
BET PLC Ord. 28,864,900 61,252
CPI Corp. 331,400 7,208
Ideon Group, Inc. (g) 2,552,700 26,803
Jostens, Inc. 2,056,500 46,785
National Service Industries, Inc. 424,300 12,517
Western Atlas, Inc. (a) 1,439,100 64,760
271,255
TOTAL SERVICES 480,429
TECHNOLOGY - 4.4%
COMPUTER SERVICES & SOFTWARE - 0.1%
Mentor Graphics Corp. (a) 946,000 17,501
COMPUTERS & OFFICE EQUIPMENT - 1.6%
Canon, Inc. 3,401,000 61,577
Casio Computer Co. Ltd. Ord. 2,995,000 29,045
Fujitsu Ltd. 1,400,000 14,813
International Business Machines Corp. 917,900 99,936
Stratus Computer, Inc. (a) 246,000 6,396
Wang Laboratories, Inc. (a) 1,042,051 19,538
231,305
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.1%
Measurex Corp. 532,700 $ 16,114
ELECTRONICS - 1.8%
AMP, Inc. 2,636,600 113,703
Hitachi Ltd. 10,088,000 106,850
Nitto Denko Corp. 1,877,000 30,798
Thomas & Betts Corp. 180,300 12,193
Toshiba Corp. 218,000 1,517
265,061
PHOTOGRAPHIC EQUIPMENT - 0.8%
Eastman Kodak Co. 10,000 576
Fuji Photo Film Co. Ltd. 2,679,000 70,332
Polaroid Corp. 1,143,300 49,019
119,927
TOTAL TECHNOLOGY 649,908
TRANSPORTATION - 2.7%
AIR TRANSPORTATION - 0.2%
KLM Royal Dutch Airlines (a) 102,300 3,811
KLM Royal Dutch Airlines Ord. 585,700 22,018
25,829
RAILROADS - 1.4%
Burlington Northern, Inc. 1,022,900 70,836
CSX Corp. 10,000 839
Canadian Pacific Ltd. Ord. 3,646,269 65,157
Illinois Central Corp., Series A 504,100 19,912
Southern Pacific Rail Corp. (a) 1,983,800 39,180
195,924
TRUCKING & FREIGHT - 1.1%
Airborne Freight Corp. 548,400 11,722
Consolidated Freightways, Inc. 1,181,300 28,204
Hunt (J.B.) Transport Services, Inc. 812,800 14,021
Roadway Services, Inc. (g) 2,035,800 102,808
156,755
TOTAL TRANSPORTATION 378,508
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 2.8%
ELECTRIC UTILITY - 0.5%
Fuji Electric Co. Ltd. 2,466,000 $ 13,506
Great Bay Power (a) 46,683 362
Veba AG Ord. 1,549,000 64,278
78,146
GAS - 0.2%
ENSERCH Corp. 1,246,700 22,285
UGI Corp. (warrants) (a) 13,633 2
22,287
TELEPHONE SERVICES - 2.1%
Ameritech Corp. 845,500 40,901
Bell Atlantic Corp. 686,900 39,325
Koninklijke PPT Nederland 1,212,763 45,357
Koninklijke PPT Nederland (a)(i) 653,900 24,455
NYNEX Corp. 3,158,100 130,272
Pacific Telesis Group 816,500 23,066
303,376
TOTAL UTILITIES 403,809
TOTAL COMMON STOCKS
(Cost $8,069,045) 9,608,965
PREFERRED STOCKS - 2.3%
CONVERTIBLE PREFERRED STOCKS - 1.5%
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.0%
Bethlehem Steel Corp. $5.00 16,300 890
METALS & MINING - 0.1%
Reynolds Metals Co. $3.31 330,400 18,213
TOTAL BASIC INDUSTRIES 19,103
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
ENERGY - 0.7%
ENERGY SERVICES - 0.1%
McDermott International, Inc., Series C, $2.875 (i) 300,000 $ 13,350
OIL & GAS - 0.6%
Atlantic Richfield Co. exchangeable $0.5575 1,217,200 33,169
Occidental Petroleum Corp. $3.875 (i) 389,500 22,104
Unocal Corp. $3.50 (i) 510,500 27,184
82,457
TOTAL ENERGY 95,807
FINANCE - 0.2%
INSURANCE - 0.2%
Alexander & Alexander Services, Inc., Series A, $3.625 (i) 146,800 7,303
Allstate Corp. exchangeable $0.575 374,600 15,921
23,224
HEALTH - 0.1%
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
U.S. Surgical Corp. $2.20 (i) 681,000 18,387
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.3%
Westinghouse Electric Corp. $1.30 (i) 3,708,000 50,522
RETAIL & WHOLESALE - 0.0%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Town & Country Corp. $2.00 (a) 112,098 84
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Alpine Group, Inc. 8% 3,025 136
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Sprint Corp. $0.6573 405,700 $ 13,997
TOTAL CONVERTIBLE PREFERRED STOCKS 221,260
NONCONVERTIBLE PREFERRED STOCKS - 0.8%
BASIC INDUSTRIES - 0.0%
IRON & STEEL - 0.0%
Stelco, Inc., Series B, 7.76% 22,425 358
PAPER & FOREST PRODUCTS - 0.0%
S D Warren Co. 14% exchangeable pay-in-kind (a) 1,970 56
TOTAL BASIC INDUSTRIES 414
DURABLES - 0.2%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Volkswagen AG $12.00 87,000 21,528
ENERGY - 0.0%
OIL & GAS - 0.0%
Gulf Canada Resources Ltd. (a)(h) 46,430 128
Gulf Canada Resources Ltd., Series 1, adj. rate 1,630,370 4,687
4,815
FINANCE - 0.2%
BANKS - 0.1%
First Interstate Bancorp depositary shares representing
1/8 share, Series G, 9% 108,000 2,835
Shawmut National Corp. depositary shares representing
1/10th share 9.30% 369,700 9,705
12,540
SAVINGS & LOANS - 0.1%
First Nationwide Bank 11 1/2% 131,455 14,329
TOTAL FINANCE 26,869
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp. 8% (a)(h) 2,581 $ 1,510
MEDIA & LEISURE - 0.1%
BROADCASTING - 0.1%
PanAmSat Corp. 12 3/4% 16,780 17,577
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Berg Electronics Holding Corp., Series E, $3.4687 202,899 5,478
UTILITIES - 0.3%
ELECTRIC UTILITY - 0.3%
Cleveland Electric Illuminating Co., Series M adj. rate (a) 31,663 3,154
Gulf States Utilities Co.:
$1.75 500,000 11,813
$9.96 (a) 44,488 4,460
Series A, adj. rate (a) 41,940 4,068
Series B, adj. rate 76,513 3,749
Long Island Lighting Co. $7.95 362,035 8,915
Public Service Co. of New Hampshire Co., Series A (a) 404,707 10,674
Texas Utilities Electric Co., Series B adj. rate 16,155 1,531
48,364
TOTAL NONCONVERTIBLE PREFERRED STOCKS 126,555
TOTAL PREFERRED STOCKS
(Cost $336,792) 347,815
CORPORATE BONDS - 9.0%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - 1.2%
CONGLOMERATES - 0.4%
Hanson America, Inc. 2.39%, 3/1/01 (i) A3 $ 28,650 $ 22,741
Hanson PLC euro 9 1/2%, 1/31/06 A2 GBP 19,500 31,812
54,553
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Cemex SA 4 1/4%, 11/1/97 (i) B1 7,700 6,276
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Centerpoint Properties Corp. 8.22%, 1/15/04 - 1,854 2,076
LTC Properties, Inc. 8 1/2%, 1/1/00 - 2,088 2,098
Liberty Property LP 8%, 7/1/01 - 1,962 1,987
6,161
TOTAL CONSTRUCTION & REAL ESTATE 12,437
ENERGY - 0.0%
OIL & GAS - 0.0%
USX-Marathon Group 7%, 6/15/17 BB- 4,490 4,086
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.2%
Roche Holdings, Inc. liquid yield option notes
0%, 4/20/10 (i) - 56,200 22,375
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp., Series C, 0%, 6/30/97 - 762 1,024
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Cooper Industries, Inc. 7.05%, 1/1/15 A3 21,962 22,429
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 23,453
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
PRECIOUS METALS - 0.1%
Agnico Eagle Mines Ltd. yankee
3 1/2%, 1/27/04 B1 $ 9,165 $ 7,710
SERVICES - 0.1%
ADT Operations, Inc. liquid yield option notes
0%, 7/6/10 Ba3 29,760 11,960
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Softe SA euro 4 1/4%, 7/30/98 (d) - ITL 16,010 11,892
TOTAL CONVERTIBLE BONDS 148,466
NONCONVERTIBLE BONDS - 7.8%
AEROSPACE & DEFENSE - 0.0%
RHI Holdings, Inc. 11 7/8%, 3/1/99 B2 2,090 2,006
BASIC INDUSTRIES - 0.5%
CHEMICALS & PLASTICS - 0.1%
Harris Chemical Corp. 0%, 7/15/01 (f) B2 3,020 2,726
Pioneer Americas Acquisition Corp.
13 3/8%, 4/1/05 (i) B2 9,500 9,833
Trans Resources, Inc. 14 1/2%, 9/1/96 B2 515 520
13,079
IRON & STEEL - 0.1%
Republic Engineered Steels, Inc.
9 7/8%, 12/15/01 B2 7,590 7,192
WCI Steel, Inc., Series B, 10 1/2%, 3/1/02 B1 2,400 2,388
9,580
METALS & MINING - 0.0%
International Wire Group, Inc.
11 3/4%, 6/1/05 (i) B3 6,850 7,021
PACKAGING & CONTAINERS - 0.1%
Crown Packaging Holdings Ltd.
0%, 11/1/03 (f) Caa 8,160 3,856
Grupo Industrial Durango
9.6875%, 11/18/96 (i)(k) B1 5,355 4,980
8,836
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.2%
Alto Parana euro 12%, 3/4/95 (n) - $ 2,460 $ 1,722
Chesapeake Corp.:
10 3/8%, 10/1/00 Baa3 2,700 3,076
9 7/8%, 5/1/03 Baa3 10,000 11,437
Great Northern Nekoosa Corp.
9 1/8%, 2/1/98 Baa2 7,800 8,234
Mail-Well Holdings, Inc. 0%, 2/15/06 (f) - 1,220 525
Stone Container Corp. 10 3/4%, 4/1/02 - 2,250 2,295
27,289
TOTAL BASIC INDUSTRIES 65,805
CONGLOMERATES - 0.1%
Jordan Industries, Inc.:
10 3/8%, 8/1/03 B3 4,460 4,237
0%, 8/1/05 (f) Caa 12,880 7,792
12,029
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Building Materials Corp. America
0%, 7/1/04 (f) B1 20,360 12,471
Cemex SA 10%, 11/5/99 (i) Ba2 5,000 4,650
17,121
CONSTRUCTION - 0.0%
Walter Industries, Inc. 12.19%, 3/15/00 - 326 331
TOTAL CONSTRUCTION & REAL ESTATE 17,452
DURABLES - 0.0%
TEXTILES & APPAREL - 0.0%
Leslie Fay Cos., Inc. (b)(h):
9.53%, 1/15/00 - 1,130 678
10.54%, 1/15/02 - 1,021 511
United States Leather, Inc. 10 1/4%, 7/31/03 B2 2,960 2,538
TOTAL DURABLES 3,727
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - 0.4%
ENERGY SERVICES - 0.1%
Petroliam Nasional Berhad yankee
6 7/8%, 7/1/03 (i) A1 $ 9,250 $ 9,121
Transtexas Gas Corp. 11 1/2%, 6/15/02 B2 10,000 10,350
19,471
OIL & GAS - 0.3%
Deeptech International, Inc. 12%, 12/15/00 B3 4,070 3,195
Elf Aquitaine yankee 7 3/4%, 5/1/99 Aa3 2,850 2,958
Harcor Energy, Inc. Unit
14 7/8%, 7/15/02 (i) B3 7,500 7,459
Mesa Capital Corp. secured 0%, 6/30/98 (f) Caa 3,100 2,802
Petroleos Mexicanos (i):
yankee 11.43%, 12/13/95 Ba2 4,000 4,005
7.60%, 6/15/00 (k) Ba2 14,000 12,075
Transamerican Refining Corp. (k):
0%, 2/15/02 Caa 3,800 2,508
16 1/2 %, 2/15/02 Caa 8,120 8,688
43,690
TOTAL ENERGY 63,161
FINANCE - 3.5%
ASSET-BACKED SECURITIES - 1.5%
Capital Auto Receivables Asset Trust
5.85%, 1/15/98 Aaa 4,828 4,806
Discover Card Trust:
7 7/8%, 4/16/98 A2 2,750 2,777
6 1/8%, 5/15/98 A2 3,700 3,691
7.30%, 5/21/99 Aaa 8,000 8,090
Ford Auto Loan Master Trust
6 7/8%, 1/15/99 Aaa 20,000 20,206
General Motors Acceptance Corp. Grantor Trust
1995-A, 7.15%, 3/15/00 Aaa 17,050 17,274
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 4,180 4,160
MBNA Master Credit Card Trust
7 3/4%, 10/15/98 Aaa 5,000 5,089
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
ASSET-BACKED SECURITIES - CONTINUED
Premier Auto Trust:
6.85%, 10/4/97 Aaa $ 21,785 $ 21,940
4.90%, 12/15/98 Aaa 1,750 1,727
4.95%, 2/2/99 A2 4,166 4,114
Sears Credit Account Trust:
8.60%, 5/15/98 Aaa 9,000 9,169
Series 1991-C, Class 1, 8.65%, 7/15/98 - 15,500 15,854
Standard Credit Card Master Trust I
participation certificates:
8 1/2%, 6/7/96 Aaa 27,800 28,347
8 1/4%, 10/7/97 A2 8,620 8,817
5 1/2%, 9/7/98 A2 5,600 5,500
6 1/4%, 9/7/98 A2 2,650 2,640
4.65%, 3/7/99 Aaa 17,000 16,639
4.85%, 3/7/99 A2 7,800 7,595
8 7/8%, 9/7/99 Aaa 20,000 21,206
7.65%, 2/15/00 A2 3,800 3,900
Union Federal Savings, Series1994-D,
8.20%, 1/10/01 Baa2 1,955 1,998
215,539
BANKS - 0.9%
Bank of Boston Corp.:
9 1/2%, 8/15/97 Baa1 5,298 5,616
10.30%, 9/1/00 Baa1 11,823 11,823
Citicorp euro (k):
5.9375%, 7/10/97 A3 2,000 1,994
5%, 1/30/98 A3 3,000 2,981
Corporacion Andina de Fomento yankee
7 1/4%, 4/30/98 (i) Baa3 5,900 5,841
Export-Import Bank Korea 7.85%, 11/1/96 A1 14,200 14,462
First Maryland Bancorp 10 3/8%, 8/1/99 Baa1 8,345 9,347
Hartford National Corp. 9.85%, 6/1/99 Baa2 2,000 2,204
Korea Development Bank 9.60%, 12/1/00 A1 6,000 6,706
Manufacturers Hanover Trust NY
5.8125%, 4/30/97 (k) A2 500 496
Merchants National Corp. 9 7/8%, 10/1/99 A2 6,850 7,619
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Midlantic Corp.:
9 7/8%, 12/1/99 Baa1 $ 18,227 $ 20,092
9.20%, 8/1/01 Baa1 11,550 12,776
Nationsbank Corp. 5 1/8%, 9/15/98 A2 2,000 1,922
Shawmut Corp.:
8 7/8%, 4/1/96 Baa1 1,840 1,869
8 1/8%, 2/1/97 Baa1 9,125 9,372
Signet Banking Corp.:
6 1/4%, 5/15/97 (k) Baa2 2,640 2,612
6%, 4/15/98 (k) Baa2 6,210 6,131
9 5/8%, 6/1/99 Baa2 7,500 8,188
United Virginia Bankshares, Inc.
8 5/8%, 4/15/98 Baa1 1,522 1,596
133,647
CREDIT & OTHER FINANCE - 0.5%
Fleet Mortgage Group, Inc. 6 1/2%, 6/15/00 A3 3,900 3,851
Ford Motor Credit Co.:
5 5/8%, 3/3/97 A1 1,250 1,237
euro 8 5/8%, 1/24/00 A1 7,250 7,776
General Motor Acceptance Corp.:
7 3/4%, 1/28/97 A3 4,250 4,337
7 3/8%, 2/27/97 A3 2,000 2,031
8 3/8%, 5/1/97 A3 4,000 4,123
7 3/4%, 5/12/97 A3 2,000 2,046
6 1/8%, 6/9/97 A3 28,500 28,381
6%, 6/16/97 A3 1,000 994
6.40%, 7/30/97 A3 1,000 1,000
6.30%, 9/10/97 A3 1,000 998
Greyhound Financial Corp.:
8%, 1/15/97 Baa1 3,000 3,066
8 1/4%, 3/11/97 Baa1 2,150 2,208
6.95%, 1/28/98 Baa2 2,000 2,014
Nacional Financiera S N C:
euro 5 7/8%, 2/17/98 - 5,000 4,425
yankee 9 3/8%, 4/23/99 (i) Ba2 5,000 4,700
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Westinghouse Credit Corp.:
9.04%, 6/1/98 Ba1 $ 2,250 $ 2,345
9.30%, 6/7/99 Ba1 3,400 3,575
79,107
INSURANCE - 0.4%
American Annuity Group, Inc. 11 1/8%, 2/1/03 Ba3 1,760 1,839
American Financial Corp. (Ohio)
9 3/4%, 4/20/04 (h) Ba3 13,860 13,704
Metropolitan Life Insurance Co.
6.30%, 11/1/03 (i) Aa3 13,640 12,804
Nationwide Mutual Insurance Co.
6 1/2%, 2/15/04 (i) Aa3 9,860 9,329
New York Life Insurance Co.
6 2/5%, 12/15/03 (i) Aa2 9,500 9,045
Ohio National Life Insurance Co.
8 7/8%, 7/15/04 (i) A3 5,940 6,417
53,138
SAVINGS & LOANS - 0.2%
Great Western Bank Federal Savings Bank
10 1/4%, 6/15/00 A3 2,400 2,654
Great Western Financial Corp. 6 3/8%, 7/1/00 Baa1 1,330 1,302
Home Savings of America 6%, 11/1/00 A3 10,500 10,052
USAT Holdings, Inc. 9.05%, 5/15/98 (i) Ba2 19,550 19,306
33,314
SECURITIES INDUSTRY - 0.0%
ECM Corp. extendible 14%, 6/10/02 (i) - 1,201 1,321
TOTAL FINANCE 516,066
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.0%
Westinghouse Electric Corp.:
9.15%, 1/20/98 Ba1 950 991
8.73%, 2/13/98 Ba1 1,100 1,148
9.40%, 1/31/01 Ba1 1,725 1,861
4,000
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Specialty Equipment Cos., Inc.
11 3/8%, 12/1/03 B3 $ 10,000 $ 10,400
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 B3 2,790 2,651
10 3/4%, 11/1/03 Caa 8,819 8,488
21,539
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 25,539
MEDIA & LEISURE - 1.1%
BROADCASTING - 0.3%
Citicasters, Inc. 9 3/4%, 2/15/04 B- 7,813 7,813
Grupo Televisa SA:
0%, 4/7/96 (k) Ba2 14,620 14,401
euro 10%, 11/9/97 Ba2 4,000 3,880
Marcus Cable Capital Corp.
0%, 12/15/05 (f)(i) Caa 3,960 2,272
NWCG Holdings Corp. 0%, 6/15/99 Caa 14,605 9,420
Peoples Choice TV Corp. Unit 0%, 6/1/04 (f) Caa 8,070 3,874
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 4,270 4,334
45,994
LEISURE DURABLES & TOYS - 0.1%
ICON Health And Fitness, Inc. 13%, 7/15/02 B3 5,050 5,176
IHF Holdings, Inc. 0%, 11/15/04 (f) Caa 10,225 5,573
10,749
LODGING & GAMING - 0.3%
Bally's Casino Holdings, Inc.
10 1/2%, 6/15/98 B3 8,480 6,190
Bally's Gaming International, Inc.
10 3/8%, 7/15/98 - 4,500 4,635
Boyd Gaming Corp. 10 3/4%, 9/3/03 B2 5,260 5,444
GNF Corp., Series B, 10 5/8%, 4/1/03 B2 4,930 4,351
Grand Casino Resorts, Inc. gtd. 1st mtg.
12 1/2%, 2/1/00 Ba3 610 683
HMH Properties, Inc. 9 1/2%, 5/15/05 (i) B1 5,000 4,913
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
President Riverboat Casinos 13%, 9/15/01 B $ 7,050 $ 6,204
Stratosphere Corp. 14 1/4%, 5/15/02 B2 1,530 1,622
Trump Plaza Funding, Inc. gtd. mtg.
10 7/8%, 6/15/01 B3 2,390 2,265
36,307
PUBLISHING - 0.1%
News American Holdings, Inc.:
gtd. 9 1/8%, 10/15/99 Ba1 10,000 10,753
8 5/8%, 2/1/03 Ba1 3,805 4,067
14,820
RESTAURANTS - 0.3%
American Restaurant Group, Inc.:
12%, 9/15/98 B2 5,180 4,248
12%, 9/15/98 (New) B2 900 738
Cafeteria Operators LP 11%, 6/30/98 (b)(h) - 7,577 1,894
Flagstar Corp. 11 1/4%, 11/1/04 Caa 23,725 19,988
Host Marriott Travel Plazas, Inc.
9 1/2%, 5/15/05 (i) B1 12,500 12,250
39,118
TOTAL MEDIA & LEISURE 146,988
NONDURABLES - 0.2%
BEVERAGES - 0.0%
Heileman Acquisition Corp. 9 5/8%, 1/31/04 B3 6,500 4,095
FOODS - 0.1%
Dart & Kraft, Inc. gtd. 7 3/4%, 11/30/98 A2 7,239 7,456
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 2,100 2,239
9,695
HOUSEHOLD PRODUCTS - 0.1%
Revlon Consumer Products Corp.
10 1/2%, 2/15/03 B3 3,770 3,789
Revlon Worldwide Corp. secured
0%, 3/15/98 B3 21,905 15,662
19,451
TOTAL NONDURABLES 33,241
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 0.3%
APPAREL STORES - 0.2%
Apparel Retailers, Inc. 0%, 8/15/05 (f) Caa $ 8,170 $ 4,984
Lamonts Apparel Corp. 10 1/4%, 11/1/99 (b)(i) - 3,082 1,510
Mothers Work, Inc. 12 5/8%, 8/1/05 (i) B3 5,000 4,919
Specialty Retailers, Inc.:
10%, 8/15/00 B1 1,450 1,392
11%, 8/15/03 B3 5,110 4,778
11%, 8/15/03 (i) B- 10,000 9,018
26,601
GENERAL MERCHANDISE STORES - 0.1%
El Puerto de Liverpool SA de CV
7 1/4%, 10/19/96 (i) - 2,988 2,839
Parisian, Inc. 9 7/8%, 7/15/03 Caa 8,840 7,072
9,911
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Barrys Jewelers, Inc. 11%, 12/22/00 - 1,595 1,563
Finlay Fine Jewelry Corp. 10 5/8%, 5/1/03 B1 2,700 2,633
Town & Country Corp. 11 1/2%, 9/15/97 B1 1,370 1,147
5,343
TOTAL RETAIL & WHOLESALE 41,855
SERVICES - 0.2%
LEASING & RENTAL - 0.1%
Acme Holdings, Inc. 11 3/4%, 6/1/00 (b) Ca 2,950 1,475
GPA Delaware, Inc.:
8 1/2%, 3/3/97 - 5,700 5,415
gtd. 8 3/4%, 12/15/98 Caa 800 732
8 5/8%, 1/15/99 - 4,000 3,475
11,097
PRINTING - 0.1%
Big Flower Press:
10 3/4%, 8/1/03 B3 5,300 5,313
10 3/4%, 8/1/03 Class A B3 3,850 3,860
10 3/4%, 8/1/03 Class B B3 1,290 1,293
10,466
TOTAL SERVICES 21,563
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.2%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Comdisco, Inc.:
7 1/4%, 4/15/98 Baa2 $ 20,085 $ 20,415
9.28%, 6/5/00 Baa2 2,000 2,188
9.30%, 6/27/00 Baa2 2,000 2,193
9 1/4%, 7/6/00 Baa2 7,625 8,340
9 1/2%, 1/28/02 Baa2 2,580 2,899
36,035
ELECTRONICS - 0.0%
Alpine Group, Inc. 12 1/4%, 7/15/03 (i) B 1,750 1,601
Grupo Condumex SA de CV
6 1/4%, 7/27/96 (i) - 3,000 2,888
4,489
TOTAL TECHNOLOGY 40,524
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 3,500 3,573
9 1/2%, 7/15/98 Baa3 4,750 5,067
Continental Airlines, Inc. 2nd priority secured
equipment certificate 11%, 3/15/00 (b) Caa 450 -
US Air, Inc.:
8 5/8%, 9/1/98 B1 3,000 2,820
9 5/8%, 9/1/03 B1 910 846
10 3/8%, 3/1/13 B1 5,240 4,873
17,179
RAILROADS - 0.0%
Transtar Holdings L.P./Transtar Cap Corp.,
Series B, 0%, 12/15/03 (f) B- 6,792 4,126
TOTAL TRANSPORTATION 21,305
UTILITIES - 0.9%
CELLULAR - 0.0%
Call-Net Enterprises, Inc. yankee 0%, 12/1/04 (f) B2 550 339
ELECTRIC UTILITY - 0.6%
Comision Federal de Electricidad euro
8%, 8/4/97 - 9,130 8,616
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
El Paso Funding Corp. lease oblig. (b):
9 3/8%, 10/1/96 Ca $ 880 $ 506
9.20%, 7/2/97 Ca 430 249
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 5,000 5,077
7.30%, 7/15/99 Ba1 17,800 17,479
N.A.E.C. 9.05%, 6/1/02 Ba1 8,493 8,763
Public Service Co. of New Hampshire:
1st mtg. 9.17%, 5/15/98 Baa3 8,000 8,342
contingent 15.23%, 7/1/00 Ba2 8,000 9,230
Systems Energy Resources, Inc. 1st mtg.
10 1/2%, 9/1/96 Baa3 1,000 1,042
Texas Utilities Electric Co.:
6 3/8%, 8/1/97 Baa2 2,000 1,997
9 1/2%, 8/1/99 Baa2 2,000 2,180
Toledo Edison Co. secured 9.30%, 4/1/98 Ba2 8,500 8,665
United Illuminating Co.:
7 3/8%, 1/15/98 Baa3 4,000 4,035
9.76%, 1/2/06 Baa3 13,135 13,786
89,967
GAS - 0.3%
Columbia Gas Systems, Inc. (b):
9%, 8/1/96 B3 370 527
9.07%, 1/12/00 - 250 359
9.43%, 10/12/19 Caa 1,250 1,819
Southwest Gas Corp.:
9 3/4%, 6/15/02 Baa3 15,150 17,158
9 3/8%, 2/1/17 Baa3 4,250 4,447
Transcontinental Gas Pipe Line Corp.:
9%, 11/15/96 Baa1 6,150 6,348
extendible 9.41%, 5/15/00 Baa1 13,920 13,896
8 7/8%, 9/15/02 Baa1 3,265 3,575
48,129
TOTAL UTILITIES 138,435
TOTAL NONCONVERTIBLE BONDS 1,149,696
TOTAL CORPORATE BONDS
(Cost $1,280,033) 1,298,162
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 15.5%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
U.S. TREASURY OBLIGATIONS - 12.0%
8 3/4%, 10/15/97 Aaa $ 47,110 $ 49,797
5 1/8%, 3/31/98 Aaa 258,460 252,926
9 1/4%, 8/15/98 Aaa 165,415 179,940
7 1/8%, 9/30/99 Aaa 11,816 12,222
7 3/4%, 12/31/99 Aaa 85,970 91,102
6 1/4%, 2/15/03 Aaa 75,775 75,064
10 3/4%, 5/15/03 Aaa 2,970 3,748
5 3/4%, 8/15/03 Aaa 10,215 9,779
11 1/4%, 8/15/03 Aaa 1,930 2,481
11 7/8%, 11/15/03 Aaa 122,880 165,024
12 3/8%, 5/15/04 Aaa 29,480 40,954
11 5/8%, 11/15/04 Aaa 19,015 25,733
12 3/4%, 11/15/10 Aaa 91,015 132,142
13 7/8%, 5/15/11 Aaa 60,435 93,674
9 7/8%, 11/15/15 Aaa 71,300 94,361
9%, 11/15/18 Aaa 11,110 13,738
8 7/8%, 2/15/19 Aaa 327,230 400,140
12%, 8/15/23 Aaa 63,745 92,370
U.S. TREASURY OBLIGATIONS 1,735,195
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.5%
Federal Agricultural Mortgage Corp.:
6.64%, 2/10/99 Aaa 2,000 2,054
7.01%, 8/10/03 Aaa 1,040 1,074
7.01%, 8/10/04 Aaa 1,340 1,385
7.04%, 8/10/05 Aaa 5,100 5,272
Federal Home Loan Bank:
7.59%, 12/23/96 Aaa 16,050 16,394
6.52%, 4/24/97 Aaa 7,120 7,175
4.89%, 10/14/98 (callable) Aaa 5,200 4,978
5.60%, 2/23/99 (callable) Aaa 27,600 26,703
Federal Home Loan Mortgage Corp.:
4.78%, 2/10/97 (callable) Aaa 4,750 4,660
5.60%, 3/1/99 (callable) Aaa 14,180 13,675
5.40%, 11/1/00 Aaa 5,795 5,472
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Federal National Mortgage Association:
6.52%, 9/15/97 Aaa $ 25,000 $ 25,200
5.20%, 7/10/98 (callable) Aaa 23,240 22,519
3%, 7/13/98 (m) Aaa 6,880 6,871
4.70%, 9/10/98 (callable) Aaa 14,400 13,733
4.95%, 9/30/98 Aaa 36,390 34,944
4 7/8%, 10/15/98 (callable) Aaa 2,070 1,981
4.82%, 10/21/98 (callable) Aaa 14,590 14,008
4.38%, 10/23/98 (callable) (m) Aaa 4,750 4,574
4.94%, 10/30/98 (callable) Aaa 13,790 13,204
5.30%, 12/10/98 (callable) Aaa 47,645 46,082
Government Trust Certificates:
(assets of the Trust guaranteed
by U.S. Government through Defense
Security Assistance Agency) Class 3-B
8.55%, 11/15/97 Aaa 8,231 8,416
(assets of Trust guaranteed by U.S.
government through Defense Security
Assistance Agency) Class 1-C
9 1/4%, 11/15/01 Aaa 8,024 8,773
(assets of Trust guaranteed by U.S.
Government through Defense Security
Assistance Agency) Class 2-E
9.40%, 5/15/02 Aaa 12,470 13,699
(assets of Trusts guaranteed by U.S.
Government through Defense Security
Assistance Agency) Class T-2
9 5/8%, 5/15/02 Aaa 20,230 22,183
(assets of Trust guaranteed by U.S.
Government through Export-Import
Bank) Series 1995-A 6.28%,
6/15/04 Aaa 24,140 23,807
(assets of Trust guaranteed by U.S.
Government through Export-Import
Bank) Series 1992-A 7.02%, 9/01/04 Aaa 4,878 4,967
(assets of Trust guaranteed by U.S.
Government through Export-Import
Bank) Series 1994-F 8.178%,
12/15/04 Aaa 13,508 14,293
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Private Export Funding Corp.:
seured 9.10%, 10/30/98 Aaa $ 4,895 $ 5,288
secured, Series CC, 9 1/2%, 3/31/99 Aaa 5,920 6,545
6.86%, 4/30/04 Aaa 4,221 4,254
State of Israel:
(guaranteed by U.S. Government through
Agency for International Development)
7 3/4%, 4/1/98 Aaa 2,389 2,442
(guaranteed by U.S. Government through
Agency for International Development)
4 7/8%, 9/15/98 Aaa 11,520 11,059
(guaranteed by U.S. Government through
Agency for International Development)
6%, 2/15/99 Aaa 2,140 2,119
(guaranteed by U.S. government through
Agency for International Development)
7 3/4%, 11/15/99 Aaa 31,010 32,492
(guaranteed by U.S. Government through
Agency for International Development)
5 3/4%, 3/15/00 Aaa 11,105 10,807
(guaranteed by U.S. Government through
Agency for International Development)
8%, 11/15/01 Aaa 21,960 23,495
(guaranteed by U.S. Government through
Agency for International Development)
6 1/8%, 3/15/03 Aaa 6,800 6,556
(guaranteed by U.S. Government through
Agency for International Development)
8 1/2%, 4/1/06 Aaa 3,390 3,716
Student Loan Marketing Association
7.56%, 12/9/96 Aaa 3,130 3,191
Tennessee Valley Authority:
8 1/4%, 11/15/96 Aaa 7,100 7,295
4.60%, 12/15/96 Aaa 5,625 5,523
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 11,375 12,328
U.S. GOVERNMENT AGENCY OBLIGATIONS 505,206
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $2,210,864) 2,240,401
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 3.6%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.0%
8%, 10/1/16 to 4/1/20 Aaa $ 4,806 $ 4,885
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.1%
5 1/2%, 11/1/09 to 8/1/09 Aaa 29,999 28,267
6%, 8/1/01 (j) Aaa 74,000 72,266
6 1/2%, 8/1/23 to 7/1/24 Aaa 18,683 17,809
7%, 8/1/24 Aaa 66,000 64,401
7 1/2%, 11/1/07 to 8/1/25 Aaa 121,103 120,960
8 1/2%, 1/1/09 to 7/1/21 Aaa 104 108
10%, 8/1/17 Aaa 192 209
304,020
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.5%
6 1/2%, 8/15/24 (j) Aaa 35,000 33,272
7%, 10/15/17 to 10/15/23 Aaa 12,937 12,624
7 1/2%, 2/1/22 to 7/1/25 Aaa 40,398 40,377
8%, 4/15/17 to 7/15/25 Aaa 38,365 39,105
8 1/2%, 2/15/17 to 7/15/23 Aaa 11,741 12,177
9%, 3/15/10 to 7/15/25 Aaa 53,295 55,937
9 1/2%, 1/15/18 to 8/15/25 Aaa 12,792 13,592
10%, 11/15/09 to 11/16 Aaa 2,694 2,938
210,022
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES (Cost $539,616) 518,927
COMMERCIAL MORTGAGE SECURITIES - 0.6%
ACP Mortgage LP commercial floater Series E,
7.5398%, 2/28/28 (i)(k) BB 2,466 1,853
American Southwest Financial Securities
commercial Series 1994-C2 Class B2,
14.20%, 12/25/01 (i)(k) - 3,000 2,978
CBA Mortgage Corp. commercial Series 1993-C1
Class E, 7.1543%, 12/25/03 (i)(k) Ba2 3,169 2,687
CS First Boston Mortgage Securities Corp.
commercial Series 1994-CFB1 Class E,
8.0195%, 1/25/28 (i)(k) Ba2 2,865 2,299
Lennar Central Partners LP commercial Series
1995-1 Class F, 11.70%, 5/15/05 (i) - 2,400 2,409
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
Morgan Stanley Capital commercial
Series 1995-1 Class A1, 7%, 2/15/02 AAA $ 8,300 $ 8,336
New England Mutual Life Insurance Co.
commercial Series 1993 1 Class D,
8%, 12/15/23 (i) Ba2 5,002 4,028
Phoenix Real Estate Securities, Inc.
commercial Series 1993, Class D-1,
8 1/4%, 11/25/23 (i) Ba2 3,500 2,805
Resolution Trust Corp.:
commercial Series 1994-C1:
Class A-4, 7 1/4%, 6/25/26 AAA 6,046 6,027
Class E, 8%, 6/25/26 BB 3,758 3,064
commercial Series 1994-C2:
Class A-2, 7 3/4%, 4/25/25 AAA 2,245 2,269
Class A-4, 7 1/2%, 4/25/25 AAA 3,539 3,554
Class E, 8%, 4/25/25 BB+ 3,497 3,152
commercial Series 1995-C1:
Class A2A, 6 1/4%, 2/25/27 Aaa 9,653 9,563
Class A4A, 6 1/4%, 2/25/27 Aaa 4,827 4,785
Class F, 6.90%, 2/25/27 Aaa 1,527 1,328
SKW Real Estate LP (i):
commercial 6.45%, 4/15/02 AA 8,749 8,708
commercial Series II Class B, 6.90%, 4/15/02 A 3,110 3,094
SML, Inc. commercial Series 1994-C1:
Class B-3, 11.69%, 9/18/99 - 1,200 1,119
Class C, 9.20%, 9/18/99 (h) - 2,450 1,694
Structured Asset Securities Corp.:
commercial Series 1992-M1 Class C,
7.05%, 11/25/02 B2 3,200 2,486
commercial Series 1993-C1 Class A-1,
6.60%, 10/25/24 AA+ 5,491 5,427
commercial Series 1995-C1:
Class A1A, 7 3/8%, 9/25/24 AAA 6,377 6,427
Class E, 7 3/8%, 9/25/24 (i) BB 4,000 2,873
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $90,464) 92,965
FOREIGN GOVERNMENT OBLIGATIONS (L) - 0.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
Argentina Republic BOTE 1.4153%, 5/31/96 (k) - $ 80,300 $ 17,355
Manitoba Province Canada:
yankee 6%, 10/15/97 - 5,000 4,976
6 3/4%, 3/1/03 - 5,000 4,945
Ontario Province:
yankee 7 3/4%, 6/4/02 - 6,000 6,298
15 3/4%, 3/15/12 - 9,400 11,197
Province of Chaco 11 7/8%, 9/10/97 (h) - 4,000 4,068
Victorian Public Authorities Finance Agency:
8.45%, 10/1/01 - 6,700 7,228
8 1/4%, 1/15/02 - 2,000 2,127
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $56,272) 58,194
SUPRANATIONAL OBLIGATIONS - 0.2%
African Development Bank:
6 3/4%, 7/30/99 - 10,200 10,249
9.30%, 7/01/00 - 15,000 16,641
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $26,709) 26,890
OTHER SECURITIES - 0.1%
PURCHASED BANK DEBT - 0.1%
WCI Communications LP term loan (h) 15,000 14,811
Leslie Fay Cos., Inc. (b):
noteholder payment 134 80
revolving loan 1,012 607
term loan 1,299 779
TOTAL OTHER SECURITIES
(Cost $16,798) 16,277
REPURCHASE AGREEMENTS - 2.0%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.82%,
dated 7/31/95 due 8/1/95 $ 284,755 284,709
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $12,911,302) $ 14,493,305
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
12,936 CHF 8/22/95 $ 11,224 $ 22
13,799,475 JPY 9/8/95 156,156 (4,171)
TOTAL CONTRACTS TO BUY
(Payable amount $171,529) $ 167,380 (4,149)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.2%
CONTRACTS TO SELL
12,936 CHF 8/22/95 $ 11,224 (525)
36,756,813 JPY 8/9/95 to 9/18/95 416,872 26,111
TOTAL CONTRACTS TO SELL
(Receivable amount $453,682) $ 428,096 25,586
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 3.0%
$ 21,437
CURRENCY ABBREVIATIONS
GBP - British pound
ITL - Italian lira
JPY - Japanese yen
CHF - Swiss franc
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Principal amount in millions.
5. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
6. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
7. Affiliated company (see Note 8 of Notes to Financial Statements).
8. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
American Financial
Corp. (Ohio)
9 3/4%, 4/20/04 5/24/95 $ 13,583
Ampex Corp. 8% 2/16/95 $ 1,355
Cafeteria Operators LP
11%, 6/30/98 6/24/93 $ 6,063
FF Holdings Corp. 10/2/92 to
1/14/94 $ 159
Food 4 Less Holdings,
Inc. (warrants) 12/30/92 $ 428
Gulf Canada
Resources Ltd. 10/15/93 $ 117
Leslie Fay Companies, Inc.:
9.53%, 1/15/00 7/19/93 $ 856
10.54%, 1/15/02 7/19/93 to
11/11/93 $ 675
Live Entertainment, Inc.:
$2.00 (warrants) 3/23/93 $ 230
$2.72 (warrants) 3/23/93 $ 241
Mail-Well Holdings, Inc. 2/17/94 $ 82
Province of Chaco,
Argentina 11 7/8%,
9/10/97 3/9/94 $ 4,195
SML, Inc. commercial
Series 1994-C1 Class C,
9.20%, 9/18/99 8/11/94 $ 1,593
Terex Corp. (rights) 7/29/92 $ -
WCI Communications LP
term loan 7/24/95 $ 14,812
9. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $449,154,000 or 3.1% of net
assets.
10. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
11. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
12. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
13. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
14. Partial interest payment received on the last interest payment date.
OTHER INFORMATION
The composition of long-term debt holdings as
a percentage of total value of investment in securities, is as follows
(ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 22.7% AAA, AA, A 21.8%
Baa 1.8% BBB 2.2%
Ba 1.2% BB 1.3%
B 1.5% B 1.6%
Caa 0.6% CCC 0.3%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.9% including long-term debt categorized
as other securities.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 79.9%
Japan 8.2
United Kingdom 2.9
Netherlands Antilles 2.7
Canada 1.7
Others (individually less than 1%) 4.6
TOTAL 100.0%
INCOME TAX INFORMATION
At July 31, 1995, the aggregate cost of investment securities for income
tax purposes was $12,913,343,000. Net unrealized appreciation aggregated
$1,579,962,000, of which $1,834,698,000 related to appreciated investment
securities and $254,736,000 related to depreciated investment securities.
The fund hereby designates $1,916,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JULY 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 14,493,305
agreements of $284,709) (cost $12,911,302) -
See accompanying schedule
Cash 1,472
Receivable for investments sold 169,536
Unrealized appreciation on foreign currency contracts 26,133
Receivable for closed foreign currency contracts 6,666
Receivable for fund shares sold 27,227
Dividends receivable 13,180
Interest receivable 79,232
Other receivables 675
TOTAL ASSETS 14,817,426
LIABILITIES
Payable for investments purchased $ 260,929
Regular delivery
Delayed delivery 107,262
Unrealized depreciation on foreign currency contracts 4,696
Payable for fund shares redeemed 20,340
Accrued management fee 6,093
Other payables and accrued expenses 3,973
Collateral on securities loaned, at value 27,461
TOTAL LIABILITIES 430,754
NET ASSETS $ 14,386,672
Net Assets consist of:
Paid in capital $ 12,696,531
Distributions in excess of net investment income (22,089)
Accumulated undistributed net realized gain (loss) on 108,831
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 1,603,399
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 861,753 shares outstanding $ 14,386,672
NET ASSET VALUE, offering price and redemption price per $16.69
share ($14,386,672 (divided by) 861,753 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME $ 212,423
Dividends (including $9,623 received from affiliated
issuers)
Interest (including income on securities loaned of $486) 313,217
TOTAL INCOME 525,640
EXPENSES
Management fee $ 63,762
Transfer agent fees 26,588
Accounting and security lending fees 842
Non-interested trustees' compensation 153
Custodian fees and expenses 2,274
Registration fees 831
Audit 271
Legal 93
Interest 3
Reports to shareholders 143
Miscellaneous 96
Total expenses before reductions 95,056
Expense reductions (703) 94,353
NET INVESTMENT INCOME 431,287
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 269,696
$(34) on sales of investment in affiliated issuers)
Foreign currency transactions (139,066)
Futures contracts (438) 130,192
Change in net unrealized appreciation (depreciation) on:
Investment securities 1,031,145
Assets and liabilities in foreign currencies 31,635 1,062,780
NET GAIN (LOSS) 1,192,972
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,624,259
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 431,287 $ 374,730
Net investment income
Net realized gain (loss) 130,192 613,089
Change in net unrealized appreciation (depreciation) 1,062,780 (258,017)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,624,259 729,802
FROM OPERATIONS
Distributions to shareholders (340,712) (289,622)
From net investment income
From net realized gain (540,172) (756,724)
TOTAL DISTRIBUTIONS (880,884) (1,046,346)
Share transactions 3,938,809 4,210,808
Net proceeds from sales of shares
Reinvestment of distributions 826,084 970,508
Cost of shares redeemed (2,020,911) (1,793,648)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,743,982 3,387,668
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,487,357 3,071,124
NET ASSETS
Beginning of period 10,899,315 7,828,191
End of period (including distributions in excess $ 14,386,672 $ 10,899,315
of net investment income of $22,089 and
$609, respectively)
OTHER INFORMATION
Shares
Sold 253,871 263,411
Issued in reinvestment of distributions 53,552 61,351
Redeemed (129,845) (112,566)
Net increase (decrease) 177,578 212,196
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED JULY 31,
1995 1994 E 1993 C 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning $ 15.93 $ 16.59 $ 15.22 $ 13.75 $ 13.08
of period
Income from Investment
Operations
Net investment income .42 .46 .72 .88 D .75
Net realized and unrealized 1.53 .88 2.14 1.37 .72
gain (loss)
Total from investment 1.95 1.34 2.86 2.25 1.47
operations
Less Distributions (.44) (.51) (.80) (.78) (.80)
From net investment income
From net realized gain (.75) (1.49) (.69) - -
Total distributions (1.19) (2.00) (1.49) (.78) (.80)
Net asset value, end of period $ 16.69 $ 15.93 $ 16.59 $ 15.22 $ 13.75
TOTAL RETURN A, B 13.03% 8.60% 20.29% 16.96% 11.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 14,387 $ 10,899 $ 7,828 $ 5,578 $ 4,942
(in millions)
Ratio of expenses to average .77% .79% .74% .64% .66%
net assets
Ratio of expenses to average .77% .80% .74% .64% .66%
net assets before expense
reductions
Ratio of net investment income 3.50% 4.00% 4.89% 6.23% 5.94%
to average net assets
Portfolio turnover rate 76% 74% 76% 102% 108%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 7 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C AS OF AUGUST 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
D INVESTMENT INCOME PER SHARE REFLECTS DIVIDENDS RECEIVED IN ARREARS WHICH
AMOUNTED TO $0.14 PER SHARE.
E EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Puritan Fund (the fund) is a fund of Fidelity Puritan Trust (the
trust) and is authorized to issue an unlimited number of shares. The trust
is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES- CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, foreign currency transactions, market
discount, defaulted bonds, partnerships, non-taxable dividends and losses
deferred due to wash sales. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions may include temporary book
and tax basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the fund's Statement of Assets and Liabilities. The U.S. dollar value of
the currencies the fund has committed to buy or sell is shown in the
schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
the fund has acquired or hedged through currency contracts at period end.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
on settlement date. Contracts that have been offset with different
counterparties are reflected as both a contract to buy and a contract to
sell in the schedule of investments under the caption "Forward Foreign
Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. The fund's investment adviser, FMR, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. With respect to purchase
commitments, the fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the commitment. Losses
may arise due to changes in the market value of the underlying securities
or if the counterparty does not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures, writing
puts, and buying calls tend to increase the fund's exposure to the
underlying instrument. Selling futures, buying puts, and writing calls tend
to decrease the fund's exposure to the underlying instrument, or hedge
other fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
INDEXED SECURITIES. The fund may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
fund uses these securities to increase or decrease its exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $39,679,000 or
0.3% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $11,136,392,000 and $9,032,797,000, respectively, of which U.S.
government and government agency obligations aggregated $4,995,980,000 and
$3,425,313,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $40,643,000 and $40,205,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2700% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during those periods,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .20%. For
the period, the management fee was equivalent to an annual rate of .52% of
average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. For the period January 1, 1993 through December 31, 1995,
Fidelity Distributors Corporation, an affiliate of FMR and the general
distributor of the fund, will voluntarily waive the sales charge (2% of the
offering price) on the sales of shares. Effective January 1, 1996 the
fund's sales charge will be eliminated.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
During the period August 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $2,457,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $25,704,000 and
$27,461,000, respectively.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $4,733,000. The weighted average
interest rate was 6.44%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$703,000 under this arrangement.
8. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
AMETEK, Inc. $ 278 $ - $ 719 $ 54,408
Ampex Corp. Class C (a) - - - -
Berkley (W.R.) Corp. 1,508 - 310 33,962
Betz Laboratories, Inc. 8,877 - 3,109 102,032
Cabot Oil & Gas Corp. Class A - 1,825 41 -
EG & G, Inc. - - 1,807 59,041
Filene's Basement Corp. (a) 671 - - 10,721
Goulds Pumps, Inc. - 1,448 424 -
Helmerich & Payne, Inc. - - 672 38,631
Ideon Group, Inc. 10,704 - 128 26,803
Kelley Oil & Gas Corp. (a) 12,000 - - 13,125
Nalco Chemical Co. 2,509 - 863 124,018
Rawlings Sporting Goods, Inc. (a) - 216 - 7,815
Roadway Services, Inc. 3,299 - 697 102,808
Snap On Tool Corp. 20,411 - 615 108,876
Sotheby's Holdings, Inc. Class A 1,473 - 238 26,497
TOTALS $ 61,730 $ 3,489 $ 9,623 $ 708,737
(a) Non-income producing.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and the Shareholders of
Fidelity Puritan Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Puritan Trust: Fidelity Puritan Fund, including the schedule of
portfolio investments, as of July 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1995 by correspondence with the custodian
and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Puritan Trust: Fidelity Puritan Fund as of July 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 8, 1995
DISTRIBUTIONS
The Board of Trustees of Fidelity Puritan Fund voted to pay on September
11, 1995, to shareholders of record at the opening of business on
September 8, 1995, a distribution of $.13 derived from capital gains
realized from sales of portfolio securities and a dividend of $.10 from net
investment income.
A total of 16.43% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 31% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1996 of these percentages for
use in preparing 1995 income tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Richard B. Fentin, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
LOW-PRICED STOCK
FUND
ANNUAL REPORT
JULY 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 39 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 43 Notes to the financial statements.
REPORT OF INDEPENDENT 53 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 54
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been positive market indications so far in 1995, no one
can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Low-Priced Stock 23.81% 163.06% 182.53%
Low-Priced Stock (incl. 3% sales 20.09% 155.17% 174.05%
charge)
Russell 2000(registered trademark) 24.93% 102.76% 100.28%
Average Small Company Growth Fund 32.17% 116.38% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on December 27, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Russell 2000 Index - a broad measure of small company stocks. To measure
how the fund's performance stacked up against its peers, you can compare it
to the average small company growth fund, which reflects the performance of
272 small company growth funds with similar objectives tracked by Lipper
Analytical Services over the past 12 months. Lipper recently changed the
fund's peer group from mid-cap funds to small company growth funds. This
change allows the fund's performance to be compared with other funds that
more closely mirror its investment objectives. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Low-Priced Stock 23.81% 21.34% 20.39%
Low-Priced Stock (incl. 3% sales charge) 20.09% 20.60% 19.74%
Russell 2000 24.93% 15.18% 13.21%
Average Small Company Growth Fund 32.17% 16.27% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Low-Priced Stock FuRussell 2000 Index (RS01)
12/27/89 9700.00 10,000.00
12/31/89 9593.30 10,183.51
01/31/90 9535.10 9,293.82
02/28/90 9719.40 9,582.38
03/31/90 9816.40 9,955.08
04/30/90 9447.80 9,630.04
05/31/90 10194.70 10,311.66
06/30/90 10476.00 10,332.56
07/31/90 10417.80 9,878.09
08/31/90 9379.90 8,562.52
09/30/90 8968.27 7,804.83
10/31/90 8816.43 7,328.36
11/30/90 9292.18 7,887.14
12/31/90 9585.72 8,200.08
01/31/91 10466.35 8,941.65
02/28/91 11397.59 9,938.77
03/31/91 12156.76 10,638.35
04/30/91 12622.38 10,611.58
05/31/91 12814.70 11,117.39
06/30/91 12045.42 10,469.50
07/31/91 12784.34 10,836.89
08/31/91 13138.61 11,238.01
09/30/91 13192.71 11,326.01
10/31/91 13653.40 11,625.57
11/30/91 13098.47 11,087.87
12/31/91 14019.94 11,975.73
01/31/92 15233.92 12,946.08
02/29/92 16211.56 13,323.74
03/31/92 15674.40 12,872.75
04/30/92 15824.80 12,421.76
05/31/92 15932.23 12,586.94
06/30/92 15545.48 11,991.68
07/31/92 16050.41 12,408.75
08/31/92 16007.44 12,058.59
09/30/92 16137.72 12,336.88
10/31/92 16406.50 12,729.02
11/30/92 17515.20 13,703.05
12/31/92 18079.01 14,180.43
01/31/93 18543.44 14,660.38
02/28/93 18384.85 14,321.78
03/31/93 18939.91 14,786.51
04/30/93 18758.67 14,380.63
05/31/93 19155.14 15,016.96
06/30/93 19223.10 15,110.64
07/31/93 19472.31 15,319.27
08/31/93 20163.30 15,981.08
09/30/93 20327.14 16,432.07
10/31/93 21075.97 16,855.01
11/30/93 20713.64 16,300.25
12/31/93 21733.10 16,857.57
01/31/94 22863.72 17,386.11
02/28/94 22851.16 17,323.23
03/31/94 21846.16 16,408.60
04/30/94 22034.60 16,506.13
05/31/94 21959.22 16,320.79
06/30/94 21645.16 15,766.59
07/31/94 22135.10 16,025.63
08/31/94 22964.22 16,918.62
09/30/94 23073.27 16,861.97
10/31/94 23252.45 16,795.42
11/30/94 22632.20 16,117.11
12/31/94 22778.19 16,550.13
01/31/95 22763.95 16,341.32
02/28/95 23418.83 17,021.10
03/31/95 23575.43 17,314.24
04/30/95 24344.19 17,699.23
05/31/95 24842.46 18,003.56
06/30/95 25796.30 18,937.50
07/31/95 27405.01 20,028.34
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Low-Priced Stock Fund on December 27, 1989, when the fund began, and paid a
3% sales charge. As the chart shows, by July 31, 1995, the value of your
investment would have grown to $27,405 - a 174.05% increase on your initial
investment. For comparison, look at how the Russell 2000 did over the same
period. With dividends reinvested, the same $10,000 investment would have
grown to $20,028 - a 100.28% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Strong corporate earnings and a
favorable interest rate
environment helped the U.S.
stock market post strong returns
for the 12 months ended July 31,
1995. The Standard & Poor's
Composite Index of 500 Stocks
finished the 12-month period with a
total return of 26.11% - well
above its historical annual
average of roughly 12%. With
inflation posing little threat,
interest rates fell during the first
half of 1995. The Federal
Reserve Board cut the federal
funds rate - the rate banks
charge each other for overnight
loans - by 0.25% on July 6.
Large-capitalization stocks led
the somewhat narrow market
rally. Technology companies -
whose goods and services
benefited from both corporate
and consumer demand - posted
the strongest earnings growth
and stock price gains. In
February, the Dow Jones
Industrial Average closed
above 4000 for the first time.
Returns from foreign markets
were varied, as investors brought
capital back to the U.S. The
Morgan Stanley Emerging
Markets Free Index was down
3.76% for the 12 months ended
July 31. The Morgan Stanley
EAFE (Europe, Australia, Far
East) Index returned 6.95% for the
year ended July 31. European
markets have fared well through
the first half of 1995 - after a
difficult year in 1994 - while the
Japanese market recently has
shown some signs of recovery
after struggling through much of
the year.
An interview with Joel Tillinghast, Portfolio Manager of Fidelity
Low-Priced Stock Fund
Q. JOEL, HOW HAS THE FUND PERFORMED?
A. Not as well as I would have liked. For the 12 months ended July 31,
1995, the fund had a total return of 23.81%. The average small company
growth fund tracked by Lipper Analytical Services returned 32.17% during
the same 12-month period.
Q. WHAT FACTORS AFFECTED PERFORMANCE?
A. If you look at the relative performance of different stock mutual funds
this year, you will see that most of the funds that did best were those
with higher percentages in larger companies, as well as those that have an
orientation toward growth stocks - companies with rapid earnings growth
and, at times, high valuations. The types of stocks the fund generally
invests in - low-priced and smaller-company issues - have not performed as
well in the stock market rally we've seen thus far in 1995. In addition,
most technology stocks were exceptional performers during the period, and
the fund held fewer than many other small-company funds. One reason is the
fund's discipline, which requires that 65% of the fund's assets normally be
invested in stocks selling for under $25 per share at the time of purchase.
Other small company growth funds may have the ability to purchase stocks
with a share price higher than $25. The popularity of technology stocks has
lifted many out of the low-priced universe. Recently, only about 10% of
stocks selling below $25 per share were in technology businesses.
Q. WHAT HAVE YOU DONE IN RESPONSE?
A. Before I outline what I've done, let me remind shareholders that the
fund's goal is to feature stocks of small companies with below-market
valuations, superior profitability, good cash flow characteristics and
above average near- and long-term sales and earnings growth. Low-priced
stocks usually are small companies or out-of-favor big companies, and
brokers tend to give both groups less analytical attention. Fidelity's
large research department helps me to spot attractive businesses selling
for prices below their investment value. Eventually, rising profits cause
value to be recognized. That being said, the fund also has the ability to
invest 35% of its assets in stocks with share prices above $25. In order to
add value, I decreased the fund's cash and short-term investment position
from 23.3% on January 31, 1995, to 12.5% at the end of the period,
branching out into larger or more expensive stocks.
Q. YOU'VE INCREASED THE FUND'S INVESTMENTS IN THE TECHNOLOGY SECTOR FROM
9.9% ON JANUARY 31, 1995, TO 14.7% ON JULY 31. WHERE HAVE YOU FOUND
OPPORTUNITIES?
A. I've been replacing some small technology shares with larger ones,
because many large technology companies are growing as well as smaller
ones, but are selling at what I find to be better valuations. IBM, the
fund's second largest holding, is valued at a historically cheap multiple
of earnings despite the leading positions the company currently holds in
personal computers and software. While IBM's mainframe computer business
currently is stagnant, it is highly profitable. The company has a new CEO
who has helped the company improve its profitability and balance sheet,
which should allow it to grow more rapidly going forward. Cohu, which makes
semiconductor testing equipment, has been among the fund's best holdings.
Sales and earnings have climbed for Cohu as semiconductor companies have
added fabrication capacity.
Q. WHAT STOCKS OUTSIDE OF THE TECHNOLOGY SECTOR HELPED THE FUND?
A. Firstbank Puerto Rico has been a fine performer for the fund. It has
shifted its emphasis toward higher-rate consumer lending, resulting in
dramatically higher profits. And, while profits have been climbing at
better than a 20% rate, the stock is selling at what I find to be a modest
price-to-earnings multiple. Devon Group, a printing company, also has
performed well. It has invested heavily in technologically advanced
equipment that enables it to offer more value-added services. While its
rapidly rising profits have enabled it to pay off long-term debt, I still
find Devon to be a cheap stock.
Q. AND WHICH STOCKS HAVE BEEN DISAPPOINTMENTS?
A. Government Technology Services and Quixote, two companies that sell
technology to the federal government, have underperformed. Attempts to cut
government spending have helped delay procurement, reduce sales and lower
margins for the companies. I had hoped that a drive for more efficiency
would spur the government to invest in automation and technology, but that
hasn't happened thus far. Venture and Caldor, two discount stores, also
have performed poorly. Both companies have suffered from price cutting and
strong competition, especially from Wal-Mart. In addition, the overall
retail market has been slow because of a glut of square footage in the
industry and the costs associated with the refurbishing and reformatting
that are necessary to keep customers coming in the door.
Q. WHAT CAN YOU TELL US ABOUT THE FUND'S FOREIGN INVESTMENTS?
A. Foreign stocks are about 21% of the fund, and have a character similar
to the U.S. holdings, although investments in foreign stocks may involve
additional risks, including increased political or economic risks, as well
as exposure to currency fluctuations. The size of the foreign holdings
depends on my ability to find companies overseas that are better positioned
and/or not as highly valued as domestic companies. For example, the fund at
present has investments in several utility stocks in the United Kingdom,
but very few in the U.S. In general, the U.K. utilities sell for much less
than American utilities, have stronger balance sheets and are subject to
price cap regulation that encourages them to cut costs and permits better
earnings growth. Samsung Electronics is a Korean electronics company that
is making most of its profits from memory chips known as DRAMs and other
semiconductors. Right now, its stock sells at lower valuations than most
other public U.S. semiconductor companies. It currently is the world leader
in DRAMs and is adding capacity that will allow it to continue to be.
Q. YOU'VE TALKED ABOUT HOW, IN GENERAL, SMALLER-COMPANY STOCKS
UNDERPERFORMED LARGER-COMPANY STOCKS DURING THE PERIOD. WHAT WERE SOME OF
THE REASONS BEHIND THAT?
A. One of the main reasons has been the weakness of the dollar, relative to
other main currencies, such as the yen and the deutsche mark. In general,
large multinational companies have more business overseas than smaller
companies. The weak dollar helped these large companies in two ways. First,
the weak dollar has inflated the dollar value of their overseas earnings.
Second, it has helped increase their export business, as American products
became cheaper overseas. Because of this backdrop, earnings for large
companies with considerable overseas business increased, attracting
investors. The added interest in these kinds of stocks helped push their
prices higher.
Q. WHAT'S YOUR OUTLOOK?
A. If the dollar strengthens over the next six months - which it may,
because it appears the Japanese Central Bank wants to bring down the value
of the yen, relative to the dollar - it will probably curb the earnings
strength of large multinationals and may brighten the prospects for
smaller-company stocks. Earnings disappointments also could arise - for
small companies, large companies, or both - if we see an economic slowdown
in the second half of the year. In situations where many companies report
lower earnings than expected, investors generally flock toward companies
that are able to achieve growth. With that in mind, I've tried to tilt the
fund toward stocks whose growth prospects have a greater degree of
predictability, while continuing to focus on low-priced stocks.
FUND FACTS
GOAL: to increase the value
of the fund's shares by
investing mainly in low-priced
common stocks ($25 or less
at time of purchase)
START DATE: December 27,
1989
SIZE: as of July 31, 1995,
more than $2.9 billion
MANAGER: Joel Tillinghast,
since 1989; analyst for
natural gas, personal care
product, appliance and
tobacco industries, 1986 to
1989; joined Fidelity in 1986
(checkmark)
JOEL TILLINGHAST ON THE
INVESTING ENVIRONMENT FOR
SMALL COMPANY STOCKS:
"Declining bond rates
normally are particularly
helpful for small com- pany
stocks. That's because
smaller companies usually
are heavier borrowers than
large companies, and
therefore tend to benefit more
from declining rates.
"In spite of the fact that interest
rates have fallen, many small
company stocks have
underperformed. One factor
has been the slower economy,
because small company stocks
tend to be more cyclical. In
addition, the weak dollar has
inflated the dollar value of
overseas earnings. That
tends to benefit large
multinationals, because they
generally have more foreign
earnings than small domestic
companies. Large companies
also are more likely to benefit
from increased export
business resulting from a
weak dollar.
"The situation may be
reversing. First, the Japanese
Central Bank seems to be
aiming to weaken the yen.
Whether the dollar firms
against other currencies is a
matter of conjecture. Second,
lower interest rates tend to
precede an improving
economy. With bond rates
near 20-year lows I don't
anticipate a protracted
recession.
"At the moment, valuations for
small stocks have compressed
compared with large stocks.
While small stocks generally can
stay cheaper than large stocks
for longer periods, the
risk/reward trade-off would
seem to favor small stocks
going forward."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Lyondell Petrochemical Co. 1.8 1.9
International Business Machines 1.8 0.0
Corp.
Hillhaven Corp. 1.3 0.0
Northumbrian Water Group PLC Ord. 1.2 1.2
Universal Health Services, Inc. 1.2 1.1
Class B
Firstbank Puerto Rico 1.1 0.7
LEGENT Corp. 1.0 0.0
Cohu, Inc. 1.0 0.5
Welsh Water PLC Ord. 0.9 1.1
Mac Frugals Bargains, Inc. 0.9 0.0
TOP FIVE MARKET SECTORS AS OF JULY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Technology 14.7 9.9
Finance 13.8 11.3
Basic Industries 9.7 9.5
Health 8.4 5.3
Durables 5.6 4.8
ASSET ALLOCATION
AS OF JULY 31, 1995 * AS OF JANUARY 31, 1995 **
Row: 1, Col: 1, Value: 12.5
Row: 1, Col: 2, Value: 2.4
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 45.1
Row: 1, Col: 1, Value: 23.3
Row: 1, Col: 2, Value: 4.3
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 32.4
Stocks 87.1%
Bonds 0.4%
Short-term
Investments 12.5%
FOREIGN
INVESTMENTS 21.1%
Stocks 72.4%
Bonds 4.3%
Short-term
Investments 23.3%
FOREIGN
INVESTMENTS 18.2%
*
**
INVESTMENTS JULY 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 86.6%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.2%
AEROSPACE & DEFENSE - 0.2%
Allied Research Corp. (a)(c) 223,110 $ 976
Datron Systems, Inc. (a)(c) 254,200 3,368
4,344
DEFENSE ELECTRONICS - 0.0%
Tech-Sym Corp. (a) 2,800 75
TOTAL AEROSPACE & DEFENSE 4,419
BASIC INDUSTRIES - 9.7%
CHEMICALS & PLASTICS - 4.7%
ADCO Technologies, Inc. 44,100 358
AEP Industries, Inc. 300,675 6,540
Aceto Corp. (c) 180,000 2,588
Agrium, Inc. 200,000 7,001
Celanese Canada, Inc. 125,000 2,360
Cytec Industries, Inc. (a) 290,300 14,842
EVC International NV (a) 10,000 478
EVC International NV (a)(e) 90,000 4,304
International Specialty Products, Inc. 64,100 585
Kemira OY sponsored ADR (a)(e) 100,000 1,713
Lyondell Petrochemical Co. 2,000,000 55,000
Martin Color-Fi, Inc. (a) 102,500 820
Mississippi Chemical Corp. 1,121,800 26,221
NL Industries, Inc. (a) 20,000 333
OM Group, Inc. 100,000 3,100
Skrinet AB Class B Free shares 225,000 1,829
Spartech Corp. (c) 708,300 4,604
Tessenderlo Chemie 335 130
Tessenderlo Chemie NV 19,475 7,535
140,341
IRON & STEEL - 1.4%
Acier Leroux, Inc. Class B (a) 200,000 667
Acier Leroux, Inc. Class B (a)(e) 200,000 667
Algoma Steel, Inc. (a) 24,700 131
Cold Metal Products, Inc. (a)(c) 541,300 3,248
Friedman Industries, Inc. 106,133 418
Harris Steel Group, Inc. Class A 50,000 307
Intermetco Ltd. (c) 339,800 1,744
Prudential Steel Ltd. 83,400 665
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Rautaruukki OY Class K (e) 200,000 $ 1,508
Roanoke Electric Steel Corp. (c) 386,700 5,607
Samuel Manu-Tech, Inc. 600,000 4,729
Shaw Industries Ltd. Class A 75,000 619
Slater Industries, Inc. Class B (c) 554,900 4,780
SSAB Svenskt Stal AB Class B Free shares 50,000 608
Steel of West Virginia, Inc. (a)(c) 551,500 6,618
Sudbury, Inc. (a) 435,000 3,589
TriMas Corp. 192,700 3,950
UNR Industries, Inc. 314,600 2,595
42,450
METALS & MINING - 1.4%
Alumax, Inc. (a) 72,600 2,496
Aluminum of Greece SA (Reg) 51,000 2,406
Alcan Australia Ltd. 2,000,000 4,714
Castech Aluminum Group (a) 196,600 3,490
Castle A.M. & Co. 156,150 3,006
De Beers Consolidated Mines Ltd. ADR 250,000 6,156
Falconbridge Ltd. (f) 100,000 715
Hindalco Industries Ltd. GDR 50,000 1,650
Kaiser Aluminum Corp. 871,700 14,165
Lindberg Corp. 236,000 1,593
Outokumpu OY Class A 51,100 997
Tremont Corp. 14,600 272
41,660
PACKAGING & CONTAINERS - 0.5%
Owens-Illinois, Inc. (a) 750,000 10,406
PCI Services, Inc. (a)(c) 256,200 2,594
U.S. Can Corp. (a) 149,600 2,169
15,169
PAPER & FOREST PRODUCTS - 1.7%
Alliance Forest Products, Inc. (a) 160,000 3,416
Bonar, Inc. 10,000 268
Enso-Gutzeit OY Class R Free shares 1,450,000 13,764
Groupe Forex, Inc. 120,000 1,100
Klippans Finpapppershrunk (a) 125,000 848
Kymmene Corp. 75,000 2,498
Metsa-Serla Ltd. Class B 525,000 24,355
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Repola OY 100,000 $ 2,231
Rock-Tenn Co. CLass A 11,000 187
Rolland, Inc. 6,400 53
St Laurent Paperboard, Inc. (a) 25,000 451
St Laurent Paperboard, Inc. (a)(e) 75,000 1,354
Specialty Paperboard, Inc. (a) 64,000 672
51,197
TOTAL BASIC INDUSTRIES 290,817
CONGLOMERATES - 0.4%
Bibby & Sons PLC 1,500,000 2,441
Quixote Corp. (c) 558,200 6,280
Standex International Corp. 78,300 2,721
11,442
CONSTRUCTION & REAL ESTATE - 4.2%
BUILDING MATERIALS - 1.9%
American Woodmark Corp. (a) 50,000 275
AMRE, Inc. (c) 162,600 650
Devcon International Corp. (a) 121,200 803
Domco Industries Ltd. 600 8
Drew Industries, Inc. (c) 303,300 3,640
Elco Industries, Inc. (c) 495,000 8,910
Evered Bardon PLC 19,500,000 9,023
Hoganas AB Class B Free shares 50,000 1,007
Martin Industries, Inc. (a) 64,000 704
Patrick Industries, Inc. (c) 617,500 8,336
Polypipe PLC 175,000 447
Raytech Corp. (a)(c) 260,800 750
Shelter Components Corp. (c) 391,625 4,944
Tecumseh Products Co. Class A 200,000 9,550
Watsco, Inc.:
Class A (c) 385,050 5,583
Class B (c) 108,780 1,523
56,153
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - 1.9%
AAF Industries PLC (a)(c) 1,250,000 $ 538
Abbey Ltd. 450,000 998
American Homestar Corp. (a) 110,000 1,540
Cavco Industries, Inc. (a)(c) 246,050 2,584
Higgs and Hill PLC (c) 3,250,000 4,509
Jacobson & Widmark AB Fria 200,000 1,654
Lennar Corp. 124,900 2,404
Lovell (Y.J.) Holdings 300,000 144
McAlpine (Alfred) Ord. 565,388 1,263
Monaco Coach Corp. (a) 50,000 663
NCI Building Systems, Inc. (a) 181,900 3,502
Oriole Homes Corp.:
Class A 91,000 660
Class B (c) 276,800 2,041
Perini Corp. (a) 169,600 1,972
Redman Industries (a) 250,900 5,959
Tay Homes PLC (c) 2,000,000 5,010
Technip SA (e) 80,000 5,347
Thorkild Kristensen 1,000 67
U.S. Home Corp. (a)(c) 534,245 12,555
Volker Stevin NV 25,000 1,693
55,103
ENGINEERING - 0.1%
Dai-Dan Co. Ltd. 20,000 265
SNC Group, Inc. Class A 75,000 1,519
Simard Beaudry, Inc. (a) 100,000 282
URS Corp. (a) 333,500 1,876
3,942
REAL ESTATE INVESTMENT TRUSTS - 0.3%
Banyan Short Term Income Trust (SBI) (a)(c) 653,200 2,121
Banyan Strategic Land Trust (SBI) (c) 991,750 4,091
First Union Real Estate Equity & Mortgage Investments 225,600 1,692
Home Properties of NY 75,000 1,341
Storage Equities, Inc. 17,000 291
9,536
TOTAL CONSTRUCTION & REAL ESTATE 124,734
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 5.6%
AUTOS, TIRES, & ACCESSORIES - 2.7%
Autocam Corp. 65,222 $ 750
Automotive Industries Holding, Inc. (a) 37,700 1,251
Breed Technologies, Inc. 100,000 2,250
Capco Automotive Products Corp. 106,700 814
Cook (D.C.) Holdings PLC 405,800 356
Deflecta-Shield Corp. (a) 60,000 420
Douglas & Lomason Co. 38,000 561
Durakon Industries, Inc. (a)(c) 651,800 9,044
Federal Screw Works (c) 108,800 2,611
Forsheda AB Class B Free shares 65,000 1,746
Gentex Corp. (a) 277,500 6,001
Hahn Automotive Warehouse, Inc. 69,528 600
Lund International Holdings, Inc. (a)(c) 375,000 9,563
Mercury Air Group (c) 379,920 3,229
Monro Muffler Brake, Inc. 196,223 2,894
Peugeot SA Ord. 33,000 4,305
Republic Automotive Parts, Inc. (a)(c) 119,800 1,707
Smith (A.O.) Corp. Class B 45,800 1,248
Superior Industries International, Inc. 400,000 14,000
Supreme Industries, Inc. Class A (a) 49,100 448
Treadco, Inc. 76,500 880
Truck Components, Inc. (a) 55,900 866
Uni Select, Inc. (c) 620,200 4,432
Valley Forge Corp. (c) 171,100 3,272
Western Star Trucks Holdings Ltd. 81,600 1,630
Wynn's International, Inc. (c) 194,700 5,062
79,940
CONSUMER DURABLES - 0.8%
American Consumer Products Corp. (a)(c) 206,000 592
Finnveden Invest AB Class B Free shares (a) 57,000 548
Iro, AB (a)(e) 100,000 1,124
Libbey, Inc. (c) 828,100 19,874
Mikasa, Inc. (a) 112,200 1,739
Syratech Corp. (a) 89,300 1,697
25,574
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 0.5%
International Jensen, Inc. (a)(c) 567,000 $ 4,111
Lg Electronics, Inc. GDR (non-vtg) (a) 320,000 4,160
North American Watch Corp. 253,500 3,739
Phoenix Gold International, Inc. (a) 50,000 450
Polk Audio, Inc. (a)(c) 69,600 731
Toastmaster, Inc. (c) 223,300 1,200
14,391
HOME FURNISHINGS - 0.3%
BMTC Group, Inc. Class A (sub.-vtg) 150,000 1,045
DMI Furniture, Inc. (a)(c) 95,000 131
Ethan Allen Interiors, Inc. (a) 32,800 611
Falcon Products, Inc. 54,700 711
Haverty Furniture Companies, Inc. 311,550 3,661
Huffman Koos, Inc. (a)(c) 392,000 2,841
9,000
TEXTILES & APPAREL - 1.3%
Concord Fabrics, Inc. (a):
Class A (c) 226,800 1,304
Class B 65,100 366
Cone Mills Corp. (a) 470,300 6,467
Decorator Industries, Inc. (c) 199,800 1,923
Dominion Textile, Inc. 162,700 1,148
Donnkenny, Inc. (a) 165,000 3,960
Fila Holding Spa sponsored ADR 605,300 17,705
Forstmann & Co., Inc. (a) 214,500 268
G-III Apparel Group Ltd. (a)(c) 303,420 569
Jones Apparel Group, Inc. (a) 71,200 2,456
KTP Holdings Ltd. 1,000,000 119
McRae Industries, Inc. Class A 46,800 339
Superior Surgical Manufacturing, Inc. 264,600 2,613
Tandy Brands Accessories, Inc. (a) 135,000 1,114
Yue Yuen Industrial Holdings Ltd. 500,000 131
40,482
TOTAL DURABLES 169,387
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 4.2%
ENERGY SERVICES - 1.4%
Akita Drilling Ltd. Class A (non-vtg.) (a) 638,150 $ 1,918
Atwood Oceanics, Inc. (a) 158,400 2,930
Aztec Manufacturing Co. (c) 516,500 1,808
Computalog Ltd. (a)(c) 475,000 2,263
Dawson Geophysical Co. (a) 90,000 1,035
Dreco Energy Services Ltd. Class A (a)(c) 437,100 5,573
Global Industries Ltd. (a) 118,400 2,368
Key Energy Group, Inc. (a)(c) 573,000 2,901
Lufkin Industries, Inc. 17,900 385
Nabors Industries, Inc. (a) 1,649,500 14,949
Patterson Energy, Inc. (a) 20,000 215
Pe Ben Oilfield Services Ltd. (a)(c) 302,000 520
Petroleum Helicopters, Inc. 82,500 763
RPC Energy Services, Inc. (a) 201,700 1,689
Serv-Tech, Inc. (a)(c) 382,900 3,303
Smalls Oilfield Services Corp. (a)(c) 164,000 390
Veritas Energy Service, Inc. (a) 50,000 243
43,253
OIL & GAS - 2.8%
Adams Resources and Energy, Inc. (a) 111,100 903
Alamco, Inc. (a)(c) 465,300 3,955
Ampolex Ltd. Ord. 5,603 13
Aran Energy (a)(c) 10,000,000 6,861
Barrington Petroleum Ltd. (a) 100,000 308
Belden & Blake Corp. (a)(c) 349,000 5,584
Belden & Blake Corp. (a)(d) 105,000 1,680
Blue Range Resource Corp. Class A (a) 25,000 199
Blue Range Resource Corp. Class A (a)(e) 175,000 1,395
British Borneo Petroleum 500,000 2,054
CEC Resources Ltd. (a)(c) 126,330 734
Castle Energy Corp. (a)(c) 1,113,450 10,715
Columbus Energy Corp. (c) 277,926 1,876
Cube Energy Corp. (a)(c) 271,600 1,419
Devran Petroleum Ltd. (a) 650,000 310
Discovery West Corp. (a) 225,000 627
Edisto Resources Corp. (a) 394,800 2,542
ENEX Resources Corp. (c) 144,300 1,335
Ensign Resource Service Group Ord. 101,400 357
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Foremost Industries, Inc. (a)(c) 247,500 $ 1,202
Goal Petroleum Ord. 2,600,000 2,696
Giant Industries, Inc. (c) 743,100 6,038
Hallwood Consolidated Resources Corp. (a) 359,500 719
Maynard Oil Co. (a) 131,000 753
McFarland Energy, Inc. (a) 81,300 549
Norcen Energy Resources Ltd. 200,000 3,024
Novus Petroleum Ltd. (a) 1,250,000 1,617
Petro-Canada 350,000 3,496
Petroleum Development Corp. (a)(c) 1,102,500 1,309
Repsol SA sponsored ADR 100,000 3,338
Rio Alto Exploration Ltd. (a) 50,000 130
Santos Ltd. 200,000 526
Swift Energy Co. (a)(c) 673,410 5,892
Unit Corp. (a) 743,000 2,508
USX-Delhi Group (c) 621,200 6,600
Williams Clayton Energy, Inc. (a)(c) 361,700 1,085
84,349
TOTAL ENERGY 127,602
FINANCE - 13.7%
BANKS - 4.7%
Arrow Financial Corp. 60,000 990
Bank of New York Co., Inc. (warrants) (a) 417,500 9,342
Bank Atlantic Bancorp, Inc. (c) 796,050 11,941
Bergens Skillingsbank 100,000 733
Bolig Og Naerings Banken 50,000 1,262
Colonial BancGroup, Inc. Class A 89,800 2,571
Fed One Bancorp 100,000 1,363
Firstbank Puerto Rico (a)(c) 1,488,500 33,490
First Empire State Corp. 55,800 9,877
First Mutual Savings Bank (a) 49,500 644
Foreningsbanken AB Class A Ord. (a) 500,000 880
GBC Bancorp (c) 479,000 5,269
Gronlandsbanken AS 15,000 665
HSBC Holdings PLC 100,000 1,357
HUBCO, Inc. 443,320 7,869
Industri & Skipsbanken 25,000 73
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Nordlandsbanken AS 150,000 $ 2,222
Okobank Class A (a) 150,000 1,356
Ringkjobing Bank 5,000 733
Shawmut National Corp. 52,746 1,629
SouthTrust Corp. 610,000 15,098
Sparebanken Sverige AB Class A (a)(e) 438,000 3,869
Sparebanken Norway Prime share certificates 350,000 8,717
Sparebanken More 50,000 1,083
Stadshypotek, Series A 100,000 1,611
Stadshypotek, Series A (e) 100,000 1,611
Sumitomo Bank 46,300 1,053
Syds-Sonderjylland Holding (c) 350,000 13,248
Union Bankshares Ltd. (a) 7,000 68
140,624
CLOSED END INVESTMENT COMPANY - 0.1%
Amagerbanken AS 50,000 1,568
CREDIT & OTHER FINANCE - 1.1%
Cash America Investments, Inc. 547,700 4,039
First Financial Caribbean Corp. (c) 249,000 4,015
Foothill Group, Inc. Class A 346,300 8,744
Greenpoint Financial Corp. 525,000 12,666
Intrum Justitia NV (Reg.) 685,000 820
Jayhawk Acceptance Corp. 4,000 40
Perpetual PLC 50,000 1,280
Surrey Metro Savings Credit Union (non-vtg.) 267,100 1,689
33,293
INSURANCE - 5.3%
ARI Holdings, Inc. (a)(c) 176,100 1,387
American Indemnity Financial Corp. (c) 194,000 1,795
Blanch E.W. Holdings, Inc. 288,900 4,947
CII Financial, Inc. (a) 208,700 1,957
Capitol American Financial Corp. 142,900 3,126
Commerce Group, Inc. 759,600 13,768
Cotton State Life & Health Insurance Co. 15,000 146
First American Financial Corp. 247,200 5,778
First Central Financial Corp. (c) 575,700 4,318
Frontier Insurance Group, Inc. 225,600 6,148
Gainsco, Inc. (c) 1,155,449 10,399
Intercargo Corp. 108,800 1,251
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Kemper Corp. 89,500 $ 4,307
Kentucky Medical Insurance Co. Class A (a) 48,500 364
Lloyd Thompson Group PLC 100,000 254
London Insurance Group, Inc. 356,600 6,797
Lowndes Lambert Group Holdings PLC 225,000 614
Merchants Group, Inc. (c) 202,000 3,333
Meridian Insurance Group, Inc. 175,700 1,977
Mid South Insurance Co. (c) 200,720 2,007
National Western Life Insurance Co. Class A (a) 82,700 3,618
Protective Life Corp. 519,600 15,068
RLI Corp. (c) 539,425 12,407
Renaissance RE Holdings 9,000 206
Rightchoice Managed Care, Inc. Class A (a)(c) 208,300 2,708
Security-Connecticut Corp. 400,900 9,972
Stewart Information Services Corp. (c) 531,000 10,355
Titan Holdings, Inc. 167,895 1,994
United Coasts Corp. (a) 195,000 1,146
United Insurance Companies, Inc. (a) 1,400,000 21,522
United Wisconsin Services, Inc. 145,700 2,914
Western National Corp. 113,900 1,353
157,936
SAVINGS & LOANS - 2.4%
Andover Bancorp, Inc. (c) 400,600 7,962
Astoria Financial Corp. (a) 416,000 15,600
Bankunited Financial Corp. Class A (a)(c) 115,850 898
Cameron Financial Corp. (a) 22,000 264
Coastal Bancorp, Inc. (c) 287,800 4,497
Collective Bancorp, Inc. (c) 1,078,900 24,410
Eagle Financial Corp. 29,000 631
Financial Bancorp, Inc. 75,000 1,013
First Federal Savings & Loan Assn. 25,300 500
First Home Savings Bank F S B 40,000 630
Independence Federal Savings Bank (c) 119,500 926
Interwest Savings Bank 9,400 142
Iroquois Bancorp, Inc. 43,000 1,226
Lakeview Financial Corp. (c) 134,760 2,375
Pennfed Financial Services, Inc. (a) 97,500 1,341
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Pocahontas Federal Saving And Loan Association. 52,000 $ 624
Poncebank (c) 397,300 4,221
Primary Bank (a) 38,300 546
Springfield Institution for Savings (a) 106,780 1,495
Virginia First Financial Corp. 102,000 1,938
Warren Bancorp, Inc. (c) 216,500 1,894
73,133
SECURITIES INDUSTRY - 0.1%
Charles JW Financial Services, Inc. (a) 8,000 29
Govett & Co. Ltd. 50,000 225
Hong Leong Industries BHD (a) 500,000 3,133
Mail Boxes Etc. 42,500 542
3,929
TOTAL FINANCE 410,483
HEALTH - 8.4%
DRUGS & PHARMACEUTICALS - 1.1%
Astra AB:
Class A Free shares 25,000 845
Class B Free shares 50,000 1,657
Bio-Rad Laboratories, Inc. Class A (a) 145,000 5,510
CSL Ltd. 50,000 117
Glaxo Holdings PLC Ord. 500,000 5,978
Medchem Products, Inc. (a) 110,100 977
Natures Sunshine Products, Inc. 241,040 4,520
North American Biologicals, Inc. (a) 374,161 4,303
Phoenix International Life Sciences, Inc. (a)(e) 250,000 1,833
Santen Pharmaceutical Co. Ord. 25,000 673
Schering-Plough Corp. 117,800 5,478
Serologicals Corp. (a) 9,500 125
Virbac SA (Societe) (a) 1,365 177
32,193
MEDICAL EQUIPMENT & SUPPLIES - 3.7%
Abbott Laboratories 424,700 16,953
Allied Healthcare Products, Inc. 195,000 2,974
American Medical Electronics, Inc. (a) 40,000 390
AMSCO International, Inc. (a) 407,900 7,597
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
EMPI, Inc. (a) 62,500 $ 1,109
HPSC, Inc. (a)(c) 352,500 1,630
Haemonetics Corp. (a) 685,500 15,167
Hycor Biomedical, Inc. (a) 292,000 1,059
Johnson & Johnson 208,200 14,881
Laser Industries Ltd. Ord. (a)(c) 500,500 4,598
Medrad, Inc. (a) 92,200 2,005
Minntech Corp. (c) 575,500 8,129
Model Imperial, Inc. (a) 133,000 781
OEC Medical Systems, Inc. 40,600 360
Orthofix International (a)(c) 533,000 9,261
Orthopedic Technology, Inc. (a)(c) 197,000 1,182
Protocol Systems, Inc. (a) 106,300 1,156
PSICOR, Inc. (a) 100,000 975
Spacelabs Medical, Inc. (a) 78,300 1,953
Sterile Concepts Holdings (c) 412,700 5,468
Utah Medical Products, Inc. (a)(c) 840,000 12,810
Vital Signs, Inc. 93,500 1,852
112,290
MEDICAL FACILITIES MANAGEMENT - 3.6%
America Service Group, Inc. (a)(c) 219,000 1,177
Clinic Holdings Ltd. 400,000 293
Employee Benefit Plans, Inc. (a) 9,700 165
Hillhaven Corp. (a) 1,311,500 37,870
Horizon/CMS Healthcare Corp. (a) 123,000 2,783
Horizon Mental Health Management, Inc. (a) 133,200 1,798
Laboratory Corp. of America Holdings 402,696 5,386
Laboratory Corp. of America Holdings (warrants) (a) 141,210 247
Lincare Holdings, Inc. (a) 136,800 4,754
Rehabcare Corp. (a)(c) 385,000 5,631
Sierra Health Services, Inc. (a) 93,300 2,472
Sierra Tucson Companies, Inc. (a) 171,000 631
Syncor International Corp. (a) 195,000 1,804
TheraTx, Inc. (a) 102,300 1,573
United America Healthcare Corp. (a) 22,300 396
Universal Health Services, Inc. Class B (a)(c) 1,096,600 34,817
Vivra, Inc. (a) 251,000 7,467
109,264
TOTAL HEALTH 253,747
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.4%
Brierley Investments Ltd. 10,000,000 $ 7,560
Marine Wendel SA 40,000 3,421
Perry Group 150,000 354
Rorviks Gruppen AB Class B Free shares 250,000 618
U.S. Industries, Inc. (a) 30,400 437
12,390
INDUSTRIAL MACHINERY & EQUIPMENT - 4.5%
ELECTRICAL EQUIPMENT - 1.2%
BMC Industries, Inc. (c) 471,800 17,339
Electronics Missiles & Communications, Inc. (a) 45,000 315
Juno Lighting, Inc. 115,700 1,996
Lifeline Systems, Inc. (a) 17,500 168
Narkes Elektrisha Class B Free shares 5,000 152
Philips Electronics NV (warrants) (a) 400,000 10,995
Star Paging International Holdings Ltd. 1,002,000 207
Twentsche Kabel Holding NV 40,400 1,389
Vertex Communications Corp. (a)(c) 284,500 4,623
37,184
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
Allied Products Corp. (c) 563,000 12,105
Amtrol, Inc. 233,900 4,035
Arts Way Manufacturing Co., Inc. (a) 44,500 267
CPAC, Inc. (c) 194,900 2,388
Case Corp. 250,000 8,813
EDAC Technologies Corp. (a)(c) 260,400 342
Enerflex Systems Ltd. 78,100 916
Fedders Corp. Class A 219,750 1,071
Gardner Denver Machinery, Inc. (a) 60,000 915
Gasonics International Corp. (a) 106,900 3,635
Gehl Co. (a)(c) 438,400 4,165
Hardinge Brothers, Inc. 39,800 935
IWP International 50,000 349
IWP International (UK Reg.) 50,000 351
JLG Industries, Inc. 135,800 4,923
Kverneland Gruppen AS 100,000 1,628
McDermott (J. Ray) SA 50,000 1,119
Molins PLC (a) 50,000 550
Oilgear Co. 10,600 207
Park Ohio Industries, Inc. (a) 254,507 3,818
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Powerscreen International PLC 1,049,800 $ 5,776
Rotork PLC 50,000 140
SkyJack, Inc. (a) 52,200 526
SkyJack, Inc. (a)(e) 300,000 3,024
Speizman Industries, Inc. (a)(c) 143,600 646
Summa Industries (a) 67,250 319
Tylan General, Inc. (a) 50,000 875
Svedala Industri 100,000 2,968
Varlen Corp. (c) 322,685 7,744
Wedco Technology, Inc. (c) 206,172 1,959
76,509
POLLUTION CONTROL - 0.7%
American Ecology Corp. 170,400 1,044
Chempower, Inc. (a)(c) 677,700 2,372
Ecology & Environment, Inc. Class A 4,000 34
Harding Associates, Inc. (a)(c) 275,600 1,688
International Recovery Corp. (c) 600,004 9,300
NSC Corp. 165,500 372
OI Corp. (a) 32,200 113
Sani Gestion, Inc. 87,400 240
Sevenson Environmental Services, Inc. (c) 157,200 2,830
TRC Companies, Inc. (a) 263,100 2,038
Weston (Roy F.), Inc. Class A (a)(c) 393,800 1,920
21,951
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 135,644
MEDIA & LEISURE - 3.6%
BROADCASTING - 0.7%
Austereo Ltd. 100,000 118
BET Holdings, Inc. Class A (a) 143,500 2,547
Canwest Global System Corp. (sub.-vtg.) 300,000 5,031
Cogeco, Inc. 227,100 1,165
Cogeco Cable, Inc. 250,000 1,672
Electrohome Ltd. Class Y (non-vtg) 50,000 403
Metropole Television SA (a) 7,000 580
Moffat Communications Ltd. 92,200 1,909
NRJ SA 12,000 977
Premier Choix Tvec, Inc. Class A 200,600 2,206
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Prime Television Ltd. 518,147 $ 682
Publishing & Broadcasting 750,000 2,276
19,566
ENTERTAINMENT - 0.2%
Alliance Communications Corp. Class A (Vtg.) 25,000 266
Atlantis Communications, Inc. (sub-vtg) (a) 25,000 153
Carnival Cruise Lines, Inc. Class A 50,000 1,131
Cinram Ltd. 100,000 1,255
Royal Caribbean Cruises Ltd. 25,000 544
Sydney Aquarium Ltd. 250,000 434
United Video, Inc. (a)(c) 236,700 1,643
Vaughns, Inc. (a) 60,500 469
5,895
LEISURE DURABLES & TOYS - 0.2%
Baldwin Piano & Organ Co. (a)(c) 80,000 1,000
Brio AB B Free shares 50,700 408
Coast Distribution System (a)(c) 136,500 853
Escalade, Inc. (a) 63,875 256
Varsity Spirit Corp. (c) 270,750 4,264
6,781
LODGING & GAMING - 0.2%
Queens Moat Houses PLC (a) 955,000 130
Resort Hotels PLC (a) 1,690,200 -
Sands Regent (The) 91,572 492
Sholodge, Inc. (a) 220,400 3,223
Showboat, Inc. 98,800 2,137
Supertel Hospitality, Inc. (a) 86,800 1,096
7,078
PUBLISHING - 0.3%
Aamulehti Yhtyma OY Series II (a)(e) 25,000 506
Culturecom Holdings Ltd. 1,000,000 46
Matichon Newspaper Group 25,000 108
Mondadori Arnoldo Editore SPA (a) 100,000 625
Wegener Tijil NV (a) 5,000 401
News Corp. Ltd. ADR 100,000 2,363
Perskor Groep Beperk 52,000 718
Sadlier (William H.), Inc. 10,000 39
WSOY (Werner Soderstrom) Class B 45,350 4,262
9,068
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 2.0%
ARK Restaurants Corp. (a)(c) 225,100 $ 2,082
Brinker International, Inc. (a) 592,100 10,510
Buffets, Inc. (a) 719,500 10,164
Consolidated Products, Inc. (a)(c) 661,402 9,342
Daka International, Inc. (a)(c) 215,000 5,348
Ground Round Restaurants, Inc. (a)(c) 274,800 996
Logans Roadhouse, Inc. 79,000 1,402
M Corp, Inc. (c) 323,500 1,630
McDonald's Corp. 167,500 6,483
Quantum Restaurant Group, Inc. (a) 183,900 2,115
Ryan's Family Steak Houses, Inc. (a) 500,000 3,500
Sbarro, Inc. 247,300 6,059
59,631
TOTAL MEDIA & LEISURE 108,019
NONDURABLES - 3.4%
AGRICULTURE - 0.1%
Kanthal AB Class B Free shares 180,000 3,333
BEVERAGES - 0.5%
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 1,000,000 336
Mondavi Robert Corp. Class A (a) 93,500 1,940
Panamerican Beverages, Inc. Class A 65,500 2,006
PepsiCo, Inc. 177,700 8,246
Todhunter International, Inc. (a) 222,500 2,114
14,642
FOODS - 0.9%
Darling International, Inc. (a) 188,500 5,467
Foodbrands America, Inc. (a) 280,200 3,923
GoodMark Foods, Inc. 250,000 4,000
Raision Tehtaat OY V Free shares 150,090 2,303
Riviana Foods, Inc. 463,900 5,740
Sylvan Foods Holdings, Inc. (a) 289,000 3,324
Thorn Apple Valley, Inc. 114,900 2,355
27,112
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 1.1%
Alberto-Culver Co. Class A 55,500 $ 1,429
Allou Health & Beauty Care, Inc. Class A (a)(c) 426,100 2,237
Aloette Cosmetics, Inc. (a) 58,500 139
BeautiControl Cosmetics, Inc. 73,000 785
Helen of Troy Corp. (a)(c) 663,600 13,936
Jean Philippe Fragrances, Inc. (a) 487,500 5,423
Maybelline, Inc. 83,500 1,879
McBride (a)(e) 160,000 532
Oriflame International SA 398,700 1,959
Paragon Trade Brands, Inc. (a) 84,300 1,265
Playtex Products, Inc. (a) 2,400 28
Safeskin Corp. (a) 38,300 618
Stephan Co. (c) 221,700 3,519
33,749
TOBACCO - 0.8%
Imasco Ltd. 75,000 1,347
RJR Nabisco Holdings Corp. 369,180 10,199
Rothmans, Inc. 2,000 150
UST, Inc. 350,000 9,538
W.D. & H.O. Wills Holdings Ltd. 558,700 866
22,100
TOTAL NONDURABLES 100,936
PRECIOUS METALS - 0.9%
Coolgardie Gold (a) 1,000,000 155
Industrias Penoles SA 5,100,000 17,292
Richmont Mines, Inc. (a) 432,700 968
Royal Oak Mines, Inc. (a) 1,000,000 3,152
Terra Mining AB (c)(e) 225,000 4,389
Viceroy Resources Corp. (a) 100,000 495
26,451
RETAIL & WHOLESALE - 4.0%
APPAREL STORES - 0.4%
Buckle, Inc. (The) (a) 113,700 1,904
Catherines Stores Corp. 17,500 221
Chateau Stores of Canada Ltd. Class A 142,900 655
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Designs, Inc. (a) 177,500 $ 1,642
Dress Barn, Inc. (a) 520,000 5,526
Frederick's of Hollywood:
Class A 54,600 341
Class B 172,600 1,079
One Price Clothing Stores, Inc. (a) 68,300 350
Pantorama Industries, Inc. (a) 100,000 139
S & K Famous Brands, Inc. (a) 101,400 887
12,744
DRUG STORES - 0.8%
Jean Coutu Group, Inc. Class A (c) 1,050,000 7,890
Medicine Shoppe International, Inc. 350,000 12,163
Vitalink Pharmacy Services, Inc. (a) 184,600 3,092
23,145
GENERAL MERCHANDISE STORES - 1.2%
Algonquin Mercantile Corp. 74,700 315
Caldor Corp. (a) 273,500 3,726
Duckwall-Alto Stores, Inc. (a) 125,000 1,344
Family Dollar Stores, Inc. 50,000 913
Mac Frugals Bargains, Inc. (a)(c) 1,500,000 26,437
Uni Marts, Inc. 236,400 1,625
Venture Stores, Inc. 338,800 2,118
36,478
GROCERY STORES - 0.6%
Food Lion, Inc. Class A 1,500,000 8,625
Iceland Group PLC 1,000,000 2,793
Riser Foods, Inc. Class A (a)(c) 541,400 6,158
17,576
RETAIL & WHOLESALE, MISCELLANEOUS - 1.0%
Adventure Electronics, Inc. 50,000 174
Best Products, Inc. (a) 178,596 1,384
Betterware PLC 100,000 76
Brookstone, Inc. (a) 88,800 633
But SA 3,000 724
Celebrity, Inc. (a) 253,500 1,870
Dickson Concepts International Ltd. 1,000,000 650
Finlay Enterprises, Inc. (a) 77,900 1,207
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Finish Line, Inc. Class A (a)(c) 403,600 $ 4,641
InterTan, Inc. (a) 59,500 483
Land's End, Inc. (a) 169,600 2,608
Little Switzerland, Inc. (a) 158,800 675
Luria (L.) & Son, Inc. (a)(c) 230,000 1,639
Old American Stores, Inc. (a)(c) 353,400 3,976
Partridge Fine Arts PLC 200,000 249
Rag Shops, Inc. (a) 192,600 602
Reeds Jewelers, Inc. (a) 97,105 971
Rex Stores Corp. (a) 101,000 1,667
Sound Advice, Inc. (a)(c) 370,900 1,113
Sun Television & Appliances, Inc. 135,000 970
Travel Ports of America (a)(c) 339,000 975
Vendex International Bearer (a) 87,000 2,380
29,667
TRADING COMPANIES - 0.0%
Hagemeyer NV (a) 20,200 884
International Cosmetics Ltd. 25,000 342
1,226
TOTAL RETAIL & WHOLESALE 120,836
SERVICES - 2.5%
ADVERTISING - 0.2%
American List Corp. 111,480 3,178
CMG Information Services, Inc. (a) 92,500 2,474
5,652
LEASING & RENTAL - 0.1%
Advantage Companies, Inc. (a) 92,400 1,594
Orix Corp. 25,000 806
2,400
PRINTING - 1.1%
Cadmus Communications Corp. 294,500 6,847
Devon Group, Inc. (a)(c) 610,600 23,813
Graphic Industries, Inc. 226,300 2,355
Paris Business Forms, Inc. (a)(c) 217,500 1,822
Pubco Corp. (a)(c) 150,000 825
35,662
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - 1.1%
BIS SA Ord. (a) 5,000 $ 448
Barefoot, Inc. 324,600 4,626
Borg Warner Security Corp. (a) 104,300 913
Creyf'S Interim 2,270 112
Caldwell Partners International Class A (c) 300,000 1,677
Capita Group PLC 50,000 164
Concord Career Colleges, Inc. (a) 130,000 49
Ecco Travaille Tempoire SA 20,000 1,376
Firstservice Corp. (a) 10,000 41
Goldfarb Class A (a) 50,000 586
Health Care Services Group, Inc. (a) 256,500 2,982
LCS Industries, Inc. 26,100 705
Lawyers Title Corp. 242,000 3,600
Morgan & Banks Ltd. 350,000 466
OroAmerica, Inc. (a) 296,500 1,149
Programming & Systems, Inc. (a)(c) 313,300 3
Rentokil Group PLC 500,000 2,263
Right Management Consultants, Inc. (a)(c) 266,400 6,727
Seattle FilmWorks, Inc. (a)(c) 127,850 2,541
Sophus Berendsen AS, Series B 10,000 993
Scandiaconsult AB Free shares 100,000 601
Supercuts, Inc. (a) 94,500 780
32,802
TOTAL SERVICES 76,516
TECHNOLOGY - 14.4%
COMMUNICATIONS EQUIPMENT - 0.6%
Centigram Communications Corp. (a) 5,000 75
Circuit Systems, Inc. (a)(c) 482,000 1,747
Digital Systems International, Inc. (a)(c) 306,800 3,336
IPC Information Systems, Inc. (a) 222,700 3,452
Napco Security Systems, Inc. (a)(c) 166,500 375
Olicom A/S (a) 150,000 2,100
Syntellect, Inc. (a)(c) 830,000 3,320
Zoom Telephonics, Inc. (a)(c) 329,300 4,404
18,809
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 3.6%
Admiral Computing Group PLC 10,000 $ 115
American Business Information, Inc. (a) 130,500 4,029
Automatic Data Processing, Inc. 100,000 6,423
BDM International, Inc. (a) 48,000 1,164
BancTec, Inc. (a) 95,000 1,686
Black Box Corp. (a) 192,700 2,915
Brandon Systems Corp. 40,000 760
CompuCom Systems, Inc. (a) 227,500 1,393
Computer Data Systems, Inc. (c) 500,000 5,250
Cyn Crona AB, Series B 125,000 1,502
ECI Telecom Ltd. 150,000 2,269
Enea Data AB B Free shares (c) 122,700 1,179
Equitrac Corp. (a)(c) 205,500 950
Frontec AB, Series B (a) 31,000 394
GEAC Computer Ltd. (a) 25,000 346
Getronics NV 77,256 3,954
Government Technology Services, Inc. (a)(c) 666,500 4,000
Group 1 Software, Inc. (a) 128,100 2,178
Hartco Enterprises, Inc. 386,200 2,300
Inacom Corp. (a)(c) 575,900 8,063
LEGENT Corp. (a) 625,000 30,000
Mai Systems Corp. 105,000 1,181
Merkantildata 50,000 346
Misys PLC Ord. 200,000 1,524
Mysoftware Co. (a) 45,000 574
Novell, Inc. (a) 150,000 2,719
Quarterdeck Office Systems (a) 240,000 3,525
Recognition International, Inc. (a) 50,000 506
Ross Systems (a)(d) 124,468 778
Skrivervik Data 73,000 844
Software Spectrum, Inc. (a)(c) 245,700 6,081
Sterling Software, Inc. (a) 71,400 2,927
Symix Systems, Inc. (a) 28,500 278
Tietotehdas Oy B 250,000 5,947
108,100
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 3.7%
Control Data Systems, Inc. (a) 371,000 $ 3,571
Equinox Systems, Inc. (a)(c) 77,000 582
Exabyte (a) 538,400 8,547
Future Now, Inc. (a)(c) 757,000 5,299
Interface Systems, Inc. (c) 414,500 2,332
International Business Machines Corp. 500,000 54,438
Interphase Corp. (a)(c) 259,800 4,368
Micronics Computers, Inc. (a)(c) 564,600 2,258
P & P PLC 750,000 1,364
PenTech International, Inc. (a) 445,300 1,085
Quantum Corp. (a) 250,000 6,438
Rexon, Inc. (a)(c) 420,200 1,313
Seagate Technology (a) 375,000 16,641
Scribona AB B Free shares 261,200 2,141
Semi-Tech (Global) Ltd. 1,009,304 1,558
111,935
ELECTRONIC INSTRUMENTS - 1.7%
Aeroflex, Inc. (a) 387,722 1,793
Aetrium, Inc. (a)(c) 93,700 2,694
BTU International, Inc. (a)(c) 498,700 5,860
Cohu, Inc. (c) 855,200 29,077
DSP Technology, Inc. (a)(c) 131,800 890
Life Sciences International PLC 200,000 391
Megatest Corp. (a) 230,100 4,602
Milltronics Ltd. (a) 150,000 2,158
Reliability, Inc. (a)(c) 250,500 1,988
49,453
ELECTRONICS - 4.8%
Advance Circuits, Inc. (a) 156,600 2,701
Advanced Micro Devices, Inc. 217,500 7,096
ASM Pacific Technology Ltd. 10,802,000 9,979
Bel Fuse, Inc. (a)(c) 495,900 6,385
Bergman & Beving AB Class B Free shares 175,000 4,131
Corcom, Inc. 185,000 1,295
DH Technology, Inc. (a) 82,000 2,214
Dallas Semiconductor Corp. 267,000 6,008
Exar Corp. (a)(c) 648,650 23,514
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Finvest B (a) 357,500 $ 289
Hadco Corp. (a) 362,500 10,422
Integrated Circuit Systems, Inc. (a) 501,100 7,524
Intel Corp. (warrants) 50,000 1,794
Lattice Semiconductor Corp. (a) 113,000 4,661
MEMC Electronic Materials, Inc. (a) 12,000 362
Merix Corp. (a) 73,300 2,364
Opti, Inc. (a) 247,900 5,919
Percon Acquisition, Inc. 11,000 107
Pioneer Standard Electronics, Inc. 81,000 2,167
Pulse Engineering, Inc. (a)(c) 546,200 4,370
Quality Semiconductor, Inc. (a)(c) 283,200 4,319
Robinson Nugent, Inc. 211,000 1,952
SGS-Thomson Microelectronic NV (a) 93,600 4,423
Samsung Electronics Co. Ltd. (e) 9,400 1,316
Samsung Electronics Co. Ltd. GDR 1,600 320
Samsung Electronics Co. Ltd. GDS (non-vtg.) (Reg.) (a) 230,000 14,950
Siliconix, Inc. (a) 275,200 8,806
Smartflex Systems, Inc. 8,000 113
Sterling Electronics Corp. (a) 236,400 4,107
Telcom Semiconductor, Inc. 3,100 47
Wongs Industrial International 4,000,000 507
144,162
PHOTOGRAPHIC EQUIPMENT - 0.0%
Fuji Photo Film Co. Ltd. 25,000 656
Photo Me International PLC 85,000 239
895
TOTAL TECHNOLOGY 433,354
TRANSPORTATION - 1.9%
AIR TRANSPORTATION - 0.3%
Alaska Air Group, Inc. (a) 80,100 1,542
Helikopter Services AS 246,110 3,405
Pittston Co. Services Group 174,200 4,356
Qantas Airways Ltd. sponsored ADR (e) 45,400 669
9,972
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
RAILROADS - 0.1%
Portec, Inc. (a)(c) 259,930 $ 3,086
SHIPPING - 0.1%
Sea Containers Ltd. 168,900 2,935
TRUCKING & FREIGHT - 1.4%
Air Express International Corp. 209,900 5,274
Anuhco, Inc. (a) 300,000 2,381
Arkansas Best Corp. 814,800 10,083
Arnold Industries, Inc. 578,400 10,556
Cannon Express, Inc.:
Class A (a) 173,100 2,294
Class B (a)(c) 240,800 3,130
Marten Transport Ltd. (a)(c) 170,900 3,162
TNT Freightways Corp. 150,000 3,300
40,180
TOTAL TRANSPORTATION 56,173
UTILITIES - 4.6%
CELLULAR - 0.8%
Century Telephone Enterprises, Inc. 754,500 21,504
Korea Mobile Telecommunications Corp. (a) 300 234
Palmer Wireless, Inc. (a) 147,200 3,054
24,792
ELECTRIC UTILITY - 0.7%
Central Maine Power Co. 208,700 2,452
Gas Y Electricidad 25,000 1,276
Hong Kong Electric Holdings Ord. 200,000 725
New York State Electric & Gas Corp. 63,500 1,484
Northern Ireland Electric PLC 1,012,900 6,173
Norweb PLC (a) 250,000 3,291
South Wales Electricity PLC 500,000 6,542
21,943
GAS - 0.2%
Aquila Gas Pipeline Corp. 338,400 2,792
Southwestern Energy Co. 128,000 1,632
4,424
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 0.5%
Atlantic Tele-Network, Inc. (a) 103,500 $ 1,100
Davel Communications Group, Inc. (a)(c) 393,300 4,620
Portugal Telecom SA sponsored ADR (a) 250,000 4,938
Koninklijke PPT Nederland (a)(e) 100,000 3,740
14,398
WATER - 2.4%
Northumbrian Water Group PLC Ord. 2,526,634 35,879
Southern Water PLC Ord. 200,000 1,991
Welsh Water PLC Ord. 2,416,666 27,931
Yorkshire Water Ord. 661,400 6,522
72,323
TOTAL UTILITIES 137,880
TOTAL COMMON STOCKS
(Cost $2,076,787) 2,600,830
PREFERRED STOCKS - 0.5%
CONVERTIBLE PREFERRED STOCKS - 0.2%
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
U S Home Corp. (a) 45,000 1,035
ENERGY - 0.2%
OIL & GAS - 0.2%
Gerrity Oil & Gas Corp. $1.50 442,200 5,472
Patrick Petroleum Co., Series B 80,200 534
TOTAL ENERGY 6,006
TOTAL CONVERTIBLE PREFERRED STOCKS 7,041
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Trilon Financial Corp.:
Class 1, Series A 87,100 $ 1,094
Class 2, Series 3 125,000 1,592
TOTAL FINANCE 2,686
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Samsung Electronics Co. Ltd. (a) 800 75
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.0%
Telecom Italia Mobile SA De Risp 1,000,000 910
WATER - 0.2%
Welsh Water PLC 2,610,000 4,227
TOTAL UTILITIES 5,137
TOTAL NONCONVERTIBLE PREFERRED STOCKS 7,898
TOTAL PREFERRED STOCKS
(Cost $14,194) 14,939
CONVERTIBLE BONDS - 0.4%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (B) (000S)
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
St Laurent Paperboard, Inc. 8%, 6/15/04 (e) - CAD 1,350 1,633
ENERGY - 0.0%
OIL & GAS - 0.0%
Swift Energy Co. 6 1/2%, 6/30/03 - 900 844
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Park Ohio Industries, Inc. 7 1/4%,
6/15/04 (a)(d) - $ 2,000 $ 1,800
TECHNOLOGY - 0.3%
ELECTRONICS - 0.3%
United Microelectronics Corp. euro 1 1/4%,
6/8/04 - 4,663 8,860
TOTAL CONVERTIBLE BONDS
(Cost $12,587) 13,137
REPURCHASE AGREEMENTS - 12.5%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.82%
dated 7/31/95 due 8/1/95 $ 376,498 376,437
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,480,005) $ 3,005,343
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE VALUE GAIN/(LOSS)
CONTRACTS TO SELL
13,298 GBP 9/8/95 $ 21,195 $ 43
(Receivable amount $21,238)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.7%
CURRENCY ABBREVIATIONS
GBP - British pound
CAD - Canadian dollar
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Affiliated company (see Note 7 of Notes to Financial Statements).
4. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
Belden & Blake Corp. 12/8/92 $ 788
Park Ohio Industries, Inc.
7 1/4%, 6/15/04 6/6/94 $ 2,000
Ross Systems 1/4/95 $ 465
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $40,534,000 or 1.4% of net
assets.
6. Purchased on an installment basis. Market value reflects only those
payments made through July 31, 1995. The remaining installments aggregating
CAD$950,000 and CAD$950,000 are due July 31, 1996 and January 31, 1997,
respectively.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 78.9%
Netherlands 1.2
United Kingdom 4.9
Canada 4.2
Finland 2.1
Sweden 1.4
Others (individually less than 1%) 7.3
TOTAL 100.0%
INCOME TAX INFORMATION
At July 31, 1995, the aggregate cost of investment securities for income
tax purposes was $2,480,098,000. Net unrealized appreciation aggregated
$525,245,000, of which $640,092,000 related to appreciated investment
securities and $114,847,000 related to depreciated investment securities.
The fund hereby designates $9,900,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JULY 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 3,005,343
agreements of $376,437) (cost $2,480,005) -
See accompanying schedule
Cash 1
Receivable for investments sold 51,132
Unrealized appreciation on foreign currency contracts 43
Receivable for fund shares sold 9,637
Dividends receivable 3,729
Interest receivable 87
Other receivables 193
TOTAL ASSETS 3,070,165
LIABILITIES
Payable for investments purchased $ 115,482
Payable for closed foreign currency contracts 1,047
Payable for fund shares redeemed 3,764
Accrued management fee 1,799
Other payables and accrued expenses 792
TOTAL LIABILITIES 122,884
NET ASSETS $ 2,947,281
Net Assets consist of:
Paid in capital $ 2,286,897
Undistributed net investment income 23,018
Accumulated undistributed net realized gain (loss) on 111,817
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 525,549
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 153,107 shares outstanding $ 2,947,281
NET ASSET VALUE and redemption price per share $19.25
($2,947,281 (divided by) 153,107 shares)
Maximum offering price per share (100/97.00 of $19.25) $19.85
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME $ 26,434
Dividends (including $4,561 received from affiliated
issuers)
Interest 33,139
TOTAL INCOME 59,573
EXPENSES
Management fee $ 16,310
Basic fee
Performance adjustment 3,787
Transfer agent 6,139
Fees
Redemption fees (1)
Accounting fees and expenses 758
Non-interested trustees' compensation 13
Custodian fees and expenses 351
Registration fees 146
Audit 69
Legal 14
Interest 1
Miscellaneous 54
Total expenses before reductions 27,641
Expense reductions (209) 27,432
NET INVESTMENT INCOME 32,141
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 178,548
$21,750 on sales of investments in affiliated issuers)
Foreign currency transactions (2,729)
Futures contracts 138 175,957
Change in net unrealized appreciation (depreciation) on:
Investment securities 344,699
Assets and liabilities in foreign currencies 884 345,583
NET GAIN (LOSS) 521,540
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 553,681
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 32,141 $ 10,615
Net investment income
Net realized gain (loss) 175,957 301,603
Change in net unrealized appreciation (depreciation) 345,583 (55,400)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 553,681 256,818
FROM OPERATIONS
Distributions to shareholders (12,296) (18,316)
From net investment income
From net realized gain (264,897) (185,598)
TOTAL DISTRIBUTIONS (277,193) (203,914)
Share transactions 859,444 562,786
Net proceeds from sales of shares
Reinvestment of distributions 271,488 200,318
Cost of shares redeemed (627,283) (766,243)
Redemption fees 579 449
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 504,228 (2,690)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 780,716 50,214
NET ASSETS
Beginning of period 2,166,565 2,116,351
End of period (including undistributed net investment $ 2,947,281 $ 2,166,565
income of $23,018 and $5,052, respectively)
OTHER INFORMATION
Shares
Sold 50,657 32,038
Issued in reinvestment of distributions 16,520 11,968
Redeemed (37,030) (44,188)
Net increase (decrease) 30,147 (182)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED JULY 31,
1995 1994 D 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 17.62 $ 17.19 $ 14.94 $ 12.63 $ 10.74
period
Income from Investment
Operations
Net investment income .20 .06 .15 .11 .17 C
Net realized and unrealized 3.57 2.15 2.88 2.93 2.09
gain (loss)
Total from investment 3.77 2.21 3.03 3.04 2.26
operations
Less Distributions (.09) (.16) (.10) (.15) (.14)
From net investment
income
From net realized gain (2.05) (1.62) (.69) (.60) (.26)
Total distributions (2.14) (1.78) (.79) (.75) (.40)
Redemption fees added to .00 .00 .01 .02 .03
paid in capital
Net asset value, end of period $ 19.25 $ 17.62 $ 17.19 $ 14.94 $ 12.63
TOTAL RETURN A, B, 23.81% 13.67% 21.32% 25.55% 22.72%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 2,947 $ 2,167 $ 2,116 $ 928 $ 256
(000 omitted)
Ratio of expenses to average 1.11% 1.13% 1.12% 1.20% 1.36%
net assets
Ratio of expenses to average 1.12% 1.14% 1.12% 1.20% 1.36%
net assets before expense
reductions
Ratio of net investment 1.31% .51% 1.00% 1.27% 2.14%
income to average net
assets
Portfolio turnover rate 65% 54% 47% 82% 84%
</TABLE>
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
G TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
H INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO
$.02 PER SHARE.
I EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Low Priced Stock Fund (the fund) is a fund of Fidelity Puritan
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for foreign
currency transactions, passive foreign investment companies (PFIC), market
discount, non-taxable dividends, partnerships and losses deferred due to
wash sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income (loss) and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 90 days are subject to a
redemption fee equal to 1.5% of the proceeds of the redeemed shares. A
portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. These contracts
involve market risk in excess of the unrealized gain or loss reflected in
the fund's Statement of Assets and Liabilities. The U.S. dollar value of
the currencies the fund has committed to buy or sell is shown in the
schedule of investments under the caption "Forward Foreign Currency
Contracts." This amount represents the aggregate exposure to each currency
the fund has acquired or hedged through currency contracts at period end.
Losses may arise from changes in the
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
value of the foreign currency or if the counterparties do not perform under
the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date. Contracts that have been offset with different
counterparties are reflected as both a contract to buy and a contract to
sell in the schedule of investments under the caption "Forward Foreign
Currency Contracts."
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. The fund's investment adviser FMR, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures, writing
puts, and buying calls tend to increase the fund's exposure to the
underlying instrument. Selling futures, buying puts, and writing calls tend
to decrease the fund's exposure to the underlying instrument, or hedge
other fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $4,258,000 or
0.1% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,703,721,000 and $1,264,163,000, respectively, of which U.S.
government and government agency obligations aggregated $98,500,000 and
$101,094,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $127,577,000 and $127,715,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2700% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .35%. The
basic fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .20%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. For the period,
the management fee was equivalent to an annual rate of .82% of average net
assets after the performance adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $3,599,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
During the period August 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $421,000 for the period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the
5. BANK BORROWINGS - CONTINUED
bank's base rate, as revised from time to time. The maximum loan and the
average daily loan balance during the period for which the loan was
outstanding amounted to $2,656,000. The weighted average interest rate was
6.44%.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$209,000 under this arrangement.
7. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
AAF Industries PLC (a) $ - $ - $ - $ 538
Aceto Corp. 673 209 - -
Aetrium, Inc. (a) 921 2,316 - -
Alamco, Inc. (a) 933 - - 3,955
Allegheny & Western Energy Corp. 1,959 2,579 - -
Allied Products Corp. 1,463 1,147 15 12,105
Allied Research Corp. (a) - 1,499 - 976
Allou Health & Beauty Care, Inc. 1,984 863 - 2,237
Class A (a).
America Service Group, Inc. (a) 321 - - 1,177
American Consumer Products - - - 592
Corp. (a)
American Educational Products, Inc. - 51 - -
American Indemnity Financial Corp. - - 49 1,795
AMRE, Inc. - 2,018 - -
Andover Bancorp, Inc. 2,353 - 48 7,962
Aran Energy (a) - 2,421 - -
ARI Holdings, Inc. (a) 78 104 - 1,387
ARK Restaurants Corp. (a) - - - 2,082
AutoInfo, Inc. 168 3,051 - -
Aztec Manufacturing Co. - 243 11 1,808
Baldwin Piano & Organ Co. (a) - 388 - -
Bank Atlantic Bancorp, Inc. 5,430 - 96 11,941
Bankunited Financial Corp. Class A (a) - - - 898
Banyan Short Term Income Trust - - - 2,121
(SBI) (a)
Banyan Strategic Land Trust (SBI) - - 397 4,091
Bel Fuse, Inc. (a) 1,088 45 - 6,385
Belden & Blake Corp. (a) - 1,743 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Benihana National Corp. $ - $ 777 $ - $ -
Bird Medical Technologies, Inc. 121 943 - -
BMC Industries, Inc. - - - -
Brock Exploration Corp. - 100 - -
BTU International, Inc. (a) - 101 - 5,860
Caldwell Partners International 121 - 56 1,677
Class A
Cannon Express, Inc. Class B (a) 179 - - 3,130
Castle Energy Corp. (a) - 152 - 10,715
Cavco Industries, Inc. (a) - 79 - 2,584
CB Bancorp, Inc. - 676 - -
CEC Resources Ltd. (a) - - - 734
Cenit Bancorp, Inc. - 469 - -
Chempower, Inc. (a) 153 251 - 2,372
Circle Financial Corp. - 485 14 -
Circuit Systems, Inc. (a) 131 320 - 1,747
Cliffs Drilling Co. - 2,540 - -
Coast Distribution System (a) - - - -
Coastal Bancorp, Inc. 150 346 - 4,497
Cohu, Inc. 675 214 116 29,077
Cold Metal Products, Inc. (a) 194 - - 3,248
Collective Bancorp, Inc. 990 - 539 24,410
Columbus Energy Corp. - - 24 1,876
Computalog Ltd. (a) 578 - - 2,263
Computer Automation, Inc. - - - -
Computer Data Systems, Inc. 109 366 51 5,250
Concord Fabrics, Inc. Class A (a) 305 96 - 1,304
Consolidated Products, Inc. (a) 135 - - 9,342
ConVest Energy Corp. - 1,657 - -
Cooperative Bankshares, Inc. - 1,022 - -
Core Industries, Inc. - 652 32 -
CPAC, Inc. - 1,178 19 -
Cube Energy Corp. (a) 798 - - 1,419
Daka International, Inc. (a) - 839 - -
Dataflex Corp. - 213 - -
Datron Systems, Inc. (a) 134 49 - 3,368
Davel Communications Group, Inc. (a) 905 - - 4,620
Decorator Industries, Inc. 369 - 22 1,923
Devon Group, Inc. (a) - 875 - 23,813
Digital Systems International, Inc. (a) 184 2,376 - -
DMI Furniture, Inc. (a) - 181 - -
Dreco Energy Services Ltd. 1,476 - - 5,573
Class A (a)
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Drew Industries, Inc. $ 88 $ 1,077 $ - $ 3,640
DSP Technology, Inc. (a) - 229 - 890
Durakon Industries, Inc. (a) 4,604 137 - 9,044
EDAC Technologies Corp. (a) - 434 - 342
Elco Industries, Inc. 1,443 - 265 8,910
Eljer Industries, Inc. 701 715 - -
Enea Data AB B Free shares - - 25 1,179
ENEX Resources Corp. - - 29 1,335
Equinox Systems, Inc. (a) 776 919 - -
Equitrac Corp. (a) 90 - - 950
Exar Corp. (a) 289 3,885 - 23,514
Federal Screws Works 117 - 87 2,611
Financial Security Corp. - 111 - -
Finish Line, Inc. Class A (a) 1,278 - - 4,641
Firstbank Puerto Rico (a) 6,043 43 - 33,490
First Central Financial Corp. - - - 4,318
First Financial Caribbean Corp. 864 - 3 4,015
First State Financial Services, Inc. - 1,061 33 -
Foremost Industries, Inc (a) - - - 1,202
FSI International, Inc. - 1,760 - -
Future Now, Inc. (a) 847 104 - 5,299
Gainsco, Inc. 1,203 - 18 10,399
GBC Bancorp. - - 153 5,269
G-III Apparel Group Ltd. (a) 156 1,448 - -
Gehl Co. (a) 1,088 - - 4,165
Giant Industries, Inc. - 4,098 156 6,038
Global Ocean Carriers Ltd. - 261 - -
Government Technology Services, - - - 4,000
Inc. (a)
Ground Round Restaurants, Inc. (a) 131 794 - -
Harding Associates, Inc. (a) 58 - - 1,688
Helen of Troy Corp. (a) 4,854 - - 13,936
Higgs & Hill PLC - 797 56 -
Homeowners Group, Inc. - 490 - -
HPSC, Inc. (a) 375 8 - 1,630
Huffman Koos, Inc. (a) 164 - - 2,841
Inacom Corp. (a) 415 363 - 8,063
Independence Federal Savings Bank - - 24 926
Interface Systems, Inc. 494 - 66 2,332
Intermetco Ltd. - - 52 1,744
International Jensen, Inc. (a) - - - 4,111
International Recovery Corp. 452 - 117 9,300
Interphase Corp. (a) - 1,283 - 4,368
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Intertrans Corp. $ - $ 206 $ 45 $ -
Jean Coutu Group, Inc. Class A 384 - 20 7,890
Keptel, Inc. - 1,929 - -
Key Energy Group, Inc. (a) 1,154 - - 2,901
Kinark Corp. - 2,129 - -
Lakeview Financial Corp. - - 13 2,375
Laser Industries Ltd. Ord. (a) 1,366 - - 4,598
Leslie Building Products - 354 - -
LF Bancorp., Inc. - - 26 -
Libbey, Inc. 289 1,204 253 19,874
Lincoln Foodservice Products, Inc. - 2,126 - -
Lund International Holdings, Inc. (a) - - - 9,653
Luria (L.) & Son, Inc. (a) - - - 1,639
M Corp Inc. - - 40 1,630
Mac Frugals Bargains, Inc. (a) - 2,074 - 26,437
Marion Capital Holdings, Inc. - 1,068 44 -
Marten Transport Ltd. (a) 279 - - 3,162
Medalist Industries, Inc. - 869 - -
Merchants Group, Inc. - 1,527 53 3,333
Mercury Air Group 914 - 2 3,229
Metro Bancshares, Inc. - 433 - -
Microlog Corp. - 66 - -
Micronics Computers, Inc. (a) 196 2,319 - -
Mid South Insurance Co. - 496 - -
MFRI, Inc. - 700 - -
Miller Building Systems, Inc. - 98 - -
Minntech Corp. 2,985 - - 8,129
Napco Security Systems, Inc. (a) - 72 - -
NFS Financial Corp. - 473 22 -
NView Corp. 933 1,172 - -
Old American Stores, Inc. (a) 1,958 - - 3,976
Oriole Homes Corp. Class B 51 - 108 2,041
Orthofix International (a) 426 - - 9,261
Orthopedic Technology, Inc. (a) 120 - - 1,182
OTR Express, Inc. 80 836 - -
Paris Business Forms, Inc. (a) 16 17 - 1,822
Patrick Industries, Inc. 981 - 25 8,336
PCI Services, Inc. (a) 614 1,354 - -
Pe Ben Oilfield Services Ltd. (a) 246 - - 520
Petroleum Development Corp. (a) 348 - - 1,309
Polk Audio, Inc. (a) - 326 - -
Poncebank 964 221 24 4,221
Portec, Inc. (a) 639 628 - 3,086
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Printronix, Inc. $ - $ 457 $ - $ -
Programming & Systems, Inc. (a) - - - 3
Pubco Corp. (a) - - - -
Pulse Engineering, Inc. 2,082 - - 4,370
Quality Semiconductor, Inc. (a) 141 - - 4,319
Quixote Corp. 878 562 112 6,280
Raytech Corp. (a) 367 - - 750
RB&W Corp. (a) - 3,161 - -
Rehabcare Corp. (a) 2,231 - - 5,631
Reliability, Inc. (a) 88 - - 1,988
Republic Automotive Parts, Inc. (a) - 991 - -
Rexon, Inc. (a) - 1,196 - -
Rightchoice Managed Care, 266 - - 2,708
Inc. Class A (a)
Right Management Consultants, 149 - - 6,727
Inc. (a)
Riser Foods, Inc. Class A (a) 1,067 - - 6,158
RLI Corp. 3,082 - 131 12,407
Roanoke Electric Steel Corp. 1,495 1,761 126 -
Ropak Corp. 141 423 - -
SBE, Inc. - 541 - -
Scientific Software Intercomp, Inc. - 482 - -
Seattle FilmWorks, Inc. (a) - 396 - -
Serv-Tech, Inc. (a) 395 - - 3,303
Sevenson Enviromental Services, 916 - 28 2,830
Inc.
Shelter Components Corp. 154 130 12 4,944
Sico, Inc. - 551 - -
Skybox International, Inc. 3,148 7,107 - -
Slater Industries, Inc. Class B 880 - - -
Smalls Oilfield Services Corp. (a) - - - 390
Software Spectrum, Inc. (a) 1,289 1,688 - 6,081
Sound Advice, Inc. (a) - - - 1,113
Spartech Corp. 256 562 - 4,604
Speizman Industries, Inc. (a) 131 1,775 - -
Steel Of West Virginia, Inc. (a) 52 572 - 6,618
Stephan Co. 260 - 4 3,519
Sterile Concepts Holdings 2,158 - 42 5,468
Stewart Information Services Corp. 15 695 111 10,355
Summit Bancorp., Inc. - - - -
Swift Energy Co. (a) - - - 5,892
Syds-Sonderjylland Holding 1,224 466 - 13,248
Syntellect Inc. (a) 2,474 68 - 3,320
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Tay Homes PLC $ - $ 707 $ 231 $ 5,010
Terra Mining AB - 1,796 77 4,389
Third Finacial Corp. - 163 - -
Toastmaster, Inc. 955 4,090 125 -
Travel Ports of America (a) - - - 975
Uni Select, Inc. - 246 33 4,432
United Video, Inc. (a) 868 214 - 1,643
Universal Health Services, Inc.
Class B (a) 308 569 - 34,817
U.S. Home Corp. (a) - - - -
US Intec, Inc. - 808 - -
USX-Delhi Group 1,588 - 15 6,600
Utah Medical Products, Inc. (a) 3,339 - - 12,810
Valley Forge Corp. 1,711 - 39 3,272
Varlin Corp. 845 - 49 7,744
Varsity Spirit Corp. 396 - 16 4,264
Vertex Communications Corp. (a) 934 1,449 - 4,623
Video Display Corp. - 177 - -
Warren Bancorp, Inc. - 314 42 1,894
Watsco, Inc. Class A - - 69 5,583
Watsco, Inc. Class B - - 20 1,523
Wedco Technology, Inc. 250 - - 1,959
Weston (Roy F.), Inc. Class A (a) 110 270 - 1,920
Williams Clayton Energy, Inc. (a) 293 - - 1,085
Wynn's International, Inc. - 65 31 -
Zoom Telephonics, Inc. (a) 124 - - 4,404
TOTALS $ 103,611 $ 112,800 $ 4,561 $ 761,619
</TABLE>
(a) Non-income producing.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and the Shareholders of
Fidelity Low-Priced Stock Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Puritan Trust: Fidelity Low-Priced Stock Fund, including the
schedule of portfolio investments, as of July 31, 1995, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Puritan Trust: Fidelity Low-Priced Stock Fund as of July 31,
1995, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 8, 1995
DISTRIBUTIONS
A total of 3.17% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 10% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1996 of these percentages for
use in preparing 1995 income tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Joel Tillinghast, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Export Fund
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
