FIDELITY
(registered trademark)
PURITAN
FUND
SEMIANNUAL REPORT
JANUARY 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 46 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 50 Notes to the financial statements.
REPORT OF INDEPENDENT 55 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION 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 a few 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.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1995 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Puritan -1.57% -3.01% 72.83% 239.21%
Puritan (including 2% sales charge) -3.54% -4.95% 69.38% 232.42%
Lehman Brothers Aggregate
Bond Index 0.98% -2.31% 49.28% 157.72%
S&P 500(registered trademark) 4.17% 0.53% 66.90% 265.09%
Average Equity Income Fund 0.31% -3.51% 53.74% 188.14%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, you would end up with $1,050. For comparison,
you can look at 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
currently reflects the performance of 124 equity income funds tracked by
Lipper Analytical Services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Puritan -3.01% 11.56% 12.99%
Puritan (including 2% sales charge) -4.95% 11.11% 12.76%
Lehman Brothers Aggregate Bond Index -2.31% 8.34% 9.93%
S&P 500(registered trademark) 0.53% 10.79% 13.83%
Average Equity Income Fund -3.51% 8.88% 10.85%
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 (004) Standard & Poor's 50Aggregate Bond Index
01/31/85 9800.00 10000.00 10000.00
02/28/85 9873.25 10123.00 9795.46
03/31/85 10036.04 10130.09 9995.16
04/30/85 10151.46 10120.97 10201.90
05/31/85 10614.77 10705.96 10735.02
06/30/85 10854.70 10874.04 10848.51
07/31/85 11018.75 10857.73 10810.68
08/31/85 10993.23 10765.44 11013.90
09/30/85 10949.85 10428.48 11080.32
10/31/85 11178.00 10910.28 11312.57
11/30/85 11587.07 11658.73 11584.41
12/31/85 11910.51 12223.01 11938.51
01/31/86 12257.44 12291.46 12004.93
02/28/86 12914.78 13210.86 12478.23
03/31/86 13436.78 13948.02 12868.83
04/30/86 13437.07 13790.41 12934.37
05/31/86 13603.81 14524.06 12687.60
06/30/86 13711.70 14769.52 13018.83
07/31/86 13354.65 13943.90 13134.51
08/31/86 14077.61 14978.54 13460.02
09/30/86 13812.76 13739.81 13327.62
10/31/86 14209.86 14532.60 13520.72
11/30/86 14339.24 14885.74 13708.98
12/31/86 14382.36 14506.16 13761.33
01/31/87 15260.71 16460.14 13954.87
02/28/87 15556.08 17110.31 14051.64
03/31/87 15818.63 17604.80 13988.30
04/30/87 15720.64 17448.12 13604.73
05/31/87 15698.45 17599.92 13551.51
06/30/87 16108.94 18488.71 13738.01
07/31/87 16565.98 19426.09 13727.46
08/31/87 16903.83 20150.68 13654.00
09/30/87 16552.33 19709.38 13363.24
10/31/87 14107.06 15463.98 13839.18
11/30/87 13605.37 14189.75 13950.03
12/31/87 14124.80 15269.59 14140.05
01/31/88 14982.34 15912.44 14637.11
02/29/88 15435.60 16653.96 14810.86
03/31/88 15152.04 16139.35 14671.86
04/30/88 15363.69 16318.50 14592.68
05/31/88 15625.15 16460.47 14494.59
06/30/88 16191.59 17216.00 14844.29
07/31/88 16229.54 17150.58 14766.43
08/31/88 16065.09 16567.46 14805.14
09/30/88 16522.27 17273.24 15140.32
10/31/88 16792.07 17753.43 15425.35
11/30/88 16676.44 17499.56 15237.97
12/31/88 16792.70 17805.80 15255.12
01/31/89 17621.80 19109.19 15474.62
02/28/89 17463.88 18633.37 15362.45
03/31/89 17781.12 19067.53 15428.87
04/30/89 18382.29 20057.13 15751.74
05/31/89 18996.81 20869.44 16165.65
06/30/89 19129.65 20750.49 16657.87
07/31/89 20186.39 22624.26 17011.96
08/31/89 20321.87 23067.69 16759.92
09/30/89 20097.82 22973.11 16845.69
10/31/89 19496.84 22440.14 17260.93
11/30/89 19860.22 22897.92 17425.44
12/31/89 20083.84 23447.47 17472.07
01/31/90 19233.58 21874.14 17264.45
02/28/90 19438.82 22156.32 17319.87
03/31/90 19466.79 22743.46 17332.63
04/30/90 18990.54 22174.87 17173.84
05/31/90 20047.23 24336.92 17682.33
06/30/90 19939.92 24171.43 17966.04
07/31/90 19758.65 24094.08 18214.57
08/31/90 18565.27 21915.98 17971.32
09/30/90 17703.22 20848.67 18120.00
10/31/90 17396.14 20759.02 18350.05
11/30/90 18378.80 22100.06 18745.05
12/31/90 18808.46 22716.65 19037.13
01/31/91 19651.33 23707.09 19272.46
02/28/91 20790.76 25402.15 19436.97
03/31/91 20928.89 26016.88 19570.69
04/30/91 21103.17 26079.32 19782.70
05/31/91 22132.98 27205.95 19898.39
06/30/91 21365.06 25959.92 19888.27
07/31/91 22104.56 27169.65 20164.07
08/31/91 22490.38 27813.57 20600.42
09/30/91 22509.28 27349.08 21017.86
10/31/91 22835.50 27715.56 21251.87
11/30/91 22052.57 26598.62 21446.73
12/31/91 23408.35 29641.51 22083.66
01/31/92 23607.00 29090.17 21783.23
02/29/92 24269.19 29468.35 21924.87
03/31/92 24150.56 28893.71 21801.27
04/30/92 24939.36 29743.19 21958.74
05/31/92 25224.67 29888.93 22373.10
06/30/92 25088.78 29443.58 22681.01
07/31/92 25853.16 30647.83 23143.75
08/31/92 25598.37 30019.55 23378.20
09/30/92 25910.50 30373.78 23655.32
10/31/92 25714.88 30480.09 23341.69
11/30/92 26408.44 31519.46 23346.97
12/31/92 27019.64 31907.15 23718.22
01/31/93 27789.54 32175.17 24173.04
02/28/93 28357.79 32612.75 24596.20
03/31/93 29479.12 33300.88 24698.69
04/30/93 30035.33 32495.00 24870.68
05/31/93 30443.22 33365.86 24902.35
06/30/93 30649.22 33462.62 25353.66
07/31/93 31099.12 33328.77 25497.05
08/31/93 31998.91 34591.93 25943.96
09/30/93 31778.65 34325.58 26015.22
10/31/93 32604.85 35036.11 26112.43
11/30/93 32080.92 34703.27 25890.30
12/31/93 32814.56 35123.18 26030.61
01/31/94 34272.98 36317.37 26382.07
02/28/94 33897.96 35333.17 25923.73
03/31/94 32636.25 33792.64 25284.60
04/30/94 32993.73 34225.19 25082.70
05/31/94 33204.02 34786.48 25079.18
06/30/94 32947.01 33934.21 25023.75
07/31/94 33773.86 35047.25 25520.81
08/31/94 34770.33 36484.19 25552.48
09/30/94 34020.62 35590.33 25176.39
10/31/94 34419.56 36391.11 25153.95
11/30/94 33333.56 35065.75 25098.09
12/31/94 33400.05 35585.77 25271.40
01/31/95 33242.18 36508.51 25771.53
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Puritan
Fund on January 31, 1985 and paid the 2% sales charge. As the chart shows,
by January 31, 1995, the value of your investment would have grown to
$33,242 - a 232.42% 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 $36,509 - a 265.09% increase.
If you'd put $10,000 in the bond index, it would have grown to $25,772 - a
157.72% 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
An interview with Richard Fentin, Portfolio Manager of Fidelity Puritan
Fund
Q. RICH, HOW DID THE FUND PERFORM?
A. It did well compared to its peers for the first nine of the past 12
months. However, over the past three months, it underperformed similar
funds and the Standard & Poor's 500 stock index. For the six months and
year ended January 31, 1995, the fund returned -1.57% and -3.01%,
respectively. This compares to returns of 0.31% and -3.51% for the average
equity income fund over the same periods, according to Lipper Analytical
Services. The S&P 500 returned 4.17% for the past six months and 0.53% for
the past year.
Q. WHAT HAS HURT THE FUND'S PERFORMANCE LATELY?
A. The fund was hurt somewhat by the drop in Mexican and Argentine emerging
market bonds, which began in mid-December of 1994. The fall of these bonds
was triggered by the unexpected devaluation of the Mexican peso and
continued as investors lost confidence in emerging market bonds. It's
important to note that emerging market bonds made up only about 4% of the
fund at the end of the period. In addition, the fund's investments in Japan
- - about 7% of the fund at the end of the period - also took a hit. The
major earthquake in Kobe, Japan, in January 1995 caused the country's stock
market to plummet 15% to 20% during that month alone. I should point out
that I think that the earthquake's effect on the Japanese market will be
short term. Ultimately, I expect the market environment to turn around,
especially as money begins pouring into Kobe for rebuilding projects.
Q. WERE THERE OTHER REASONS THE PAST THREE MONTHS WERE ROUGH FOR THE FUND?
A. Yes. Some of the fund's biggest sectors underperformed the broad market
during the past few months. For instance, energy stocks, which made up the
fund's top sector, were hurt by low demand for heating fuel - the result of
an historically warm winter in Europe and a mild one in the United States
as well.
Q. HAVE THESE FACTORS AFFECTED THE FUND'S PERFORMANCE AGAINST THE S&P 500?
A. Some of them. The S&P 500 outperformed the fund over the past six months
mostly because it had no investments in emerging markets and Japan. I
should note that the S&P 500 had about the same weighting in energy as the
fund. That said, the fund was pretty much neck-and-neck with the S&P 500
for the first nine of the past 12 months. That was mostly because many of
the fund's stock selections, especially cyclical stocks that tend to move
in tandem with the economy, such as Caterpillar and Alcan, were excellent
performers during this period.
Q. HAS THE POSITIVE IMPACT OF CYCLICALS ABATED RECENTLY?
A. Yes. They dropped in the late fall when many market analysts concluded
that the economy - and, along with it, the performance of cyclical stocks -
had peaked. During that time, investors began gravitating more strongly
toward growth stocks - those of companies with steady earnings growth. That
helped lift some of the fund's consumer nondurable stocks, such as food,
beverage and tobacco conglomerate Philip Morris.
Q. STILL, MUCH OF THE FUND WAS INVESTED IN CYCLICAL STOCKS AT THE END OF
THE PERIOD. WHY?
A. Because I think there's a fairly good chance that some cyclicals haven't
yet peaked. As a result, I've maintained a fairly heavy stake in "deep"
cyclical stocks, such as aluminum, paper and commodity chemical companies.
Deep cyclicals tend to perform well fairly late in the economic cycle. At
the end of the period, these cyclicals had excellent fundamentals - or
business prospects - but their stock prices didn't reflect it because of
concerns that cyclical stocks had peaked. Going forward, I think investing
in these types of stocks looks good. If the marketplace's bet is right and
deep cyclicals are done growing, then these stocks could drop somewhat.
However, if the marketplace is wrong - which is not uncommon - and earnings
growth for cyclical companies has not peaked, then these stocks could do
very well. Frankly, I like those odds.
Q. LET'S SWITCH DIRECTION AND DISCUSS THE FUND'S BONDS. WE'VE TALKED ABOUT
EMERGING MARKET BONDS. WERE THERE BONDS THAT DID WELL?
A. Yes, long-term U.S. Treasury bonds, which made up about 13% of the fund
at the end of the period. These bonds rallied over the past six months,
boosting the fund's performance.
Q. RICH, DESPITE A FAIRLY TOUGH INVESTMENT ENVIRONMENT IN THE PAST FEW
MONTHS, YOU MADE ALMOST NO CHANGES IN YOUR TOP FIVE STOCKS. WHAT'S BEHIND
THIS?
A. Even though some of my top five stocks - especially energy companies
Schlumberger and British Petroleum - had a rough few months, I still think
they all have excellent fundamentals and will be strong performers in the
future. I should point out that I did add United Technologies Corp., which
manufactures aerospace equipment, elevators, air conditioners and auto
parts, to my top five stocks. It looked good because its stock was
inexpensive and it was seeing the benefits of cost-cutting measures.
Q. DERIVATIVES ARE STILL IN THE NEWS. DID THE FUND OWN THEM?
A. Yes. About 11% of the fund was hedged with forward foreign currency
contracts, a common type of derivative, at the end of the period. I used
these investments to hedge against foreign currency - especially yen -
fluctuations and to protect the value of the fund's foreign investments.
Keep in mind, I did not use these contracts to speculate on any market, but
to protect the fund from currency risk, especially the risk of the
overpriced yen.
Q. HOW DOES THE FUND LOOK GOING FORWARD?
A. In terms of its stock investments, I'm fairly optimistic because a
number of foreign countries, including most European countries and Japan,
are well into economic recoveries. In this environment, I think the fund's
deep cyclical stocks that do business internationally will probably do
well. On the bond side, I expect to reduce the fund's investments in longer
maturity bonds because I believe the rally in the long bond market is
pretty much finished. As a result of rising short-term interest rates,
shorter-term bonds are beginning to look more attractive.
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 January 31,
1995, more than $11 billion
MANAGER: Richard Fentin,
since April 1987; manager
Fidelity Growth Company
Fund, January 1983 - April
1987; joined Fidelity in 1980
(checkmark)
RICH FENTIN ON PURITAN FUND'S
PHILOSOPHY:
"The fund buys value stocks
and bonds - or stocks and
bonds that are relatively
inexpensive but have strong
capital appreciation potential
- - and generally avoids
expensive securities. This
approach usually pays off for
the fund as these
value-oriented investments
increase in price. However,
sometimes the market goes
through periods when
expensive stocks do well and
inexpensive ones don't.
We have been experiencing
such a period over the past
three months.
"Still, I'm not going to change
the stripes of the fund and buy
expensive stocks just
because they appear to have
upward momentum. For
instance, many people are
buying a high-quality growth
stock, such as Coca Cola,
because its stock price is
increasing. But I think Coke's
too expensive and that it won't
be a good value for the fund in
the long run. So it doesn't look
like a bargain to me.
"Ultimately, I believe the
fund's value philosophy is
the best way to serve its
shareholders."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE STOCKS 6
MONTHS AGO
Schlumberger Ltd. 2.6 2.2
British Petroleum PLC ADR 1.5 1.5
Philip Morris Companies, Inc. 1.4 1.2
Loews Corp. 1.3 1.4
United Technologies Corp. 1.1 0.6
TOP FIVE BONDS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE BONDS 6
MONTHS AGO
United States Government (various issues) 14.8 9.2
Argentina Republic (various issues) 1.7 2.6
French Government (various issues) 1.0 1.1
New Zealand Government (various issues) 0.5 0.8
Treuhandanstalt (various issues) 0.5 0.1
TOP FIVE MARKET SECTORS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE MARKET
SECTORS
6 MONTHS AGO
Energy 11.1 10.3
Finance 10.8 14.6
Basic Industries 8.5 11.3
Retail & Wholesale 6.3 6.2
Nondurables 5.1 4.6
ASSET ALLOCATION
AS OF JANUARY 31, 1995* AS OF JULY 31, 1994**
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: 1, Value: 2.3
Row: 1, Col: 2, Value: 3.6
Row: 1, Col: 3, Value: 30.1
Row: 1, Col: 4, Value: 64.0
Stocks 63.4%
Bonds 28.4%
Convertible
securities 2.6%
Short-term and
other investments 5.6%
FOREIGN
INVESTMENTS 23.5%
Stocks 64.0%
Bonds 30.1%
Convertible
securities 3.6%
Short-term and
other investments 2.3%
FOREIGN
INVESTMENTS 31.2%
*
*
*
INVESTMENTS JANUARY 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 62.2%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.8%
AEROSPACE & DEFENSE - 0.7%
Flightsafety International, Inc. 778,600 $ 29,197
Lockheed Corp. 487,000 35,064
Martin Marietta Corp. 450,000 20,081
84,342
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. 158,300 10,567
SHIP BUILDING & REPAIR - 0.0%
Celsius Industrier AB Class B 200,000 4,462
TOTAL AEROSPACE & DEFENSE 99,371
BASIC INDUSTRIES - 7.6%
CHEMICALS & PLASTICS - 5.0%
Betz Laboratories, Inc. (g) 2,122,400 97,896
CBI Industries, Inc. 286,000 6,650
Dow Chemical Co. 134,600 8,396
du Pont (E.I.) de Nemours & Co. 280,100 14,915
Goodrich (B.F.) Company 10,000 434
Grace (W.R.) & Co. 3,330,464 129,055
Great Lakes Chemical Corp. 2,146,500 122,082
Hoechst AG Ord. 110,100 23,219
Imperial Chemical Industries PLC ADR 68,800 3,208
Nalco Chemical Co. 3,184,400 109,066
Olin Corp. 156,000 7,761
Shinetsu Chemical 1,606,000 27,394
Union Carbide Corp. 1,305,700 33,295
583,371
IRON & STEEL - 0.0%
Armco, Inc. (a) 688,300 4,388
METALS & MINING - 1.0%
Alcan Aluminium Ltd. 3,274,900 79,134
Alumax, Inc. (a) 1,000,100 25,378
Reynolds Metals Co. 71,600 3,580
108,092
PACKAGING & CONTAINERS - 0.1%
Carnaudmetalbox SA 285,000 9,861
Sonoco Products Co. 245,500 5,155
15,016
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 1.5%
Albany International Corp. Class A 10,000 $ 179
Champion International Corp. 1,673,000 63,992
Enso-Gutzeit Class R free shares 300,000 2,453
International Paper Co. 322,797 22,959
Jefferson Smurfit Corp. (a) 810,000 13,061
Kymmene Corp. 100,000 2,746
Mail-Well Holdings, Inc. (a) 7,500 38
QUNO Corp. (a) 223,300 4,067
QUNO Corp. (a)(i) 49,300 898
Repola 550,000 9,687
Stone Container Corp. (a) 723,400 12,298
Stora Kopparbergs Class A free shares 279,500 17,832
Union Camp Corp. 391,000 18,425
Westvaco Corp. 211,100 7,679
Weyerhaeuser Co. 10,000 379
176,693
TOTAL BASIC INDUSTRIES 887,560
CONGLOMERATES - 2.2%
Allied-Signal, Inc. 923,500 33,015
Brascan Ltd. Class A 950,000 12,575
Coltec Industries, Inc. (a) 1,426,800 22,115
Crane Co. 1,228,800 33,638
Textron, Inc. 334,000 17,243
Tomkins PLC Ord. 3,407,700 11,953
United Technologies Corp. 2,010,800 129,194
259,733
CONSTRUCTION & REAL ESTATE - 1.2%
CONSTRUCTION - 0.0%
Centex Corp. 65,100 1,481
ENGINEERING - 0.4%
EG & G, Inc. (g) 3,170,000 44,380
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - 0.8%
Associated Estates Realty Corp. 87,700 $ 1,809
Bradley Real Estate, Inc. 20,000 303
Cali Reality Corp. (a) 314,500 5,032
Carr Realty Corp. 98,200 1,768
CenterPoint Properties Corp. 75,000 1,444
Crown American Realty Trust (SBI) 735,200 10,017
Developers Diversified Realty 80,000 2,260
Equity Residential Property Trust (SBI) 161,600 4,303
Excel Realty Trust, Inc. 61,800 1,035
Federal Realty Investment Trust (SBI) 152,900 3,192
Glimcher Realty Trust 162,500 3,270
Haagen Alexander Properties, Inc. 185,000 2,867
Kimco Realty Corp. 158,200 5,715
LTC Properties, Inc. 362,600 4,623
Liberty Property Trust (SBI) 277,500 5,481
Macerich Company 397,600 8,051
Mid Atlantic Realty Trust, 272,000 2,142
RFS Hotel Investors, Inc. 600,000 8,100
Simon Properties Group, Inc. 465,400 10,878
Taubman Centers, Inc. 57,000 513
Urban Shopping Centers, Inc. 160,000 3,320
Vornado Realty Trust 55,100 1,908
88,031
TOTAL CONSTRUCTION & REAL ESTATE 133,892
DURABLES - 4.4%
AUTOS, TIRES, & ACCESSORIES - 2.2%
Cooper Tire & Rubber Co. 10,000 260
Genuine Parts Company 326,500 11,958
Honda Motor Co. Ltd. 2,827,000 43,966
Johnson Controls, Inc. 1,562,600 74,224
Snap-on Tools Corp. 1,785,900 56,479
Suzuki Motor Corp. 515,000 4,780
Toyota Motor Corp. 3,750,000 71,489
263,156
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 1.1%
Matsushita Electric Industrial Co. Ltd. 4,719,000 $ 65,341
Sony Corp. 1,322,200 60,893
126,234
TEXTILES & APPAREL - 1.1%
Burlington Industries, Inc. (a) 2,360,200 25,372
Liz Claiborne, Inc. 1,153,300 19,174
Nisshinbo Industries 791,000 8,333
Russell Corp. 107,000 3,157
Shaw Industries, Inc. 54,500 811
Stride Rite Corp. 1,326,100 14,421
Unifi, Inc. 1,865,800 50,843
122,111
TOTAL DURABLES 511,501
ENERGY - 9.8%
COAL - 0.0%
Eastern Enterprises Co. 32,900 876
MAPCO, Inc. 51,300 2,668
3,544
ENERGY SERVICES - 4.5%
Baker Hughes, Inc. 3,835,100 67,594
Halliburton Co. 2,200,300 79,761
Helmerich & Payne, Inc. (g) 1,343,700 34,264
Marine Drilling Companies, Inc. (a) 500,000 1,250
McDermott International, Inc. 1,594,800 41,066
Schlumberger Ltd. 5,786,200 305,222
529,157
OIL & GAS - 5.3%
Amerada Hess Corp. 2,155,300 97,797
British Petroleum PLC:
Ord. 6,742,447 43,678
ADR 2,216,922 172,089
Burlington Resources, Inc. 1,438,300 49,621
Cabot Oil & Gas Corp. Class A 717,800 8,973
Coastal Corp. (The) 1,915,500 51,719
Kerr-McGee Corp. 242,700 11,498
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Mesa, Inc. (a) 95,994 $ 468
Murphy Oil Corp. 940,400 40,907
Occidental Petroleum Corp. 2,499,500 46,866
Petro-Canada, Inc. 557,200 4,455
Renaissance Energy Ltd. 130,000 2,298
Royal Dutch Petroleum Co. 102,200 11,434
San Juan Basin Royalty Trust (UBI) 1,469,600 9,185
Sun Company, Inc. (a) 10,000 290
Total SA Class B:
Ord 751,024 42,344
sponsored ADR 222,947 6,326
Unocal Corp. 897,744 23,454
623,402
TOTAL ENERGY 1,156,103
FINANCE - 6.7%
BANKS - 0.3%
Bank of New York Co., Inc. 66,600 1,998
Chase Manhattan Corp. (warrants) (a) 50,221 201
Deutsche Bank AG 80,000 36,236
Grant Street National Bank (a) 1,047,299 164
Shawmut National Corp. (warrants) (a) 1,436 5
38,604
CREDIT & OTHER FINANCE - 0.4%
American Express Co. 1,655,827 52,159
INSURANCE - 4.0%
ACE Ltd. (a) 369,800 9,106
Alexander & Alexander Services, Inc. 236,100 4,752
Allstate Corp. 2,907,700 70,147
Berkley (W.R.) Corp. (g) 885,000 32,966
Loews Corp. 1,702,300 157,250
MBIA, Inc. 524,100 31,643
NAC Re Corp. 707,900 23,361
Old Republic International Corp. 553,000 12,650
Providian Corp. 30,000 1,028
SAFECO Corp. 69,100 3,645
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Travelers, Inc. (The) 3,142,249 $ 115,870
Western National Corp. 399,000 4,738
467,156
SAVINGS & LOANS - 0.8%
Ahmanson (H.F.) & Co. 3,373,928 55,248
Golden West Financial Corp. 905,200 33,492
88,740
SECURITIES INDUSTRY - 1.2%
Bear Stearns Companies, Inc. 619,000 10,291
Daiwa Securities Co. Ltd. 1,264,000 16,360
ECM Corp. L.P. (i) 6,318 632
Edwards (A.G.), Inc. 531,700 9,637
Lehman Brothers Holdings, Inc. 496,500 8,441
Morgan Stanley Group, Inc. 211,000 12,686
Nomura Securities Co. Ltd. 4,015,000 78,153
PaineWebber Group, Inc. 356,400 5,346
141,546
TOTAL FINANCE 788,205
HEALTH - 3.2%
DRUGS & PHARMACEUTICALS - 1.9%
American Home Products Corp. 1,161,600 81,457
Bristol-Myers Squibb Co. 659,600 40,566
Rhone Poulenc Rorer, Inc. 69,800 2,722
Sankyo Co. Ltd. 2,044,000 48,401
Schering AG 51,800 36,900
Sigma Aldrich Corp. 372,400 13,313
Takeda Chemical Industries Ltd. 403,000 4,974
228,333
MEDICAL EQUIPMENT & SUPPLIES - 1.3%
Acuson Corp. (a) 200,900 3,214
Baxter International, Inc. 2,189,500 64,590
Boston Scientific Corp. (a) 723,600 13,387
Pall Corp. 3,492,300 66,354
147,545
TOTAL HEALTH 375,878
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.3%
Brierley Investments Ltd. 35,224,151 $ 25,838
Lagardere Groupe SCA (Reg.) 600,000 13,287
39,125
INDUSTRIAL MACHINERY & EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 1.1%
AMETEK, Inc. (g) 2,994,800 48,291
Ampex Corp. (a):
Class A (warrants) 93,551 111
Class C (g) 346 1
Mitsubishi Electric Co. Ord. 7,286,000 44,666
Omron Corp. 1,885,000 32,342
Westinghouse Electric Corp. 20,000 280
125,691
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
Caterpillar, Inc. 386,600 19,910
Cooper Industries, Inc. 920,100 35,194
Gardner Denver Machinery, Inc. (a) 1,200 14
Goulds Pumps, Inc. (g) 1,088,900 22,050
Harnischfeger Industries, Inc. 1,236,100 32,911
Keystone International, Inc. 1,468,100 24,957
Mitsubishi Heavy Industry 6,256,000 42,182
Terex Corp. (rights) (a) 5,610 3
Thermadyne Holdings Corp. (a) 82,059 974
Valmet Corp. Ord. (a) 1,000,000 18,451
Watts Industries, Inc. Class A 3,000 60
196,706
POLLUTION CONTROL - 0.3%
Safety Kleen Corp. 1,074,800 16,928
WMX Technologies, Inc. 700,000 19,863
36,791
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 359,188
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 0.5%
ENTERTAINMENT - 0.0%
Live Entertainment, Inc. (a)(h):
$2.00 (warrants) 256,000 $ 64
$2.72 (warrants) 244,705 61
125
LEISURE DURABLES & TOYS - 0.1%
Rawlings Sporting Goods, Inc. (a)(g) 799,500 9,994
LODGING & GAMING - 0.4%
Accor SA 300,000 30,321
Bally's Gaming International, Inc. (a) 84,392 654
Bally's Gaming International, Inc., (warrants) (a) 135,000 945
Bally's Grand, Inc. (a):
(New) 238,531 2,713
(warrants) 12,878 40
Forte PLC 2,750,000 10,254
Motels of America, Inc. (a) 3,000 249
Sun International Hotels Ltd. 39,107 1,447
Trump Plaza Holding Associates (warrants) (a) 270 135
46,758
PUBLISHING - 0.0%
General Media, Inc. (warrants) (a) 1,110 17
McClatchy Newspapers, Inc. Class A 100,000 2,225
2,242
TOTAL MEDIA & LEISURE 59,119
NONDURABLES - 4.7%
BEVERAGES - 0.6%
Seagram Co. Ltd. 2,354,700 67,777
FOODS - 1.5%
ConAgra, Inc. 2,613,300 80,686
Dole Food, Inc. 1,709,700 47,017
Flowers Industries, Inc. 201,600 3,604
Nestle SA (Reg.) 45,200 41,244
172,551
HOUSEHOLD PRODUCTS - 0.5%
First Brands Corp. 546,100 18,363
London International Group (a) 10,370,000 14,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Rubbermaid, Inc. 433,600 $ 13,062
Stanhome, Inc. 342,900 10,030
56,030
TOBACCO - 2.1%
Imasco Ltd. 534,800 15,346
Philip Morris Companies, Inc. 2,764,400 164,827
RJR Nabisco Holdings Corp. (a) 12,135,614 71,297
251,470
TOTAL NONDURABLES 547,828
PRECIOUS METALS - 0.1%
Agnico Eagle Mines Ltd. 1,169,400 10,597
Sudbury Contact Mines, Ltd. (a) 345,000 3,831
14,428
RETAIL & WHOLESALE - 6.2%
APPAREL STORES - 1.3%
Charming Shoppes, Inc. 4,339,600 27,665
Edison Brothers Stores, Inc. 1,068,000 13,217
Filene's Basement Corp. (a)(g) 1,927,310 6,746
Gap, Inc. 418,900 13,614
Lamonts Apparel, Inc. (a) 50,220 6
Lamonts Apparel, Inc. (warrants) (a) 92,674 --
Limited, Inc. (The) 5,605,400 94,591
United States Shoe Corp. 113,700 2,288
158,127
GENERAL MERCHANDISE STORES - 2.9%
Dayton Hudson Corp. 1,318,900 90,510
Dillard Department Stores, Inc. Class A 2,104,800 55,251
Family Dollar Stores, Inc. 999,600 13,495
Federated Department Stores, Inc. (a) 3,157,110 59,590
Federated Department Stores, Inc. (a):
Class C (warrants) 157,911 671
Class D (warrants) 157,911 711
Ito Yokado Co. Ltd. 707,000 32,418
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Mac Frugals Bargains, Inc. (a) 177,900 $ 2,913
Price/Costco, Inc. (a) 1,481,000 20,364
Sears, Roebuck & Co. 1,465,100 64,647
340,570
GROCERY STORES - 1.3%
FF Holdings Corp. (a)(h) 39,600 79
Fleming Companies, Inc. 1,624,555 33,100
Food 4 Less Holdings, Inc. (warrants) (a) 14,206 431
Giant Food, Inc. Class A 972,200 21,996
Grand Union Capital Corp. Class B (a) 5,975 1
Grand Union Co. (warrants) (a) 2,130 --
Great Atlantic & Pacific Tea Co., Inc. 1,647,800 30,690
Supervalu, Inc. 2,941,600 69,863
156,160
RETAIL & WHOLESALE, MISCELLANEOUS - 0.7%
Barrys Jewelers, Inc. (warrants) (a) 5,697 2
Barrys Jewelers, Inc. (a) 45,576 228
Duty Free International, Inc. 1,029,700 8,753
Fabri-Centers of America, Inc. (a) 441,800 7,234
Fingerhut Companies, Inc. 273,400 4,101
Finlay Enterprises, Inc. (a) 3,670 55
Sotheby's Holdings, Inc. Class A (g) 1,981,100 21,544
Toys "R" Us, Inc. (a) 800,000 23,400
Uny Co., Ltd. 1,332,000 20,582
85,899
TOTAL RETAIL & WHOLESALE 740,756
SERVICES - 3.0%
ADVERTISING - 0.3%
WPP Group PLC 1,869,800 3,368
WPP Group PLC ADR 541,000 1,894
WPP Group PLC (i) 13,740,000 24,531
29,793
LEASING & RENTAL - 0.0%
PHH Corp. 20,000 738
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
PRINTING - 1.1%
Deluxe Corp. 1,086,200 $ 29,056
Donnelley (R.R.) & Sons Co. 1,588,100 48,040
Harland (John H.) Co. 5,000 108
Komori Corp. 757,000 18,533
Nashua Corp. 235,700 4,537
Standard Register Co. 97,200 1,628
Toppan Printing Co. Ltd. 1,667,000 22,078
Wallace Computer Services, Inc. 12,800 368
124,348
SERVICES - 1.6%
ADT Ltd. 2,431,900 24,319
Angelica Corp. 10,000 264
BET Public Ltd. Co. Ord. 28,864,900 46,975
CPI Corp. 331,400 4,888
Jostens, Inc. 2,056,500 38,559
National Service Industries, Inc. 424,300 10,979
Western Atlas, Inc. (a) 1,251,700 45,844
171,828
TOTAL SERVICES 326,707
TECHNOLOGY - 3.9%
COMPUTER SERVICES & SOFTWARE - 0.2%
Mentor Graphics Corp. (a) 1,860,000 24,877
COMPUTERS & OFFICE EQUIPMENT - 1.4%
Canon, Inc. 3,401,000 50,163
Casio Computer Co. Ltd. Ord. 2,995,000 32,454
Fujitsu Ltd. 1,400,000 12,038
International Business Machines Corp. 982,400 70,856
165,511
ELECTRONIC INSTRUMENTS - 0.1%
Measurex Corp. 582,700 13,548
ELECTRONICS - 1.7%
AMP, Inc. 1,318,300 93,599
Hitachi Ltd. 9,097,000 77,950
Nitto Denko Corp. 1,420,000 20,517
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Thomas & Betts Corp. 81,500 $ 5,328
Toshiba Corp. 218,000 1,343
198,737
PHOTOGRAPHIC EQUIPMENT - 0.5%
Eastman Kodak Co. 10,000 490
Fuji Photo Film Co. Ltd. 1,282,000 27,784
Polaroid Corp. 1,143,300 35,014
63,288
TOTAL TECHNOLOGY 465,961
TRANSPORTATION - 1.6%
AIR TRANSPORTATION - 0.2%
Continental Airlines, Inc. (a):
Class A 827 7
Class B 2,298 19
KLM Royal Dutch Airlines (a) 102,300 2,749
KLM Royal Dutch Airlines Ord. (a) 585,700 15,665
18,440
RAILROADS - 0.8%
Burlington Northern, Inc. 50,000 2,291
CSX Corp. 10,000 716
Canadian Pacific Ltd. Ord. 3,579,234 48,650
Illinois Central Corp., Series A 1,149,000 37,773
89,430
TRUCKING & FREIGHT - 0.6%
Airborne Freight Corp. 548,400 12,065
Roadway Services, Inc. 1,095,300 54,765
66,830
TOTAL TRANSPORTATION 174,700
UTILITIES - 2.9%
ELECTRIC UTILITY - 0.6%
Baltimore Gas & Electric Co. 52,000 1,261
DPL, Inc. 117,700 2,531
Fuji Electric Co., Ltd. 2,466,000 12,272
Great Bay Power (a) 46,683 373
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
New England Electric Systems 96,800 $ 3,219
Veba AG Ord. 154,900 52,084
71,740
GAS - 0.3%
ENSERCH Corp. 1,124,700 14,621
UGI Corp. (warrants) (a) 13,633 3
Williams Companies, Inc. 688,400 18,587
33,211
TELEPHONE SERVICES - 2.0%
Ameritech Corp. 1,148,100 50,373
Koninklijke PPT Nederland 1,164,900 38,177
Koninklijke PPT Nederland (a)(i) 653,900 21,431
NYNEX Corp. 3,158,100 124,745
234,726
TOTAL UTILITIES 339,677
TOTAL COMMON STOCKS
(Cost $7,061,755) 7,279,732
PREFERRED STOCKS - 3.0%
CONVERTIBLE PREFERRED STOCKS - 1.8%
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.0%
Bethlehem Steel Corp. $5.00 16,300 844
METALS & MINING - 0.1%
Alumax, Inc., Series A, $4.00 (a) 6,233 682
Reynolds Metals Co. $3.31 330,400 16,190
16,872
TOTAL BASIC INDUSTRIES 17,716
ENERGY - 0.7%
ENERGY SERVICES - 0.1%
McDermott International, Inc. Series C, $2.875 (i) 300,000 12,450
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - 0.6%
Atlantic Richfield Co. exchangeable 993,600 $ 23,350
Occidental Petroleum Corp. $3.875 (i) 389,500 18,696
Unocal Corp. $3.50 (a)(i) 510,500 24,504
66,550
TOTAL ENERGY 79,000
HEALTH - 0.2%
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
U.S. Surgical Corp. $2.20 (i) 782,000 20,919
INDUSTRIAL MACHINERY & EQUIPMENT - 0.5%
ELECTRICAL EQUIPMENT - 0.5%
Ampex Corp. 8% (a) 3,217 1,222
Westinghouse Electric Corp. $1.30 (i) 3,708,000 52,376
53,598
MEDIA & LEISURE - 0.0%
ENTERTAINMENT - 0.0%
Live Entertainment, Inc., Series B, pay-in-kind 508,660 2,003
LODGING & GAMING - 0.0%
Bally Entertainment Corp., Series D, exchangeable (a) 4,303 112
TOTAL MEDIA & LEISURE 2,115
RETAIL & WHOLESALE - 0.0%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Town & Country Corp. $2.00 (a) 112,098 140
TECHNOLOGY - 0.0%
COMPUTERS & OFFICE EQUIPMENT - 0.0%
Alpine Group 8% 1,585 71
TRANSPORTATION - 0.2%
TRUCKING & FREIGHT - 0.2%
Consolidated Freightways, Inc. Series C, $1.54 947,000 19,768
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Philippine Long Distance Telephone (GDR) 200,000 $ 10,000
TOTAL CONVERTIBLE PREFERRED STOCKS 203,327
NONCONVERTIBLE PREFERRED STOCKS - 1.2%
BASIC INDUSTRIES - 0.0%
IRON & STEEL - 0.0%
Stelco, Inc., Series B, 7.76% 22,425 377
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
UDC Homes, Inc. prime exchangeable 159,536 598
DURABLES - 0.1%
AUTOS, TIRES, & ACCESSORIES - 0.1%
Volkswagen AG $12.00 87,000 17,349
ENERGY - 0.1%
OIL & GAS - 0.1%
Gulf Canada Resources Ltd. (a)(h) 46,430 110
Gulf Canada Resources Ltd. Series 1, adj. rate 2,369,770 5,924
6,034
FINANCE - 0.6%
BANKS - 0.4%
BankAmerica Corp. Series 1 adj. rate 182,500 8,669
Chase Manhattan Corp., Series J, 9.08% 258,524 6,625
First Fidelity Bancorporation, Series D adj. rate 76,780 7,390
First Interstate Bancorp depositary shares representing
1/8 share, Series G, 9% 208,000 5,304
Fleet Financial Group, Inc. depository shares representing
1/4 share. Series IV perpetual 5,089 130
Shawmut National Corp. depositary shares representing
1/10th share 9.30% 369,700 9,288
Summit Bancorporation adj. rate 105,069 2,115
Wells Fargo, Series C, 9% 316,050 8,059
47,580
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 0.0%
Household International, Inc. depositary shares
representing 1/4, Series 89-A, 9 1/2% 162,100 $ 4,215
INSURANCE - 0.0%
Travelers, Inc. Series D, 9 1/4% 122,980 3,166
SAVINGS & LOANS - 0.2%
Ahmanson (H.F.) & Co. depositary shares representing
1/2 share Series B, 9.60% 206,000 5,304
First Nationwide Bank 11 1/2%, 142,613 13,798
Washington Mutual Savings Bank Seattle Series C, 9 1/8% 24,000 597
19,699
TOTAL FINANCE 74,660
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Berg Electronics Holding Corp., Series E, $3.4687 189,984 4,940
UTILITIES - 0.4%
ELECTRIC UTILITY - 0.4%
Cleveland Electric Illuminating Co., Series M adj. rate (a) 31,663 3,107
Gulf States Utilities Co.:
$1.75 500,000 11,313
$9.96 14,788 1,499
Series A, adj. rate 41,940 4,131
Series B, adj. rate 82,405 3,955
Long Island Lighting Co. $7.95 496,477 11,667
Public Service Co. of New Hampshire Co., Series A 404,707 10,421
Texas Utilities Electric Co., Series B, adj. rate 16,155 1,426
47,519
GAS - 0.0%
Transcontinental Gas Pipelines $6.65 29,062 2,848
TOTAL UTILITIES 50,367
TOTAL NONCONVERTIBLE PREFERRED STOCKS 154,325
TOTAL PREFERRED STOCKS
(Cost $372,963) 357,652
CORPORATE BONDS - 10.0%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - 0.8%
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
Stone Container Corp. 8 7/8%, 7/15/00 (i) B2 $ 1,100 $ 1,815
CONGLOMERATES - 0.4%
Hanson America, Inc. 2.39%, 3/1/01 (i) A3 12,800 9,280
Hanson PLC euro 9 1/2%, 1/31/06 A2 GBP 19,500 31,811
41,091
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.0%
Cemex SA 4 1/4%, 11/1/97 (i) Ba3 7,700 5,313
REAL ESTATE INVESTMENT TRUSTS - 0.1%
Centerpoint Properties 8.22%, 1/15/04 - 1,854 1,933
LTC Properties, Inc. 8 1/2%, 1/1/00 - 2,088 2,088
Liberty Property L. P. 8%, 7/1/01 - 1,962 1,950
Sizeler Property Investors, Inc. 8%, 7/15/03 - 1,000 860
6,831
TOTAL CONSTRUCTION & REAL ESTATE 12,144
ENERGY - 0.0%
OIL & GAS - 0.0%
USX-Marathon Group 7%, 6/15/17 BB- 4,490 3,676
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp., Series C, 0%, 6/30/97 - 762 282
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Cooper Industries, Inc. 7.05%, 1/1/15 BBB+ 21,962 21,715
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 21,997
PRECIOUS METALS - 0.0%
Agnico Eagle Mines Ltd. yankee bonds 3 1/2%,
1/27/04 B1 9,165 6,129
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Softe SA euro 4 1/4%, 7/30/98 (d) - ITL 16,010 $ 11,269
TOTAL CONVERTIBLE BONDS 98,121
NONCONVERTIBLE BONDS - 9.2%
BASIC INDUSTRIES - 0.8%
CHEMICALS & PLASTICS - 0.1%
NL Industries, Inc.:
11 3/4%, 10/15/03 B1 3,300 3,325
0%, 10/15/05 (f) B2 1,530 956
Trans Resources, Inc. 14 1/2%, 9/1/96 B2 515 520
4,801
IRON & STEEL - 0.2%
Inland Steel Industries, Inc. 12 3/4%, 12/15/02 Ba3 4,225 4,537
Republic Engineered Steels, Inc. 9 7/8%,
12/15/01 B2 14,700 13,598
WCI Steel, Inc., Series B, 10 1/2%, 3/1/02 B1 9,220 8,724
26,859
METALS & MINING - 0.1%
Kaiser Aluminum & Chemical Corp. 9 7/8%,
2/15/02 B1 5,500 5,142
Sherritt Inc.:
10 1/2%, 3/31/14 B1 1,800 1,724
11%, 3/31/14 B1 2,500 1,621
8,487
PACKAGING & CONTAINERS - 0.1%
Crown Packaging Holdings Ltd.:
10 3/4%, 11/1/00 B3 2,250 2,165
0%, 11/1/03 (f) Caa 8,160 3,774
Grupo Industrial Durango 9.6875%,
11/18/96 (i)(j) BB 5,355 4,659
10,598
PAPER & FOREST PRODUCTS - 0.3%
Alto Parana euro 12%, 3/4/95 - 2,460 1,599
Chesapeake Corp.:
10 3/8%, 10/1/00 Baa3 2,700 2,929
9 7/8%, 5/1/03 Baa3 10,000 10,764
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Great Northern Nekoosa Corp. 9 1/8%, 2/1/98 Baa3 $ 7,800 $ 8,003
Indorayon Yankee 9 1/8%, 10/15/00 BB 2,090 1,651
Mail-Well Corp. 10 1/2%, 2/15/04 B- 1,150 1,012
Mail-Well Holdings, Inc. 0%, 2/15/06 (f) - 1,500 615
Stone Container Corp.:
9 7/8%, 2/1/01 B1 8,330 7,799
10 3/4%, 4/1/02 B2 2,250 2,160
Tjiwi Kimia International Finance Co.
13 1/4%, 8/1/01 B1 1,500 1,440
37,972
TOTAL BASIC INDUSTRIES 88,717
CONGLOMERATES - 0.1%
Jordan Industries, Inc.:
10 3/8%, 8/1/03 B3 3,500 3,185
0%, 8/1/05 (f) Caa 14,370 7,616
Sequa Corp. 9 3/8%, 12/15/03 B3 1,840 1,569
12,370
CONSTRUCTION & REAL ESTATE - 0.4%
BUILDING MATERIALS - 0.4%
Adience, Inc. 11%, 6/15/02 - 1,415 1,026
Building Materials Corp., America 0%, 7/1/04 (f) B1 22,370 11,297
Cemex SA (i):
8 7/8%, 6/10/98 Ba2 1,750 1,391
10%, 11/5/99 Ba2 5,000 3,900
9 1/2%, 9/20/01 Ba2 12,000 8,010
DAL Tile International, Inc. secured, 0%, 7/15/98 Caa 13,310 8,452
Hillsborough/Jim Walter Corp. sinking fund
13 3/4%, 2/1/03 (b) Ca 875 525
PT Semen Cibinong 9%, 12/15/98 (i) - 5,000 4,475
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Sunbelt (Cemex) Enterprises 8 1/2%,
5/4/95 (h) - $ 5,000 $ 4,888
Tolmex SA de CV 8 3/8%, 11/1/03 Ba2 5,480 3,130
47,094
CONSTRUCTION - 0.0%
UDC Homes 11 3/4%, 4/30/03 B2 510 357
REAL ESTATE - 0.0%
Bramalea Ltd. 0%, 3/22/98 - 2,778 1,583
TOTAL CONSTRUCTION & REAL ESTATE 49,034
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Clevite Industries Inc. sinking fund
12 3/8%, 6/30/01 - 3,600 1,080
TEXTILES & APPAREL - 0.0%
Leslie Fay Companies, Inc. (b)(h):
9.53%, 1/15/00 - 1,130 768
10.54%, 1/15/02 - 1,021 592
1,360
TOTAL DURABLES 2,440
ENERGY - 0.5%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 10 1/4%,
6/1/95 Baa3 6,975 7,041
Petroliam Nasional Berhad yankee
6 7/8%, 7/1/03 (i) A2 12,000 10,906
17,947
OIL & GAS - 0.3%
Deeptech International, Inc. 12%, 12/15/00 B3 5,730 5,157
Flores & Rucks, Inc. 13 1/2%, 12/1/04 B3 2,340 2,363
Petro-Canada yankee 8.60%, 10/15/01 Baa1 5,000 5,079
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - CONTINUED
OIL AND GAS - CONTINUED
Petroleos Mexicanos:
11.43%, 12/13/95 (i) Ba2 $ 4,000 $ 4,035
7.4375, 3/8/99 (i)(j) - 15,000 13,725
Societe Nationale Elf Aquitaine 7 3/4%, 5/1/99 Aa3 2,850 2,819
33,178
TOTAL ENERGY 51,125
FINANCE - 3.5%
ASSET BACKED SECURITIES - 0.3%
Capital Auto Receivables Asset Trust, 5.85%,
1/15/98 Aaa 5,653 5,506
Discover Card Trust, 6 1/8%, 5/15/98 A2 3,700 3,620
Premier Auto Trust 4.95%, 2/2/99 A2 3,612 3,490
Standard Credit Card Master Trust I:
participation Certificate, 5 1/2%, 9/7/98 A2 5,600 5,278
6 1/4%, 9/7/98 A2 2,650 2,537
Standard Credit Card Master Trust 4.85%,
3/7/99 A2 7,800 7,356
Union Federal Savings 1994-D 8.20%, 1/10/01 Baa2 2,344 2,361
30,148
BANKS - 1.8%
Banco Ganadero SA euro 9 3/4%, 8/26/99 - 5,000 4,599
Banco Nacional de Commercio Exterior SNC:
7 1/2%, 7/1/00 Ba2 25,000 18,438
8%, 8/5/03 (i) Ba2 7,000 4,655
Bancomer SA 9%, 6/1/00 (i) Ba2 8,000 5,240
Bank of Boston Corp.:
9 1/2%, 8/15/97 Baa2 5,298 5,482
10.30%, 9/1/00 Baa2 11,703 11,996
Banobras euro 10 3/4%, 8/16/96 Ba2 5,000 4,750
Citicorp:
euro:
5.6875%, 7/10/97 (j) A3 2,000 1,990
6.075%, 1/30/98 (j) A3 3,000 2,978
Continental Bank Corp. 6.3125%, 5/18/00 (j) A2 9,500 9,453
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Corporacion Andina De Fomento yankee bonds
7 1/4%, 4/30/98 (i) Baa3 $ 5,900 $ 5,310
Export-Import Bank Korea 7.85%, 11/1/96 A1 13,200 13,210
First Hawaiian Bank secured 6.93%,
12/1/03 (i) A1 11,900 10,617
First Maryland Bancorp 10 3/8%, 8/1/99 Baa1 8,345 8,980
First USA Bank Wilmington 7.65%, 8/1/03 Ba1 18,000 16,528
HSBC Finance Nederland BV 7.40%,
4/15/03 (i) A3 4,000 3,700
Korea Development Bank 9.60%, 12/1/00 A1 6,000 6,283
Manufacturers Hanover Trust, NY:
euro 6 5/8, 7/15/97 (j) A2 500 499
6 5/8%, 4/30/97 (j) A3 500 498
Merchants National Corp. 9 7/8%, 10/1/99 A2 6,850 7,261
Midland International Financial Services BV euro
0%, 3/6/99 (j) - 5,000 4,925
Midlantic Corp.:
9 7/8%, 12/1/99 Baa3 17,640 18,447
9.20%, 8/1/01 Baa3 11,850 12,075
Shawmut Corp.:
8 7/8%, 4/1/96 Baa1 1,840 1,860
8 1/8%, 2/1/97 Baa1 9,125 9,173
Signet Banking Corp.:
6.4375%, 4/15/98 (j) Baa1 6,210 6,109
9 5/8%, 6/1/99 Baa1 7,500 7,806
Wells Fargo and Company euro 6 1/8%,
4/28/00 (j) A3 2,000 1,953
204,815
CREDIT & OTHER FINANCE - 0.8%
Chrysler Financial Corp. 9 1/2%, 12/15/99 A3 3,000 3,143
Comdata Network, Inc. 13 1/4%, 12/15/02 A3 3,960 4,242
General Motors Acceptance Corp.:
7%, 3/6/95 Baa1 6,000 6,004
7 3/4%, 1/28/97 Baa1 4,250 4,230
Greyhound Financial Corp. 6.95%, 1/28/98 Baa2 2,000 1,936
Imperial Credit Industries 9 3/4%, 1/15/04 B1 2,000 1,480
La Salle National Trust NA, Trust No. 118501
mortgage note (h) - 1,962 1,962
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Nacional Financiera SNC:
euro:
5 7/8%, 2/17/98 - $ 5,000 $ 3,981
9 3/8%, 7/15/02 Ba2 5,000 3,250
yankee 9 3/8%, 4/23/99 (i) Ba2 5,000 3,650
Treuhandanstalt:
5 3/4%, 4/29/99 Aaa DEM 69,700 43,567
7 1/8%, 1/29/03 Aaa DEM 17,500 11,245
Westinghouse Credit Corp.:
9.04%, 6/1/98 Ba1 2,250 2,267
9.30%, 6/7/99 Ba1 3,400 3,422
94,379
INSURANCE - 0.3%
American Annuity Group, Inc. 11 1/8%,
2/1/03 B2 1,760 1,725
Metropolitan Life Insurance Co. 6 30%,
11/1/03 (i) Aa3 16,000 13,635
Nationwide Mutual Insurance Co. 6 1/2%,
2/15/04 (i) Aa3 7,500 6,576
New York Life Insurance Co. 6.40%, 12/15/03 (i) Aa2 9,500 8,220
Ohio National Life Insurance Co. 8 7/8%,
7/15/04 (i) A3 6,400 6,330
36,486
SAVINGS & LOANS - 0.3%
Great Western Bank 10 1/4%, 6/15/00 A3 2,400 2,560
Great Western Financial Corp.
6 3/8%, 7/1/00 Baa1 5,130 4,697
Home Savings of America:
10 1/2%, 6/12/97 A3 3,820 3,937
6%, 11/1/00 A3 10,500 9,384
USAT Holdings, Inc. 8.05%, 5/15/98 (i) Ba2 19,550 18,573
39,151
SECURITIES INDUSTRY - 0.0%
ECM Corp. extendible 14%, 6/1/02 (i) - 1,557 1,712
TOTAL FINANCE 406,691
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.0%
Westinghouse Electric Corp.:
9.15%,1/20/98 Ba1 $ 950 $ 960
8.73%, 2/13/98 Ba1 1,100 1,087
9.40% 1/31/01 Ba1 1,725 1,725
3,772
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
RHI Holdings, Inc. 11 7/8%, 3/1/99 B2 2,090 1,986
Specialty Equipment Companies, Inc. 11 3/8%,
12/1/03 B3 6,000 5,820
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 - 2,790 2,678
10 3/4%, 11/1/03 - 8,819 8,466
18,950
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 22,722
MEDIA & LEISURE - 1.4%
BROADCASTING - 0.5%
Citicasters, Inc. 9 3/4%, 2/15/04 B- 7,813 7,598
Grupo Televisa SA:
euro 10%, 11/9/97 Ba2 4,000 3,500
9%, 4/7/96 (j) Ba2 14,620 13,377
NWCG Holdings Corp. 0%, 6/15/99 Caa 9,640 5,230
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 4,270 4,099
SCI Television, Inc. secured 11%, 6/30/05 B3 7,560 7,589
Telecommunications, Inc.:
7.13%, 2/2/98 Baa3 5,000 4,836
6.58%, 2/15/05 Baa3 6,000 5,592
Time Warner, Inc. 6.05%, 7/1/95 (i) Ba1 5,000 4,972
56,793
ENTERTAINMENT - 0.0%
Live Entertainment, Inc. 10%, 9/1/98 - 2,325 1,395
LEISURE DURABLES & TOYS - 0.1%
IHF Capital Inc. 13%, 7/15/02 (1,000 IHF
Holdings, Inc. 0%, 11/15/04 and 1 IHF
Capital warrant) (i) B3 4,000 4,020
IHF Holdings, Inc. 0%, 11/15/04 (1,000 ICON
Health 13%, 7/15/00 and 1 IHF Capital
warrant) (f)(i) Caa 10,225 5,164
9,184
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.5%
Aztar Corp.:
11%, 10/1/02 B2 $ 2,750 $ 2,537
13 3/4%, 10/1/04 B2 5,000 5,163
Bally's Gaming International, Inc., 10 3/8%,
7/15/98 - 4,500 4,208
Boyd Gaming Corp. 10 3/4%, 9/3/03 B2 15,000 14,044
California Hotel Finance Corp. gtd. 11%,
12/1/02 B2 5,000 4,775
GNF Corp., Series B, 10 5/8%, 4/1/03 B2 2,190 1,555
Grand Casino Resorts, Inc. gtd. 1st mtg.
12 1/2%, 2/1/00 - 370 356
Harrah's Jazz Co. 14 1/4%, 11/15/01 B1 6,850 7,278
Host Marriott Corp.:
9 1/8%, 12/1/00 B1 995 970
10 1/2%, 5/1/06 B1 655 652
11%, 5/1/06 B1 1,366 1,371
Host Marriott Hospitality, Inc. 10 3/8%, 6/15/11 B1 2,626 2,626
Motels of America, Inc. 12%, 4/15/04 B3 3,440 3,474
President Riverboat Casinos 13%, 9/15/01 (i) B2 5,000 4,575
Resorts International Hotel Financing, Inc. mtg.
11%, 9/15/03 - 2,223 1,666
Sun International Hotels Ltd. 10 1/2%,
12/12/95 (h) - 295 295
55,545
PUBLISHING - 0.1%
News American Holdings, Inc.:
gtd. 9 1/8%, 10/15/99 Ba1 7,000 7,128
8 5/8%, 2/1/03 Ba1 7,750 7,624
14,752
RESTAURANTS - 0.2%
American Restaurant Group, Inc.
12%, 9/15/98 (New) B2 270 250
12%, 9/15/98 B2 4,430 4,098
Cafeteria Operators LP 11%, 6/30/98 (b)(h) - 7,577 1,894
Flagstar Corp.:
10 7/8%, 12/1/02 B2 940 865
11 1/4%, 11/1/04 Caa 16,185 13,029
20,136
TOTAL MEDIA & LEISURE 157,805
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
NONDURABLES - 0.4%
BEVERAGES - 0.1%
Fomento Ecunomico Mexicano SA
9 1/2%, 7/22/97 (i) - $ 4,000 $ 3,590
Heileman Acquisition Corp. 9 5/8%, 1/31/04 B3 6,500 4,355
7,945
FOODS - 0.0%
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 2,100 2,069
HOUSEHOLD PRODUCTS - 0.3%
Mary Kay Corp. 10 1/4%, 12/31/00 (i) B+ 2,080 1,997
Revlon Consumer Products Corp.:
9 3/8%, 4/1/01 B2 1,230 1,092
10 1/2%, 2/15/03 B3 4,010 3,548
Revlon Worldwide Corp. secured 0%, 3/15/98 B3 43,775 25,499
32,136
TOBACCO - 0.0%
Empresas La Moderna SA 10 1/4%, 11/12/97 (i) - 5,260 4,734
TOTAL NONDURABLES 46,884
RETAIL & WHOLESALE - 0.1%
APPAREL STORES - 0.0%
Apparel Retailers, Inc. 12 3/4%, 8/15/05 Caa 4,720 2,502
Lamonts Apparel Corp. 10 1/4%, 11/1/99 (b) - 3,081 1,664
4,166
GENERAL MERCHANDISE STORES - 0.0%
El Puerto de Liverpool SA de CV 7 1/4%,
10/19/96 (i) - 4,820 3,952
GROCERY STORES - 0.0%
Farm Fresh Holdings Corp.:
12 1/4%, 10/1/00 B2 1,030 927
14 1/4%, 10/1/02 (i) - 2,890 872
Pathmark Stores, Inc. 0%, 11/1/03 (f) B3 1,700 867
2,666
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
Barrys Jewelers, Inc. 11%, 12/22/00 - 1,595 1,563
Color Tile, Inc. 10 3/4%, 12/15/01 B2 6,900 5,848
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Town & Country Corp.:
11 1/2%, 9/15/97 B1 $ 1,609 $ 1,335
13%, 5/31/98 B3 2,859 2,007
10,753
TOTAL RETAIL & WHOLESALE 21,537
SERVICES - 0.3%
GOVERNMENT SERVICES - 0.2%
Financiera Energetica Nacional:
6 5/8, 12/13/96 - 4,000 3,790
9%, 11/8/99 (i) BBB- 20,000 18,950
22,740
LEASING & RENTAL - 0.1%
Acme Holdings, Inc. 11 3/4%, 6/1/00 Ca 2,950 1,003
GPA Delaware, Inc.:
8 1/2%, 3/3/97 - 5,700 4,888
8 5/8%, 1/15/99 - 4,000 2,860
8,751
PRINTING - 0.0%
Big Flower Press:
10 3/4%, 8/1/03 B3 390 362
Class A, 10 3/4%, 8/1/03 B3 2,630 2,439
Class B, 10 3/4%, 8/1/03 B3 830 770
3,571
TOTAL SERVICES 35,062
TECHNOLOGY - 0.2%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Alpine Group, Inc. 13 1/2%, 12/28/95 (h) Baa2 240 237
Comdisco, Inc.:
Bank Entry, 7.82%, 2/5/97 Baa2 2,000 1,991
9 3/4%, 1/15/97 Baa2 5,850 6,017
9.28%, 6/5/00 Baa2 2,000 2,062
9.30%, 6/27/00 Baa2 2,000 2,070
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Comdisco, Inc. - continued
9 1/4%, 7/6/00 Baa2 $ 7,625 $ 7,883
9 1/2%, 1/28/02 Baa2 2,580 2,692
22,952
ELECTRONICS - 0.0%
Berg Electronics, Inc. 11 3/8%, 5/1/03 B3 2,470 2,470
Grupo Condumex SA de CV 6 1/4%, 7/27/96 (i) - 3,000 2,640
5,110
TOTAL TECHNOLOGY 28,062
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
AMR Corp. 9 1/2%, 7/15/98 Baa3 4,750 4,827
Continental Airlines, Inc. 2nd priority secured
equipment certificate 11%, 3/15/95 (b) Caa 450 -
US Air, Inc.:
9 5/8%, 9/1/03 B2 2,880 2,448
10 3/8%, 3/1/13 B2 5,240 4,402
11,677
TRUCKING & FREIGHT - 0.0%
Consolidated Freightways, Inc. 9 1/8%, 8/15/99 Baa3 2,000 2,013
TOTAL TRANSPORTATION 13,690
UTILITIES - 1.2%
CELLULAR - 0.0%
Horizon Cellular Telephone 0%, 10/1/00 (f) Caa 6,300 4,489
ELECTRIC UTILITY - 0.8%
Comision Federal De Electricidad euro
8%, 8/4/97 - 10,000 8,438
El Paso Funding Corp. lease obligation (b):
9 3/8%, 10/1/96 Ca 880 502
9.20%, 7/2/97 Ca 430 245
10 3/4%, 4/1/13 Ca 8,390 4,782
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Hydro-Quebec euro 6.6875%, 7/31/02 (j) A+ $ 3,000 $ 2,907
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 5,000 5,033
7.30%, 7/15/99 Ba1 17,800 16,340
N.A.E.C 9.05%, 6/1/02 Ba1 9,000 8,438
Public Service Co. of New Hampshire:
1st mtg. 9.17%, 5/15/98 Baa3 8,000 8,121
contingent 15.23%, 7/1/00 Ba2 8,000 9,420
Systems Energy Resources, Inc. 1st. mtg.
10 1/2%, 9/1/96 Baa3 1,000 1,032
Toledo Edison Co.:
secured 9.30%, 4/1/98 Baa3 8,500 8,361
8.70%, 9/1/02 B1 3,500 2,857
United Illuminating Co.:
7 3/8%, 1/15/98 Baa3 4,000 3,873
9.76%, 1/2/06 Baa3 13,135 13,482
93,831
GAS - 0.4%
Centragas Transpotadora De Gas 10.65%,
12/1/10 (i) BBB- 5,000 4,775
Columbia Gas System, Inc. (b):
7 1/2%, 10/1/97 Caa 2,000 2,254
9.07%, 1/12/00 - 250 295
10 1/4%, 8/1/11 Caa 1,420 1,825
10.15%, 11/1/13 Caa 290 361
9.43%, 10/12/19 Caa 1,250 1,527
Southwest Gas Corp.
9 3/4%,6/15 /02 Baa3 15,150 16,069
9 3/8%, 2/1/17 Baa3 4,250 4,346
Texas Gas Transmission Corp. 8 5/8%, 4/1/04 Ba2 2,500 2,475
Transcontinental Gas Pipe Line Corp.:
9%, 11/15/96 Ba2 6,050 6,111
extendible 9.41%, 5/15/00 Ba2 5,000 4,863
8 7/8%, 9/15/02 Ba2 3,265 3,265
48,166
TOTAL UTILITIES 146,486
TOTAL NONCONVERTIBLE BONDS 1,082,625
TOTAL CORPORATE BONDS
(Cost $1,269,904) 1,180,746
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 14.0%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
U.S. TREASURY OBLIGATIONS - 12.8%
7 1/4%, 11/15/96 to 5/15/04 Aaa $ 128,910 $ 126,854
5 5/8%, 1/31/98 Aaa 42,445 40,402
5 1/8%, 3/31/98 Aaa 73,100 68,417
9 1/4%, 8/15/98 Aaa 88,035 92,781
8 3/4%, 8/15/00 Aaa 16,030 16,897
6 1/4%, 2/15/03 Aaa 80,225 73,782
5 3/4%, 8/15/03 Aaa 225,865 199,784
7 7/8, 11/15/04 Aaa 76,690 78,140
11 5/8%, 11/15/04 Aaa 65,000 82,509
10 3/4%, 8/15/05 Aaa 91,260 111,280
12 3/4%, 11/15/10 Aaa 89,975 122,324
9 7/8%, 11/15/15 Aaa 71,300 86,351
8 7/8%, 8/15/17 Aaa 102,800 114,285
8 1/8%, 8/15/19 Aaa 195,430 202,118
12%, 8/15/23 Aaa 63,745 85,936
TOTAL U.S. TREASURY OBLIGATIONS 1,501,860
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.2%
Agency for International Development
(guaranteed by U.S. government):
4 7/8%, 9/15/98 Aaa 7,100 6,452
7 3/4%, 11/15/99 Aaa 10,000 9,978
5 3/4%, 3/15/00 Aaa 1,025 936
8%, 11/15/01 Aaa 2,960 2,978
6 1/8%, 3/15/03 Aaa 6,800 6,069
Federal Home Loan Mortgage Corp.:
5.40%, 11/1/00 Aaa 5,795 5,112
6.55%, 4/2/03 Aaa 10,000 9,091
Financing Corporation:
9.40%, 2/8/18 Aaa 3,000 3,380
9.65%, 11/2/18 Aaa 8,400 9,647
9.70%, 4/5/19 Aaa 6,525 7,531
Government Trust Certificates:
Class T-2 (assets of Trusts guaranteed by
U.S. Government through Defense Security
Assistance Agency) 9 5/8%, 5/15/02 Aaa 2,500 2,648
Series 1994-F (assets of Trusts guaranteed by
U.S. Government through Export-Import
Bank) 8.178%, 12/15/04 Aaa 14,294 14,352
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Government Trust current coupon certificate,
Class G-2 8%, 5/15/98 Government Trust
Certificates, Series 1992-A (assets of Trusts
guaranteed by U.S. Government through
Export-Import Bank) 7.02%, 9/1/04 Aaa $ 5,135 $ 4,941
Tennessee Valley Authority:
6%, 1/15/97 Aaa 12,311 11,926
8 3/8%, 10/1/99 Aaa 15,085 15,448
8 1/4%, 4/15/42 Aaa 18,800 18,338
U.S. Housing & Urban Development 8.27%,
8/1/03 Aaa 11,375 11,375
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 140,202
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,666,926) 1,642,062
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 0.8%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.0%
8%, 10/1/16 to 4/1/20 Aaa 4,932 4,782
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.1%
7 1/2%, 8/1/07 to 5/1/08 Aaa 6,912 6,711
8 1/2%, 1/1/09 to 7/1/21 Aaa 105 105
10%, 8/15/17 Aaa 203 215
7,031
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.7%
7%, 10/15/17 to 10/15/23 Aaa 13,252 12,108
7 1/2%, 4/15/17 to 12/15/23 Aaa 37,887 35,758
8%, 8/15/16 to 10/15/23 Aaa 18,842 18,324
8 1/2%, 11/15/05 to 7/15/23 Aaa 12,579 12,550
9 1/2%, 7/15/09 to 7/15/17 Aaa 331 347
10%, 11/15/09 to 11/15/16 Aaa 2,984 3,186
82,273
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $100,546) 94,086
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
PRIVATE SPONSOR - 0.0%
Maryland National Bank pass thru Series 1990-1
Class A, 9 1/2%, 10/25/20 (Cost $715) Aaa $ 691 $ 687
COMMERCIAL MORTGAGE SECURITIES - 0.6%
ACP Mortgage LP Commercial floater Series E,
6.6978%, 2/28/28 (i)(j) BB 2,559 1,585
American Southwest Financial Securities
commercial Series 1994-C2 Class B2,
8%, 12/25/01 (i)(j) - 3,000 2,754
CBA Mortgage Corp. commercial Series 1993-C1
Class E, 7.158%, 12/25/03 (i) Ba2 2,169 1,752
CS First Boston Mortgage Securities Corp.
commercial Series 1994-CFB1 Class E,
6.4769%, 1/25/28 (i) Ba2 2,956 2,128
New England Mutual Life Insurance Co.
commercial Series 1993-1 Class D, 8%,
12/15/23 (i) Ba2 5,001 3,785
Nomura Asset Securities Corp. commercial Series
1994-MD-I Class B-2, 8.4263%, 3/15/98 (i) - 2,840 2,168
Resolution Trust Corp.:
commercial Series 1991-M5 Class A,
9%, 3/25/07 Aa2 17,187 17,383
commercial Series 1994-C2 :
Class A-2, 7 3/4%, 4/25/25 AAA 3,754 3,732
Class A-4, 7 1/2%, 4/25/25 AAA 6,241 6,200
Class E, 8%, 4/25/25 BB 3,576 2,927
commercial Series 1994-C1 :
Class A-4 7 1/4%, 6/25/26 AAA 7,137 7,046
Class E, 8%, 6/25/26 AAA 3,852 3,010
SML, Inc. commercial Series 1994-C1:
Class B-3, 11.69%, 9/18/99 - 1,200 1,058
Class C, 9.28%, 9/18/99 (h) - 2,450 1,603
Structured Asset Securities Corp.:
commercial Series 1992-M1 Class C,
7.05%, 11/25/02 B2 3,200 2,316
commercial Series 1993-C1 Class A-1,
6.60%, 10/25/24 AA+ 6,257 5,925
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $65,659) 65,372
FOREIGN GOVERNMENT OBLIGATIONS (K) - 3.6%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
Alberta Province 9 1/4%, 4/1/00 Aa2 $ 5,500 $ 5,793
Argentina Republic:
BOCON:
0.00%, 4/1/01 (j) B1 94,852 50,814
0.40%, 4/1/01 - ARP 36,620 13,562
Peso 3.2712%, 9/1/02 (j) - ARP 2,100 380
BOTE:
3.5625%, 5/31/96 (j) - 80,300 25,203
CNEA euro 3.0625%, 9/1/97 (j) - ARP 20,200 11,176
4.3297%, 4/3/00 (j) - 48,333 29,499
6 1/2%, 3/31/05 (i)(j) - 250 151
Brady:
euro:
6 1/2%, 3/31/05 (j) BB- 17,500 10,544
4 1/4%, 3/31/23 (j) B1 96,500 42,460
Letras 0%, 2/24/95 BBB ARP 9,388 9,289
Province of Chaco 11 7/8%, 9/10/97 (h) - 4,800 4,700
French Government OAT:
8 1/2%, 11/25/02 Aaa FRF 82,000 15,970
8 1/2%, 4/25/03 Aaa FRF 269,300 52,346
8 1/2%, 10/25/19 Aaa FRF 245,000 46,695
German Government:
8%, 7/22/02 Aaa DEM 14,440 9,749
6 1/4%, 1/4/24 Aaa DEM 20,790 11,198
Manitoba Province Canada:
yankee 6%, 10/15/97 A1 5,000 4,793
6 3/4%, 3/1/03 A1 5,000 4,571
Mexico Value Recovery (rights) (a) - 12,454 --
Mexican Brady discount note 6.7656%,
12/31/19 (j) Ba3 8,100 5,640
New Zealand Government:
10%, 3/15/02 Aaa NZD 33,300 22,736
8%, 4/15/04 Aaa NZD 54,075 33,167
Republic of Uruguay 8 1/4%, 6/8/95 (i) Ba1 2,500 2,475
Victorian Public Authorities Finance Agency:
8.45%, 10/1/01 Aa3 4,700 4,774
8 1/4%, 1/15/02 Aa3 4,000 3,980
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $462,845) 421,665
SUPRANATIONAL OBLIGATIONS - 0.2%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
African Development Bank:
6 3/4%, 7/30/99 Aa1 $ 10,000 $ 9,531
9.30%, 7/01/00 Aa1 15,000 15,706
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $26,513) 25,237
INDEXED SECURITIES - 0.0%
OTHER - 0.0%
Bankers Trust New York Corp. note 13.84%,
8/7/95 (inversely indexed to 1-month
gold lease rate) (j) (Cost $4,000) 4,000 4,077
PURCHASED BANK DEBT - 0.0%
Leslie Fay Cos., Inc. (b):
term loan 1,299 883
revolving loan 1,012 688
noteholder payment 134 91
TOTAL PURCHASED BANK DEBT
(Cost $1,987) 1,662
REPURCHASE AGREEMENTS - 5.6%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.81%
dated 1/31/95 due 2/1/95 $ 657,152 657,046
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $11,690,859) $ 11,730,024
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
16,121 CAD 3/6/95 $ 11,439 $ (160)
63,486 FRF 3/7/95 12,022 281
6,118 DEM 2/28/95 4,016 16
17,640,454 ITL 2/17/95 10,952 (60)
1,312,167 JPY 2/1/95 13,166 (129)
TOTAL CONTRACTS TO BUY
(Payable amount $51,647) $ 51,595 (52)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.4%
CONTRACTS TO SELL
11,159 GBP 4/26/95 17,616 194
18,097 CAD 3/6/95 12,842 238
110,529 NLG 4/6/95 64,815 (1,343)
989,137 FRF 3/7/95 to 4/11/95 187,339 (3,818)
126,012 DEM 2/28/95 to 3/6/95 82,731 (2,546)
17,640,454 ITL 2/17/95 10,952 13
89,142,239 JPY 2/1/95 to 5/1/95 898,728 7,800
12,936 CHF 2/21/95 10,076 (76)
TOTAL CONTRACTS TO SELL
(Receivable amount $1,285,561) $ 1,285,099 462
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 11.0%
$ 410
CURRENCY ABBREVIATIONS
ARP - Argentine peso
GBP - British pound
CAD - Canadian dollar
NLG - Dutch guilder
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
NZD - New Zealand dollar
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 6 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)
Alpine Group, Inc.
13 1/2%,
12/28/95 1/4/95 $ 234
Cafeteria Operators
LP 11%, 6/30/98 6/24/93 6,063
Province of Chaco,
Argentina 11 7/8%,
9/10/97 3/9/94 4,931
FF Holdings Corp. 10/2/92 to
3/8/93 159
Gulf Canada
Resources Ltd. 10/15/93 117
La Salle National Trust NA,
Trust No. 118501 2/29/93 1,962
Leslie Fay Cos., Inc.:
Mortgage Note
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 (warrant ) 3/23/93 230
$2.72 (warrant) 3/23/93 241
SML, Inc. commercial
Series 1994-C1
9.28%, 9/18/99 8/11/94 1,593
Sun International
Hotels Ltd. 10 1/2%,
12/12/95 12/12/94 295
Sunbelt (Cemex) Enterprises
8 1/2%, 5/4/95 2/12/93 4,853
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 $409,203,000 or 3.5% of net
assets.
10. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
11. 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 19.3% AAA, AA, A 18.4%
Baa 2.1% BBB 2.5%
Ba 1.9% BB 1.7%
B 2.7% B 1.7%
Caa 0.5% CCC 0.4%
Ca, C 0.1% CC, C 0.0%
D 0.1%
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 1.8% 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 76.5%
Japan 7.5
United Kingdom 3.3
Canada 2.5
Germany 2.1
France 1.9
Argentina 1.7
Mexico 1.2
Others (individually less than 1%) 3.3
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1995, the aggregate cost of investment securities for income
tax purposes was $11,692,832,000. Net unrealized appreciation aggregated
$37,192,000, of which $666,447,000 related to appreciated investment
securities and $629,255,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JANUARY 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 11,730,024
agreements of $657,046) (cost $11,690,859) -
See accompanying schedule
Cash 69,969
Receivable for investments sold 278,741
Unrealized appreciation on foreign currency contracts 10,335
Receivable for fund shares sold 27,501
Dividends receivable 15,221
Interest receivable 83,797
Other receivables 909
U.S. Treasury obligations, at value, held as collateral for 126,457
securities loaned
TOTAL ASSETS 12,342,954
LIABILITIES
Payable for investments purchased $ 300,269
Unrealized depreciation on foreign currency contracts 9,925
Payable for fund shares redeemed 17,471
Accrued management fee 5,123
Other payables and accrued expenses 4,576
Collateral on securities loaned, at value 149,115
TOTAL LIABILITIES 486,479
NET ASSETS $ 11,856,475
Net Assets consist of:
Paid in capital $ 11,800,183
Undistributed net investment income 14,421
Accumulated undistributed net realized gain (loss) on 2,332
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 39,539
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 804,278 shares outstanding $ 11,856,475
NET ASSET VALUE, offering price and redemption price per $14.74
share ($11,856,475 (divided by) 804,278 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1995
INVESTMENT INCOME $ 101,236
Dividends (including $3,226 received from affiliated
issuers)
Interest (including security lending fees of $309) 150,897
TOTAL INCOME 252,133
EXPENSES
Management fee $ 29,877
Transfer agent fees 12,170
Accounting and security lending fees 437
Non-interested trustees' compensation 122
Custodian fees and expenses 2,024
Registration fees 431
Audit 164
Legal 69
Reports to shareholders 132
Miscellaneous 76
Total expenses before reductions 45,502
Expense reductions (316) 45,186
NET INVESTMENT INCOME 206,947
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 111,771
($24) on sales of investment in affiliated issuers)
Foreign currency transactions (8,728)
Futures contracts (438) 102,605
Change in net unrealized appreciation (depreciation) on:
Investment securities (511,693)
Assets and liabilities in foreign currencies 10,613 (501,080)
NET GAIN (LOSS) (398,475)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (191,528)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JULY 31, 1994
JANUARY 31, 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 206,947 $ 374,730
Net investment income
Net realized gain (loss) 102,605 613,089
Change in net unrealized appreciation (depreciation) (501,080) (258,017)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (191,528) 729,802
FROM OPERATIONS
Distributions to shareholders: (191,917) (289,622)
From net investment income
From net realized gain (506,266) (756,724)
TOTAL DISTRIBUTIONS (698,183) (1,046,346)
Share transactions 1,912,809 4,210,808
Net proceeds from sales of shares
Reinvestment of distributions 656,501 970,508
Cost of shares redeemed (722,439) (1,793,648)
Net increase (decrease) in net assets resulting from 1,846,871 3,387,668
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 957,160 3,071,124
NET ASSETS
Beginning of period 10,899,315 7,828,191
End of period (including under (over) distribution $ 11,856,475 $ 10,899,315
of net investment income of $14,421 and $(609),
respectively)
OTHER INFORMATION
Shares
Sold 124,921 263,411
Issued in reinvestment of distributions 42,636 61,351
Redeemed (47,454) (112,566)
Net increase (decrease) 120,103 212,196
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31,
ENDED JANUARY
31, 1995
1994 1993 D 1992 1991 1990
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 15.93 $ 16.59 $ 15.22 $ 13.75 $ 13.08 $ 14.90
beginning of period
Income from
Investment
Operations
Net investment .28 .46 F .72 .88 E .75 .88
income
Net realized and (.50) .88 2.14 1.37 .72 (1.17)
unrealized gain
(loss)
Total from investment (.22) 1.34 2.86 2.25 1.47 (.29)
operations
Less Distributions (.26) (.51) (.80) (.78) (.80) (.99)
From net investment
income
From net realized (.71) (1.49) (.69) - - (.54)
gain
Total distributions (.97) (2.00) (1.49) (.78) (.80) (1.53)
Net asset value, end $ 14.74 $ 15.93 $ 16.59 $ 15.22 $ 13.75 $ 13.08
of period
TOTAL RETURN B, C (1.57)% 8.60 20.29 16.96 11.87 (2.12)
% % % % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 11,856 $ 10,899 $ 7,828 $ 5,578 $ 4,942 $ 4,766
period (in millions)
Ratio of expenses to .78% .79 .74 .64 .66 .65%
average net assets A % % % %
Ratio of expenses to .78% .80 .74 .64 .66 .65%
average net assets A % % % %
before expense
reductions
Ratio of net investment 3.56% 4.00 4.89 6.23 5.94 6.30%
income to average A % % % %
net assets
Portfolio turnover rate 67% 74 76 102 108 58%
A % % % %
</TABLE>
A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D AS OF AUGUST 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
E INVESTMENT INCOME PER SHARE REFLECTS DIVIDENDS RECEIVED IN ARREARS WHICH
AMOUNTED TO $0.14 PER SHARE.
F EFFECTIVE AUGUST 1, 1993, THE FUND BEGAN REFLECTING IN NET INVESTMENT
INCOME PER SHARE CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES IN ACCORDANCE WITH NEW GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 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.
Reported 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
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but 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 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. 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 net investment income per share. 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 on
settlement date. Contracts that have been offset with different
counterparties are reflected as both a contract to
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
buy and a contract to sell in the schedule of investments under the caption
"Forward Foreign Currency Contracts."
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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.
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 privately placed
restricted securities. These securities 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 $17,254,000 or 0.2% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $4,448,587,000 and $3,784,062,000, respectively, of which U.S.
government and government agency obligations aggregated $1,452,626,000 and
$750,740,000, 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 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 annualized rate of .51%
of average net assets.
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.
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 $1,135,000 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
5. SECURITY LENDING - CONTINUED
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 $146,822,000 and $149,115,000, respectively.
6. 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
AFFILIATE COST COST INCOME VALUE
AMETEK, Inc. $ 162 $ - $ 360 48,291
Ampex Corp. Class C (a) - - - 1
Berkley (W.R.) Corp. 1,508 - 97 32,966
Betz Laboratories, Inc. 2,959 - 1,504 97,896
Cabot Oil & Gas Corp. Class A - 1,801 41 --
EG & G, Inc. - - 888 44,380
Filene's Basement Corp. (a) 671 - - 6,746
Goulds Pumps, Inc. - - - 22,050
Helmerich & Payne, Inc. - - 336 34,264
Rawlings Sporting Goods,
Inc. (a) - - - 9,994
Sotheby's Holdings, Inc. Class A . 1,473 - - 21,544
TOTALS $ 6,773 $ 1,801 $ 3,226 $ 318,132
(a) Non-income producing
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
$316,000 under this arrangement.
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 January 31, 1995, and the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months ended January 31, 1995 and for the year ended
July 31, 1994 and the financial highlights for the six months ended January
31, 1995 and for the five years in the period ended July 31, 1994. 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 January 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 January 31, 1995,
the results of its operations for the six months then ended, the changes
in its net assets for for the six months ended January 31, 1995 and for
the year ended July 31, 1994, financial highlights for the six months
ended January 31, 1995 and for the five years in the period ended July 31,
1994, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 9, 1995
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
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Stephen P. Jonas, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Robert H. Morrison, Manager,
Security Transactions
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
SEMIANNUAL REPORT
JANUARY 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 37 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 41 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION 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 a few 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 JANUARY 31, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Low-Priced Stock 2.84% -0.44% 138.74% 134.68%
Low-Priced Stock (incl. 3% sales -0.24% -3.42% 131.58% 127.64%
charge)
Russell 2000 1.83% -6.14% 75.58% 63.18%
Average Small Company Growth Fund 5.06% -4.53% 93.09% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 27, 1989. For example, if you had
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. You can compare these figures 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 currently
reflects
the performance of 264 small company growth funds tracked by Lipper
Analytical Services. 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 JANUARY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Low-Priced Stock -0.44% 19.01% 18.20%
Low-Priced Stock (incl. 3% sales charge) -3.42% 18.29% 17.50%
Russell 2000 -6.14% 11.92% 10.08%
Average Small Company Growth Fund -4.53% 13.67% 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 FunRussell 2000 Index (
12/27/89 9700.00 10000.00
12/31/89 9593.30 10183.51
01/31/90 9535.10 9293.82
02/28/90 9719.40 9582.38
03/31/90 9816.40 9955.08
04/30/90 9447.80 9630.04
05/31/90 10194.70 10311.66
06/30/90 10476.00 10332.56
07/31/90 10417.80 9878.09
08/31/90 9379.90 8562.52
09/30/90 8968.27 7804.83
10/31/90 8816.44 7328.36
11/30/90 9292.18 7887.14
12/31/90 9585.72 8200.08
01/31/91 10466.35 8941.65
02/28/91 11397.60 9938.77
03/31/91 12156.76 10638.35
04/30/91 12622.38 10611.58
05/31/91 12814.71 11117.39
06/30/91 12045.42 10469.50
07/31/91 12784.34 10836.89
08/31/91 13138.62 11238.01
09/30/91 13192.70 11326.01
10/31/91 13653.40 11625.57
11/30/91 13098.47 11087.87
12/31/91 14019.93 11975.73
01/31/92 15233.91 12946.08
02/29/92 16211.55 13323.74
03/31/92 15674.39 12872.75
04/30/92 15824.79 12421.76
05/31/92 15932.22 12586.94
06/30/92 15545.47 11991.68
07/31/92 16050.40 12408.75
08/31/92 16007.43 12058.59
09/30/92 16137.72 12336.88
10/31/92 16406.49 12729.02
11/30/92 17515.19 13703.05
12/31/92 18078.99 14180.43
01/31/93 18543.43 14660.38
02/28/93 18384.84 14321.78
03/31/93 18939.90 14786.51
04/30/93 18758.65 14380.63
05/31/93 19155.12 15016.96
06/30/93 19223.09 15110.64
07/31/93 19472.30 15319.27
08/31/93 20163.29 15981.08
09/30/93 20327.12 16432.07
10/31/93 21075.95 16855.01
11/30/93 20713.62 16300.25
12/31/93 21733.07 16857.57
01/31/94 22863.70 17386.11
02/28/94 22851.13 17323.23
03/31/94 21846.14 16408.60
04/30/94 22034.57 16506.13
05/31/94 21959.20 16320.79
06/30/94 21645.14 15766.59
07/31/94 22135.07 16025.63
08/31/94 22964.20 16918.62
09/30/94 23073.24 16861.97
10/31/94 23252.43 16795.42
11/30/94 22632.18 16086.12
12/31/94 22778.16 16550.13
01/31/95 22763.92 16318.10
$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 January 31, 1995, the value of your
investment would have grown to $22,764 - a 127.64% 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 $16,318 - a 63.18% 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
An interview with Joel Tillinghast, Portfolio Manager of Fidelity
Low-Priced Stock Fund
Q. JOEL, HOW HAS THE FUND PERFORMED?
A. The fund had a total return of 2.84% for the six months ended January
31, 1995. That trailed the average small company growth fund tracked by
Lipper Analytical Services, which returned 5.06% during the same period.
For the 12 months ended January 31, the fund returned -0.44%, while the
average small company growth fund returned -4.53%.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF THE AVERAGE SMALL COMPANY
GROWTH FUND FOR THE PAST SIX MONTHS?
A. The fund has lower weightings of technology stocks than other small
company growth funds, and technology was one of the best performing sectors
over the past six months. The fund's underweighting in technology is
partly a function of the fund's charter; it is a low-priced stock fund as
well as a small company growth fund. Therefore, it is somewhat limited by
the fact that, for example, of the 50 largest technology stocks, only four
are currently selling for under $25 per share. In addition, the technology
stocks that the fund does own - mainly personal computer distributors - had
a weak six months. Another factor affecting performance was the fund's
focus on very small companies, which didn't do as well as larger small
companies during the period.
Q. WHAT SORT OF STOCKS HAVE YOU BEEN FOCUSING ON?
A. I've been trying to focus on companies that have a growth story -
meaning companies with rapid earnings growth - as well as a cyclical story
to tell. Cyclical stocks are those that tend to rise and fall with the
economy. The broad market has tended to move away from cyclicals and
toward growth stocks in the past six months. I've also been focusing on
stocks that are taking advantage of the worldwide capital spending boom.
Q. WHAT ARE SOME EXAMPLES OF COMPANIES WITH BOTH A CYCLICAL STORY AND A
GROWTH COMPONENT?
A. I have holdings in Lund International and Durakon, which make light
truck accessories. While auto parts is a cyclical business and may be
dropping off, these companies are growing earnings because they have hot
products. Concerns about a slowing economy have brought down cyclical stock
valuations - stock prices compared to other measures such as earnings and
dividends - so I'm looking for companies that are growing for reasons other
than the general health of the economy.
Q. YOU MENTIONED EARLIER THAT YOU'RE FOCUSING ON STOCKS THAT ARE TAKING
ADVANTAGE OF THE CAPITAL SPENDING BOOM. WHAT DO YOU MEAN BY CAPITAL
SPENDING?
A. I mean spending for any kind of machinery or equipment, road building,
infrastructure, rebuilding, together with technology and cellular telephone
equipment.
Q. CAN YOU GIVE US SOME EXAMPLES OF STOCKS THAT HAVE BENEFITED FROM THIS
CAPITAL SPENDING BOOM, AND NOTE ANY OTHER INVESTMENTS THAT HAVE HELPED THE
FUND?
A. Sure. Nokia, a Finnish cellular telephone equipment manufacturer, is a
good example. So are companies like JLG Industries, which makes boom lifts
for construction work, and Astec Industries, which constructs asphalt
plants. Among other investments, low natural gas prices are contributing to
the profitability of Lyondell - the fund's top holding - a chemical company
that produces ethylene and methanol. Devon Group, a printer, is gaining an
increased share of the catalog preparation business and has had a number of
posters that have sold well. Firstbank Puerto Rico has performed well by
increasing its portfolio of higher interest rate consumer loans, helping to
widen its interest rate margins - the difference between the interest the
bank pays to its depositors and the interest it receives from its
borrowers.
Q. IT SEEMS THAT IF THE ECONOMY SLOWS DOWN, THE CAPITAL SPENDING STORY
MIGHT FADE.
A. That's true, and that's why I'm keeping an eye on the three factors that
have contributed to positive capital spending. First, there are new
technologies that have been widely applied, such as personal computers,
networking and cellular phones. Second, companies have benefited from
exports or the shift in manufacturing abroad. Finally, low interest rates
have made it cheap for companies to invest in capital improvements. Of
these three, I believe the technology story will continue, but I'm warily
watching the other two, especially after the Mexican currency crisis and
the rise we've seen in short-term interest rates.
Q. WHAT STOCKS HAVE DISAPPOINTED?
A. As I mentioned before, personal computer distributors - such as
Government Technology Services, Inacom and Future Now - haven't performed
as well as expected. The problem is that anyone can sell or distribute
personal computers. It's a business that's intensely competitive and
subject to rapid product change. These companies have dramatically
increased computer sales, but the margins they get for distributing them
have plunged. However, I'm holding on to them because they are doing a lot
to reduce costs and the stocks are too inexpensive to sell.
Q. WHAT'S YOUR OUTLOOK GOING FORWARD?
A. Since the fund's average price to earnings ratio - a measure that gives
investors an idea of how much they are paying for a company's earnings
power - is below the market average, and the average expected earnings
growth is above the market average, I'm hoping that the fund will provide
above-market returns. As far as the market is concerned, there are several
uncertainties. We'll have to see short-term rates come down to provide a
buoyant environment for small company investment. At the same time, current
results of most companies in the fund are quite strong, so I don't see any
disasters ahead. I'm cautiously optimistic.
FUND FACTS
GOAL: to increase the value of
the fund's shares over the long
term by investing in stocks
of up-and-coming and
out-of-favor companies whose
prices are generally below $25
a share
START DATE: December 27,
1989
SIZE: as of January 31, 1995,
more than $2.4 billion
MANAGER: Joel Tillinghast,
since December 1989;
assistant, Fidelity OTC
Portfolio, 1988-1989; stock
analyst for natural gas,
personal care product,
appliance, and tobacco
industries, 1986-1989; joined
Fidelity in 1986
(checkmark)
JOEL TILLINGHAST ON INVESTMENT
STRATEGY:
"Before I buy a stock, I try to
make sure that it is selling for
less than what I think its
investment value is. That
gives me a margin of safety. I
try to make sure that a
component of the business
acts as some kind of shock
absorber, in case market
conditions or other factors
change. Although the fund
has a fairly aggressive
charter, I would say it's been
managed in somewhat of a
conservative manner, in order
to optimize risk/reward. If you
don't take much risk, you
won't make very attractive
returns. If it looks like the
risk/reward trade-off of an
investment is attractive, I'll
take the risk to give
shareholders the opportunity
to reap the benefits of positive
results."
(solid bullet) The fund's cash and
short-term investments
remained relatively high, at
23.3% of the fund as of
January 31, 1995. The high
cash position is a reflection of
several factors. First, cash
has increased as the fund
manager has sought to
reduce the number of
holdings in the fund. Second,
the position is a reflection of
the fund manager's
cautiousness about today's
market. Finally, since the fund
invests in small companies,
the fund manager may not be
able to buy more shares of
attractive stocks that are
already in the fund because of
investment limits. The fund is
not permitted to hold more
than 10% of any one
company's stock.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Lyondell Petrochemical Co. 1.9 0.0
Northumbrian Water Group PLC 1.2 1.2
Ord.
Welsh Water PLC Ord. 1.1 1.4
Universal Health Services, Inc. 1.1 1.4
Class B
Collective Bancorp, Inc. 0.8 0.1
Devon Group, Inc. 0.7 0.6
Firstbank Puerto Rico 0.7 0.5
Exar Corp. 0.6 0.8
UST, Inc. 0.5 0.0
Castle Energy Corp. 0.5 0.7
TOP MARKET SECTORS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Finance 11.3 12.3
Technology 9.9 8.6
Basic Industries 9.5 7.9
Health 5.3 4.2
Durables 4.8 6.4
ASSET ALLOCATION
AS OF JANUARY 31, 1995* AS OF JULY 31,1994**
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
Row: 1, Col: 1, Value: 23.0
Row: 1, Col: 2, Value: 1.25
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 36.0
Stocks 72.4%
Bonds 4.3%
Short-term
investments 23.3%
FOREIGN
INVESTMENTS 18.2%
Stocks 76.7%
Bonds 0.3%
Short-term
investments 23.0%
FOREIGN
INVESTMENTS 21.1%
*
**
INVESTMENTS JANUARY 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 72.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.1%
Allied Research Corp. (a)(c) 261,610 $ 1,112
Datron Systems, Inc. (a)(c) 242,200 2,664
3,776
BASIC INDUSTRIES - 9.4%
CHEMICALS & PLASTICS - 4.4%
AEP Industries, Inc. 330,475 5,948
Aceto Corp. (c) 321,032 4,615
American Pacific Corp. (a) 62,000 442
Celanese Canada, Inc. 146,700 2,854
Cominco Fertilizer Ltd. 200,000 5,153
Cytec Industries, Inc. (a) 309,900 11,776
Dyno Industrier AS 50,000 1,406
EVC International NV (a)(e) 80,000 3,760
Kemira OY (a) 25,000 176
Kemira OY sponsored ADR (a)(e) 100,000 1,387
Kinark Corp. (a)(c) 258,800 906
Lyondell Petrochemical Co. 2,050,000 45,356
Martin Color-Fi, Inc. (a) 177,500 754
Mississippi Chemical Corp. 124,600 2,165
OM Group, Inc. 100,000 2,250
Oil Dri Corp. of America 122,500 2,205
Sung Bo Chemical Co. 5,000 160
Skrinet AB Class B Free shares 150,000 1,089
Spartech Corp. (a)(c) 769,300 4,135
Sudbury, Inc. (a) 435,000 2,773
Tessenderlo Chemie NV 26,775 8,487
107,797
IRON & STEEL - 1.5%
Algoma Steel, Inc. (a) 24,700 171
Cold Metal Products, Inc. (a)(c) 541,300 4,195
Friedman Industries, Inc. 177,365 732
Harris Steel Group, Inc. Class A 50,000 378
Insteel Industries, Inc. 216,731 1,571
Intermetco Ltd. (c) 339,800 1,660
Proler International Corp. (a) 106,100 729
Rautaruukki OY Class K (a) 50,000 387
Rautaruukki OY Class K (a)(e) 200,000 1,547
Roanoke Electric Steel Corp. (c) 364,800 5,837
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Samuel Manu-Tech, Inc. 286,000 $ 4,370
Shaw Industries Ltd. Class A 75,000 640
Slater Industries Class B (a)(c) 554,900 4,240
SSAB Svenskt Stal AB Free shares B 25,000 1,155
Steel of West Virginia, Inc. (a)(c) 555,000 6,660
TriMas Corp. 69,200 1,358
35,630
METALS & MINING - 1.0%
Acier Leroux, Inc. Class B (a) 200,000 675
Acier Leroux, Inc. Class B (a)(e) 200,000 675
Castech Aluminum Group (a) 185,500 2,736
Castle A.M. & Co. 205,150 2,821
De Beers Consolidated Mines Ltd. ADR 326,300 6,485
Eramet SA (a) 5,000 351
Eramet SA (a)(e) 4,500 316
Lindberg Corp. 196,000 1,372
Outokumpu OY Class A (a) 100,000 1,887
Simsmetal Ltd. 160,391 704
Terra Mining AB (c)(e) 250,000 5,594
23,616
PACKAGING & CONTAINERS - 0.6%
Owens-Illinois, Inc. (a) 828,000 8,590
PCI Services, Inc. (a)(c) 396,200 2,823
U.S. Can Corp. (a) 128,400 2,520
13,933
PAPER & FOREST PRODUCTS - 1.9%
Alliance Forest Products, Inc. (a) 148,900 2,540
Donohue, Inc. 125,000 1,421
Enso-Gutzeit OY Class R Free shares 1,355,100 11,081
Groupe Forex, Inc. 125,000 1,455
Klippans Finpapppershrunk (a) 125,000 716
Metsa-Serla Ltd. Class B 275,000 10,897
Norske Skog Industries Class B AS (e) 25,000 771
Norske Skog Industries Class B AS sponsored ADR (e) 100,000 2,975
Rayonier, Inc. 252,000 7,245
Repola OY 100,000 1,761
Rock-Tenn Co. Class A 184,900 3,559
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
St. Laurent Paperboard, Inc. (a)(e) 100,000 $ 1,297
Specialty Paperboard, Inc. (a) 64,000 704
Timberwest Forest Ltd. (a) 65,000 612
47,034
TOTAL BASIC INDUSTRIES 228,010
CONGLOMERATES - 0.2%
Figgie International Holdings, Inc. Class A (a) 85,400 587
Quixote Corp. (c) 485,200 4,731
5,318
CONSTRUCTION & REAL ESTATE - 4.6%
BUILDING MATERIALS - 2.3%
AMRE, Inc. 488,600 2,504
Bettis Corp. (a) 233,350 787
CGC, Inc. 75,000 480
Devcon International Corp. (a) 121,200 985
Drew Industries, Inc. (c) 308,800 2,625
Elco Industries, Inc. (c) 433,700 6,641
Eljer Industries, Inc. (a)(c) 509,100 2,991
Evered Bardon PLC 20,000,000 10,112
Hoganas AB Class B Free shares (a) 100,000 1,605
Patrick Industries, Inc. (c) 617,500 6,021
Prudential Steel Ltd. 100,000 711
RB&W Corp. (a)(c) 451,600 3,726
Raytech Corp. (a)(c) 260,800 1,043
Shelter Components Corp. (c) 389,525 4,431
Tecumseh Products Co. Class A 117,700 5,561
Watsco, Inc.:
Class A (c) 256,700 4,107
Class B (cv.)(c) 72,520 1,142
55,472
CONSTRUCTION - 1.8%
AAF Industries PLC (a)(c) 1,250,000 691
Abbey Ltd. 500,000 980
American Homestar Corp. (a) 110,000 1,004
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
Cavco Industries, Inc. (a)(c) 259,050 $ 2,914
Centennial Group, Inc. 253,700 -
Higgs and Hill PLC (c) 3,500,000 4,590
Jacobson & Widmark AB Fria (a) 225,000 2,143
Lovell (Y.J.) Holdings 300,000 228
McAlpine (Alfred) Ord. 565,388 1,474
Monaco Coach Corp. (a) 50,000 800
Mowlem (John) & Co. PLC (a) 2,611,182 3,919
Oriole Homes Corp.:
Class A 90,500 634
Class B (c) 270,000 1,856
Perini Corp. (a) 170,100 1,658
Schult Homes Corp. 42,200 496
Sundance Homes, Inc. (a) 45,000 141
Technip SA (a)(e) 80,000 3,793
U.S. Home Corp. (a)(c) 534,245 9,216
Tay Homes PLC (c) 2,000,000 5,340
Volker Stevin NV 20,000 1,094
42,971
ENGINEERING - 0.1%
Dai-Dan Co. Ltd. 10,000 188
SNC Group, Inc. Class A 75,000 1,219
Simard Beaudry, Inc. 100,000 284
URS Corp. 126,800 745
2,436
REAL ESTATE - 0.0%
South Sea Development Co. 1,277,936 83
REAL ESTATE INVESTMENT TRUSTS - 0.4%
Banyan Short Term Income Trust (SBI) (a)(c) 653,200 1,429
Banyan Strategic Land Trust (SBI) (c) 991,750 4,091
First Union Real Estate Equity & Mortgage Investmemts 496,400 4,095
Home Properties of NY 75,000 1,406
11,021
TOTAL CONSTRUCTION & REAL ESTATE 111,983
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 4.8%
AUTOS, TIRES, & ACCESSORIES - 2.0%
Appleyard Group 750,000 $ 1,244
Autocam Corp. (a) 75,450 830
Automotive Industries Holding, Inc. (a) 90,000 1,598
Cook (D.C.) Holdings PLC 405,800 253
Deflecta-Shield Corp. (a) 53,000 451
Douglas & Lomason Co. 33,000 553
Durakon Industries, Inc. (a)(c) 366,300 5,769
Federal Screw Works (c) 108,800 2,094
Forsheda AB B Free shares 50,000 1,185
Hahn Automotive Warehouse, Inc. (a) 72,700 1,091
Lund International Holdings, Inc. (a)(c) 375,000 6,188
Mercury Air Group 219,300 1,727
Monro Muffler Brake, Inc. 73,260 1,355
Peugeot SA Ord. (a) 35,000 4,564
Republic Automotive Parts, Inc. (a)(c) 189,300 2,698
Schwitzer, Inc. (a) 67,000 561
Supreme Industries, Inc. Class A (a) 105,900 582
Travel Ports of America (a)(c) 339,000 848
Treadco, Inc. 134,000 2,127
Truck Components, Inc. (a) 125,900 1,259
Uni Select, Inc. (c) 656,000 4,429
Valley Forge Corp. (c) 159,500 3,090
Western Star Trucks Holdings Ltd. 50,000 542
Wynn's International, Inc. 194,700 3,991
49,029
CONSUMER DURABLES - 0.8%
American Consumer Products Corp. (a)(c) 206,000 489
Finnveden Invest AB B Free shares 570,000 516
Libbey, Inc. (c) 828,100 13,043
Mikasa, Inc. (a) 193,900 3,006
Syratech Corp. (a) 152,900 2,618
19,672
CONSUMER ELECTRONICS - 0.5%
International Jensen, Inc. (a)(c) 567,000 5,670
North American Watch Corp. 29,500 428
Polk Audio, Inc. (a)(c) 103,000 1,262
Toastmaster, Inc. (c) 641,400 4,409
11,769
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
HOME FURNISHINGS - 0.2%
BMTC Group, Inc. Class A (sub.-vtg.) 150,000 $ 960
DMI Furniture, Inc. (a) 95,000 154
Haverty Furniture Companies, Inc. 196,550 2,064
Huffman Koos, Inc. (a)(c) 392,000 2,744
5,922
TEXTILES & APPAREL - 1.3%
Concord Fabrics, Inc. (a):
Class A (c) 237,000 1,600
Class B 65,100 431
Cone Mills Corp. (a) 425,300 4,944
Crown Crafts, Inc. 12,000 181
Decorator Industries, Inc. (c) 199,800 1,573
Fila Holding Spa sponsored ADR 298,300 5,668
Forstmann & Co., Inc. (a) 245,500 1,228
G-III Apparel Group Ltd. (a)(c) 518,420 842
Georgia Bonded Fibres, Inc. (a) 66,000 314
Jones Apparel Group, Inc. (a) 109,400 2,626
KTP Holdings Ltd. 1,000,000 111
McRae Industries, Inc. Class A 46,800 322
Nautica Enterprises, Inc. (a) 233,175 6,616
Porter Chadburn PLC (a) 2,500,000 1,580
Tandy Brands Accessories, Inc. (a) 245,225 3,127
Victoria Carpet Holdings PLC 50,000 95
31,258
TOTAL DURABLES 117,650
ENERGY - 4.5%
ENERGY SERVICES - 1.2%
Akita Drilling Ltd. Class A (non-vtg.) (a)(c) 563,150 1,221
Aztec Manufacturing Co. (c) 560,000 2,800
Computalog Ltd. (a) 350,000 1,772
Dawson Geophysical Co. (a) 125,000 1,375
Dreco Energy Services Ltd. Class A (a) 304,600 2,779
Galveston Houston Co. 120,100 285
Global Industries Ltd. 30,900 718
Greenway Holdings PLC 250,000 462
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Key Energy Group, Inc. (a) 302,400 $ 1,342
Marine Drilling Cos., Inc. (a) 146,000 365
Nabors Industries, Inc. (a) 1,500,000 9,750
Pe Ben Oilfield Services Ltd. (a)(c) 197,700 246
Scientific Software Intercomp, Inc. (a) 157,000 962
Serv-Tech, Inc. (a)(c) 318,400 1,990
Smalls Oilfield Services Corp. (a)(c) 164,000 431
Transocean Drilling AS (a) 200,000 1,855
Veritas Energy Service, Inc. (a) 25,000 107
28,460
OIL & GAS - 3.3%
Adams Resources and Energy, Inc. (a) 111,100 1,000
Alamco, Inc. (a)(c) 419,800 2,519
Ampolex Ltd. Ord. 405,603 1,037
Aran Energy (a)(c) 16,500,000 11,340
Belden & Blake Corp. (a)(c) 374,500 4,307
Belden & Blake Corp. (a)(d) 105,000 1,234
British Borneo Petroleum 500,000 1,754
Canadian Pioneer (a) 125,000 209
Castle Energy Corp. (a)(c) 1,121,450 13,177
Columbus Energy Corp. (a)(c) 252,660 2,084
ConVest Energy Corp. (a) 2,800 13
Cube Energy Corp. (a)(c) 216,000 1,190
Devran Petroleum Ltd. (a) 650,000 314
Discovery West Corp. (a) 150,000 416
Edisto Resources Corp. (warrants) (a) 116,800 146
Edisto Resources Corp. (a) 394,800 2,467
ENEX Resources Corp. (c) 144,300 1,299
Ensign Resource Service Group Ord. (a) 26,400 75
Foremost Industries, Inc. (a)(c) 247,500 1,297
Goal Petroleum Ord. 3,050,000 3,205
Giant Industries, Inc. (c) 1,164,000 10,039
Hallwood Consolidated Resources Corp. 347,000 694
Hardy Oil & Gas PLC 1,500,000 3,093
Maynard Oil Co. (a) 131,000 589
McFarland Energy, Inc. (a) 127,300 955
Norcen Energy Resources Ltd. 600,000 6,610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Petroleum Development Corp. (a)(c) 932,500 $ 1,107
Prairie Oil Royalties Co. Ltd. (a) 213,100 1,865
Premier Consolidated Oilfields Ltd. Ord. (a) 2,070,000 769
Santos 100,000 248
Swift Energy Co. (a) 293,810 2,424
Unit Corp. (a) 315,300 906
Williams Clayton Energy, Inc. (a)(c) 361,700 2,034
80,416
TOTAL ENERGY 108,876
FINANCE - 11.2%
BANKS - 2.9%
BancFirst Corp. 90,200 1,297
Bank of New York Co., Inc. (warrants) (a) 417,500 4,071
Bank Atlantic Bancorp, Inc. (c) 356,000 5,607
Benson Financial Corp. (a) 161,200 1,934
Bolig Og Naerings Banken 100,000 1,907
Colonial BancGroup, Inc. Class A 71,200 1,673
Fed One Bancorp 100,000 1,137
Foreningsbanken AB Class A Ord. (a) 750,000 1,309
Forstaedernes Bank (Reg.) (a) 5,000 85
GBC Bancorp (c) 479,000 6,227
Grant Street National Bank (a) 1,417,834 222
Gronlandsbanken AS 15,900 581
HUBCO, Inc. 174,720 2,948
North Fork Bancorporation, Inc. 234,015 3,422
Nordlandsbanken AS 150,000 1,683
Okobank Class A (a) 150,000 1,415
Republic New York Corp. 100,000 4,763
Ringkjobing Bank 7,000 733
SouthTrust Corp. 500,000 9,625
Spar Nord Holding 19,350 569
Sparebanken Norway Prime share certificates (a) 104,000 1,968
Sparebanken More 25,000 419
Sparebanken More (RFD) 18,750 295
Stadshypotek Series A (a) 75,000 964
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Stadshypotek Series A (a)(e) 100,000 $ 1,285
Sumitomo Bank 46,300 1,076
Syds-Sonderjylland Holding (a)(c) 300,050 10,168
Zions Bancorporation 72,900 2,752
70,135
CLOSED END INVESTMENT COMPANY - 0.0%
Amagerbanken AS (a) 50,000 1,329
CREDIT & OTHER FINANCE - 0.2%
Central Mortgage Bancshares, Inc. 101,000 2,029
Intrum Justitia NV (Reg.) 685,000 714
Surrey Metro Savings Credit Union (non-vtg.) (c) 300,000 2,559
5,302
INSURANCE - 3.8%
ARI Holdings, Inc. (a)(c) 166,100 1,142
American Indemnity Financial Corp. (c) 194,000 2,207
American Travellers Corp. (a) 135,600 2,288
Capitol American Financial Corp. 80,300 1,746
Commerce Group, Inc. 314,100 4,790
Cotton State Life & Health Insurance Co. 15,000 126
First American Financial Corp. 198,600 3,376
Gainsco, Inc. 627,376 5,490
Guaranty National Corp. 72,700 1,218
Homeowners Group, Inc. (a) 74,500 84
Kentucky Medical Insurance Co. Class A (a) 48,500 291
Lloyd Thompson Group, PLC 50,000 114
London Insurance Group, Inc. 500,000 8,173
Lowndes Lambert Group Holdings PLC 200,000 464
Merchants Group, Inc. (c) 261,500 3,792
Meridian Insurance Group. Inc. 243,200 2,493
Mid South Insurance Co. 237,720 2,199
Nelson Hurst PLC 50,000 136
Protective Life Corp. 142,600 6,203
RLI Corp. (c) 302,700 6,432
Rightchoice Managed Care, Inc. Class A (a) 67,000 946
Security-Connecticut Corp. 400,900 9,171
Stewart Information Services Corp. (c) 566,500 8,781
United Coasts Corp. (a) 195,000 877
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
United Insurance Companies, Inc. (a) 356,000 $ 12,549
United Wisconsin Services, Inc. 192,900 6,269
Western National Corp. 125,800 1,494
92,851
SAVINGS & LOANS - 4.2%
Astoria Financial Corp. (a) 416,000 12,558
BFS Bankorp, Inc. (a) 57,960 1,377
Bankunited Financial Corp. Class A (c) 115,850 666
Boston Bancorp 2,100 61
Charter One Financial Corp. 233,204 4,606
Coastal Bancorp, Inc. (c) 297,800 4,355
Collective Bancorp, Inc. (c) 1,078,900 18,881
Cooperative Bankshares, Inc. (a)(c) 149,160 2,088
Financial Bancorp, Inc. (a) 75,000 703
Financial Security Corp. (a) 70,800 1,142
First Southeast Financial Corp. 127,000 1,714
First State Financial Services, Inc. (c) 286,900 2,188
Firstbank Puerto Rico (a)(c) 966,000 16,422
FirstFed Michigan Corp. 54,300 1,083
First Federal Financial Services 37,562 676
GP Financial Corp. 525,000 11,320
Independence Federal Savings Bank (c) 119,500 702
Iroquois Bancorp, Inc. 43,000 731
LF Bancorp, Inc. (c) 43,000 1,333
Lakeview Financial Corp. 106,260 1,514
Marion Capital Holdings, Inc. (c) 121,000 1,875
NFS Financial Corp. 89,200 2,609
Pennfed Financial Services, Inc. (a) 115,000 1,236
Pocahontas Federal Saving And Loan Assn. 52,000 572
PONCEBANK (c) 320,500 2,464
Reliance BanCorp, Inc. 177,700 1,955
Southern Missouri Bancorp, Inc. 84,200 905
Standard Financial, Inc. (a) 110,000 1,128
Virginia First Financial Corp. 102,000 1,415
WFS BanCorp, Inc. 69,300 1,074
Warren Bancorp, Inc. (a)(c) 228,500 1,771
101,124
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.1%
Marine Wendel SA 35,000 $ 2,252
Marine Wendell SA (warrants) (a) 50,000 57
2,309
TOTAL FINANCE 273,050
HEALTH - 5.3%
DRUGS & PHARMACEUTICALS - 0.7%
Astra AB:
A Free shares 25,000 629
B Free shares 50,000 1,235
Bio-Rad Laboratories, Inc. Class A (a) 43,700 1,169
Biowhittaker, Inc. (a) 59,300 408
CSL Ltd. 50,000 94
Igen, Inc. (a) 28,500 167
International Research & Development Corp. 152,500 153
Natures Sunshine Products, Inc. 331,400 4,060
North American Biologicals, Inc. (a) 363,461 2,362
Phoenix International Life Sciences, Inc. (a)(e) 250,000 1,066
Sigma Aldrich Corp. 41,000 1,466
Teva Pharmaceutical Industries Ltd. ADR 115,000 2,961
15,770
MEDICAL EQUIPMENT & SUPPLIES - 2.3%
Allied Healthcare Product, Inc. 166,500 2,685
AMSCO International, Inc. 47,000 646
Bird Medical Technologies, Inc. (a)(c) 495,500 1,982
Gish Biomedical, Inc. (a) 12,500 86
HPSC, Inc. (a) 259,500 940
Hycor Biomedical, Inc. (a) 72,500 299
Instrumentarium Class B 50,000 1,038
Laser Industries Ltd. Ord. (a)(c) 325,000 1,828
Lunar Corp. (a) 25,000 425
Marquette Electronics, Inc. Class A (a) 33,500 779
Medical Technology Systems, Inc. (a) 122,500 689
Medrad, Inc. 41,200 618
Mentor Corp. 98,400 2,005
Merit Medical Systems, Inc. (a) 152,000 741
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
Minntech Corp. 295,500 $ 4,506
Model Imperial, Inc. (a) 133,000 632
Moore Medical Corp. (a) 81,700 950
Orthofix International (a) 465,500 6,459
Proteon, Inc. (a) 48,000 354
Protocol Systems, Inc. (a) 131,300 1,296
PSICOR, Inc. (a) 88,000 1,056
St. Jude Medical, Inc. 30,500 1,159
SciMed Life Systems, Inc. (a) 188,300 11,157
Sterile Concepts Holdings (c) 350,000 5,819
Techne Corp. 35,000 385
Utah Medical Products, Inc. (a)(c) 713,200 7,221
Vital Signs, Inc. 93,500 1,169
56,924
MEDICAL FACILITIES MANAGEMENT - 2.3%
America Service Group, Inc. (a)(c) 178,000 935
American Homepatient, Inc. (a) 96,200 2,453
Clinic Holdings Ltd. 374,200 275
Employee Benefit Plans, Inc. (a) 168,400 1,389
Homedco Group, Inc. (a) 245,000 10,152
Lincare Holdings, Inc. (a) 159,800 4,155
National Health Laboratories Holdings, Inc. 559,300 7,481
Res-Care, Inc. (a) 44,700 726
Sierra Tucson Companies, Inc. (a) 325,000 934
Universal Health Services, Inc. Class B (a)(c) 1,096,600 25,770
Vivra, Inc. (a) 69,050 2,089
56,359
TOTAL HEALTH 129,053
HOLDING COMPANIES - 0.6%
Brierley Investments Ltd. 16,214,220 11,894
Catena AB Class A Free shares 100,000 832
Perry Group 150,000 308
Rorviks Gruppen AB Class B Free shares (a) 300,000 979
Skane-Gripen AB Ord. 50,000 366
14,379
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 4.6%
ELECTRICAL EQUIPMENT - 1.0%
BMC Industries, Inc. 531,800 $ 9,439
Charter Power Systems, Inc. 137,600 2,855
Leitch Technology (a) 20,000 188
Lifeline Systems, Inc. (a) 52,500 368
Narkes Elektrisha Class B Free shares 10,000 226
Oak Industries, Inc. (a) 61,200 1,431
Philips NV (warrants) (a) 400,000 5,384
Star Paging International Holdings Ltd. 516,000 119
Star Paging International Holdings Ltd. (warrants) (a) 103,200 3
Twentsche Kabel Holding NV 10,000 1,349
Vertex Communications Corp. (a) 162,000 2,106
WPI Group, Inc. (a) 107,500 269
23,737
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
Alamo Group, Inc. 31,600 514
Allied Products Corp. (a)(c) 643,000 10,449
Amtrol, Inc. 205,000 3,203
Arts Way Manufacturing Co., Inc. (a) 50,000 300
Astec Industries, Inc. (a) 332,900 3,953
CMI Corp. Oklahoma Class A (a) 122,400 796
CPAC, Inc. (c) 354,906 4,081
Case Corp. 250,000 5,656
Core Industries, Inc. 268,300 2,750
EDAC Technologies Corp. (a)(c) 372,300 303
Enerflex Systems Ltd. 44,300 523
Fedders Corp. Class A (a) 198,500 1,017
Gasonics International Corp. (a) 329,600 5,191
Gehl Co. (a)(c) 318,100 2,187
IWP International 50,000 270
JLG Industries, Inc. 92,900 3,530
K-Tron International, Inc. (a) 114,000 1,140
Kverneland Gruppen AS 100,000 1,421
Park Ohio Industries, Inc. (a) 103,700 1,387
Powerscreen International PLC 150,000 581
Rule Industries, Inc. (a) 56,000 700
SkyJack, Inc. (a) 102,200 926
SkyJack, Inc. (a)(e) 300,000 2,718
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Speizman Industries, Inc. (a)(c) 273,600 $ 1,026
Summa Industries (a) 67,250 319
Svedala 100,000 2,358
Tylan General, Inc. 50,000 363
Varlen Corp. 173,350 4,204
Wedco Technology, Inc. 97,172 1,081
62,947
POLLUTION CONTROL - 1.0%
American Ecology Corp. 170,400 1,086
Chempower, Inc. (a)(c) 687,700 2,794
Ecology & Environment, Inc. Class A 68,310 623
GZA GeoEnvironmental Technologies, Inc. (a) 143,300 609
Harding Associates Inc. (a)(c) 274,600 1,802
Horsehead Resource Development, Inc. 418,500 2,773
International Recovery Corp. (c) 396,900 6,003
Leslie Building Products (a)(c) 340,600 562
MFRI, Inc. (a) 202,300 986
NSC Corp. 165,500 414
OI Corp. (a) 49,700 199
Sani Gestion, Inc. 87,400 230
Sevenson Environmental Services, Inc. (c) 113,800 1,735
TRC Companies, Inc. (a) 235,300 1,971
Tanknology Environmental, Inc. (a) 465,000 1,133
Weston (Roy F.), Inc. Class A (a)(c) 371,300 1,880
24,800
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 111,484
MEDIA & LEISURE - 2.7%
BROADCASTING - 0.5%
Canwest Global System Corp. (sub.-vtg.) 150,000 3,731
Central European Media Class C (a) 41,000 441
Cogeco, Inc. 227,100 1,090
Cogeco Cable, Inc. 250,000 1,466
Emmis Broadcasting Corp. Class A (a) 40,000 640
Multimedia, Inc. (a) 103,000 2,910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Premier Choix Tvec, Inc. Class A 200,600 $ 1,853
Prime Television Ltd. 502,581 475
12,606
ENTERTAINMENT - 0.2%
Airtour PLC 150,000 1,037
Carmike Cinemas, Inc. Class A (a) 100,000 2,213
Cinram Ltd. 125,000 966
S-K-I Ltd. 21,500 247
United Video, Inc. (a) 115,200 864
Vaughns, Inc. (a) 73,000 502
5,829
LEISURE DURABLES & TOYS - 0.4%
Baldwin Piano & Organ Co. (a) 145,800 1,531
Bollinger Industrials, Inc. (a) 115,000 1,783
Brio AB B Free shares 70,700 725
Coast Distribution System (a) 201,300 1,459
Escalade, Inc. (a) 71,075 346
Varsity Spirit Corp. (a)(c) 180,500 3,441
9,285
LODGING & GAMING - 0.3%
Friendly Hotels PLC 200,000 490
Hamilton Island Ltd. (a) 1,250,000 681
Queens Moat Houses PLC (a) 7,000,000 -
Resort Hotels PLC 1,690,200 -
Sands Regent (The) 91,572 618
Showboat, Inc. 277,000 3,774
Supertel Hospitality, Inc. (a) 94,400 1,204
6,767
PUBLISHING - 0.1%
Aamulehti Yhtyma OY Series II (a)(e) 25,000 466
American Educational Products, Inc. (a)(c) 208,000 390
Artistic Greetings Inc. 206,400 722
Ming Pao Enterprise Corp. Ltd. 80,000 50
Perskor Groep Beperk 50,000 636
Sadlier (William H.), Inc. 10,000 45
2,309
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 1.2%
ARK Restaurants Corp. (a)(c) 225,100 $ 1,801
Buffets, Inc. (a) 285,000 2,779
Consolidated Products, Inc. (a)(c) 613,530 6,289
Daka International, Inc. (a)(c) 270,000 3,982
Ground Round Restaurants, Inc. (a)(c) 622,000 3,499
M Corp, Inc. (c) 323,500 1,667
Quantum Restaurant Group, Inc. (a) 183,900 2,000
Ryan's Family Steak Houses, Inc. (a) 525,000 4,265
Sbarro, Inc. 51,000 1,179
Shoney's, Inc. (a) 110,800 1,302
28,763
TOTAL MEDIA & LEISURE 65,559
NONDURABLES - 2.2%
AGRICULTURE - 0.1%
Bibby & Sons PLC 549,000 681
Kanthal AB Class B Free shares 180,000 2,853
3,534
BEVERAGES - 0.1%
PepsiCo, Inc. 50,000 1,844
FOODS - 0.5%
Doskocil Cos., Inc. (a) 471,408 3,948
GoodMark Foods, Inc. 217,000 2,984
Raision Magariini OY 75,000 582
Raision Tehtaat OY V Free shares 109,000 1,874
TCBY Enterprises, Inc. 389,000 2,139
11,527
HOUSEHOLD PRODUCTS - 0.6%
Allou Health & Beauty Corp. Class A (a) 141,000 1,198
Aloette Cosmetics, Inc. (a) 58,500 106
Helen of Troy Corp. (a)(c) 404,400 7,380
Jean Philippe Fragrances, Inc. (a) 82,000 635
MEM Co. (a) 37,400 164
Oriflame International SA 423,700 1,674
Paragon Trade Brands, Inc. (a) 165,900 2,115
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Playtex Products, Inc. (a) 102,400 $ 845
Safeskin Corp. (a) 84,100 1,188
15,305
TOBACCO - 0.9%
RJR Nabisco Holdings Corp. (a) 1,129,200 6,634
Rothmans, Inc. 5,000 336
UST, Inc. 450,000 13,275
W.D. & H.O. Wills Holdings Ltd. 603,000 1,072
21,317
TOTAL NONDURABLES 53,527
PRECIOUS METALS - 0.7%
Coolgardie Gold (a) 750,000 114
Equity Silver Mines Ltd. Class A (a) 1,000,000 306
GoldCorp, Inc. Class A 800,000 4,122
Industrias Penoles SA (a) 5,250,000 13,152
Richmont Mines, Inc. (a) 382,700 884
18,578
RETAIL & WHOLESALE - 2.5%
APPAREL STORES - 0.2%
Baker (J.), Inc. 78,300 1,087
Chateau Stores of Canada Ltd. Class A 142,900 787
Dress Barn, Inc. (a) 210,000 2,100
Frederick's of Hollywood Class A 6,000 30
Nasan Industrial Co. (a) 500 16
One Price Clothing Stores, Inc. (a) 138,200 1,123
Pantorama Industries, Inc. (a) 100,000 135
5,278
DRUG STORES - 0.5%
Jean Coutu Group, Inc. Class A 50,000 235
Medicine Shoppe International, Inc. 337,500 9,028
Vitalink Pharmacy Services, Inc. (a) 126,100 1,608
10,871
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - 0.8%
Algonquin Mercantile Corp. 74,700 $ 186
Caldor Corp. (a) 280,000 5,880
Casey's General Stores, Inc. 270,800 3,994
Duckwall-Alto Stores, Inc. (a) 125,000 1,219
National Convenience Stores (a) 121,400 1,153
T & S Stores PLC 400,000 998
Uni Marts, Inc. 223,400 1,201
Value City Department Stores, Inc. (a) 99,100 855
Venture Stores, Inc. 313,800 3,844
19,330
GROCERY STORES - 0.2%
Food Lion, Inc. Class A 353,900 1,924
Iceland Group PLC 500,000 1,209
Kesko OY 25,000 296
Riser Foods, Inc. Class A (a) 314,000 2,316
5,745
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Best Products, Inc. (a) 518,596 2,982
Betterware PLC 100,000 66
Brookstone, Inc. (a) 111,300 612
Celebrity, Inc. (a) 133,500 801
Circuit City Stores, Inc. 25,000 562
Finish Line, Inc. Class A (a)(c) 403,600 3,027
InterTan, Inc. 44,500 356
Little Switzerland, Inc. (a) 158,800 655
Luria (L.) & Son, Inc. (a)(c) 230,000 1,610
Old American Stores, Inc. (a) 102,000 1,454
Partridge Fine Arts PLC 350,000 487
Rag Shops, Inc. (a) 115,800 492
Reeds Jewelers, Inc. (a) 85,550 770
Rex Stores Corp. (a) 101,000 1,654
Sound Advice, Inc. (a)(c) 370,900 2,133
Sun Television & Appliances, Inc. 120,000 1,155
18,816
TOTAL RETAIL & WHOLESALE 60,040
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 2.6%
ADVERTISING - 0.2%
American List Corp. 91,380 $ 1,645
CMG Information Services, Inc. (a) 80,000 1,740
3,385
LEASING & RENTAL - 0.1%
Advantage Cos., Inc. (a) 92,400 1,548
Gowrings PLC 125,000 134
Renters Choice, Inc. 69,750 837
Sydney Aquarium Ltd. 250,000 426
2,945
PRINTING - 1.3%
Cadmus Communications Corp. 294,500 4,712
City Investing Co. Liquidating Trust (a) 25,000 17
Devon Group, Inc. (a)(c) 635,600 17,956
Paris Business Forms, Inc. (a)(c) 220,500 717
Pubco Corp. (a) 150,000 712
Skybox International, Inc. (a)(c) 700,000 8,313
32,427
SERVICES - 1.0%
Borg Warner Securities Corp. (a) 60,300 490
Caldwell Partners International Class A (c) 150,000 1,119
Children's Discovery Centers of America, Inc. (a) 141,000 1,833
Concord Career Colleges, Inc. (a) 130,000 37
Goldfarb Class A (a) 50,000 551
Health Care Services Group, Inc. (a) 207,000 2,872
Kinder-Care Learning Centers, Inc. (a) 68,000 807
Lawyers Title Corp. 247,000 2,841
Morgan & Banks Ltd. 250,000 284
Norrell Corp. GA 76,000 1,463
Oroamerica, Inc. (a) 296,500 1,927
Plasti Line, Inc. (a) 10,000 51
Programming & Systems, Inc. (c) 313,300 3
Right Management Consultants, Inc. (a)(c) 266,400 4,729
Seattle FilmWorks, Inc. (a)(c) 276,900 4,846
Scandiaconsult AB Free shares 100,000 799
24,652
TOTAL SERVICES 63,409
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 9.9%
COMMUNICATIONS EQUIPMENT - 0.9%
Circuit Systems, Inc. (a)(c) 501,500 $ 2,445
Code-Alarm, Inc. (a) 105,000 945
Communications Systems, Inc. 98,300 1,180
Computer Automation, Inc. (a)(c) 100,000 1
Dialogic Corp. (a) 49,500 1,089
Digital Systems International, Inc. (a)(c) 525,300 3,808
IPC Information Systems, Inc. (a) 69,000 897
Napco Security Systems, Inc. (a) 181,500 476
Nokia Corp. AB 15,000 2,180
Olicom AS (a) 235,000 2,291
Syntellect, Inc. (a)(c) 760,000 5,130
Zoom Telephonics, Inc. (a) 245,900 2,213
22,655
COMPUTER SERVICES & SOFTWARE - 3.0%
Affiliated Computer Services Class A (a) 84,500 2,007
American Business Information, Inc. (a) 145,000 2,574
AutoInfo, Inc. (a)(c) 473,500 1,420
Black Box Corp. 112,700 1,521
Brandon Systems Corp. 117,800 2,165
CompuCom Systems, Inc. (a) 272,500 1,022
Computer Data Systems, Inc. (c) 500,000 4,969
Computer Horizons Corp. (a) 213,875 3,422
Digi International, Inc. (a) 25,000 538
ECI Telecom Ltd. 165,500 2,327
EIS International, Inc. (a) 161,400 2,572
Enea Data AB B Free shares (c) 122,700 1,406
Equitrac Corp. (a) 135,500 576
Getronics NV 253,841 9,136
Government Technology Services, Inc. (a)(c) 666,500 6,332
Group 1 Software, Inc. (a) 128,100 1,217
Harris Computer Systems Corp. (a) 52,000 689
Hartco Enterprises, Inc. 386,200 2,059
Inacom Corp. (a)(c) 580,900 5,010
Intera Information Technologies Corp. Class A (a) 100,000 341
Merkantildata (a) 75,000 393
Novell, Inc. (a) 239,900 4,258
Ross Systems (a)(d) 500,000 1,700
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Skrivervik Data 73,000 $ 710
Software Spectrum, Inc. (a)(c) 321,900 6,438
Sterling Software, Inc. (a) 184,900 6,610
Structural Dynamics Research Corp. (a) 96,400 566
Symix Systems, Inc. 16,000 128
72,106
COMPUTERS & OFFICE EQUIPMENT - 2.3%
Black Arrow Group 750,000 486
Boca Research, Inc. (a) 157,500 1,929
CSP, Inc. (a) 66,800 534
Cray Research, Inc. (a) 73,500 1,084
Dataflex Corp. (a) 197,000 1,625
Equinox Systems, Inc. (a)(c) 342,000 3,163
Exabyte 45,000 771
Future Now, Inc. (a)(c) 723,000 3,434
Insight Enterprises, Inc. 100,000 1,025
Interface Systems, Inc. (c) 414,500 2,901
Interphase Corp. (a)(c) 354,800 3,193
Madge NV (a) 351,000 4,607
Micronics Computers, Inc. (a)(c) 979,600 5,143
P & P PLC 800,000 1,062
PenTech International, Inc. (a) 445,300 1,670
QMS, Inc. (a) 342,200 2,652
Quantum Corp. (a) 250,000 3,688
Rexon, Inc. (a)(c) 615,200 3,922
Robec, Inc. (a) 97,500 152
SBE, Inc. (a)(c) 136,100 1,191
Seagate Technology (a) 375,000 9,516
Scribona AB B Free shares 100,000 666
Semi-tech Microelectronics 1,009,304 1,847
56,261
ELECTRONIC INSTRUMENTS - 1.1%
Aeroflex, Inc. (a) 350,722 1,359
Aetrium, Inc. (a)(c) 248,900 2,753
American Sensors, Inc. 33,000 487
BTU International, Inc. (a)(c) 517,200 2,327
Cohu, Inc. (c) 437,600 11,378
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - CONTINUED
DSP Technology, Inc. (a)(c) 168,600 $ 906
Electro Scientific Industries, Inc. (a) 139,900 2,693
Megatest Corp. (a) 230,100 2,071
Milltronics Ltd. (a) 100,000 942
Reliability, Inc. (a)(c) 250,500 689
25,605
ELECTRONICS - 2.6%
Advance Circuits, Inc. (a) 123,100 1,693
Advanced Micro Devices, Inc. (a) 343,000 10,076
ASM Pacific Technology Ltd. 1,000,000 511
Bel Fuse, Inc. (a)(c) 495,900 4,401
Bergman & Beving AB B Free shares 100,000 2,011
Dallas Semiconductor Corp. (a) 100,000 1,575
Exar Corp. (a)(c) 769,650 15,778
Finvest B 357,500 307
Finvest OY Free shares B (warrants) (a) 65,000 10
Hadco Corp. 25,200 227
Integrated Circuit Systems, Inc. 95,000 1,069
LSI Logic Corp. of Canada (a) 50,000 133
Lattice Semiconductor Corp. (a) 249,300 5,391
Merix Corp. (a) 100,000 2,287
NView Corp. (a)(c) 336,500 2,650
Opti, Inc. (a) 48,900 880
Quality Semiconductor, Inc. (a) 9,000 94
Robinson Nugent, Inc. 230,000 2,070
Siliconix, Inc. (a) 253,000 3,479
Standard Microsystems Corp. (a) 150,000 4,200
Sterling Electronics Corp. (a) 236,400 2,807
Tower Semiconductor Ltd. (a) 100,000 1,375
Video Display Corp. (a)(c) 229,500 402
63,426
PHOTOGRAPHIC EQUIPMENT - 0.0%
Photo Me International PLC 85,000 287
TOTAL TECHNOLOGY 240,340
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 2.0%
AIR TRANSPORTATION - 0.4%
Alaska Air Group, Inc. (a) 254,000 $ 3,778
Atlantic Southeast Airlines, Inc. 270,000 4,455
Helikopter Services AS 128,610 1,232
9,465
RAILROADS - 0.2%
Portec, Inc. (a)(c) 307,230 3,840
SHIPPING - 0.1%
Global Ocean Carriers Ltd. 124,100 403
IMC Holdings Ltd. 250,000 220
Sea Containers Ltd. 168,900 2,365
2,988
TRUCKING & FREIGHT - 1.3%
Aasche Transportation (a) 42,000 325
Anuhco, Inc. (a) 166,200 1,662
Arkansas Best Corp. 573,700 7,028
Arnold Industries, Inc. 287,000 5,381
Cannon Express, Inc. (a):
Class A 148,700 2,026
Class B (c) 237,600 3,208
Intertrans Corp. (c) 589,000 8,025
Marten Transport Ltd. (a)(c) 163,900 3,032
OTR Express, Inc. (a)(c) 97,000 946
31,633
TOTAL TRANSPORTATION 47,926
UTILITIES - 4.1%
CELLULAR - 0.0%
Korea Mobile Telecom Corp. (a) 300 204
ELECTRIC UTILITY - 0.8%
Central Maine Power Co. 518,600 7,195
Northern Ireland Electric PLC 2,000,000 11,092
18,287
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
GAS - 0.5%
Allegheny & Western Energy Corp. (a)(c) 632,300 $ 7,074
Aquila Gas Pipeline Corp. 153,700 1,114
Southwestern Energy Co. 362,200 4,482
12,670
TELEPHONE SERVICES - 0.3%
Davel Communications Group, Inc. (a)(c) 312,300 3,826
Koninklijke PPT Nederland (a)(e) 132,200 4,332
8,158
WATER - 2.5%
Northumbrian Water Group PLC Ord. 2,596,634 27,980
Southern Water PLC Ord. 500,000 4,132
Welsh Water PLC Ord. 3,000,000 27,587
59,699
TOTAL UTILITIES 99,018
TOTAL COMMON STOCKS
(Cost $1,589,307) 1,751,976
PREFERRED STOCKS - 0.4%
CONVERTIBLE PREFERRED STOCKS - 0.3%
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
U S Home Corp. (a) 45,000 748
ENERGY - 0.2%
OIL & GAS - 0.2%
Gerrity Oil & Gas Corp. $1.50 442,200 4,864
Patrick Petroleum Co. Series B 80,200 521
5,385
MEDIA & LEISURE - 0.0%
LODGING & GAMING - 0.0%
Queens Moat Houses PLC #2 7 1/2% (a) 850,000 -
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SERVICES - 0.1%
Automated Security Holdings 6% 2,013,000 $ 1,368
TOTAL CONVERTIBLE PREFERRED STOCKS 7,501
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Trilon Financial Corp.:
Class 1, Series A 87,100 828
Class 2, Series 3 125,000 1,166
TOTAL FINANCE 1,994
MEDIA & LEISURE - 0.0%
RESTAURANTS - 0.0%
Sportscene Restaurants, Inc. $0.18 8 -
TOTAL NONCONVERTIBLE PREFERRED STOCKS 1,994
TOTAL PREFERRED STOCKS
(Cost $13,385) 9,495
CORPORATE BONDS - 0.2%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (A) (000S)
CONVERTIBLE BONDS - 0.2%
BASIC INDUSTRIES - 0.1%
PAPER & FOREST PRODUCTS - 0.1%
St. Laurent Paperboard, Inc. 8%,
6/15/04 (e) - CAD 1,350 1,267
ENERGY - 0.0%
OIL & GAS - 0.0%
Swift Energy Co. 6 1/2%, 6/30/03 - 900 794
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
HOLDING COMPANIES - 0.0%
Brierley Investements Ltd. 9%, 6/30/98 - NZD 625 $ 419
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Park Ohio Industries, Inc. 7 1/4%,
6/15/04 (d) - 2,000 1,860
MEDIA & LEISURE - 0.0%
RESTAURANTS - 0.0%
Consolidated Products, Inc. 10%, 11/30/02 - 135 452
TOTAL CONVERTIBLE BONDS 4,792
NONCONVERTIBLE BONDS - 0.0%
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Finvest OY 5 1/2%, 5/30/97 - FIM 325 58
TOTAL CORPORATE BONDS
(Cost $4,352) 4,850
U.S. TREASURY OBLIGATIONS - 20.4%
U.S. Treasury Bill yield at date of purchase
5.63%, 3/30/95 Aaa 400,000 396,572
6 3/4%, 2/28/97 Aaa 100,000 99,016
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $494,985) 495,588
REPURCHASE AGREEMENTS - 7.0%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements,
(U.S. Treasury obligations), in a
joint trading account at 5.81%
dated 1/31/95 due 2/1/95 $ 169,335 169,308
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,271,337) $ 2,431,217
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
19,666 GBP 3/7/95 $ 31,063 $ (363)
(Receivable amount $30,700)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.3%
CURRENCY ABBREVIATIONS
GBP - British pound
CAD - Canadian dollar
FIM - Finnish markka
NZD - New Zealand dollar
LEGEND
(a) Non-income producing
(b) Principal amount is stated in United States dollars unless otherwise
noted.
(c) Affiliated company (see Note 6 of Notes to Financial Statements).
(d) 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
Belden &
Blake Corp. 12/8/92 $788,000
Park Ohio
Industries, Inc.
7 1/4%, 6/15/04 6/6/94 $2,000,000
Ross Systems 1/4/95 $1,875,000
(e) 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 $33,249,000 or 1.4% of net
assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.8%
United Kingdom 4.9
Canada 4.1
Finland 1.5
Sweden 1.3
Netherlands 1.2
Others (individually less than 1%) 5.2
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1995, the aggregate cost of investment securities for income
tax purposes was $2,271,557,000. Net unrealized appreciation aggregated
$159,660,000, of which $313,443,000 related to appreciated investment
securities and $153,783,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) JANUARY 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 2,431,217
agreements of $169,308) (cost $2,271,337) -
See accompanying schedule
Cash 1
Receivable for investments sold 12,960
Receivable for fund shares sold 9,447
Dividends receivable 2,674
Interest receivable 2,888
Other receivables 102
TOTAL ASSETS 2,459,289
LIABILITIES
Payable for investments purchased $ 41,557
Unrealized depreciation on foreign currency contracts 363
Payable for fund shares redeemed 3,062
Accrued management fee 1,645
Other payables and accrued expenses 838
TOTAL LIABILITIES 47,465
NET ASSETS $ 2,411,824
Net Assets consist of:
Paid in capital $ 2,244,879
Undistributed net investment income 4,866
Accumulated undistributed net realized gain (loss) on 2,281
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 159,798
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 150,817 shares outstanding $ 2,411,824
NET ASSET VALUE and redemption price per share $15.99
($2,411,824 (divided by) 150,817 shares)
Maximum offering price per share (100/97.00 of $15.99) $16.48
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 10,481
Dividends (including $2,220 received from
affiliated issuers)
Interest 15,391
TOTAL INCOME 25,872
EXPENSES
Management fee $ 7,748
Basic fee
Performance adjustment 1,755
Transfer agent fees 3,036
Redemption fees (19)
Accounting fees and expenses 380
Non-interested trustees' compensation 6
Custodian fees and expenses 239
Registration fees 79
Audit 37
Legal 10
Total expenses before reductions 13,271
Expense reductions (70) 13,201
NET INVESTMENT INCOME 12,671
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 68,718
$14,942 on sales of investments in affiliated issuers)
Foreign currency transactions (1,114)
Futures contracts 138 67,742
Change in net unrealized appreciation (depreciation) on:
Investment securities (20,759)
Assets and liabilities in foreign currencies 591 (20,168)
NET GAIN (LOSS) 47,574
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 60,245
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JANUARY JULY 31, 1994
31, 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 12,671 $ 10,615
Net investment income
Net realized gain (loss) 67,742 301,603
Change in net unrealized appreciation (depreciation) (20,168) (55,400)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 60,245 256,818
FROM OPERATIONS
Distributions to shareholders: (12,296) (18,316)
From net investment income
From net realized gain (264,900) (185,598)
TOTAL DISTRIBUTIONS (277,196) (203,914)
Share transactions 405,060 562,786
Net proceeds from sales of shares
Reinvestment of distributions 271,490 200,318
Cost of shares redeemed (214,689) (766,243)
Redemption fees 349 449
Net increase (decrease) in net assets resulting from 462,210 (2,690)
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 245,259 50,214
NET ASSETS
Beginning of period 2,166,565 2,116,351
End of period (including undistributed net investment $ 2,411,824 $ 2,166,565
income of $4,866 and $5,052, respectively)
OTHER INFORMATION
Shares
Sold 22,148 32,038
Issued in reinvestment of distributions 16,520 11,968
Redeemed (10,811) (44,188)
Net increase (decrease) 27,857 (182)
</TABLE>
FINANCIAL HIGHLIGHTS
DECEMBER 27, 1989
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) TO
JANUARY 31, 1995 YEARS ENDED JULY 31, JULY 31,
(UNAUDITED) 1994 1993 1992 1991 1990
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.62 $ 17.19 $ 14.94 $ 12.63 $ 10.74 $ 10.00
of period
Income from Investment
Operations
Net investment income .08 .06 .15 .11 .17 D .12
Net realized and .43 2.15 2.88 2.93 2.09 .60
unrealized gain (loss)
Total from investment .51 2.21 3.03 3.04 2.26 .72
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 .02
paid in capital
Net asset value, $ 15.99 $ 17.62 $ 17.19 $ 14.94 $ 12.63 $ 10.74
end of period
TOTAL RETURN B, C 2.84% 13.67% 21.32 25.55 22.72 7.40%
% % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,412 $ 2,167 $ 2,116 $ 928 $ 256 $ 116
(in millions)
Ratio of expenses to 1.13% 1.13% 1.12 1.20 1.36 1.92%
average net assets A % % % A
Ratio of expenses to 1.13% 1.14% 1.12 1.20 1.36 1.92%
average net assets A % % % A
before expense
reductions
Ratio of net investment 1.08% .51% 1.00 1.27 2.14 3.77%
income to average A % % % A
net assets
Portfolio turnover rate 55% 54% 47 82 84 126%
A % % % A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO
$.02 PER SHARE.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1995 (Unaudited)
8. 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.
Reported 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
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but 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 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 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 net investment income per share. Accumulated undistributed net
investment income 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 1.50% 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.
9. 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.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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 privately placed
restricted securities. These securities 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 $4,794,000 or 0.2% of net assets.
10. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated
3. PURCHASES AND SALES
OF INVESTMENTS - CONTINUED
$638,100,000 and $486,671,000, respectively, of which purchases of U.S.
government and government agency obligations aggregated $98,500,000.
The market value of futures contracts opened and closed during the period
amounted to $127,577,000 and $127,715,000, respectively.
11. 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 annualized rate of .81% 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 $1,708,000 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 February 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 pursant 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. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
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 $207,000 for the period.
12. 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
$70,000 under this arrangement.
13. 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) $ - $ - $ - $ 691
Aceto Corp. 673 83 - 4,615
Aetrium, Inc. (a) 226 - - 2,753
Akita Drilling Ltd. Class A - - - 1,221
(non-vtg.) (a)
Alamco, Inc. (a) 605 - - 2,519
Allegheny & Western Energy Corp. 1,959 - - 7,074
(a)
Allied Products Corp. (a) 1,463 - - 10,449
Allied Research Corp. (a) - 519 - 1,112
America Service Group, Inc. (a) 100 - - 935
American Consumer Products - - - 489
Corp. (a)
American Educational Products, - - - 390
Inc. (a)
American Indemnity Financial Corp. - - 23 2,207
AMRE, Inc. - 2,018 20 -
Aran Energy (a) - 437 - 11,340
ARI Holdings, Inc. (a) - 104 - 1,142
ARK Restaurants Corp. (a) - - - 1,801
AutoInfo, Inc. (a) - 536 - 1,420
Aztec Manufacturing Co. - - - 2,800
Baldwin Piano & Organ C0. (a) - 388 - -
Bank Atlantic Bancorp, Inc. 463 - 44 5,607
Bankunited Financial Corp. Class A - - - 666
Banyan Short Term Income Trust - - - 1,429
(SBI) (a)
Banyan Strategic Land Trust (SBI) - - 198 4,091
Bel Fuse, Inc. (a) 1,088 45 - 4,401
Belden & Blake Corp. (a) - 814 - 4,307
Benihana National Corp. - 777 - -
Bird Medical Technologies, Inc. (a) 121 - - 1,982
BMC Industries, Inc. - - - -
Brock Exploration Corp. - 100 - -
BTU International, Inc. (a) - 46 - 2,327
Caldwell Partners International 121 - 15 1,119
Class A
Cannon Express Class B (a) 139 - - 3,208
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Castle Energy Corp. (a) $ - $ - $ - $ 13,177
Cavco Industries, Inc. (a) - 17 - 2,914
CB Bancorp, Inc. - 676 - -
Cenit Bancorp, Inc. - 469 - -
Chempower, Inc. (a) 153 202 - 2,794
Circle Financial Corp. - 485 14 -
Circuit Systems, Inc. (a) 131 176 - 2,445
Cliffs Drilling Co. - 2,540 - -
Coast Distribution System - - - -
Coastal Bancorp, Inc. - - - 4,355
Cohu, Inc. 675 - 51 11,378
Cold Metal Products, Inc. (a) 194 - - 4,195
Collective Bancorp, Inc. 990 - 162 18,881
Columbus Energy Corp. (a) - - - 2,084
Computer Automation, Inc. (a) - - - 1
Computer Data Systems, Inc. 109 366 51 4,969
Concord Fabrics, Inc. Class A 305 - - 1,600
Consolidated Products, Inc. (a) - - - 6,289
ConVest Energy Corp. - 1,657 - -
Cooperative Bankshares, Inc. (a) - - - 2,088
Core Industries, Inc. - 652 32 -
CPAC, Inc. - 30 19 4,081
Cube Energy Corp. (a) 445 - - 1,190
Daka International, Inc. (a) - 303 - 3,982
Dataflex Corp. - 213 - -
Datron Systems, Inc. (a) - 49 - 2,664
Davel Communications Group, Inc. - - - 3,826
(a)
Decorator Industries, Inc. 369 - 22 1,573
Devon Group, Inc. (a) - 532 - 17,956
Digital Systems International, Inc. - 1,701 - 3,808
(a)
DMI Furniture, Inc. - 181 - -
Drew Industries, Inc. - 949 - 2,625
DSP Technology, Inc. (a) - - - 906
Durakon Industries, Inc. (a) 41 95 - 5,769
EDAC Technologies Corp. (a) - - - 303
Elco Industries, Inc. 499 - 126 6,641
Eljer Industries, Inc. (a) 701 567 - 2,991
Enea Data AB B Free shares - - - 1,406
ENEX Resources Corp. - - 14 1,299
Equinox Systems, Inc. (a) 776 - - 3,163
Exar Corp. (a) 289 1,889 - 15,778
Federal Screws Works 117 - 65 2,094
Financial Security Corp. (a) - 111 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Finish Line, Inc. Class A (a) $ 1,278 $ - $ - $ 3,027
Firstbank Puerto Rico (a) 5,432 - - 16,422
First State Financial Services, Inc. - 97 29 2,188
Foremost Industries, Inc (a) - - - 1,297
FSI International, Inc. - 1,760 - -
Future Now, Inc. (a) 549 - - 3,434
GBC Bancorp. - - 77 6,227
G-III Apparel Group Ltd. (a) 156 - - 842
Gehl Co. (a) - - - 2,187
Giant Industries, Inc. - 110 58 10,039
Global Ocean Carriers Ltd. - 261 - -
Government Technology - - - 6,332
Services, Inc. (a)
Ground Round Restaurants, Inc. 131 71 - 3,499
(a)
Harding Associates, Inc. (a) 52 - - 1,802
Helen of Troy Corp. (a) - - - 7,380
Higgs & Hill PLC - 399 56 4,590
Homeowners Group, Inc. (a) - 490 - -
Huffman Koos, Inc. (a) 164 - - 2,744
Inacom Corp. (a) 415 272 - 5,010
Independence Federal Savings - - - 702
Bank
Interface Systems, Inc. 494 - 33 2,901
Intermetco Ltd. - - 26 1,660
International Jensen, Inc. (a) - - - 5,670
International Recovery Corp. 389 - 37 6,003
Interphase Corp. (a) - 504 - 3,193
Intertrans Corp. - - 44 8,025
Keptel, Inc. - 1,929 - -
Kinark Corp. (a) - 411 - 906
Laser Industries Ltd. Ord. (a) 177 - - 1,828
Leslie Building Products (a) - 63 - 562
LF Bancorp., Inc. - - 26 1,333
Libbey, Inc. 289 1,204 129 13,043
Lincoln Foodservice Products, - 2,126 - -
Inc.
Lund International Holdings, Inc. - - - 6,188
(a)
Luria (L.) & Son, Inc. (a) - - - 1,610
M Corp Inc. - - 21 1,667
Marion Capital Holdings, Inc. - 803 44 1,875
Marten Transport Ltd. (a) 138 - - 3,032
Medalist Industries, Inc. - 869 - -
Merchants Group, Inc. - 635 28 3,792
Mercury Air Group - - - -
Metro Bancshares, Inc. - 433 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Microlog Corp. $ - $ 66 $ - $ -
Micronics Computers, Inc. (a) 196 175 - 5,143
Mid South Insurance Co. - 496 - -
MFRI, Inc. (a) - 700 - -
Miller Building Systems, Inc. - 98 - -
Napco Security Systems, Inc. (a) - 72 - -
NFS Financial Corp. - 472 22 -
NView Corp. (a) 649 172 - 2,650
Oriole Homes Corp. Class B - - 108 1,856
OTR Express, Inc. (a) - - - 946
Paris Business Forms, Inc. (a) 16 - - 717
Patrick Industries, Inc. 981 - - 6,021
PCI Services, Inc. (a) 426 - - 2,823
Pe Ben Oilfield Services Ltd. (a) 45 - - 246
Petroleum Development Corp. (a) 116 - - 1,107
Polk Audio, Inc. (a) - 26 - 1,262
PONCEBANK 54 - - 2,464
Portec, Inc. (a) 639 - - 3,840
Printronix, Inc. - 457 - -
Programming & Systems, Inc. - - - 3
Pubco Corp. - - - -
Quixote Corp. - 562 53 4,731
Raytech Corp. (a) 367 - - 1,043
RB&W Corp. (a) - 699 - 3,726
Reliability, Inc. (a) 88 - - 689
Republic Automotive Parts, Inc. (a) - 643 - 2,698
Rexon, Inc. (a) - 283 - 3,922
Right Management Consultants, 149 - - 4,729
Inc. (a)
RLI Corp. - - - 6,432
Roanoke Electric Steel Corp. 1,495 249 127 5,837
Ropak Corp. 141 423 - -
SBE, Inc. (a) - 125 - 1,191
Scientific Software Intercomp, Inc. - 482 - -
(a)
Seattle FilmWorks, Inc. (a) - 158 - 4,846
Serv-Tech, Inc. (a) 12 - - 1,990
Sevenson Enviromental Services, 233 - 11 1,735
Inc.
Shelter Components Corp. - - - 4,431
Sico, Inc. - 551 - -
Skybox International, Inc. (a) 3,148 - - 8,313
Slater Industries Class B (a) 880 - - 4,240
Smalls Oilfield Services Corp. (a) - - - 431
Software Spectrum, Inc. (a) 1,289 - - 6,438
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Sound Advice, Inc. (a) $ - $ - $ - $ 2,133
Spartech Corp. (a) 256 310 - 4,135
Speizman Industries, Inc. (a) 131 - - 1,026
Steel Of West Virginia, Inc. (a) 52 531 - 6,660
Sterile Concepts Holdings 1,336 - 14 5,819
Stewart Information Services 15 - 57 8,781
Corp.
Summit Bancorp., Inc. - - - -
Surrey Metro Savings Credit
Union (non-vtg.) - - 38 2,559
Syds-Sonderjylland Holding (a) - 466 - 10,168
Synellect Inc. (a) 2,041 - - 5,130
Tay Homes PLC - 707 181 5,340
Terra Mining AB - 1,106 - 5,594
Third Finacial Corp. - 162 - -
Toastmaster, Inc. 937 697 27 4,409
Travel Ports of America (a) - - - 848
Uni Select, Inc. - - 33 4,429
Universal Health Services, Inc.
Class B (a) 308 569 - 25,770
U.S. Home Corp. (a) - - - 9,216
US Intec, Inc. - 808 - -
Utah Medical Products, Inc. (a) 1,971 - - 7,221
Valley Forge Corp. 1,492 - 12 3,090
Varsity Spirit Corp. (a) 397 - - 3,441
Vertex Communications Corp. (a) - 1,449 - -
Video Display Corp. (a) - - - 402
Warren Bancorp, Inc. (a) - 128 - 1,771
Watsco, Inc Class A - - 33 4,107
Watsco, Inc Class B (cv.) - - 9 1,142
Weston (Roy F.), Inc. Class A (a) - 270 - 1,880
Williams Clayton Energy, Inc. (a) 293 - - 2,034
Wynn's International, Inc. - 65 31 -
TOTALS $ 42,569 $ 46,341 $ 2,220 $ 605,935
(a) Non-income producing.
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* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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MEANS THAT
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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
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INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
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(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
Stephen P. Jonas, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Robert H. Morrison, Manager,
Security Transactions
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
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THE FIDELITY TELEPHONE CONNECTION
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(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 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.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION 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 a few 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 stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Balanced -2.29% -7.79% 59.74% 120.90%
S&P 500(registered trademark) 4.17% 0.53% 66.90% 148.57%
Lehman Brothers Aggregate Bond 0.98% -2.31% 49.28% n/a
Index
Average Balanced Fund 0.84% -3.76% 54.90% 102.66%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on November 6, 1986. For example, if you had
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. For comparison, you can look at both 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 balanced fund, which currently reflects the
performance of 176 balanced funds tracked by Lipper Analytical Services.
These benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Balanced -7.79% 9.82% 10.09%
S&P 500 0.53% 10.79% 11.68%
Lehman Brothers Aggregate Bond Index -2.31% 8.34% n/a
Average Balanced Fund -3.76% 9.09% 8.88%
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
Balanced (304) Standard & Poor's 50Aggregate Bond Index
11/30/86 10000.00 10000.00 10000.00
12/31/86 9970.56 9745.00 10038.18
01/31/87 10490.67 11057.65 10179.36
02/28/87 10765.45 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 11135.04 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 10166.91 10257.86 10314.45
01/31/88 10648.06 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 12217.64 12809.25 11254.57
04/30/89 12613.58 13474.05 11490.09
05/31/89 12896.40 14019.75 11792.02
06/30/89 13089.01 13939.84 12151.06
07/31/89 13604.78 15198.61 12409.36
08/31/89 13685.01 15496.50 12225.50
09/30/89 13695.74 15432.96 12288.07
10/31/89 13742.17 15074.92 12590.96
11/30/89 13951.09 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 13669.78 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 14145.81 16186.01 13286.59
08/31/90 13547.38 14722.80 13109.16
09/30/90 13326.06 14005.80 13217.61
10/31/90 13261.50 13945.57 13385.42
11/30/90 13726.36 14846.46 13673.55
12/31/90 14025.60 15260.67 13886.61
01/31/91 14606.16 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 16319.72 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 16964.59 18372.67 15331.45
10/31/91 17344.08 18618.86 15502.15
11/30/91 17034.87 17868.52 15644.29
12/31/91 17781.86 19912.68 16108.90
01/31/92 17781.86 19542.31 15889.75
02/29/92 18041.03 19796.35 15993.07
03/31/92 17926.02 19410.33 15902.91
04/30/92 18144.63 19980.99 16017.78
05/31/92 18479.83 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 18967.61 20166.64 17053.20
09/30/92 19098.83 20404.61 17255.34
10/31/92 19007.31 20476.03 17026.57
11/30/92 19053.07 21174.26 17030.42
12/31/92 19194.72 21434.70 17301.23
01/31/93 19616.41 21614.75 17633.00
02/28/93 20147.43 21908.71 17941.67
03/31/93 20789.93 22370.99 18016.43
04/30/93 21453.44 21829.61 18141.89
05/31/93 21800.99 22414.64 18164.99
06/30/93 21818.19 22479.65 18494.19
07/31/93 22105.69 22389.73 18598.79
08/31/93 22824.45 23238.30 18924.79
09/30/93 22604.65 23059.36 18976.77
10/31/93 22788.70 23536.69 19047.68
11/30/93 22387.14 23313.09 18885.64
12/31/93 22894.96 23595.18 18988.00
01/31/94 23510.51 24397.42 19244.37
02/28/94 23100.14 23736.25 18910.03
03/31/94 22152.02 22701.35 18443.82
04/30/94 21962.10 22991.92 18296.54
05/31/94 21996.63 23368.99 18293.97
06/30/94 21769.73 22796.45 18253.55
07/31/94 22187.04 23544.18 18616.12
08/31/94 22395.69 24509.49 18639.22
09/30/94 22238.22 23909.00 18364.88
10/31/94 21975.56 24446.96 18348.52
11/30/94 21660.38 23556.60 18307.77
12/31/94 21678.27 23905.94 18434.19
01/31/95 21678.27 24525.82 18799.01
$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 January 31, 1995, the value of your investment would have
grown to $21,678 - a 116.78% 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 $24,526 - a 145.26% increase.
If you'd put $10,000 in the bond index, it would have grown to $18,799 - an
87.99% 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
An interview with Robert Haber, Portfolio Manager of Fidelity Balanced Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
A. It was a tough 1994, during which the fund underperformed its peers. For
the six months and year ended January 31, 1995, the fund returned -2.29%
and -7.79%, respectively. That trails the average balanced fund which
returned 0.84% and -3.76% for the same time periods, according to Lipper
Analytical Services.
Q. HOW DO YOU ACCOUNT FOR THE FUND'S DISAPPOINTING RESULTS?
A. Bonds in general have fared very poorly over the past year, and
especially during the past six months. The fund had 55% to 60% of its
assets invested in bonds, and the bond market had one of its worst years
ever. The fund also was hurt by the fall in Mexican and Argentine emerging
market bonds. And, the fund's investments in French government bonds, which
are normally considered less risky, still underperformed. When interest
rates rose in the U.S., corresponding rate hikes in several foreign
countries caused international bond markets to perform poorly.
Q. DESPITE WHAT YOU SAY ABOUT BONDS UNDERPERFORMING, YOU STILL INCREASED
THE FUND'S INVESTMENTS IN BONDS FROM 47.5% TO 61.0% OVER THE PAST SIX
MONTHS. WHY?
A. First, I don't make asset allocation decisions on a month-to-month basis
- - they're part of a one- or two-year strategy. I reduced the fund's
holdings in stocks and increased its total stake in bonds during the past
six months because I perceived bonds to be a better value. I still do;
here's why: Interest rates have already risen - and bond prices fallen -
substantially. Real yields - the difference between bonds' stated interest
rates and the rate of inflation - are at historically attractive levels
both in the U.S. and in France. However, I've recently made some changes
within the bond portion of the fund. I've reduced the fund's exposure to
foreign debt and increased its holdings in U.S. Treasuries of varying
maturities - but with an intermediate average maturity of about seven years
- - in order to reduce risk in the fund.
Q. YOU MENTIONED FRENCH GOVERNMENT BONDS. WHAT WAS THE ATTRACTION THERE?
A. On January 31, 1995, about 5% of the fund was invested in French
government bonds; it had been higher during the past six months. I believed
that the U.S. economy was stronger than industrialized economies in Western
Europe, and thought if I shifted some bond investments to foreign markets,
their bonds would perform better than U.S. bonds because their economies
were weaker. I was right about our economy being stronger, but the second
part of my thesis didn't work out as anticipated since French bonds sold
off as much as the U.S. bonds.
Q. LET'S SWITCH GEARS FOR A MOMENT AND LOOK AT THE FUND'S EQUITY HOLDINGS.
WHAT WAS YOUR STRATEGY?
A. Stocks generally outperformed bonds during the period, and the fund was
about 35% invested in equities - including securities convertible into
stocks - on January 31; down from about 50% six months ago. Most of the
stocks that I held during the period were deep cyclicals - which tend to
prosper late in the economic cycle. Because the economy remained strong,
earnings exceeded forecasts for some of these companies. The demand for
commodities also stayed strong, and paper companies such as Stone Container
- - which has been a bit volatile but a good overall performer -helped the
fund.
Q. WAS THE FUND AFFECTED BY THE EARTHQUAKE IN JAPAN?
A. Not really. I reduced the fund's holdings in Japan during June and July
of 1994. By January, when the earthquake occurred, the fund's investment in
Japanese stocks and bonds was about 1%.
Q. DESPITE ALL THE TURMOIL, YOU STAND BY BONDS AS A BETTER VALUE THAN
STOCKS. WHY?
A. All bonds did this year was get cheaper, which is an opportunity for
investors. The stock market, on the other hand, stayed relatively flat
during the year. The makeup of the fund's bond investments has changed, but
my conviction in bonds as a better investment right now has stayed strong.
However, as interest rates climb around the world, there isn't as much
reason to hold as many foreign bonds. I'll probably continue to sell some
overseas positions and redirect assets into U.S. Treasuries.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. By reducing some of the fund's foreign debt exposure and taking
advantage of 7% and 8% yields that are available in the marketplace, I
think I've eliminated some excess volatility from the fund. If rising
interest rates have the desired effect, and the economy begins to slow, the
fund's 61% stake in bonds should
help performance going forward. Also, if the economy stays strong, cyclical
stocks should help the fund as well.
FUND FACTS
GOAL: to provide as much
income as possible
consistent with the
preservation of capital by
investing in both stocks and
bonds
START DATE: November 6,
1986
SIZE: as of January 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 SHIFTING BOND
INVESTMENTS:
"I shifted part of the bond
portfolio overseas to France,
England and Germany
because I felt the U.S.
economy was stronger than
many overseas economies.
The threat of inflation -
which eats away at a bond's
fixed interest payment -
seemed much more likely in
the U.S. than in industrialized
nations abroad. However, the
correction of the U.S. bond
market during the past year
was more severe than
expected. Unfortunately,
when U.S. interest rates rose,
so did rates in Western
Europe, despite the fact that
there was no threat of inflation
in those countries. As a result,
I've reduced the fund's
exposure to foreign debt."
(solid bullet) The fund's stake in foreign
investments fell from 39.2%
to 23.9% of the fund during
the past six months.
(solid bullet) The fund's position in
financial stocks and bonds
was reduced from 13.2% to
8.2% of the fund.
(solid bullet) The fund increased its
stake in U.S. Treasury
obligations, including
short-term treasuries from
11.5% to 29.6% of the fund.
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE STOCKS 6
MONTHS AGO
Stone Container Corp. 1.3 1.0
Unocal Corp. $3.50 1.2 1.2
Temple-Inland, Inc. 1.2 1.0
Jefferson Smurfit Group PLC 1.2 0.8
Methanex Corp. 1.0 1.2
TOP FIVE BONDS AS OF JANUARY 31, 1995
(BY ISSUER, WITH MATURITY MORE THAN ONE YEAR) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE
BONDS 6 MONTHS
AGO
U.S. Treasury Obligations (various issues) 26.9 11.5
French Government (various issues) 5.4 10.1
Commonwealth of Australia (various 2.1 0.0
issues)
Thermo Electron Corp. 1.4 1.4
Government National Mortgage 1.2 1.6
Association
(various issues)
TOP FIVE MARKET SECTORS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS IN
THESE MARKET
SECTORS
6 MONTHS AGO
Basic Industries 12.6 11.7
Finance 8.2 13.2
Energy 5.2 8.2
Utilities 3.4 5.3
Technology 3.2 4.5
ASSET ALLOCATION
AS OF JANUARY 31, 1995* AS OF JULY 31, 1994**
Row: 1, Col: 1, Value: 1.5
Row: 1, Col: 2, Value: 3.8
Row: 1, Col: 3, Value: 13.1
Row: 1, Col: 4, Value: 61.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 22.0
Row: 1, Col: 1, Value: 1.5
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 15.3
Row: 1, Col: 4, Value: 47.5
Row: 1, Col: 5, Value: 34.6
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%
Stocks and
equity futures 34.6%
Bonds 47.5%
Convertible
securities 15.3%
Short-term
investments 1.5%
Other
investments 1.1%
FOREIGN
INVESTMENTS 39.2%
*
**
INVESTMENTS JANUARY 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 19.1%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 10.9%
CHEMICALS & PLASTICS - 2.2%
Cominco Fertilizer Ltd. 501,100 $ 12,910
Kemira OY (a) 1,807,900 12,699
Methanex Corp. (a) 4,013,300 49,558
Monsanto Co. 52,500 3,859
Terra Industries, Inc. 2,101,900 23,909
Wellman, Inc. 291,600 7,655
110,590
METALS & MINING - 2.0%
Alcan Aluminium Ltd. 1,029,100 24,867
Aluminum Co. of America 355,600 27,959
Kaiser Aluminum Corp. (a) 206,800 2,223
Reynolds Metals Co. 257,600 12,880
Sherritt Gordon Mines Ltd. (a)(k) 3,312,500 31,782
Union Miniere SA (a) 1,000 73
99,784
PACKAGING & CONTAINERS - 0.2%
Mayr Melnhof Karton AG (a) 182,800 10,141
PAPER & FOREST PRODUCTS - 6.5%
Aracruz Celulose SA ADR (a) 1,081,100 14,054
Avenor, Inc. (a) 290,900 5,556
Boise Cascade Corp. 160,300 4,328
Bowater, Inc. 181,900 4,820
Cascades, Inc. 547,100 2,819
Champion International Corp. 17,500 669
Chesapeake Corp. 297,500 8,776
Domtar, Inc. (a) 4,096,600 30,207
Jefferson Smurfit Corp. (a) 497,200 8,017
Jefferson Smurfit Group PLC 9,492,240 59,091
Longview Fibre Co. 393,200 6,144
Mead Corp. 271,200 13,526
QUNO Corp. (a) 501,200 9,128
QUNO Corp. (a)(e) 26,500 483
St. Laurent Paperboard, Inc. (a) 91,100 1,182
St. Laurent Paperboard, Inc. (a)(e) 354,700 4,601
Stone Consolidated Corp. (a) 1,126,800 13,914
Stone Container Corp. (a) 3,766,800 64,036
Temple-Inland, Inc. 1,336,600 60,815
Union Camp Corp. 206,900 9,750
321,916
TOTAL BASIC INDUSTRIES 542,431
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.3%
ENGINEERING - 0.0%
Maculan Holding AG Ord. 11,000 $ 829
REAL ESTATE INVESTMENT TRUSTS - 0.3%
CBL & Associates Properties 86,000 1,698
Cali Realty Corp. (a) 123,200 1,971
Crown American Realty Trust (SBI) 97,700 1,331
LTC Properties, Inc. 572,400 7,298
Liberty Property Trust (SBI) 140,000 2,765
15,063
TOTAL CONSTRUCTION & REAL ESTATE 15,892
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.3%
Chrysler Corp. 87,300 3,928
Johnson Controls, Inc. 83,400 3,961
TRW, Inc. 121,100 7,766
15,655
TEXTILES & APPAREL - 0.1%
Jones Apparel Group, Inc. 142,200 3,413
Russell Corp. 2,300 68
3,481
TOTAL DURABLES 19,136
ENERGY - 1.0%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 499,800 12,870
OIL & GAS - 0.8%
British Petroleum PLC ADR 242,600 18,832
Coastal Corp. (The) 111,900 3,021
Elf Gabon 50,695 9,787
Mark Resources, Inc. (a) 778,100 3,664
Mesa, Inc. (a) 2,000 10
Pennzoil Co. 5,700 256
San Juan Basin Royalty Trust (UBI) 422,500 2,641
38,211
TOTAL ENERGY 51,081
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 1.3%
BANKS - 0.6%
Bank of Boston Corp. 420,599 $ 11,777
CPR (Comp Par Reescompte) 244,680 15,051
Republic New York Corp. 53,900 2,567
29,395
CLOSED END INVESTMENT COMPANY - 0.2%
ASA Ltd. 172,800 7,452
SECURITIES INDUSTRY - 0.5%
Daiwa Securities Co. Ltd. 919,000 11,895
Nomura Securities Co. Ltd. 752,000 14,638
26,533
TOTAL FINANCE 63,380
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
ELECTRICAL EQUIPMENT - 0.1%
Omron Corp. 231,000 3,963
INDUSTRIAL MACHINERY & EQUIPMENT - 0.5%
Caterpillar, Inc. 221,300 11,397
Deere & Co. 205,400 14,635
26,032
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 29,995
MEDIA & LEISURE - 0.0%
ENTERTAINMENT - 0.0%
Royal Caribbean Cruises Ltd. 84,800 2,332
LODGING & GAMING - 0.0%
Resort Hotels PLC (a) 62,500 -
TOTAL MEDIA & LEISURE 2,332
NONDURABLES - 0.8%
TOBACCO - 0.8%
Philip Morris Companies, Inc. 636,500 37,951
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
PRECIOUS METALS - 1.2%
Barrich Gold Corp. 1,029,200 $ 20,572
Battle Mountain Gold Co. 768,200 6,818
Buffelsfontein Gold Mining Co. Ltd.:
ADR 378,000 2,315
Ord. 39,000 229
Driefontein Consolidated Ltd.:
Ord. 87,800 1,014
sponsored ADR 482,600 5,610
Echo Bay Mines Ltd. 236,400 2,184
Free State Consolidated Gold Mines Ltd.:
ADR 307,000 3,530
Ord. 308,414 3,544
Glamis Gold Ltd. 1,000 8
Hecla Mining Co. 61,000 534
Placer Dome, Inc. 293,900 5,535
Vaal Reefs Exploration & Mining Co. Ltd.:
ADR 495,200 3,497
(Reg.) 35,400 2,597
Western Deep Levels Ltd. ADR 45,600 1,305
TOTAL PRECIOUS METALS 59,292
RETAIL & WHOLESALE - 0.1%
GROCERY STORES - 0.1%
Smith's Food & Drug Center, Inc. 191,600 4,934
SERVICES - 0.1%
PRINTING - 0.1%
Donnelley (R.R.) & Sons Co. 139,300 4,214
TECHNOLOGY - 1.3%
COMPUTERS & OFFICE EQUIPMENT - 0.8%
Digital Equipment Corp. (a) 99,000 3,354
Tandem Computers, Inc. (a) 2,128,100 38,040
41,394
ELECTRONIC INSTRUMENTS - 0.0%
Varian Associates, Inc. 3,000 111
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - 0.5%
Hitachi Ltd. 657,000 $ 5,630
Marshall Industries (a) 235,600 5,802
Nitto Denko Corp. 970,000 14,015
25,447
TOTAL TECHNOLOGY 66,952
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
AMR Corp. (a) 110,000 6,174
RAILROADS - 0.0%
Trinity Industries, Inc. 1 -
TOTAL TRANSPORTATION 6,174
UTILITIES - 1.0%
ELECTRIC UTILITY - 0.5%
Texas Utilities Co. 646,300 22,459
TELEPHONE SERVICES - 0.5%
Koninklijke PPT Nederland 475,900 15,597
Koninklijke PPT Nederland (a)(e) 327,900 10,746
26,343
TOTAL UTILITIES 48,802
TOTAL COMMON STOCKS
(Cost $924,909) 952,566
PREFERRED STOCKS - 9.5%
CONVERTIBLE PREFERRED STOCKS - 7.7%
BASIC INDUSTRIES - 1.5%
IRON & STEEL - 0.0%
Armco, Inc. Class A $3.625 35,400 1,752
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 1.5%
Alumax, Inc., Series A, $4.00 (a) 103,433 $ 11,326
Kaiser Aluminum Corp.:
$0.96 390,500 4,393
depositary shares representing 1/10 share,
Series A, $0.65 2,231,600 18,411
Magma Copper Co., Series D, $2.80 (f) 171,500 9,947
Reynolds Metals Co. $3.31 562,500 27,563
71,640
TOTAL BASIC INDUSTRIES 73,392
CONSTRUCTION & REAL ESTATE - 0.1%
REAL ESTATE - 0.1%
Amoy Properties Ltd. 5 1/2% (e)(f) 77,550 5,312
DURABLES - 0.6%
AUTOS, TIRES, & ACCESSORIES - 0.6%
Federal Mogul Corp. $1.9375 (e)(f) 253,700 13,636
Ford Motor Co., Series A, $4.20 (f) 188,800 15,505
TOTAL DURABLES 29,141
ENERGY - 2.3%
ENERGY SERVICES - 0.1%
McDermott International, Inc., Series C, $2.875 (e) 16,100 668
Noble Drilling Corp. exchangeable $2.25 123,230 3,674
4,342
OIL & GAS - 2.2%
Occidental Petroleum Corp. $3.00 1,068,600 49,156
Unocal Corp. $3.50 (a)(e) 1,280,100 61,445
110,601
TOTAL ENERGY 114,943
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
FINANCE - 1.2%
BANKS - 1.0%
Barnett Banks, Inc., Series A, $4.50 (f) 92,500 $ 7,631
Citicorp $5.375 (e)(f) 223,100 24,931
Norwest Corp., Series B, $3.50 (f) 312,200 20,605
53,167
CREDIT & OTHER FINANCE - 0.2%
Echo Bay Finance Corp., Series A, $1.75 309,200 8,812
TOTAL FINANCE 61,979
HOLDING COMPANIES - 0.1%
Jardine Strategic Holdings Ltd. 7 1/2% (f) 46,960 5,119
PRECIOUS METALS - 0.4%
Amax Gold Inc., Series B, $.9375 52,200 2,336
Battle Mountain Gold Co. $.8125 211,300 11,727
Newmont Mining Corp. depositary shares representing
1/2 share $1.375 (e) 117,100 5,855
TOTAL PRECIOUS METALS 19,918
RETAIL & WHOLESALE - 0.1%
GROCERY STORES - 0.1%
Dairy Farm International Holdings Ltd. 6 1/2% (f) 37,130 3,267
SERVICES - 0.4%
PRINTING - 0.4%
Alco Standard Corp., Series AA, $2.375 (f) 309,900 22,429
TECHNOLOGY - 1.0%
COMPUTERS & OFFICE EQUIPMENT - 0.8%
IBM France 5 3/4% 502,297 40,404
ELECTRONICS - 0.2%
Storage Technology Corp. exchangeable $3.50 (f) 185,700 9,610
TOTAL TECHNOLOGY 50,014
TOTAL CONVERTIBLE PREFERRED STOCKS 385,514
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 1.8%
BASIC INDUSTRIES - 0.2%
METALS & MINING - 0.2%
Freeport McMoran Copper & Gold, Inc. depositary shares
representing .025 share 472,200 $ 8,913
CONSTRUCTION & REAL ESTATE - 0.0%
ENGINEERING - 0.0%
Maculan Holding AG Ord. 8,700 656
FINANCE - 1.2%
BANKS - 0.8%
Bank United Texas FSB, Series A, $10.12 409,580 9,984
BankAmerica Corp.:
Series 1, adj. rate 131,300 6,237
Series H, 9% 154,440 3,938
Chase Manhattan Corp.:
Series I, 10.84% 78,162 2,247
Series J, 9.08% 118,445 3,035
Citicorp, Series 9, 9.12% 87,600 2,190
First Fidelity Bancorporation, Series D, adj. rate 7,510 723
First Interstate Bancorp depositary shares representing
1/8 share, Series G, 9% 130,300 3,323
Shawmut National Corp. depositary shares representing
1/10 share 9.30% 363,100 9,123
40,800
CREDIT & OTHER FINANCE - 0.1%
Household International, Inc. depositary shares
representing 1/4 share, Series 89-A, 9 1/2% 158,100 4,111
SAVINGS & LOANS - 0.3%
Ahmanson (H.F.) & Co. depositary shares
representing 1/2 share, Series B, 9.60% 145,000 3,734
First Nationwide Bank 11 1/2% 91,000 8,804
12,538
TOTAL FINANCE 57,449
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
UTILITIES - 0.4%
ELECTRIC UTILITY - 0.4%
Gulf States Utilities Co. $1.75 308,500 $ 6,980
Long Island Lighting Co. $7.95 295,892 6,953
Louisiana Power & Light Co. 9.68% 16,225 410
Public Service Co. of New Hampshire Co., Series A 207,125 5,333
TOTAL UTILITIES 19,676
TOTAL NONCONVERTIBLE PREFERRED STOCKS 86,694
TOTAL PREFERRED STOCKS
(Cost $524,418) 472,208
CORPORATE BONDS - 13.6%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - 5.4%
ENERGY - 1.4%
INDEPENDENT POWER - 1.4%
Thermo Electron Corp. senior 4 5/8%, 8/1/97 (e)(f) Ba1 $ 47,771 67,596
FINANCE - 0.8%
BANKS - 0.3%
Daiwa Bank euro 3 3/4%, 3/31/95 A3 2,110 2,094
West One Bancorp 7 3/4%, 6/30/06 (f) Baa1 10,073 14,568
16,662
CREDIT & OTHER FINANCE - 0.3%
Investor AB 8%, 6/1/01 (f) A- SEK 73,570 12,788
INSURANCE - 0.2%
Cincinnati Financial Corp. 5 1/2%, 5/1/02 (f) A2 9,216 10,575
TOTAL FINANCE 40,025
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 1.5%
ENTERTAINMENT - 1.0%
Carnival Cruise Lines, Inc. 4 1/2%, 7/1/97 (f) Baa1 $ 40,371 $ 50,666
PUBLISHING - 0.3%
Daily Mail General Trust PLC 8 3/4%, 9/27/05 (f) - GBP 5,970 13,111
RESTAURANTS - 0.2%
Wendy's International, Inc. 7%, 4/1/06 (f) Baa3 9,055 12,315
TOTAL MEDIA & LEISURE 76,092
RETAIL & WHOLESALE - 0.8%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Home Depot, Inc. 4 1/2%, 2/15/97 (f) A1 6,550 7,917
Lowe's Companies, Inc. 3%, 7/22/03 (f) Baa1 23,781 33,412
TOTAL RETAIL & WHOLESALE 41,329
SERVICES - 0.1%
First Financial Management Corp. 5%,
12/15/99 (f) Baa2 5,615 5,882
TECHNOLOGY - 0.5%
COMMUNICATIONS EQUIPMENT - 0.4%
Ericsson (L.M.) Telephone Co. 4 1/4%, 6/30/00 (f) A2 SEK 95,734 17,342
ELECTRONICS - 0.1%
Motorola, Inc. liquid yield option notes
0%, 9/7/09 (f) A1 5,870 6,340
TOTAL TECHNOLOGY 23,682
UTILITIES - 0.3%
TELEPHONE SERVICES - 0.3%
Compania de Telefonos de Chile Yankee bonds
4 1/2%, 1/15/03 (f) Baa2 17,294 16,689
TOTAL CONVERTIBLE BONDS 271,295
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - 8.2%
CONSTRUCTION & REAL ESTATE - 0.4%
BUILDING MATERIALS - 0.4%
Sunbelt (Cemex) Enterprises 8 1/2%, 5/4/95 (d) - $ 19,750 $ 19,306
ENERGY - 0.5%
ENERGY SERVICES - 0.4%
McDermott International, Inc. 10 1/4%,
6/1/95 Baa3 8,400 8,480
Petroliam Nasional BHD yankee
6 7/8%, 7/1/03 (e) A2 11,250 10,224
18,704
OIL & GAS - 0.1%
McDermott, Inc. 7.95%, 7/7/97 Baa3 5,000 4,925
TOTAL ENERGY 23,629
FINANCE - 3.7%
ASSET-BACKED SECURITIES - 0.5%
Capital Auto Receivables Asset Trust 5.85%,
1/15/98 Aaa 2,717 2,646
Chase Manhattan Credit Card Master Trust
7.65%, 11/15/98 Aaa 7,331 7,336
Discover Card Master Trust I 6.90%, 2/16/00 A2 4,500 4,393
Standard Credit Card Master Trust 4.85%,
3/7/99 A2 5,200 4,904
Standard Credit Card Master Trust I participation
certificate 5 1/2%, 9/7/98 A2 2,800 2,639
Union Federal Savings 8 1/5%, 1/10/01 Baa2 1,406 1,416
United Federal Savings Bank Grantor Trust
7.275%, 11/10/00 Baa2 2,076 2,036
25,370
BANKS - 1.7%
Banco Ganadero SA euro 9 3/4%,
8/26/99 - 5,000 4,600
Bancomer SA:
euro 8%, 7/7/98 (e) Ba2 135 105
SNC euro 8%, 7/7/98 Ba2 3,005 2,344
9%, 6/1/00 (e) Ba2 10,500 6,877
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Bank of Boston Corp. 10.30%, 9/1/00 Baa2 $ 5,000 $ 5,125
Citicorp euro (g):
6.6875%, 7/10/97 A3 1,000 995
6.075%, 1/30/98 A3 2,000 1,985
Corporacion Andina De Fomento yankee bonds:
euro 7 1/4%, 4/30/98 Baa3 550 495
7 1/4%, 4/30/98 (e) Baa3 5,900 5,310
First Hawaiian Bank secured 6.93%,
12/1/03 (e) A1 8,600 7,674
First USA Bank 5.40%, 12/6/96 Baa3 1,900 1,805
HSBC Finance Nederland BV 7.40%,
4/15/03 (e) A3 10,000 9,250
Korea Development Bank 6 1/4%, 5/1/00 A1 4,150 3,771
Midlantic Corp.:
9 1/4%, 9/1/99 Baa2 1,543 1,590
9 1/5%, 8/1/01 Baa3 4,620 4,708
Shawmut Corp. 8 1/8%, 2/1/97 Baa1 12,000 12,063
Signet Banking Corp.:
6.4375%, 4/15/98 (g) Baa1 3,750 3,689
9 5/8%, 6/1/99 Baa1 4,469 4,652
Zions Bancorporation 8 5/8%, 10/15/02 BBB- 6,000 5,924
82,962
CREDIT & OTHER FINANCE - 0.5%
General Motors Acceptance Corp.:
7% 6/2/97 Baa1 8,000 7,822
6 3/4%, 2/25/98 Baa1 5,000 4,808
5 5/8%, 1/12/99 Baa1 10,000 9,137
Greyhound Financial Corp. 6.95%, 1/28/98 Baa2 1,250 1,210
Westinghouse Credit Corp.
8.98%, 6/15/98 Ba1 2,000 2,012
8.85%, 7/26/99 Ba1 1,300 1,288
26,277
INSURANCE - 0.6%
Metropolitan Life Insurance Co. 6.30%,
11/1/03 (e) Aa3 11,000 9,374
Nationwide Mutual Insurance Co.
6 1/2%, 2/15/04 (e) Aa3 5,000 4,384
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
INSURANCE - CONTINUED
New York Life Insurance Co. 6.40%,
12/15/03 (e) Aa2 $ 9,000 $ 7,788
Ohio National Life Insurance Co. 8 7/8%,
7/15/04 (e) A3 4,350 4,302
Protective Life Corp. 7.95%, 7/1/04 A3 2,000 1,929
27,777
SAVINGS & LOANS - 0.4%
Great Western Bank:
10 1/4%, 6/15/00 A3 1,600 1,707
9 7/8%, 6/15/01 A3 1,000 1,057
Great Western Financial Corp.:
6 3/8%, 7/1/00 Baa1 3,140 2,875
8.60% 2/1/02 Baa1 3,950 3,978
Home Savings of America 6%, 11/1/00 A3 14,500 12,959
22,576
TOTAL FINANCE 184,962
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Westinghouse Electric Corp. 9.13%, 6/20/01 Ba1 5,000 4,934
MEDIA & LEISURE - 0.4%
BROADCASTING - 0.2%
Telecommunications, Inc.:
7.13%, 2/2/98 Baa3 6,000 5,803
6.58%, 2/15/05 Baa3 4,000 3,728
Time Warner, Inc. 6.05%, 7/1/95 (e) Ba1 2,000 1,989
11,520
PUBLISHING - 0.2%
News America Holdings, Inc. 8 5/8%, 2/1/03 Ba1 8,500 8,362
TOTAL MEDIA & LEISURE 19,882
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
NONDURABLES - 0.1%
FOODS - 0.0%
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 $ 1,000 $ 985
TOBACCO - 0.1%
Empresas La Moderna SA 10 1/4%, 11/12/97 (e) - 4,040 3,636
RJR Nabisco, Inc. 9 1/4%, 5/1/95 Baa3 1,500 1,505
5,141
TOTAL NONDURABLES 6,126
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
El Puerto de Liverpool SA de CV 7 1/4%,
10/19/96 (e) - 6,480 5,314
SERVICES - 0.5%
GOVERNMENT SERVICES - 0.5%
Financiera Energetica Nacional (e):
6 5/8%, 12/13/96 - 20,000 18,950
9%, 11/8/99 BBB 5,000 4,738
TOTAL SERVICES 23,688
TECHNOLOGY - 0.4%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Comdisco, Inc.:
6.88%, 8/30/96 Baa2 3,000 2,959
9 3/4%, 1/15/97 Baa2 4,500 4,628
7.82%, 2/5/97 Baa2 2,000 1,991
9.45%, 6/8/00 Baa2 6,000 6,251
9.30%, 6/27/00 Baa2 3,750 3,881
19,710
ELECTRONICS - 0.0%
Grupo Condumex SA de CV:
euro 6 1/4%, 7/27/96 - 750 660
6 1/4%, 7/27/96 (e) - 750 660
7 3/8%, 7/27/98 (e) - 2,000 1,540
2,860
TOTAL TECHNOLOGY 22,570
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.2%
AMR Corp. 9 1/2%, 7/15/98 Baa3 $ 4,000 $ 4,065
Delta Air, Inc. 9 7/8%, 4/30/08 Baa3 4,687 4,624
8,689
TRUCKING & FREIGHT - 0.1%
Consolidated Freightways, Inc. 9 1/8%, 8/15/99 Baa3 4,230 4,257
TOTAL TRANSPORTATION 12,946
UTILITIES - 1.7%
ELECTRIC UTILITY - 1.3%
British Columbia Hydro & Power Authority gtd.
15%, 4/15/11 Aa1 725 821
Comision Federal de Electricidad euro 8%, 8/4/97 - 2,130 1,797
Gulf States Utilities Co.:
9.72%, 7/1/98 Baa3 10,690 10,945
1st mtg. 6 3/4%, 10/1/98 Baa2 1,000 935
Hydro-Quebec euro 6.6875%, 7/31/02 (g) A+ 5,140 4,981
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 10,908 10,980
7.30%, 7/15/99 Ba1 13,000 11,933
Public Service Co. of New Hampshire 1st mtg.
9.17%, 5/15/98 Baa3 16,900 17,156
United Illuminating Co. 9.76%, 1/2/06 Baa3 4,491 4,610
64,158
GAS - 0.4%
Centragas Transpotadora de Gas 10.65%,
12/1/10 (e) BBB- 5,000 4,775
Southwest Gas Corp.:
9 3/4%, 6/15/02 Baa3 10,700 11,349
9 3/8%, 2/1/17 Baa3 4,000 4,090
20,214
TOTAL UTILITIES 84,372
TOTAL NONCONVERTIBLE BONDS 407,729
TOTAL CORPORATE BONDS
(Cost $730,008) 679,024
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 39.9%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
U.S. TREASURY OBLIGATIONS - 29.6%
U.S. Treasury Bills, yield at time of purchase
5.23% to 5.47%, 3/9/95 Aaa $ 137,300 $ 136,554
U.S. Treasury Bonds:
11 5/8%, 11/15/04 Aaa 33,550 42,587
12 3/4%, 11/15/10 Aaa 49,000 66,617
9 7/8%, 11/15/15 Aaa 35,000 42,388
8 7/8%, 8/15/17 Aaa 84,600 94,052
8 1/8%, 8/15/19 Aaa 174,200 180,161
7 1/4%, 2/15/23 Aaa 205,000 190,746
U.S. Treasury Notes:
5 1/2%, 4/30/96 Aaa 26,000 25,525
7 1/4%, 11/15/96 Aaa 30,500 30,524
8%, 1/15/97 Aaa 19,700 19,974
6 3/4%, 2/28/97 Aaa 74,200 73,470
8 3/4%, 10/15/97 Aaa 28,000 28,910
5 5/8%, 1/31/98 Aaa 6,135 5,840
5 1/8%, 3/31/98 Aaa 57,500 53,816
9 1/4%, 8/15/98 Aaa 116,895 123,197
8 3/4%, 8/15/00 Aaa 19,750 20,818
6 1/4%, 2/15/03 Aaa 76,230 70,108
5 3/4%, 8/15/03 Aaa 197,775 174,938
7 1/4%, 5/15/04 Aaa 51,700 50,521
7 7/8%, 11/15/04 Aaa 47,500 48,398
TOTAL U.S. TREASURY OBLIGATIONS 1,479,144
U.S. GOVERNMENT AGENCY OBLIGATIONS - 10.3%
Federal Home Loan Bank:
0%, 3/6/95 Aaa 137,530 136,705
0%, 4/6/95 Aaa 70,000 69,221
Federal Home Loan Mortgage Corp.:
0%, 3/2/95 Aaa 56,000 55,703
5.40%, 11/1/00 Aaa 3,600 3,176
6.55%, 4/2/03 Aaa 15,000 13,637
Federal National Mortgage Association:
0%, 2/21/95 Aaa 70,000 69,761
0%, 3/31/95 Aaa 40,000 39,591
6.80%, 1/10/03 Aaa 5,825 5,432
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Financing Corporation:
0%, 2/8/97 Aaa $ 2,820 $ 2,437
9.40%, 2/8/18 Aaa 1,000 1,127
9.65%, 11/2/18 Aaa 6,000 6,891
Government Trust Certificates:
Class G-2 (assets of Trust guaranteed by
U.S. Government through Defense Security
Assistance Agency) 8%, 5/15/98 Aaa 7,581 7,660
Class T-2 (assets of Trust guaranteed by
U.S. Government through Defense Security
Assistance Agency) 9 5/8%, 5/15/02 Aaa 1,840 1,949
Series 1992-A (assets of Trust guaranteed by
U.S. Government through Export-Import
Bank) 7.02%, 9/1/04 Aaa 3,565 3,430
Series 1994-F (assets of Trust guaranteed by
U.S. Government through Export-Import
Bank) 8.187%, 12/15/04 Aaa 9,529 9,568
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
5 1/4%, 3/15/98 Aaa 25,720 23,951
4 7/8%, 9/15/98 Aaa 15,700 14,267
7 1/2%, 11/15/99 Aaa 5,000 4,989
5 3/4%, 3/15/00 Aaa 1,200 1,096
8%, 11/15/01 Aaa 1,880 1,891
6 1/8%, 3/15/03 Aaa 4,400 3,927
Tennessee Valley Authority:
6%, 1/15/97 Aaa 7,700 7,459
8 3/8%, 10/1/99 Aaa 13,000 13,313
6 7/8%, 12/15/43 Aaa 10,000 8,203
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 6,270 6,270
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 511,654
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,995,192) 1,990,798
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 1.6%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.4%
7%, 11/1/22 to 6/1/24 Aaa $ 14,972 $ 13,824
7 1/2%, 6/1/07 to 4/1/08 Aaa 4,144 4,012
8%, 2/1/10 to 9/1/17 Aaa 2,832 2,799
20,635
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.2%
7%, 5/15/22 to 11/15/23 Aaa 16,527 15,112
7 1/2%, 1/15/23 to 6/15/23 Aaa 18,192 17,171
8%, 1/15/17 to 8/15/22 Aaa 2,966 2,884
8 1/2%, 8/15/06 to 11/15/24 Aaa 25,281 25,225
60,392
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $85,040) 81,027
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
PRIVATE SPONSOR - 0.0%
Maryland National Bank pass thru Series 1990-1
Class A, 9 1/2%, 10/25/20 (Cost $306) Aaa 296 295
COMMERCIAL MORTGAGE SECURITIES - 0.5%
Resolution Trust Corp.:
commercial Series 1991-M5 Class A,
9%, 3/25/07 Aa2 8,465 8,562
commercial Series 1994-C1 Class A-4,
7 1/4%, 6/25/26 AAA 4,725 4,665
commercial Series 1994-C2 Class A-2,
7 3/4%, 4/25/25 AAA 2,470 2,455
commercial Series 1994-C2 Class A-4,
7 1/2%, 4/25/25 AAA 4,095 4,068
Structured Asset Securities Corp. commercial
Series 1993-C1 Class A-1, 6.60%,
10/25/24 AA+ 4,112 3,893
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $23,767) 23,643
COMPLEX MORTGAGE SECURITIES - 0.3%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
INTEREST ONLY STRIPS - 0.1%
Federal National Mortgage Association
7%, 4/25/23 (h) Aaa $ 15,884 $ 5,644
PRINCIPAL ONLY STRIPS - 0.2%
Federal National Mortgage Association
0%, 4/25/23 (i) Aaa 15,884 9,044
TOTAL COMPLEX MORTGAGE SECURITIES
(Cost $14,511) 14,688
FOREIGN GOVERNMENT OBLIGATIONS (J) - 10.4%
Argentina Republic BOCON (g):
3.2712%, 4/1/01 - ARP 52,741 $ 19,533
3.2712%, 9/1/02 - ARP 32,394 9,566
3.2712%, 4/1/07 - ARP 16,832 3,870
Commonwealth of Australia:
7%, 4/15/00 Aaa AUD 80,000 52,563
12%, 11/15/01 Aa2 AUD 66,175 53,875
French Government OAT:
7%, 11/12/99 Aaa FRF 706,305 129,591
8 1/2%, 11/25/02 Aaa FRF 15,000 2,921
8 1/2%, 4/25/03 Aaa FRF 246,100 47,837
6 3/4%, 10/25/03 Aaa FRF 36,000 6,268
8 1/2%, 10/25/19 Aaa FRF 70,000 13,341
8 1/2%, 4/25/23 Aaa FRF 351,360 66,954
New Zealand Government:
9%, 11/15/96 Aaa NZD 10,850 6,879
10%, 7/15/97 Aaa NZD 14,320 9,265
10%, 3/15/02 Aaa NZD 16,700 11,402
8%, 4/15/04 Aaa NZD 38,050 23,338
Territory of Victoria Public Authorities Finance
Agency, Australia 8 1/4%, 1/15/02 Aa3 8,000 7,960
United Kingdom, Great Britain & Northern Ireland:
10%, 2/26/01 Aaa GBP 20,790 34,840
8%, 6/10/03 Aaa GBP 11,044 16,790
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $545,888) 516,793
SUPRANATIONAL OBLIGATIONS - 0.1%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
African Development Bank 7 3/4%, 12/15/01
(Cost $2,979) Aa1 $ 3,000 $ 2,946
MUNICIPAL SECURITIES - 0.0%
Louisiana Pub. Facs. Auth. Rev. 9.95%, 6/1/96
(Cost $2,115) A3 2,000 2,058
INDEXED SECURITIES - 0.1%
Merrill Lynch & Co., Inc. Japan Index equity
participation securities 0%, 1/31/00
(Cost $8,000) 8,000 6,800
COMMERCIAL PAPER - 0.0%
Unilever 0%, 4/6/95 (Cost $1,711) CSK 50,000 1,786
REPURCHASE AGREEMENTS - 4.9%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.81%
dated 1/31/95 due 2/1/95 $ 244,143 244,104
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $5,102,948) $ 4,988,736
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
131 Midcap 400 Contracts March 95 $ 11,266 $ (129)
191 S&P 500 Contracts March 95 45,095 163
$ 56,361 $ 34
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.1%
SECURITIES SOLD SHORT
AMOUNTS IN THOUSANDS
NUMBER OF SHARES ISSUER VALUE
346 Alco Standard Corp. $ 22,243
2,982 Amoy Properties Ltd. 2,641
173 Barnett Banks, Inc. 7,413
2,319 Carnival Corp. Class A 48,691
187 Cincinnati Financial Corp. 9,659
611 Citicorp 24,830
212 Compania de Telefonos Chile SA sponsored ADR 15,533
723 Dairy Farm International Holdings Ltd. 879
91 Ericsson (L.M.) Telephone Co. Class B 4,908
227 Ericsson (L.M.) Telephone Co. Class B ADR 12,254
703 Federal Mogul Corp. 11,947
81 First Financial Management Corp. 5,002
616 Ford Motor Co. 15,549
169 Home Depot, Inc. 7,891
478 Investor AB Free shares B 12,084
750 Jardine Strategic Holdings Ltd. 2,385
909 Lowe's Companies, Inc. 33,420
591 Magma Copper Co. 9,013
107 Motorola, Inc. 6,331
856 Norwest Corp. 20,542
329 Reuter Holdings PLC ADR 13,760
395 Storage Technology Corp. 8,336
59 Thermo Ecotek Corp. (Rights) 7
1,481 Thermo Electron Corp. 66,100
736 Wendy's International, Inc. 11,860
541 West One Bancorp 14,685
TOTAL SECURITIES SOLD SHORT
(Total proceeds $404,770) $ 387,963
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 7.8%
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
63,541 CAD 2/3/95 to 3/6/95 $ 45,122 $ (897)
56,856 CHF 2/23/95 44,081 1,245
267,420 DEM 2/28/95 to 3/6/95 175,567 2,865
996,985 FRF 2/3/95 to 3/7/95 188,748 698
88,077 GBP 3/7/95 to 3/22/95 139,116 599
29,612,679 ITL 2/17/95 18,385 167
7,650,692 JPY 2/1/95 to 4/19/95 77,074 (1,099)
TOTAL CONTRACTS TO BUY
(Payable amount $684,515) $ 688,093 3,578
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 13.8%
CONTRACTS TO SELL
383,359 CAD 2/3/95 to 4/24/95 $ 272,252 $ 7,257
86,183 CHF 2/23/95 to 4/18/95 67,216 (1,064)
267,420 DEM 2/28/95 to 3/6/95 175,567 (4,756)
2,340,117 FRF 2/3/95 to 4/13/95 443,090 (2,157)
88,077 GBP 3/7/95 to 3/22/95 139,116 (1,816)
29,612,679 ITL 2/17/95 18,385 10
7,650,692 JPY 2/1/95 to 4/19/95 77,074 357
TOTAL CONTRACTS TO SELL
(Receivable amount $1,190,531) $ 1,192,700 (2,169)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 23.9%
$ 1,409
CURRENCY ABBREVIATIONS
ARP - Argentine peso
AUD - Australian dollar
GBP - British pound
CAD - Canadian dollar
CSK - Czech koruna
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
NZD - New Zealand dollar
SEK - Swedish krona
CHF - Swiss franc
LEGEND
(a) Non-income producing
(b) Principal amount is stated in United States dollars unless otherwise
noted.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) 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
Sunbelt (Cemex)
Enterprises 8 1/2%,
5/4/95 2/12/93 to
10/25/94 $19,521,000
(e) 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 $302,163,000 or 6.0% of net
assets.
(f) Security 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 $407,193,000.
(g) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(h) Security represents right to receive monthly interest payments on an
underlying pool of mortgages. Principal shown is the par amount of the
mortgage pool.
(i) Principal Only Strips represent the right to receive the monthly
principal payments on an underlying pool of mortgage loans.
(j) 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.
(k) Affiliated company (see Note 8 of Notes to Financial Statements).
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 43.5% AAA, AA, A 42.8%
Baa 6.3% BBB 7.2%
Ba 2.1% 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 1.9% including long-term debt categorized
as other securities. FMR has determined that unrated debt securities that
are lower quality account for 0.7% of the total value of investment in
securities.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 76.1%
France 6.6
Canada 4.5
Australia 2.3
United Kingdom 1.7
Ireland 1.2
Japan 1.0
New Zealand 1.0
Others (individually less than 1%) 5.6
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1995, the aggregate cost of investment securities for income
tax purposes was $5,104,478,000. Net unrealized depreciation aggregated
$115,742,000 of which $140,508,000 related to appreciated investment
securities and $256,250,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JANUARY 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 4,988,736
agreements of $244,104) (cost $5,102,948) - See
accompanying schedule
Securities sold short, at value (proceeds received (387,963) $ 4,600,773
$404,770)
Restricted cash on securities sold short 404,770
Cash 7
Receivable for investments sold 182,457
Unrealized appreciation on foreign currency contracts 15,840
Receivable for closed foreign currency contracts 1,052
Receivable for fund shares sold 20,970
Dividends receivable 3,511
Interest receivable 70,390
Receivable for daily variation on futures contracts 283
Other receivables 1,730
U.S. Treasury obligations, at value, held as collateral for 47,780
securities loaned
TOTAL ASSETS 5,349,563
LIABILITIES
Payable for investments purchased 227,597
Unrealized depreciation on foreign currency contracts 14,431
Payable for closed foreign currency contracts 180
Payable for fund shares redeemed 30,337
Accrued management fee 2,186
Other payables and accrued expenses 9,044
Collateral on securities loaned, at value 47,780
TOTAL LIABILITIES 331,555
NET ASSETS $ 5,018,008
Net Assets consist of:
Paid in capital $ 5,322,912
Undistributed net investment income 86,606
Accumulated undistributed net realized gain (loss) on (295,249)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on (96,261)
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 408,342 shares outstanding $ 5,018,008
NET ASSET VALUE, offering price and redemption price per $12.29
share ($5,018,008 (divided by) 408,342 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 35,913
Dividends
Interest (including security lending fees of $29) 139,367
TOTAL INCOME 175,280
EXPENSES
Management fee $ 13,552
Transfer agent fees 6,174
Accounting and security lending fees 398
Non-interested trustees' compensation 33
Custodian fees and expenses 612
Registration fees 36
Audit 77
Legal 24
Interest 1
Dividends on securities sold short 3,755
Miscellaneous 3
Total expenses before reductions 24,665
Expense reductions (118) 24,547
NET INVESTMENT INCOME 150,733
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of (244,759)
$699 on sales of investment in affiliated issuers)
Foreign currency transactions (43,785)
Futures contracts 757
Short sales 14,616 (273,171)
Change in net unrealized appreciation (depreciation) on:
Investment securities (30,708)
Futures contracts (5,076)
Short sales 20,695
Assets and liabilities in foreign currencies 16,300 1,211
NET GAIN (LOSS) (271,960)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ (121,227)
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1995 JULY 31,
(UNAUDITED) 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 150,733 $ 197,865
Net investment income
Net realized gain (loss) (273,171) 10,705
Change in net unrealized appreciation (depreciation) 1,211 (243,781)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (121,227) (35,211)
FROM OPERATIONS
Distributions to shareholders (74,674) (88,138)
From net investment income
From net realized gain - (157,422)
In excess of net realized gain - (127,230)
TOTAL DISTRIBUTIONS (74,674) (372,790)
Share transactions 754,374 3,990,023
Net proceeds from sales of shares
Reinvestment of distributions 71,258 357,197
Cost of shares redeemed (1,001,818) (2,148,510)
Net increase (decrease) in net assets resulting from (176,186) 2,198,710
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS (372,087) 1,790,709
NET ASSETS
Beginning of period 5,390,095 3,599,386
End of period (including undistributed net investment $ 5,018,008 $ 5,390,095
income of $86,606 and $10,547, respectively)
OTHER INFORMATION
Shares
Sold 58,626 298,399
Issued in reinvestment of distributions 5,693 26,645
Redeemed (78,454) (162,688)
Net increase (decrease) (14,135) 162,356
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31,
1995
(UNAUDITED) 1994 1993 1992 1991 1990
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 12.76 $ 13.84 $ 12.79 $ 12.15 $ 11.11 $ 11.87
beginning of period
Income from
Investment
Operations
Net investment .37 .25 E .62 .62 .65 .71
income
Net realized and (.66) (.17) 1.45 1.07 1.07 (.25)
unrealized gain
(loss)
Total from investment (.29) .08 2.07 1.69 1.72 .46
operations
Less Distributions (.18) (.25) (.66) (.60) (.68) (1.00)
From net investment D
income
From net realized - (.50) (.36) (.45) - (.22)
gain D
In excess of net - (.41) - - - -
realized gain
Total distributions (.18) (1.16) (1.02) (1.05) (.68) (1.22)
Net asset value, end of $ 12.29 $ 12.76 $ 13.84 $ 12.79 $ 12.15 $ 11.11
period
TOTAL RETURN B, C (2.29)% .37% 17.18% 14.73% 16.24% 3.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 5,018 $ 5,390 $ 3,599 $ 1,366 $ 458 $ 268
period (in millions)
Ratio of expenses to .93% 1.01% .93% .96% .98% .97%
average net assets A
Ratio of expenses to .93% 1.02% .93% .96% .98% .97%
average net assets A
before expense
reductions
Ratio of net investment 5.70% 4.09% 5.07% 5.68% 5.93% 6.74%
income to average A
net assets
Portfolio turnover rate 211% 157% 162% 242% 238% 223%
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
E EFFECTIVE AUGUST 1, 1993, THE FUND BEGAN REFLECTING IN NET INVESTMENT
INCOME PER SHARE CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES IN ACCORDANCE WITH NEW GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1995 (Unaudited)
14. 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.
Reported 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
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but 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 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 is accrued as earned. Investment income,
which includes accretion of original issue discount, 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.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income 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.
15. 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 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."
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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
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 captions "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.
2. OPERATING POLICIES - CONTINUED
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 privately placed
restricted securities. These securities 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 $19,306,000 or 0.4% of net assets.
16. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $5,398,372,000 and $5,896,496,000, respectively, of which U.S.
government and government agency obligations aggregated $3,570,646,000 and
$3,253,214,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $1,031,835,000 and $1,264,785,000, respectively.
17. 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 annualized rate of .51%
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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
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 $1,056,000 for the period.
18. 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 $46,839,000 and $47,780,000,
respectively.
19. 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 $7,264,000. The weighted average
interest rate was 5.25%.
20. 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
$118,000 under this arrangement.
21. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions 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 Gordon Mines Ltd. (a) $ - $ 6,861 $ - $ 31,782
(a) Non-income producing
FIDELITY
(registered trademark)
GLOBAL BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 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 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 25 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION 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 a few 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 JANUARY 31, 1995 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
Global Balanced -6.17% -17.89% 18.38%
Morgan Stanley World Index -1.99% -2.91% 26.37%
Salomon Brothers World Government 2.97% 3.66% 16.33%
Bond Index
Average Global Flexible Fund -3.36% -9.01% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on February 1, 1993. For example, if you had invested $1,000 in a
fund that had a 5% return over the past year, you would end up with $1,050.
For comparison, you can look at both 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 currently reflects the performance of 34 global
flexible portfolio funds tracked by Lipper Analytical Services. These
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1995 PAST 1 LIFE OF
YEAR FUND
Global Balanced -17.89% 8.80%
Morgan Stanley World Index -2.91% 12.42%
Salomon Brothers World Government Bond Index 3.66% 7.85%
Average Global Flexible Fund -9.01% 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
Fidelity Global BalaWorld Index World Government Bon
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 12064.61 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 13268.93 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 12795.93 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 12616.59 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 11838.44 12637.29 11632.69
$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 January 31, 1995, the value of your investment would have
grown to $11,838 - a 18.38% 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 $12,637 - a 26.37% increase. If you had put
$10,000 in the Salomon Brothers World Government Bond Index, it would have
grown to $11,633 - a 16.33% 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
An interview with Robert Haber, Portfolio Manager of Fidelity Global
Balanced Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
A. For the six months and year ended January 31, 1995, the fund returned
- -6.17% and -17.89%, respectively. That trails the average global flexible
fund which returned -3.36% and -9.01% for the same time periods, according
to Lipper Analytical Services.
Q. WHY DID THE FUND TURN IN SUCH DISAPPOINTING RESULTS?
A. The primary reason was bonds. Bonds in general have fared very poorly
over the past year, and especially during the past six months. As of
January 31, 1995, the fund had about 49% of its assets invested in bonds,
and the bond market had its worst year in 70 years. More specifically, the
fund was also hurt by the fall in Mexican and Argentine emerging market
bonds. When the Mexican government unexpectedly devalued the peso in
mid-December, it affected all investment-grade, U.S. dollar-denominated
emerging market debt. The fund only had a very small amount of direct peso
exposure, but when Mexico devalued the peso, investors lost confidence in
all emerging markets. The fund's holding in emerging market debt was as
high as 24% of fund assets during the period, but by January 31, I had
decreased it to about 4% of assets.
Q. BUT EMERGING MARKET DEBT WASN'T THE WHOLE STORY . . .
A. No. As I said earlier, all bonds performed poorly. The fund's
investments in French and German government bonds, for example, which are
normally considered less volatile than those in emerging markets, also
underperformed. When interest rates rose in the U.S., corresponding rate
hikes in several foreign countries caused international bond markets to
perform poorly. It's important to note that about 20% of the fund's
investments was hedged with forward foreign currency contracts, in order to
reduce foreign currency risk - the chance that movements in a country's
currency might negatively affect the fund's investments there. However,
while these investments removed some currency risk from the portfolio they
didn't protect the fund from losses due to rising interest rates.
Q. YOU MENTIONED FRENCH GOVERNMENT BONDS. WHAT WAS THE ATTRACTION THERE?
A. On January 31, 1995, 4% of the fund was invested in French government
bonds. I believed that the U.S. economy was stronger than industrialized
economies in Western Europe. I thought if I shifted some bond investments
to foreign markets, their bonds would perform better than U.S. bonds
because their economies were weaker. I shifted part of the bond portfolio
overseas to France, England and Germany because I felt that the threat of
inflation - which eats away at a bond's fixed interest payment - seemed
much less likely in those countries than in the U.S. Unfortunately, bonds
around the world were more closely tied together than expected. When U.S.
interest rates rose, so did rates in Western Europe, despite the fact that
there was no threat of inflation in those countries. I was right about our
economy being stronger, but the second part of my thesis didn't work as
anticipated, since French bonds sold off as much as the U.S. bonds.
Q. LET'S SWITCH GEARS FOR A MOMENT AND LOOK AT THE FUND'S EQUITY HOLDINGS.
WHAT WAS YOUR STRATEGY?
A. Stocks generally outperformed bonds during the period, and the fund was
about 47% invested in stocks on January 31. Some of the stocks I owned
posted positive, though nominal, returns. I found that the fund's best
performers were North American industrial stocks, deep cyclicals - which
tend to prosper late in the economic cycle. Because the economy remained
strong, earnings exceeded forecasts for some of these companies. The demand
for commodities also stayed strong and chemical companies such as Methanex
and paper companies like Stone Container did well. Methanex should report
good earnings and therefore have a lot of financial flexibility due to the
significant amount of free cash flow that the company is generating that
will probably be returned to stockholders. In addition, investor perception
that the economic recovery in Europe was continuing boosted our holdings in
undervalued stocks such as VEBA and Koninklijke PPT Nederland.
Q. WAS THE FUND AFFECTED BY THE EARTHQUAKE IN JAPAN?
A. Yes. The Kobe earthquake impacted our holdings in Japanese stocks, which
were about 14% of the fund as of January 31, 1995. Although the companies
in which the fund was invested performed well, the stock market in Japan
tumbled around 10% - 15% on investors' fears that foreign investors would
sell their Japanese stocks. Since the effects of the earthquake will
probably be short term, I've used the dip in the market as a buying
opportunity.
Q. DESPITE ALL THE TURMOIL, YOU STAND BY BONDS AS A BETTER VALUE THAN
STOCKS. WHY?
A. All bonds did this year was get cheaper, which is an opportunity for
investors. Most stocks, after all, just stayed the same. However, the
makeup of the fund's bond investments has changed. My conviction in bonds
as a better investment right now has stayed strong. As interest rates climb
around the world, there isn't as much reason to hold as many foreign bonds.
I'll probably continue to sell some overseas positions and redirect assets
into U.S. Treasuries.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. If you look at the difficulties of the past six months, the overwhelming
negative was the fund's exposure to emerging market debt. The equity
performance was acceptable for a volatile market period. By reducing some
of the fund's foreign debt exposure and taking advantage of 7% and 8%
yields that are available in the marketplace, I've attempted to eliminate
some excess volatility from the fund. The next six months should see a
further reduction in the volatility of the fund's bond holdings. I also
think that the underlying value of the bonds that will remain in the fund
will eventually work to the fund's advantage.
FUND FACTS
GOAL: to provide as much
current income as possible
while preserving capital, and
considering the potential for
capital growth by investing in
stocks and bonds from
around the world
START DATE: February 1, 1993
SIZE: as of January 31,
1995, more than $218 million
MANAGER: Robert Haber,
since February 1993;
manager, Fidelity Balanced
Fund, since November 1986;
manager, Fidelity Advisor
Income & Growth Fund,
since 1987; joined Fidelity in
1985
(checkmark)
BOB HABER ON SHIFTING
BOND INVESTMENTS:
"I perceive bonds to be a
better value than stocks.
Here's why: Interest rates
have already risen - and
bond prices fallen -
substantially. Real yields -
the difference between bonds'
stated interest rates and the
rate of inflation - are at
historically attractive levels
both in the U.S. and in
some industrialized nations in
Western Europe. However,
I've recently made some
changes within the bond
portion of the fund. I've
reduced the fund's exposure
to foreign debt and increased
its holdings in U.S. Treasuries
of varying maturities - but
with an intermediate average
maturity of about seven years
- - in order to reduce risk in
the fund."
(solid bullet) After the period, Richard
Mace was named
co-manager of Fidelity Global
Balanced Fund which he
previously co-managed from
February 1993 - February
1994. Mr. Mace also
manages Fidelity
International Growth &
Income Fund and Fidelity
International Value Fund.
Previously, he managed the
Select Transportation,
Industrial Materials, and
Chemical Portfolios. Mr. Mace
joined Fidelity in 1987.
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Jefferson Smurfit Group PLC 2.0 1.0
(Ireland)
Occidental Petroleum Corp., Series 1.6 0.7
A, Indexed
$3 (United States)
Stone Container Corp. (United States) 1.5 1.0
Methanex Corp. (Canada) 1.5 1.4
Omron Corp. (Japan) 1.3 0.2
TOP FIVE BONDS AS OF JANUARY 31, 1995
(BY ISSUER, WITH MATURITIES % OF FUND'S % OF FUND'S
MORE THAN ONE YEAR) INVESTMENTS INVESTMENTS
6 MONTHS AGO
United States Government (various 7.9 0.0
issues)
German Government 8%, 7/22/02 6.5 0.0
United Kingdom Treasury Bond 4.9 0.0
9 3/4%, 8/27/02
Commonwealth of Australia 7%, 4.4 0.0
4/15/00
French Government (various issues) 4.0 5.8
TOP FIVE COUNTRIES AS OF JANUARY 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
United States of America 32.3 24.7
Japan 18.3 8.0
Canada 8.2 14.0
Germany 7.9 1.5
United Kingdom 7.0 3.1
ASSET ALLOCATION
AS OF JANUARY 31, 1995* AS OF JULY 31, 1994**
Row: 1, Col: 1, Value: 5.6
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 16.1
Row: 1, Col: 4, Value: 36.4
Row: 1, Col: 5, Value: 41.9
Stocks 37.3%
Bonds 39.0%
Convertible
securities 22.3%
Other 0.3%
Short-term
investments 1.1%
Stocks 41.9%
Bonds 36.4%
Convertible
securities 16.1%
Other 0.0%
Short-term
investments 5.6%
Row: 1, Col: 1, Value: 1.6
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 22.3
Row: 1, Col: 4, Value: 38.5
Row: 1, Col: 5, Value: 36.8
* FOREIGN
INVESTMENTS 67.7%
** FOREIGN
INVESTMENTS 75.3%
INVESTMENTS JANUARY 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 41.9%
SHARES VALUE (NOTE 1)
(000S)
AUSTRALIA - 0.0%
QNI Ltd. 1,000 $ 1,422
AUSTRIA - 0.7%
Mayr Melnhof Karton AG (a) 28,200 1,564,379
BRAZIL - 0.0%
Aracruz Celulose SA ADR (a) 6,300 81,900
CANADA - 7.1%
AT Plastics, Inc. 247,100 1,975,676
Alcan Aluminium Ltd. 48,600 1,174,372
Barrich Gold Corp. 28,700 573,674
Cascades, Inc. 174,700 900,163
Cominco Fertilizer Ltd. 100 2,576
Cominco Ltd. (a) 100 1,528
Domtar, Inc. (a) 283,400 2,089,673
Echo Bay Mines Ltd. 10,500 97,011
Methanex Corp. (a) 262,200 3,237,785
QUNO Corp. (a) 32,000 582,780
St. Laurent Paperboard, Inc. (a) 5,700 73,931
St. Laurent Paperboard, Inc. (a)(e) 104,500 1,355,407
Sherritt Gordon Mines Ltd. (a) 173,800 1,667,531
Stone Consolidated Corp. (a) 121,700 1,502,816
15,234,923
FINLAND - 0.8%
Kemira OY (a) 130,300 915,219
Kemira OY sponsored ADR (a)(e) 61,100 847,763
Kone Corp. Ord. Class B 100 11,113
1,774,095
FRANCE - 2.3%
Accor SA 7,212 728,912
Carnaudmetalbox SA 32,000 1,107,145
Dapta-Mallinjoud SA 33,000 810,713
Montupet SA 7,010 1,178,174
Pechiney SA CIP 7,000 486,231
Total SA Class B 10,000 563,831
4,875,006
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
GERMANY - 1.4%
Schering AG 600 $ 427,419
Veba Vereinigte Elektrizitaets & Bergwerks AG Ord. 7,500 2,521,810
2,949,229
HUNGARY - 0.0%
Pick Szeged RT sponsored GDS (e) 1,000 45,000
IRELAND - 2.0%
Jefferson Smurfit Group PLC 701,149 4,364,793
JAPAN - 14.2%
Amada Metrecs Co. Ltd. 55,000 772,588
Canon, Inc. 50,000 737,471
Daiwa Securities Co. Ltd. 155,000 2,006,221
Fuji Electric Co. Ltd. 240,000 1,194,401
Fuji Photo Film Co. Ltd. 20,000 433,452
Hitachi Ltd. 295,000 2,527,769
Honda Motor Co. Ltd. 57,000 886,470
Ito Yokado Co. Ltd. 35,000 1,604,876
Kaneka Corp. 145,000 947,123
Matsushita Electric Industrial Co. Ltd. 130,000 1,800,031
Mitsubishi Electric Co. Ord. 392,000 2,403,172
Mitsubishi Motors Corp. 50,000 449,004
Nifco, Inc. 60,000 860,884
Nitto Denko Corp. 85,000 1,228,114
Nomura Securities Co. Ltd. 120,000 2,335,825
Nichicon Corp. 50,000 627,101
Omron Corp. 166,000 2,848,142
Sankyo Co. Ltd. 40,000 947,173
Shinetsu Chemical 10,000 170,571
Sony Corp. 43,000 1,980,334
Takasago Thermal Engineering Co. 1,000 14,950
Tayca Corp. (a) 57,000 220,759
Tokai Rika Denki Co. Ltd. 99,000 1,013,195
Toppan Printing Co. Ltd. 100,000 1,324,437
Uny Co. Ltd. 50,000 772,588
Wako Electric Co. Ltd. 15,000 263,382
Yamanouchi Pharmaceutical 10,000 203,682
30,573,715
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NETHERLANDS - 1.6%
Hoogovens en Staalfabrieken (a) 100 $ 4,471
Koninklijke PPT Nederland 80,000 2,621,876
Koninklijke PPT Nederland (a)(e) 23,000 753,789
Vredestein NV 8,000 61,333
3,441,469
NORWAY - 1.1%
Kverneland Gruppen AS 160,000 2,273,850
SOUTH AFRICA - 0.2%
Driefontein Consolidated Ltd.:
Ord. 4,000 46,210
sponsored ADR 3,100 36,038
Free State Consolidated Gold Mines Ltd. ADR 12,400 142,600
Vaal Reefs Exploration & Mining Co. Ltd.:
ADR 8,500 60,031
(Reg.) 1,600 117,359
402,238
SPAIN - 0.8%
Banco Bilbao Vizcaya SA Ord. (Reg.) 35,000 873,513
Argentaria Corporacion Bancaria de Espana SA 26,000 871,739
1,745,252
SWEDEN - 0.6%
Catena AB Class A Free shares 41,000 341,316
Volvo Aktiebolaget Class B 52,000 966,208
1,307,524
UNITED KINGDOM - 2.1%
BET PLC Ord. 500,000 813,700
British Petroleum PLC ADR 15,800 1,226,475
Cook (D.C.) Holdings PLC 1,068,200 666,664
Eurocamp PLC 270,000 1,070,777
Resort Hotels PLC (a) 570,000 -
Wace Group PLC 220,000 775,148
4,552,764
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED STATES OF AMERICA - 7.0%
ASA Ltd. 7,700 $ 332,063
Allied Products Corp. 100 1,625
Aluminum Co. of America 13,400 1,053,575
Bank of Boston Corp. 10,500 294,000
Battle Mountain Gold Co. 14,500 128,688
Bearings, Inc. 7,400 237,725
Bowater, Inc. 1,900 50,350
Cadmus Communications Corp. 10,100 161,600
Cascade Corp. 7,100 170,400
Caterpillar, Inc. 7,800 401,700
Chase Brass Industries, Inc. 10,000 110,000
Claire's Stores, Inc. 20,000 270,000
Deere & Co. 1,400 99,750
Donnelley (R.R.) & Sons Co. 3,000 90,750
Gaylord Container Corp. Class A (a) 98,500 824,938
Hecla Mining Co. 2,700 23,625
Insteel Industries, Inc. 400 2,900
Jefferson Smurfit Corp. (a) 60,000 967,500
Johnson Controls, Inc. 3,200 152,000
Jones Apparel Group, Inc. 800 19,200
Kaiser Aluminum Corp. (a) 5,100 54,825
Longview Fibre Co. 21,600 337,500
Marshall Industries (a) 600 14,775
Philip Morris Companies, Inc. 24,200 1,442,925
Pier 1 Imports, Inc. 50,100 475,950
Pride Petroleum Services, Inc. (a) 57,700 281,288
Reynolds Metals Co. 5,700 285,000
Royal Caribbean Cruises Ltd. 1,500 41,250
Smith's Food & Drug Center, Inc. 8,300 213,725
Stone Container Corp. 191,400 3,253,800
TRW, Inc. 1,600 102,600
Tandem Computers, Inc. (a) 19,400 346,775
Temple-Inland, Inc. 20,400 928,200
Terra Industries, Inc. 86,500 983,938
Union Camp Corp. 5,800 273,325
Utah Medical Products, Inc. (a) 59,000 597,375
Varian Associates, Inc. 100 3,688
Wellman, Inc. 2,500 65,625
15,094,953
TOTAL COMMON STOCKS
(Cost $92,642,373) 90,282,512
PREFERRED STOCKS - 5.2%
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - 5.2%
BERMUDA - 0.1%
Jardine Strategic Holdings Ltd. 7 1/2% (a)(g) 1,700 $ 185,300
HONG KONG - 0.4%
Amoy Properties Ltd. 5 1/2% (e)(g) 7,200 493,200
Dairy Farm International Holdings Ltd. 6 1/2% (g) 3,040 267,520
760,720
UNITED STATES OF AMERICA - 4.7%
Alco Standard Corp., Series AA, $2.30 (g) 19,000 1,375,125
Alumax, Inc., Series A, $4.00 (a) 1,200 131,400
Ford Motor Co. (Del.), Series A, $4.20 (g) 14,100 1,157,963
Kaiser Aluminum Corp. $0.96 15,600 175,500
Kaiser Aluminum Corp. despositary shares representing
1/10 pfd., Series A, $0.65 137,600 1,135,200
Magma Copper Co., Series D, $2.80 (g) 10,200 591,600
Newmont Mining Corp. depositary shares representing 1/2
pfd. $1.375 (e) 6,900 345,000
Noble Drilling Corp. exchangeable $2.25 17,000 506,813
Occidental Petroleum Corp., Series A, Indexed $3 73,100 3,362,600
Reynolds Metals Co. $3.31 25,800 1,264,200
Unocal Corp. $3.50 (e) 3,900 187,200
10,232,601
TOTAL CONVERTIBLE PREFERRED STOCKS 11,178,621
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
AUSTRIA - 0.0%
MaCulan Holdings Ltd. Ord. 1,600 120,556
TOTAL PREFERRED STOCKS
(Cost $12,601,025) 11,299,177
CORPORATE BONDS - 15.0%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - 10.9%
CANADA - 1.1%
Repap Enterprise Corp. 9%, 6/30/98 - CAD 2,020,000 $ 1,220,109
St. Laurent Paperboard, Inc. 8%, 6/15/04 (e) - CAD 1,350,000 1,266,480
2,486,589
CHILE - 0.7%
Compania de Telefonos de Chile yankee
4 1/2%, 1/15/03 (g) Baa2 1,466,000 1,414,690
JAPAN - 0.4%
Daiwa Bank Ltd. euro 3 3/4%, 3/31/95 A3 100,000 99,250
Nitto Denko Corp. 3.90%, 3/30/01 (d) - JPY 68,000 770,984
870,234
LUXEMBOURG - 0.6%
Softe SA euro 4 1/4%, 7/30/98 (d) - ITL 1,800,000 1,267,020
SWEDEN - 1.0%
Ericsson (LM) Telephone Co.
4 1/4%, 6/30/00 (g) A2 SEK 7,094,000 1,285,060
Investor AB 8%, 6/1/01 (g) A- SEK 5,350,000 929,945
2,215,005
UNITED STATES OF AMERICA - 7.1%
Aspect Telecommunication Corp.
5%, 10/15/03 (e)(g) B3 382,000 387,730
Cellular Communications Puerto Rico, Inc.
8 1/4%, 8/1/00 (g) Caa 1,148,000 2,564,345
General Instrument Corp. 5%, 6/15/00 (g) B1 1,334,000 1,639,153
Hillhaven Corp. 7 3/4%, 11/1/02 (g) B3 386,000 609,880
Lowe's Companies, Inc. 3%, 7/22/03 (g) Baa1 1,925,000 2,704,800
Office Depot, Inc., liquid yield option notes
0%, 12/11/07 (g) Ba2 669,000 512,203
Orbital Sciences Corp. 6 3/4%, 3/1/03 (g) B3 829,000 990,655
Owens-Corning Fiberglas Corp.
8%, 12/30/05 (e)(g) Ba1 858,000 937,365
Thermo Electron Corp. 4 5/8%, 8/1/97 (e)(g) Ba1 3,488,000 4,935,520
15,281,651
TOTAL CONVERTIBLE BONDS 23,535,189
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NONCONVERTIBLE BONDS - 4.1%
JAPAN - 3.7%
Japan Development Bank 5%, 10/1/99 (d) Aaa JPY 800,000 $ 7,890,400
MEXICO - 0.4%
First Mexican Acceptance Corp. euro
10 3/4%, 9/15/96 - 500,000 418,990
Third Mexican Acceptance Corp. coll. notes gtd.
by Grupo Sidek SA and Grupo Situr SA
10 1/2%, 3/15/98 (e) - 750,000 583,125
1,002,115
TOTAL NONCONVERTIBLE BONDS 8,892,515
TOTAL CORPORATE BONDS
(Cost $33,673,252) 32,427,704
GOVERNMENT OBLIGATIONS (I) - 33.8%
ARGENTINA - 1.4%
Argentina Republic euro 6 1/2%, 3/31/05 (h) BB- 4,850,000 2,922,125
AUSTRALIA - 4.4%
Commonwealth of Australia 7%, 4/15/00 Aaa AUD 14,500,000 9,526,984
BRAZIL - 0.7%
Brazil Federative Republic IDU euro
7.8125%, 1/1/01 (h) B1 1,940,000 1,552,000
FRANCE - 4.0%
French Government:
BTAN 7%, 11/12/99 Aaa FRF 4,380,000 803,629
8 1/2%, 12/26/12 Aaa FRF 40,000,000 7,678,244
8,481,873
GERMANY - 6.5%
German Government 8%, 7/22/02 Aaa DEM 20,850,000 14,077,340
MEXICO - 0.4%
Mexican Government Brady 6.63%, 12/31/19 Ba2 FRF 9,750,000 918,088
Mexico Value Recovery (rights) (a) - 1,695,000 -
918,088
GOVERNMENT OBLIGATIONS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (C) (000S) (000S)
NEW ZEALAND - 2.1%
New Zealand Government 9%, 11/15/96 Aaa NZD 7,000,000 $ 4,438,160
UNITED KINGDOM - 4.9%
United Kingdom Treasury Bond 9 3/4%,
8/27/02 Aaa GBP 6,310,000 10,527,486
UNITED STATES OF AMERICA - 9.4%
Federal Home Loan Bank discount note
0%, 3/6/95 Aaa 210,000 208,740
U.S. Treasury Bills, yields at date of purchase
5.36% to 5.43%, 2/2/95 to 3/9/95 (f) Aaa 3,185,000 3,173,924
U.S. Treasury Bonds 8 1/8%, 8/15/19 Aaa 2,200,000 2,275,284
U.S. Treasury Notes:
7 1/4%, 11/30/96 Aaa 5,000,000 5,002,350
6 3/4%, 2/28/97 Aaa 790,000 782,226
7 1/2%, 11/15/01 Aaa 8,000,000 7,970,000
6 1/4%, 2/15/03 Aaa 850,000 781,737
7 7/8%, 11/15/04 Aaa 120,000 122,138
20,316,399
TOTAL GOVERNMENT OBLIGATIONS
(Cost $74,172,840) 72,760,455
REPURCHASE AGREEMENTS - 4.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.81%
dated 1/31/95 due 2/1/95 $ 8,785,418 8,784,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $221,873,490) $ 215,553,848
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
9 MidCap 400 Stock Index Futures March, 1995 $ 774,000 $ (8,839)
10 Nikkei 225 Index Futures March, 1995 937,000 (47,600)
22 U.S. Treasury Bond Futures March, 1995 2,232,313 50,655
6 S&P 500 Stock Index Futures March, 1995 1,416,600 5,110
$ 5,359,913 $ (674)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.5%
SECURITIES SOLD SHORT
NUMBER OF SHARES ISSUER VALUE
20,600 Alco Standard Corp. $ 1,323,550
259,500 Amoy Properties Ltd. 229,854
9,800 Aspect Telecommunications Corp. 333,200
79,200 Cellular Communications Puerto Rico, Inc. 2,455,200
17,500 Compania de Telefonos de Chile sponsored ADR 1,284,063
44,900 Dairy Farm International Holdings Ltd. 54,576
5,300 Ericsson (LM) Telephone Co. Class B Free shares 285,201
18,079 Ericsson (LM) Telephone Co. Class B ADR 974,006
45,800 Ford Motor Co. 1,156,450
53,600 General Instrument Corp. 1,460,600
22,900 Hillhaven Corp. 595,400
34,300 Investor AB Free B shares 868,042
32,500 Jardine Strategic Holdings Ltd. 103,350
73,600 Lowe's Companies, Inc. 2,704,800
34,900 Magma Copper Co. 532,225
19,500 Office Depot, Inc. 507,000
57,500 Orbital Sciences Corp. 977,500
28,569 Owens-Corning Fiberglas Corp. 878,497
107,511 Thermo Electron Corp. 4,797,678
4,300 Thermo Ecotek (rights) 536
TOTAL SECURITIES SOLD SHORT
(Total proceeds $20,777,333) $ 21,521,728
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 10.0%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
2,849,054 CAD 2/3/95 $ 2,024,554 $ (27,446)
7,369,320 CHF 2/23/95 5,740,777 160,707
35,055,520 DEM 3/7/95 to 4/18/95 23,051,732 95,352
94,326,339 FRF 2/3/95 to 2/28/95 17,858,800 13,408
8,550,211 GBP 3/7/95 to 3/22/95 13,504,704 (9,645)
3,081,709,500 ITL 2/23/95 1,912,586 (22,414)
1,674,134,400 JPY 3/14/95 16,869,894 (251,372)
TOTAL CONTRACTS TO BUY
(Payable amount $81,004,457) $ 80,963,047 (41,410)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 37.6%
CONTRACTS TO SELL
28,628,557 CAD 2/3/95 to 4/20/95 $ 20,339,253 $ 696,877
11,535,048 CHF 2/23/95 to 4/18/95 8,996,905 (138,357)
57,377,804 DEM 3/7/95 to 4/18/95 37,731,360 (222,543)
133,911,254 FRF 2/3/95 to 3/20/95 25,355,995 (389,045)
8,550,211 GBP 3/7/95 to 3/22/95 13,504,704 (176,058)
3,752,519,800 ITL 2/23/95 2,328,907 (5,936)
1,674,134,400 JPY 3/14/95 16,869,894 30,108
TOTAL CONTRACTS TO SELL
(Receivable amount $124,922,064) $ 125,127,018 (204,954)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 58.0%
$ (246,364)
CURRENCY ABBREVIATIONS
AUD - Australian dollar
GBP - British pound
CAD - Canadian dollar
FRF - French franc
DEM - German deutsche mark
ITL - Italian lira
JPY - Japanese yen
NZD - New Zealand dollar
SEK - Swedish krona
CHF - Swiss franc
LEGEND
22. Non-income producing
23. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
24. Principal amount is stated in United States dollars unless otherwise
noted.
25. Principal amount in thousands.
26. 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 $12,137,579 or 5.6% of net
assets.
27. 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 $1,184,845.
28. Security 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 $22,981,879.
29. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
30. 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:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 34.0% AAA, AA, A 35.1%
Baa 1.9% BBB 3.7%
Ba 3.4% BB 2.0%
B 2.4% B 0.7%
Caa 1.2% CCC 1.2%
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 2.6%.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of
Investment in Securities
Aerospace & Defense 0.5%
Basic Industries 18.7
Construction & Real Estate 0.7
Durables 5.2
Energy 5.2
Finance 7.5
Government Obligations 33.7
Health 1.3
Holding Companies 0.3
Industrial Machinery & Equipment 4.7
Media & Leisure 0.5
Nondurables 0.7
Precious Metals 0.8
Repurchase Agreements 4.1
Retail & Wholesale 3.1
Services 2.5
Technology 4.8
Utilities 5.7
100.0%
INCOME TAX INFORMATION
At January 31, 1995, the aggregate cost of investment securities for income
tax purposes was $221,954,166. Net unrealized depreciation aggregated
$6,400,318, of which $8,735,330 related to appreciated investment
securities and $15,135,648 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending July 31, 1995,
$7,298,000 of losses recognized during the period November 1, 1993 to July
31, 1994.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS JANUARY 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 215,553,848
agreements of $8,784,000) (cost $221,873,490) -
See accompanying schedule
Securities sold short, at value (proceeds received (21,521,728) $ 194,032,120
$20,777,333)
Restricted cash on securities sold short 20,777,333
Cash 804
Receivable for investments sold 9,057,311
Unrealized appreciation on foreign currency contracts 1,098,833
Receivable for closed foreign currency contracts 16,334
Receivable for fund shares sold 523,837
Dividends receivable 181,172
Interest receivable 1,942,731
Receivable for daily variation on futures contracts 12,351
Other receivables 357,881
TOTAL ASSETS 228,000,707
LIABILITIES
Payable for investments purchased 6,190,836
Unrealized depreciation on foreign currency contracts 1,345,197
Payable for closed foreign currency contracts 16,202
Payable for fund shares redeemed 1,423,170
Accrued management fee 145,770
Other payables and accrued expenses 632,316
TOTAL LIABILITIES 9,753,491
NET ASSETS $ 218,247,216
Net Assets consist of:
Paid in capital $ 254,795,865
Undistributed net investment income 675,942
Accumulated undistributed net realized gain (loss) on (30,033,019)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on (7,191,572)
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 19,393,755 shares outstanding $ 218,247,216
NET ASSET VALUE, offering price and redemption price per $11.25
share ($218,247,216 (divided by) 19,393,755 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,635,480
Dividends
Interest 7,316,890
TOTAL INCOME 8,952,370
EXPENSES
Management fee $ 1,043,053
Transfer agent fees 431,919
Accounting fees and expenses 74,800
Non-interested trustees' compensation 1,131
Custodian fees and expenses 121,775
Audit 24,588
Interest 15,088
Dividends on securities sold short 152,393
Total expenses before reductions 1,864,747
Expense reductions (14,962) 1,849,785
NET INVESTMENT INCOME 7,102,585
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (25,107,567)
Foreign currency transactions (3,766,743)
Futures contracts (1,785,620)
Short sales 2,676,824 (27,983,106)
Change in net unrealized appreciation (depreciation) on:
Investment securities 6,777,155
Futures contracts (178,847)
Short sales (2,257,334)
Assets and liabilities in foreign currencies 1,401,589 5,742,563
NET GAIN (LOSS) (22,240,543)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (15,137,958)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JANUARY JULY 31, 1994
31, 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 7,102,585 $ 8,239,034
Net investment income
Net realized gain (loss) (27,983,106) (10,895,215)
Change in net unrealized appreciation (depreciation) 5,742,563 (14,173,854)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (15,137,958) (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 40,824,618 710,176,957
Net proceeds from sales of shares
Reinvestment of distributions - 11,133,210
Cost of shares redeemed (120,685,847) (463,821,613)
Net increase (decrease) in net assets resulting from (79,861,229) 257,488,554
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS (94,999,187) 229,088,917
NET ASSETS
Beginning of period 313,246,403 84,157,486
End of period (including undistributed net investment $ 218,247,216 $ 313,246,403
income (loss) of $675,942 and $(6,426,643),
respectively)
OTHER INFORMATION
Shares
Sold 3,427,157 54,873,359
Issued in reinvestment of distributions - 878,740
Redeemed (10,159,263) (36,649,262)
Net increase (decrease) (6,732,106) 19,102,837
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS YEAR ENDED FEBRUARY 1, 1993
ENDED JULY 31, (COMMENCEMENT
JANUARY 31, 1994 OF
1995 OPERATIONS) TO
(UNAUDITED) 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) (1.02) .25 E 1.91
Total from investment operations (.74) .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 $ 11.25 $ 11.99 $ 11.98
TOTAL RETURN B, C (6.17)% 4.58% 20.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 218,247 $ 313,246 $ 84,157
Ratio of expenses to average net assets 1.35% A 1.67% 2.12% A
Ratio of expenses to average net assets 1.36% A 1.68% 2.12% A
before expense reductions
Ratio of net investment income to average 5.17% A 2.56% 4.02% A
net assets
Portfolio turnover rate 233% A 226% 172% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN
(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.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1995 (Unaudited)
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 exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities 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.
Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward
currency contracts, and foreign currency options, 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 not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but 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 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, passive foreign investment companies (PFIC),
foreign currency transactions, market discount, non-taxable dividends,
partnerships 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 net investment income per share. Accumulated undistributed net
investment income 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 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
2. OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
and a contract to sell in the schedule of investments under the caption
"Forward Foreign Currency Contracts."
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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 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. 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.
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.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $317,399,032 and $401,416,811, respectively, of which U.S.
government and government agency obligations aggregated $19,905,238 and
$3,076,713, respectively.
The market value of futures contracts opened and closed during the period
amounted to $92,555,401 and $107,287,915, 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 annualized rate of .76% 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 Limited (FIJ). Under the sub- advisory arrangements, FMR may receive
investment advice and research services and may grant the sub-advisers
investment 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. and FIJ 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 fee contract pursuant to which
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
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 $45,948 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 $2,828,516,
respectively. The weighted average interest rate was 5.10%.
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
$14,962 under this arrangement.
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)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)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 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)(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)(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 193
Boston, MA 02210-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(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
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
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
Stephen P. Jonas, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Robert H. Morrison, Manager,
Security Transactions
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
